Johannesburg — AS THE new year unfolds, trade negotiators from the developing world confront a daunting trade landscape. There is cautious optimism that the Doha Round will be revived, which will certainly tax their resources. At the same time, regional and bilateral impulses remain strong.

By the end of December, the African, Caribbean and Pacific (ACP) group of nations must conclude reciprocal economic partnership agreements (EPAs) with the European Commission (EC).

These regional free-trade agreements with the EU are to supersede the current Cotonou trade regime, which is deemed to be WTO incompatible since it grants nonreciprocal preferences to ACP exporters to the European market.

If we are to believe Brussels, then EPAs are all about development, poverty reduction and greater integration of the ACP into regional and world markets. In past meetings, some EC officials have even proclaimed fancifully that Europe has no offensive interests! As beguiling as such politics may appear, we should not lose sight of the fact that EPAs in their current form are about hard-nosed economic interests.

The questions then are: what offensive and defensive positions should the ACP adopt? What policy flexibilities should we demand? And how best can EPAs be shaped into real instruments of development, as the EC is wont to insist?

In reality, the manner in which the EPAs are being negotiated pose a significant threat to the future development of the African continent.

Civil society and business groups from across the continent have voiced concerns that EPAs will undermine regional integration processes, already fraught given the regional spaghetti-bowl of overlapping memberships; frustrate national and regional industrialisation and diversification; lead to revenue losses; and divert EU funds targeted for social development towards tackling supply-side constraints and the costs of implementation.

It is clear that without adequate policies and resources to adjust and foster necessary economic transformation, and to produce and market their goods competitively, African countries are unlikely to benefit fully from any new trade regime.

But there are potential opportunities too. A well structured and sequenced EPA that truly mainstreams development, stimulates economic growth and strengthens domestic institutions and governance will certainly be a boon for the poor. For exporters, this could include addressing supply-side constraints and prohibitive nontariff barriers in the EU, liberalising rules of origin and binding EU aid commitments.

SA is no longer just an observer to the talks, but has joined the SADC configuration as a full negotiating party. The other members of this grouping are Botswana, Lesotho, Namibia and Swaziland (BLNS), along with Mozambique, Angola and Tanzania (MAT). They collectively outlined their negotiating position last March. This held that reciprocity has been dealt with effectively by virtue of SA's trade, development and co-operation agreement with the EU, which de facto applies to the BLNS.

Second, the MAT are leastdeveloped countries, entitled to duty and quota-free access to the EU market for everything but arms.

Third, the SADC EPA is to be restricted to trade in goods; there are to be no new trade issues, apart from capacity-building; and development assistance is to be prioritised.

The long-awaited response from the EC points to critical areas of convergence and divergence in these talks. First, the EC accepts that SA should be included in the SADC EPA, and proposes that this process be merged with, and supersede, the trade, development and co-operation agreement (under mid-term review). The agreement will then be used as the base line for market access commitments, with appropriate adjustments to be negotiated.

Second, the EC seeks to differentiate between its market access offers to SA and the BLNS. It is thus unlikely that SA will be able to leverage any new concessions. On the other hand, the BLNS may be able to negotiate some improvements beyond the trade, development and co-operation agreement, particularly for their beef and sugar exports.

Third, the EC strongly opposes raising trade, development and cooperation agreement duties on some of their exports to SADC, although this may be necessary to accommodate BLNS sensitivities. Brussels holds that such increases would necessarily also apply to SA, which is unacceptable.

But the BLNS have legitimate defensive concerns, and more creative effort is required here.

Fourth, Brussels is insistent that an EPA must include the new trade issues, as these are the "essence of the EPA sustainable development package". The SADC is less enamoured, citing its institutional and capacity weaknesses. But the EC position is clear and rather vindictive too: no domestic regulatory reforms, no major new access to its market.

Finally, while the EC initially insists that it has no offensive interests, it then explicitly identifies such interests, listing chemicals, cosmetics, olive oil, oats, barley and wheat. Many of these are sensitive sectors for SA and the region, and our trade negotiators are well advised to appreciate their importance better. For instance, the Cape winelands is home to a growing number of boutique olive-oil manufacturers with great potential to stimulate local economic development, exports and jobs. However, EU subsidies allow Spanish and Italian producers to sell their oils at half the local cost!

With less than 12 months to go, the negotiation game is on. Business, labour and civil society should place the EPAs on their radar screens urgently and help to fashion an outcome that strongly mainstreams development.