News Archive August 2018
Tensions grow over the future of the ACP group
The African Union wants to have a continent-to-continent dialogue with Europe, a change that could make the framework of the Cotonou Agreement implode and leave the Pacific and Caribbean states out in the cold.
The 79 countries of the Africa, Caribbean and Pacific Group are due to begin formal negotiations with the European Union on 1 September to redraw the outlines of the Cotonou Agreement.
This broad agreement governing relations between the two blocs expires in 2020. But on the eve of the official renegotiation of the partnership begun in 1975, the ACP bloc is questioning its future.
“When this cooperation started in 1975, the agreement between the EU and the ACP countries was truly innovative. It was an attempt by European countries to build a partnership with their former colonies, helping them to integrate into the world economy while keeping them close. It was a postcolonial pact,” explains Jean Bossuyt, a specialist on ACP-EU relations at the European Centre for Development Policy Management (ECDPM).
“But that was 50 years ago. Is this framework still relevant today?” the expert continues. “The ACP group brings together 79 countries that are extremely different, that include both Nigeria and Vanuatu, for example. This group has become too heterogeneous.”
On the European side, the wish for maintaining the current framework, which brings together countries from the four corners of the globe, is not obvious.
Some countries such as France, Belgium, Italy or Portugal wished to maintain cooperation with the ACP group. But others, such as Germany, Sweden or the Netherlands, called for the ACP framework to end.
“This cooperation makes it possible to maintain a pole of stability in 79 countries, particularly at a time when the United States is disengaging from multilateralism,” says a French source.
Conversely, other European powers consider that the ACP framework is no longer relevant, given the diversity of the countries it brings together.
“There are frictions between the African Union (AU) and the Pacific and Caribbean over the negotiating framework,” admitted a French diplomat. And for good reason.
Without the African partner, the group of 79 countries would no longer be worth the trouble for the European Union. “The main challenge of the ACP partnership is, after all, the relationship between Africa and Europe,” acknowledges the French diplomat.
An ACP position?
While negotiations for the redefinition of the Cotonou Agreement are due to start on 1 September at the latest, the various blocs have agreed on their negotiating mandate. The European countries agreed to maintain the current framework, giving the European Commission a mandate to open the talks.
On the ACP side, a negotiating mandate was also adopted in May. But the African Union has called for more time, wishing to adopt a separate position on the ACP mandate.
At a session in Kigali in March, representatives of the African Union resolutely took a stand against the alliance between the ACP countries.
“We commit to establishing a new framework for cooperation with the EU, separate from the ACP context,” the AU stated in its conclusions. “The new Agreement must be separated from the ACP context and based on a strong and lasting partnership between the two continents.”
For AU representatives, “the ACP Group can in no way represent a relevant policy framework to address global and regional governance, peace and security, and migration issues”.
Another point of tension is the fragmentation of African unity, induced by the current form of cooperation. Indeed, the ACP group includes the majority of African countries but excludes the most advanced economies, such as Morocco or Algeria.
“This geographical fragmentation of Africa in its cooperation with the EU weakens and slows down the ongoing integration process on the continent and undermines Africa’s political and socio-economic interests,” underlines the African common position on the post-Cotonou period.
Nevertheless, African countries are far from a unique position. “It is a total mess because the African countries do not agree among themselves on the need of the ACP group,” underscores Jean Bossuyt.
Beyond the political and trade cooperation provided for in the Cotonou Agreement, development cooperation constitutes the third channel of ACP-EU relations. And it’s the one that developing countries are most reluctant to give up.
“Some African states such as Mali, Togo or Burkina Faso are still in favour of the ACP framework because they fear they will have less European funds in the framework of a partnership agreement with Africa alone,” explains Bossuyt.
