EU makes tricky offer more tempting
Inter Press Service | 4 April 2007
EU Makes Tricky Offer More Tempting
David Cronin
BRUSSELS, Apr 4 (IPS) — The European Union has this week sought to increase the likelihood that it will sign controversial free trade agreements with African, Caribbean and Pacific (ACP) countries by offering to open its markets to virtually all of their agricultural goods.
But the African governments negotiating these Economic Partnership Agreements have given a tepid response to the offer.
The EU’s executive arm, the European Commission, stated Apr. 4 that virtually all tariffs and import restrictions placed on agricultural goods from ACP countries will be eliminated. The offer is to apply to products including dairy, beef, cereals, fruit and vegetables.
Sugar and rice, two products deemed ’sensitive’ by the EU, will not be initially covered. But sugar imports should be brought within its scope by 2015, and rice by a date yet to be specified.
Commission officials say that the offer is in response to concerns raised by agricultural exporters such as Kenya and Ghana. Its aim is that all 77 ACP countries should enjoy the same access to the Union’s market as those designated by the United Nations as ’least developed’ currently do.
Forty ’least developed’ ACP countries have extensive access to the EU’s markets under a system known as Everything But Arms.
The EU side is hoping that EPAs can be finalised with six regions from the ACP bloc by the end of this year. It says they are needed to replace the trade provisions in the 2000 Cotonou agreement.
Signed in Benin, West Africa, this agreement underpins relations between the Union and the ACP on a range of economic and political matters. Those provisions have been granted a waiver from rules set by the World Trade Organisation, but that waiver expires Dec. 31.
African diplomats suggest the Commission’s offer will not bring adequate benefits to their economies unless they are flanked by measures to boost their capacity to export.
Although the EU is adamant that the EPAs must be signed by the New Year’s Eve deadline, some African governments have broached the possibility that they will only approve an interim deal in 2007. Such a deal would only cover market access, leaving a wider trade agreement to a later date.
"Signing an EPA by the end of this year depends on our ability to exploit full the market openings that the EU gives us," said a Ghanaian diplomat, speaking on condition of anonymity. "If we have no ability to exploit these openings, there is no use in signing an agreement."
A Kenyan diplomat said that the market access issue was not his government’s chief concern. "Kenya is worried about what will happen if we are not in a position to sign at the end of December," he added. "We don’t want any disruption to trade."
EU officials have warned ACP countries that they could lose trade preferences already granted to them if they miss the deadline. This has led anti-poverty activists to accuse the Commission of trying to browbeat ACP governments into signing deals that are more favourable to western firms than the needs of the poor.
"This offer is a small step in the right direction," Luis Morago, head of Oxfam’s Brussels office told IPS. "But we don’t want to see the Commission using this offer to put more pressure on the ACP to sign Economic Partnership Agreements before they are ready."
In February, the UN Economic Commission for Africa (UNECA) said that none of the four African regions negotiating EPAs has sufficient information or is adequately prepared to sign accords this year. The UNECA highlighted concerns that the ACP countries do not have the capacity to implement the deals.
More recently, Oxfam has accused the EU of using "aggressive tactics" in the negotiations. The Union’s call on ACP countries to reduce a large number of tariffs on imports to zero would imperil the livelihoods of small farmers, Oxfam believes.
The Ghana Trade and Livelihood Coalition has said that an EPA would further open up the country’s market to heavily subsidised imports from the EU, thereby impoverishing small producers. Ghana has become the number one tomato paste importer in Africa, for example. Its imports of prepared and preserved tomatoes from the EU rose from 3,700 tonnes to more than 27,000 tonnes in the 1993-2003 period.
A European Commission spokeswoman said the EPAs would "not be a free trade agreements in the classical sense." But anti-poverty activists have accused the Commission of failing to address how trade can be used to alleviate poverty.
Whereas the EU has agreed that the terms under which multinational firms can invest in poor countries could be removed from the Doha round of world trade talks, it has placed these matters on the table for the EPA talks. Oxfam has accused it of trying to prise open ACP markets, so that local firms are driven out of business.
Meanwhile, the Commission has refuted allegations that EU governments are ’inflating’ the amount of money they give to poor countries in development aid.
The European Network on Debt and Development (Eurodad) this week claimed that one- third of the EU’s official development assistance in 2006 did not deliver fresh resources to the poor.
This follows data released by the 30-country Organisation for Economic Cooperation and Development showing that debt cancellation was a major component of aid last year. Rich countries wrote off 3 billion dollars in debt for Iraq and almost 11 billion dollars for Nigeria.
Lucy Hayes from Eurodad described the inclusion of the Iraqi debt cancellation package in aid figures as an "accountancy trick". The money covered was largely debt which the Baghdad government had not been repaying, she told IPS.
But the European Commission’s development spokesman Amadeu Altafaj said there had been "no falsification of figures" by EU governments as debt cancellation fulfills the eligibility criteria for development aid set by the OECD.
Nonetheless, he acknowledged that future aid needs to be "more predictable and sustainable."
