The impact of the SA-EU FTA and the Cotonou Agreement on the economy of Namibia with particular emphasis on the fisheries and meat sectors

Mulunga, Immanuel (2000-03)

Thesis (MBA)--Stellenbosch University, 2000.


On October 1999 South Africa signed a historic TDCA with the European Union. The main objective of this agreement is to liberalise most trade between the two parties over time through a free trade agreement. Namibia as a member of SACU became automatically a de facto member of the SA-EU FTA. At the same time the EU concluded another 20-year agreement with the ACP countries effectively changing its traditional trade relationship with these countries. Namibia also being a member of the ACP group of countries finds itself in the middle of these two agreements. South Africa and the EU however opted to leave some of the sectors that are considered sensitive out of the free trade agreement in order to mitigate some of the adjustment costs likely to be faced by lesser-developed partners in SACU such as Namibia. Beef is one of those sensitive sectors as it is the main Namibian agricultural export to both the EU and South Africa. The fisheries sector likewise contributes a lot to Namibia's export earnings and the fact South Africa and the EU are negotiating for a fisheries agreement could mean a change in Namibia's competitive position in this sector. The impact that these two agreements will have on the beef sector is not very significant or at least manageable at this stage. The impact on the fisheries sector is mainly uncertain at this stage in the absence of an EU-SA fisheries agreement. The major impact of the SA-EU FTA will be on government revenues, which rely heavily on receipts from the SACU common revenue pool. The SADC has also started its regional economic integration process, which the EU hopes to be a move towards a REPA with which it hopes to do business as part of the new Cotonou Agreement. However the vast disparities in economic development between the EU and SADC does not favour such a move. The benefits will most probably accrue to the EU and the costs to SADC countries, especially those countries that are not part of SACU. It is important that if the new Cotonou Agreement is to be mutually beneficial steps need to be taken to strengthen the industrial and export capacities of the ACP countries. Otherwise this wave of globalisation will be nothing but a zero sum game.

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