This article is part of EURACTIV’s special report EU-ACP relations after Cotonou Agreement: Re-set, re-launch or retreat?.
tralac’s Daily News Selection
South African trade updates:
(i) South African farmers play chicken with Trump tariffs (Reuters). AGOA grants qualifying countries duty-free access to US markets for thousands of goods and South Africa is among the main beneficiaries. South Africa’s poultry industry agreed to the deal despite the fact its exports remain blocked from entering the US market. It calculates the quota has cost about 6,500 jobs. “It was for the good of the other industries. So we kind of put on a Team South Africa hat in terms of making the rest of the AGOA benefits possible,” said Stander, who is CEO of Country Bird Holdings Ltd - one of South Africa’s top poultry producers. Now that SAPA has filed a lawsuit to force a suspension of the poultry quota, the SA government finds itself in an awkward position. If the anti-dumping tariff is reapplied, South Africa risks retaliation from Washington which could have a more far-reaching impact on the economy as a whole. [The analyst: Joe Bavier]
(ii) Qatar, South Africa trade rises by 70% post-siege (The Peninsula). The SA ambassador said that post-blockade time had seen a huge increase in bilateral trade volume largely on part of imports into Qatar from South Africa. “We have seen 70 increase from pre-blockade to post blockade.” South Africa exports fresh fruit and vegetables, agro-processed food products and other items to Qatar. At present, South Africa is seeking to introduce meat and livestock products in Qatari market as well as opening a meat processing facility here. To formalise the efforts both countries are likely to sign a bilateral animal health agreement, which will ease trade of live animals and chilled meat. Also, South Africa is seeking for Qatari investment in the oil and gas sector and expecting a prominent representation by Qatar at the upcoming International Investor Conference of the SA President Cyril Ramaphosa in Johannesburg in October, according to Moosa. “There is an intention for the President Cyril Ramaphosa to come to Qatar before the end of this year. We are confident that our president will be coming soon accompanied by government ministers, officials and South African captains of industry.”
(iii) Competition Amendment Bill: Concern over act’s security clause (IOL). The business community has raised concerns about the uncertainty created by the Competition Amendment Bill’s “national security interest” clause. The bill was debated in Parliament yesterday. One of the contentious points of the bill has been a new regime for the president to identify a list of national security interests and to establish a committee to assess whether an acquisition by a foreign firm will be adverse to national security. Busa’s economic and trade policy director, Olivier Serrao, said the bill’s national security provisions should not be seen as being exercised arbitrarily or resulting in undue delays in merger proceedings. “In Busa’s view, it is essential that these powers are used responsibly and that the government provides maximum guidance to the market on its approach to national security, how choices are made and communicating interventions,” Serrao said. [Simon Roberts: Faith in market-friendly policies and trust in big businesses hold SA back] [ pdf Competition Amendment Bill, 2018 (992 KB) ]
(iv) Top court to hear appeal on SADC ruling (Business Day). The Constitutional Court will, today, hear an appeal by the state in which it seeks to overturn a high court ruling that declared former president Jacob Zuma’s participation in the suspension of the operations of the SADC Tribunal “unlawful, irrational and unconstitutional”.
(v) @UNCTADKituyi: I agreed with Dr Siyabonga Cwele, South African telecom minister at the G20 Digital Economy Ministerial meeting in Salta Argentina: Africa needs its own “going digital” initiative. @UNCTAD will help do a diagnostic eTrade preparedness study for South Africa
Zimbabwe: July trade deficit reaches $1,5bn (Daily News)
Latest figures released by the Zimbabwe Statistics Agency show that between February and July 2018, the country incurred a $1,475bn trade deficit after importing goods and services worth $3,431bn against exports of $1,957bn. The statistical agency has not provided trade data for January 2018, which would undoubtedly push the trade deficit for the year beyond the $1,5bn. The figures suggest that the deficit for the full year is set to surpass last year’s levels of around $2,5bn. In July, Zimbabwe incurred a trade deficit of $219m after importing goods and services worth $560m, against exports of $340m. Between February and July, Zimbabwe imported goods worth $1,44bn from South Africa, the country’s largest trading partner, against $917m exports. [Germany to open lines of credit for Zimbabwe]
Zambia: Tobacco exports can grow five times – RITCO (Zambia Business Times)
Zambia’s tobacco production – and in effect exports – can grow five times the current production levels, says Roland Imperial Tobacco sales and marketing director Zabu Mwenda. In an exclusive interview with the Zambian Business Times, Mwenda said that currently about two million people are directly and indirectly employed in the tobacco industry. “Considering that our neighbouring countries such as Zimbabwe do about 200 million tons per year, Malawi does about 150 million tons per year and Zambia only does about 30 million tons a year, there is room and an urgent need to put in place measures that will enable farmers grow more tobacco. It’s a cash crop that benefits the Zambian economy by bringing in the much needed forex through exports and boosts the economy in terms of revenue generation by local farmers.”
