1 Introduction
'My mission, as Europe's new Trade Commissioner,
is to make trade fair for the many, not just free for the few.
By fairness, I mean enabling all countries, including the poorest,
to share in rising global prosperity.' (Commissioner Peter Mandelson,
Directorate General for Trade, European Commission)[1]
1. Negotiations for Economic Partnership Agreements
(EPAs) between the European Union (EU) and regional groupings
of the African, Caribbean and Pacific (ACP) countries began in
2000. The EPAs, mandated by the Cotonou Agreement,[2]
will replace the current trade and development policies under
the Lomé Convention[3]
from 2008 onwards.
2. We are concerned that these agreements have not
been given the attention they deserve. While the Doha round meetings
of the World Trade Organisation (WTO) have grabbed the media and
government attention, negotiations for new trade agreements with
the ACP states have been proceeding apace with little public scrutiny.
Because the ACP group includes all but nine of the world's least-developed
countries (LDCs) and many of the poorer middle income countries
(MICs), these new trade agreements have important developmental
implications.
3. Accordingly, the Committee decided to carry out
an inquiry which focused on four main issues:
- the extent to which EPAs are
sufficiently oriented toward development, and the alternatives
for those ACP states who do not wish to sign an agreement;
- the justification for the inclusion of the Singapore
issues[4] in the EPAs after
their rejection in the WTO;[5]
- the options available for the LDC-ACP states;
and,
- what can be done to assist those ACP states which
are heavily dependent on preferential access to the EU sugar market,
in the light of changes to be made to the EU sugar regime.
4. We received written submissions from a number
of interested parties including NGOs, industry representatives
and academics. We subsequently held three evidence sessions at
Westminster. We took oral evidence from DFID and DTI officials,
NGO representatives from CAFOD and from Traidcraft, representing
a group of NGOs, an academic commentator and a civil society representative
from Uganda. We subsequently held evidence sessions with the newly-appointed
Commissioners for Trade (Peter Mandelson), and Development and
Humanitarian Aid (Louis Michel). We are grateful to all those
who made submissions and gave evidence to the inquiry. [6]
5. The negotiations mark a significant turning point
in the longstanding relationship between the EU and the ACP. While
the Lomé Convention trade arrangements allowed the ACP
states preferential and non-reciprocal access to the EU market,
the EPAs will eventually become asymmetrical but reciprocal Regional
Trade Agreements (RTAs). Many of the unique features of the Lomé
Convention, held up in the 1970s as the model for North-South
negotiations, such as compensatory schemes and the commodity protocol
guarantees, have already been eroded as part of the EU effort
to normalise and liberalise the EU's relationship with the ACP.[7]
The changes to the trade regime represent one more step in the
process, with significant implications for the ACP states.
6. The relationship between the EU and the ACP has
never been an equal one. This has not changed in the negotiations
for the Economic Partnership Agreements. There appears to be an
assumption within the UK Government and the European Commission
that the ACP can sign up to, or reject, whatever they wish. This
is not the case. The ACP states remain recipients of EU aid, some
of which funds ACP negotiating capacity. The ACP nevertheless
lacks the negotiating capacity of the EU and is stretched to negotiate
simultaneously in the WTO and other regional negotiations. The
ACP is also economically weak compared to the EU: it has very
little to offer the EU and potentially much to gain from the negotiations.
The collective ACP stake in the partnership negotiations is therefore
significant. The negotiating process should be undertaken with
this disparity in power in mind.
7. There is a lack of clarity within the negotiating
process about where competence lies and where decisions are taken.
While DG Trade are clearly the lead negotiators for the EU, it
is unclear what role DG Development is playing. Similarly, within
the UK Government, the relationship between the poverty-focused
Department for International Development and the Department of
Trade and Industry is not spelled out in any detail. These relationships
are important if the negotiations are to produce outcomes which
favour development.
8. Much of the substance of the agreements such as
coverage, transition times and rules, has yet to be agreed. Nevertheless,
there is concern among northern and southern NGOs about possible
negative impacts of the negotiations.[8]
Part of the impetus for reform comes from the requirement for
WTO compatibility in any new trade arrangements.[9]
Yet progress in the current WTO round is already delayed, which
increases the likelihood that the ACP will be negotiating for
agreements which may exceed, in terms of the extent of liberalisation,
what is eventually agreed in the WTO. While this need not necessarily
be harmful, it would be wise to be cautious.
9. Our report highlights a number of concerns which
were raised in evidence about the negotiating process, as well
as the content of the negotiations. While some of our concerns
have been dispelled, others remain unresolved. We
think that the success or failure of the negotiations should be
assessed against the mission which Peter Mandelson set himself:
to make trade fair for the many and to ensure that the poorest
have their share of rising global prosperity.
In the context of the promise of a development round in the WTO,
we would like to see more than just a rhetorical commitment to
fairer trade and poverty reduction in these negotiations.
1 "This is our 21st Century Challenge",
The Guardian, 1 December 2004, available at http://www.guardian.co.uk/comment/story/0,3604,1363374,00.html. Back
2
See Glossary Back
3
See Glossary Back
4
The Singapore issues are: trade and investment, competition policy,
transparency in government procurement and trade facilitation.
All but the last have been excluded from the Doha round of trade
negotiations because of developing country objections. Back
5
See International Development Committee (IDC), First Report of
Session 2003-04, Trade and Development at the WTO: Learning
the lessons of Cancún to revive a genuine development round,
HC 92-I, available at http://www.publications.parliament.uk/pa/cm200304/cmselect/cmintdev/92/92.pdf. Back
6
A full list of witnesses can be found on page 29. Back
7
Arts, K. & Dickson, A. (eds), EU Development Cooperation:
from Model to Symbol, Manchester: Manchester University Press,
2004. Back
8
Most recently Action Aid have produced a report on Trade Traps:
Why EU-ACP EPAs pose a threat to Africa's development,
London, 2005, available at http://www.actionaid.org.uk/wps/content/documents/trade_traps_17122004_10619.pdf. Back
9
Article 36.1 of the Cotonou Agreement, available at http://europa.eu.int/comm/development/body/cotonou/agreement_en.htm. Back
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