The
Committee consisted of the following
Members:
Barrett,
John
(Edinburgh, West)
(LD)
Burns,
Mr. Simon
(West Chelmsford)
(Con)
Clifton-Brown,
Mr. Geoffrey
(Cotswold)
(Con)
Cunningham,
Tony
(Workington)
(Lab)
Devine,
Mr. Jim
(Livingston)
(Lab)
Ennis,
Jeff
(Barnsley, East and Mexborough)
(Lab)
Featherstone,
Lynne
(Hornsey and Wood Green)
(LD)
Hayes,
Mr. John
(South Holland and The Deepings)
(Con)
Jack,
Mr. Michael
(Fylde)
(Con)
Kilfoyle,
Mr. Peter
(Liverpool, Walton)
(Lab)
McCarthy,
Kerry
(Bristol, East)
(Lab)
Morgan,
Julie
(Cardiff, North)
(Lab)
Thomas,
Mr. Gareth
(Parliamentary Under-Secretary of State for
International
Development)
Hannah Weston,
Committee Clerk
attended
the Committee
European
Standing
Committee
Monday 3
December
2007
[Hugh
Bayley
in the
Chair]
Economic Partnership Agreements
4.30
pm
The
Parliamentary Under-Secretary of State for International Development
(Mr. Gareth Thomas):
This is a welcome
opportunity again to serve under your chairmanship, Mr.
Bayley. It is entirely appropriate that you are in the Chair, given
that the subject of development is, as hon. Members will know,
particularly close to your
heart.
I welcome the
opportunity to debate both the Commission communication on economic
partnership agreements and the proposed regulation, which will provide
for the EUs market opening from 1 January 2008 to the countries
that have agreed an EPA. Both are critical for putting in place EPAs
with our partners in the African, Caribbean and Pacific group of
states.
We have come a
long way from signing the Cotonou agreement, which set out the
objectives and principles of EPAs, reflecting the need to agree a World
Trade Organisation-compliant trade regime with the ACP states. Cotonou
allowed us some seven years in which to conclude EPA agreements, and
hon. Members will know that those negotiations were launched in 2002.
In March 2005, the UK set out our view on what EPAs should look like in
order to be good for development: ACP countries should receive
duty-free, quota-free access to EU markets and better rules of origin,
and they should not be forced to include matters other than trade in
goods unless they specifically ask to. EPA market opening requirements
should be asymmetric, allowing for long transition periods according to
the needs of a
region.
That
position paper led to some disagreement with the Commission, and at
times it felt as though the UK was the sole voice in Europe pushing for
the agreements to deliver for development in that way. As negotiations
have progressed, however, other countries have joined our push to
ensure development-focused agreements and, slowly, the Commission has
moved towards our position. This April, the Commission made the
EUs market access offer: duty-free, quota-free access, albeit
with transitional periods for just two products, rice and sugar. In
September, it finally committed to improving rules of origin, after
pressure from the UK in alliance with a number of other member states.
That will help the ACP countries to add value to their products. We
were pleased with that progress, although, of course, we wanted both
those matters to be put on the table earlier and, in the case of rules
of origin, with a little more
ambition.
As
the Committee will recognise, we are one of 27 voices, albeit a loud
one in the Council and in discussions. Some of our EU colleagues would
like the regulation to include a time limit for the ACP to conclude
negotiations on other matters, such as services and investment, before
the EU market access offer is made permanent. Others do not want
improved rules of origin, and some would be happy for the market access
offer to be weakened in order to protect their own agricultural
sectors.
On 23 October,
the Commission produced the communication that we are scrutinising
today in order to deal with the impending deadline. Agreement of that
communication at the November General Affairs and External Relations
Council ensured that the EU took two important steps towards its aim of
agreeing EPAs by the end of the year. First, it emphasised that
negotiations should focus on concluding goods-only agreements by the
end of the year, leaving other issues that are not essential for WTO
compatibility until 2008. Secondly, it outlined the need to conclude
sub-regional EPAs, where full regional EPAs were not possible. That is
obviously not ideal, but we have consistently sought to prevent ACP
countries from receiving worse market access to the EU on 1 January,
and if sub-regional EPAs help to achieve that, I hope the Committee
will recognise them as a pragmatic way
forward.
EPAs have now
been signed by 13 countries in three regions. Other ACP countries,
however, are worryingly close to the deadline without having signed
yet. The countries that have signed an EPA in the past two weeks were
not in a position to agree on matters outside trade in goods, and the
EPAs signed so far are only with sub-regional
groups.
