Examination of Witnesses (Questions 138-159)
WEDNESDAY 19 MARCH 2003
COMMISSIONER PASCAL
LAMY
Chairman
138. Commissioner, thank you very much for giving
us your time. As you know, we are a Select Committee of the House
of Commons that particularly monitors and scrutinises international
development. We are doing an inquiry on trade and development,
so we are very interested in the Doha Round and the present trade
negotiations. Our Government's Department for International Development
have set themselves a target by which they are going to judge
the success of the WTO negotiations. They say that this target
will be judged to have been met if there is agreement at the "development
round" of WTO negotiations by WTO members, taken as a whole,
to an average 20% reduction in bound tariffs on industrial goods
and a substantial reduction in support for agriculture. The test
they have set is a substantial reduction in industrial tariffs
and a substantial reduction in support for agriculture. I was
wondering whether you thought that those were the appropriate
benchmarks of judging whether or not this will be a development
round and, if so, are those the sorts of targets that are achievable
in your view?
(Commissioner Lamy) Basically, yes, and
we are limiting this to the multilateral negotiation, which is
one of the aspects where development policy and trade policy are
related. There are many other aspects of trade policy where development
and trade are related—bilateral relationships, the preferences
we give, the ACP relationship, but I suppose we will talk of this
later. On the WTO round, we have named it the development round;
it is our policy to make it a development round. I think that
the first of these benchmarks, which is a substantial reduction
in industrial tariffs, is a good one and is obviously the most
important one. Industrial goods are 75% of the exports of the
European countries and it is 80% of all trade. The rest is 10%
on agriculture and 10% on energy. It is not only very important
North-South-wise but also South-South-wise. One of the big gains
of trade liberalisation for developing countries lies in developing
countries opening their trade to developing countries. So, yes,
20% is a sort of clever number. Of course, you cannot apply that
to the European Union. The average tariff in the European Union
is in the order of magnitude of 8% to 9%. We may have higher tariffs
in textiles or footwear here and there—although they are
much lower than the US tariffs—but there is an average tariff
of 28% or 30%. However, the idea that this results in a serious
tariff reduction, especially for developing countries—notably
in textiles and footwear, which is one of the proposals we have
made, namely to make a special effort on this one—yes, it
is true. Agriculture is also one, obviously, not only in terms
of a level of support and whether it is domestic support or export
support, or whether it is market access—it is also a big
chunk of that, but it is not the only one. This round is about
classical market opening but it is also about rules-building,
in things like antidumping, competition, investment, public procurement,
trade facilitation, which is also very important for developing
countries. The gains they can make in streamlining their systems,
in trade managing, are enormous. The obstacle to trade which you
have in things like red tape in many developing countries, or
indeed in some of our countries, sometimes amounts to between
5% and 10% of the cost of what you trade. It is fine having a
big fight about 5% tariff reduction—if you are still loaded
with 8% to 10% of the cost of your goods because of port formalities
and things like that. So I think that the rules part of it is
also very important.
Mr Colman
139. Going on to agricultural policy, I was
in Doha and congratulate you on the hand you played in terms of
getting commitment to agricultural reform by the EU clearly put
on the table. Do you believe that the World Trade Organization
negotiations on agriculture can succeed without European Union
agreement on CAP reform? Will they fail if there is no CAP reform
within the European Union?
(Commissioner Lamy) No, but they will be at a higher
level at the end of the day if we succeed in pushing through the
package which we have tabled to the Council of Ministers at the
European Parliament. In agriculture, like in other areas, the
WTO negotiation—and especially in agriculture—is more
about disciplines than tariffs, although it is also about tariffs.
