News analysis: High hopes for trade agreement with EU in Namibia

Namibia has high hopes of harvesting huge profits in both trade and development from the recently signed Economic Partnership Agreement (EPA) with the European Union.

Namibia signed the deal under the Southern African Development Community (SADC) EPA group in Kasane, Botswana on June 10 together with Mozambique, Lesotho, Swaziland, Botswana, and South Africa after 10 years of stiff negotiations.

The other countries in the SADC region, the Democratic Republic of Congo, Madagascar, Mauritius, Malawi, Zimbabwe and Zambia, are negotiating EPAs with the EU under other regional groups, namely Central Africa, Eastern or Southern Africa.

The agreement provides Namibia's products duty-free and quota free access into the EU market. In return, Namibia will also grant free market access for EU goods at the agreed preferential duty.

The EU is Namibia's biggest importer of beef and fish products. Namibia exports fish, especially hake, whose value is estimated to be worth 6 billion Namibian dollars (about 400 million U.S dollars) annually. It also exports beef worth 613 million Namibian dollars.

In 2015, the EU imported 32 billion Euros worth of goods from the southern African region which were largely minerals and metals, while the region also imported goods, such as engineering, chemicals and automotive products of the same value.

The signing of the deal comes after about 10 years during which Namibia was refusing to sign saying that the interim agreement presented then would curtail the country's options as a sovereign nation to conduct economic and industrial policies.

Namibia also argued that the interim agreement meant that the EU demands would amount to an unjustifiable encroachment into its obligations to the World Trade Organization.

The prolonged negotiation process ended in July 2014 with the SADC EPA group expressing satisfaction with the changes made to the interim agreement.

Just after the conclusion of the negotiations, the former trade minister, Calle Schlettwein, who is now the finance minister said Namibia took strong and consistent policy stances during the negotiations despite threats of isolation and exclusion from market access, and the risk of creating divisions within the negotiating group.

Schlettwein also said Namibia was more concerned with the Most Favored Nation (MFN) treatment the EU insisted upon, the abolition of quantitative restrictions upon entry into force, the freezing of existing export taxes and the prohibition of new export taxes, a highly restricted use of infant industry protection, among others.

Addressing the 31st Session of the African Caribbean and Pacific-EU joint parliamentary assembly in Windhoek on June 12, Schlettwein said there was consensus on the issue of the Most Favored Nation and other issues in the final text of the agreement.

"It confers latitude of additional policy space that ACP countries can leverage to address domestic supply side constraints and productive capacities within the special circumstances of each country," he said.

Schlettwein said the EPA presents immense opportunities for improved demand and export-led growth because of increased market access into the EU.

Namibia, the minister said, will focus on growth-at-home strategy towards industrialization since securing market access into the EU will support an enabling framework for production, manufacturing and value addition.

He also said Namibia needs to optimize the market access provided under the EPA to expand its agricultural and industrial output.

For Namibia that has a small population, Schlettwein said, expanding key resource sectors is key to development since the agreement provides for the export of other products other than beef, grapes, dates and fish.

Namibia's vice president Nickey Iyambo also told the ACP-EU joint parliamentary assembly that he hoped the EPA will make a positive contribution to Africa.

"It is important that we get the EPAs right from the onset to help manage Africa's food security, fresh water security and energy security," Iyambo said, adding that the finalization of the agreement in terms of signing and ratification was just beginning of the actual key process.

Iyambo further said he would like to see the agreement making the lives of ordinary people better by bringing immense benefits. Endit