Angola Set to Start Trade Negotiations With the EU
- August 19, 2022
- Posted by: Quatro Strategies
- Category: Politics
Angola is set to start trade negotiations with the European Union this year after the bloc and African partners accepted a request from the oil rich nation to join a regional trade bloc. The EU approved the start of negotiations in late July, just before Angola holds general elections next week. While the formal negotiations is on the horizon, a date is still to be agreed with Angola. The EU expects the talks to start in fourth quarter of this year.
If a deal is reached with the European Union, exports of Angolan products to the bloc will likely increase and possibly reduce dominance of oil in the country’s exports. Currently, nearly all of Angola’s export revenue comes from oil.
Angolan products such as frozen shrimps, ethyl alcohol, wheat bran and bananas are likely to benefit the most thanks to the expected lift of tariffs, according to EU estimates.
As a result of EU’s increased need for energy amid the energy crisis caused by Russia’s invasion of Ukraine, Angola’s exports of oil to the bloc would also benefit from an agreement. China is by far Angola’s largest customer for oil.
Most of Angolan exports to the EU already benefit of preferential treatment because the country had been classed as a least developed nation.
But thanks to its recent economic growth fueled by oil revenue, it is set to lose that status in 2027. That means it would face tariffs on several products unless it joins the regional trade agreement the EU signed with six southern African nations in 2016.
Under the deal, EU products will also access the Angolan market with lower duties – an advantage for local consumers but a risk to domestic industries if they do not invest to remain competitive.
Under the current regional trade deal, the EU removed tariffs and quotas on any imports from Botswana, Lesotho, Mozambique, Namibia, and Eswatini, and lifted most of the duties on South African exports.
In exchange, the southern African countries removed duties on up to 86% of EU exports.
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