What is the purpose of this negotiation? It is to move the ceilings
of support which we had agreed in the previous round, which is
1995, lower. That is what we mean when we say reduce domestic
support and reduce export support. This is against the benchmark
which was set in 1995. Since then, the CAP reform has resulted
in a large part of the ceiling not being used. This is why we
were able to table, with the CAP as it is today before any reform,
a proposal that we would commit ourselves to reduce domestic support
by 55%, to reduce export subsidies by roughly 50%, and to increase
market access by roughly a third. This we can do today, as a result
of the CAP reform that has taken place since 1995. If everybody
around the table at WTO—including the Americans, by the
way, who in the meantime have been increasing their support and
re-linking it to production—agreed to that tomorrow, it
would already be a big step forward, because the level of the
1995 agreed disciplines will be lower and we would start the next
negotiation at a much lower level. The present CAP reform—the
package which is on the table—if adopted, will result in
an extra credit of negotiation in terms of domestic support, in
terms of export support and, to a lesser extent, in terms of market
access. So if you add the sort of credit we have gained since
1995 and this one, we can buy a better result in the whole negotiation.
But if the negotiation were to stop today, we would take the commitments
which the present CAP allows. It would already be a big step forward.
140. The decoupling, which I think you are describing—the
shift from price support to direct payment to farmers—do
you see that as making CAP WTO-compliant and do you see it as
making it more development country-friendly?
(Commissioner Lamy) Of course it is, because it is
less trade-distorting. If you start from a position where we have
7 million farmers in the European Union, 6.5 million of them are
non-competitive by academic international standards; 70% of these
farming operations employ less than one full person a year. So
it is all small farming, except for a chunk—
141. Hobby farmers we would call them in Britain.
It is not serious in terms of being their main source of livelihood.
(Commissioner Lamy) It is not serious, but we want
them to remain there, for a variety of reasons. This is the basic
European choice. We want them to remain there. We know that they
are not competitive and, because they are not competitive, they
provide a sort of service. We want this to be paid for, which
is why we will keep support to farming; but we do not want this
to have the sort of trade-distorting consequences which the original
CAP model had—as a big thing to become self-sufficient and
then have an export capacity, but with an insulated system. The
whole shift from price support to revenue support makes things
less trade-distorting. We have in the WTO a sort of waiver for
support, called the green box, which is where you put support
that is not trade-distorting. If we have special rules on animal
welfare and if the European Union citizens' view is that hens
are happier with one square metre per hen, it certainly makes
the average cost of eggs less competitive than if you had 100
hens per square metre. This has to be offset one way or another.
The same for environment, for food security and for food safety.
So there is a cost there which we have to compensate for. The
whole decoupling makes it less linked to production, so we do
not overproduce—which, by the way, has a good environmental
impact—and we do not dump it into world markets, then contributing
to the decrease which a number of developing countries suffer
from—of course, under the condition that others do the same,
notably the Americans who support their farming activities as
much as we do.
142. They say half.
(Commissioner Lamy) No. Look at the numbers. 0.5%
of GNP. Of course they say half because, for instance, they do
not include food stamps in the support system; but they do not
have oil stamps or farmer stamps or footwear stamps. It is all
about dumping their surpluses into social aid. If it was not social
aid, however, it would just be piling in stocks. They spend 0.5%
of their GNP, as we do, on supporting farming, and they of course
export a lot more than we do. We are by far the biggest importers
in the world—by the way, including from developing countries.
Hugh Bayley
143. In President Chirac's recent proposals
there is a proposal substantially to reduce trade-distorting export
subsidies. How much do you achieve that? To put it more strongly,
how can you achieve that without reducing excess production in
Europe? How might we achieve that goal?
(Commissioner Lamy) This proposal is within the Union's
proposal which we tabled in Geneva, which is that we are ready
to eliminate export subsidisation in areas of particular significance
for the developing countries. Mr Chirac's view of developing countries
is focused on Africa. We talk about developing countries because
we have a larger concept than that. The proposal implies price
reductions or price decoupling or support decoupling, so that
you do not have to put your thing onto the market at reduced prices.
