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TRADE: EU Urged to Consider New Agreements

Stefania Bianchi

BRUSSELS, Feb 23 2006 (IPS) - As the European Union continues its controversial trade negotiations with developing countries, a leading development think-tank says there is a “clear alternative” to regional agreements.

The European Centre for Development Policy Management (ECDPM) says African, Caribbean and Pacific (ACP) countries have a “wide range of potential alternative scenarios” to Economic Partnership Agreements (EPAs), which are currently being negotiated with the European Commission, the European Union (EU) executive.

The ECDPM is an organisation based in Maastricht in the Netherlands that seeks to promote better trade and aid relations between the EU and the ACP group of countries.

Reciprocal free trade agreements are currently the only option to ensure a World Trade Organisation (WTO) compatible market access agreement between EU and ACP countries. The ECPDM says other forms of preferential treatment are also possible, and some flexibility could be found in the WTO rules.

EPAs are reciprocal trade deals under the Cotonou agreement between the EU and 77 countries from 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.

This is a crucial year for the negotiations because the first draft texts of the EPAs will be produced, and a comprehensive review will be carried out.

However, some development non-governmental organisations (NGOs) and researchers fear that in their current form EPAs will not deliver development for ACPs.

They say that while EPAs were meant to be about the sustainable development of the ACPs, as well as their smooth and gradual integration into the world economy, the EU has so far focused on trade issues.

“ACP countries entered into these negotiations in good faith, but the focus of the EU has so far been more on trade issues alone than on responding to the development concerns of many ACP countries and regions,” the ECDPM said in a statement Thursday (Feb.. 23).

In spite of such concerns, so far no clear alternatives to EPAs have been presented to ACP countries.

The ECDPM’s new report launched Thursday and commissioned by the NGOs Oxfam International and Both Ends shows that ACPs have “a wide range of potential alternative scenarios” to EPAs.

“ACP countries and regions should not feel obliged to sign onto an unsatisfactory deal. The study provides more than a dozen scenarios, which might help ACPs in their decision on the preferable trade arrangement according to their realities and long-term economic plans,” Dr Sanoussi Bilal, one of the authors of the report told IPS.

One of the options outlined by the ECDPM is known as the “minimalist approach” to EPAs.

This would provide for reciprocal free trade that opens ACP markets to the minimum level necessary to secure WTO compliance, but avoid potentially negative effects of drastic liberalisation.

At a second stage, negotiations with the EU could centre on a long-term approach to address supply-side capacity constraints in the ACP, building effective regional markets, as well as further liberalisation from the ACP side.

But the ECDPM says the “most realistic” alternative to EPAs remains the preferential trade regime granted by Europe to all developing countries, known as the generalised system of preference.

An enhanced version of this regime would maintain a privileged access to the European market for all products from the ACP countries, without requiring any reciprocal opening of ACP markets…

“EPAs should be first and foremost an instrument to foster the development of ACP countries. Their scope and content should be determined by this objective. Should they fail to deliver on their development promises, the ACP should consider alternative options. This study provides both ways forward and possible benchmarks against which an EPA could be assessed,” Francesco Rampa, co-author of the study told IPS.

Dr Bilal says he would like the European Commission to “better integrate the development concerns of the ACP, respect their interests, and provide the appropriate accompanying measures that any new trade agreement with the EU will require in the ACP.”

But he is concerned that the Commission will be reluctant to listen to the ECDPM alternatives.

“The Commission does not like to hear about alternatives, which they see as an unwelcome distraction for the task at hand: conclude a comprehensive EPA as they propose,” he said. But in the end “they cannot force ACP to sign an agreement – so the EC might be willing to comprise and accept a less ambitious EPA if some ACP regions want that.”