Examination of Witness (Questions 200-206)
Ms Anja Osterhaus
24 JUNE 2008
Q200 Chairman: Instead of regional
agreements, would you hope for individual agreements with individual
countries?
Ms Osterhaus: On the EPAs it is back
to the WTO rules that the previous system could not continue and
was not particularly good. It did not address problems before
and it does not address problems now either. On the EPAs altogether,
in Africa I think it is completely the wrong approach in general,
not in the Caribbean.
Q201 Chairman: What would be the
right approach in Africa?
Ms Osterhaus: The right approach would
have been a different regional set-up, for instance, one which
has been decided by the African countries not to put them under
enormous pressure to sign up to trade deals even though there
is a lot of evidence for strategic sectors in several of these
countries and in the context of WTO to look for a different solution.
There would have been different solutions but there was no political
will on behalf of the EU to look into different solutions, solutions
which start from the point that we need to enable development
and overcome poverty in these countries. That is the highest concern.
In all African countries the highest concern is not that they
are open to receive trade from the European Union but it has not
been looked at like that. For years the development experts in
the EU were not involved. All the time they said that this would
be good for development, it would help African countries, but
the development experts from DG Development were not involved,
they just became involved because of the enormous pressure from
NGOs saying, "You talk about development but the people who
sit around this negotiating table are trade negotiators, they
don't know about development, so at least do it jointly".
Two years ago towards the end when most things were already decided
they brought them to the table. At least that happened, but it
happened too late.
Q202 Lord Woolmer of Leeds: What
would be the structure and content of an agreement between the
European Union and some African countries? What would be the content
of an agreement that would leave your people, your organisation,
happy?
Ms Osterhaus: Now we have ended up having
a lot of EBA—Everything But Arms—situations for many
of the poorest countries and from the outset they could have said,
"this is your option, let's leave it there". Why should
the poorest countries which have free access to the markets of
the EU without having to give a lot for that be put under pressure
to negotiate something different, which has happened for years,
they have been put under this pressure? Now we have no regional
agreements in Africa but a lot of individual EBA regimes, et cetera.
There has been some legal advice which has shown that many of
these countries would be eligible to just have this GSP Plus regime,
which is much better than an EPA. Rather than trying to put them
into regions which did not work and putting them under enormous
pressure to sign up to trade deals which are not being signed
because it is obvious they do not work for these countries and
they have resisted because they have been empowered and supported
by civil society in the north which helped them get their points
to the negotiating table and supported the developing countries,
which was questionable in many cases because we have many dictatorships
in Africa but what could they do, they were put under such high
pressure by the EU, now we will have a lot of individual agreements
and it is not good. From the outset it could have been done much
better.
Q203 Lord Kerr of Kinlochard: I think
there are three reasons why we have ended up at what you describe
as a sub-optimal negotiating position. One is the belief, which
is pretty general around this town, that the bigger the cake the
more everybody benefits, admittedly with some unfairness in the
slicing of the cake. It would be in the interests of those African
countries to liberalise their import regimes, which would reduce
domestic inflation. Infant industry protection can be arranged
in particular cases, but in general liberalisation is what you
would like to see. Two, perhaps working from our own example,
we would say, and people around this town tend to say, the more
we can encourage regional economic co-operation the less likely
countries are to go to war with each other. To take the example
of the EU, the original idea was to ensure that France and Germany
would never, ever go to war again, and that has been achieved,
whatever else we have failed to do. So there is that aim, which
is a political aim, and I am not sure it is a dishonourable aim.
Third, you say that some of them are dictatorships, some are people
we should not be offering preferential agreements to, but I do
not know that I agree with that. The number of African regimes
that are really unpleasant would probably fall if the African
economy started growing faster, as it would if arguments one and
two were applied. I would also perhaps add a fourth argument,
which is that a bigger barrier to economic development, certainly
in Africa, is the trade barriers at the borders between contiguous
countries: the more one can encourage a regional pattern the more
one might produce a reduction in the costs of moving goods or
services across a frontier inside Africa or inside West Africa
or East Africa. How would you counter that?
