EU-LDC Themes - Regional Focus - Policy
The EU and South Africa
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History
In 1985 the European Community adopted a package
of positive and restrictive measures as a response to intensified
repression under the Apartheid regime in South Africa (SA). A second
package was announced in 1986. These measures included among others
an embargo on trade in arms, discouragement on cultural, scientific
and sporting contacts and a ban on new investment on the restrictive
side, and assistance to the victims of Apartheid on the positive
side. When in 1990 the ban on ANC and other political parties was
removed and Nelson Mandela was released from Prison, the EU started
to lift the sanctions gradually.
In April 1994, right after the parliamentary
elections, the EU adopted a package of intermediate measures. This
included improved market access through granting the Generalised
System of Preferences to SA, support to the process of regional
economic co-operation, introduction of a political dialogue,
promotion of EU investment in SA and a continuation of the Special
Programme for Victims of Apartheid. In October of the same year the
EU and SA signed a Simplified Co-operation Agreement, which
contained a mutual understanding to co-operate in all the areas of
respective competence. It explicitly promotes regional economic
co-operation in Southern Africa.
For further details go to the European
Union in South Africa website
Current Agreements
Negotiations for a long-term co-operation
framework started in June 1995, which would include both a Protocol
of Accession to the Lomé Convention and a bilateral Trade and
Co-operation Agreement. In November 1996 the EU council adopted a
regulation that covers development co-operation with South Africa.
The Multi-annual Indicative Programme (MIP) signed in May 1997
provides a general framework for development co-operation between
the two parties for a period of three years. In June 2000 agreement
for a new Programme was reached. The areas of development
co-operation in the new MIP include the following:
- Support for the integration of SA into the world economy, for
regional co-operation and integration, for the expansion of
employment and for the development of sustainable private
enterprises.
- Enhancement of living conditions and the delivery of basic
social services.
- Support for democratisation, good governance, the protection
of human rights, the strengthening of civil society and its
integration into the development process.
In April 1997 an agreement was signed for a
qualified membership of the Lomé Convention for South Africa and
entered into force in June 1998. This qualified membership implies
that SA will enjoy all benefits of the Lomé Convention, except for
the non-reciprocal trade preferences and for access to the financial
resources of the European Development Fund (EDF). Reasons to exclude
SA from the non-reciprocal trade preferences include the following:
- If SA would have enjoyed the benefits of this trade regime,
benefits for other ACP countries would have been eroded.
- Other members of the WTO, given the existing controversy of
the EU-ACP Agreement, would have challenged the granting
non-reciprocal trade preference to SA.
- It would have threatened the interests of certain EU
industrial and agricultural sectors.
- It might have led to a slow down in the SA liberalisation
process.
On the other hand, companies from SA are now
allowed to tender for projects in other ACP countries that are
financed under the 8th EDF. Additionally, SA can now
fully participate in Lomé institutions. This will help SA in
redressing its historically isolated position. In the negotiations
for the Cotonou Agreement, SA was already a full partner.
The negotiations between the EU and SA in the
area of trade have taken place from 1995 to 1999. In October 1999
the Trade, Development and Co-operation Agreement was signed and on
1st January 2001 it entered into force.
The most important elements of this agreement
are:
1. The establishment of a Bilateral Free Trade Area (FTA). After a
transition period of ten years, 95 percent of the EU imports from SA
will have duty-free market access, while the respective percentage
is 86 percent of the SA imports from the EU (the percentages are
based on the average trade value from 1994 to 1996). The following
principles apply to the FTA:
- The FTA will help SA to integrate into the world economy
through increased economic growth and competitiveness and
through the liberalisation of trade and stimulation of
investment.
- The FTA complies with the WTO rules.
- The design of the FTA is such that it supports the process of
regional economic integration in Southern Africa.
- Development aspects are reflected in the asymmetry and
differentiation of the trade provisions: the EU opens up its
markets faster and more extensively for SA products than SA does
for EU products.
- Both parties have excluded certain products from the FTA to
protect some economic vulnerable sectors.
Furthermore, there will be co-operation in
trade-related areas, like customs services, competition policy,
intellectual property rights, public procurement etc.
2. Increased co-operation in the economic and social fields. The
Agreement includes co-operation in the field of economics and
industry, development and other areas. In the economic and
industrial field the focus is on the promotion of sustainable
development, diversification and strengthening of economic links and
support for regional economic co-operation. Regarding development
co-operation, continued financial assistance for development
activities is provided for the duration of the Agreement.
Additionally, the Agreement includes co-operation on environment,
social co-operation, cultural contacts, human resource development,
and co-operation in the fight against drugs and money laundering.
3. A continuing political dialogue on subjects of common
interest. This dialogue should encourage the support for democracy
and rule of law, promotion of social justice, creation of conditions
to eliminate poverty and discrimination and respect for human
rights.
Because SA is part of a customs union together
with Botswana, Lesotho, Namibia and Swaziland (called the BLNS
countries) the EU-SA FTA will also affect the partner countries of
the Southern Africa Customs Union (SACU). EU products can now enter
the BLNS countries, which will on the hand lead to a greater variety
of products and a shift to lower cost producers, but on the other
hand to a decrease of customs revenue. The EU has offered support
for transitional problems in the BLNS countries.
Further details
For further details go to the European
Union in South Africa website and the EU-South
Africa Development website on Europa.
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