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The EU is trying to trick developing countries into poor trade deals

The Guardian | Thursday November 8, 2007

The EU is trying to trick developing countries into poor trade deals

These negotiations are flawed and unnecessarily hurried, say Alex Cobham and Sophie Powell

Peter Mandelson and Louis Michel, the EU’s commissioners for trade and development, are staggeringly disingenuous in their broadside at those raising concerns about the impact on poor countries of the EU’s stance in trade negotiations (This is not a poker game, October 31). They claim "The economic partnership agreements (EPAs) that the EU is negotiating with six African, Caribbean and Pacific (ACP) regions [will] take a trading relationship based on dependency and turn it into one based on diversification and growth." Such an outcome is unlikely if they insist on using every trick possible to extract more sweeping deals than ACP countries believe are in their best interests.

The dirtiest trick is the spurious insistence on a December deadline. Mandelson and Michel claim a deal must be done by then to ensure WTO compliance. They say they will have to "fall back on our default preferences scheme" — meaning higher tariffs for ACP countries — if EPAs are not agreed by the end of the year, as "there is no credible alternative". This is untrue. They have choices, but lack political will. For example, the EU could seek to extend its WTO waiver or fine-tune the enhanced general system of preferences (often called the GSP+) to allow all ACP countries to retain market access equivalent to that which they have now. Even if a country brought immediate proceedings against the EU and the ACP, the glacial speed of WTO proceedings would allow ACP countries more time to assess their needs and the deals on the table. Forcing the pace of negotiations can only disadvantage the weakest players.

The opportunism of the European negotiating approach also contradicts the claim that "EPAs will build strong regional markets". The African Union says EPAs could compromise regional integration - a conclusion supported by studies from the UN, the University of Sussex and the Overseas Development Institute, which show that the EU’s proposals could lead to a contraction of trade within Africa and increased barriers to trade between African countries. On top of this, the commission’s latest approach — that individual countries should sign up to EPAs without their weaker neighbours — reveals how shallow their commitment to ACP regional integration is.

The commissioners deny critics’ claims that "EPAs will open ACP markets to EU trade at the expense of local businesses, and local growth". But it is undeniable that the EU is demanding greater and faster liberalisation than regions are willing to offer — and the evidence on rapid liberalisation is clear. A Traidcraft report showed that Jamaica’s dairy market liberalisation decimated small farmers, left local milk production with barely a tenth of the market, and led to the EU supplying two-thirds of the island’s milk powder. A Christian Aid assessment of tomato liberalisation in Senegal showed that the local price halved, while imports of EU paste increased twenty-fold.

With just eight weeks to go, business contracts and investments are already being affected by the EU’s refusal to confirm that it will leave no ACP country with worse market access than now. We demand an end to the shabby tricks and this flawed negotiating process. What is needed to make a good deal possible is more time and more openness to external scrutiny of EPAs’ development impact.

Alex Cobham manages the policy team at Christian Aid; Sophie Powell is a senior policy adviser at Traidcraft

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 source: The Guardian