SOUTH AFRICA - EUROPEAN UNION AN UPDATE ON RELATIONS

CHIEF DIRECTORA TE: EUROPEAN ORGANISATIONS

3 NOVEMBER 2006

1. SA-EU JOINT CO-OPERATION COUNCIL

The Seventh SA-ED Joint Co-operation Council is scheduled for 14 November 2006 in Brussels. Belgium. A Senior Officials Meeting (SOM) was held on 18 October 2006 in Pretoria. in preparation for the JCC. The SOM discussed the conclusions of the 2005 JCC, the proposed SA-ED strategic partnership, the Review and Full

Implementation of the TDCA and the impact on the broader development of Southern Africa. Germany and Portugal participated as observers as they will be ED Presidencies in 2007. SADC States taking part in the EPA negotiations were also invited as observers. Angola. Mozambique, Swaziland and Tanzania were represented.

A follow-up SOM is scheduled for 13 November 2006 in Brussels to finalise preparations. There will also be a Trade Co-operation Committee meeting on 10 November 2006 in Brussels to try resolve the still outstanding issues that include the automotives and cheese quotas.

On outstanding issues, there has also been little movement on the Review and Full Implementation of the TDCA. little movement has been done because the EU's mandate is still outstanding. The European Commission is still waiting for a mandate from the European Council_ Nevertheless. the SOM decided that informal discussions could be started which would then be formalised when the mandate is given for the Commission.

Minister Dlamini Zuma will lead the SA Delegation to the JCC. She will be accompanied by Minister Xingwana from the Department of Agriculture and Land Affairs and the Mr Hanekom Deputy Minister of Science and Technology. The SA Delegation consists of representatives from the Departments of Agriculture, Foreign Affairs. National Treasury, Revenue Services, Science-and Technology and Trade and Industry all led by senior officials in addition to the colleagues at the Mission in Brussels.

The JCC will consider the sector-specific reports on Trade, Development and Science and Technology Co-operation. It will look at the Joint Progress Report on the Review and Full Implementation of the TDCA and the proposed SA-ED strategic partnership. It will also focus on the SADC EPA negotiations, the EU Strategy for Africa and the Europe-Africa Second Summit. Political issues will include the Great Lakes, Sudan. Cote d'ivoire. Somalia and Zimbabwe (requested by the EU). Global issues will be the DNSC the Middle East, Migration. WTO/DOHA and HIV/ AIDS (requested by the ED)

2. PROPOSED SA-EU STRATEGIC PARTNERSHIP

At the SOM on 18 October. both Parties agreed that IDCA will remain the legal framework for SA-ED relations and are not looking to replace it. The proposed strategic partnership would build on it. They stated that the strategic partnership would not be a document. but rather a content-driven relationship. building on shared political social and economic values. as well as the shared commitment to peace and stability, governance and poverty. Stemming from this. the partnership would entail moving from political dialogue to active co-operation and the joining of forces. This synergy is based on the ideals of attaining the Millennium Development Goals (MDGs). Nepad and other such programmes, which the strategic partnership would strive to attain. In support of the partnership, the European Foreign Ministers adopted positive conclusions on 17 October 2006 and the European Parliament passed a resolution on 23 October 2006

The SOM also decided that a separate joint statement on the proposal would be drafted for the JCC The draft statement will be finalised at the meeting on 13 November. The draf1 proposes, among others, a Joint Action Plan be finalised and agreed by the end of June 2007 and that a progress report on its implementation be drafted for adoption at the 8th Joint Co-operation Council in 2007. An issue of importance is whether the strategic partnership is whether its will include Summit meetings as the EU has with other countries it has strategic partnerships with (US, China etc).

3. SADC EPA NEGOTIATIONS

In line with the effort to promote regional integration in Southern Africa the SADC EPA Group including South Mica has proposed to the EU in March 2006 a joint and integrated negotiating approach that aims to draw together the IDCA and SADC EPA processes. The proposal represents a political consensus in the SADC EPA Group (including South Africa), it is manageable technically sound, WTO consistent and would strengthen integration in Southern Africa by moving towards rationalising the SADC EPA Group's trade relations with the EU in a considered and progressive manner. Confidence in the EU proposal [or a strategic partnership with South Africa would be greatly enhanced if the EU were to respond positively to the SADC EPA proposal Further, a positive response from the EU is required urgently due to the fact that Botswana, Swaziland and Namibia may Iose their preferential access to the EU market unless a new trade arrangement is in place by December 2006.The EU has yet to respond to the document. According to the European Commission. the document is being discussed by the European Council. Realistically. it is doubtful whether the Council will make a decision prior to the JCC. South Africa will strongly highlight the delay at the JCC.

