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TRADE-AFRICA: ”EU Inflexible Towards Most Vulnerable Countries”

David Cronin

BRUSSELS, Nov 16 2007 (IPS) - There has been no shortage of speculation in Brussels recently about breakthroughs being imminent in the trade talks taking place between the European Union (EU) and African, Caribbean and Pacific (ACP) countries.

Three of the four African regions participating in the talks have all been rumoured to be on the verge of signing an economic partnership agreement (EPA) with the EU over the past few weeks.

Yet none of these configurations – Eastern and Southern Africa, Central Africa and the Southern African Development Community – have so far been willing to accept draft accords prepared by the EU’s executive, the European Commission.

This reluctance has generally been attributed to marked differences of opinion over such issues as the level of tariff reduction on EU imports that African governments would be required to undertake, the treatment that should be given to products deemed ‘‘sensitive’’ and the length of transition periods for phasing in trade liberalisation.

After advocating that the EPAs should encompass a wide range of issues – including services liberalisation, investment, competition, government procurement and intellectual property – the Commission announced in October that deals concluded before the end of this year will be primarily limited to trade in goods.

This scaling down of ambition notwithstanding, EU trade officials say that this is the bare minimum that must be achieved this year.

While the preferential treatment given by European countries to former colonies in the ACP are currently exempt from rules set by the World Trade Organisation, that waiver expires at the beginning of 2008. If the EPAs cannot be signed by New Year’s Eve, the Commission says it will have no option but to impose heavy tariffs on a wide range of ACP goods destined for the EU market.

‘‘There are no alternatives being discussed,’’ Peter Power, the Commission’s spokesperson for trade, told IPS. ‘‘Nobody has come up with any credible alternative that would stand up in the WTO.’’

Many trade analysts and anti-poverty campaigners feel, however, that the Commission’s claim is unconvincing.

‘‘WTO conformity is probably not as binding and urgent as the European Commission has been proclaiming,’’ said Claire Delpeuch from Sciences Po, a political studies institute in Paris.

In theory, WTO rules only allow preferential treatment to be given to a developing country if other countries are not discriminated against as a result.

But there are precedents where Africa has been singled out for favourable treatment by rich countries without the WTO’s wrath being incurred. This is the case, for example, with the Africa Growth and Opportunity Act (AGOA), introduced by the U.S..

Delpeuch points out that a British parliamentary report urged in 2005 that ACP countries should only be asked to open their markets fully to EU agricultural goods when the EU has drastically cut back on the lavish subsidies it pays to its farmers.

A transition period for opening up ACP markets would, therefore, explicitly be linked to a shake-up of Europe’s farm support system.

Even though these subsidies give the EU a considerable advantage when selling abroad, the EU has still insisted that ACP countries should remove the tariffs they levy on 80 percent of farm imports from Europe. Counter-proposals from Central Africa for a 60 percent elimination have been rejected by the Commission.

‘‘It does not make sense to attempt to conclude, under the gun and with so little time, agreements that are of such critical importance to poor countries’ development,’’ Delpeuch added.

‘‘While WTO compliance is a commendable objective, the particular situation of ACP countries – and the historical debt of responsibility carried by EU member states for their current predicament – should be reason enough for the EU to seek a way of finding the necessary time to reach more mutually acceptable solutions,’’ she said.

Christopher Stevens from the Overseas Development Institute in London says the Commission is wrong to state there are no viable alternatives to concluding the EPAs this year.

One option, he believes, would be to apply a modified version of the EU’s Generalised System of Preferences (the scheme for setting trade tariffs) to ACP countries. Known as GSP+, the modified version would allow a wide range of goods to enter the EU’s markets tariff-free. At present, GSP+ only applies to 15 Latin American countries.

Carrying out the EU’s threat of imposing punitive tariffs on ACP exports in the absence of deals being concluded would be a ‘‘disaster’’, Stevens argued.

If the threat is carried out, he has calculated that 22 ACP countries face tariff increases that would affect more than one-quarter of their current exports. A further five (Kenya, Mauritius, Guyana, Nauru, the Seychelles and Tonga) would have over half of their exports hurt. And in the case of Swaziland, Fiji and Belize the proportion would be higher than 75 percent.

Alexander Woollcombe, Oxfam’s spokesperson in Brussels, says it is vital that the Commission demonstrates greater flexibility than it has to date. He points out that the 2000 Cotonou Agreement, which underpins EU-ACP relations, explicitly commits the Union to offering alternatives to free trade agreements.

‘‘Saying ‘you either sign up or risk having your exports to the EU harmed’ puts the ACP countries between a rock and a hard place,’’ he said. ‘‘This puts the poorest and most vulnerable economies in the world under tremendous pressure.’’