EPA Impact Studies: SADC and the regional coherence

The SADC is a regional organisation consisting of 14 African countries that, following the signing of the Cotonou Partnership Agreement in June 2000, are entitled to enter into EPAs with the EU by 2008. South Africa, which is only a qualified member of the ACP, already concluded a free trade agreement with the EU in 2000 (i.e. the Trade, Development and Cooperation Agreement - TDCA), and will not therefore be part of the EPA negotiations. As illustrated by Figure 1, SADC membership often overlaps with other regional arrangements, which have different (and sometimes conflicting) integration and trade programmes, and whose members are also expected to negotiate EPAs with the EU. In development terms, the SADC is a very diverse region consisting of eight least developed countries (LDCs), five non-LDCs and one developed country (i.e. South Africa). This diversity poses a major challenge to the EPA negotiations because LDCs can benefit from the Everything-But-Arms (EBA) initiative, which provides non-reciprocal tariff-free and quota-free access to EU markets for all products from LDCs (except arms and, for certain transitional periods, bananas, rice and sugar). The non-LDCs, however, stand to lose their current Lomé preferences by 2008.

As part of the process of preparing for the negotiation of an economic partnership agreement (EPA) with the European Union (EU), the Secretariat of the Southern Africa Development Community (SADC) commissioned two studies. One was on the compatibility of trade policies in the context of the current regional economic integration processes in the SADC, and the other was an assessment of the impact of EPAs on the SADC1 and preliminary adjustment scenarios2. The studies were conducted by Moses Tekere and Dan Ndlela of the Trade and Development Studies Centre (TRADES CENTRE), in accordance with the framework of priority actions prepared by the ACP Secretariat and in consultation with ACP states and regional organisations.

The studies:
(i) review the compatibility and coherence of SADC members' trade policies and liberalisation programmes with the SADC regional economic integration framework;
(ii) offer a preliminary assessment of the impact on SADC economies of an EPA with the EU;
(iii) suggest possible scenarios for economic and trade adjustments; and
(iv) make recommendations for the SADC's regional integration process and the content of EPAs.