144. Or quota changes?
(Commissioner Lamy) No, I would not like it to be
this way because then it would mean that you have to stop the
import side so that the addition of imports through domestic consumption
does not result in added exports. I do not think it should be
this way.
145. Can I move on to Everything But Arms? It
is early days, but which countries do you see as benefiting most,
which benefiting least, and why? What are the prospects for broadening
Everything But Arms to include all developing countries, or at
least more developing countries? Again, President Chirac has a
proposal to include all of Africa. What about India, for instance?
(Commissioner Lamy) First, it is two years old and
it is quite soon to look at numbers. Basically, however, it has
resulted in a DCs' export increase of 10% since then, which is
to be compared to average developing countries' export rise of
something between 5 and 7% a year—which means, by the way,
that you cannot really compare the without-Everything-But-Arms'
potential rise because, by definition, these countries are least
developed countries. Their supply system, their export system,
their harbours and so on, are in a much worse shape—if that
is possible. It has worked, notably with sugar where they have
started exporting sugar. Of course, it is not big numbers. The
sort of increase is in the order of magnitude of
10 million, which is not much for us, but
10 million is a big number for them because, remember,
they are the poorest. On Everything But Arms my view is that,
at the end of the day, this is the sort of concession which we
could consider, for instance with the whole of Africa or the economic
partnership agreements which we are negotiating with Africa, because
this is what we can table in terms of concessions. Obviously,
100% duty-free, quota-free, for a country like India would not
be possible in the present CAP system. In things like sugar or
rice, for instance, India has quotas. By the way, sugar will have
to be reformed. It is not in the first package of the MTR but
it is a very developing country-sensitive thing. So it obviously
would not be possible for a country like India in the present
situation. I was in India a few days ago. India's agricultural
strategy does not very much reach out to external markets. It
is feeding its population and increasing the efficiency and productivity
of its own agriculture. The sort of "respiration" with
the rest of the world which a continent like India has in agriculture
will, in my view, always be marginal. It is not Australia or Argentina.
146. When you say Africa, Commissioner, do you
include the Maghreb? North Africa, or are you talking about the
sub-Sahara?
(Commissioner Lamy) We already have a free trade agreement
with the Maghreb and we periodically review the agricultural part
of this—as, by the way, we review the industrial part, and
we will be starting to negotiate services quite soon with them.
147. The American Africa Growth and Opportunity
Act sets targets, I believe, for increasing the volume of exports
from African countries. Has that been more successful in generating
growth in exports than Everything But Arms?
(Commissioner Lamy) It is a valuable initiative. They
started from very small numbers. Most of the African countries
do not trade with the US, or very little. On top of that, it is
mixed with terribly strict rules of origin, notably in the textile
sector. But I have to acknowledge that the PR value of this is
well run on the US side. I sometimes wish that we could sell our
own system of preferences or the special relationship we have
with ACP as well as they do.
Alistair Burt
148. It was widely thought that the acceptance
of the principle of Special and Differential Treatment by the
WTO was a marked success for developing countries. I have two
particular questions. First, does the EU see Special and Differential
Treatment as meaning countries having a longer period of time
to harmonise and liberalise trade policies, or does the EU see
Special and Differential Treatment as allowing those countries
to have a much greater flexibility in terms of their policy choices
for the future? Secondly, what is the EU's view about how countries
move on from their position, to make sure that the development
box does not become so much of a straitjacket that we classify
countries as remaining at almost subsistence level? How does the
EU see a ladder of progress to enable countries to be graded and
differentiated within those terms?
(Commissioner Lamy) It is a very complex issue. The
concept of Special and Differential Treatment is extremely attractive
because it is vague and flexible, and it is a good old GATT principle.