Nigeria: Rice production saves Nigeria $800m in two years – BoA (Premium Times)
The Bank of Agriculture has disclosed that the federal government has saved about $800m by encouraging local production of rice in the country. Niyi Akenzua, the Executive Director, Finance and Risk Management, said at a media briefing in Lagos ahead of the “Meet the Farmers Conference” scheduled for 10 October 10 in Lagos. The News Agency of Nigeria reports that the conference, which is organised by Crenov8 Consulting, is aimed at exposing African farmers to the opportunities in agro-export, especially to Dubai and other Middle-East countries. Mrs Bola Oyedele, a representative of Crenov8 Consulting, said Dubai imported over $100bn worth of food in 2017 from Africa and it is expected to rise to about $400bn in the next eight years.
Dr Akinwumi Adesina: Unlocking Africa’s agricultural potential to create wealth
Two African companies prepare to list on the London Stock Exchange and a new UK-Africa FinTech Partnership is launched; Ambitious new Innovation Partnerships with African countries; PM Theresa May meets Buhari in Abuja, signs key bilateral agreements; UK announces £70m programme to create 100,000 jobs in Nigeria; Theresa May’s visit set to unlock stagnated Kenya-UK trade
- CSIS’s Judd Devermont: The world is coming to Sub-Saharan Africa. Where is the United States?
IORA Ministerial Conference: outcomes
Ministers and heads of delegations adopted the pdf Balaclava Declaration on Women’s Economic Empowerment and Gender Equality (142 KB) . In his address, the Prime Minister, Mr Pravind Kumar Jugnauth, highlighted that gender equality is a cross cutting issue and permeates the six priority areas which are: maritime safety and security and the blue economy; trade and investment facilitation; fisheries management; disaster risk management; academic science and technology corporation; and tourism and cultural exchange. As the Chair of the IORA and Minister of Small Business Development of South Africa, Mrs Lindiwe Zulu, pointed out IORA enables Member States to share best practices and experiences to enhance the emancipation of women who still face various challenges in the society.
G20 Digital Economy Ministerial: outcomes
The meeting built on the work of the G20 Digital Economy Task Force, which met in in Buenos Aires in February and again in August. The Digital Economy Task Force was established under the 2017 German presidency, based on the decision adopted in Hangzhou in 2016 under the Chinese Presidency. Argentina selected the theme, “Building consensus for fair and sustainable development” for the 2018 G20 Leaders’ Summit and identified the future of work, infrastructure for development, and a sustainable food future as three key issues for the agenda. Extract from the pdf Salta Declaration (593 KB) : Emerging digital technologies.
“We encourage countries to enable individuals and businesses to benefit from digitalization and emerging technologies, such as 5G, Internet of Things, artificial intelligence, distributed ledger technologies, by: (i) considering appropriate policy approaches and flexible legal frameworks that create an environment that empowers entrepreneurs and fosters research, innovation and competition; (ii) promoting the application of emerging digital technologies in manufacturing, agriculture and other vital areas; and (iii) taking into account the challenges that these new technologies may pose in terms of privacy and security, among others, and the opportunities to improve quality of life and foster economic growth.
We face the challenge of capturing the benefits of digitalization to improve productivity that may lead to new business models including sharing economy, economic development, and the realization of broader opportunities for individuals and business. We highlight the importance of supporting entrepreneurs and MSMEs, noting that they employ a significant part of the labor force in G20 countries and that some have low levels of digitalization and research and innovation for new products and services. G20 countries commit to share lessons from their extensive experience and enhance partnership and cooperation in the effective use of emerging digital technologies, in particular regarding adoption and its opportunities and challenges.”
