1. EUROSTEP, TERRE DES HOMMES AND WEED ORGANISE MEETING ON THE EU-SOUTH AFRICA TRADE AGREEMENT AND EU PROPOSALS FOR FREE TRADE ARRANGEMENTS WITH THE ACP
As a follow up to the conference organised by Eurostep’s member Terre des Hommes – Germany, and German NGO – WEED (World Economy, Ecology and Development), on the impact of the conclusion of the South Africa - EU Free Trade Agreement on future trade arrangements between the ACP and the EU (April 23-25 - Germany), the Eurostep secretariat organised a meeting to debate the conclusions of the conference on Wednesday 5 May in Brussels.
The meeting consisted of the sharing of perspectives on the EU proposals for reciprocal free trade with the ACP and the EU-South Africa agreement by a panel of resource persons. Ms. Dot Keet (Senior Researcher on regionalisation and globalisation from the Centre for Southern Africa Studies, University of Western Cape) speaking on the implications of reciprocal free trade for South Africa, said the EU’s proposal on free trade arrangements with ACP (REPAs- Regional Economic Partnership Agreements) actually mean the setting up of inter-regional reciprocal free trade arrangements. She identified several problems in establishing such arrangements with southern Africa. 1) The EU’s proposed timeframe (2000-2005) for the negotiation of REPAs is unrealistic. Firstly SADC (Southern African Development Community) trade negotiations (a pre-requisite for REPAs) will only be fully implemented, at best, by 2008. 2) SADC does not have the institutional capacity to negotiate with the EU. 3) The timing of REPA negotiations will seriously complicate current SADC trade negotiations, the implementation of the EU South Africa trade agreement and the WTO Millennium Round of multi-sectoral negotiations. The broad implications for the ACP on EU-SADC negotiations for a REPA are: 1) It will divide the ACP and weaken their bargaining power vis-ā-vis the EU. 2) The model of an EU-SADC agreement could be inappropriately imposed on ACP regions that are a lot weaker than SADC. 3) An EU-SADC agreement could spark a scramble in the ACP from EU competitors (US and Japan) in their aim to establish reciprocal free trade arrangements so as to prevent the EU from sole reaping the fruits of reciprocal trade with the region.
On the argument of the compatibility between EU-ACP trade arrangements and WTO rules, she said the EU has chosen to underplay or ignore the WTO’s Different and Most Favourable terms for developing and especially least developed countries. However, she added that in the final analysis "the most fundamental issue is not how Lomé must be altered in order to fit in with the WTO’s rules but how the WTO and underlying neo-liberal paradigm need to be adjusted radically to allow for genuine co-operative and equitable international economic and political relations."
Ms. Judith Head (Researcher on social transformation processes and migration from University of Cape Town) informed the meeting of the effects of free trade between the EU and South Africa on women canning workers in South Africa. She said trade negotiations should not simply be about trade. Principles of gender equity need to be linked. She added that there is a need to monitor the EU-South Africa agreement and a need for a commitment to develop real indicators by which the agreement’s impact on development could be measured.
Ms Mirjam van Reisen (Consultant for Eurostep) said the EU proposal on trade leads to a real contradiction. In principle the LDCs among the ACP can choose whether to enter into a REPA or not. But in reality the choice may be non-existent because even when there is no hard economic evidence that a REPA may bring benefits, LDC ACP countries will be inclined to enter in negotiations for REPAs so as not to isolate themselves from the world market. She added that the EU might use time-pressure for the negotiations as a ‘stick’ and offer financial assistance as a ‘carrot’. However as long as the EU is weak in delivering financial assistance, and the offers with regards to trade are likely to be more harmful than beneficial, it would be rational for the ACP to consider opting out of REPAs.
Among the points Peter Eisenblätter (Programme Officer responsible for international networks at terre des homme – Germany); outlined in his presentation were: 1) the basic pre-requisite for an EU north-south policy should take into account, the reform of the EU’s Common Agricultural Policy and the improvement of market access for agricultural products from the South. 2) The EU and the ACP should ensure the participation of civil society in the negotiations on REPAs.
