DEVELOPMENT: New EU Head Portugal to Focus on Africa

By IPS Correspondents Reprint | | Print |

David Cronin

BRUSSELS, Jul 5 2007 (IPS) - Portugal, the new holder of the European Union&#39s rotating presidency, has promised that Africa will be one of its key priorities for the next six months.

Prime Minister José Socrates, whose government took over the Union&#39s helm Jul 1, is hoping to fulfil a long-standing Portuguese ambition of hosting a summit between the EU and African heads of state in Lisbon this December.

This will only be the second such event. An inaugural summit was held in 2000 but efforts to organise a follow-up have been thwarted by disagreements over whether Robert Mugabe, Zimbabwe&#39s increasingly autocratic president, should be invited to attend.

If the December gathering can proceed, it is likely that it will be characterised by much tension between the EU and Africa over a looming deadline for concluding trade deals, known as Economic Partnership Agreements (EPAs).

The European Commission, the EU&#39s executive arm, is adamant that the African, Caribbean and Pacific (ACP) bloc sign a series of EPAs with it by Dec. 31. The Commission insists that this deadline must be respected because existing commercial arrangements between the EU and ACP have been granted a waiver from rules set by the World Trade Organisation. That waiver expires at the beginning of 2008.

A new Commission paper suggests that the EU should use the Lisbon summit as a springboard for more intense political dialogue with Africa. The long-term objective of this dialogue would be "to move further beyond the donor-recipient arrangements of the past towards a genuine partnership of equals, based on mutual or complementary interests and benefits," the paper says.

One of the principal components of this strategy would be to make "trade rules and regimes more coherent and harmonised," the paper adds, stating that the EPAs will "underpin" such efforts.

Yet Christopher Stephens, a research fellow with the Overseas Development Institute in London, argues that it would be premature to sign EPAs this year.

"The problem is that EPAs will be very detailed agreements, specifying exactly what treatment will be accorded thousands of separate products," he said. "Yet discussion of these decisions has barely begun."

Stephens predicts that the EPA talks still have two or three years to run and "that it is too late for agreements that are credible" during 2007.

The Commission&#39s default option in the case of the deadline not being met is that it would impose higher tariffs on ACP exports to the EU if the EPAs cannot be concluded by the deadline.

Stephens has calculated that a tariff increase of about 10 percent on ACP goods would mean they would have to transfer 156 million euros (212 million dollars) to Europe&#39s treasuries per annum. This would be more than 2.5 times the amount that the Commission&#39s foreign assistance department EuropeAid allocated in health projects to all ACP countries in 2005, he noted. Agricultural exporters like Kenya, Namibia and Swaziland would be severely affected.

A preferable option, he said, would be to apply a modified version of the EU&#39s Generalised System of Preferences (the system for setting trade tariffs) to ACP countries. Known as GSP+, the modified version would allow a wide range of goods to enter the EU&#39s markets tariff-free. At present, GSP+ only applies to 15 Latin American countries.

While Stephens believes that this option would be compatible with WTO rules, he complains that there is a marked reluctance among EU officials to even consider the option.

"Frank, open discussions of these options is not happening," he said. "This is because the EU has retreated into a negotiation mode: a belief that to admit the possibility of December 2007 being an unrealistic deadline will be self-fulfilling by removing the pressure on parties to agree."

Luis Morago, head of Oxfam&#39s Brussels office, said that the Portuguese government is "desperate to have a big political win" by hosting the Lisbon summit.

"It is scared to death that if the EPA negotiations are not in a very healthy shape at that stage, there could be big political controversies and a lot of resentment towards the EU from African countries," he told IPS.

Oxfam believes that the EPAs are being driven more by a European desire to flood African markets with Western goods than to use trade to tackle poverty in Africa.

"We are challenging the Portuguese presidency to open up the debate," said Morago. "So far most of the things on the table concerning EU-Africa relations have been about promoting a European agenda, not an African agenda. The process of dialogue has been very limited and the EU side can&#39t say there has been enough engagement with trade unions, small farmers, civil society and national parliaments in Africa and the Union&#39s own member states."

Paul Goodison from the European Research Office, which monitors trade relations between the EU and Africa, said that the Commission has failed to examine the impact of reforms to the Union&#39s farm subsidies regime during the EPA talks.

Reforms to the EU&#39s Common Agricultural Policy undertaken since 1992 have seen the Union moving away from price support for farm products in favour of directly supplementing the income of European farmers. This has facilitated reductions in the price of food produced in Europe, without undermining farmers&#39 pay.

But it has also allowed the EU to increase exports to ACP countries of food items that are sensitive to their economies. For example, exports of poultry meat parts to the ACP bloc rose from 14,500 tonnes in 1991 to nearly 80,000 tonnes in 2002.

"The issue of the trade-distorting effects of new forms of EU agricultural support are left singularly unaddressed in the Commission&#39s current approach to the EPA negotiations," said Goodison.

As part of the EPA talks, the Commission is pressing ACP countries to scrap most of the tariffs that they levy on EU goods entering their markets. Many ACP governments have requested that tariff reductions should be phased in over a lengthy period and that they can take protective measures for goods of particular importance to their economies.

Yet Goodison said that "this is an area where the Commission is showing profound resistance to any concessions" because it has refused to acknowledge to the WTO that its reformed system of agricultural supports continues to distort trade.