TRADE: EU Talks Tough with the Poor

By IPS Correspondents Reprint | | Print |

David Cronin

BRUSSELS, Oct 24 2007 (IPS) - The European Union&#39s top trade official has refused to accept African demands that he grant them lengthy transition periods for removing restrictions on imports under a new market opening deal.

Although Peter Mandelson, the European commissioner for trade, has previously stated that he would be willing to allow African, Caribbean and Pacific (ACP) countries take up to 25 years to liberalise imports under planned free trade deals, he backtracked on those statements this week.

The EU has instead told ACP governments that it is prepared to give them a maximum of 12 years during which they can protect farmers and industry from European imports.

According to Mandelson, the longer transition periods favoured by the ACP would be struck down under rules for opening up commerce set by the World Trade Organisation. "Proposals to liberalise 60 percent of imports over a 25-year-period will get us nowhere at the WTO," he said.

Mandelson is hoping that a series of trade agreements can be concluded by the end of this year with the six regional groupings in the ACP with which he is negotiating. Yet while he originally urged that the agreements should cover a broad range of issues – from services to intellectual property – he announced this week that some regions "will need a little more time" beyond the Dec. 31 deadline. Initial agreements can be limited to trade in goods, he said.

Anti-poverty activists have argued that even with this scaling down of ambition for the negotiations, the accords reached this year could have an adverse effect on jobs and earnings.

Francisco Marí from the Church Development Service (EED) in Germany said that chicken farmers in Cameroon have been able to take some steps in recent years to invest in their businesses because their government decided to restrict poultry imports.

"If the partnership agreements are signed the protection in Cameroon will disappear," said Marí, who has undertaken a study on the poultry sector in Africa.

The African Industrial Association cited United Nations estimates that by reducing tariffs on imports, governments in Gambia, Senegal and Ghana will lose up to 20 percent of their revenues. It has denounced threats by Mandelson to impose heavy taxes on ACP goods destined for the EU if their governments do not sign the agreements this year.

"It is deeply unjust for the EU to oblige the world&#39s poorest countries to chose between liberalising their domestic markets under pressure – with the risks that may entail to national and regional economies – or risking livelihoods in export sectors as tariffs are raised on exports to the EU," said Pierre Magne, the association&#39s president.

Mandelson also suggested this week that his officials will assess the possibility of signing different types of agreements – some covering goods, others covering a wider range of trade issues – with different ACP countries.

Robert Sturdy, a British Conservative member of the European Parliament (MEP), described Mandelson&#39s comments on new trade agreements as "unbelievably farcical". Promoting varying degrees of liberalisation in Africa would create a "spaghetti bowl mess", he predicted.

A new study by the EU Coherence project, a group monitoring whether the Union&#39s economic policies conform to its stated object of reducing poverty, concludes that the "stakes are much higher" for ACP countries than for the European Union in the negotiations. About 40 percent of ACP trade is directed towards Europe, whereas less than 3 percent of the Union&#39s trade is bound for the ACP.

And whereas the EU bestows munificent subsidies on farmers, the Word Bank and other donors have put pressure on African countries not to provide public support to farmers. For that reason, it is not possible to speak of a level playing field between Europe and Africa, the study says, suggesting that the way Western trade concerns are driving the negotiations is at odds with an obligation contained in an EU treaty to take the interests of poor countries into account in all policies that affect them.

Else Boonstra, spokeswoman for EU Coherence, said that the European Commission had a different understanding of policy coherence than she had.

"They see it as a two-way street," she told IPS. "They are saying that development should be coherent with trade policy, as well as trade policy being coherent with development. I personally think this is quite dangerous."

Next week ministers from the two continents will meet in Accra, Ghana to discuss a proposed strategy on their further relations. The meeting is being held as part of preparations for an EU-Africa summit in Lisbon this December – an event mired in controversy over whether Robert Mugabe, Zimbabwe&#39s autocratic president, should be invited.

A draft of the strategy document, seen by IPS, says one of its priorities will be to help "Africa move up the value-added scale and become less dependent on raw materials and simple processed products."

Critics of the new agreements believe that such free trade deals run counter to these goals as they will deprive African countries of the possibility to nourish industries free from foreign competition.

Alain Hutchison, a Belgian Socialist MEP, said that the proposed EPAs would make African countries "more disadvantaged than they are today".