Economic Partnership Agreement with EU would add little for SA

THE DECISION by the SA
government not to sign
an economic partnership
agreement (EPA) with the
European Union (EU) is
not the major blow to the
clothing and textile industry
that recent press reports
suggested, according to Brian
Brink, executive director of the
Textile Federation.
He also argued that the
EPA – signed last November
by Botswana, Lesotho,
Mozambique and Swaziland,
but rejected by SA and
Namibia – added little
that the SA/EU free trade
agreement (FTA) signed in
January 2001 did not already
supply.
“With the FTA’s on-going
phase-down of tariffs,” he
said, “most SA textile and
clothing items can already get
into the EU on a duty-free
basis.”
The only area where the
EPA really had advantage was
less restrictive rules of origin.
“Under the FTA rules
of origin – where an EUR1
certificate of origin is
required,” Brink told FTW, “a
two-stage transformation of
imported raw materials needs
to be made before textile and
clothing products can qualify
as 'Made in SA'.
“Under the EPA only a
one-stage transformation is
required.”
Although used as a major
argument by the press
commentators, Brink added
that this more relaxed rule
of origin was unlikely to give
the major advantage to the
countries which had signed
the EPAs.
“Also, what must be borne
in mind,” he said, “was that
SA and Namibia pulled out of
the EPA negotiations because
they felt that unreasonable
demands were being made on
the part of the EU.”
Brink also rejected the
suggestion in a business daily
that the EPA dispensation
of rules of origin might
encourage SA manufacturers
to relocate to an EPA-eligible
country.
“The textile and clothing
industries are extremely
labour-intensive,” he told FTW.
“And the argument that they
might get lower labour costs
is likely to carry more weight
in any relocation decision than
this minor relaxation of the
rules of origin ever would.”