EU aid row threatens to sink South Africa's trade hopes

Andrew Marshall, in the first of a series, reports on the EU's role in helping Africa by strengthening economic links with Pretoria

A plan for free trade between Europe and South Africa could be delayed by disputes between EU member states, diplomats and officials in Brussels say.

Joao de Deus Pinheiro, European Commissioner for Development, who recently returned from South Africa,underlined the priority he puts on the agreement.

"South Africa is, I think, the great hope of Africa," he said. Reconstructing its economy is vital to underpinning democracy, but also to assisting the whole region, where peace has returned to Mozambique and the outlook in Angola is better. "For the first time, there is a real prospect of improvement in Southern Africa," he added.

Relations with the new government in Pretoria are shaping up as a key test of EU relations with Africa and strategy towards developing countries in general.

The European Commission has proposed a deal that would eventually allow free trade between South Africa and the EU. Europe would drop its trade barriers first, allowing South African industry to adjust. After four or five years, South Africa would follow, creating free trade in 10 or 12 years' time.

The idea initially caused controversy because South Africa thought it should be allowed access to the EU's preferential trade scheme reserved for developing countries. The Lome Convention covers trade and aid relations with 70 developing countries in Africa, the Caribbean and the Pacific (ACP). Because parts of the South African economy are far more developed than the rest of Africa's, the Commission rejected that, though a "two- track" policy gives the country some links to Lome.

On his visit, Mr Pinheiro resolved most South African doubts. But he has still to win the agreement of the 15 EU member states. Some continue to disagree about the free trade idea, fearing it may undermine their own producers - particularly in sensitive agricultural sectors such as fruit.

But Commission sources and diplomats say that a larger problem may be emerging. The agreement of EU governments to the mandate under which European officials would negotiate with South Africa may be held hostage to a deal to increase the aid available under the European Development Fund (EDF), a scheme for assisting the 70 ACP states.

Britain and Germany are opposing plans for a substantial increase in the EDF, but they are the two principal supporters of free trade with South Africa. France, president of the EU, has put more cash for the EDF at the top of its priorities. It could use the South African deal as leverage. It had been hoped the negotiating mandate could be agreed today, but it may take several more weeks, officials say.

The trade agreement is pivotal for both the Commission and South Africa. Mr Pinheiro, a former Portuguese foreign minister, thinks the EU can and should play an important role in South Africa because of its economic involvement - it is South Africa's leading trade partner. The EU is also offering 125m ecus (pounds 100m) of aid a year for five years to South Africa's reconstruction and development programme.

But the Commission also hopes the deal with Pretoria can serve as the nucleus of a strategy for Southern Africa, and this was one of the major themes of discussion between Mr Pinheiro and Thabo Mbeki, First Deputy President.

"Because we think South Africa will be decisive in the region, we intend to be generous," said Mr Pinheiro. The Commission is offering new support for regional integration through the Southern African Development Community.

Analysts hope the changes in South Africa will refocus European attention on the continent. With Eastern Europe, Latin America and the Mediterranean all absorbing much time and money in Brussels, Africa has started to slide off the agenda. And the former colonial powers now look to Asia for economic opportunities. Foreign investment has collapsed. A study by the institute of development studies at Sussex University shows rapid disinvestment by British firms in the early 1990s.

Suggested Topics
Life and Style
Customers can get their caffeine fix on the move
food + drink
Life and Style
techCould new invention save millions in healthcare bills?
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Have you tried new the Independent Digital Edition apps?
ebooksAn evocation of the conflict through the eyes of those who lived through it
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
Jermain Defoe got loads of custard
peoplePamela Anderson rejects ice bucket challenge because of ALS experiments on animals
Arts and Entertainment
tvExecutive says content is not 'without any purpose'
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
newsChester Zoo have revealed their newest members
sportLeague Managers' Association had described Malky Mackay texts as 'friendly banter'
The video, titled 'A Message to America', was released a day after Islamic State, an al Qaeda offshoot that has overrun large parts of Iraq, threatened to attack Americans 'in any place'. U.S. officials said they were working to determine the video's authenticity
Life and Style
Arts and Entertainment
tvSpielberg involved in bringing his 2002 film to the small screen
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Data Insight Manager - Marketing

£32000 - £35000 Per Annum: Clearwater People Solutions Ltd: Our client based o...

Internal Communications Advisor - SW London

£30000 - £35000 per annum: Ashdown Group: Internal Communications Advisor - SW...

Data Insight Manager

£40000 - £43000 Per Annum plus company bonus: Clearwater People Solutions Ltd:...

Trainee Recruitment Consultant - IT

£20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape