EU Statement at the Trade Policy Review of the Republic of Angola, 18 March 2024

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EU Statement at the Trade Policy Review of the Republic of Angola, 18 March 2024

18.03.2024 EU mission to the WTO in Geneva - Press and information team

Statement delivered by Ambassador João Aguiar Machado

I would first like to welcome the Delegation of Angola, led by H.E. Rui Miguens de Oliveira, Minister of Industry and Commerce and also thank the Discussant, H.E. Mr. Guilherme de Aguiar Patriota (Brazil) for his remarks.

The EU supports Angola towards sustainable and inclusive development in line with Angola's long-term development vision "Angola 2050". The EU acknowledges the importance of ongoing efforts regarding the diversification of the oil-dependent economy, which is vital to reduce Angola's vulnerability to external shocks and to create jobs. We welcome the fact that promoting investments and private sector growth are at the centre of "Angola 2050" and of the 2023-2027 National Development Plan. This is all the more important now that the macroeconomic outlook is deteriorating, with growth estimated to slow down to 1.3% and public debt to increase to 85% of GDP in 2023.

The EU has a strong and comprehensive partnership with Angola encompassing political, trade and cooperation relations reflected in the "Joint Way Forward". This is supported through significant Global Gateway flagships such as the Lobito Corridor. The Lobito Corridor will create economic opportunities, value and jobs for Angola, the Democratic Republic of Congo and Zambia. It is already attracting significant investments. We look forward to learning more about the plans to harmonize trade/border procedures with your neighbouring countries.

The EU and Angola have long economic ties and are important trade and investment partners. The EU is Angola's second main trade partner and first investment partner and we continue to be the biggest direct donor for development aid in Angola.

In 2022, EU-Angola bilateral trade flows reached all-time record in our trade flows (around EUR 17.8 billion) - a nearly four times growth compared to 2021 (4.6 billion). In 2023 trade flows decreased to EUR 12.8 bn, mainly due to decrease in value of Angola's exports of oil to the EU. While Angola's exports to the EU are still highly concentrated in oil and related products (around 94%) and diamonds (another 5%), there are signs that Angola's efforts at diversification are already bearing fruit, as demonstrated by the increase of exports of agricultural and fishery products.

The EU welcomes the signature of the Sustainable Investment Facilitation Agreement signed at the EU-Angola business forum on 17 November 2023. This is a clear recognition of Angola's investment potential beyond the oil and gas sector, and of the path of business-friendly reforms already accomplished by Angola. The agreement is an important signal to investors -that Angola is ready for business. The EU welcomes Angola' participation in the Investment Facilitation for Development Agreement that, once entered into the WTO rulebook and implemented, will unlock further benefits in attracting foreign direct investment for developing countries.

In order to magnify the message of openness to business, now it would be the time to start negotiations for accession to the EU-Southern African Development Community (SADC) Economic Partnership Agreement. Angola's accession to the EU-SADC EPA is expected to have a positive effect on bilateral and regional trade and investment. It would ensure that Angolan economic operators continue benefitting from tariff preferences while exporting to the EU market after graduating from LDC status, or when cumulating origin with other countries in the region.

What is equally important is that Angola advances in its talks with other SADC countries on accession to the SADC Trade Protocol - this will strengthen regional economic integration and offer further possibilities to develop regional value chains. Currently less than 5% of Angola's imports originates in the SADC region (mostly South Africa). We believe that Angola's accession to the EPA and to the SADC trade protocol will contribute to Angola's goal of economic and trade diversification.

Mr Chairman, turning now to a few concerns and as a general remark, the EU would invite Angola to fully respect WTO rules when adopting measures affecting trade and investment. Let me now highlight a few issues that the EU has raised also in its written questions and that are considered and confirmed by EU operators as difficulties for trade.

While we fully support Angola's efforts at diversification of its economy and development of national production, this should take place in full compatibility with WTO rules. The EU is concerned with the implementation of the PRODESI programme as it could result in import substitution through measures, which amount to barriers to trade in the form of non-automatic licensing requirements conditional on fulfilment of domestic purchase requirements. While the new Presidential Decree 213/23 is still under consultations, it is important that Angola ensure its compatibility with WTO rules.

Concerning Angola's high security tax stamps, we understand the underlying motivations for this scheme. We want, however, to call on Angola to make the system workable for economic operators from outside Angola, including by allowing for a sufficient transition period and a full exhaustion of stocks of un-stamped products that are already on the market.

We would like to thank Angola for the responses to our questions. On behalf of the EU, I wish Angola's Delegation the utmost success during its 3^rd Trade Policy Review.