Trade: 2021 a record year for trade between the EU and Seychelles |07 January 2023
In 2021, despite the pandemic, the European Union (EU) has remained the main trade partner of the Republic of Seychelles and even increased its share in the Seychelles total trade, thanks to the EU-ESA5 Economic Partnership Agreement, applied between the EU and the Seychelles together with the Comoros, Madagascar, Mauritius and Zimbabwe.
This is the result of an analysis of trade flows carried out by the Delegation of the EU.
Vincent Degert, ambassador of the European Union to the Republic of Mauritius and to the Republic of Seychelles stated:
“The analysis of trade flows in 2021 shows that the EU remained a key partner of the Republic of Seychelles despite the pandemic. In fact, the EU has even reinforced its position as the first trade partner of the Seychelles in 2021, which is a record year for trade between the Seychelles and the EU, both in exports and imports. In addition, trade with the EU clearly shows an upward trend since the implementation of the interim Economic Partnership Agreement (iEPA) in 2012, imports and exports having more than doubled! The deepening of the iEPA, currently under negotiations, will bring numerous growth opportunities, accelerating sustainable growth and decent job creation for the Seychelles.”
Trade flows between the EU and the Republic of Seychelles in 2021:
Total trade
In 2021, according to the Seychelles National Bureau of Statistics, the Seychelles total trade was valued at €1.67 billion, representing an increase of +8.9% when compared to 2020 (€1.53 billion). Total trade in 2021 is the highest when compared to the previous ten years, an increase driven by higher exports and imports.
Again in 2021, the EU remained by far the main trade partner of the Seychelles with 40.7% of total trade, followed by the UAE (23.8%), the UK (6.8%), South Africa (6.3%), India (3.5%) and China (2.4%). Total trade with the main trade partners increased when compared to 2020 except for the UK and South Africa which decreased by -11.7% and -5.5% respectively. The EU increased its share in total trade by 1.7 percentage points (with a share of 39% of total trade in 2020), at the detriment of South Africa and the UK.
Among the EU, France remained the first trade partner of the Seychelles with 42.7% of total trade with the EU, followed by Italy (23.4%), Spain (15.4%), Germany (5.4%) and The Netherlands (4%).
The Seychelles trade performance for the year reflects both the impact of the pandemic and the measures taken to address the recovery. The Seychelles lockdown which was in place from April 2020 and partial lockdown in place until mid-2021, has severely affected international trade flows with limited air and maritime connectivity. The value of trade might also have been impacted by exchange rate policies implemented to mitigate the impact of the pandemic.
Exports
The EU remained by far the main destination for the Seychelles exports, with a share of 67.6% of total exports for 2021 (63.7% in 2020). Exports to the EU, amounted to €250.07 million in 2021, representing an increase of +56.4% when compared to 2020 (€159.88 million).
Among the EU, France was the main recipient, with a share of 59.4% of Seychelles exports to the EU, followed by Italy (20.5%), Germany (8.7%) and The Netherlands (3.3%).
Main export to the EU in 2021 was canned tuna (87%), sent mainly to France and Italy; and the EU is the biggest client for the Seychelles canned tuna, with 58.8% of the Seychelles total exports of canned tuna.
Other products exported to the EU in 2021 were mineral fuels and mineral oils (4.9%); ships, boats and floating structures (1.8%); fish oils and fats (1.3%); medicaments and medical appliances (0.2%); and fresh and frozen fish (0.1% of exports to the EU).
Imports
In 2021, the EU remained the first supplier of the Seychelles, with a share of 40.8% of the Seychelles total imports (20.7% in 2020). Imports from the EU amounted to €428.22 million representing an increase of +57.8% in 2021 when compared to 2020.
Among the EU, France was the main supplier with a share of 33% of Seychelles imports from the EU, followed by Italy (25%), Spain (24.5%), The Netherlands (4.4%) and Germany (3.4%).
The main imports from the EU in 2021 were live animals and animal products (22.1%), machinery and appliances (21.6%), transport equipment (13.6%), base metals and articles (10.6%), foodstuffs, beverages and tobacco (8.5%), products of the chemicals or allied industries (5.5%) and textile and textile articles (4.5%).
Table 1: Seychelles main trading partners in 2021
The impact of the Economic Partnership Agreement:
a) On EU-Seychelles trade:
Trade with the EU has maintained an upward trend over the last ten years with a few dips. Imports have increased faster than exports. 2021 is a record year for trade between the Seychelles and the EU, both in exports and imports, as can be seen in tables 1-3.
