Africa and EU may settle for a temporary trade agreement

...................As deadline for EPAs approaches



By Isabella Gyau Orhin
Writes from Brussels

Africa and the European Union may have to settle on other temporary trade agreements come January 2008.
This is as a result of the stance taken by both parties in the Economic Partnership Agreements (EPAs) negotiations.

Speaking to a team of African media personnel in the EU headquarters in Brussels recently, an assistant of the EU Trade Commissioner Mr. Stephen Adams said negotiations with the Caribbean countries are far advanced and the Caribbean countries may be likely to sign the EPAs by the scheduled date of December 2007.
“We may just focus on agricultural and manufactured products for the time being with the African countries,” he said
“What we should remember is that we all agreed in 2001 to change the situation and gave ourselves seven years to do that,” Adams said in a briefing.
Giving a background to the Cotonou agreement which was signed on 23rd June 2000 and revised in Luxembourg in 2005, he said that agreement was based on historical circumstances and the special relationship between the EU and the ACP countries.
Some of the provisions of this agreement he said are in contravention of World Trade Organisation (WTO) regulations which insist that trade relations should be reciprocal.

According to Adams, other developing countries, particularly in Latin America who are outside the ACP have threatened to sue the EU at the WTO if it does not put an end to its preferential treatment for ACP countries.
“This is what we have spent the last seven years doing in order to prevent ourselves from a law suit from the other developing world,” Adams explained.
“The notion here is that the EU discriminates in its trade relations by having different trade arrangements with developing countries,” he added.
He said since the Cotonou agreement is based on preferential access, it does not provide any incentives for the ACP counties to diversify their exports or add value to them.
“We want to use the EPAs to change that,” he said adding, “ at the heart of the EPAs is regional market building so that the EU can negotiate with regional groupings instead of individual countries.”
Mr. Adams also said the EU is not asking ACP countries to liberalize their markets on the same scale as the EU would. “We are just asking them to liberalize just enough to meet WTO regulations,” he said.
According to him, the EU is also guaranteeing increased aid for development assistance although development assistance is not being negotiated as part of EPAs.
Reacting to allegations that the EU is trying to smuggle the Singaporean issues of Investment, Competition and Public Procurement in the EPAs, Mr. Adams said, the EU is not insisting that the Singaporean issues which have been taken off the table at the Multilateral level should be included at all cost in the EPA negotiations.
“The catalyst in Asian wealth is from international capital markets and most investors invest outside Africa, it is about creating the right conditions and agreeing on clear investment rules,” he said adding, “a lot of NGOs have taken this to mean that the EU is forcing the issue of Investment on ACP countries.”
He also explained that the EU cannot accede to calls by NGOs to give Generalized Systems of Preferences Plus (GPS+) to African countries which even give better assess to countries in terms of trading with the EU.
He said the GPS+ is given to countries that have signed international conventions such as the Kyoto Protocol on Climate Change, the International Labour Organisation (ILO) agreements on Labour Standards and sustainable development.

Mr. Adams who is a speech writer for EU Trade Commissioner Mr. Peter Mandelson was of the view that most African countries have not signed on to such conventions and as such the EU risks another law suit at the WTO if it attempts to put ACP countries in that category which the EU uses to promote social standards around the world.
In an open letter to anti poverty campaigners who appear to have succeeded in convincing ACP governments not to sign the EPAs, EU Trade Commissioner Mr. Peter Mandelson said “By assisting with the creation of regional markets and accompanying the sometimes difficult adjustments these entails the EU is standing by the side of its ACP partners in their drive to adapt to the challenges of globalization.”

He said no question in Europe’s trade development policy is more pressing than how that continent can use trade to help ACP countries build strong economies.
He said ACP countries received 1.6 billion euros in development assistance over the period 2001-2005 through the European Development Fund and the EU budget.
“Not only will these assistance continue and increase but also ACP countries will be major beneficiaries of the decision to increase Europe’s spending on aid for trade to 2 billion euros.
But critics say that is too small considering the fact that China is investing over five billion dollars in the Democratic Republic of Congo alone.

An article in The Guardian of UK on October 31, 2007 co- authored by Peter Madelson and the EU Development Commissioner Louis Michel, argues that the current trade arrangements discriminate in favour of developing countries. “This is not morally right nor is it compatible with international trade rules.

“Unless we agree on new compatible arrangements with ACP countries we will have to fall back on our Default Preference Scheme for all developing countries which is less generous than our current scheme,” the article said adding, “the EU is not threatening to raise tariffs for these countries, it is doing everything it can to avoid it.”
African countries particularly those in ECOWAS say removing tariffs within regional blocs to strengthen regional trade will cut down revenue for development among others while civil society groups are standing by them.