The draft
regulation will grant the ACP duty-free, quota-free market access to
the EU and improved rules of origin from 1 January. That delivers on
two key parts of the UKs position on EPAs. The outstanding
issue is which ACP countries will be allowed to benefit from the
regulation.
We
want as many ACP countries as possible to receive improved market
access to the EU from 1 January 2008 and are pushing the Commission
hard to show as much flexibility as possible when accepting ACP market
access offers. That would ensure that as many ACP countries as possible
are placed under the regulation and that they are not at risk of being
subject to raised tariffs on 1 January 2008. At the Council of
Ministers meeting on 20 November, my right hon. Friend the Secretary of
State for Business, Enterprise and Regulatory Reform asked the
Commission to make a presentation of options and recommendations on
those countries to EU Ministers at the next Council, on 10
December.
I hope that
the Committee found that a useful introduction. I am ready to answer
questions.
The
Chairman:
We now have until half-past 5
for questions to the Minister. I remind hon. Members that questions
must be brief and cover one subject at a time. There will be plenty of
opportunities for hon. Members to ask more than one
question.
Mr.
Geoffrey Clifton-Brown (Cotswold) (Con): It is good to
serve under your chairmanship, Mr.
Bayley.
I
have made a note of most of the Ministers points in that rather
rushed opening statementI do not blame him for that, because we
were expecting a vote at any minute. He said that since we debated EPAs
in Westminster Hall last Wednesday, 13 countries in three regions have
signed up to them. Which countries in which regions have signed? Which
regions does he expect to sign by
31 December? Which regions and countries might be a problem? And what
will happen to those that do not
sign?
Mr.
Thomas:
That cannot meet the requirement for questions to
deal with one point at a time, but I shall try and do justice to the
questions range and
ambition.
The
Chairman:
Order. It was just within the
limit.
Mr.
Thomas:
Agreements have been signed by
the East African Community, which is a sub-region of the Common Market
for Eastern and Southern Africa, which includes Kenya, Uganda, Rwanda,
Burundi and Tanzania. Most members of the Southern African Development
Community have also signed agreements: Namibia and South Africa did
not, but Botswana, Swaziland, Lesotho and Mozambique did, which is
almost a full region. In the Pacific, Papua New Guinea and Fiji have
also signed agreements with the Commission, and they account for 90 per
cent. of EU-Pacific trade. The Commission is now working to regionalise
that agreement.
The
Caribbean has not yet signed, but negotiations are ongoing, and, as the
hon. Member for Cotswold knows, substantial progress has been made.
However, the negotiations are live, and therefore I cannot provide a
definitive answer on where we are. Caribbean Heads of State meet at the
end of the week to review progress on the EPA, and we are fully engaged
with them. They met my right hon. Friend the Secretary of State last
week at the Commonwealth Heads of Government meeting to discuss
progress.
A deal for
the whole of central Africa by the end of the year looks unlikely.
However, the Committee should remember that the least developed
countries already benefit from duty and quota-free access to the EU
through the Everything but Arms agreement. The key
question, therefore, is what happens to the non-LDCs, which are Gabon,
Cameroon and Congo-Brazzaville. The Commission is discussing with them
measures to avoid the trade disruption that would follow the imposition
of a generalised system of preferences regime and the resulting
increase in tariffs. I understand that Commission officials are in the
region at the
moment.
The non-LDC
countries in west Africa are Ghana, Côte dIvoire and
Nigeria. Again, it looks unlikely that a deal will be signed by the end
of the year. Commission officials are in the region, and given our
history, we are watching those discussions particularly closely. I have
mentioned that the East African Community, a sub-region of COMESA, has
signed. Zimbabwe and the Seychelles, two of the other non-LDCs in the
COMESA region, have also signed with the Commission. Mauritius is the
one non-LDC that has not done so, but it wants to and negotiations are
under way as we speak. The key issue is to sort out the non-LDC
situation by the end of the year, and I hope that I have clarified our
current position.
The
Chairman:
Order. It was perfectly reasonable to ask which
countries have and which countries have not signed, but due to the
nature of the question, the reply was rather long, so I remind hon.
Members once again that we need short questions and short
replies.
Mr.
Peter Kilfoyle (Liverpool, Walton) (Lab): Somewhere in the
papers, I saw a reference to the Indian Ocean Region. Is that one of
the ACP areas involved? If so, does it include the Chagos archipelago?
