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EU trade agreements poses threat to development

EU trade agreements pose huge threat to development, campaigners warn

EU Ministers will today formally approve a market access regulation for African, Caribbean and Pacific (ACP) countries with which the EC has concluded interim trade agreements. Development campaigners warn these deals may devastate livelihoods and undermine future growth. Countries that have not signed up to deals will face a reimposition of tariffs on their exports to the EU. *

"These trade agreements raise serious concerns for the Pacific," says Oxfam New Zealand Executive Director Barry Coates. "The EU's threat to cause massive job losses has persuaded Fiji and PNG to sign interim agreements. Other Pacific countries have recognised that it is not in their interests to do so, but their exports to the EU will suffer. Any notion of partnership in these Economic Partnership Agreements has clearly been abused."

The ACP Council of Ministers meeting last week officially expressed "serious concerns" about the negotiations. In their declaration the Ministers deplored "the enormous pressure that has been brought to bear on the ACP States by the European Commission to initial the interim trade arrangements." They also observed that, "[the] European Union's mercantilist interests have taken precedence over the ACP's developmental and regional integration interests".

The Ministerial Committee of ECOWAS expressed similar criticism in Ouagadougou this Monday, when Ministers, "deplored the pressure being exerted by the European Commission."

"The interim agreements have been rushed through on the basis of draft texts proposed by the Commission at the last minute. ACP negotiators have not had the chance to examine or amend them properly," says Tetteh Hormeku of Third World Network in Ghana. "The result is bad agreements that require onerous commitments from developing countries and offer little protection for vulnerable sectors. As they are mostly signed by individual countries rather than full regions they will not just undermine those countries' economic development, but also undermine regional integration".

"Last year the fourteen Pacific nations submitted specific proposals that would have gone a long way towards building development into an EPA," added Coates. "However these proposals were rejected by the EU. Threats of increased tariffs were then used to try to force Pacific countries into signing interim agreements. Two Pacific countries, Papua New Guinea and Fiji, have signed. The overall outcome is that the EU has reneged on their specific commitment in the Contonou Agreement that no ACP country would be worse off than if they did not sign an EPA. And the EU has driven a massive truck through the Pacific's regional integration plans."

Analysis carried out by Oxfam International shows that the interim agreements:

  • Commit the ACP countries to liberalising their imports from the EU deeper and faster than could be expected from earlier statements (in most cases even more than 80% percent of imports is to be liberalised, mostly within fifteen years)

  • Do not offer adequate protection for infant industry or food security as they do not contain proper safeguards

  • Do not contain a clause for the modification of the tariff commitments

  • Demand the reduction or elimination of export restrictions (reducing the possibilities for reserving raw materials for local processing)

  • Do not contain an EU commitment to reduce or eliminate export subsidies
  • Only contain minor improvement of rules of origin, limiting cumulation to countries that have signed interim agreements

  • Oblige ACP countries to negotiate services, investment, government procurement and other issues even though the Cotonou Agreement does not contain such an obligation
  • Remain vague on development cooperation and impact assessment

"Significant damage could be done to subsistence farmers' livelihoods and fledgling industries as a result of these agreements. Furthermore, the obligation to negotiate on services and other issues next year, could harm poor countries' economic prospects," says Luis Morago of Oxfam International. "We urge the EU to show flexibility and allow problematic clauses to be renegotiated. If they don't then the ACP would have every right to consider refusing to ratify the deals."


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