TRADE-EU: African Deal Could Open a Door to WTO

By IPS Correspondents Reprint | | Print |

Stefania Bianchi

BRUSSELS, Feb 5 2004 (IPS) - Development groups are hoping that a regional trade agreement between the EU and developing countries in eastern and southern Africa will kickstart the stalled Doha Development Round.

Senior officials from the European Union (EU) will travel to Mauritius Saturday (Feb. 7) to launch regional trade negotiations with 16 countries (Burundi, Comoros, Djibouti, the Democratic Republic of Congo, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia and Zimbabwe).

The EU and several countries from the Africa, Caribbean and Pacific group (the ACP comprising 79 countries) will seek to promote trade and development by negotiating a region-to-region Economic and Partnership Agreement (EPA).

EPAs are based on the Cotonou agreement signed in 2000 (in Cotonou in Benin, Africa) giving the 79 members of the ACP group a special trade status with the EU.

EPA negotiations were launched in Brussels September 2002 and are due to be concluded in December 2007.

The EU says that under the agreements it will be prepared to further open its market to ACP products and tackle all other trade barriers. ACP states have indicated they will implement policies to strengthen their supply capacity and to reduce transaction costs.

At meetings at Port Louis in Mauritius, both sides will work out a structure and roadmap for the negotiations. They will exchange views on regional priorities and on ways of integrating development into the EPA process.

The European Commission, the executive arm of the EU, hopes that by opening up trade between both regions and setting up clear trade rules, EPAs will contribute to the economic integration of the region.

Tearing down trade barriers among these countries is a necessary complement to access to the EU market they already enjoy, the Commission says.

“The EPA negotiations with eastern and southern Africa will follow a hands-on approach: development is the objective, trade one of the tools,” EU trade commissioner Pascal Lamy said Thursday.

“If at the end of these negotiations eastern and southern Africa stands as a stronger region, able to define its common interest and improve jointly the environment for business and investors, we will all have won,” he said.

Many of the APC countries are among the poorest in the world and have faced some of the harshest conflicts and humanitarian crises in Africa. Economic integration is expected to lower the risk of new conflicts.

EU development commissioner Poul Nielson hopes the trade talks will boost development.

“Deepening regional integration, breaking down barriers to neighbours and creating larger markets are crucial steps if these countries are to stimulate the necessary investments and productivity improvements that will drive their development,” he said in a statement Thursday. “This long-term perspective of development is the prime objective of the EPAs.”

The Mauritius launch marks the second phase of the EPA negotiations.

The first phase of talks between the EU and all ACP countries covered market access, trade-related areas, services and the development dimension of EPAs.

Both EU and ACP countries hope the EPAs will get the Doha Development Round (DDR) back on track. The round of world trade negotiations launched in 2001 in Doha in Qatar was scheduled to conclude this year, but is months behind schedule.

Talks in the Mexican beach resort Cancun broke down last September mainly over the estimated 350 billion dollars a year rich countries spend on farm subsidies, and on the new issues the EU wants to include in World Trade Organisation (WTO) negotiations. These include trade and competition policy, trade facilitation, and transparency in government procurement. Efforts to restart the trade negotiations in December failed.

“EPAs are highly complimentary and supportive of the Doha Development Round as they involve the same issues for the same countries,” Martin Dihm from the European Commission’s directorate-general for trade told media representatives Thursday.

“By strengthening their capacity within the EPAs, developing countries can also strengthen their capacity in Geneva and the World Trade Organisation,” he said. “The first step of getting trade back on track is the development between north-north relationships and south-south. The second step is integration between them and us.”

Commission spokesperson for trade Arancha Gonzalez said EU officials “will also be consulting the 16 countries over the Doha Development Round when they are in Mauritius to see how they think trade negotiations can be restarted.”

ACP spokesperson at its secretariat in Brussels Hegel Goutier said “EPAs should be oriented towards the achievement of sustainable development for the ACP states; they should preserve unity and solidarity and be WTO compatible.”

This launch could be “the first step to getting the Doha Development Round back on track,” he said. “But it is difficult to comment at this point whether or not they will make a real difference.”

Guggi Laryea from the Brussels-based network of non-governmental organisations Eurostep welcomed the move but feared that the timing of the launch may divide the ACP.

“EPAs should prompt both parties to go use the Doha Round to revise existing trade rules so they can be made more compatible with poverty reduction before going any further with the negotiations,” he told IPS.

“However, the launch at this moment poses a number of problems,” he said. “Firstly the all ACP-EU negotiations are yet to be completed. What now happens is that east and southern Africa will begin negotiations with the EU without any agreed set of parameters for all the regions. This is likely to promote disintegration in the ACP.”