Mohalenyane Phakela
THE European Union (EU) recently launched the Economic Partnership Agreement (EPA) which will enable Lesotho to benefit from duty-free exports to the EU bloc.
Lesotho will also benefit from a €6 million fund which has been set aside by the EU to enable the country to position itself to take full advantage of trade opportunities.
The EPA is an agreement among the EU, African, Caribbean and Pacific (ACP) countries.
It was recently launched at the Lesotho National Convention Centre in Maseru on Thursday by the European Union and the government.
The EU delegation comprised of Roberto Cecutti (Trade Affairs Officer for Southern Africa EPA Implementation), Markus Theobald (Head of Cooperation – Delegation of the EU to Lesotho) and John Taylor (EU Delegation in Botswana).
Also part of the delegation were Jyrki Torni, the Operations Manager of the delegation the Austrian Deputy Trade Commissioner for Southern Africa, Thomas Spazier.
Lesotho was represented by officials from the Ministry of Trade and Industry, civil society and the private sector also attended the event.
Lesotho, Botswana, South Africa, Mozambique, Namibia and Swaziland signed the EPA with the EU in June 2016 after more than a decade of negotiation.
The agreement provides for enhanced market access, development cooperation and an asymmetric trading relationship which is favourable for EPA states as they are either developing or least developed countries. The member states have to develop implementation plans and review certain institutional arrangements that address the core issues of the agreement.
The EU delegation was in the country to present on the terms and conditions of the agreement, steps to follow when shipping goods under EPA and also the ten benefits of the programme.
During the presentations it was reported that the EPA offers flexible conditions with regards to the rules of origin under which ACP countries can easily source raw materials for their products elsewhere without losing their access to the EU market.
Some of the benefits of the EPA include the creation of new business opportunities as firms from ACP which can freely export to the EU and further import the inputs they need for final products at reduced costs.
The EPA targets to assist countries to attract more investors through long-term stability as the EPAs are permanent, expand the economy through the emergence of new industries and create jobs and offer trade aid which helps countries adapt their customs procedures and reduce paperwork. This will reduce import and export, thereby reducing import and export meaning less difficulties.
EPA enables ACP countries to protect their local producers that might struggle to compete against EU imports by keeping tariffs on sensitive goods such as foodstuffs as well as assist in the production and exportation of higher value processed goods.
ACP farmers are also assisted to meet the EU’s high standards in food safety as well as animal and plant health, enabling them to seek help if problems arise.
The EPA also advocates for the integration of ACP countries’ economies by promoting regional value chains where a country can process inputs from neighbours and still benefit from the duty-free regime in Europe.
The agreement will entail compliance with International Labour Organisation laws and further promote environmental protection, good governance and protect human rights and also opens channels for EU development aid.
Mr Theobald said they expect diversity of products from Lesotho and are ready to assist local traders in sourcing loans from global financial institutions.
“EPA gives free access to the EU market, zero tariffs and unlimited quantities for all products which can reach half a billion European consumers,” he told the Lesotho Times on the side lines of the seminar.
“We learned that the LNDC (Lesotho National Development Corporation) has already conducted a study about Lesotho’s products that can be competitive in the European market therefore we are expecting a variety of products to fully exploit the huge market.
“EU is prepared to offer development assistance with trade capacity-building measures to support producers. We already have a relationship with International Financial Institutions which are ready to offer loans to Lesotho traders. There is also 6 Million Euros set aside to help Lesotho implement the EPA.”
He said it was the EPA country’s duty, such as Lesotho, to ensure that investors do not take advantage of the EPA agreement by enforcing laws which will ensure the country benefits more.
Adding to that, Mr Cecutti said the EPA should not be limited to exports to the EU but must be an opportunity for ACP countries to work together.
“This plan should not be EU oriented but an opportunity to realise each country’s sustainable development goals,” he said.
“Training and exchange of expertise between ACP countries should be considered in order to foster regional economic integration by joining up smaller markets that were established ACP countries themselves.”
The officials said the EU was committed to monitor the EPA implementation, its effects and impact while the commission will further discuss execution on continued efforts with ACP countries, civil society, and non-state actors including the private sector.
For his part, Minister of Trade and Industry, Tefo Mapesela, said his ministry had sourced a consultant to ensure that Lesotho fully exploits the EPA opportunity.
“The EPA has a development chapter with provisions for technical assistance and capacity building so that we can attain full implementation of the agreement and to maximise its benefits thereof,” he said.
“The ministry has commissioned a consultant to develop a national EPA implementation plan in order to map the way forward to harness the benefits of the EPA by exploring all possible ways to exploit the international market through our private sector.
“On 7 March this year we held a stakeholders’ sensitisation meeting to brainstorm on the development process with the private sector, civil society, academia, government ministries and various institutions. We have allocated resources towards the development of the EPA and will continue to work with EU towards completion of this exercise,” Mr Mapesela said.