My second question is, subsequent
to
The
Chairman:
Order. We will come to the second
question.
Mr.
Thomas:
The Indian Ocean Region is a
reference to a sub-region of COMESA. It includes the Comoros islands,
the Seychelles, Madagascar and Mauritius. The IOR wanted to negotiate a
sub-regional EPA with the Commission. That has not happened, but as I
have said, the Seychelles has signed an agreement with the Commission,
Mauritius is in negotiations and Madagascar and the Comoros islands are
LDCs, so they already benefit from the biggest potential
prizeduty and quota-free access under the Everything
but Arms agreement. The two key countries in the IOR are the
Seychelles and Mauritiusthe Seychelles has signed, and
Mauritius is still locked in
negotiations.
John
Barrett (Edinburgh, West) (LD): Will the Minister explain
how EPAs, if signed, will be ratified, and what Parliaments
role will be?
Mr.
Thomas:
The situation depends on the
nature of the agreement. If it is a goods-only agreement, which is
within the Commissions competence, it will be ratified once the
regulation completes its passage through the Council of Ministers.
There will be scrutiny in Parliament through the EU scrutiny process,
which, in the traditional way, involves an explanatory memorandum from
myself to the European Scrutiny Committee.
If, however, the agreement is
more than a goods-only agreement and includes services and some of the
Singapore issues, Parliament will have to approve it. As I understand
it, the statutory instrument process will be the vehicle. Currently, it
looks as though just goods-only agreements will be concluded, so they
will go through the scrutiny process only.
Mr.
Kilfoyle:
May I try again, Mr. Bayley? In the
perhaps forlorn hope that the Chagos islanders may one day be able to
return to the Chagos archipelago, may I ask the Minister again whether
it will be covered by any of the agreements or proposals that are set
out in the documents before us?
Mr.
Thomas:
The British Indian Ocean
Territory, or the Chagos islands, as my hon. Friend refers to it, is
not covered by an EPA. Many Chagossians live in Mauritius, so in that
sense they would be covered by an EPA, but the territory concerned
would not
be.
Mr.
Clifton-Brown:
The documents suggest:
The Commission should be
ready to provide an alternative to an EPA at the request of any ACP
country.
We touched on
that territory in an Adjournment debate last Wednesday. Will the
Minister give us greater clarity about what will happen first, with an
LDC, and secondly, with a non-LDC that does not sign by the end of the
year? What will be their position?
Mr.
Thomas:
An LDC that currently has duty and quota-free
access under the Everything but Arms agreement is
unlikely to see any increase in tariffs on the goods that it trades
into the European Union. The rules of origin package that has been
negotiated under the EPAs is slightly more generous than that available
under the Everything but Arms agreement, and those LDCs
would not have access to that package straight off. Essentially,
however, they will not be worse off as a result of not signing an EPA
on 1 January.
The position
for non-LDCs is somewhat different. The Commission says that countries
that have not signed an EPA on 1 January should revert to the
generalised system of preferences regime, which will mean a significant
increase in tariffs on the goods of some countries, but that position
must still be ratified by the Council of Ministers. We have made it
clear that our position is that countries market access should
be no worse on 1 January and we will be working for that at next
weeks meetingindeed, we have been working for it with a
number of other member states for some
time.
Mr.
Michael Jack (Fylde) (Con): The documents supplied by the
Commission refer to a revenue consequence to member states of
€13 million in lost income. The Ministers explanatory
memorandum says that there are no financial
implications for the UK as a result of these implications. Will
he explain that apparent paradox, given that that the
Communitys income is reduced and that we are a net contributor
to the
Community?
Mr.
Thomas:
I am sure that the right hon. Gentleman will
recognise that the sum that he mentioned is not hugely significant in
the great scheme of things or compared with the scale of damage that
would be done to developing countries and, therefore, the EUs
long-term interests if these trade agreements are not concluded. I
would always draw the Committees attention to any issue that
involved significant implications for Britain, but that is not the
case.
Mr.
Kilfoyle:
In the Ministers preamble to the
documents, he says that
EPAs are intended to be in
conformity with WTO
rules.
Are
the proposals not, in fact, over and above the requirements of the WTO
or, indeed, the Cotonou agreement?
Mr.
