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OPINION (2023/2065(INI))

On the implementation of the EU-Southern African Development Community (SADC) Economic Partnership Agreement (EPA)

DEVE-AD-751832

Committee on Development · Rapporteur: Karsten Lucke

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The Committee on Development calls on the Committee on International Trade to include its suggestions in a resolution on the implementation of the EU-Southern African Development Community (SADC) Economic Partnership Agreement (EPA). It welcomes the first ex post evaluation but says many challenges remain in SADC partner countries. It asks for development cooperation and financial and technical assistance, support for regional integration and value chains, and help for small and medium-sized enterprises (SMEs) to meet EU rules and use tariff rate quotas. It calls on the EU to refrain from banning export taxes on raw materials as a general rule, to support sustainable fiscal systems and tax evasion efforts, and to apply the global minimum corporate tax rate of 15 %. It wants a mandatory and enforceable sustainable development chapter in EPAs, covered by dispute settlement, and a formal mechanism for civil society engagement in implementation and monitoring.

Committee position. The Committee on Development calls on the Committee on International Trade to incorporate its suggestions into its motion for a resolution. It welcomes the first ex post evaluation but stresses remaining challenges and asks for development cooperation, support for regional integration and SMEs, a mandatory sustainable development chapter, and a formal civil society mechanism.

Key points

  1. Welcomes the first ex post evaluation of the EU-SADC EPA but notes remaining challenges in economic diversification, competitiveness, growth, rule of law, poverty reduction, labour rights, land grabbing and environmental protection.
  2. Highlights development cooperation and technical and financial assistance as essential for achieving the EPA's objectives and beneficial cooperation between the parties.
  3. Stresses that the EPA must support regional and sub-regional integration, promote regional value chains in SADC and Africa, and that EU development finance must boost intra-African trade.
  4. Recognises that SADC countries should benefit from the EPA through economic diversification and value-added products, with fair trade rules that promote human rights, rule of law, democracy, jobs and poverty reduction.
  5. Underlines financial and technical difficulties for SMEs in meeting EU regulations and standards, and calls for assistance so they can comply and access EU markets, including awareness of tariff rate quotas.
  6. Stresses that the EPA should enhance competitiveness and sustainable growth through a fair trade and investment system that considers development disparities between the EU and SADC EPA partners.
  7. Calls on the EU to refrain from prohibiting developing countries from levying export taxes on raw materials as a general rule, insofar as this is WTO-compatible, and recalls the right of African countries to regulate raw materials in the public interest.
  8. Recalls the pandemic's impact on SADC EPA countries and underlines the importance of good governance, capacity-building for sustainable fiscal systems, fighting tax evasion, and strengthening public sector institutions.
  9. Stresses that the EPA should support progressive asymmetrical liberalisation of trade and enhance partnership between SADC countries and the EU.
  10. Calls for an effective, predictable and transparent regional regulatory framework for trade and investment, and for EPAs to contribute to the African Continental Free Trade Area (AfCFTA) and resilient regional value chains.
  11. Believes EPAs should include a mandatory and enforceable sustainable development chapter with the highest labour and environmental standards, covered by dispute settlement, and urges the Commission to strengthen the SADC EPA's trade sustainability development (TSD) chapter in the ongoing review.
  12. Calls for exceptions to national treatment and export tax elimination to protect infant industries, and for broad involvement of civil society, academia, trade unions and private sector in EPA implementation and monitoring, including a formal civil society mechanism.

Who is affected

  • SADC partner countries: should benefit from the EPA through economic diversification and value-added production, but face challenges in many areas.
  • Small and medium-sized enterprises (SMEs) in SADC countries: need assistance to meet EU regulations and standards to export to the EU market.
  • African, Caribbean and Pacific (ACP) countries: may face challenges in implementing EPAs, especially smaller ones lacking resources and infrastructure.
  • EU and its member states: called on to assist developing partner countries, refrain from banning export taxes, and ensure the global minimum corporate tax rate is applied.

Figures and deadlines

  • 15 %: the agreed global minimum corporate tax rate for multinational enterprises.
  • USD 150 billion: estimated additional global tax revenues annually from the minimum tax rate.