The United Kingdom (UK) and members of the Southern African Customs Union (SACU) amongst them Botswana, have agreed to continue discussions to explore ways to ensure that the existing trade arrangement between the two blocs currently governed by the EU-SADC EPA will not be disrupted by Britain’s departure from the EU.
The two sides also agreed to continue discussions to explore ways to ensure that the existing trade arrangement between the UK and SACU currently governed by the EU-SADC EPA will not be disrupted by the UK’s departure from the EU.
In a joint statement, SACU and the UK’s Department of International Trade, said talks are likely to focus on steps to agree an arrangement that replicates the effects of the EPA once the UK has left the EU.
As a result, Botswana is expected to continue to benefit from the EPA with the European Union (EU), after member states of the Southern African Development Community (SADC) concluded negotiations with the EU over renewal of the EPA mid last year.
Following negotiations lasting more than a decade, the ‘EPA Group’ of the Southern African Development Community (SADC), which comprises Botswana, Lesotho, Mozambique, Namibia and South Africa, signed an EPA with the EU on 10th June 2016. While there is scope for Angola to join the ranks later on, the nine remaining members of SADC are either exempt or in discussions over other regional EPAs.
Botswana, Namibia and Swaziland can look forward to uninhibited access to the EU market, offering 74.1 percent full access and 12.1 percent partial access to their own markets in exchange. Although a step up in terms of legally-binding and increased market access, the three states already had unilateral access as of 2008. As middle-income states, and stakeholders in a potential EPA, the EU had provided them with Market Access Regulations – essentially temporary free trade agreements.
After the first EPA expired in 2000, an interim agreement was concluded in 2007 and signed in 2009 by Botswana, Lesotho, Swaziland and Mozambique. The remaining SADC countries had refused to sign the interim agreement, saying they had numerous concerns that needed to be addressed first. Negotiations were rekindled in 2009 to fine tune the agreement and address concerns raised by the SADC member states. South Africa, for example, had concerns about improved market access. Other concerns involved rules of origin and disagreements over the most favoured clause, export taxes and sustainable development. The other unresolved issue was about agricultural safeguards.
“Member states raised varied concerns about the EPA. But in the end it was all about compromise; win some lose some. What is important is that everyone is happy because we all took something home,” said former Permanent Secretary in the Ministry of Trade and Industry in Botswana, Banny Molosiwa who was part of Botswana’s negotiation team.
The EPA also contains a ‘most favoured nation’ clause, compelling SADC members to offer one another a deal as good as that received by the EU in every instance. It is hoped this will facilitate stronger, legally bound integration in the bloc, backed up by its largest trading partner.
One key positive outcome of the EPA is speeding up the regional integration. Botswana, Lesotho, Namibia, South-Africa and Swaziland form together the Southern African Customs Union (SACU). Established in 1910, it is the oldest existing customs union in the world. A customs union’s principal characteristic is a common external tariff for imports. The European Union says that in the case of its imports, the SACU members today do not all impose the same duty.
The EU believes that the SADC EPA will harmonise the SACU tariffs imposed on imports originating in the EU and consequently improves the functioning of the customs union – an objective that all participants wanted to achieve.
“In this way, the SADC EPA strengthens regional integration” says EU.