Annexures to the Salta Declaration: Paper 1 - G20 Digital Government Principles; Paper 2 - Bridging the digital gender divide; Paper 3 - Measurement of the digital economy; Paper 4: Accelerating digital infrastructure for development
Related: UNCTAD statement. ”While we are seeing hyper-digitalization in some parts of the world, we still have other parts of the world where millions have not even climbed the first rung of the digital ladder,” UNCTAD Secretary-General Mukhisa Kituyi told the meeting. “Just look at the level of international cooperation: as we talk today, only 1% of all Aid for Trade funding globally goes to ICT-related areas. Similarly, the multilateral development banks; not more than 2% of their total funding goes to ICT-related activities, and of this, only about 4% goes to policy development areas.”
Layered on this policy architecture challenge are the myriad regulatory concerns raised by the digital transformation. These include preservation of personal privacy, integrity of democratic processes, maintaining the tax base to fund public goods, and economic regulation to address market failure. Even the very definition of national production is at issue, given the ability to locate intangible capital anywhere internationally at the discretion of companies (e.g. to take advantage of low corporate tax regimes). Importantly for the international community, the data-driven economy promises to serve up market failure in abundance. This reflects, inter alia:
Thursday’s Quick Links:
Japan detects weakness in exports for first time in 3 years
Michael Bloomberg’s New Economy Forum (6-8 November) moves to Singapore from Beijing
Ngaire Woods: Britain’s losing trade strategy
Yongding Yu: Why is the Renminbi depreciating?
CFR’s Brad Setser: Can anyone other than the US fund a current account deficit these days?
The Grand Ethiopian Renaissance Dam: Back to the negotiating table
Africa50: Mauritius becomes 30th shareholder
Nigeria to expand visa-on-arrival counters at Lagos airport
Ethiopia and Singapore agree to tighten their relations
tralac’s Daily News Selection
Africa’s trade and investment relations: selected updates from recent events
Prime Minister Theresa May in Cape Town
(i) Joint statement by UK, SACU and Mozambique on a future EPA: Ministers responsible for Trade in the UK (G Hollingbery) and in SACU and Mozambique (represented by B.J. Kenewendo of Botswana) met in Cape Town yesterday. “We take note of the progress achieved regarding the UK and EU’s agreement on a time-limited implementation period between the EU and UK following the UK’s departure from the EU, and in particular the intention for the UK to be treated, for the purposes of EU international agreements, as an EU Member State for the duration of the implementation period between the EU and UK. The SACU and Mozambique Trade Ministers indicated that they look forward to receiving formal confirmation of the same via the proposed notification, and to continuing to receive regular updates on progress from the UK on the EU-UK negotiations under Article 50 of the Treaty of the European Union on the UK’s withdrawal from the EU. SACU and Mozambique emphasise the importance of continued cumulation between all the parties in promoting continuity and to avoid disruption in trade, and urge both the UK and the EU to recognise the importance of cumulation in the discussions on a post-Brexit EU-UK arrangement. Nevertheless, we recognise that it is responsible to prepare for all potential outcomes. We confirm that we are therefore taking steps to ensure that our replicated agreement can be in place, if required, immediately upon the UK’s withdrawal from the EU in March 2019, in the event that no agreement is reached between the UK and EU.”
(ii) South Africa-UK Business Forum: speech by Prime Minister Theresa May. So a driving focus of our development programme will be to ensure that governments in Africa have the environment, knowledge, institutions and support to attract sustainable, long-term investments in the future of Africa and Africans. And to help bring those investments about, I can today announce an additional £4bn programme of UK investment in African economies that will pave the way for at least another £4bn of private sector financing. This includes, for the first time, an ambition from the UK government’s Development Finance Institution, CDC, to invest £3.5bn in African nations over the next four years. And next year London will host an Africa Investment Summit, helping investors and African governments forge closer ties with one another. And because markets and economies need people as well as capital, we will also be sharing our expertise – supporting partner countries in developing their business environments and institutions, integrating into global value chains, building ties with investors and tackling barriers to growth. To do so, we will radically expand the UK government’s presence in Africa, opening new missions and bringing in trade experts, investment specialists, and other policy experts.
