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POLITICS: Old Trade Beefs to Resurface at ACP Meet

Peter Richards

PORT OF SPAIN, Dec 5 2006 (IPS) - Not many Caribbean leaders are expected to attend the two-day summit of the African, Caribbean and Pacific (ACP) Group starting in Sudan Thursday, but the region will follow its agenda quite keenly, including a proposed Economic Partnership Agreement with the European Union and a new threat to its ailing banana industry.

Founded in 1975 to promote closer ties with Europe, the ACP Group has 79 members, including 48 countries from sub-Saharan Africa, 16 from the Caribbean and 15 from the Pacific.

Over the last 30 years, its mission has evolved to include greater cooperation among member states in areas such as trade, economics, politics and culture.

This year’s summit in Khartoum, Sudan, which is currently riven by violent conflicts in the south, west and east of the country, will look at how to achieve the Millennium Development Goals (MDGs), the Economic Partnership Agreement (EPA), Doha Development Agenda and cross-cutting issues of HIV/AIDS and gender.

The MDGs cover a broad range of internationally-agreed targets, including cutting extreme poverty in half by 2015 and forging a global partnership for development between rich and poorer countries.

President Omar Hasan Ahmad al-Bashir, the host of the summit – which coincides with the 50th anniversary of Sudan’s independence from Britain – said it will address “our global commitments and those that the group shares with its partner, the European Union”.

ACP leaders plan to weigh the future of the bloc, made up mostly of former European colonies, and their prospects for survival in a changing world characterised by new trading patterns for the majority of their commodities and products.

The Caribbean, for example, has already raised a red flag against efforts by Ecuador, which last month formally requested consultations with the European Union under the World Trade Organisation (WTO) rules governing the settlement of disputes as they relate to the export of ACP bananas to Europe.

The dispute has pitted the so-called Most Favoured Nations (MFNs) – many in Latin America – against the smaller countries of the ACP, whose banana sectors have for years enjoyed preferential market access to the EU.

Ecuador, in its request circulated to all WTO members, said that it considered the new EU tariff of 231 dollars (176 Euros) per metric tonne to be too high, causing the MFNs to lose market share to ACP suppliers.

The EU began applying the banana tariff in January 2006 as part of a commitment to Ecuador and the United States in 2001 to introduce a tariff-only regime from that date. The commitment was part of an understanding to bring an end to the banana disputes of 1997 and 1999 between the EU and the Latin American banana producers and Washington.

But Caribbean states argue that when the actual volume of bananas exported by the two sides is shown, a huge disparity remains.

Dominica’s Trade and Industry Minister Charles Savarin said that from January to June 2005, the Latin American producers exported 1.58 million tonnes of bananas to the EU, a figure that hit 1.64 million tonnes in 2006.

“This is compared to ACP countries’ exports of 367,571 tonnes from January to June in 2005 compared to 436,161 tonnes for the same period in 2006. Some fear that this action by Ecuador will only have the effect of reigniting and reviving the more than a decade-old banana war,” he added.

The banana issue aside, the proposed EPA agreement with Europe is another key issue for the region, particularly as the Caribbean negotiators have insisted that any new accord must go beyond trade to embrace genuine development.

Caribbean countries want to ensure that development is placed “on the front burner” during negotiations, even as the EU and the Caribbean Forum (CARIFORUM) countries ended two days of talks in Brussels last week indicating that there were still areas of disagreement.

CARIFORUM groups the 15 member states of the Caribbean Community, the Dominican Republic and Haiti.

Prior to the Brussels meeting, Richard Bernal, head of the Caribbean Regional Negotiating Machinery, said a question mark remained about the inclusion of sugar and bananas in the accord.

“Sugar and bananas are really exceptions. They were dealt with in the old Lome Convention by special protocols and the banana issue has assumed its own momentum in the WTO dispute settlement mechanism and that may not be resolved in time for us to include it in the EPA text,” he said.

“It may be in a side agreement or a special arrangement which complements that. Sugar also is a special arrangement and it is an open question at this stage if it will be included and how,” Bernal said.

In a joint statement, both sides said progress had been made on a draft text, but added that three major challenges remain. These include the specific nature of commitments within the EPA; the negotiation of tariff liberalisation for goods; and the negotiation of commitments for trade in services and investment.

The joint EU/ACP parliamentary assembly held in Barbados last month agreed that undue pressure should not be placed on ACP countries as they seek to craft the new accord with Europe.

“Now is the time for a radical and rigorous rethink, and not for what is being perceived as complacent reassurance from Europe’s negotiators,” warned EU parliamentarian Glenys Kinnock, the co-president of the Assembly, who said that the expiry of the WTO waiver should not compel the signing of an EPA agreement that is perceived as detrimental to ACP development interests.

A resolution adopted at the end of the week-long assembly also said steps should be taken to ensure that if negotiations are not completed by the Jan. 1, 2008 deadline, existing ACP exports to the EU will not be disrupted until a final settlement is reached.

However, there is quiet optimism that a deal can be forged before that date.

Barbados’ Foreign Trade Minister Dame Billie Miller, who is also chair of the ACP Ministerial Trade Committee, told the Barbados meeting that while the divide between Europe and its former colonies appeared insurmountable at this point, she was hopeful that a mutually acceptable agreement could be found.

“The eyes of the world are on these EPA negotiations. The multilateral trading system needs a success story if it is to maintain its credibility. The ACP/EU can show the world that it is possible to forge an EPA between 79 developing countries and 25 developed ones,” she said.