A much more difficult question is, for instance, can there be
special and differential treatment within Special and Differential
Treatment. I think that you again have to distinguish here between
multilateral rules and bilateral rules. We already do a lot of
special and differential treatment through bilateral rules, notably
trade preferences which are unilateral—the extreme of these
being Everything But Arms. Within the multilateral rules our concept
is not that we should create, with Special and Differential Treatment,
a sort of two-class WTO. It is more a first option that developing
countries have more flexibility in terms of transitions and they
have more de minimis possibilities of using this or that.
The vision behind this is that at the end of the day—and
it may be very far away on the horizon—the sort of least
common denominator which we have in WTO, which we are trying to
raise decade after decade, is good for everybody. In terms of
climbing the ladder, it has happened that a few countries have
moved out from the developing countries' group to the developed
countries' group. That was the case with Korea. We do not have
any African example of this, unfortunately; we have a few Asian
examples of it. However, they will resist a lot—they have
always resisted a lot and will go on resisting a lot—differentiation
among developing countries, notably under UNCTAD influence and
because of the view that, together as a developing country group,
they have better pressure and leverage on the whole system than
if we start dividing them in terms of groups.
149. Are you sympathetic to the view which is
sometimes advanced by NGOs and development agencies that there
is still a question mark over to what extent liberalising trade
can actually make a serious difference to the eradication of poverty?
(Commissioner Lamy) I believe that it is a necessary
condition but not a sufficient one. If you look at the distribution
of countries and at a number of criteria, over the last 50 years
you do not find countries which have seriously developed closed
systems. There are a number of countries which have tried to develop
closed systems and which have failed—sort of inner-focussed
development theories which obviously did not work. If you rank
them or distribute them according to governance capacity, you
have a much better explanation of where it works and does not
work than just by looking at trade. Trade opening is something
which is good; it is not only good in goods, but it is good in
agriculture and in services. Remember that, on average, 50% of
developing countries' economies are with services today. It is
one area where they can gain a big comparative advantage. A country
like Kenya, for instance, is now terribly good at exporting a
number of services. That is my basic thrust. It is important to
do it, but of course it has to be matched with rules, with domestic
governance—which is of utmost importance—and, as much
as we can, with a reorientation of our classical development assistance
programme into trade-related development assistance. Maybe we
could give to our friends this brochure which we have published
on a number of cases. Not theory, not declarations, not visions,
but how, in addressing and simply focussing on a few things—trade-related
technical assistance—it has resulted in making trade work,
whereas it did not work before. It is not about spending billions
on roads, railroads, airports or harbours; it is about spending
1, 2 or 5 million on things which have to do with sanitary or
phytosanitary requirements, for instance. At the end of last year
I asked for a rapid poll amongst ACP countries. We sent this to
all delegations and asked them to contact five or 10 authorities
in trade in each and every country. The question was, "Where
are the obstacles to trade for your country with the European
Union?". Eighty per cent of the answers were "non-tariff
barriers"; 20% were about tariff barriers, amongst which
two-thirds were about sugar and bananas—which is an area
where, if trade was totally liberalised, African countries would
be totally wiped out. The big issue, therefore, is non-tariff
barriers—which are there for reasons which have nothing
to do with development. If we have a requirement that there is
a zero tolerance for chloramphenicol in seafood, we will not change
that because we would like to have a better development policy.
Mr Colman
150. But they could be protectionist.
(Commissioner Lamy) They are protections. They are
protections for health. I do not know whether it would work in
the House of Commons, but I can tell you that it would not work
in the European Parliament if the Development Commissioner were
to go there and say, "I need legislation that says that the
level of chloramphenicol in shrimps should be . . ." or "There
has to be a special tolerance for exports of developing countries".
It will not work. The only solution is helping them match the
increasing requirement in terms of standards in this domain. I
can tell you, at least for the European Union, these are not inspired
by protection. By the way, we have totally changed our system
and there is a Chinese wall between those people who deal with
trade and those who deal with health and consumers. Ask David
Byrne if he will accept any instructions from my side that he
should do this or that—or the other way round. It does not
work.
