Bamako, 21/04/2005 (Agence Europe) - On Tuesday, European Commissioner for Trade Peter Mandelson delivered an eloquent plea for complementarity between trade and development, in his first address to the ACP/EU Joint Parliamentary Assembly. In answer to the concerns of the parliamentarians about the impact of multilateral trade liberalisation and the future economic partnership agreements (EPAs) on the vulnerable economies of poor countries which produce mainly raw materials, the Commissioner outlined his faith in the merits of multilateral trade with a framework of rules and in full support of the development of ACP trade capacities to promote South-South trade, which is vital if there is to be a gradual and non-reciprocal opening up between the EU's market and that of the ACP regions, starting in 2008.
“We have the common concern of using all the instruments at our disposal to fight against poverty in the world and to reduce inequality”, said Mr Mandelson, emphasising the determination of the Commission to put “development and trade at the service of each other (…) by working multilaterally, regionally and bilaterally”. This approach requires “coherence, rigour (…) because the law of the jungle leads nowhere”: it is necessary due to the need to be “more creative” to remedy the failure of outdated methods which were not enough to bring the ACP countries out of poverty, as testified by the dramatic fall in ACP exports to the EU (although the EU is their largest trade partner) and their share in world trade (which fell from 6% in 1980 to 2% in 2002). The Commissioner said that he was convinced that the EPAs, a “21st century solution”, would be a “key element in revitalising the partnership for ACP/EU development” by offering an opening up in the South-South market before the North-South one, whilst promoting the ACP regional integration process. “The constitution of regional economic markets is a key element of development. This is the starting point (…) to get out of the narrowness of the ACP markets” (out of 53 countries in Africa, 39 have populations below 15 million, and 21 have fewer than 5 million) and to provide greater benefit to small island States or enclaves, he repeated. “But this will not be led by Brussels. There is no secret agenda. We will support the priorities of the regions themselves (…). This is the best way for the private sector to develop and attract investment”, said Peter Mandelson. The final results of the negotiations will be a single trade regime at regional level, common customs procedures, an enlarged market, he said. Moving on to how the EPAs should be dealt with in trade rules on investment, public procurement and trade facilitation (known as the “Singapore” questions at the WTO), the Commissioner stressed that the EPAs will be “leverage to work on these issues which are fundamental to economic and human development”. Mr Mandelson took pains to reassure his audience, specifying that tariff liberalisation between the six ACP regional integration regions and the EU will happen gradually, “using a pragmatic and flexible approach”, and for which “the exact terms will be negotiated region by region, on the basis of needs, not of a doctrinal approach”. Safeguard mechanisms are anticipated to protect vulnerable sectors, he promised, noting that the artificial isolation of the ACP countries in the global economy highlights their vulnerability. Peter Mandelson announced that the follow-up mechanism of the EPAs to allow development aid to go hand in hand with trade policy was “ready to be implemented in partnership with the ACPs”, and that the priority could be to identify the bottlenecks in current aid programmes in order to sort them out, then to integrate support for the EPAs into national indicative programmes. The Commission spoke of his hope that the detailed guidelines would be ready in the autumn for the following phases, and that negotiations would be concluded in mid-2007, “on the back of a successful conclusion of negotiations for the development of Doha”. “You have my pledge that the EPAs will be a complement, not an opponent, to the strategy laid down by the millennium development objectives”, he said.
These assurances did not entirely convince the parliamentarians. When asked about the duration of the transition periods he will recommend to allow the ACPs enough time to enter free trade with the EU on an equal footing (12 years is far too short for an economically fair relationship, said a group of NGOs from the South in a statement adopted in Bamako), the Commission did not take position, simply referring to “the need for negotiations via dialogue”. In answer to an African parliamentarian who asked him if South-South trade to be developed would be “trading coffee for gold”, Peter Mandelson said: “let us not underestimate the potential of developing South-South trade. If it is encouraged within the African continent and if its full potential is exploited, it could boost growth to the tune of 5 to 10%”. When asked about the impact of the loss of customs duty as a result of the future EPAs on the budgets of countries which are already very poor, the Commissioner noted that the impact of tariff reductions will not be felt before 2020 and that the positive effect of reform of the tax system and reduction of red tape in ACP countries should not be neglected. The Commissioner dismissed the adverse social impact of the EPAs, saying one should “not even contemplate failure of EPAs”. “If ACP countries note a negative impact, it will be up to us to adjust to this reality”, he added, citing the example of the scandal involving European frozen chicken exports to Africa. Speaking to the press, however, the Commission said on this subject: “We must affirm that EPAs will make this problem worse. I don't mind looking at the consequences but nothing shows that this arises from EU farm policy. It is up to the importer countries to impose standards”. “With the EPAs, the ACP countries will be able to maintain tariff barriers”, Peter Mandelson pointed out. Regarding the timetable for reform of the sugar regime, he said it was the Commission's wish that the sugar protocol should be integrated into the EPAs, on a regional basis. “We shall discuss market access around September 2006”.
Oral defence in favour of rapid solution at WTO on problem of African cotton
More convincing on the subject of cotton, Peter Mandelson said he was pleased with having been able to visit a factory for cotton seeking in Mali and told the press that he had reassured operators in that sector of the high importance he attaches to “necessary changes being made to international rules and practices of rich countries, especially the United States, but also the EU”, which puts African cotton in an unfavourable position, although it could be highly competitive, because of massive subsidies. The Commissioner recalled in this respect that “65% of EU support to its farmers, for production lower than African production, is decoupled from production and therefore does not entail market distortion”. He went on to add that the United States has lost at the WTO and that US reaction is awaited. The United States, he continued, must now comply very rapidly to the panel's verdict. On the strength of the Europe/Africa partnership on cotton at the WTO, the Commissioner said that negotiations at the WTO must entail broader market access but also a reduction in subsidies for rich countries. The EU is ready to be a pioneer in defence of this cause, he stated, saying that clear and exact deadlines must be set. He appealed to members of the WTO to implement their commitments, rapidly and as soon as the Doha Declaration is signed. Mandelson added that he hoped the resolve to speed up the rate of discussion at the WTO would be duly taken into account by Europeans. He stressed how urgent it was to find a solution, as was recognised by all his interlocutors beginning with the president and prime minister of Mali. The Commissioner, moreover, recognised the interest that cotton processing holds for Mali in order to be able to export added value rather than a raw material.