An Analysis of EU-Southern African Relations

1. An Analysis of EU-Southern African Relations Medicine Masiiwa University of Zimbabwe mmasiiwa@science.uz.ac.zw

2. INTRODUCTION • The paper analyses the EU-Southern Africa relations from the period 2000 to the present. • It highlights problems, contradictions and future perspectives of the relationship. • The negotiation for a new partnership within the context of ACP-EU relations dominates. • Analysis is done from the perspective of Southern Africa in general and from that of Zimbabwe in particular.

3. Background • The relations dates back to the dark ages of slavery and colonialism. • The early 1970s ushered a new era of a relationship that is based on some degree of mutual respect and equality (Lomé Agreement).

4. The Lomé Agreement • Came into effect in 1975 comprising firstly France and its former colonies with the former British colonies joining later. • EU (colonial mothers) granted the former colonies non-reciprocal market access preferences (complemented by development aid) in return for access to natural resources.

5. Expiry of Lomé • Before the expiry of Lomé IV Agreement in 2000, the EU had already made it clear that it would not renew it and wanted to negotiate a new partnership agreement compatible with the World Trade Organization (WTO) provisions (esp. MFN principle). • Southern African countries reluctantly accepted the EU’s position & signed the Cotonou Agreement.

6. The Cotonou Agreement • Signed in June 2000 in Cotonou, the capital of Benin. • Based on the principle of reciprocity. • Aims to have sustainable development and poverty reduction (with eventual aim of eliminating it) and the gradual integration of the ACP countries into the world economy.

7. The Cotonou Agreement (cont.) • Based on five pillars, which are economic and trade cooperation, political dialogue, involvement of civil society, the private sector and other non-state actors, poverty reduction as well as rationalization of financial instruments. • Paved way for the negotiation of a new trading arrangement compatible with the WTO requirements (EPAs)

8. Initial EPA debate Against (by S. African states) For (mainly by EU) EPAs would make Southern African countries’ policies more predictable. This would attract Foreign Direct Investment (FDI), diversify the economy, contributes to good governance etc. EPAs would lower prices for imported industrial inputs and thereby lead to growth or creation of new industries. • Principle of reciprocity was impractical. It would lead to further de-industrialization, destroy peoples’ livelihoods and increase poverty. • EPA negotiations are divisive and undermine regional integration initiatives already in progress in Southern Africa.

9. Initial EPA debate Against (by S. African states) For (mainly by EU) EPAs would increase competition, enhance efficiency in production, & increase specialisation. • Divisions (SADC, ESA, SACU, S. Africa, LDCs) - Problems of trade diversion, deflation and loss of revenue etc.

10. The Interim EPAs • Southern African countries signed the Interim EPAs by December 2007 (despite being unprepared. Angola, Namibia & SA have not yet signed). • Goods only agreement. • WTO compatibility achieved. • Stepping stone towards a full EPA.

11. Interim EPA controversy • Southern African countries did not get the best out of it. • It seems the initial hypothesis that EPAs would undermine development and regional integration in Southern Africa was confirmed. • Countries in the same regional grouping liberalised different baskets of products and thereby created new barriers to intra-regional trade.

12. Interim EPA controversy • Revenue loss: Zimbabwe will lose about 48 % of its trade revenue during the first trance of liberalization. The Seychelles will lose a whopping 99 %, Mauritius 21 % and Madagascar 42%. • MFN clause (relations with third parties).

13. Interim EPA controversy • Negotiations for full EPAs still on (services, government procurement, competition policy, investment, trade-related intellectual property rights (TRIPS) etc). • Southern African countries are not keen: They feel that they do not have the necessary regulatory environment and relevant institutions in place and therefore do not have the capacity and ability to make informed decisions on these issues. They fear that they would endanger their much needed policy space to develop.

14. The power game Why should Southern African countries enter into negotiations they are not sure will benefit them? • Dependency: Virtually all of them are economically and financially dependent on the EU. As a result, they fear opposing it, in case that support maybe withdrawn. Apparently the EU uses this fear to control their less-fortunate partners. • History shows that this has always been the case.

15. The power game • But there is something called “Hope”. It can also be used to gain control. That hope is needed in Southern Africa; not “Fear”.

16. END Thank You

17. EPA negotiations • Started in 2004 (after 2 years delay). • Should have been concluded at the end of December 2007. • Key problems: unbalanced negotiation capacity, risk of revenue loss, adjustment costs as well as speed and level of the trade liberalization.