Thomas:
The Commissions advice has always been
that, to be WTO compliant, a goods-only agreement would have to see
market opening of up to 80 per cent. of goods for the ACP regions. Some
countries wanted to be go beyond 80 per cent., and the 13 countries
that have signed up so far are WTO compatible. From what we understand
of its figures, the East African Community will hit 82 per cent. over
the lifetime of the agreement.
John
Barrett:
Back in 2005, the Government made a statement on
what EPAs should deliver and how they should be pro-development. Will
the Minister detail the public evidence that suggests that EPAs as they
stand will be pro-development?
Mr.
Thomas:
Given that the 13 agreements
have only just been signed, it is difficult to give immediate,
up-to-date evidence. However, as I suggested in last weeks
Westminster
Hall debate, we see a series of potential development benefits on the
table as a result of EPAs. The biggest prize of all is for non-LDCs
that sign, because they will get duty and quota-free access to the
EUs market. That means that a number of countries will be able
to sell more of their main
goods
The
second significant development benefit will be simpler rules of origin.
During our exchanges in Westminster Hall, I gave the hon. Gentleman the
example of Lesotho, which already has the benefit of much more liberal
rules of origin when selling its goods into the United States, as the
US is not as prescriptive as the European Union about where Lesotho can
get textiles for making clothes. As a result of the reforms to the
rules of origin, countries such as Lesotho will have the opportunity to
sell into EU markets in the way that they sell into the US. That is a
huge potential prize for such countries. Other elements of those
reforms will benefit other countries in different
ways.
There
are other development benefits, too. The agreements that have been
signed contain measures allowing countries to protect infant industries
for up to 10 years, and special safeguards will allow
countries to deal with problems facing particular industries
for much shorter periods. Under the agreement, up to 20 per
cent. of a countrys goods need not be opened up at all, which
is significant in terms of the revenue that tariffs on such goods raise
for countries economies.
The other development benefit
that I should like to highlight is more equal competition. Commissioner
Mandelson has given a commitment that for countries that sign up to an
EPA and sell goods into the EU market, similar goods coming the other
way from the EU will not have any EU subsidy. Those hon. Members
familiar with the common agricultural policy will know how much CAP
subsidies have distorted world trade.
I believe that
countries signing up to the EPAs will gain significant development
benefits. Understandably, Trade Ministers negotiations go to
the wire, but throughout the conversations that I have had, no country
has not wanted to sign up to an EPAthe hon. Member for Cotswold
alluded to that. However, the discussions are detailed, and we are now
in the witching hour of negotiations.
Mr.
Clifton-Brown:
The Minister chose his
words with great care in answering my question, because he knows the
subject backwards, but I want to drill him to his answer, particularly
on the matter of non-LDC countries that do not sign by 31 December. If
I understand correctly, he said that they will have no worse market
access after that date. What he did not say was that if one of those
countriesfor example, Jamaicadoes not sign, the
generalised system of preferences will apply to it on 1 January, and it
will suddenly find a tariff raised against it that applies to about 25
per cent. of all its exports to the EU. That will be a disaster for the
economy of such a country. How does he square that with the answer that
I thought he gave to me in Westminster Hall last Wednesdaythat
no country would be worse off by not signing by 31
December?
Mr.
Thomas:
The hon. Gentleman is right. If non-LDCs revert to
the GSP regime on 1 January, there will be a substantial hike in
tariffs applicable to their goods, and that could be economically
devastating. My point, which
I restate today, was that we in Britainwe are making this case
in Europe to the other 26 member states and the Commissiondo
not want any country that is engaging in negotiations, as Jamaica is,
to face worse market access on 1 January simply because it has not
quite completed them. That is what we are working to secure, and to do
so we are talking to other friendly member states in the European
Union.
We will
articulate that position again at the General Affairs and External
Relations Council on Monday in Brussels. My right hon. Friend the
Secretary of State secured a commitment at the last meeting that the
Commission would produce a report at this meeting to explore how the
Commission will deal with the matter. We are looking forward to seeing
the Commissions communication in plenty of time for us to make
a considered judgment about the position that we should take on Monday.
I give a commitment that we are determined to continue to push for no
worse market access for non-LDCs heavily engaged in the negotiations.
However, I remind the hon. Gentleman that at this point we are one of
27 member states and, as I alluded to in my opening statement, not
every member state shares our view of the nature of the negotiations.
We have not always seen eye to eye with the Commission on that
matter.
Mr.