Ms. Eileen Sudworth (Independent Development Consultant) in her presentation stated that given the time cost and expertise required for the negotiation of REPAs, as demonstrated by the EU-South Africa agreement, both parties would to have examine whether they can afford REPAs economically, politically or socially.
Among the points Mr. Philip Lowe, the Director-General of the Development Directorate of the European Commission (DG VIII), made in defence of the EU position were: 1) The EU is battling with its own employment and socio-economic problems. If trade arrangements were designed to be more in favour of the ACP, Europeans would begin to protest. 2) The EU is not forcing liberalisation on the ACP, rather it is a world-wide phenomenon that should be accepted. 3) The REPAs option is the best way forward given the circumstances. The benefits of free trade for poor countries have been demonstrated in other countries. 4) The EU will not force the ACP countries to accept REPAs within the given time frame. The situation of each ACP entering REPA negotiations will be reviewed in 2004 to assess whether a REPA is feasible. 5) There are no truly good options possible for future EU-ACP trade arrangements. Critics of REPAs should realise that though there may seem to be better options than REPAs, the reality of the situation is that REPAs are the only ‘politically’ feasible option (referring here possibly to the socio-economic situation in Europe, WTO rules and EU relations with the US) of benefit to the ACP.
Mr. Carl Greenidge, the Deputy Secretary General of the ACP Secretariat, in response to Mr. Lowe made the following arguments: 1) The South Africa-EU Agreement cannot be used as a model for REPAs with the rest of the ACP. Because South Africa is currently fashionable in international relations, the EU might have been prepared to provide it with more concessions than it would provide for other ACP countries. 2) Given that the objective of the EU-ACP partnership is poverty eradication, the important question asked should be what economic instruments are appropriate for poverty eradication. Trade liberalisation is not simply neutral to poverty eradication. It is harmful. 3) While the EU uses the argument of inadequate capacity to absorb financial aid as an argument for reducing aid, the question of capacity to cope with free trade is not raised. 4) Though REPAs claim to have an economic support dimension, it is only their reciprocal trade aspect that the EU has concretely proposed to the ACP. 5) The EU can argue for different treatment for ACP countries from other developing countries in the WTO based on objective indicators of their trade dependence on the EU. He concluded that given the EU’s aim to fashion trade arrangements that were politically feasible, it should note that REPAs are not politically acceptable within the EU-ACP partnership.
Background documents to all the presentations apart those from Mr. Lowe and Mr. Greenidge are available from the Eurostep secretariat. The secretariat hopes to organise a follow up meeting in June to meet the demands of the participants who, due to time constraints, were unable to put their views across in the debate. The PAF will keep you informed on this.
2. COMMISSION TO PRESENT PAPER ON REFORM OF EU BANANA IMPORT REGIME TO EU AGRICULTURAL MINISTERS
The Commission will present a paper on reform of the EU banana import regime with ACP banana producers, with the aim of kick-starting EU reforms on the regime later this month. This follows the WTO panel’s ruling against the previously revised EU regime with traditional ACP banana producers adopted last year. The WTO panel's ruling was on the grounds that the EU's revised regime was still discriminatory towards other banana producers. This opened the door for the US, which has spearheaded a campaign in support of bananas from Latin American countries (marketed by US multinationals) against the EU trade regime, to legally impose sanctions on a number of EU products.
According to trade experts the Commission
will seek to make concessions on the allocation of import
licences. The Commission has decided to keep the quota system
that restricts the quantity of bananas and keeps prices up. This
time the Commission will try to ensure that its plan is
acceptable to the US before seeking support from EU governments,
so as to avoid going through the painstaking process of having
the proposal challenged before the WTO by the US. The
Commission claims however that the EU will not be able to agree
to a new regime before the installation of the new European
Parliament in autumn.