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EU urged to halt regional agreements

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IPS, 27/9/05

EU Urged to Halt Regional Agreements

Stefania Bianchi

BRUSSELS, Sep 27 (IPS) - As European Union trade chief Peter Mandelson prepares to kick off a new phase of trade negotiations in the Caribbean this week, trade groups are asking the bloc to shelve regional agreements in order to avoid a "development disaster".

The Britain-based Traidcraft and the Kenya-based non-governmental organisation (NGO) EcoNews Africa say the bloc’s current proposals would require developing countries to open up their markets rapidly to European corporations, threatening jobs, industries, government revenues and public services in some of the poorest countries in the world. Both organisations are members of a ’Stop EPA’ campaign launched in October last year.

Mandelson will travel to St. Lucia in the Caribbean Wednesday (Sep. 28) to launch a new phase of Economic Partnership Agreement (EPA) negotiations with the Caribbean region.

EPAs are reciprocal trade deals under the Cotonou agreement between the European Union (EU) and 77 countries from Africa, the Caribbean and the Pacific (ACP) regions. The Cotonou agreement was named after the capital of the West African nation Benin where it was signed in June 2000.

The proposed deals under the agreement would remove controls on import prices and allow EU member states to sell subsidised goods more easily to those countries. The deals are due to be concluded by December 2007 and will be implemented between 2008 and 2020.

The EU says EPAs will integrate ACP states into the world economy, promote sustainable development and contribute to poverty eradication. Mandelson said he is a "strong supporter" of such agreements.

"These are not classic free trade agreements where both sides make equal concessions: we have no agenda of liberalisation that we want to force on the poorest ACP countries. Rather, they are development tools that will lead in time to the growth of regional markets and trade with the EU," he said in a statement Monday (Sep. 26).

But the trade groups say EPAs have been "a highly political process driven by the EU and about which the ACP has consistently expressed fundamental concerns." They say EPA negotiations have been "very imbalanced", with the EU generally getting its way at each stage. They are urging Mandelson to start work on alternatives to EPAs.

A report by Traidcraft and EcoNews Africa released Tuesday says that by way of example the declining manufacturing sectors, increased poverty and rising unemployment levels in Kenya should be taken into account before committing to "more of the same".

The report ’EPAs: Through the Lens of Kenya’ says liberalisation in the country has brought "dire hardship" that includes soaring crime rates, prostitution, lost education and even suicides.

"The slump resulted in the number of poor people rising from 11 million to 17 million — more than half of Kenya’s population," the report says. "Primary school enrolment fell, illiteracy grew, life expectancy dropped, the proportion of fully vaccinated children plummeted and death rates among babies and under-fives increased."

The report says that the European Commission itself estimates that under reciprocal liberalisation Kenya would lose 82 percent of its customs revenue — 12 percent of government income.

Given that EPAs will force Kenya to liberalise still further, allowing market access to highly competitive European businesses, the report says past experiences show what is at stake, and what the impacts on Kenya’s future development are likely to be.

The trade groups are calling for EPAs "as they are currently envisaged" to be stopped everywhere because they say ACP countries are negotiating with great reluctance.

"They have been forced to the negotiating table: partly out of fear that they will lose market access to the EU if they do not agree to an EPA, and partly because there is no alternative available at the moment. They are also concerned that refusing to sign may threaten future aid flows," the report says.

The groups are satisfied that their campaign is making some headway.

"We have made progress in that the UK government has issued a position paper questioning the Commission’s approach to the negotiations," Liz Dodd, trade policy adviser for Traidcraft told IPS. "But the Commission is not moving so far, and even described the UK intervention as unhelpful," said Dodd.

Ultimately the EU’s 25 member states set the agenda, Dodd said. "We are calling for them to stop hiding behind the Commission and to give Peter Mandelson a new pro-development negotiating mandate."

Traidcraft is demanding that the EU provides ACP countries an alternative to EPAs that would at least not leave them worse off than they are now.

"It is not up to us to decide what this should be, but there are a number of options," said Dodd. "Particularly relevant at the moment is that the EU should work with the ACP to change WTO rules on regional trade agreements. This would allow fairer deals to be agreed between countries at very different levels of development."

There will be a major review of EPAs next year when the NGOs hope that EU and ACP member states will "urgently stop" the current free trade EPAs before many of the world’s poorest countries are "forced to negotiate away their future."

 source: IPS