South Africa would need to ensure that the strategic partnership offers meaningful support to regional integration processes currently underway in Southern Africa. These processes have been given additional impetus and direction following agreements reached at the SADC Summit 23 October 2006.

The SADC EPA Negotiating Forum met from 18-21 SeptemberD6 in Maseru, Lesotho. This follows the last SADC EPA Senior Officials Meeting held in Piggs Peak, Swaziland in May 2006. In-depth discussions and exchange of views were held on several substantive issues that included Market Access, Rules of Origin. Trade Related issues, Institutional Negotiating Structure and Process (TDCA Review, in the main), Activities of the Regional Preparatory Task Force (RPTF) and Status of studies commissioned.

The meeting highlighted the delay of the Commission to respond to the SADC negotiation proposal The Chief Co-ordinator of the SADC EPA Negotiations and Minister of Trade and Industry' of Botswana, Hon D N Moroka, has not yet received a response to the letter he wrote to EU Trade Commissioner Peter Mandelson on this issue. In the meantime the Commission has indicated to the SADC Secretariat that the following areas are problematic for them: i) The inclusion of South Africa in the EPA Process: ii) The position taken with regard to the non-reciprocity for Angola,

Mozambique and Tanzania, which seem to fragment the region and iii) The scope of the future agreement and the proposal by SADC not to make any binding commitments on trade related issues. The meeting agreed that SADC should continue to address the various negotiating issues and further develop the Framework paper and not allow the non-response from the EC to delay its work

It is evident that there is strong support from the SADC-EPA countries for South Africa to be fully involved in the process. The meeting reiterated the decision taken at the SADC-EPA Ministerial meeting held in Angola in February 2006 where the Ministers took a decision to include South Africa as a full member of the SADC-EPA It was pointed out that the EC must accept the decision of the Ministers and accept the fact that the SADCEPA grouping includes South Africa as a fun member. It remains to be seen whether the EC will acquiesce to this position.

EPA reviews have been taking place at regional level and will be consolidated into an all ACP report and discussed at the all ACP level before the Joint ACP-EU Review. TRALAC was contracted to undertake the review and the final report was expected by the end of October 2006.

4. REACH

The European Parliament's Environment Committee (ENVI) vote adopted resolution 210, that exempts the use of ores and concentrates from authorisation requirements of REACH on 10 October 2006. The vote was adopted with a margin of 37 for and 27 against. Generally the voting trend was heavily in favour of a cross party (Socialists. Greens and Liberals) pro- environment grouping that had the implicit support of the ENVI's Rapporteur, Mr Guido Sacconi. The vote is welcomed news, considering that it formed the core of South Africa's lobbying efforts. However the pending and bigger challenge is to get a qualified majority during the second Plenary vote scheduled for 14 November 2006

In a best case scenario (Plan A), a yes vote during the second Plenary would mean Mission accomplished, from the Parliamentary side as ores and concentrates would have been removed completely from the scope of REACH. It may be recalled that during the first plenary vote of 13 November 2005, ores and concentrates were removed from the registration requirements. The third and last phase would be to ensure that this endorsement is also effected in the Common Position of both Parliament and Council.

In the event of a worst case scenario, wherein the second Plenary vote rejects the exclusion of these substances from the authorisation requirements, (plan B), would almost be the only hope. The latter addresses adequate control under RIP 4.3 ensuring becomes a key element. Needless to therefore say that should the current efforts towards the exclusion of these substances from the Authorisation requirements not yield much the matter would then be tackled at the implementation phase. RIPs.

Meanwhile REACH is on course for implementation. For South Africa's technical preparation.. the Department of Minerals and Energy and Mintek are leading the process. There is also a South African Reach Initiative Group (SARlG) which consists of public and private stakeholders who will be affected by REACH. Mintek had had various interactions with the stakeholders in Brussels on REACH. The SA Government has appointed Mintek's Alan Mckenzie, to participate in the RIPs, where the technical arrangements are being made. Mr. McKenzie is working closely with the Mission in Brussels.

