14 February 2013

Namibia: Minister Allays Fears Over EPA Talks

Government is making progress towards the conclusion of negotiations over the controversial interim Economic Partnership Agreement (EPA) with the European Union.

"We seem to be approaching the conclusion of the EPA negotiations, but a few important areas still need to be dealt with. I trust that it would be evident that our success in industrialisation will require a wide range of policy measures and targeted interventions, and it is in this context that we need trade agreements such as the EPA to accommodate and not obstruct our policy objectives," said the Minister of Trade and Industry Calle Schlettwein.

The comments follow the release of an academic paper - 'The EU preferences for Namibia: Implications for the Namibian Meat Export Industry' by Festus Tangeni Kandenga of the University of Namibia. The paper, released towards the end of last year, intimated that Namibia stands to lose N$480 million every year for not signing the EPA. Last year the European Parliament extended the deadline to terminate the interim EPA to 2016. The initial deadline was 2014.

The extension came in part thanks to the pressure from leftist political parties in Europe. The EU wanted to remove the countries that have not signed the EPA from the list of countries with market access to the EU. The removal would have seen Namibia paying hefty duties, rates and taxes on beef, fish and other lucrative agricultural products that the country ships to the EU annually.

Cattle production is the most important agricultural activity for many Namibian commercial and communal farmers, with the beef industry generating over 60 percent of the livelihood of the Namibian population.

It is estimated that the total cattle population of Namibia is 2.4 million. Namibia exports nearly 81 percent of its beef production to the EU, South Africa and other markets. The industry generated N$1 billion in foreign earnings in 2010.

The old deadline disadvantaged Namibia, because of a new categorisation of Namibia as an upper middle-income country, putting it in a category where it has to trade with the EU using the Generalised System of Preferences (GSP), a much less favourable access regimen compared to the one the country currently enjoys, and with less comprehensive coverage.

The GSP excludes beef and table grapes that are important exports to the EU from Namibia. The EU is on record that the current situation is not compatible with WTO rules and it is not fair towards countries that have already fulfilled their obligations and ratified their agreements, hence the earlier proposal to remove the 17 countries that had not yet signed from the list of beneficiaries. Of the 17, nine would not be affected at all since they continue to benefit from the EU's 'everything but arms' (EBA) duty-free schemes.

These include Burundi, Comoros, Haiti, Lesotho, Mozambique, Rwanda, Tanzania, Uganda and Zambia. The eight other countries would have reverted to a less advantageous preference scheme. These include Botswana, Cameroon, Fiji, Ghana, Côte d'Ivoire, Kenya, Namibia and Swaziland.

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