Jack:
Article 20 deals with the concept of the approved
exporter. Will the Minister outline what regime will be adopted by the
Commission to ensure that systems put in place by exporting countries
are rigorous in delivering on the articles
provisions?
Mr.
Thomas:
If the right hon. Gentleman will forgive me, I
will not give him an answer at this stage, but will return during the
debate to the specific and detailed point that he raises and give him
as full an answer as I can
then.
John
Barrett:
When I asked the Minister in last
weeks debate about the difficulty that the ACP countries have
had in dealing with donor countries in Europe, he said:
Resources might be
available for aid for trade in order to help implement the
provisions of EPAs.[Official Report, Westminster
Hall, 28 November 2007; Vol. 468, c.
110WH.]
Will he clarify what that
meant?
Mr.
Thomas:
Sure. On aid for trade, the hon. Gentleman will be
aware of the European development fund, which is one of the ways in
which the European Union supports countries in the ACP region. The fund
has had a significant uplift in financein comparison with the
9th European development fund, we are now in the 10thand there
is no doubt that some of those increased resources can be used to help
to deal with the aid-for-trade implications of signing an economic
partnership agreement. In addition, member states have themselves
agreed to commit to a further increase in bilateral sources for
aid-for-trade resources. We have pledged a substantial increase in
those resources and are well on the way to meeting those commitments.
Our bilateral spending will inevitably help the ACP countries to deal
with some of their aid-for-trade
requirements.
Mr.
Clifton-Brown:
When I talked to senior Trade Ministers in
Caribbean countries three or four weeks ago, they complained that the
EU was being unnecessarily harsh, particularly on two aspects: the
basket of exceptions
and the transitional period. If the answer that the Minister gave
reflects what will happen and some of the countries that do not sign
suddenly find that they have a huge tariff barrier against them on 1
January, is that not an appalling way for the EU to negotiate with very
small countries? It is basically saying, Sign or else you will
get a huge tariff barrier against you. They are greatly
concerned about the periods of transition and the basket of exceptions
on goods. Irrespective of what the EU wants to put in the agreement,
those countries will be forced to agree to things that they do not
want. Is that not a poor way to
negotiate?
Mr.
Thomas:
Let me restate the position and
add one or two points. We are well aware of the concerns of the
Caribbean region and do not want any of the Caribbean countries to face
worse market access and higher tariffs for their goods in the EU market
from 1 January. That is one reason why the Prime Minister and my right
hon. Friend the Secretary of State for International Development took
significant time out from the Commonwealth Heads of Government meeting
diaries specifically to meet Caribbean Heads of State to discuss EPA
arrangements. I hope to follow up on those discussions this week. We
are well aware of the implications for the Caribbean region and we are
seeking to support those countries as they work through their concerns
with the Commissions negotiators.
In defence of the Commission,
there was a considerable period of time before the point that we are
now at. We have known for seven years that we would have to come to a
conclusion regarding EPAs by this stage. Nevertheless, as we get into
the detail of what are very technical trade agreements, Trade Ministers
are focusing on some extremely difficult issues with their Heads of
State. One thing that we have done to try to support the Caribbean
nations throughout the process is to ensure that they have the capacity
within their negotiating teams to handle the complexity of the full
range of the talks, and to support their Ministers while they weigh up
the drawbacks and benefits of particular provisions in the
agreements.
I am aware of
the potential significance of a reversion to GSP and the higher tariffs
that the Caribbean nations might face. We are trying to support them as
they work through the negotiations with the Commission so that they
find a solution to the problem.
John
Barrett:
This is my final question. Does the Minister
think that the ACP nations have been left with a raw deal, or does he
think that they will end up with something that will not only be to
their benefit, but be the best deal that they could have got? As the
year approaches its end, there is a lot of concern that it is a case of
them saying, Well, we have to make the best of a bad
deal.
Mr.
Thomas:
As I have said to other hon.
Members, what has been interesting is the ongoing commitment of ACP
Ministers to negotiating an economic partnership agreement. I do not
think that they would be as committed to that if they did not see the
significant benefits for their countries. For non-LDCs, the opportunity
to have greater access into the EUs marketpotentially
lifting quotas on the sale of key goods into itis a huge prize
for some key non-LDCs. For example, simplifying rules of origin would
be a massive prize for Lesotho, and other countries will benefit in
other ways.
