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TRADE: Small Nations’ Doubts About EU Get Bigger

Peter Dhondt

BRUSSELS, Oct 12 2006 (IPS) - A proposal by Senegalese Trade Minister Mamadou Diop to postpone the 2008 deadline for signing trade agreements with the European Union found much support at a meeting here Thursday.

The meeting was attended by ministers and ambassadors from the African, Caribbean and Pacific (ACP) group of countries ahead of EU ministers’ trade and development talks next week.

Some of the leaders from Pacific nations among the 79-member ACP said they would consider opting out of the controversial Economic Partnership Agreements (EPAs) between the EU and ACP regions.

“In the Pacific, a pessimistic mood prevails,” Fiji trade minister Kaliopate Tavola said at the meeting. “At the beginning of negotiations, we expected a lot of the idea of the EPAs becoming a tool for development. But as things stand now, the agreement is threatening to overwhelm our fragile economies. Some small islands may just opt out of the agreement altogether.”

Talks on new trade agreements between the EU and the 79 ACP countries began in 2002, and are currently being reviewed. The agreements are due to be ready by the end of 2007.

But the EU proposals through the talks threaten to undermine development rather than foster it, ACP ministers and members of non-governmental organisations agreed at the conference. Europe should consider genuine alternatives during the forthcoming meeting of EU trade and development ministers Oct. 16-17, they said. The ACP countries are calling for EPAs to be high on the EU meeting agenda.

Several ACP countries feel betrayed by the direction the negotiations have taken. In 2000 they signed the Cotonou agreement(in Benin in West Africa), a framework for ACP-EU cooperation. The Cotonou text says EPAs should promote development, contribute to poverty eradication and foster the integration of ACP countries in the world economy. But that is not how things are looking now.

“In the Caribbean, the feeling is that EU is neglecting the problems of small countries,” said Barbados trade minister Dame Billie Miller. “Until now, we only see a limited offer of trade-related support. The EU should invest much more in capacity building and the enhancement of competitiveness before trade is opened up.”

There should also be more consideration for EPA-related loss of revenue, she said. “A high percentage of government revenue in ACP countries now is coming from import taxes. The EU should make up for the loss of revenue when taxes disappear.” The Caribbean countries are proposing an EPA adjustment facility for quick financial support.

Miller said EU negotiators are trying to push agreements through without taking Caribbean peculiarities into account. The EU has divided the 79 ACP countries into six regions to conclude separate regional agreements, but negotiators often take a ‘one size fits all’ approach.

“We are harnessing the carriage in front of the horses,” said Senegalese trade minister Diop. “We still don’t have a good impact study of the EPA for West Africa. And we still don’t know which flexibility ACP countries can count with regarding general trade rules in two years time.”

At the start of the EPA negotiations, the ACP countries were assuming that there would be a World Trade Organisation (WTO) agreement on trade liberalisation by 2004 allowing for special and flexible treatment of poor countries. But the WTO trade liberalisation talks have stalled, which means that the current more rigid trade rules would apply.

European negotiators must stop imposing their agenda and start to concentrate on development issues, Diop argued. “Until now, we do not see a clear commitment to increase competitiveness and production capacity in the ACP countries and to agree on transition periods that are long enough.”

The European EPA proposals have been drawing criticism from farmers and industries in the ACP countries and from NGOs for years. These groups oppose the idea of reciprocity that underlies the negotiations – reciprocity among players that are hardly equals.

“EPAs as they stand will be a disaster for the economic prospects of some of the world’s poorest people. EPAs need radical reform,” said Yash Tandon, executive director of the South Centre that organised the conference. The South Centre is a Geneva-based inter- governmental organisation of developing countries.

“Europe should first support the ACP countries in their regional integration process, and only then start looking whether and when the economies can be opened up internationally,” said Marc Maes of the Belgian NGO 11.11.11. “That is the strategy the EU is following in Latin and Central America.”

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