New push on flagging EU-South Africa trade talks

Date: 12/06/1997

SOUTH African and EU negotiators are gearing up for another round of tough talking when they meet to discuss free trade next week.

Although they hope to report some progress when they brief ministers at a meeting in July, officials privately acknowledge that the discussions are likely to be difficult and could have several months yet to run.

On the table are proposals from the Union for tariff-free commerce in industrial goods and a number of agricultural products, covering around 96&percent; of all EU-South Africa trade.

But disagreements over the republic's agriculture still dog the talks a year after the deal was first tabled.

Pretoria is particularly concerned at a list of 'sensitive products' - including South African specialities like fruit and beef - which countries such as Spain, France and Germany insist should be excluded from any free trade agreement.

But the country has not yet made any detailed counter-offer, say European Commission officials, thus slowing progress.

Elias Links, South Africa's ambassador to the EU, says his country is “now ready to put something much more detailed on the table”, but is waiting to finalise parallel trade talks with its neighbours.

Commission negotiators assert that the Union's offer is fair - constituting “a world record” if it went ahead, in the words of one official - and stress that “nothing is set in stone”.

But they are nevertheless in a difficult position given the intransigence of EU governments on the one hand, and the Union's promises to support South African development on the other.

Although the EU has pledged, and begun delivering on, a 500-million-ecu package of aid over four years and has welcomed South Africa as a partial member of the Lome Convention, its unwillingness to support trade in those areas where South Africa is most competitive has come under fire from Pretoria and development organisations.

Critics point to a large gap between EU promises for a fast-track deal supporting the republic's recent transition to democracy and concrete action.

Commission officials reply that Pretoria's reaction to the offer is far from all bad. “It depends who you are talking to - the new or the ancien regime,” said one. “The department of trade and industry is causing difficulties, but the foreign affairs ministry wants to strengthen our relationship. The agriculture ministry also seems to be in favour.”

They add that the current deal offers great opportunities for South African producers in new niche markets such as kiwi fruits.

Meanwhile, Pretoria is still battling to persuade the Union to halt its practice of dumping cheap beef on the country.

Although the Union has cut the subsidies on beef by 35&percent; already this year, South Africa remains concerned about the damage it feels EU produce is wreaking upon its domestic and neighbouring markets, and has won the support of MEPs for a change in policy.

But the Commission argues that Union support mechanisms make it difficult to give special treatment to any one country.

“We are certainly not in the business of hurting people,” said one official.

According to figures presented to the European Parliament, EU beef exports to South Africa have risen from about 5,000 tonnes in 1991 to more than 45,000 tonnes in 1995, and now account for 11&percent; of the local beef market.

While in 1991 European produce cost 4&percent; more than local produce, it now costs just 49&percent; of the domestic market price, with EU farmers receiving around 1.3 ecu per kilo for beef sold at 0.5 ecu per kilo.

“Paying 50 million ecu a year of taxpayers' money to destroy Southern Africa's cattle industry is patently absurd,” said Socialist MEP Alex Smith.

To answer Commission claims that it has received no firm evidence that EU beef is damaging local markets, South Africa is now preparing a study on the issue.