In the long term, the biggest
benefit for countries will be from the extra regional integration that
flows from EPAs. The sub-regional EPAs that have been agreed have not
yet produced as much regional integration as we would like, but
hopefully there will be more integration over the course of next
year.
LDCs will not be
worse off. That is very clear. Those LDCs that will be part of EPAs
will be better off as a result of the rules of origin and the
regional integration. The key objective for the UK Government is to
ensure that the non-LDCs are not worse off on 1 January 2008
and that they can use what is negotiated then as a stepping stone to
more regional integration and, if they want them, to negotiations in
other
areas.
Mr.
Jack:
Will the Minister flesh out the benefits to the ACP
countries which are anticipated as a result of these agreements as they
build up over
time?
Mr.
Thomas:
The right hon.
Gentlemans question follows the question put by the hon. Member
for Edinburgh, West. There are a series of development benefits. The
slightly richer ACP countriesthe non-LDCs which already trade
into the EU marketwill no longer have to bump up against
particular quotas. Some countries will be able to sell more beef, some
will be able to sell more fruit, and some will be able to sell more rum
into the EU market free of quotas and tariffs. That is potentially a
huge prize, and it starts from 1 January for the non-LDCs that sign up.
Beyond that, as I have said, rules of origin will be simplified, which
is a huge prize for Lesotho and a number of other
countries.
The
regional integration benefits will develop. The East African Community
has formed its own customs union, and the International Monetary Fund
predicts growth rates of about 7 per cent. a year over the coming
years. The economic partnership agreement that the East African
Community has signed will help to add value to that customs
union.
There is a
series of other benefits from the agreement. I have mentioned the
protection for infant industries, the safeguards that apply when there
are surges in imports from particular areas and the fact that, in some
cases, up to 20 per cent. of goods do not have to be liberalised or
opened up at all. There is a series of benefits for ACP countries. I
suspect that, in the long term, the two biggest benefits will be the
duty and quota-free access offer for the non-LDCs and the regional
integration for all ACP countries that will potentially flow from
countries signing
up.
Mr.
Clifton-Brown:
I think that the Minister
said that the Southern African Development Community had signed, with
the exception of South Africa and Namibia. I understand that those two
countries red lines centre on two things: the EUs
insistence on inclusion of most favoured nation status and the
insistence that the so-called Singapore terms, relating to investment,
services and Government procurement, be included in the agreements.
Will the Minister give the Committee an assurance that no country will
be forced to include either the Singapore terms or the most favoured
nation terms and that, if necessary, goods-only agreements will be
signed? If
goods-only agreements are signed, what will be the mechanism to include
the Singapore terms during 2008, which he mentioned in his opening
speech?
Mr.
Thomas:
Let me take the second part of the hon.
Gentlemans question first. We have always been clear on the
so-called Singapore issues. In our view, no country should have to
negotiate and commit on those issues, if it does not want to, and the
only area of agreement that was required to be WTO-compatible was an
agreement on trade in goods. A number of countries have made it clear
that they want to negotiate on services. The Caribbean, for example,
definitely wants to negotiate on services, and a number of members of
the SADC also want to do a deal. My understanding is that South Africa
made it clear that it did not want to do so. That has been an issue for
it, and there has been no question of the Commission trying to force
South Africa to sign up on
services.
This is one
of the areas on which we have had a robust
disagreementcriticism is too strong a
wordwith the Commission: we thought all along that the
Commission should concentrate on negotiating on trade in goods and not
on seeking to pursue an agreement on services and the Singapore issues,
unless regions made it clear that they wanted to make progress in those
areas. Only more recently, as we have got closer to the wire, has the
Commission moved on from wanting to negotiate in those other areas and
just tried to drill down into the detail on trade in goods. That delay
has not been
helpful.
My
understanding is that most favoured nation status has been a concern in
the negotiations. I still hope that South Africa and Namibia will feel
that they can resolve their issues with the Commission, because the
benefits of regional integration that I have discussed in answer to
other hon. Members questions would be that much greater for all
the players in the
SADC.
Mr.
Clifton-Brown:
One thing that has not
come out in all the questions and debatesand, indeed, this
afternoonis how the EPAs will strengthen regional co-operation
and regional trade. It seems far from clear how that will happen,
particularly if some countries in a region sign and some do
notsome are LDCs and some are not. How does the Minister think
that regional co-operation and inter-regional trade will be
strengthened? That is, after all, one of the things that will benefit
such small and often poor countries the
most.
Mr.
