Foreign Affairs press comments on South Africa - European Union
Ministerial Troika meeting

9 October 2007

Ambassador Sooklal

You are aware that for the first time the Ministerial Troika meeting will be
hosted in South Africa. This is since we signed the comprehensive agreement
with the European Union (EU) that came into effect in 2000. Soon after the new
dispensation came into power, we began our dialogue with the European Union
which led to a very prolonged series of negotiations – almost four and a half
years – which eventually manifested in the Trade, Development and Co-operation
Agreement (TDCA) which came into partial effect in 2000. It was fully
operationalised in 2004.

Now, it was one of the first comprehensive agreements that South Africa
entered into with any global partner. The TDCA is basically composed of four
pillars: political dialogue, trade chapter, economic and other co-operation,
and development co-operation.

It is a legally binding agreement between the EU and South Africa. In terms
of the provisions of the TDCA we were supposed to conduct a mid-term review.
That mid-term review is currently underway and we hope that this will be
finalised at the Ministerial Troika. What it entails is to take stock of our
co-operation since we began the comprehensive co-operation with the European
Union and to see whether we need to revise some of the provisions within the
TDCA.

Off course, the relationship has matured and as you know, earlier in the
year, at the last Troika meeting that took place on 14 May 2007 in Brussels,
South Africa and the EU entered into a Strategic Partnership. This Strategic
Partnership is the overall political umbrella that now governs the relationship
between the EU and South Africa. This partnership is known as the Mokobakoba
Dialogue. This comes from our national tree and also that in the African
culture, discussions are held under trees.

What it did, is to elevate the status of the relationship to a higher level
politically. The EU has a Strategic Partnership with a very limited number of
countries – the United States of America (USA), Canada, Japan, India, China –
and a Strategic Partnership with Brazil is being finalized.  We are one of
those few countries with this special relationship with the European Union.

Of course, one has to put into perspective the various dimensions of this
co-operation.

As you know, the EU is our largest trading bloc accounting for almost R300
billion of two-way trade, almost 40% of South Africa's foreign trade is
conducted with EU member states.

In terms of development co-operation: you know they are the largest partner
in terms of development co-operation. Thus far, we had an envelope of €1,5
billion from 1994 to the present time and one of the important developments
that will take place during the Ministerial Troika is the finalisation of the
Country Strategy Paper. The Country Strategy Paper is a paper which will deal
with the period 2007 to 2013, determine the scope of development co-operation
between the European Union and South Africa and the EU has given us a new
allocation of €985 million over this period. This is a substantial allocation
for South Africa.

In addition to this, the European Investment Bank, which has also granted us
soft loans have also made an allocation of €900 billion for this period. So we
have both these structures and facilities of substantial funding to assist us
in terms of our own developmental agenda and economic challenges.

As far as the agreement in terms of the TDCA between South Africa and the
European Union: we have met annually for the Joint Co-operation Council (JCC)
followed by the Ministerial Troika meeting. The Ministerial Troika on the side
of the European Union is made up of the current Presidency, the High
Representative for Foreign and Security Relations Javier Solana and the
President of the Council. This is the Troika on the side of the EU.

On the South African side: the delegation is led by the Minister of Foreign
Affairs Nkosazana Dlamini Zuma and depending on the issues to be discussed, the
Ministers accompanying her may vary.

Under the Strategic Partnership and in terms of the elevation of the status
of the relationship, these meetings will now happen twice a year. So in 2007 we
met in Brussels in May where the JCC and the Ministerial Troika was held. We
also signed the Strategic Partnership. In keeping with all other Strategic
Partnership, the EU has meetings twice a year with all other Strategic
Partners. As I said, the historical significance of this is that the meetings
will rotate between Brussels and South Africa. Previously, we have only met in
Brussels and this has been something that has been bothering the South Africa
side: when you have a partnership you should rotate meetings between the EU and
South Africa. We are therefore very pleased that for the first time, the JCC
and Ministerial Troika meeting will take place at the Presidential Guesthouse
in Pretoria.

The EU delegation is composed of a representative from Solana's office, the
Head of the Africa division, Commissioner Louis Michel from the European
Commission, the Portuguese Foreign Minister Amado – as you know, Portugal is
the current President of the European Union, and the State Secretary in the
Cabinet of the Prime Minister of Slovenia, on behalf of the future EU
Presidency.

Our Minister will lead the deliberations on behalf of South Africa. She will
be accompanied by several Cabinet ministers – Ministers of Trade, Home Affairs
and Environmental Affairs and the Deputy Minister of Defence – will be part of
the delegation.

