VZCZCXRO3233
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #1148 1591437
ZNR UUUUU ZZH
R 081437Z JUN 09
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 8743
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHOR/AMEMBASSY GABORONE 5512
RUEHMR/AMEMBASSY MASERU 2871
RUEHMB/AMEMBASSY MBABANE 4546
RUEHWD/AMEMBASSY WINDHOEK 5011

UNCLAS PRETORIA 001148 
 
SIPDIS 
 
PLEASE PASS TO USTR FOR BILL JACKSON 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EIND EINT SF
SUBJECT: SOUTHERN AFRICAN COUNTRIES SIGN ECONOMIC 
PARTNERSHIP AGREEMENT WITH E.U.; SOUTH AFRICA ABSTAINS 
 
REF: PRETORIA 00022 AND PRETORIA 00328 
 
¶1.  (SBU)  Summary:  Botswana, Lesotho, Mozambique, and 
Swaziland signed the interim EU-SADC Economic Partnership 
Agreement (EPA) in Brussels on June 4.  South Africa did not 
sign the EPA, nor did Angola or Namibia.  The signing of the 
EPA has raised questions about the future of the Southern 
African Customs Union (SACU), which is now split into EPA 
parties Botswana, Lesotho, and Swaziland and non-parties 
South Africa and Namibia.  End Summary. 
 
¶2.  (SBU) Botswana, Lesotho, Mozambique, and Swaziland signed 
the interim EU-SADC Economic Partnership Agreement (EPA) in 
Brussels on June 4.  South Africa did not sign the EPA, nor 
did Angola or Namibia.  Per reftels, South Africa has 
objected to the interim EPA since the negotiations began, 
citing concerns about the impact on regional integration and 
South Africa's trade agenda with other developing countries. 
(Note:  Article 31 of the SACU Agreement states:  "No Member 
state shall negotiate and enter into new preferential trade 
agreements with third parties . . . without the consent of 
other Member States."  SACU did not reach a consensus on the 
EPA prior to the signing in Brussels.  End Note.) 
 
¶3.  (SBU) South African Minister of Trade and Industry Rob 
Davies has warned that South Africa will step up border 
controls in response to the signing, according to press 
reports.  "We will not be admitting things which do not 
comply with the rules of origin under the Trade and 
Development Cooperation Agreement (South Africa's trade deal 
with the EU)," warned Davies.  South Africa's Department of 
Trade and Industry Chief Trade Negotiator Xavier Carim also 
told journalists that the interim EPA has implications for 
SACU customs revenue sharing.  He said, "There could be 
implications for the customs pool and the way customs revenue 
is shared between the members, because the pool functions on 
the assumption that the common external tariff is intact ... 
the future of the customs union will have to be thought 
through very carefully."  (Note:  SACU revenues are a crucial 
source of budget support for Botswana, Lesotho, Namibia, and 
Swaziland.  End Note.) 
 
¶4.  (SBU) Comment:  SACU has been controversial with many SAG 
officials (particularly in National Treasury) who grumble 
about the disproportionate share of SACU revenue that goes to 
other member states.  SACU is also seen as anachronistic by 
some SAG officials more focused on SADC-wide integration. 
However, the political implications of tearing up a regional 
integration treaty would be significant, and ensure that 
Pretoria will not take this step casually. End Comment. 
BROWN