President Uhuru Kenyatta in Washington
(i) Joint statement by Presidents Trump, Kenyatta: The Presidents are pleased to announce that their governments established direct flights between Nairobi and New York City, a move that will expand the economic and cultural ties between the two great countries. Recognizing the importance of high-quality infrastructure, President Trump and President Kenyatta welcomed the proposal by United States engineering and construction firm Bechtel Corporation to build a modern superhighway from Nairobi to Mombasa. Both sides agreed to undertake further consultations to conclude the terms of the financing agreement. This and nearly $900m in other commercial deals and engagements announced during the visit are expected to create thousands of American and Kenyan jobs, further enhancing the prosperity and economic competitiveness of both nations.
(ii) On the establishment of a US-Kenya Trade and Investment Working Group: USTR Robert Lighthizer, Kenyan Cabinet Secretary for Industry, Trade and Cooperatives, Peter Munya - “our two countries will work together to explore a mutually beneficial trade and investment framework to guide our relationship moving forward, including by maximizing the remaining years of AGOA and looking ahead to the next steps”
(iii) President Kenyatta at the Business Council for International Understanding: The US Overseas Private Investment Corporation and Kipeto Wind Energy Company signed documents to close a $232m deal in financing for the construction and operation of a 100-megawatt grid-connected wind power plant south of Nairobi. The second agreement signed was a $5m letter of commitment in financing to expand the distribution network of Twiga Foods and improve food security and agricultural wages in Kenya.
(iv) US Trade and Development Agency and Kenya: The upcoming visit will connect leading US manufacturing and technology providers to Kenyan officials that are responsible for enhancing Kenya’s communication capabilities in fire, health, or weather-related emergencies and improving access to emergency responders for all Kenyan citizens.
Africa-Singapore Business Forum
(i) Minister for Trade and Industry Chan Chun Sing calls on African businesses to make Singapore a base and a partner “in South-east Asia and beyond”. Even as some developed economies pull back from the world stage, Africa and South-east Asia can work together more closely and promote economic integration, Mr Chan told an audience of some 600 delegates, in a keynote address at the biennial Africa Singapore Business Forum. At Tuesday’s forum, an avoidance of double taxation agreement was inked between Singapore and Gabon - the 13th such deal with an African country. Five other pacts were also signed at the event, which was held at the Grand Copthorne Waterfront Hotel and organised by government agency Enterprise Singapore. The agency’s Singapore Cooperation Enterprise arm and the Mozambique Investment and Export Promotion Agency have agreed to work on exchanging consultancy, advisory and training services for urban master plans and special economic and industrial zones, while the Singapore Manufacturing Federation and Egyptian Businessmen Association will work to match companies in each country with their counterparts. Enterprise Singapore said it has successfully facilitated close to 50 projects for Singapore companies in Africa in the last two years, 80% of which were undertaken by small and medium enterprises (SMEs). Over 60 Singapore companies are present in Africa, operating across more than 40 African countries and multiple industries. [Decoding development: Insights from Singapore’s Economic Development Board]
(ii) Enterprise Singapore supports companies in Africa’s Digital Economy: In the last year, Enterprise Singapore has helped more than 10 Singapore companies to break into Africa’s digital technology space including e-Government services, e-commerce platforms and cross border payments. According to Singstat, foreign direct investment from Africa into Singapore amounted to S$27.4bn in 2016. In 2017, trade between Singapore and Africa amounted to S$9.78bn according to data from Enterprise Singapore, while Singapore investment into Africa reached S$18.5bn in 2016, making the republic its 7th largest trading partner.
(iii) Singapore and Africa – partners for Smart Cities: theme of the Third Singapore-Sub-Saharan Africa High-Level Ministerial Exchange. Remarks by MFA, Dr Vivian Balakrishnan on Singapore Cooperation Programme and Africa: We believe that no single country, let alone a tiny city-state, has a monopoly on the answers to the challenges we face. We also do not believe that there is a single universal model of development that is applicable to all. All of us have our own unique history, geography, societies, and our own unique set of challenges. We believe that by coming together, on occasions like this, we can exchange ideas and perspectives, synthesise them and come up with something that works in our own unique national circumstances. For this reason, we have sought to share our own development journey through the Singapore Cooperation Programme (SCP) over many decades. In fact, since 1992, over 120,000 officials from 170 countries, including 9,000 from Africa, have attended our SCP courses.
