Zimbabwe, EU sign interim EPA treaty
Saturday, 5 September 2009
Li Nuer
Zimbabwe has signed the interim Economic Partnership Agreement with the European Union that is expected to run until December 2010, The Herald reported on Friday.
Confederations of Zimbabwe Industries economist Dephine Mazambani told the CZI congress on Wednesday that Zimbabwe was among the four African countries that signed the interim treaty last week.
Madagascar, Seychelles and Mauritius also signed the EPA interim agreement, which would see signatories to the trade pact with Europe gradually open up their markets to European goods until 2023.
Deputy Minister for Industry and Commerce Mike Bimha had assented to the interim EPA agreements on behalf of Zimbabwe.
"Negotiations for the signing of the full EPA are still ongoing and should be concluded by the end of 2009, covering additional agriculture, trade related areas, (procurement and competition issues). The full EPA would also cover trade in services, investments and better regional rules," Mazambani said.
Under the EPA, Zimbabwe would have opened up 45 percent of her market to Europe by 2012 and 80 percent by 2022, while 20 percent of the local market would remain shut to EU products.
Local exports would enter the European market duty free, which could increase their competitiveness.
The interim agreement pertains to market access for fisheries, rules of origin, development cooperation and general provisions between the EU and Zimbabwe.
The full EPA would result in the liberalization of trade in capital goods, raw materials, and intermediate products, but animal products, cereals, beverages, clothing and vehicles are excluded from the pact.
Footwear, glass, ceramics, consumer electronics and paper are also excluded for purposes of protecting sensitive products and infant industries.
Local firms would benefit in terms of easy access to bigger EU markets, safeguarding of sensitive and strategic industries, binding legal agreements, trade facilitation and simplified rules of origin for local goods.
Challenges for the local industry include increased competition from EU products, undermining of regional integration and significant loss of revenue for the government through removal of tax on imports.
As the country moves towards relaxing market access terms for the EU products, industry is expected to participate in the negotiation of the full EPA.
Zimbabwe is among 11 countries negotiating the EPA within Eastern and Southern Africa.
EPA is a trade arrangement the EU is currently negotiating with 76 former colonies in Africa, the Caribbean and Pacific countries.
Thirty-nine countries have so far signed "interim" EPAs covering trade in goods, but countries like Senegal and South Africa have refused to sign it.
In December 2007, most of the countries in the Southern African Development Community (SADC), including Botswana, Swaziland, Lesotho, Namibia and Mozambique, Comoros, Madagascar, Seychelles and Mauritius. Zimbabwe initiated an interim EPA to avoid trade disruption.
The country, however, is not yet well prepared for the EPA . Local industry, smarting from debilitating effects of almost a decade long economic instability, does not have the technology, equipment and financial sophistication to withstand competition from EU products.
Antiquated, obsolete machinery and old production systems and business models mean production costs for local goods will remain high and the products could face stiff competition from the EU. -- Xinhua
Zimbabwe has signed the interim Economic Partnership Agreement with the European Union that is expected to run until December 2010, The Herald reported on Friday.
Confederations of Zimbabwe Industries economist Dephine Mazambani told the CZI congress on Wednesday that Zimbabwe was among the four African countries that signed the interim treaty last week.
Madagascar, Seychelles and Mauritius also signed the EPA interim agreement, which would see signatories to the trade pact with Europe gradually open up their markets to European goods until 2023.
Deputy Minister for Industry and Commerce Mike Bimha had assented to the interim EPA agreements on behalf of Zimbabwe.
"Negotiations for the signing of the full EPA are still ongoing and should be concluded by the end of 2009, covering additional agriculture, trade related areas, (procurement and competition issues). The full EPA would also cover trade in services, investments and better regional rules," Mazambani said.
Under the EPA, Zimbabwe would have opened up 45 percent of her market to Europe by 2012 and 80 percent by 2022, while 20 percent of the local market would remain shut to EU products.
Local exports would enter the European market duty free, which could increase their competitiveness.
The interim agreement pertains to market access for fisheries, rules of origin, development cooperation and general provisions between the EU and Zimbabwe.
The full EPA would result in the liberalization of trade in capital goods, raw materials, and intermediate products, but animal products, cereals, beverages, clothing and vehicles are excluded from the pact.
Footwear, glass, ceramics, consumer electronics and paper are also excluded for purposes of protecting sensitive products and infant industries.
Local firms would benefit in terms of easy access to bigger EU markets, safeguarding of sensitive and strategic industries, binding legal agreements, trade facilitation and simplified rules of origin for local goods.
Challenges for the local industry include increased competition from EU products, undermining of regional integration and significant loss of revenue for the government through removal of tax on imports.
As the country moves towards relaxing market access terms for the EU products, industry is expected to participate in the negotiation of the full EPA.
Zimbabwe is among 11 countries negotiating the EPA within Eastern and Southern Africa.
EPA is a trade arrangement the EU is currently negotiating with 76 former colonies in Africa, the Caribbean and Pacific countries.
Thirty-nine countries have so far signed "interim" EPAs covering trade in goods, but countries like Senegal and South Africa have refused to sign it.
In December 2007, most of the countries in the Southern African Development Community (SADC), including Botswana, Swaziland, Lesotho, Namibia and Mozambique, Comoros, Madagascar, Seychelles and Mauritius. Zimbabwe initiated an interim EPA to avoid trade disruption.
The country, however, is not yet well prepared for the EPA . Local industry, smarting from debilitating effects of almost a decade long economic instability, does not have the technology, equipment and financial sophistication to withstand competition from EU products.
Antiquated, obsolete machinery and old production systems and business models mean production costs for local goods will remain high and the products could face stiff competition from the EU. -- Xinhua