Addis Abeba, 17/02/2004 (Agence Europe) - The concerns of ACP States (African/Caribbean/Pacific) concerning the future economic partnership agreements (EPA) being negotiated with the EU were amply expressed by ACP and a number of European representatives at the debate of the ACP/EU Parliamentary Assembly on Monday in Addis Abeba (Ethiopia). The debate placed emphasis on the prospects provided by these future agreements which must be concluded in 2008 in order to open the way to free trade within the next 20 years. Emphasis, however, was also placed on the difficulties and the costs of adjustment facing the ACP States and on the need to help these states with adequate financial resources. The scepticism shown by many MEPs (mainly the Greens and United Left) that these agreements could constitute a real instrument for development, and the requirement that everything should be done to ensure this, dominated the debate. In a concern for compromise, the terms of the resolution to be voted by the Assembly should, however, be attenuated in order to prevent the divide between the EPP-ED Group and the Left from leading to a separate vote between ACP and European countries. The EPP-ED, which was largely over-represented in Addis Abeba, had threatened to demand this, which would have prevented Thursday's adoption of a resolution, something that was greatly feared by ACP parliamentarians.
Introducing the debate, Harlem Désir (PES, France), EU co-rapporteur on this subject, stressed that the EPAs will represent the biggest upheaval ever in trade relations between ACP and EU countries, and that it is therefore "natural for this to give rise to concern and worry". In order for EPAs to become synonymous with hope and not threat, he said, it is necessary to enhance ACP/EU solidarity and to "create conditions of confidence" by providing answers to questions raised during negotiation. Although both parties agree on the aims of the EPAs, there are still different approaches, he commented, noting that these negotiations cannot essentially aim, as in traditional trade talks, at the mutual opening of markets and liberalisation, but must strengthen production and supply capacities, support the agriculture and fisheries sectors as well as infrastructure in order to contribute to the diversification and overall development of the economies of ACP countries. Harlem Désir is of the view that liberalisation which is too rapid and uncontrolled could entail real risks, and that the concerns are legitimate when ACP States fear the consequences of doing away with tariff barriers on certain sectors of agricultural activity or in the processing of primary products, on which many jobs depend. The co-rapporteur was also highly critical of the idea, which he feels is simplistic, that the fact that ACP economies are lagging behind is mainly due to protectionism. Experience gained from South Korea, Malaysia, Taiwan and China prove the virtue of maintaining temporary sectoral protection, if not direct support over several decades to promote the growth of certain industries and agriculture, and to allow sufficient diversification before gradually opening up the market, he said. The draft resolution therefore calls for EPAs to be development instruments which take into account specific economic, social, environmental and structural constraints of ACP regions and countries, as well as their development guidelines. This, says Mr Désir, is the only way to comply with the EPA objective as set out in the Cotonou Agreement, namely the sustainable development of ACP countries, their harmonious and gradual incorporation into the world economy and eradication of poverty. To this end, it is appropriate to maintain the principle of non-reciprocity of market opening as long as necessary, and to also maintain a special and differentiated treatment, effective safeguard measures to protect the sectors particularly exposed to exports from industrialised countries, and to take into account the situation of the small ACP insular states. This also requires having the financial resources needed to improve infrastructures (transport, telecommunications, energy, access to water, development of education and health services). The rapporteur insisted on the need not to use EPAs to force ACP countries to liberalise their public services or to seek to reintroduce commitments linked to the so-called Singapore issues, which were rejected by the WTO, in Cancun.
Sharon Hay Webster (Jamaica), ACP co-rapporteur, was of the view that the priority aim of the EPAs must be to eradicate poverty and for emphasis to be placed on economic growth and on strengthened capacities in ACP States. She believes the EU and ACP states share in common the responsibility to integrate ACPs harmoniously into the global economy. She went on to comment that this was a question of development and not just of survival for 500 million people.
Pascal Lamy says there will be neither reciprocity nor additional financial resources
Pascal Lamy, Trade Commissioner, expressed surprise at the large amount of criticism and recalled that most of the concerns expressed were the subject of "intense discussion" and had been covered during years of negotiation with the whole group before regional negotiations were launched.
Rejecting the idea that the development dimension for EPA is synonymous with additional financial resources to those of the European Development fund (EDF), Mr Lamy took a very hard line, "The Commission's objective is to help trade and aid for development, mutually support each other. We have to be clear, the development of the EPAs cannot be resolved by financial transfers alone. The experience acquired during the partnership demonstrates that: initially its is ACP countries that should put into place an environment that helps private sector activity, which is a key driving force for efficient economic development in the long term. The objective of the EPAs are to help contribute to good governance in ACPs in regions linked to trade", declared the Commissioner. Therefore, no additional resources, stated Lamy, who said that the "question is not pertinent for the moment" and that EPAs aimed first of all to promote regional integration in ACP countries and South - South trade. He explained that this would involve a new cooperation model aiming to expand ACP markets for the construction and consolidation of regional ACP markets and increase transparency in regulation and forecasts for economic and trade policies.