(iv) Related: Inaugural Session of the 3rd Indian Ocean Conference. Let me share a couple of principles which shape Singapore’s views of the Indian Ocean, which are drawn from our experience at the tip of the Straits of Malacca. The first thing which we in Singapore believe – and I think I can speak on behalf of ASEAN – is that we need an open and inclusive regional architecture. The key words here are “open” and “inclusive”. This brings me to my second point today. ASEAN has always sought a regional architecture that articulates a complete, coherent, and consistent economic strategy. In other words, trade is strategy. We must look for every opportunity to facilitate trade and mutual investment, enhance connectivity, and invest in infrastructure. The global consensus for free trade and economic integration is fraying.
In other news
Rwanda Development Board Annual Report 2017: selected highlights (pdf)
Total exports increased by 36% compared with 2016, almost reaching$2bn as merchandise exports grew by 58%; In 2017, the main export destination regions for Rwandan goods were the Middle East, Africa (without close neighbours) and Europe while major country destinations were UAE, Kenya & Switzerland; RDB supported promising exporters as well as SMEs - yielding a 43% export increase for 8 leading manufacturing and agro-processing companies; Service exports grew by 20% as tourism exports continued on a growth trajectory increasing by another 12% from 2016-2017; As the chief negotiator for the Government of Rwanda, RDB closed 8 strategic deals in 2017, resulting in the registration of $588m new investments. [Rwanda’s Greens pledge to push for import-export bank]
The latest edition of its Tourism Highlights, published on Monday, shows international arrivals reached 1.323 million last year. The figure represents an 84 million increase over 2016, and a new record, with the sector also recording “uninterrupted growth” in arrivals for eight consecutive years. Europe and Africa led the regions with increases in arrivals, with growth of eight per cent and nine per cent, respectively. WTO added that tourism is the world’s third largest export category, earning $1.3 trillion in receipts in 2017: an increase of five per cent. Meanwhile, total exports from international tourism stood at $1.6 trillion, or an average of $4 billion a day: that is, seven per cent of the world’s exports. Extract: Africa regional results (pdf):
International tourist arrivals in Africa are estimated to have increase by 9% and receipts at the same level (+8%). Results were driven by the continued recovery in North Africa and the solid growth in most destinations that reported data. Tunisia continued to rebound strongly in 2017 with a 23% growth in arrivals, while Morocco also enjoyed better results after weaker demand in the previous year. Growing demand from European source markets and a more stable environment contributed to the subregion’s positive results. In Sub-Saharan Africa, strong performance continued in large destinations Kenya, Côte d’Ivoire, Mauritius and Zimbabwe. The subregion’s top destination South Africa reported slower growth in arrivals though a strong increase in receipts. Island destinations Seychelles, Cabo Verde and Reunion; all reported double-digit growth in arrivals, benefiting from increased air connectivity. [AfDB: Africa Tourism Monitor 2018]
The report The web of transport corridors in South Asia (pdf) – jointly produced with the ADB, DFID and JICA – argues that the many transport corridors proposed across Asia would cost trillions of dollars to implement, far exceeding the financing resources available. Hence, countries need to prioritize the most promising corridors that will deliver transformative impacts on economies and people – or, in the terms of the title of the report, will offer wider economic benefits. And while engineering designs and geopolitical considerations are important factors in the decision, sound economic analysis is key to designing truly successful corridors, the report notes.
Joint statement on UK, SACU and Mozambique EPA
Joint meeting of the United Kingdom (UK), Southern African Customs Union member states (SACU) and Mozambique trade ministers on a future UK, SACU and Mozambique Economic Partnership Agreement (EPA)
The Honourable Ministers responsible for Trade in the UK, G. [George] Hollingbery and in SACU and Mozambique, herein represented by B.J. [Bogolo Joy] Kenewendo of Botswana, met in Cape Town, Republic of South Africa, today, 28th August 2018.
