By Julio Godoy
THE HAGUE, Sep 28 2004 (IPS)

The EU should introduce fair trade rules as the best way to promote development, experts said at a conference here Tuesday.

A fair trade policy should be complemented by direct investment in the South, said Khamis Mwinyimbegu, project coordinator with the Netherlands Cameroon Council at the conference ‘Europe and the South: A New Era – European Development Cooperation: towards policy renewal and a new commitment’.

The two-day conference opened in The Hague Sep. 27. It is being organised by the Society for International Development (SID), a Rome-based international non- governmental association of individuals and organisations with members and activities in 125 countries.

The meeting brings together some 250 experts from Europe, North America, Latin America, Africa and Asia to explore relations between foreign policy, security, trade, and development.

Mwinyimbegu said the African economy suffers from local markets that are too small, low diversification of production, and lack of investment. “Therefore we need to export to other African countries but also to the outside world, to Europe. Trade can be a powerful development instrument.”

Alfred Nhema, a Zimbabwean development consultant based in Addis Ababa, Ethiopia, said African intraregional trade amounts to less than 10 percent of the countries’ exchange of goods and services. Similar trade in parts of Asia and Latin America passes 30 percent.

Juergen Wiemann, director of the German Development Institute said “Africa, more than other regions in the South, urgently needs a vast programme of development to increase local and external demand, to diversify production, and launch a real industrialisation process.”

Some of this could be done by private enterprises, but Wiemann said it is necessary to admit that state intervention might be needed to boost industrialisation and development.

“We Africans need a powerful private sector and foreign direct investment,” Nhema said. “But we also need to make sure that an eventual process of industrialisation comes to stay. Assembly plants that can go away from our countries instantaneously at the first turn of the mood and leave nothing but wasteland is not what we need.”

Europe’s import of goods and services from Africa, Asia and Latin America has been falling for the last 15 years.

“In 2001, the EU-25 – that is the old 15 Western European members plus the ten eastern and southern European countries that joined the EU in May 2004 – accounted for one-sixth of total developing country exports and imports,” Ian Gillson, researcher at the London-based Overseas Development Institute said at the conference. “This represents a sharp decrease from 1990.”

Gillson said considerable shifts in EU market share among developing countries’ exports have taken place during the last decade. “While the ACP (a group of 77 African, Caribbean and Pacific countries) exports to the EU have stagnated at around 27 billion dollars for almost 30 years, European imports from Asia have been growing,” Gillson added.

“In 2001, China was the third largest exporter to the EU-25, far ahead of the ACP countries,” Gillson said.

Sheila Page from the ODI said the most protected markets in Europe and North America are sugar, dairy products and tobacco. “For the U.S., the highest tariff is 350 percent on tobacco, for the EU it is 471 percent on milk and cream,” she said.

Page said these high tariffs “depress the potential export earnings and the income of developing countries.” Therefore “all developing countries want improved access to markets, although with different specific targets.”

Manuel Chiriboga, a Peruvian researcher at the Latin American Centre for Rural Development said “a strategic partnership for development between Europe and the South must include a revision of the liberalisation of trade, a reduction of trade barriers and subsidies in Europe, and the creation of a fair trade policy to enhance economic development.”

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