Ms Osterhaus: One point about the economic
integration leading to less risk of war, there are elements of
that with which I would agree, but if we look at the European
Union we first had political agreement that there should not be
war any more because of the terrible experiences we had and the
wisdom of people in power at that time. Once that was applied
politically then economic integration was the first step to putting
the EU into practice. It was not that economic integration started
and there was no war, it was good enough that there was no war,
imposed by others actually, and that was a starting point to get
to a political agreement which was implemented by economic steps.
To give a drastic example, imagine the WTO imposed on the European
Union in 1940 to subscribe to a trade deal with Africa as it is
today. Of course, that is extreme because there was a World War
at the time which is not there now, but if you think about it
for a second you will see this is not the way to go. We cannot
solve the problems in Africa. We can try and support development
in a good way, but I am not convinced that the WTO rules help
systematically to overcome political problems we have in Africa.
I truly believe that the way of distributing the regions in Africa
by the EU was not helpful at all and that has been criticised
by the African governments and many other experts. We cannot assume
that just because of the EU now being in a good position to implement
the WTO rules and work with them that in the rest of the world
the situation is the same, that is just not true.
Q204 Lord Kerr of Kinlochard: Could
I ask you about the change in world food prices and how that affects
the arguments as you see them on the agricultural dossiers in
the GATT round? World prices are higher than support prices in
a lot of commodities now and it is a very different world agricultural
scene from the one in which the Doha Round started. What do you
think they should be doing to their negotiating positions as a
result of the real world changes?
Ms Osterhaus: As I say, I am not really
a specialist in WTO so I would have to speculate. I do not know
that I can be very helpful on that answer. I wanted to address
one of the other points you made. I am not really sure that liberalisation
of trade is always in the interests of the developing countries.
If it is done well and takes care of protection in a good way
in key sectors of society, for instance in a commodity exporting
country which has three commodities, why should it be supportive?
It can be supportive to some sectors in society who can now buy
the European products without an increase in price by the tariffs,
but while this may help the more wealthy parts of society to buy
their fantastic European television set or whatever, it reduces
the income of the state because it takes away the tariffs which
created income for the government in that country. It is not that
liberalisation of trade is always helpful for developing countries.
If it is done well, in the right way, accompanied by the right
measures in the right sequence it can be positive, but it can
also be very harmful and we see that with the EPAs where the government
revenues through tariffs just disappear from one moment to another
or reduce, and that may be a third of the state income because
they do not have taxes or do not manage to collect the taxes in
a good way, so they really need this tariff income. You come in
with development aid but this is not how trade should work. It
is not that you make it worse on the trade side and then compensate
a bit with development measures, this is not what we think should
happen.
Q205 Lord Kerr of Kinlochard: I totally
agree with you about television sets, although it is open to the
government of the importing country to tax luxury goods at a high
level and thus recoup the money it loses by not having a tariff.
My worry is tariffs against fellow African producers, and I think
there is quite a lot of that still in Africa.
Ms Osterhaus: Between countries?
Lord Kerr of Kinlochard: More generally. I also
think that the bigger the cake the better for the majority of
people. There will always be losers, and I am with you that one
needs to think of clever, intelligent ways of protecting those
who gain less than the others or do not gain at all, but in general
I believe in free trade.
Q206 Chairman: Can I just ask a social
question as a wind-up. What do you think is the impact of trade
agreements on domestic labour markets and levels of migration?
Are these factors given enough weight?
Ms Osterhaus: No, definitely not. There
is not one answer. In countries like India and China where you
have a lot more job opportunities, many of these are positive
for society and give new jobs to people who need them, but many
others are under conditions which we can only reject. What is
absolutely true is that it is not given the right weight. The
WTO is not a place where you can negotiate these things. They
are not labour experts in the WTO. The labour rights should be
enforced and the ILO should be much more powerful in things like
that. The WTO cannot enforce labour rights, it is not the right
instrument to do that.
Chairman: I think that is probably right. It
only remains for me to say thank you very much for coming to see
us, it has been very helpful.
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