Botswana signed controversial deal with EU to protect its commercial interests

URL: http://www.polity.org.za

Policy, Law, Economics and Politics - Deepening Democracy through Access to Information

This privately-owned website is operated and maintained by Creamer Media

Polity

Article by: Christy van der Merwe

Published: 17 Jul 2009

Botswana signed controversial deal with EU to protect its commercial interests

Botswana's decision to sign an Interim Economic Partnership Agreement (I-EPA) with the European Union (EU) earlier this year did not pose a threat to the Southern African Customs Union (Sacu) and was based on the country's need to protect its immediate commercial interests, Botswana's Trade and Industry Minister Daniel Neo Moroka asserted on Thursday.

Speaking in Johannesburg at an event arranged by the South African Institute of International Affairs, Moroka said that he saw "absolutely no threat to Sacu, as long as we are committed and true to our objectives under Sacu".

His comments came amidst disagreement among Sacu members about the best approach to take in regard to negotiations with the EU.

The so-called ‘Southern African Development Community-EPA' group, comprising Botswana, Lesotho, Namibia, Swaziland, Mozambique, Angola and South Africa, split in June over whether or not to sign the I-EPAs offered by the EU. Botswana, Lesotho, Swaziland and Mozambique moved ahead with the signing, notwithstanding the objections of the other members, including South Africa.

South Africa subsequently warned that it might be forced to strengthen customs controls within Sacu to avoid the transshipment of EU exports, leading some to suggest that Africa's largest economy was attempting to "bully" its neighbours.

But, Moroka was sanguine, arguing that he was certain that all Sacu member countries were committed to the objectives of the customs union, despite the differences in opinion about the pace at which those objectives should be delivered.

Botswana had signed the agreement mainly because the EU was the largest market for its beef, and by failing to sign it risked losing its preferential access into that market. This would mean a loss of income of some P500-million, which would have an adverse social impact on about 600 000 people in Botswana.

Botswana's other major export, and the largest driver of the economy, was diamonds, where the EU was again the biggest market.

Thus, "the commercial interest [for signing the agreement] became paramount," said Moroka.

He stressed that, in safeguarding the economic interest of its relatively small and undiversified economy, Botswana was not attempting to undermine geopolitical relations.

One of the major sticking points of the agreement was that all Sacu members, except South Africa, would benefit from a duty-free, quota-free clause. Moroka said this was an understandable sticking point, but was not strong enough to put Botswana in a position where it did not sign the agreement.

Botswana signed to calibrate its relations with the EU to World Trade Organisation rules and ensure that the country could still benefit from the preferential market access.

Moroka dismissed South Africa's transhipment concerns, particularly were these related to its vulnerable textiles sector.

"In my view there is no chance, no danger at all, of that happening," said Moroka, noting that, as a landlocked country, the majority of the country's imports came through South African ports.

In answering a question as to whether or not Botswana felt bullied by South Africa, Moroka said that it depended on "what your idea of bulling is, and secondly, it depends on which side you are sitting".

"It would be remiss of me to say that anyone of us is bullying the other," he added.

The event's chairperson Moletsi Mbeki quipped that, given that 82% of the country's imports came from South Africa, its lack of diversity left it vulnerable to bullying. To which Moroka jokingly replied that, "it would be unwise to bully a good client like us."