Pretoria seeks allies in battle over trade deal

Date: 03/02/2000

By Gareth Harding

SOUTH Africa is mobilising other countries in the fight against what it regards as EU protectionism, amid mounting anger at the Union's failure to honour the terms of a free-trade deal signed more than three months ago.

Greece and Italy are threatening to sink the accord because they believe it does not do enough to protect their two national liquors - grappa and ouzo. European Commission officials have been shuttling between Brussels and Pretoria for the past fortnight in a bid to clinch a compromise deal, but this has so far proved elusive.

In an attempt to break the deadlock, South African Trade Minister Alec Erwin offered to label locally-produced spirits as South African grappa or ouzo, but Italy and Greece rejected the offer.

Pretoria is now seeking to rally support for its position among other countries which are opposed to the EU's ring-fencing of traditional terms such as ouzo and grappa and geographical names like Scotch beef. A wine and spirits agreement with New Zealand has been held up for months by the same problem and Australia is fighting to retain the right to use terms such as vintage and rosé.

South Africa wants the issue to be discussed at the World Trade Organisation and is trying to forge an alliance with countries such as Brazil and India to fight for developing countries' interests.

Erwin described the current situation as "chaos" and accused the EU of doing "considerable damage to its credibility". South African President Thabo Mbeki also joined in the chorus of criticism, saying that the hold-up sent a "bad message about the Europeans" to all developing countries. "You cannot enter agreements and then back away. It is dishonourable and surely you cannot conduct negotiations on that basis," he added.

South Africa's leaders are lobbying EU member states to support the deal and are winning some high-profile converts. UK Foreign Office Minister Peter Hain said the Union's stalling "implies a protectionist club that is not interested in an open trading agreement".

With the EU about to kick off talks aimed at agreeing free-trade pacts with South America's most powerful states, both the Union and its trading partners are aware of the damage which the current dispute could do to hopes of future accords.

Referring to the spat over ouzo and grappa, the head of the Commission's development directorate-general Phillip Lowe said: "It is not an issue of major commercial interest to South Africa, but a question of principle". However, a South African diplomat said that the EU's position "sent a worrying message as far as other agreements are concerned".

South Africa is mobilising other countries in the fight against what it regards as EU protectionism, amid mounting anger at the Union's failure to honour the terms of a free-trade deal signed in 1999.