On behalf of the EU, I would like to welcome the delegations of all SACU countries and my Ambassador colleagues in Geneva, and thank Ambassador Thabo Matjama of Lesotho, for the opening statement on behalf of SACU. I would also like to thank the WTO Secretariat and the SACU delegations for their respective reports, and extend our appreciation to the Discussant, Ambassador H.E. Mr. Simon Manley (United Kingdom) for his remarks.

The EU is a strong supporter of the Southern African Customs Union (SACU), and welcomes its significant progress since the creation in 1969. The EU is also a staunch supporter of the African Continental Free Trade Agreement (AfCFTA) which is of paramount importance for facilitating the free flow of goods and services across the continent and boosting the trading position of Africa in the global market.

The SACU members face common challenges, with large inequality in terms of income distribution and relatively high unemployment, averaging 24% in 2022. Some of the challenges are global, such as the increasing number of droughts, caused by climate change.

The report shows that the SACU economies, largely dominated by South Africa, had a collective growth by 1.2% annually from 2014 to 2022. This can be partially attributed to the global economic slowdown following the COVID-19 pandemic, but other factors relate to under-maintained transport infrastructure, high telecommunications costs, and severe shortages of electricity.

In this context, the EU commends the SACU Strategic Plan 2022-2027 that establishes practical ways to promote industrialization, export and investment, facilitate trade and logistics, diversify export markets and strengthen trade relations with third parties.

The five SACU countries are active participants in the work of the WTO. Here, I would like to express our appreciation especially to Ambassador of Botswana, H. E. Dr Molokomme, for her role over the last few years as the Chair of the Dispute Settlement Body and now of the General Council. SACU Members have all implemented commitments under the Trade Facilitation Agreement. The EU welcomes in particular the support of Botswana, Lesotho and Namibia in the work on trade and gender. We also encourage engagement in the work on micro, small and medium-sized enterprises (MSMEs). SACU countries might consider adhering to the Government Procurement Agreement within the WTO framework as it would help to reduce the costs and delays associated with trade and procurement, as well as provide a level playing field for regional and international companies.

The EU is the key trading partner for most SACU members, with the EU accounting for 36% of SACU's total trade. The 27 EU member states are also a major source of investment in Southern Africa.

The EU and SACU (plus Mozambique) have a strong trade relationship anchored in the Economic Partnership Agreement (EPA). The EPA can help to further diversify and develop the economies, and contributes to regional integration. Since the application of EPA in 2016, SADC EPA States’ exports to the EU increased by 85%, and their imports from the EU by 29%.

The EU is also developing a new approach to investment facilitation, through the Investment Facilitation Agreements (SIFAs), with the objective of helping partner countries in Africa to attract, retain and expand sustainable investments, particularly as regards sustainable energy and digitalization. Improving the business environment would also attract investment and make it easier for businesses to operate.

In its advance questions, the EU has raised a number of questions, notably on regional integration, intellectual property rights, business climate, restrictions in place for foreign investments, and government procurement. The EU is also keen to learn more on the way ahead for SACU, for example the development of a common customs policy or the coordination in the definition and application of tariffs and trade defence instruments.

I would now like to address specifically South Africa, which is one of the strategic partners of the EU globally and the biggest economy of SACU.

Trade in goods between the EU and South Africa has been steadily increasing (EUR 55.5 billion in 2022), notably thanks to the EU-SADC EPA. South Africa recorded a trade surplus in 2022 (EUR 2.7 billion). EU is South Africa’s largest source of foreign direct investment (accounting for around 49% (2022) of overall FDI stocks in South Africa) and remains South Africa’s most important trading partner (providing 22.1% of the country’s total imports and accounting for 21.7% of total South African exports, 2022).

The EU promotes an integrated value chain approach in South Africa in order to help the country develop industries which add value and create jobs and diversifies its economy. An example of this is the EU's investment in the automotive sector in South Africa.

The EU remains committed to foster green industrialisation in South Africa, so that it can integrated better in supply chains linking it with the region and global markets. However, the EU is of the opinion that forced localisation through legally binding designated products in precise percentages – as it is the case in public procurement processes and in other frameworks – runs against the economics of the industrialisation process and is doubtful from a WTO compliance perspective.

Mr Chairman, state interventions in support of industrial sectors have become a pressing global trade policy challenge as they have become more widespread and complex. The EU considers that this is a highly relevant topic for global trade today that needs to be addressed as part of our work to reform the WTO. We are proposing that a process of deliberation on this be launched at MC13, which should include, as well, consideration of the development dimension. This is in line with our view that mainstreaming development considerations in all the different areas of our work is an objective for the WTO, as we also highlighted at the Senior Officials Meeting just yesterday.

With just a few months until MC13, we continue to be ready to engage with our SACU partners towards a successful Ministerial, and one that showcases the role of the WTO for development notably by helping developing countries and LDCs integrate better into global trade.

I would like to thank the SACU delegation for the replies to our questions, which we will review carefully. On behalf of the EU, I look forward to a constructive exchange of views, and wish to the SACU and its individual Member States a successful 5^th joint review.