Hopes fading for South Africa deal

Date: 03/12/1998

By Gareth Harding

THE EU's hopes of reaching a trade deal with South Africa by the end of the year appear to be fading after high-level talks between the two sides ended without agreement this week.

The European Commission is under pressure to wrap up the negotiations quickly following its failure to meet the original autumn deadline for a deal set by EU leaders.

Speaking after a meeting with South African Trade Minister Alec Erwin earlier this week, Development Commissioner Joao Pinheiro said he was still optimistic that a deal could be struck by Christmas, but admitted that time was running out.

Pinheiro will now have to ask EU member states for a new negotiating mandate at a meeting of foreign ministers next Monday (7 December). The issue may also be discussed by Union leaders at their summit in Vienna four days later.

After three tortuous years of talks, prospects of a deal being struck looked rosy at the end of last month after negotiators stitched together a global compromise deal. But political leaders from both sides are refusing to give ground on a number of outstanding issues.

The most sensitive area remains the trade in wine and spirits. The EU wants South Africa to gradually give up the use of the terms "port" and "sherry" for both exports to the EU and its internal market. However, Pretoria insists that it should be allowed to continue using the terms inside its borders.

Fisheries also remain contentious, with the Union insisting that South Africa should begin discussing an agreement early next year, while Erwin refuses to be bound by a date. The two sides are also divided over what future talks should focus on. Brussels is holding out for access to South Africa's resource-rich waters, but Pretoria says it will not even consider such a move.

Finally, there is still no agreement on the level of EU access to South African textiles markets and the opening up of EU agricultural markets to South African exporters.

The EU's chief negotiator said last month that under the Union's current offer, 95% of South Africa's exports to the EU would be fully liberalised within the next decade. For its part, Pretoria is offering to open up 86% of its trade with Europe within a similar time-frame.