Trade and Industry Minister Dr Rob Davies on Tuesday said the negotiations regarding the Economic Partnership Agreement (EPA) between the European Union (EU) and the African, Caribbean and Pacific Group of States (ACP) would be one of the focus points at this year’s South Africa–EU Summit, to be held in Pretoria later this week.

“EPA negotiations will surely feature on the summit agenda and we will discuss with [European] Commissioner [for Trade] Karel de Gucht tomorrow.

“The commissioner has been saying that the withdrawal of the provisional market access is October next year. Last year, the [European] Parliament said the deadline would be 2016. We support this rather than 2014, as there are still some matters that we need to solve.

“It [the EPA] would not affect us, but it would affect our neighbours [Botswana, Namibia and Swaziland] and we are concerned about the consequences of any unilateral withdrawal of market access of developing countries merely because we cannot meet an artificial deadline,” Davies stated.

Department of Trade and Industry (DTI) international trade and economic development deputy director-general Xavier Carim pointed out that if the EPA was not finalised by the October 2014 deadline, there would be significant declines in exports to the EU from Namibia, Botswana and Swaziland, which would hold serious socioeconomic consequences for these countries.

“October 1, next year, is probably sufficient time to conclude the EPA negotiations, but it is placing a lot of pressure on the negotiations.

“One could see a perverse outcome from this. If we are not able to conclude the negotiations in time for it to enter into force on October 1, next year, we could find a situation where these countries could lose preferential access to the EU, while they would still be providing preferential access to the EU imports through the Trade Development and Cooperation Agreement [TDCA], because Botswana, Swaziland and Namibia are part of the customs union,” Carim said.

DTI trade and investment deputy director-general Pumla Ncapayi said the department envisaged an open discussion at the summit to determine how the EU could assist South Africa in furthering the country’s industrialisation objectives.

“In addition, one of the key elements during the forum will be employment creation, included in this is youth employment…this is a topic we started engaging the EU with last year and we are looking to learn from them to address this challenge,” she stated.

Meanwhile, Davies said the aim would also be to convey to EU countries at the summit that Africa was one of the next growth frontiers and that it was committing itself to industrialisation that was anchored on strengthened regional integration, which was, in turn, underpinned by an infrastructure programme.

“We have seen a strengthening in the EU investment relationship with South Africa. Between January 2008 and May 2013, there were a total of 350 foreign direct investment projects in South Africa by European companies, with a total capital investment of a R162.4-billiion,” he indicated.

Davies highlighted that South Africa’s total trade with the EU had not reached the levels it achieved immediately before the onset of the global crisis in 2008. The total trade with the EU countries in 2012 was R383-billion, compared with R429-billion in 2008.

South Africa’s exports the EU also remained well below the 2008 levels when the country exported R186-billion, compared with R14-billion last year. However, imports from the EU have recovered to R239-billion last year, a marked increase from R233-billion in 2008.

This translated into South Africa’s negative trade balance growing from a deficit of R47-billion in 2008 to a deficit of R95-billion last year.

“There are a number of factors that underpin this. In a number of countries in the EU, there has been constrained growth and recession, among others. Thus, while the EU remains our largest trading partner as a bloc, our exports to them have been impacted by their economic crisis,” the Minister indicated.

He said South Africa’s aim at the summit would be to achieve an agreement, apart from the TDCA, that was commercially beneficial.

“We are keen to strengthen the investment partnership.”