Deep-seated differences. The definition of the new agreements between the EU and the ACP has become a political affair that is both dangerous and unpleasant. It is a problem for which no outcome is in sight. The kind of agreements envisaged is rejected in practice by part of the ACP states (mainly in Africa) and criticised by some European political forces and by development cooperation bodies, that accuse such agreements of no longer being effective for the development of the countries concerned.
All those playing a part in the negotiation have a share of the responsibility. The new agreements represent a turning point in the relations that have governed the connection between the European Community (today the European Union) and the former colonies of a number of member states for half a century. Political relations have changed in nature since former colonies have gained independence to become sovereign states, but economic relations are still geared to the two former pillars: preferential access to the European market (thanks to derogations to the GATT rules to begin with, and then WTO rules) and substantial financial support. These pillars are today shaken by evolution along two lines: a) trade exemptions are expiring and preferential schemes are reserved for countries or groups of countries in free trade areas; and b) the EU is largely composed of countries that have never had colonies, or not had colonies for a long while, and that see no reason to grant trade preferences to some poor countries to the detriment of the others. From their point of view, the least developed countries should all benefit from comparable regimes.
Global trade liberalisation is to the disadvantage of the weakest. Negotiation of a new regime has encountered a series of errors and misunderstandings. As an indication of misunderstanding, one could come up with the famous slogan whereby priority should be given to trade: the economic development of a poor country is helped more by opening up export outlets than by subsidies. Who does not agree with this in principle? But in fact, in a system of growing global trade liberalisation and in the absence of trade preferences, the least advantaged countries lose their trade outlets as the emerging countries step into the breach left open and conquer the markets. If the EU accepted what is being asked of it by the major agricultural farming countries in the Doha Round, who would be the first to profit? The answer is obvious: Brazil, India and even more so China, which remains silent but is ready to invade all the western markets, from which Africa would be almost totally excluded.
The EU has made an effort not to open up its borders erga omnes but has given priority to the countries on the UN's list of disadvantaged countries, safeguarding “preferences” in favour of ACPs. But this direction has been hindered and contested not only by the major agricultural exporting countries (which is only natural) but also by other economic or political forces: international trade (including European importers), and powerful international bodies such as OXFAM, which no doubt has considerable merit in its action in favour of poor countries but which, in the dossier on opening up world agricultural markets, has had a disastrous effect on ACP countries. This has been seen in two specific cases: bananas and sugar. External pressure has practically forced the EU to dismantle its preferential regimes (in the case of bananas, it cannot be reproached for having defended its own interests, as its production is insignificant) by gradually reducing the number of guaranteed outlets, guaranteed prices and the other advantages enjoyed by ACP producers. And this dismantling is set to continue. Some ACP countries have in practice come into line with international pressure in favour of totally opening the European agricultural market, forgetting all solidarity.
Havoc wreaked by a mistaken concept. The above-mentioned cases are an example of the damage done by the tendency to consider that unlimited expansion of trade should take primacy over all other considerations, neglecting true priorities such as: the right of each country or group of countries to a reasonable degree of food autonomy; the fight against famine; preservation of nature; and the security of food products. How many African countries have given way to outside pressure encouraging them to develop single-crop farming for export, with the result that traditional subsistence farming has been destroyed, regional balance demolished (by the swelling and sprawling of towns) and these countries have become totally dependent on food imports for their population!