The Joint Co-operation Council will precede the Ministerial Troika meeting.
This will be led by the Director-General of Foreign Affairs Ayanda Ntsaluba and
the Director-General of Development Stefano Manservisi.

Now, in terms of the substance of the JCC, one of the main foci will be to
look at the review of the TDCA – those four chapters. We have not included a
review of the Trade Chapter because as you know, South Africa is busy
negotiating together with the South African Development Community (SADC)
Economic Agreement Partnership (EPA) group, a new trade regime with the EU. In
order to align the trade arrangement we have with the EU, together with our
region, South Africa was accepted as a full member of the SADC EPA group which
comprises eight of the 14 SADC member states. Since we are integrally part of
the SADC EPA group and negotiating an economic partnership agreement as it is
called, we have decided to bracket the trade chapter pending the conclusion of
the EPA negotiations which must be concluded by 31 December 2007 in terms of
the World Trade Organisation waiver that will expire (i.e. special preferences
given to ACP countries at this time).

In terms of development co-operation, the co-operation has moved
excellently. In fact, we have ensured we have spent almost all of the funds
allocated to us by the European Union and the European Investment Bank (EIB).
Now, under the new Country Strategic Paper the funding will in the form of
budget support and we welcome that because it reinforces the priorities of the
various departments that will benefit from this funding and it tapers with
government priorities.

Now, you may ask the question: What is different with the TDCA and the
Strategic Partnership? Of course, one of the main differences is the high-level
political dialogue because, the EU has, with all its Strategic Partners a
Summit level meeting. Now we hope that we will be able to move towards a Summit
level meeting in 2008. But because this is the first meeting of the Strategic
Partnership we have decided to consolidate and get the system working and then
move towards a summit in the coming year.

Within the Ministerial Troika meeting, the Political Dialogue will touch on
a number of issues: as you know, the EU is a major partner for Africa in terms
of peacekeeping and conflict prevention. So we will look at some of the areas
where we have worked with the EU – when I say worked, I don't mean South Africa
alone but the continental institutions of the African Union – in areas like
Sudan, Darfur, Somalia, Côte d'Ivoire, Chad, the Democratic Republic of Congo
and Burundi.

We will also touch on the forthcoming summit of the European Union and
Africa. As you know, the first summit was held in 2000 in Cairo. The second
should have convened in 2003. Because of the EU position on the situation in
Zimbabwe, the summit did not take place. The Germans, under their Presidency
during the first half of 2007 announced there would be a summit later this
year. The process is underway in terms of the substantive issues. The EU Troika
and the AU Troika have held several meetings including a Ministerial meeting in
May 2007 where they have adopted draft documents. There will basically be three
documents emerging from this meeting: at the end of December 2005, the EU at
its Council meeting in December adopted its EU Strategy for Africa. It
basically is a document that elaborates on how the EU would like to operate
with Africa in dealing with various issues – from the political, to peace and
security, to economic regeneration, to social issues – it is quite a
comprehensive agreement and as I said, it was adopted by the EU and thus far it
is the EU Strategy for Africa. There have been discussions with the AU and with
the continent, including South Africa to ensure that this document has
co-ownership, that it becomes the EU Africa Strategy. And that is one of the
main purposes of the summit – to see that this document is adopted as a joint
EU-Africa Strategy by the Continent and by the EU.

And we hope the summit will take place because we believe both the EU and
Africa has much to gain from such an association. We have extensive
interaction. The EU is still Africa's largest trading bloc and apart from
trade, the EU is also the largest partner in terms of peace and security issues
and in terms of our own economic regeneration and support for New Partnership
for Africa's Development (Nepad) and a host of host of other issues. We believe
that such a summit can only bring benefit to both sides. The EU is very keen –
the Portuguese Presidency is doing everything it can to ensure the summit takes
place.

That is one of the areas on which we will be focusing. We will also look at
how we can give concrete expression to the joint action plan that we adopted in
signing the Strategic Partnership. I spoke of the four chief pillars of the
TDCA but there are various areas where have not fully began co-operating
although we have done some work – viz. issues around the environment, climate
change, co-operation in the field of culture and sport, and in various other
aspects of seeing broader co-operation between the EU and South Africa,
including skills development and skills enhancement within the framework of
Accelerated and Shared Growth Initiative for South Africa (AsgiSA).

