The Economic Partnership Agreement (EPA) between the European Union and the Southern African Development Community (SADC) EPA Group[1] is a WTO compatible Free Trade Agreement (FTA) for liberalizing trade in goods.[2] The EU guarantees Botswana, Lesotho, Mozambique, Namibia, and eSwatini 100% free access to its market and has also fully or partially removed customs duties on 98.7% of imports from South Africa. The Trade Development and Cooperation Agreement (TDCA) between the EU and South Africa (which was not a party to the EU’s trade arrangements with countries from Africa, the Caribbean and the Pacific (ACP),[3] has been integrated into this EPA.[4]

In the context of Southern Africa’s trade with the rest of the world, this is an important agreement. It is also the only fully operational African EPA. One of its advantages is that, because the United Kingdom is a party to this agreement, it provides a legal basis to agree on post-Brexit trade between the UK and the SADC EPA group of countries. Present indications are that the immediate post-Brexit trade in goods between the UK and the SADC EPA group will be conducted on the basis of “rolled-over” legislation to be adopted in the states concerned. These laws will repeat the EPA provisions and benefits.

The SADC-EU EPA is designed to be a rules-based Agreement. This means that the Parties are bound by the mutually agreed rules and procedures. Disputes between them about the application or interpretation of the provisions of the Agreement must be settled in terms of Part III of the Agreement, on Dispute Avoidance and Settlement.

What could such disputes be about? Most trade disputes involving trade in goods arise from measures taken by individual Parties curtailing imports or protecting domestic industries. Such measures may, under certain conditions, be permissible, provided they comply with the rules which grant exceptions. They are not discretionary in nature. This important aspect of the SADC-EU EPA is dealt with in Chapter III of the Agreement, the main provisions of which are mentioned below.

Anti-dumping and countervailing measures. The Parties may impose anti-dumping or countervailing measures as permitted by the relevant WTO Agreements. Unfair trade practices such as the dumping of goods or the importation of subsidized goods may be countered.

Multilateral safeguards. The Parties may impose safeguards permitted by the WTO. These are “emergency” actions against increased imports resulting from trade liberalization obligations, which cause or threaten to cause serious injury to the importing Member's domestic industry. They involve suspension of concessions or obligations and can consist of quantitative import restrictions or duty increases to higher than bound rates. Multilateral safeguards must be temporary, be applied on a non-selective (MFN) basis and be progressively liberalized while in effect. A state imposing them (generally) must pay compensation to the Members whose trade is affected. Safeguards, unlike anti-dumping and countervailing measures, do not require a finding of an “unfair” trade practice.

General bilateral safeguards. The SADC-EU EPA Parties may apply bilateral safeguard measures as stipulated in the Agreement. They must be of limited duration and are permitted when a product is being imported in such increased quantities as to cause or threaten to cause serious injury to the domestic industry producing like or directly competitive products, or disturbances in a sector of the economy producing like or directly competitive products. Bilateral safeguard measures shall not exceed what is necessary to remedy or prevent serious injury or disturbances.

The permitted measures consist of the suspension of the further reduction of the rate of import duty for the product concerned, an increase in the customs duty on the product concerned up to a level which does not exceed the MFN applied rate, or the introduction of tariff quotas on the product concerned. They shall only be maintained as long as necessary to prevent or remedy serious injury or disturbances and shall (normally) not be applied for a period exceeding 2 years. They are not subject to WTO Dispute Settlement provisions.

Agricultural safeguards. Under certain prescribed conditions safeguard measures (in the form of an import duty) may be imposed on a list of agricultural products. These duties may not exceed the prevailing MFN applied rate.

Food security safeguards. Where essential for the prevention or relief of critical general or local shortages of foodstuffs or other products in order to ensure food security of a SADC EPA State and where this situation gives rise or is likely to give rise to major difficulties for such a SADC EPA State, food security safeguards may be adopted. They involve the suspension of the further reduction of the rate of import duty for the product concerned, an increase in the customs duty on the product concerned (up to a level which does not exceed the MFN applied rate), or the introduction of tariff quotas on the product concerned. The measure will be reviewed at least annually and shall be removed as soon as the circumstances leading to their adoption cease to exist.

BLNS transitional safeguards. The BLNS countries may impose a transitional safeguard (for the first 12 years) if goods imported from the EU cause or threaten to cause serious injury in any BLNS State. This protection applies to domestic industries producing one of 64 ‘sensitive’ products, such as poultry (HS0207), natural honey (HS0409), vegetables (legumes, spinach and sweetcorn under HS0710) and olives, cucumbers and mushrooms (HS0711)), fats and oils (HS1517), meat preparations (HS1602), chocolate (HS1806), foodstuffs (pasta, gingerbread and rusks under HS19), fruit juices (HS2009), beer (HS2203), soap and candles, toilet paper, handkerchiefs, tablecloths, umbrellas and two types of slide fasteners (HS 9607).

The BLNS measure shall take the form of a duty on the product concerned up to a level not exceeding the MFN applied rate, or a zero duty tariff rate quota (TRQ). These measures shall normally be applied for a period not exceeding 4 years.

Infant industry protection safeguards. Botswana, Lesotho, Namibia, Mozambique and eSwatini may temporarily suspend reductions of customs duties or increase them (up to a level not exceeding the applied MFN duty) where a product originating in the EU is being imported in such increased quantities as to threaten the establishment of an infant industry, or cause or threaten to cause disturbances to an infant industry producing like or directly competitive products. These measures may be applied for a period of up to 8 years and may be further extended by a decision of the Joint Council.

Balance of Payments Safeguards. The provisions on current payments and capital movements provide that where, in exceptional circumstances, payments and capital movements between the Parties cause or threaten to cause serious difficulties for the operation of monetary policy or exchange rate policy for a Party, certain safeguard measures with regard to payments and capital movements that are strictly necessary may be taken.[5] They may last for a period not exceeding 6 months.

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[1] Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland (now called eSwatini).

[2] Art 20 SADC-EU EPA Agreement:  pdf SADC-EU EPA consolidated text and annexes (12.53 MB) - September 2016

[3] This relationship is now governed by the Cotonou Agreement. Before the Cotonou Agreement, the Lomé Conventions applied.

[4] Protocol 4 of the Agreement explains how this has been done.

[5] Art 70.