Thomas:
The more countries that sign up
to an EPA, the more regional integration there will be. There will not
be as much as I suspect the Committee would want, or as much as would
have come about, if all six regions had signed an EPA of sorts. There
will be some benefits with respect to regional integration, and there
will be some more regional integration, if not as much as we had hoped.
We want the agreements that are signed to become the basis for further
regional integration after 1 January as countries return to
conversations with the Commission about how to take forward and expand
what has been agreed.
Mr.
Jack:
In the course of negotiating the agreements, what
effort was made to include environmental safeguards in the discussions?
The temptation to exploit the natural environment to take advantage of
a more benevolent
tariff regime could raise a query in some peoples minds about
the possibility that delicate ecosystems, whether land-based or
marine-based, could be upset. Perhaps the Minister could help with some
background.
Mr.
Thomas:
We would expect the Commission
to have touched on those issues in its impact assessments. Similarly,
we would have expected developing countries to air, through their
regional negotiating teams, any concerns that they had about tariffs
being lowered on particular products. One reason we have always
encouraged the Commission to be as flexible as possible has been to
permit recognition of the circumstances in particular countries that
might be relevant to certain products. Given the number of natural
disasters that several African countries have suffered, and the
difficulties with food security, we have in particular wanted enough
flexibility in EPAs to permit protection against a surge of imports of
a particular product that might be crucial for a countrys food
security. In the agreements that have been signed to date, there is, we
believe, sufficient flexibility to allow that
protection.
Mr.
Clifton-Brown:
The Minister, again choosing his words
carefully, said that he hoped that no country would be forced to agree
to either the Singapore terms or the most favoured nation terms by the
end of December. Assuming that that is so, but that there are
individual countries or groupings of countries that sign a goods-only
agreement by 31 December, as they are required to do, but which
subsequently want to include the important areas of investment,
Government procurement and services, what mechanism will there be after
31 December to add those items to the existing EPAs? Also, what
mechanism will there be for reviewing those EPAs, if they are having an
unforeseen but greatly deleterious effect on any
country?
Mr.
Thomas:
On additional investment
services and other Singapore issues, there is nothing stopping any
region coming back to negotiate with the Commission. Given the original
negotiating mandate that the Commission had from member states, I am
sure that it would respond quickly and extremely positively to such a
request.
The hon.
Gentleman also asked about monitoring. There will be an EPA council for
each region, or indeed each country, that has negotiated an agreement,
and it will consist of representatives from the Commission and from the
region, sub-region or individual country. They will meet to review
progress and to find out whether there are problems, in which case they
will examine them. To return to the point made by the hon. Member for
Edinburgh, West, there will no doubt be discussions about development
spending and aid for trade to help with the implementation of the EPAs.
A monitoring process is incorporated in
them.
Mr.
John Hayes (South Holland and The Deepings) (Con): I
apologise for arriving late, Mr. Bayley.
I wish to ask questions
subsequent to the previous two points. My right hon. Friend the Member
for Fylde mentioned safeguards; has the Minister come to any conclusion
on what the notional costs of those safeguards will be? On the point
raised by my hon.
Friend the Member for Cotswold, the timetable for the meetings that the
Minister described is presumably in place. He said that there will be
meetings to monitor progress, but gave the impression that the
arrangement was rather informal. Is there a schedule or timetable, and
is there a plan for such scrutiny? If so, can we be made aware of
it?
Mr.
Thomas:
The agreements have only just
been signed in the case of the 13 countries, so a detailed monitoring
process has not yet been agreed, nor would I have expected it to have
been. We need to recognise that the Commission will focus on sorting
out agreements in the regions and countries that have not yet signed
them. I have no doubt that parliamentarians and all sorts of
institutions, civil society organisations and business organisations in
the relevant countries will want to know the details of the monitoring
arrangements, and will encourage the Commission and their own
Governments to put them
together.
Mr.
Clifton-Brown:
I pressed the Minister
very hard last week on carrying out economic impact assessments. Will
his Department assist any ACP country that wants assistance in carrying
out a proper assessment once an agreement has been signed, so that he
can assess what help his Department ought to give in aid for trade to
cushion that country in its transition to dealing with the impact of
the
agreements?
Mr.
