1.
EU AGREES TO DILUTED ‘EVERYTHING BUT ARMS’ MARKET
ACCESS PROPOSAL FOR LDC COUNTRIES
The EU approved a watered down version of the European Commission’s proposal to eliminate quotas and duties on all products except arms (the Everything But Arms – EBA proposal from the 48 Least Developed Countries (LDCs) at the EU General Affairs Council this week). Duty and quota elimination for almost all products is supposed take effect from 5 March 2001 (according a Commission civil servant in reality the implementation of this initiative may delayed by several months due to the administrative work involved). The transition periods for the liberalisation of bananas, sugar and rice have now been extended. The full liberalisation of sugar, rice and bananas will be phased in during a transition period. Duties on fresh bananas will be reduced by 20% annually starting on 1 January 2002 and eliminated at the latest on 1 January 2006. Duties on rice will be reduced by 20% on 1 September 2006, by 50% on 1 September 2007 and by 80% on 1 September 2008 and eliminated at the latest by 1 September 2009. Duties on sugar will be reduced by 20% on 1 July 2006, by 50% on 1 July 2007 and by 80% on 1 July 2008 and eliminated at the latest by 1 July 2009. In a compromise gesture to compensate for the delay in liberalisation for these products, the EU will improve gradually improve, for LDCs, duty-free quotas for sugar and rice, based initially on the best figures for LDC exports during the 1990s, plus 15%. These will increase by 15% each year during the interim period (period between now and when liberalisation starts) The extension of the transitions periods was negotiated as a compromise to EU agricultural produce and some EU Member States who had opposed the original Commission EBA proposal based on the argument that it would flood EU markets with products from LDCs to the detriment of EU producers. However, several studies produced, including one by Oxfam GB, point out that most LDCs are not in a position to flood EU markets with their products due to the supply side constraints they face.
According
to a note on the Commission’s website, http://europa.eu.int/comm/trade/miti/devel/eba3.htm
the package is intended to improve trading opportunities for LDCs
significantly, while giving time for EU countries to adapt to
changes required in the Common Agricultural Policy for those with
an interest in the three most sensitive products. The
Commission aims to monitor imports of rice, bananas and sugar
carefully and apply safeguard measures if necessary to prevent
‘damaging surges’ in exports from LDCs. There will be
monitoring to verify respect for rules of origin, as well as
anti-fraud measures. The Commission will report to the Council in
2005 on the impact of trade within the EU and for LDCs, as well
as on African, Caribbean and Pacific countries. Eurostep
expressed support for the Commission EBA proposal when it was
proposed last autumn, but also called on the EU to address the
concerns of non-LDC developing countries, which might be
adversely affected by the proposal. Reports in the European
press highlight the concerns of representatives of ACP countries,
who point out that the EBA proposal violates the Cotonou
Agreement signed between the EU and the ACP countries last June.
Under the Cotonou Agreement the EU claimed that market access for
all ACP countries (39 of which are non-LDCs) would either be
maintained or improved, but not reduced. But according to one ACP
ambassador, the EBA breaches this abovementioned deal on market
access for the ACP. The EU’s decision, according to the note
on its website, is meant to be a sign of political goodwill in
the run-up to the UN Conference on Least Developed Countries,
which the EU will host in Brussels in May 2001, and the fourth
World Trade Organisation Ministerial Conference, due to be held
in Qatar in November. However, many observers have questioned
whether the EBA proposal on its own can deliver real benefits to
LDCs. Eurostep has called on the EU to develop a
strategy alongside the EBA initiative to address the supply side
constraints that hinder developing countries from exporting their
products to the EU.
2. EU AND MEXICO COMPLETE FREE
TRADE AGREEMENT
The EU and Mexico
this week completed the remaining aspects of their Free Trade
Agreement at the first EU-Mexico Joint Council of the EU-Mexico
Economic Partnership, Political Co-ordination and Cooperation
Agreement (Global Agreement). The Free Trade Agreement in
Services between the EU and Mexico will enter into force on 1
March 2001, together with preferential arrangements on
economically significant aspects such as public procurement,
investments and intellectual property. The decisions taken by the
EU-Mexico Joint Council, the political driving force of the
agreement, mark the full entry into force of all trade aspects of
the Global Agreement that entered into force in October 2000,
marking the beginning of a new phase in the relationship between
the EU and Mexico. The decisions concerning services, investments
and intellectual property will enter into force on 1 March 2001.
The decision also includes provisions to establish an effective
dispute settlement mechanism. EU and Mexican ministers also
held their first ever ‘political dialogue’ meeting,
discussing mainly issues concerning Chiapas and UN reform. The EU
welcomed the decision by the Mexican government to open dialogue
with the Zapatistas.
3. EU
CONSIDERS RESUMING CO-OPERATION WITH THE DEMOCRATIC REPUBLIC OF
CONGO
EU
Ministers attending the EU General Affairs Council this week
welcomed the economic reforms announced by the new government in
Democratic Republic of Congo. In the Council’s adopted
conclusions on the Democratic Republic of Congo, the
ministers state that if these reforms result in concrete action,
the EU is willing to engage in substantive discussions with Congo
on a gradual resumption of development co-operation. The EU
Ministers also made an appeal to all parties involved in the
conflict that country to take measures to permit the
disengagement orderly withdrawal of troops. The Ministers pledged
to examine how the EU can provide concrete support to the UN
force in Congo and assist in drawing up a plan of disarmament,
demobilisation and reintegration into society of all armed
groups. The General Affairs Council reminded the governments
involved in the conflict in Congo that it was their duty to
control their forces in Congo and respect human rights.
4. EUROPEAN
COMMISSION TRADE ISSUE MEETINGS WITH CIVIL SOCIETY
The
European Commission’s this week organised the first round of
trade issue group meetings with civil society and other
stakeholders in the second cycle of its system of dialogue with
civil society and business organisations. Four meetings were held
on the four issues: investment, competition, WTO reform and
intellectual property rights. At the meeting on intellectual
property rights the Commission invited comments from the
participants on its draft communication on the relationship
between TRIPs and Convention on Bio Diversity http://europa.eu.int/comm/trade/pdf/dc_bdtrips.pdf
Further written comments on this can be sent to [email protected],
but should be done within a week. The Commission will meet with
EU Member States in the 133 Committee in mid March to discuss the
paper. The paper will then be submitted to the WTO TRIPs Council.
The
Commission is also holding a discussion meeting on sustainable
trade in addition to the four issues mentioned above on 2 March
in Brussels. The meeting is supposed to discuss the
Commission’s discussion paper on sustainable trade. This
is the first time that the European Commission has tried to
articulate a comprehensive position on sustainable trade,
including the social, development, environment and economic
dimensions of trade, trade policy and trade liberalisation. The
paper does not only deal with WTO issues but also the EU’s
trade arrangements with other regions such as that with the ACP
and Mexico. The Commission will organise a further consultation
meeting on this issue on 27 April in Brussels.
5. IN BRIEF
Sweden’s
Permanent Representative to the UN, speaking in an open debate of
the UN Security Council, reiterated the EU’s full support on
a global certification on diamonds on traded with Africa.