Two conflicting stances. At present, the question raised is first and foremost that of knowing whether the new agreements envisaged will indeed contribute to the development of ACP countries and correct the existing failings. Opinions expressed, which are no doubt partially exaggerated for the argument, are
at variance. The European Commission continues to defend the Economic Partnership Agreements (EPAs) currently being negotiated, saying that the criticism they receive creates a false impression of them. Last Saturday, European Commissioner for Development Cooperation Louis Michel defended these agreements and their objectives against what he considers to be a distortion of reality (see yesterday's bulletin). Trade Commissioner Peter Mandelson reaffirmed that there was no alternative and spoke of the dangers that ACP countries would encounter if agreements were not concluded by the end of the year. Several days earlier, the GUE/NGL Group at the European Parliament had organised a “hearing” giving those opposed to these agreements an opportunity to forcefully and fervently air their views (see Aminata Niang's account in our bulletin No.9505). On Thursday 27 September, in Brussels, a Global Day of Action and Protest will be held against EPAs, organised by the ACP and EU civil society organisations. The “Development” Council meeting in informal session in Funchal is largely in line with Louis Michel's views, but at the same time sets out a number of hypothetical procedures for breaking the stalemate.
Radical opposition. Let us look at these two theses a little closer. The offensive by opponents of EPA is bitter and deep-seated. During the hearing of 18 September, Francis Wurtz, President of the European United Left/Nordic Greens Left (GUE/NGL) parliamentary group, complained that Europe had broken the “taboo of non-reciprocity” when it comes to trading matters between developed and poor countries. The latter's fragile economies cannot face up to the “shock of competition”, with repercussions on their budget (import duties are the main income for some African countries) and balance of payments. They will no longer be able to develop their modest agricultural and industrial production sectors, and will also lose the few outlets that they have in neighbouring countries, where European products will take the place of their products. A number of impact studies have been carried out, but the EU has apparently chosen to neglect or dismiss them. German MEP Helmuth Markov and Italian MEP Vittorio Agnoletto echo Wurtz's words. As do the representatives of civil society in certain ACP countries. It is true that the GUE/GNL group is one of the smallest at the EP (41 members out of 785), but it has its supporters. At the meeting in Funchal, Socialist member Glenys Kinnock also criticised the EPAs and made several suggestions for an alternative solution. She said that first and foremost one should face the facts - the new agreements will not be signed by the end of the year. In which case, we shall have to make do with framework agreements fixing a few principles and objectives, and extending the GSP system (Generalised System of Preferences) to all ACP countries. See Aminata Niang's report on the Funchal meeting.
Vigorous support. The European Commission's strong support can be seen in its forceful rejection of conflicting theses. Louis Michel has affirmed that, in reality, EPAs are “development agreements” that invite ACP states to take the road followed by Europe itself in its process of integration. ACP countries must begin to trade among themselves as there is no development without integrated regional markets. The opening up of their markets to Europe will be very slow: other than the products needed by the ACP states, liberalisation will take time - sometimes 20-25 years - and in some cases no time limit is foreseen.
Risks for ACP states. Trade Commissioner Peter Mandelson, for his part, took up what he had explained on 11 September before the international trade committee at the European Parliament. The current EU/ACP trade regime will expire at the end of this year. Without a new agreement in line with WTO rules, the EU and ACP states will be guilty of infringement and will be confronted before the Geneva organisation in January 2008 (the recent complaint filed by Ecuador against the EU's “banana” regime shows there will be no holding back). ACP countries will not be able to benefit from the GPS Plus regime in 2008 (not even those that appear on the UN list of least advantaged countries), as this regime is subject to compliance with several international conventions or standards, in social matters and respect of human rights. Verification will be made in 2008 and, according to Mr Mandelson, very few ACP countries will meet the conditions set. The 31 ACP states that do not appear on the UN list will lose their current tariff advantages for textiles, tuna, cocoa, bananas, etc. For EPAs to take effect in good time, negotiations should end next month. We are still a long way off, according to the European commissioner, as negotiations are blocked with Western African and Eastern Africa; Southern Africa depends on the attitude adopted by South Africa, which is not clear; Central Africa is moving forward but there are still difficulties to be overcome; the Caribbean is making progress but the EU still awaits an offer of trade reciprocity; and the messages sent out by the Pacific region are contradictory.
As you can see, the situation is a complex one. Tomorrow, I shall try and draw a few conclusions. (F.R.)
European Parliament Plenary Session