The agreement was the first regional EPA in Africa to be fully operational after Mozambique began implementing the EPA in February 2018. The EPA provides asymmetric access to the partners of the APE CDAA group. They can protect sensitive products from full liberalisation and safeguards can be taken if imports from the EU increase too rapidly. A detailed chapter on development identifies areas of trade that can benefit from financing. The agreement also contains a chapter on sustainable development that covers social and environmental issues. On 10 June 2016, the EU signed an Economic Partnership Agreement (EPA) with the CDAA-EPA Group of Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland. The agreement was the first regional EPA in Africa to be fully operational after Mozambique`s accession in February 2018. The EU`s Economic Partnership Agreements aim to promote trade with participating countries and ultimately contribute to sustainable development and poverty reduction through trade and investment. The EPA EU-SADC is also one of the building blocks of the future Continental Free Trade Area (AfCFTA).
The rules of origin define which products can benefit from trade preferences. In the CDAA EPA, they were formulated in such a way as to make it easier for CDAA EPA countries to benefit from reduced EU rights. The textile industry, for example, benefits in countries such as South Africa and Lesotho, which depend on imported fabrics. In addition, it is the first agreement that excludes the possibility for the EU to use agricultural export subsidies. Under the CDAA EPA, the EU grants 100% free access to Botswana, Lesotho, Mozambique, Namibia and Swaziland. In addition, the EU has eliminated all or part of tariffs on 98.7% of imports from South Africa. The states of the CDAA EPA do not have to react with the same level of market opening. Instead, they can retain tariffs on products that are sensitive to international competition. This is sometimes called asymmetric liberalization. The South African Customs Union (SACU) removes tariffs on only about 86% of imports from the EU. Apart from EPAs, the EU has never agreed on such asymmetry in a free trade agreement.
The EPA also contains a large number of “safety valves” or safety valves. EPA countries can activate them and increase import duties if imports from the EU increase so sharply or so rapidly that they threaten to disrupt domestic production. The agreement contains no less than five bilateral safeguards, a figure that is not repeated in any other EU trade agreement. In addition, if the EU applies protection under WTO rules, the EU offers its CEPOL partners a five-year renewable exemption from its application, which will allow EPA countries to continue exporting. European Commission Trade Commissioner Cecilia Malmstrom said: “Trade is a powerful development tool and I am very pleased that this development-focused agreement is bearing fruit. We must now focus on putting into practice all the remaining aspects of the agreement, so that citizens and businesses on both sides can take full advantage of the opportunities offered by our partnership. Today`s decisions by the Joint Council are moving us in the right direction. How is the CFDC EPA a development-oriented agreement? These trade rules are based on a detailed chapter on development, which identifies areas of trade that could benefit from increased funding and support.