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Namibian table grape exporters fearful over lack of progress in EPA negotiations

29 July 2013

In June 2013, according to The Namibian newspaper, Namibian table grape farmers warned that in the absence of an agreement to secure duty-free, quota-free access for Namibian table grape exports to the EU market, the Namibian table grape industry would “die a sudden death” as it would not be able to compete on the EU market with duty-free imports from Chile, South Africa and Peru. According to a position paper tabled by Namibian table grape producers at a national consultation on the EPA negotiations, there are no alternative market opportunities available, given the specificity of the Namibian grape trade into the EU and the strict US sanitary and phytosanitary (SPS) regulations applied to Namibian table grapes.

At present, 89.83% of Namibian table grape exports are destined for the EU market, compared to 5.3% exported to African markets, 2.3% to the Russian market, 1.47% exported to Far Eastern markets and 1.1% exported to Middle Eastern markets. Namibia exports a total of 25,966 tonnes of table grapes, with a final sales value of N$500 million (€38.55m). Current plans to expand table grape production, however, could double this trade. The Namibian table grape industry employs 3,000 permanent and 4,500 seasonal workers.

Without duty-free access, “farmers say they will be forced [to] pay customs duties of between N$10 and N$12 [€0.77–0.93] to export one 4.5 kg grape carton”. A 4-year survey confirmed that farmers were making “an average return on investment of between N$7.09 and N$8.80 per carton”. With the new customs duties envisaged, “farmers foresee an average loss of 28%” if the EU reimposes import duties. The farmers maintain that “the private sector will not be able to invest under such conditions” (i.e. the possible loss of duty-free access from 1 October 2014).

Editorial comment

The development of the Namibian table grape industry was attributable to Namibia’s accession to the Lomé Convention, as the prospect of duty-free, quota-free access to the EU market prompted the first investment in this sector, located on the north bank of the Orange River (Namibia) rather than the south bank (South Africa). In fact, grapes were not even included at that time in the duty-free access granted under the Lomé Convention: the Namibian government had to negotiate the addition of grapes to annex XL of the Convention, thus providing quota-restricted access for a range of sensitive horticultural products.

The development of the Namibian table grape industry is a typical case of where trade preferences have stimulated investment in the creation of an entirely new agricultural sector, with consequent employment and income gains. However, this industry is now under threat from the possible loss of duty-free, quota-free access from 1 October 2014.

This situation is ironic for, as South Africa’s chief EPA negotiator has pointed out in an interview with Agritrade, “irrespective of whether the EPA enters into force or not, [Botswana, Namibia and Swaziland] will continue to grant the EU preferential access to their markets by virtue of the TDCA, … [while] these countries will lose their existing access to the EU market at a great cost to their economies.” This outcome, it is argued, “would be highly inequitable and unfair” (see Agritrade interview with Xavier Carim, Deputy Director-General, International Trade and Economic Development Division of the South African Department of Trade and Industry, ‘ Agricultural dimensions of the EPA negotiations between the SADC EPA Gro...’, 30 June 2013).

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