South Africa will become the 71st ACP state to join the 4th Lome Convention on June 1st. The announcement at the Joint Assembly was tempered with yet another failure by European Commission and South African trade negotiators to make progress in discussions on a separate free trade agreement. South Africa has been denied preferential trading conditions on the grounds that it is a more advanced economy than other African states. Instead it was offered a free trade agreement. Negotiations began in 1995 on a mandate from the Council of Ministers, but after 18 rounds the sides seem no nearer to reaching an agreement. The deadlock prompted the South African delegate, Rob Davies, to express his frustration with the EU's intransigence, at the insistence of Mediterranean countries, in not agreeing to tariff-free access for South African agricultural exports, including wine.
The British Presidency has set great store on negotiating a deal but time is fast running out. With the next round of talks scheduled for May 28th and 29th, Development Commissioner Pinheiro told the Joint Assembly that both sides would have to make improved offers. On the European side, there is recognition of concern in South Africa about the impact of a free trade agreement on the country itself and on neighbouring African countries such as Swaziland and Namibia, who would lose vital customs revenue. The intention is to apply tariff reductions more gradually on EU imports going into South Africa than would be the case with South African exports going to Europe.
The EU has also stated that it accepts the need to agree specific measures to protect fragile industries in South Africa. But as can be seen with the motor industry, where South African-based assembly plants are sheltered behind protective tariffs as high as 110 per cent, a free trade agreement, even if implemented over 10 years, would threaten local production and employment.
Another South African complaint concerns EU subsidies for agricultural exports such as beef and cereals, which are already undercutting local products in Namibia and Botswana. This subsidised competition has, for example, led to a flour mill in Lesotho being closed with the loss of 150 jobs. Canning factories in South Africa are also closing in the face of competition from subsidised European products.
These concerns were taken up in a resolution adopted by the Joint Assembly which calls on the EU to improve its offer over South African agricultural exports, take note of sensitive sectors in southern Africa and include in the agreement provisions to take account of the effect of subsidised EU farm products on South African agricultures.