Economy & Trade, Europe, Headlines

DEVELOPMENT: EU-ACP Meet Fails to Bridge Divide

Greta Hopkins

BAVARO, Dominican Republic, Jul 1 2002 (IPS) - Delegates from the European Union and from former European colonies in Africa, the Caribbean and the Pacific failed to bridge differences over trade policies at a meeting last week.

The core issue over which differences remained at the meeting held in Bavaro, a holiday resort about 100 miles east of the capital Santo Domingo, was the losses the 78 ACP countries would face as they lose the preferential trade terms that have been in place so far. Under free trade both parties would agree to cut tariffs on imports. The tariffs in place so far have made it easier for ACP countries to sell in the EU than for the EU to sell in the ACP countries.

President of the Dominican Republic Hipolito Mejia told the meeting: “These negotiations should embody the principle of special and differentiated treatment for the ACP: a logical and justified consequence of the different levels of development between the ACP group and the EU.”

Jean Robert Goulongana, secretary-general of the ACP group, said that development, not commerce must be the priority. “These Economic Partnership Agreements are not just trade agreements,” he said. “Above all, these negotiations must help the ACP countries to eradicate poverty and integrate into the world economy.”

The ACP group represents about 650 million people. It includes 40 of the world’s poorest countries.

ACP states say that their budgets will suffer from the loss of important income under preferential trade. “If we want to promote the development of the ACP we will need more resources,” said Goulongana. “If we lose customs income, we will need compensation for this budget loss.” He said the EU should compensate the ACP for losses with more aid.

The EU turned down the demand for more aid beyond the 20 billion dollars announced during a United Nations summit in March to help compensate for losses from removal of trade barriers.

EU Commissioner for Development Poul Nielson argued that the loss of income from tariffs on imports from the EU would be compensated by economic growth. Free trade with the EU will reduce prices, encourage consumer spending and boost government income from value added tax on goods, he said.

“I am warning against looking at the loss of tariff income for public finances as the only thing that happens when you liberalise,” he says. “This is a very defensive way of looking at things.”

The ACP delegates raised concerns about a “trend to marginalise EU development policy and even to subordinate it to the EU’s foreign policy,” said Goulongana.

A recent example of this is a decision by EU heads of state to abolish special meetings of EU development ministers at a summit of EU heads in Seville, Spain. Instead, development policy will be discussed at ministerial meetings on general foreign policy issues.

The ACP group says this brings a risk that development policy will be drowned by other concerns such as terrorism, the crisis in the Middle East or relations with large trading partners. The ACP are demanding further clarification on this from the EU.

An indication of the low priority EU governments give to development is the EU presence at the meeting with the ACP leaders. Only three ministers from Sweden, Portugal and Spain bothered to make the trip.

The ACP and the EU signed an agreement in June 2000 in Cotonou, in Benin, Africa to develop political dialogue, enhanced trade relations, and improved financial co-operation. But ACP leaders say the partnership has not become what they had hoped.

The main bone of contention is the EU vision of future trade relations. The Cotonou convention provides for the EU and the ACP to begin negotiating new trade relations in September, and to complete them by 2007.

The ACP also complained to several EU members about delays to ratification of the Cotonou convention. Only eight EU states have ratified the convention. The agreement must be ratified by all 15 member states before it can be enforced. Development projects are currently running on left over funds from previous agreements. These funds will soon run out.

Mejia has called upon the EU member states to ratify the convention “to ensure the continuity of this successful and innovative partnership.”

Josep Pique, Spanish Minister for Foreign Affairs, assured the ACP that all EU countries will ratify the agreement by the end of the year.

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