There will be the 9th meeting of the European Commission Working Group on the practical preparations for REACH on 22-23 November 2006 in Helsinki. This meeting is crucial as it will take stock of developments to date and the way forward. The Commission has invited Missions and capitals to send their representatives.

The Commission has also made calls for nominations for the Stakeholders Expert Groups (SEG). Missions and capitals have been invited to nominate their candidates. However there are specific guidelines regarding an expert that could partake in the SEG. It is essential for South Africa to participate at the Helsinki meeting and also have representation at the SEG. Ambassador Sooklal and Mr. McKenzie were scheduled to discuss the issues at a meeting on 31 October 2006.

5. EU STRATEGY FOR AFRICA

The current ED Strategy for Africa is an attempt to work within a strategic partnership framework in order for. Africa to attain the UN MDGs. The Strategy is all encompassing, with a focus on overall socio-economic development and improving aid levels and effectiveness throughout Africa. Priority is to also be given to further cooperation in the area of infrastructure. In this regard, the EU-Africa Infrastructure Partnership was launched in July 2006 and constitutes the EU's response to the NEPAD Infrastructure Action Plan as endorsed by the African Union. The Partnership will support programmes in the sectors of transport energy, water and sanitation and JCTs that facilitate interconnectivity at continental and regional level. The establishment of the EU-Africa Infrastructure Trust Fund as an innovative instrument is welcomed.

The Fund will be open to the contributions of the EU Member States and other key development partners. This will help attract investments to Africa in the areas of infrastructure and there will be a key role for African institutions to play in the operationalisation of this Fund.

Following the 5^th EU -Africa Ministerial Troika meeting in Bamako, 2005, a decision was taken to create a Joint EU-Africa Strategy using the current EU Strategy for Africa and the Joint EU - AU Implementation Matrix as the points of reference. A Joint Strategy for Africa will further intensify areas of cooperation with the EU - based on African priority needs. On 10 August 2006, the Troika An1bassadors met in Addis Ababa. They reviewed the updated version of the Joint Implementation Matrix and endorsed it. At this occasion the Troika Ambassadors emphasised the need to put more effort into the implementation of the commitments outlined in the Joint Implementation Matrix.

The 7^th EU- Africa Ministerial Troika Meeting in Brazzaville on 8-10 October 2006, welcomed progress made on the preparation of the Joint EU-Africa Strategy. An Expert Group composed of Troika members has been mandated to resume work on the Outline by starting consultations with civil society and other stakeholders. The results are to be presented at next Troika meeting in May 2007. The meeting furthermore stressed that there was a need to monitor and follow-up on the actual implementation of commitments made by each side. It was decided that future updates of the Joint Implementation Matrix will take place at six month intervals. On this basis, a final draft outline will be considered with both sides elaborating on the strategy for adoption at the 2^nd Europe-Africa Summit. In this context both parties agreed to expedite work towards the possible holding of the second Europe-Africa Summit in Lisbon during 2007.

A historic visit of the European Commission to the African Union in Addis Ababa took place in October 2006. The outcome of tills meeting led to the signing of the Euro 55 million grant Financing Agreement for capacity building of the African Union Commission. The African Union Commission, the European Commission and the Council Secretariat where encouraged to further enhance their policy dialogue and to exchange experiences. via the EU-AU Task Force.

A strengthened EU - Africa Partnership will also contribute towards the NEPAD objectives of a new global partnership with industrialised countries and multilateral organisations. The EU Governance Initiative for Africa aims at sustaining democracy and the meeting of NEPAD conditions for sustainable development. The EU Strategy for Africa and the Joint EU - AU Implementation Matrix address various NEPAD sectoral priorities with an emphasis on the bridging of the infrastructure gap. The African side will have to ensure that. within the context of the EU - Africa Political Dialogue the allocation of EU resources for the financing of NEP AD endorsed priority projects is maintained.

As part of the priorities identified through the EU Strategy for Africa, an EU-Africa Ministerial Conference on Migration and Development will be held in Sirte. Libya on 22-23 November 2006.