EU warns Swaziland about complacency over EU EPA

MBABANE – With
Swaziland’s ratification of
an Economic Partnership
Agreement (EPA) with
the EU, exposure to what
economists call serious
exogenous export shocks
will be minimised as long as
the country shows progress
towards political and human
rights reforms, Nicola
Bellomo, EU Ambassador to
Swaziland, told FTW.
“Around 50-55% of
Swaziland’s sugar production
goes to the European market.
There was a temporary trade
agreement, which expired
on October 1, and trade is
now under the EPA. The
EU is also a major market
for Swaziland’s canned
fruit from Malkerns. The
Swaziland Meat Industries
(SMI) is exporting to
French islands. Norway,
while not an EU country,
is importing Swazi meat
using EU standards, so
Swaziland is already using
EU standards for exporting
to the Norwegian market,”
said Bellomo.
“The EPA deal is a form of
‘asymmetric liberalisation,’
meaning the EU guarantees
100% free access to its
market. The SADC EPA
countries, of which Swaziland
is one, do not have to respond
with the same level of market
openness for EU goods. In
addition, there
are a number
of ‘safeguards’
that can be
activated to
enable an
increase in
SADC import
duties if it
happens
that imports
from the EU
increase so
much or so
quickly that
they disrupt
domestic
production,” Bellomo said.
“In this regard, with an
option of protecting local
infant industries, Swaziland
will access intermediate
goods such as fertilisers
and seeds and machinery
or industrial parts which
will make it easier for the
economy to diversify and
add more value to local
products. This will enhance
industrialisation, and this in
turn will play a significant
role in lifting people out
of poverty. The Southern
African Customs Union
(Sacu) agreed
to drop import
duties on
industrial
inputs that
will be used
to make
products for
export under
the EPA,” the
ambassador
said.
In 2015,
Swaziland was
suspended
from the
US trade
agreement, the African
Growth and Opportunity
Act (Agoa), because of unmet
benchmarks on democratic
reforms. Government
responded by announcing
that exports would be
boosted to Europe. Had
Swaziland failed to also
secure an EPA with the EU,
the consequence would have
been economic collapse,
Bellomo said. The EPA has
no specific benchmarks, but
is linked to demonstrable
progress in such matters
as the amendment of
undemocratic laws and
alignment to international
standards.
“The European parliament
debated the issue of
Swaziland’s human rights in
2015, and since then there
has been a close monitoring
of the situation. More than
200 MPs voted against an
EPA with the SADC region
(which includes Swaziland)
mainly because of the human
rights issue,” Bellomo said.
A majority of MPs were
swayed that incremental
progress was being made
by the Swazi government
toward reforms, which
allowed the trade pact to
go through. “Despite the
positive vote by the European
Parliament, the Swaziland
government must not be
complacent,” Bellomo noted.
“The EPA offers an
excellent opportunity to
access the world’s largest
single market,” he said. The
ambassador pointed to the
growth of Swaziland’s textile
industry, founded on foreign
investors accessing the US
market under Agoa, as a
precedent for new factories
to open in the country to
export without duty or
quota restrictions to the EU
market.
Swaziland needed to
develop a value chain
industry to elevate its exports
from raw food commodities
to more lucrative value-added
products, Bellomo said. For
now, agricultural products
are the primary exports
that likely will continue
to dominate Swazi trade
with the EU. In addition to
promoting the development
of the value chain industry
with technical support, the
EU mission in Swaziland was
identifying new products that
would find a ready market in
the EU, such as Swazi honey,
he said.
INSERT & CAPTION
More than 200 MPs
voted against an EPA
with the SADC region
(which includes
Swaziland), mainly
because of the
human rights issue.
– Nicola Bellomo