February 9, 2004

EU Opening a 'Back Door' to WTO

Regional trade agreements between the EU and countries in eastern and southern Africa could be detrimental to developing countries, African and international civil society groups say.

Senior officials from the European Union (EU) travelled to Port Louis in Mauritius Saturday (Feb. 7) to launch regional trade negotiations with the eastern and southern Africa region (ESA). The EU and several countries from the Africa, Caribbean and Pacific group (the ACP comprising 79 countries) within which the ESA countries fall, have been seeking to promote trade and development by negotiating a region-to- region economic and partnership agreements.

Sixteen countries -- Burundi, Comoros, Djibouti, the Democratic Republic of Congo, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia and Zimbabwe -- are involved in the negotiations which will lead to new trade and investment arrangements with the EU as mandated by the signing of the Cotonou agreement in 2000 (in Cotonou, Benin, Africa).

The economic and partnership agreements (EPA) negotiations were launched in Brussels September 2002, giving ACP members a special trade status with the EU. They are due to be concluded in December 2007. The EU says that under these agreements it will further open its market to ACP products and tackle all other trade barriers. The European Commission, the executive arm of the EU, says that by opening up trade between both regions and setting up clear trade rules, EPAs will contribute to the economic integration of the region.

But many civil society groups including the Kenyan EcoNews Africa, Trade Watch, and the Kenyan Human Rights Commission are warning that regional agreements could be detrimental to the ACP countries. They say the EPAs will mean greater unrestricted access for EU goods and services into developing countries, undermining their development. The non-governmental organisations (NGOs) say they are particularly concerned because the negotiations are being undertaken between parties with great imbalance of political and economic power.

Most ACP countries have a much weaker negotiating capacity than the EU, the group of NGOs said in a joint statement. And given their dependence on EU aid, African countries will be subject to implicit threats and pressures, which will undermine their ability to stand by their negotiating positions. They add that there should therefore not be any negotiations on trade liberalisation commitments until issues such as improvement of the World Trade Organisation (WTO) rules, implementation of measures to address supply-side constraints, the conclusion of regional market integration processes in the ACP countries, elimination of EU's export subsidies and trade distorting agricultural support are ensured.

The group is urging eastern and southern African (ESA) countries to insist that negotiations continue on the overall ACP level in order to address the major issues of common concern to all ACP countries. They are also concerned that enterprises in ACP countries are not ready for full and rapid liberalisation because of local constraints that are serious obstacles to competitive production and marketing.

Through the EPAs the EU is seeking an increased market access for their own goods and services into developing and least developed country markets, says John Ochola from the Institute of Economic Affairs, a British-based think- tank. This will pose serious threats to already vulnerable local food production, food processing and infant manufacturing industries.? EPAs are incompatible with the developmental needs of ACP countries, he says.

ACP countries are not in a position to cope with such market opening, they do not have the capacities to compete with EU products, says Marc Maes from the Belgian NGO 11.11.11. Such competition would lead to the destruction of less competitive ACP industries and would require large funds to deal with the social and economic costs of such destruction,he told IPS.

The NGOs say the EU is trying to push through issues in the EPAs that developing countries have resisted in the WTO. 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 WTO negotiations. These include trade and competition policy, trade facilitation, and transparency in government procurement.

African countries' strong objection to the introduction of agreements on investment, competition and procurement was a major cause of the breakdown of the WTO talks, says Karin Gregow from EcoNews Africa. The position of African countries could not be more clear on this issue, yet the EU continues to shamelessly bulldoze their agenda through whatever routes they can find.

The civil society groups are also concerned that the EPAs will undermine regional integration efforts under way in the ACP region and damage local initiatives such as COMESA (Common Market of Eastern and Southern Africa) and SADC (South African Development Community). The ESA group that has started negotiations with the EU did not exist as a group before.

EPA negotiations are pushing existing regional initiatives aside and replacing them by EU driven regional configurations and a series of free trade areas of which the EU always is the strongest member, Maes says. EPAs do not strengthen intra ACP south-south trade, but disturb such south-south development and strengthen traditional south-north links. The NGOs are calling for a rigorous set of benchmarks and principles, including independent assessments, open dialogue and democratic negotiations as a precondition for further engagement around trade and development agreements appropriate to the needs of ACP countries. (IPS)

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