We welcomed the significant progress made on a future UK, SACU, and Mozambique EPA that will ensure that the parties maintain the current market access and replicate the effects of the existing EU-SADC EPA, which will ensure continuity of trade relations between the UK, SACU and Mozambique once the EU-SADC EPA no longer applies to the UK. In this regard therefore:
We set out today our shared understanding that inclusive trade is essential for poverty eradication and sustained growth. We agreed that the UK-SACU and Mozambique EPA must promote development and support the integration efforts of the African Continent.
The two sides commit to continue to work together towards the conclusion of a future UK, SACU and Mozambique EPA that ensures continuity in the trade relationship once the EU-SADC EPA no longer applies to the UK.
We recalled our roundtable discussions on trade relations post-Brexit on the 19th July 2017, wherein we agreed to explore ways to ensure that the existing trade arrangement between the UK, SACU and Mozambique currently governed by the EU-SADC EPA, will not be disrupted by the UK’s departure from the EU. The UK re-affirmed its commitment to ensuring continuity of the effects of the EU-SADC EPA following the UK’s withdrawal from the EU, in particular maintaining the current market access for SACU and Mozambique into the UK.
We welcome the significant progress our officials have made since then in the discussions on a future UK, SACU, and Mozambique EPA, that will replicate the effects of the existing EU-SADC EPA which has strong aspects of reciprocity. During this process, we recognise the UK’s continuing obligations while it remains an EU Member State.
We have today confirmed that we will be in a position to ensure that an Agreement can be in place between the UK, SACU, and Mozambique, as soon as the EU-SADC EPA no longer applies to the UK. This confirmation, and the future UK, SACU and Mozambique EPA, are without prejudice to the terms of the EU-SADC EPA.
We take note of the progress achieved regarding the UK and EU’s agreement on a time-limited implementation period between the EU and UK following the UK’s departure from the EU, and in particular the intention for the UK to be treated, for the purposes of EU international agreements, as an EU Member State for the duration of the implementation period between the EU and UK. The SACU and Mozambique Trade Ministers indicated that they look forward to receiving formal confirmation of the same via the proposed notification, and to continuing to receive regular updates on progress from the UK on the EU-UK negotiations under Article 50 of the Treaty of the European Union on the UK’s withdrawal from the EU. SACU and Mozambique emphasise the importance of continued cumulation between all the parties in promoting continuity and to avoid disruption in trade, and urge both the UK and the EU to recognise the importance of cumulation in the discussions on a post-Brexit EU-UK arrangement.
Nevertheless, we recognise that it is responsible to prepare for all potential outcomes. We confirm that we are therefore taking steps to ensure that our replicated agreement can be in place, if required, immediately upon the UK’s withdrawal from the EU in March 2019, in the event that no agreement is reached between the UK and EU.
We re-affirm that we share a strong ambition to further strengthen our partnership in the future, in order to further benefit both parties. Our EPA will form the core basis of our future economic and development relationship. We recognised that some issues have been identified that will require consideration after the UK’s withdrawal from the EU in March 2019 and therefore direct our officials to prepare a built-in agenda on those outstanding issues for expeditious conclusion. We also acknowledge a range of potential issues which could help us further strengthen our partnership, and look forward to discussing those at the most appropriate time.
We re-affirm our intention to cooperate closely in order to ensure that the mutual benefits of a UK, SACU and Mozambique EPA are fully realised.
In addition, we reiterate support for a rules-based multilateral trading system, with the World Trade Organization (WTO) at its core, reaffirm the centrality of development in the WTO’s work and the need to continue to fight WTO non-compliant measures that lead to protectionism and unilateralism. We remain committed to a rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system and are determined to work together to further strengthen the WTO and ensure that it facilitates effective participation of all countries in the multilateral trading system.
Finally, we recognise that the affirmations set forth in this political understanding are not intended to be legally binding and remain ‘without prejudice’ to the technical discussions currently underway.