European Companies Not Interested in Markets - EU Officials
9 Oct 2007
A Trade agreement between the EU and developing countries will not mean free trade but rather a full removal of tariffs and quotas by the EU on more exports from poor countries, senior officials from the block have said.
In an open letter to anti-poverty campaigners, EC Trade Commissioner Peter Mandelson and Development counterpart Louis Michel say the block of developing countries under the ACP will have more to gain from on going trade negotiations than the EU.
Come January 1 2008, the negotiations are supposed to come up with Economic Partnership Agreement (EPA). These EPAs are set to replace trade arrangements giving African, Caribbean and Pacific states preferential access to the EU market. These preferences have to be scrapped to conform to World Trade Organisation (WTO) principles.
However, anti-poverty campaigners are up in arms arguing that this shift to the EPA will expose fragile industry in poor African nations to crushing competition from more modern, efficient EU-based firms.
"These negotiations are certainly not about EU companies and investment muscling these (developing) markets. In fact if we exclude South Africa, we trade less with all Sub-Saharan Africa that we do with South Korea alone", the two commissioner argue in their letter. "The problem is that EU companies have too little interest in these (African) markets, not that they have too much."
The EPA negotiations that have dragged on for years, have been slow because of controversies including regional configurations of African states and the trade reciprocity that these states will eventually be required to give to EU products and services.
"We often hear people say that EPAs won't be fair. That they will open ACP markets to EU trade at the expense of local businesses, and local growth. This is simply not true", Mandelson and Michel note.
They say under any deal, the ACP countries will be able to protect and exclude sensitive products and take advantage of long transition periods to nurture growing industries. From the EU side there will be a full removal of tariffs and quotas, with only a temporary exception for sugar and rice, the officials argue.
"We will also make sure there are no export subsidies on any goods where ACP countries remove tariffs and quotas, so they will not be competing against subsidized EU produce", they say. The officials also say the block will provide substantial technical and financial support to the developing countries to help them implement the EPA deal.
Mr. Mandelson warned in September that the preferential tariffs of the Cotonou agreement will fall away and the generalized system of preferences (GSP) will come into effect if the deadline of 31 December 2007 is missed.
However, he now says the no ACP country qualifies for the GSP at the moment because they have not ratified and implemented core international agreements on labour and sustainable development. The EU brought up the GSP plan to require countries doing business with the block to adopt strong labour protection incentives and environment standards.
Released on: 9 October 2007
Resource: www.allafrica.com