Thomas:
I think that if any country or region wished to
review the likely consequences of what it had signed and approached
member states for resources to do so, such a request would be viewed
sympathetically. The UK is not active in the Pacific, but we are active
in the Caribbean and most of the four African regions. We see ourselves
as having particular responsibility in the areas in which we are
active, but it would be a matter of examining what other member states
were doing and what resources were available from the Commission
through the European development fund. If there were gaps, we would
need to consider collectively how to resolve
them.
I
add a word of caution: the Ministers to whom I have been speaking about
the negotiations are focused on the details. Many of them are extremely
impressive individuals who are clearly doing an excellent job in
fighting their countries corners. I do not believe that any
country that has signed so far, or is locked in negotiations with the
Commission, is in any way weak or lacks the capacity to understand
fully the implications of the agreements. Notwithstanding that, if we
are faced with a request, we shall consider
it.
5.19
pm
Sitting
suspended for a Division in the
House.
5.36
pm
On
resuming
The
Chairman:
The Committee is back in session. We will have
injury time, so to speak, at the end of the sitting. We now have
roughly an hour and 10 minutes. If no Member wishes to ask further
questions of the Minister, we will now proceed to the debate on the
motion.
Motion
made, and Question proposed,
That the
Committee takes note of European Union Documents No. 14498/07,
Commission Communication, Economic Partnership Agreements, and No.
14968/07 and ADD 1, Council Regulation applying the arrangements for
goods originating in certain states which are part of the African,
Caribbean and Pacific Group of States (ACP) provided for in agreements
establishing, or leading to the establishment of, Economic Partnership
Agreements; and welcomes the progress being
made.[Mr.
Thomas.]
5.38
pm
Mr.
Jack:
The Minister said that he would be
able to tell me more about checking authenticity and customs
proceedings before the end of our debate on this important matter, and
I want to ensure that he has the opportunity to do so. I would be most
grateful if he could give me the information that I
soughtpossibly by intervening on
me.
Mr.
Thomas:
I cannot resist such an
invitation. The right hon. Gentleman referred to article 20 and
approved exporters, but those relate to two separate processes. As he
knows, article 20 relates to surveillance measures and the potential
for serious injury to Community industry from a sudden increase in
imports from ACP countriesI suspect that that is relatively
unlikely at this stage, but the Commission is nevertheless right to
prepare for it. That is separate from the issue of approved exporters,
which are dealt with on a company-by-company basis. That is a
well-established system for facilitating trade by companies that meet
the standard of approved exporter. As I say, decisions on which
companies qualify as approved exporters are taken on a
company-by-company basis. The two issues are therefore distinct and
separate.
Mr.
Jack:
I am grateful to the Minister for giving me that
outline, but the issue needs to be monitored with considerable care
because benefit will be visited on some ACP countries under these
arrangements, and one would not like to think that other countries
might exploit that in a way that they should not.
I have one
concluding point for the Minister. As the arrangements come to
fruition, I hope that heperhaps through the medium of his
Departments annual report
will be able to give a pen picture of the countries that are benefiting
from them and of what the development impacts have been. He alluded to
some potentially high growth numbers for some African ACP countries
when I questioned him about the economic impact of the agreements. He
will realise that, particularly among NGOs that campaign with Members
on questions of market access, there is sometimes a considerable
difference between reality and the selective examples that are put
before Members to try to encourage certain forms of market access
development. It is important that one is acquainted with the facts, and
I hope that, as these matters unfold over the years to come,
particularly if there is an agreement on the Doha round, which will
also impact on the area, the Minister will agree to keep the House
informed with some accurate feedback about the real-world impact of
those important agreements.
The
Chairman:
If there are no other contributions from
Members, I shall call the Minister to
reply.
5.41
pm
Mr.
Thomas:
Let me deal first with the point
made during the debate by the right hon. Member for Fylde, because we
had a very useful question-and-answer session. On the question of
feedback, keeping the House informed about progress, and about the
development benefits in particular, I shall, through the auspices of
the Departments annual report, if not through other means,
endeavour to keep the House informed. I have no doubt
that civil society will continue to take an interest in the
implementation of the agreements and write to Members. I am sure that
the Select Committees on International Development, on Business,
Enterprise and Regulatory Reform, and indeed, perhaps on Environment,
Food and Rural Affairs, which the right hon. Gentleman chairs, will
retain a keen interest in how EPAs work out in practice. There will be
many ways in which the House will continue to be kept informed about
the detail of what has happened since the agreements were signed. With
that, I commend the motion to the Committee.
Question put and agreed
to.
Committee
rose at eighteen minutes to Six
oclock.