EU deal worries SA businesses

Johannesburg - The signing of an interim Economic Partnership Agreement with the European Union by Botswana, Lesotho and Swaziland was cause for concern, Business Unity South Africa said in a statement on Monday. The deal was signed last week, with a fourth Southern Africa Development Community (SADC) country, Mozambique, said to be eager to be part of the agreement as soon as possible.

The three remaining SADC countries, South Africa, Namibia and Angola, refused to sign the agreement.

While Busa acknowledged the realities that led the countries to sign the interim agreement, it remained "concerned". "These negotiations have been difficult from the outset," said Jerry Vilakazi, chief executive officer of Busa.

"The divisions that have been caused in the region, and in the Southern African Customs Union (Sacu) in particular, are of serious concern for the private sector," he said.

Busa had been following the EPA negotiations closely and had expressed frustration with "the lack of transparency and communication around key issues" since the interim agreement was initialled by some countries in November 2007.

Busa said it accepted that the EU was an important economic partner and that the EPA provided an opportunity for the region to rationalise its trading regime with the EU.

However, it said that this opportunity had been "undermined".

"The result is now a very real threat to Sacu and plans for deeper economic integration of the SADC," Vilakazi said.

He acknowledged that in the present difficult economic times it was important for developing countries to secure export markets.

"But it is worrying that this step was taken without resolving the fundamental issues raised by South Africa, Namibia and Angola," he said.

"Little thought seems to have been given to the practical implications of having different trade agreements for members of a customs union."

According to Vilakazi, there was still some time before the EPA entered into force as it would need to be ratified by all the parties.

"Busa calls upon the governments of the region to make urgent efforts to come together and find a way forward that does not result in the dissolution of the Sacu," he emphasised.

"We believe that there is still a chance to salvage this situation and we are prepared to work with the negotiators to ensure a result that not only protects the trading relationship with the EU but that makes a positive contribution to regional integration," he said.

- AP