Mr Battle
151. Could I ask you about capacities of developing
countries? To trade and take part in negotiations you have to
have something to trade. You also have to have negotiating skills
to bring to the table, and I think that it is generally acknowledged
that there is a deficit there. What is the EU doing to help developing
countries develop an effective voice themselves, so that they
are not dependent or led by the nose by NGOs, or indeed donor
governments?
(Commissioner Lamy) We are directing a number of our
assistance programmes into training, transfer of knowledge and
so on. Bilaterally—for instance, with Africa—we have,
in the present systems, either national or regional or pan-African
programmes precisely for training negotiators. We have financed
the ACP Office in Geneva, which I inaugurated 18 months ago. So
we are providing them, through the ACP secretariat here, with
monies, training, either directly or through the WTO system—which
we do not finance directly but which our Member States do finance
directly—or through things like the Integrated Framework,
which is a joint venture between the IMF, the World Bank, UNCTAD
and the WTO, which we also fund and which we sponsor as a sort
of "godfather" for some countries like Mauritania or
Cambodia, for instance.
152. Is that money increasing? There was a meeting
on 17 December of the Trade, Debt and Finance Working Group to
discuss an Africa Group proposal, but there were no African delegates
there because they were at a TRIPS meeting and they did not have
enough people to cover both. Is that being tackled now, do you
think?
(Commissioner Lamy) It remains a problem that they
have fewer resources—which, by the way, is one of the characteristics
of less developed countries—but there is a big improvement.
I remember the Uruguay Round, and I can tell you that the level
of participation, understanding and knowledge is incomparable
to what it was 15 years ago. Of course, they obviously still have
a problem.
153. This is a question on "new issues".
In your view, do you think that developing countries actually
want the "new issues" to be on the agenda? What would
the EU gain from them being on the agenda?
(Commissioner Lamy) We got them on the agenda because
of the view we have that overall it is good for the system and
good for them. The fact that a number of developing countries
do not have written, transparent, predictable, multilevel rules
for foreign direct investment, for instance, is a big handicap.
I used to be a banker in my previous life, and I can tell you
that it is a big problem. Taking competition, for instance, there
is no way that the benefits of trade liberalisation will be spilled
over to consumers if you have a big cartel, which sometimes happens
in developing countries—for reasons which we all know. For
us, all of these issues are systemic issues. We Europeans do not
need much of that because we usually have bilateral investment
treaties, very good competition law and open public procurement.
We believe, therefore, that overall it is one of the things we
have to do on the rules side, precisely to translate the benefits
of trade opening into development. Of course it is putting a constraint
on their governance systems, but I think that we would all agree
that part of the development problem is improving the governance
system. If this can be done as a sort of trade-off, in the WTO
not plugging extremely sophisticated systems but the sort of basic
systems which improve the level of economic governance of these
countries, then it is a good deal for everybody.
Mr Walter
154. Commissioner, earlier on you touched a
little on the General Agreement on Trade in Services—GATS.
To some extent, GATS is misunderstood by a lot of people. It is
a voluntary arrangement and it is not for industrialised countries'
utilities taking over the utilities of developing countries. On
the other hand, you need developing countries to participate and
to come into it. The UK Government maintains that GATS is not
about promoting privatisation. In the current negotiations it
appears, however, that the EU has targeted sectors in other countries
where the state is currently the sole supplier of these services.
I wonder if you could tell us what are the implications, as you
see them, for such state provision of making a GATS commitment?
(Commissioner Lamy) No problem. A GATS commitment
is about opening your market to foreigners. It is not about changing
the rules of the game; it is not about privatisation. It is just
whether or not you are ready to open your market. It was a nice
understatement when you said GATS was not the best understood
thing on this planet! It is not about liberalisation of services.
It is about liberalisation of trade in services and it does not
impact the regulatory environment, nor the way companies are run.
