Maputo — The Mozambican government and the European Union on Monday signed an interim Economic Partnership Agreement (EPA), which will allow Mozambican goods duty-free and quota-free access to the European market, while negotiations continue between the EU and other members of the Southern African Development Community (SADC).

Mozambique is the fourth SADC country to sign an EPA, following Botswana, Lesotho and Swaziland. South Africa, Namibia and Angola are still negotiating with the EU (although South Africa already has a separate free trade arrangement with the EU, lasting until 2012).

Other SADC members are not in the SADC EPA group at all. Tanzania is negotiating with the EU as a member of the East African Community, while Zambia, Zimbabwe and Malawi are all part of a block of counties known as the ESA (Eastern and southern Africa) group. Thus the EPA negotiations have managed to split SADC.

An EU statement received by AIM cited the EU Commissioner for Trade, Catherine Ashton, as stating "The signature of this agreement is an important step. In the first place because it guarantees access to the European market for the countries who have signed the agreement so far. More important than this, it is a vote of confidence in the process we have launched to build a strong and lasting economic relationship".

Based on the interim agreement, the signatories will continue negotiations for a definitive EPA, which will cover not only trade in commodities, but the more delicate and so far unsolved questions of investment, competition and trade in services.

Unlike the previous trade deals between the EU and the ACP (African, Caribbean and Pacific) countries, the Lome and Cotonou agreements, the EPAs have a strong element of reciprocity. The price for access to the European market is that the African signatories must grant the EU access to their markets.

In December, the Mozambican parliament, the Assembly of the Republic, approved a new customs tariff list, taking effect this year, which paved the way for the interim EPA by removing import duties from most imports from the EU. Mozambique has until 2023 to liberalise the rest of its trade with the EU.

The EU is currently the main market for Mozambican exports - mainly because European countries are the main buyers of the aluminium ingots produced at the MOZAL smelter on the outskirts of Maputo. Last year 84 per cent of Mozambique's exports to the EU were aluminium, followed by tobacco (nine per cent) and shellfish (4.4 per cent).

The EU statement claimed that the SADC region has been "the greatest beneficiary of trade with the EU to date", and promised that the EPA "will allow the region to improve its competitiveness, diversify its exports, and build strong networks of regional cooperation in support of those that currently exist or are being developed".