According to the Commissioner, reciprocity is not on the agenda. He noted that "Our market is very open. Your markets are less open to our exports. This is normal and it will stay like that as long as you need to build your regional markets". He professed that reciprocity would be gradual, with sufficiently long transition periods, exceptions and aid. He also said that this flexibility was perfectly compatible with WTO rules. He said that he was aware of the worries about liberalisation and the impact of tariff reductions on the ACP balance of payments but declared that if negative consequences were in the realms of possibility, they had not been proved. He said that the Cotonou agreement included the possibility of aid for lost income involving exports to the EU but only from 2008. The Commission recognised that the means must be made available to ACP countries for helping put future agreements into place. The Commissioner ruled out in no uncertain terms the idea that EPAs were a "window for re-introducing such and such a theme that has been thrown out by the WTO". Lamy underlined that the two negotiations were fundamentally different and according to the common ACP/EU agenda, the so-called Singapore issues should be tackled, in the same way as the ACP regions had to deal with them among themselves, given that this was sometimes a matter of setting priorities, which are themselves set in the framework of deepening regional integration.
Jayen Cuttaree, foreign affairs, international trade and regional cooperation minister in Mauritius was pleased that the first negotiations session between the 16 west and east African countries had allowed for an agreement on the road map and that structure for the negotiations. He believed, like the two co-rapporteurs, that the 10 year transition period before free trade is examined by the WTO, should be extended to 15 years and that cover for products should be brought down from 90% to 70%, like in the EU/South Africa agreement. Illustrating the constraints on the ACP, Mr Cuttaree appealed for more resources to fund necessary accompaniment measures (structural transformation of the countries, development of the knowledge-based economy, technology transfers) and cancellation of the debt. He declared that they were asking the Commission and the APP for new initiatives and that the issue had to have flesh put on it. He also stated that the EDF was not appropriate for this model and that a rapid disbursement mechanism was needed and that they were not convinced that the budgetisation of the EDF would improve the situation. Cuttaree pointed out that 40 out of 79 APC are the least advanced countries and that the others were poor countries with vulnerable economies. He called for the EPAs to become an instrument of growth and sustainable development and added that the EPAs were showing the way but had to take into account WTO development. ACPs were committed to the agreements compatible with WTO rules he said, but that these rules had to be focused on development if not, trade would not be equal.
Konrad Schwaiger (EPP, Germany) criticised the fact that discussions did not focus on the proposals that the Commission had put on the table at the WTO (36% reduction in tariff duties for processed products and 45% off European agricultural subsidies, which according to him would allow for getting rid of scepticism from ACP countries and allow for a vision based on perspectives rather than problems, as the report of Harlem Désir did. He added that they supported the report but that it presented their partnership too pessimistically. According to Schwaiger, good governance and democracy went together with economic growth and EPA countries should allow the ACP to develop markets, make economies of scale by creating a large market and produce products of quality at low cost, without having to import from industrialised countries.
Joseph Kamotho (Kenya) believes that a reform of the WTO rules is needed, as they were drawn up for developed countries, and EPAs are negotiated by the least advanced countries, who have the right to benefit by non-reciprocal trade preferences. "Better rules for free-trade agreements concluded between an economic giant like the EU and a group of least advanced countries like ours", he said. Richard Howitt (PES, United Kingdom) wondered if there was any "secret agenda" leading the Commission to start negotiations with certain regions as a priority, and pleaded in favour of a parliamentary control of negotiations and EPA impact studies, especially on the social side of things and in terms of lost revenue for the ACP. Didier Rod (Green, France) spoke out against "the dogmatic premise that increasing trade reduces poverty, and to boost trade, you have to liberalise it", whereas facts have shown that with liberalisation of multilateral trade, rich countries become richer and poor countries poorer. "Aren't we going to reproduce at regional level what has happened globally?" he asked, adding: "some of our European colleagues are concerned about non-reciprocity in free trade. But in terms of debt, non-reciprocity exists to the detriment of poor countries, as servicing the debt is seven times higher than development aid". Sergio Ribeiro (GUE, Portugal) pointed out that partnership would not impose the same model for all by setting up the market in "theology at world level". Mali's representative said "in the 1980s, you asked us to adjust to the requirements of the World Bank and the IMF, and we did it. In the 1990s, you asked us to democratise, and we democratised. You asked us to liberalise our economies, and we did that too. Since then, health, water, transport, and agriculture have all become more expensive in our countries. We are extremely concerned".
Answering questions, Pascal Lamy sought to reassure by pointing out that free trade between the ACP and the EU was a very long-term project. "For the transition period, the figure of ten years is not set in stone. If you have any worries, remind yourselves that you [the ACPs] then we [the EU] represent two-thirds of the seats at the WTO. We have the power of opposition. Don't worry", he added. However, he recalled that the cancelling of the ACP debt to the Member States does not fall within the Commission's competency.