Of course, if it is a monopoly, it will probably resist opening
to foreigners because it means that you have to renounce your
monopoly. However, it does not change the fact that it is a publicly
owned company that runs a service operation.
155. Could I draw you out a little further on
that? If we want countries to participate in this process, what
evidence is there that making a commitment under GATS will bring
greater benefit to that country in liberalising these services
than having that agreement outside GATS?
(Commissioner Lamy) It is a trade-off. They need more
market access in services in our countries, in things like tourism
and in plenty of areas where they can get more market access.
WTO is not, above all, a philanthropic organisation. It is a bargaining
system. The philanthropy of the system stems from the fact that
trade opening, with rules and the necessary conditions, is a win-win
game. If we ask developing countries to liberalise trade in a
number of services, it is because we believe that basically is
good for their consumers. Take a very hotly debated topic, water
distribution, which we have to distinguish clearly from access
to the resource itself. In my view, there is no way we can meet
the Johannesburg targets in terms of linking people to water if
a number of developing countries do not open their market for
water distribution. We just will not be able to make it. This
idea—and I have debated it with many NGOs, notably European,
in recent months—that the rest of the planet, notably developing
countries, is covered by excellent-quality public services and
that we are trying to damage these is an eerie concept. It does
not work that way. When you go to these countries, you realise
what the public services are—in transport, water distribution,
health and the rest. It is therefore just a means of putting things
together.
Alistair Burt
156. As you said earlier, it is all about bargaining
and about a trade-off. There is still the suspicion that, because
the terms of trade are so very unequal between the developed world
and the less developed world, any form of bargain that is struck
will be so weighted in the interests of those who have the greater
power—who are able to dangle the carrots towards the less
developed nations in order to get what they want—that is
what fuels the suspicion outside. We all understand perfectly
well the arguments you make about public services and so on, and
I cannot believe that those who run NGOs are stupid either. Why
is it so difficult to shift opinion on this GATS issue, which
leads those who speak for and represent less developed countries
to feel that somehow something unfair is being transacted?
(Commissioner Lamy) It is a very good point. I think
that the basic reason behind this is because we have not tried.
Nobody knows what GATS is. It pops up suddenly, and a number of
NGOs, whose basic problem is to defend the weak against the strong—and
I am fine with that, it is part of my own personal political philosophy—have
this idea that it is a gain by being strong and, at the end of
the day, "What we gain they will lose and what they gain
we will lose". That idea is just wrong. That is not what
trade is about. Of course we are more powerful, but the WTO table
is a table where it is one country, one vote. Two-thirds of the
members of WTO are developing country members. If the system is
unbalanced, they can re-balance it—notably with the European
Union, which has goodwill in this direction. It is true that we
have a carrot, but what is the carrot? The carrot is that we have
a huge market which is very rich and that their getting a chunk
of this very rich, huge market is enormously important for them
and for their development. That is the way it works.
Mr Khabra
157. There is a growing concern in the developing
countries about the lack of progress made in the TRIPS negotiations
and agreement, and also public health issues. What are the prospects
for a development-friendly agreement on TRIPS and public health,
and what would you suggest is needed to achieve such an outcome?
That is one question. May I ask you another question straightaway?
Looking at different economic partnership agreements and regional
agreements, what is the relationship between the EU's bilateral
and regional trade negotiations—Cotonou—and multilateral
trade negotiations, which is the WTO?
(Commissioner Lamy) On the first one, we missed this
agreement which we were looking for around the table at WTO on
the remaining problem of the TRIPS-related access to medicine
problem. Let us remember that access to medicine is a huge problem
which has many components, part of which is price, and part of
the price problem is patent-related. It is 10% to 15% of the problem.
The quality of distribution systems, the availability of funding—all
these are very important components in order to ensure that access
to essential medicines is there in a number of developing countries.
In Doha we solved part of the problem, which is how do you use
compulsory licensing, which should potentially result in reduction
of prices for countries which have manufacturing capacities. The
problem remained of what do you do with countries which do not
have manufacturing capacities. That is, how do you translate the
compulsory licensing system into importing and exporting generally?