Trade between the EU and the Seychelles increased by +126.7% since 2011, year prior to the ESA EPA implementation.
The Seychelles exports to the EU increased by +117.1% since 2011. Imports from the EU increased by +132.5% since 2011.
Table 2: Seychelles Trade with the EU - 2010 to 2021 (€ million)
Source: National Bureau of Statistics, Seychelles
b) On intra ESA5 trade:
In addition, a trend analysis, based on the data from the International Monetary Fund Department of Trade Statistics, was carried out to assess whether the iEPA has had an impact on trade among the ESA countries (the Comoros, Madagascar, Mauritius, the Seychelles and Zimbabwe). The collected data shows an upward trend in trade between the ESA5 countries (the Comoros, Madagascar, Mauritius and Zimbabwe) and the Seychelles since the implementation of the iEPA.
In 2021, trade between the Seychelles and the ESA4 was valued at €59.51 million in 2021, representing an increase of +69.5% when compared to 2020 (€35.10 million). Trade with the ESA4 is at its highest since 2015. The ESA4 had a share of 3.6% of the Seychelles total trade in 2021, improving by 0.3 percentage points in 1 year.
Taking aside the exceptional year in 2011 due to very high exports, trade between the Seychelles and the ESA4 has increased since 2012 by 77.1%, with a dip in 2016 and 2020.
Among the ESA4, similar to 2020, the main trade partner of the Seychelles in 2021 was Mauritius with a share of 94.1%. Madagascar was far behind with 5.5% and Zimbabwe had a negligible share of 0.3%. There was no trade between the Seychelles and the Comoros.
Table 3: Trade between ESA4 and the Seychelles from 2010 to 2021 (€ million)
Source: IMF DOTS
Methodology
The analysis of trade flows between the EU and Seychelles has been undertaken by the Regional Trade Section of the Delegation of the European Union to the Republic of Mauritius and to the Republic of Seychelles. The analysis of trade flows with the EU for the ESA5 group of countries (the Comoros, Madagascar, Mauritius, the Seychelles and Zimbabwe), parties to the interim Economic Partnership Agreement (iEPA) has also been undertaken.
Data for Seychelles were sourced from the National Statistics Bureau of Seychelles, the International Monetary Fund Department of Trade Statistics, EU Trade Statistics and the United Nations Conference on Trade and Development (UNCTAD) Foreign Direct Investment (FDI) Statistics (Year 2021, World Investment Report 2022).
Background:
What is the interim Economic Partnership Agreement (iEPA)?
The EU concluded the interim Economic Partnership Agreement (iEPA) negotiations with six countries from the Eastern and Southern African (ESA) region (the Comoros, Madagascar, Mauritius, the Seychelles, Zambia and Zimbabwe) at the end of 2007. The agreement was signed in August 2009 by four countries namely Madagascar, Mauritius, the Seychelles and Zimbabwe and has been applied by the four countries since May 2012. The Comoros ratified the agreement in February 2019 and began applying it immediately.
Under the iEPA, ESA5 exports to the EU do not face any tariff barriers, as the EU has immediately liberalised 100% of its market for exports from these five countries. In exchange, the ESA5 countries have progressively opened up a large part of their market over a 10-year transition period and the percentage of liberalised tariff lines varies from 98% for the Seychelles, 96% for Mauritius, 80% for Madagascar, 86% for Zimbabwe and 80% for the Comoros (2024).
The deepening of the iEPA
In 2017, 4 Eastern and Southern African (ESA4) countries (Mauritius, Madagascar, the Seychelles and Zimbabwe) requested negotiations on upgrading this Agreement (commonly referred to as “deepening”). Article 3 of the Agreement stipulates that both parties will complete negotiations on all outstanding issues (listed in Article 53) with a view to having a comprehensive EPA. On October 2, 2019, the EU started negotiations with the ESA5 countries to deepen the existing Economic Partnership Agreement. The negotiations are expected to conclude by mid-2023.
The deepened iEPA or full EPA will include: rules of origin; customs and trade facilitation; sanitary and phytosanitary measures; technical barriers to trade; trade defence mechanism/trade remedies; transparency; trade in services, investment liberalisation and digital trade; public procurement; intellectual property rights; trade and competition; trade and sustainable development; agriculture; fisheries; dispute avoidance and settlement; institutional structure; and economic development cooperation/Means of Implementation.
The future agreement will be the EU’s first modern and comprehensive free trade agreement (FTA) with the Sub-Saharan Africa. It will contribute to achieving the objectives of the new Africa-Europe Alliance for Sustainable Investment and Jobs.
Press release from the EU