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EU in search of new African markets

Staff writer |
EU Trade Commissioner Karel De Gucht is trying to strengthen trade relationships with Kenya, Namibia, Botswana, and South Africa.

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EU Trade Commissioner Karel De Gucht will be travel to those four African countries to discuss ways to strengthen trade and investment relations with the African regions, in particular through comprehensive trade and development partnerships. The Economic Partnership Agreements (EPAs) that the EU has been negotiating with EAC and the SADC group aim to consolidate countries' free access to the EU market, foster trade-related cooperation and promote investment.

"Sub-Saharan Africa is now one of the fastest growing regions in the world, while the EU, with 500 million consumers, is the biggest market in the world. There are great opportunities to be seized on both sides."

"EPAs can provide a framework for deeper trade ties between the EU and Africa, whose geographical proximity can be turned into a distinct commercial advantage by way of trade and job creation. I hope this visit will deepen the dialogue on the EPAs and address other issues of mutual interest such as the multilateral trade talks", said Commissioner Karel De Gucht.

On the basis of the Cotonou Agreement signed in 2000, African, Caribbean and Pacific (ACP) countries, organised into self-defined regional groupings, and the European Union have been negotiating Economic Partnership Agreements. Those agreements aim to ensure duty free, quota free access to EU market, along with other provisions tailored to the needs of the ACP countries.

To date, there are three EPAs under implementation: one with the Caribbean region (CARIFORUM), one with the Pacific region (Papua New Guinea and Fiji, only Papua applying it), and one with Eastern and Southern Africa (ESA, including Zimbabwe and the three Indian Ocean nations of Madagascar, Mauritius and Seychelles).

Kenya negotiates an EPA with the EU as a member of the East African Community, along with Burundi, Rwanda, Tanzania and Uganda. The EU is Kenya's biggest trading partner, accounting for around 25% of the country's total exports - over €1 billion a year.

EU-Kenya reciprocal trade in goods has continued to grow in recent years, reaching more than €2.5 billion in 2012. Kenya's main exports to the EU are fresh cut flowers, tea, coffee and vegetables, mainly peas and beans.

Botswana, Namibia and South Africa are negotiating a regional Economic Partnership Agreement with the EU as part of the Southern African Development Community (SADC) EPA Group, which also includes Angola, Lesotho, Mozambique and Swaziland.

Trade between the EU and South Africa is currently governed by the Trade, Development and Cooperation Agreement (TDCA) signed in 1999. By implementing an Economic Partnership Agreement with the EU, Botswana and Namibia can maintain duty-free, quota-free access to the EU market.

The three Southern African countries are rich in natural resources and export diamonds (Botswana, South Africa), uranium (Namibia), platinum (South Africa) and other commodities to the EU. They are strong exporters in sectors such as beef (Namibia, Botswana), fisheries (Namibia) and table grapes (Namibia).

South Africa has also a strong agri-food sector exporting wine, sugar, citrus and other fruit, but, as an emerging rather than developing country has a much more diversified economy and exports also manufactured or semi-manufactured goods.

The EU exports a wide range of goods to the SADC EPA Group countries, including vehicles, machinery, electrical equipment, pharmaceuticals and processed food. All in all, trade between the EU and the SADC EPA Group is dominated by exchanges with South Africa, the biggest economy in the region and beyond.

Total EU-South Africa bilateral trade increased by more than three quarters since 2000 and amounted to €46 billion last year. South Africa runs a €200 million surplus with the EU.

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