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The Wrong Ointment


November 2004

The Wrong Ointment

Why the EU’s proposals for free trade with Africa will not heal its scar of poverty.

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Executive Summary

The leadership and personal commitment of Tony Blair and Gordon Brown will bring Africa to the forefront of international attention in 2005.

But the UK Government’s positive focus on Africa is being seriously undermined by the inequitable bilateral free trade agreements currently being negotiated between the Europe Union and African countries.

The European Union is asking African countries to liberalise 90% of their markets over 10 years. At the same time the EU is refusing to discuss its own highly protectionist Common Agricultural Policy.

The European Commission proposals would lead to free trade areas in which the poorest African countries, their farmers, producers, and companies would compete openly with the richest European countries, their producers, and companies - and their heavily subsidised farmers. This will not be an equal contest - the average EU farmer receives 100 times more in agricultural support than the average annual earnings of an African peasant farmer - their likely direct competitors under the EU’s proposals.

In addition the European Union is pushing for trade negotiations in areas of ‘offensive interest’ that African countries have long opposed at the WTO.

What could be heralded as a new start for Europe’s trade relationship with Africa is instead looking depressingly like business as usual.

It doesn’t have to be this way.

The Africa Commission will report in early 2005. It is already recommending that trade with Africa should be “non reciprocal” and should not require Africa to open their markets in return for access to the markets of the richest countries.

And the UK Government has also made two commitments that, if delivered, would radically alter the shape of current negotiations and help deliver trade that works for African development.

CAFOD is asking the UK Government to live up to these two commitments.

1. Holding the EU to drop all ‘offensive interests’ in these negotiations.

The UK Government stated in its recent Trade and Investment White Paper that the EU did not have ‘offensive’ market access interests in these bilateral trade negotiations, and that the UK would hold their EU partners to this.

But to date the UK Government has done nothing to ensure that the EU negotiators drop their offensive interests in negotiations. Indeed the government continues to support the inclusion of several offensive interests that have been opposed by African countries at both the WTO and the bilateral level.

2. Providing ‘alternative’ non-reciprocal trade relationships that are not free trade areas

The UK Government made a commitment to African countries and to the UK Parliament that it would, through the European Commission, provide alternatives to those countries that did not want to sign up to free trade agreements.

But to date neither the UK Government nor the European Commission has provided African countries with any alternatives. To the best of CAFOD’s knowledge, neither the UK government nor the European Commission has seriously examined any alternative with the view to providing this to African countries.

November 2004

Written by Matt Griffith and Liz Stuart. The authors would like to thank Henry Northover, George Gelber, Michael Bailey, Peter Holmes and Christina Weller for comments, all mistakes however are the authors own.

 source: CAFOD