The Strategic Partnership provides for this and to show that movement has
already taking place, we last week in Brussels hosted a very senior delegation
from the Department of Environmental Affairs and Tourism to start to dialogue
on issues related to climate change. That meeting went very well and Minister
van Schalkwyk has met Commissioner Dimas, the EU Commission responsible for
environment and climate change issues. They have started a dialogue that has
led to this senior officials meeting. Coming out of that meeting last week, we
have agreed that an EU delegation will visit South Africa early next year to
continue the dialogue for co-operation in all of these areas.

As we prepare for the World Cup, the EU, as you know, has signed an
agreement with Fifa in terms of providing assistance in terms of capacity
building and I am sure they would be looking at the same for South Africa.

There are various other areas in which we will be expanding the scope of
co-operation.

Science and Technology is a typical area where our scope of co-operation is
expanding very well. Our science and technology agreement with the EU is now 10
years old. In fact, the science and technology agreement was signed even before
the TDCA was signed. This is a very mature interaction that we have with the
EU.

Under what the EU calls the FB 6 Framework Programme (FB 6 that just ended
last year), South Africa was the 4th ranked partner with the EU in terms of
this co-operation. Ninety projects are funded out of the FB6 programme of the
EU. In terms of the FB7 programme we have already made very good headway. They
have a very high regard for the South African science and technology
community.

Basically this is what is going to happen with the meetings tomorrow with
the Joint Co-operation Council (JCC) and the Ministerial Troika which seeks to
intensify the relationship and give practical expression to some of the new
areas on which we seek co-operation.

Condition of Deputy Foreign Minister Aziz Pahad (Ronnie Mamoepa). The
Minister of Foreign Affairs Nkosazana Dlamini Zuma is happy to announce that
Deputy Minister Aziz Pahad was last night discharged and released from a
Swedish hospital.

As you know, the Deputy Minister had fallen ill during a visit of the Deputy
President to Sweden.

Two South African doctors, as the Minister had yesterday said, were
dispatched to work in tandem with the Swedish doctors attending Deputy Minister
Pahad.

The Minister has accordingly, on behalf of our government and the people,
extended our gratitude to the Swedish government and the people as well as the
doctors attending Deputy Minister Pahad during his illness.

Currently our Director-General Ayanda Ntsaluba is busy finalising
arrangements for Deputy Minister Aziz Pahad to return to South Africa
accompanied by the two South African doctors.

We welcome your concerns around the Deputy Minister and we hope that you
will see him very soon interacting with you.

Questions and answers

Question: Ambassador, the meaning of the budget support facilitates means
that the money goes directly to government, right? What is this percentage?

Answer: I don't have the figure, but I do know it is very small. I am sure
that the Department of Finance can confirm this figure. I know that the total
is well under 5%. This is basically budget support to the departments.

Question: Ambassador, does this then facilitate the easier flow of
funds?

Answer: I think why we also agreed to budget support is that firstly, it
supports government priorities and in instances where there is insufficient
funding to role out on those priorities this kind of support from the EU
becomes very critical for us. For example, on the infrastructure roll-out plan,
the EU is very keen on this – in 2007 they have focused on water - some €100
million have been contributed to this.

Question: Ambassador, could you give us some idea of the state of progress
in the EU-SADC EPA negotiations?

Answer: As you know, the EPA negotiations – I am going to speak specifically
of the SADC-EPA group of which South Africa is a part (this comprises the SACU
countries, Mozambique, Angola and Tanzania) – the underlying principle of the
Economic Partnership Agreement is to assist regional integration and to help us
grow and develop our economies in the region to make them totally competitive.
This is the primary reason the EU has formulated this.

South Africa was an observer until March 2007 to the EPA group because we
had the TDCA under which we already had a trade agreement. We were an observer
but in 2006 when the SADC EPA Ministers met in February in Angola they took a
decision that they want South Africa to be a full member. South Africa also
agreed to this proposal because we said there should be a single trade regime
for the SADC region with the EU – i.e. you cannot have a multi-layered trade
regime in terms of what we are trying to achieve in terms of the regional
integration agenda.

It was in March 2007 that the Commission responded to what was handed to
them in 2006 as a framework paper which outlines the position of the SADC-EPA
group and the level we aspire to in our interaction with the EU. We have had
thus far three rounds of senior officials meetings and several rounds of
technical experts meetings.

It is a bit complicated because as you know, in terms of the market access
offer, SACU can make a single offer. But Mozambique, Angola and Tanzania belong
to different custom unions and have to make individual offers. So in the
region, you are going to have four different offers.

