A reassuring hearing. Not for nothing do we speak of the British school of democracy! Peter Mandelson, who will be European Commissioner for Trade in three weeks, gave extra proof of this in his hearing before the EuroMPs. The summary of it published in our bulletin of 5 October (pages 6/7) paints a picture of a confident man, relaxed and easily recounting his political experience acquired in his country of origin. He won the MEPs over (apart from a few). I'm not going to go back through all of his hearing, just a few parts on his views on the liberalisation of world trade. Compared to the recent stance taken by the British government, so completely ultra-liberal (see this column of 3 September), his views served to reassure. Here are a few of the things Mr Mandelson said: "If liberalisation happens too quickly, exposing markets in developing countries to competition before they are ready, this could be a disaster". On textile trade, which will be fully liberalised on 1 January: "China's objective is 50% of the world textiles market (…). I am not so sure. I fear for the least developed countries". On agriculture: "The increase of world trade should take account of each country's food requirements (…). On sugar, trade alone cannot provide the answers to all the changes needed in the ACP countries. We must do all we can to help them". These phrases back up his initial statement: "I am not a simplistic liberal. Liberalisation is not an end in itself, but a means to create a fairer society and improve people's lives".
A drama for the poorest countries. I would like to add a few considerations to explain these comments, starting with the textiles sector. On 1 January next year, quantitative restrictions on imports of textiles and clothing will be removed under the WTO. This decision was taken several years ago, and at the time it was believed that transition periods would be a good way of getting round any problems. But the transition period is up, and the moment of truth has arrived. It was the poorest countries which asked for the quotas to be removed, with the support of NGOs (whose role was not always so anodyne). These countries are not so happy now, because they can see that they can't compete with China; the European market, which is already pretty much swamped by Chinese products, will be entirely taken over. Bangladesh, Cambodia, Romania and many others are worried, and are calling for help. At the end of July, Neil Kearney, Secretary General of the International Textiles, Garments and Leather Workers' Federation (ITGLWF), said: "Who is going to explain to 40 million workers, mostly women in poor countries, that the mass destruction of jobs which will happen in 2005 is a good thing for them?". We might reply: just send representatives of certain NGOs, they'll be able to do a good job of explaining what they so successfully called for.
Meeting recently in Tunis, producers from 12 Mediterranean countries called for "regulations, in terms of price and volume, on Chinese products coming onto the Euro-Mediterranean market". But we can't go back to restrictions; to change the agreement in force would require unanimity among WTO members, which would have to include China itself and India, another country with much to gain from the change. The countries which fought so hard in Geneva (of which China was not one, as it had not yet joined the WTO) for Europe to remove all limits got what they wanted; and now they're regretting their short-termism. American textiles workers have also announced 702,000 job losses at home; the authorities are therefore planning bilateral negotiations with China on a way of bringing back certain quantitative restrictions. The United States is always seduced by the temptation of bilaterals. For the other countries, there is only the path of normal WTO procedures: safeguard clause and anti-dumping measures. The EU could, in theory, use these to protect its production, but it can do nothing for Bangladesh, Romania and Tunisia! Pascal Lamy planned a monitoring mechanism for the EU, and at the end of last week, the WTO held a meeting with the poor exporting countries to see what it could do to help them. But their options seem somewhat limited.
A bet. I'm prepared to make a bet: if the option for total liberalisation also goes for agriculture, in a few years' time we'll be hearing the same complaints, but multiplied by 100, from the poorest countries, who will have lost their outlets (the winners will be Brazil, the United States, Canada, Argentina, Australia and various others). The African countries must not forget that the EU buys three-quarters of their agricultural exports, and that it pays well over world market price for their bananas, and gives European price for their sugar. Total liberalisation of the agricultural markets would do away with these kinds of support.
(F.R.)