The TDCA, EPAs and Southern African regionalism

This paper looks at the potential problem that EPAs (Economic Partnership Agreements) may create a division in the Southern African region. It argues that although a strategy of the EU’s support for EPAs is to reinforce regionalism among sub-groups of the African, Caribbean and Pacific states, the insistence on creating EPAs may actually drive a wedge between Southern African countries, halting rather than accelerating trade integration.

This paper describes the problem of overlapping trade agreements between EPAs and TDCA (Trade, Development and Co-operation Agreement), and reviews some suggested solutions.

The problem presented is the position of Botswana, Lesotho, Namibia and Swaziland (BLNS) as participants in the TDCA and members of an EPA.

Under the TDCA, countries are allowed to exclude, from any liberalisation at all, a group of its most sensitive products, and to defer until the end of the transition period liberalisation on another, indeterminate-sized set of items. However, in the case of BLNS the decision of which products will be excluded from any liberalisation have already been established, as has the tariff reduction. Therefore any partners of BLNS’s in an EPA would have to:accept the TDCA exclusions and timetable; or accept BLNS membership of two, separate and different, reciprocal trade agreements with the EU.

The paper goes on to discuss the problem products, and discusses some possible solutions, including:

• implement robust rules of origin and customs controls between the BLNS and other EPA members. This would undermine Southern African integration less dramatically than the exclusion of BLNS from any EPA but in a more corrosive, drawn-out fashion. Without such intra-regional border controls, imports from the EU could evade any exclusions or delays that were in the EPA but not in the TDCA
• exclude BLNS from the Southern African EPA. This would drive a wedge between Southern African states. BLNS would be forced to negotiate on their own. The outcome could be either a separate agreement to the TDCA or a retro-fitting of the TDCA to include, for BLNS alone, preferences in the EU that they currently enjoy, or may aspire to, that are not available to South Africa
• extend the EU's liberalisation. The TDCA currently excludes some products (such as sugar) that are important BLNS exports to the EU. This would be a feasible option because the nature of the products means that it would be technically possible to limit the preferences to BLNS suppliers

The paper was prepared for a conference on The TDCA: Impacts, Lessons and Perspectives for EU–South and Southern Africa Relations, 2004.