Africa, Economy & Trade, Headlines

TRADE: ACP, EU Negotiations Drag On At Snail’s Pace

Lewis Machipisa

HARARE, May 14 1999 (IPS) - The gap between the positions of the 71 African, Caribbean and Pacific (ACP) states and the European Union (EU) looks set to expand as negotiations for a successor agreement to the Lome IV Convention drag on at snail’s pace.

The EU want to speedily move toward the introduction of reciprocal trade preferences with the various economic groupings, while the ACP countries say there is a need to defer decisions for sometime to allow informed decision and choices and building capacity for competitiveness.

“These negotiations promise to be the most difficult the group has faced since its establishment (in 1975),” said Carl Greenidge, deputy secretary general of the ACP grouping. “It is especially difficult because of the extent of the gap between the positions of the group and that of the EU.”

“The pace of the negotiations is itself a symptom of another problem, namely the gap between the attitudes and wishes of each side regarding the nature and content of successor convention to Lome,” Greenidge told delegates to a Southern African Development Community (SADC)/LOME regional workshop held in Harare, Zimbabwe, this week.

The workshop aimed to strengthen regional advocacy and lobby strategy and advise governments on options for strengthening the ACP negotiation strategy on trade.

The negotiations on the future of EU relations with the ACP started at the end of September 1998 and end this year. Discussions on the trade options are proving to be especially difficult. Forty percent of SADC imports come from the EU.

The ACP is in search of a new convention which will enhance the status quo of Lome IV, improve the capacity of the partners to more effectively implement the ideas and be protected from the threats posed by global developments such as the unpredictable and expanding role of the World Trade Organisation (WTO).

Within the trade negotiations, the EU has specifically recommended Regional Economic Partnership Agreements (REPAs) with SADC, as one of the future mechanisms of cooperation in the area of trade, investment and development. There has been a diversity of opinion and challenging discussion on this aspect.

According to Zimbabwean economist, Moses Tekere, “the REPA …is a take-it-or-leave it proposal…the ACP countries are reluctant to take it because they feel they will come out second best.”

Issues discussed included the concept of good governance and transparency.

Kato Lambrechts, senior researcher with South African-based NGO, the Foundation for Global Dialogue, said “Good governance is a political concept, and the ACP and EU interprets it differently and should not be included as an essential element.”

However, it is the trade chapter of the successor agreement to Lome IV which remains the most contentious part of the negotiations.

Refusal to opt for the REPAs, leaves the ACP with non- reciprocity and the Generalised System of Preferences (GSP), which the ACP members say is inferior to the Lome IV Convention.

Under the REPAs, the EU will coordinate with regions like SADC. But there are fears that the EU will use stronger economies to gain influence. The EU has already done that in the SADC region when it established an EU-South Africa Free Trade. The deal will see goods from the EU come into South Africa and fears are that, the EU goods will end up over-flowing into the region’s countries.

“For example, beef is subsidised in the EU and if it comes to South Africa it will kill our industry as South Africa is our major trading partner. We will feel increased competition in South Africa,” said Medicine Masiiwa, projects officer with the Friedrich Ebert Stiftung (FES), co-organsiser of the workshop.

The other reason why SADC is sceptical about EU’s proposal, according to Tekere, is that “the EU’s negotiating stance is inherently unequal due to the donor-recipient relationship which is not equal.”

The REPA proposal will take a long time, say SADC members, to create a free trade area. A Trade Protocol among SADC is not likely before the year 2008 and not possible to meet the EU deadline of 2000, and the year 2005 deadline for negotiations for establishing a REPA.

The ACP countries position is that where free trade is introduced between economies of unequal levels of development and radically different sizes, then moves toward an FTA (Free Trade Area) tend to be trade diverting rather than creation.

Before the EU can talk about a REPA, the SADC countries say that necessary conditions need to be established to enable them to compete effectively with the EU.

The conditions include closing the gap in the human resource base. Many ACP developing countries face major human resource constraints. Literacy levels in many ACP countries are relatively low compared to the EU.

A huge gulf also exists between the EU and ACP countries in the underlying conditions which provide the foundations for competitive economic activity.

If moves toward free trade were to occur without this gulf being reduced significantly, then most of the benefits of free trade would accrue to the EU, while most of the costs would be carried by the ACP countries, the participants argued.

Paul Goodison of the Brussels-based European Research Office (ERO) said “a strong case exists for focussing the post Lome discussion on economic cooperation on the necessary conditions which need to be created in ACP countries for ACP enterprises to be able to compete effectively with EU enterprises.”

“While through existing Lome programmes, the EU is attempting to address many of the problems faced across a range of the areas where ACP countries are disadvantaged, it needs to be recognised that, given the scale of the challenge faced and the technical and human resources being made available, these programmes have proved relatively ineffective,” he noted.

Goodison called for a far more comprehensive approach which reaches beyond the confines of Lome aid programmes and beyond the administrative and institutional arrangements currently in place.

“It’s clearly not an ideal solution but in the circumstances the ACP has opted to deferring until 2005 consideration or whether or not to agree to REPAs and then seeking to secure a 10- year transition period. But the question of transition period to reciprocity should be determined by the state of competitiveness or preparedness of commodity dependant states,” said Greenidge.

The Lome Convention is a co-operation agreement between the EU and the ACP countries, signed in 1975. The Fourth Lome Convention was signed on Dec 15, 1989, and ends this year.

The agreement covers co-operation in areas of trade development, cultural and social, regional co-operation, the environment, food security and rural development, fishery development, commodities, industrial development, mining and energy developments.

 
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