Brussels trade deal with SA recedes

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EUROPEAN protectionism is undermining European Union foreign policy plans in South Africa and the Middle East, according to diplomats in Brussels.

The EU finally hopes to agree a package of trade measures for South Africa this week, according to diplomats in Brussels, but has seen them whittled away by protectionists. And relations with Israel are proving difficult because of stalled talks on a trade deal.

The root of the problem is that for countries such as South Africa and Israel, the main attraction of the EU is its large market; their main need is for increased exports. The EU wants to make symbolic foreign policy gestures, but some member states are worried by the inroads that new exporters will make and undercut the value of such initiatives by blocking trade concessions, echoing problems the EU has faced in its dealings with central and eastern Europe over the past five years.

EU foreign ministers decided in April to put together a package of trade measures for South Africa after its successful transition to democracy. But protectionism has cut the value of the trade offer to South African exporters from 400m ecus ( pounds 315m) to closer to 260m ecus, according to the diplomats. France, Italy, Spain, Portugal, and Belgium united to put reserves on the deal, fearing increases in South African exports would hurt their producers.

They were particularly concerned about agricultural products, paper products and timber, according to officials. France compromised on some of its problem areas, but the others persisted. The issue led to 'rather tense exchanges' at a meeting of officials last month, according to EU diplomats, with Britain particularly annoyed that the package had been scaled back.

The EU is also running into problems with Israel on a new trade and co-operation accord to replace one struck in 1975. It is EU policy for Europe to play a stronger role in the region, but again, the EU's partners feel it has been unwilling to make concessions with broader political aims in sight.

Negotiations have been going on for two years, but Israel feels that since progress has been recorded on Middle East peace negotiations, its contribution should be recognised. Discussions have been thwarted by disagreements between EU members, diplomats say. The main problems are trade access and inclusion in research and development programmes.