EU calls for more trade with Le­sotho

Lesotho Times - - Business - Retha­bile Pitso

EURO­PEAN Union (EU) Am­bas­sador to Le­sotho Michael Doyle has urged Le­sotho to take full ad­van­tage of the trade op­por­tu­ni­ties avail­able un­der the South­ern African De­vel­op­ment Com­mu­nity Eco­nomic-euro­pean Union Part­ner­ship Agree­ment (SADC-EU EPA).

Dr Doyle made the re­marks dur­ing an in­for­ma­tion seminar held yesterday at Avani Maseru Ho­tel which ex­plored the trade op­por­tu­ni­ties avail­able to Le­sotho un­der the fa­cil­ity. The seminar was at­tended by gov­ern­ment of­fi­cials, the busi­ness com­mu­nity and mem­bers of civil so­ci­ety or­gan­i­sa­tions among oth­ers.

The SADC-EU EPA is a bi­lat­eral trade and de­vel­op­ment agree­ment be­tween Botswana, Le­sotho, Mozam­bique, Namibia, South Africa, and Swaziland with the EU. The trade ne­go­ti­a­tions were con­cluded on 15 July 2014 cul­mi­nat­ing in a long-term agree­ment for duty and quota-free ac­cess to the EU mar­ket for SADC-EU EPA mem­bers.

“When we speak of trade, we are not only re­fer­ring to trade in goods, but also trade in ser­vices as well as in­vest­ment and de­vel­op­ment co­op­er­a­tion,” said Dr Doyle, adding that to­tal SADC EPA group ex­ports to the EU were €31 bil­lion (about M431 bil­lion) while EU ex­ports amounted to €33 bil­lion.

“EPAS are am­bi­tious trade and de­vel­op­ment part­ner­ships which go be­yond trade in goods to cre­ate favourable con­di­tions for eco­nomic de­vel­op­ment. There is po­ten­tial in Le­sotho to de­velop the ser­vices sec­tor and the EPA pro­vides for co­op­er­a­tion in this area too.”

He said the EU took into ac­count the dif­fer­ences in the lev­els of de­vel­op­ment with its SADC-EU EPA part­ners, adding that un­der the agree­ment, the lat­ter could shield sen­si­tive prod­ucts and ser­vices from lib­er­al­i­sa­tion.

The am­bas­sador also noted that for Ba­sotho to fully ben­e­fit from the 500 mil­lion strong EU mar­ket, they need to fully un­der­stand rules of trade and rules of ori­gin.

“The ap­pli­ca­ble rules of ori­gin un­der the EPA will be more flex­i­ble than the cur­rent rules and will no­tably make it eas­ier for ex­porters to use ma­te­ri­als from other coun­tries, a process called ‘cu­mu­la­tion of ori­gin’,” Dr Doyle said.

“An ex­am­ple of this could be canned fruit, where some of the ac­tual fruit crop is sourced out­side Le­sotho, for ex­am­ple in Swaziland. As long as there is some pro­cess­ing in Le­sotho — the canned fruit pro­duced can be ex­ported as orig­i­nat­ing in Le­sotho.”

He said the EPA was not just about mar­ket ac­cess but also “de­vel­op­ing a true sus­tain­able part­ner­ship; di­ver­si­fy­ing and de­vel­op­ing in­dus­try in Le­sotho, and adding value within the coun­try to stim­u­late em­ploy­ment and eco­nomic growth”.

“I urge the gov­ern­ment of Le­sotho to cre­ate a con­ducive en­vi­ron­ment to al­low pri­vate busi­nesses the ca­pac­ity and abil­ity to trade and en­joy the full ben­e­fits of the EPA,” he added.

“The gov­ern­ment of Le­sotho and pri­vate busi­nesses need to work har­mo­niously to in­crease the value of goods that they ex­port to our mar­kets.

“Le­sotho al­ready ex­ports rough di­a­monds to the EU mar­ket which con­sti­tutes a large share of your ex­ports to the EU. Added value of di­a­monds ex­ported to Euro­pean mar­kets could be boosted.”

In his re­marks, Trade and In­dus­try Min­is­ter Joshua Setipa said Le­sotho needed to re­sus­ci­tate trade re­la­tions it used to en­joy with the EU through the ex­port of as­para­gus and textile prod­ucts.

“Given our his­tor­i­cal trade re­la­tion­ship, it is a mys­tery that vol­umes have been de­clin­ing. If you go back to 10 or 15 years ago, Le­sotho was ex­port­ing al­most its en­tire as­para­gus pro­duce to the EU,” Mr Setipa said.

“We were ex­port­ing clothes to the EU but all that has dis­ap­peared so we have an op­por­tu­nity to re­sus­ci­tate those re­la­tion­ships. I don’t know what it would take for us to be­come a food pro­cess­ing hub, but hav­ing lis­tened to the am­bas­sador, I be­lieve it is another sec­tor with a huge po­ten­tial.”

He also high­lighted the need for gov­ern­ment to ex­ploit EPA op­por­tu­ni­ties to par­tic­i­pate in global value chains.

“We have a fac­tory in Ma­put­soe that pro­duces leather seats for BMW and they go straight to the Poland in the United King­dom,” the min­is­ter said.

“We also need to un­der­stand how we could use the re­la­tion­ship with the EU to pro­vide sup­port for com­pa­nies that work with us. But I think the test of how far we can fully ex­ploit the ben­e­fits of the EPA lies in how far we can use this pro­gramme, which is one part de­vel­op­men­tal and one part a trad­ing re­la­tion­ship, to drive eco­nomic growth among our own en­trepreneurs.”

EU Am­bas­sador to Le­sotho Michael Doyle

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