We tried to broker an agreement in Geneva on this with the European
Union as the broker, because we have a foot on both sides. We
are pushing developing countries into it but we also have a pharmaceutical
industry which is very reluctant regarding any concession on the
TRIPS agreement. We got there, and the US finally blocked this
compromise under the pressure of their pharmaceutical industry—and
there we are. In the meantime, we have fixed the problem short
term. Any developing countries which do not have a manufacturing
capacity and which want to use the compulsory licensing system
for HIV, malaria, TBT, can do it under a system of waiver which
the US, EU, Japan and Switzerland put in place. So short term,
legally speaking, the solution is there. What is not there is
the medium and long-term solution, on the basis of a multilaterally
agreed rule. We prefer to have a multilaterally agreed rule because
it provides for the necessary framework, so that people can engage
both in the pharmaceutical industry, in producing the necessary
medicines and doing tiered pricing, and also a variety of other
actors in the health system—distribution, financing—to
step in there. What we need, therefore, is to bring the US on
board. In order to bring the US on board, we need to fill the
system with a bit of trust. The problem on the US side is that
the pharmaceutical industry mistrusts a number of European countries,
suspecting that they will use the system to unravel the patent
protection or the research-based industry. It is terribly important,
of course, for the research-based industry that the patent system
remains. Otherwise, there is no investment, and so on. There is
also quite a suspicion on the side of a number of developing countries
regarding the pharmaceutical industry, given their behaviour in
the years between 1995 and 2000—which we saw in South Africa,
Brazil, and so on. That is the problem. I had a meeting here yesterday
with the European pharmaceutical industry to try to address this.
So that is where we are.
158. Can I ask you a related question? The pharmaceutical
industry in India particularly has a great potential to manufacture
medicine, but they are finding it very difficult under the present
rules and trade barriers.
(Commissioner Lamy) No. That was true five years ago,
but I was there a week ago and they have coped with that. They
have understood that TRIPS—intellectual property protection—has
its good side. They have a powerful generic system, but it is
now working fine. They clearly have problems to address—their
own problems—before going to exports. They have a huge problem
domestically, notably on HIV/AIDS. So I do not think that it is
a big problem now.
159. Is it possible that different countries
of the European Union operate a different policy on that issue?
(Commissioner Lamy) No. The EU pharmaceutical industry
is very much multinational. I do not think so. On economic partnership
agreements, EPAs, yes, that is what we are trying to do as a result
of Cotonou. We are trying, with the relevant regional groupings
in Africa, to negotiate trade agreements which will result in
regional liberalisation in Africa, which is absolutely crucial—with
their putting together a number of common rules so that they reach
the numbers, in terms of size of markets, which are needed in
today's world, in the market capitalist system in which we live.
A market of 20 million people is not worth anything for an investor
today. It has to be much bigger. So that is what we are trying
to do with them. It is a construction; it is very difficult, although
they have started doing this in many regions of Africa. When you
look at NEPAD, for instance, one of its important concepts is
regional integration before going to African unity. How does it
relate to WTO? It is two parallel negotiations, with a similar
"tool box" in terms of trade liberalisation, agriculture,
industry, services, or rules on intellectual property, air transport,
or whatever—which is not within WTO but within the sort
of thing they can do locally. Let us assume that we succeed in
concluding a round at the end of 2004 in Geneva. The negotiation
of economic partnership agreements should be finished by 2008.
We will then have a system where they are within the least common
denominator—which is the WTO system—and they will
have a preferential trade relationship with us, sort of free trade-like,
in the future. Obviously we accept that we have no protection
and that they have a protection for a long time, because they
probably need it in order to get their act together—where
the level of rights and obligations in trade terms is higher between
the Union and each of these partnerships than it is in the least
common denominator which we have in WTO.
|
