New concessions bring EU-Pretoria deal closer

Date: 05/11/1998

By Simon Taylor

EUROPEAN Commission officials are confident that the EU can agree a new offer on agricultural trade concessions for South Africa by next week and keep the trade talks on track to meet the autumn deadline.

Officials are currently working on an improved offer on access to Union markets for agricultural products to be presented to the full Commission next Wednesday (11 November).

According to one official, the deal would be better balanced by including more concessions on 'northern' European farm goods such as dairy products, grains and meat.

South Africa's main interest is in increasing exports of fresh and processed fruit which compete directly with products from southern EU countries Spain, Portugal and Greece.

But trade experts at the South African embassy in Brussels said that concessions on beef and grain would not be especially interesting as the country was not a major exporter of these products, although they added that extra scope for dairy exports might be attractive.

South African diplomats said that an improved offer on agricultural products was essential before Pretoria could make extra concessions to the Union.

According to Commission officials, the EU is looking for a better deal across a number of sectors including industrial policy and competition rules.

The Union is unhappy about Pretoria's insistence that it should be allowed to continue paying aid to industrial sectors. South African officials argue, however, that an important domestic debate is under way about competition rules because of the state of South Africa's economy in the post-apartheid era.

They maintain that any free trade agreement should not prejudge this debate, arguing that the EU should accept a commitment to come back to this issue at a later stage.

The Union is also looking for improved access to South Africa's textiles and automobile markets, urging Pretoria to offer deeper import tariff cuts. But South African officials claim they have already offered significant concessions in these sensitive areas.

“The Commission should recognise the movement we have made,” said one, who pointed out that an improved offer on industrial tariffs had allowed the scope of the agreement to be extended to cover 85&percent; of all trade between the two parties, compared with the earlier figure of 81&percent;.

One area in which the South Africans are looking for better terms is the 'non-execution' clause which would allow the EU to suspend trade concessions if certain standards on good governance and democratic rights were not met.

Pretoria is concerned that the Union could use this clause to avoid having to make painful concessions on farm imports, for example, and is looking for safeguards to be built into the agreement to limit the risks of the EU using political criteria to avoid having to meet its trade commitments.

South Africa is also being asked to improve its offer on the use of the terms 'port' and 'sherry' on domestically produced drinks. Officials suggest that one solution might be to agree a phasing out period, but stress that this is only one of a range of options being considered.