Secondly, in terms of what Commissioner Mandelsohn announced, there will by
duty and quota free access into the EU market for all ACP countries except
South Africa. In the entire EPA negotiations, South Africa is standing apart.
The rationale of the commission is based on the size of our economy and the
competitiveness of some of our sectors. Therefore there has to be a special
dispensation.

We were not happy with this because we wanted a single trade regime. But,
for now, we have accepted that these are the parameters under which we are
negotiating.

We have made an offer as SACU in terms of market access and the negotiations
are ongoing.

The fundamental difference and I know there have been some accusations of
South Africa from the commission that we are holding up this process and
dragging our feet on the negotiations. That is totally incorrect.

The reason why we could not make a market access offer earlier is because we
had to take into account the BLNS sensitivities and ensure that when we make a
market access offer as SACU the sensitivities of the other SACU members are
taken into account.

The EU, in their side, wants a complete EPA – by complete I mean not just an
EPA dealing with trade and goods but also dealing with all the trade related
issues, these new generation issues including services.

Now, in our framework document we have stated that for now we want an EPA
that will focus on trade and goods and we are confident we can meet the
deadline of the waiver expiry of 31 December to ensure that no-one is
disadvantaged in terms of preferential treatments currently enjoyed under the
Cotonou ACP countries.

The EU has insisted that we must negotiate separately on services and all
new generation issues. On the side of the SADC – EPA group we are saying we are
not ready for that.

Firstly, besides South Africa and perhaps one or two other countries that
have a very competitive and fairly developed services sector the others don't.
If you look at some of the new generation issues like competition, government
procurement, very few have a competition board in our region.

We are saying: first help us to develop our own structures, our legal
framework and help us to build capacity in all of these areas. We understand
the importance of all of these areas but for now, our economies are not in a
position to take on commitments in these areas and this is where the current
logjam is in terms of moving towards the successful conclusion of the EPA.

We will be meeting next week in Maputo for another round of senior officials
meeting followed by the SADC-EPA Ministerial meeting next Friday to hopefully
further advance the negotiations and try to meet the deadline if we can find
compromises. Some of the SADC EPA states have indicated they are prepared to
look at negotiating services, not in this round, but in future. For now South
Africa has said we are only prepared to negotiate an agreement on trade and
goods and I believe we are confident we can achieve this – that we have made
good headway in achieving an EPA on trade and goods and looking towards a
co-operative arrangement on the trade related issues that we can negotiate at a
later date.

Question: Ambassador, about the EU-Africa Summit – various countries have
been making statements regarding whether they will attend if Zimbabwe's
President Mugabe is invited.

Answer: Now one of the reasons why the summit has not taken place thus far,
we have made it very clear on the side of Africa and I think this is a common
African position that if you want to have a summit with the African continent
there should be no preconditions.

That if you do not agree with the policies of any leader and / or country
the best way in which to address this is in the presence of that leader and /
or country. Let them be there and directly speak to the parties concerned. But
don't lay down preconditions to say that if this leader attends then the
following countries are not going to attend.

And it is unfortunate that the United Kingdom has taken this position. Our
position has been that if you say it is a summit between equals – between the
African continent and the European Communities - then let us meets on equal
grounds and discuss all of these issues including the difficult issues in the
relationship because as I indicated the general feeling from the EU membership
is that this summit must take place. Likewise, we in Africa want this summit.
We have a substantive relationship at all levels with the European Commission
and I think the summit is overdue.

But, as South Africa, we are saying that we would not allow for the EC or
some member states of the EC to lay down preconditions under which this Summit
will take place. I think this will be disastrous and will derail what could be
a very successful summit.

Question: Where do things stand?

Answer: Chancellor Merkel was in South Africa a few days ago and she made a
clear pronouncement on this. We have the Portuguese foreign minister here and
I'm sure this will be raised. We did raise this issue at the meeting in May
this year and the Portuguese, the current Presidency of the EU, made it very
clear that they want this summit to take place. The Slovenians, as the incoming
President of the EU, have stated they want the Summit to take place. We have
had the Deputy Minister of Poland here making a pronouncement that Poland wants
this to happen.

So I think the ball is in the court of the EU, for them to sort out their
politics because on the side of the African continent we are very eager to have
this summit but we have made it very clear we will not attend a watered down
summit. We want a summit, as the EU has said, of equals and thus far the summit
has been postponed for several years precisely because of the politics that
enters into the whole question of the summit.

Thank you

Issued by: Department of Foreign Affairs
9 October 2007