Friday, November 10, 2006

EPAs: public debates and priority of the forthcoming German presidency

October 2006 was a busy month for EPA events: Starting with the Policy Coherence conference in Helsinki that recognized the important role of NGOs in exposing incoherence, the South Centre Conference in Brussels with ACP trade ministers exposing existing divergences in the negotiations and suggesting an extension of the deadline, the hearing at the European Parliament by the European Socialists with a (rather furious) Commissioner Mandelson defending the EC’s “smart and clean trade agenda” against adversaries and the Finnish Presidency announcing the GAERC Council conclusions on Aid for Trade package that responds partly to ACP requests to provide “additional” (to EDF) funds for EPA related adjustment cost.

Surprisingly, the EPA review hardly featured at all in any of those discussions despite a timetable expecting to present a compilation of six joint sub-regional reports by the end of this year and the ACP Council calling for an inclusive and comprehensive review. The risk to accept a bad deal that lacks informed choices and full understanding of the impacts may come closer with the EU Council agreement on an aid package for EPA related adjustment related costs that is a new bargaining chip in the hands of the EC. However, it is obvious that no aid or adjustment cost package will ever compensate for trade rules that do not work to the advantage of ACP economies. Thus, utmost care and more engagement are needed on the concrete negotiation proposals on the table.

EPA light, that is an agreement on trade in goods only - would be one option for a do-no-harm strategy. Flexibilities under WTO article 24 could allow for asymmetry in liberalization up to 70% or could include moratoriums for preparation and extension of transition periods Recent discussions at WTO have led to the growing number of notifications of Regional Trade Agreement (RTA) and proposal for RTA to be subject to regular reviews for stocktaking. Development benchmarks could be used to help identify and monitor criteria in this review panel. Liberalization commitments could be subject to development criteria based on food security, protection of infant industry, livelihood security and gender equality. On a case by case basis, exemptions of liberalization commitments could be justified on the ground of development concerns until no longer needed and until eventual liberalization would be justified.

Such proposals would be in the spirit of the Doha Development Agenda and would be easier to justify than arbitrary transition periods.

The German EU Presidency has set itself an ambitious agenda aiming at the “successful conclusion of the EPA negotiations within the set timetable”; arguing that otherwise the risk of opening up the EU markets to India, China, Brazil and others will be detrimental to ACP interests. Key to a development friendly EPA for the German Presidency would be the proposal for an “EBA for all (ACP countries)” to which EU Member States would need to agree, a monitoring mechanism in place for the EPA process and implementation, and binding economic and policy reforms on ACP side to a development and trade agreement. Latter is seen as the unique chance of EPAs with no other workable alternative instrument in place that would deliver on this triangle of reform, development and trade. Negotiations in 2007 should be guided by the promotion of political dialogue, the elaboration of the Aid for trade framework and be accompanied by support to structural policies and economic reforms. But this would also mean that any concession on flexibility and asymmetry in trade liberalisation would be conditional on commitments by ACP governments to economic and policy reform.

Harmonising 25 EU Member States understanding of what a development focused EPAs should look like will be very challenging. In line with previous EU presidencies, there is consensus on the Commission’s exclusive mandate to conclude EPA negotiations and the role of the German government to facilitate successful conclusion of negotiations. This position is followed by a call by the German government to NGOs to desist from referring to EPAs as a closed process given the scope available for influencing and shaping the content of EPAs to become tools for development. However, the defensive and aggressive position of the EC in the negotiations lack to prove that there is and will be scope for NSA to influence the content of the negotiations. In addition, the opportunity of the EPA review to engage in meaningful consultation with ACP stakeholders from civil society to parliamentarians to farmers and women’s organisations and trade unions will soon be missed.

Scheduled during the German EU Presidency are an informal Development Ministers meeting on 13 March 2007, GAERC meeting with development focus on 14-15 May 2007, the ACP-EU Ministerial Meeting in May 2007 in Brussels and the ACP-EU Joint Parliamentary Assembly in Wiesbaden on 23 - 27 June.

According to Atle Sommerfeld, NCA Director, a theology of involvement: participating in the struggle for economic justice with the courage and the power to transform trade bodies and policies into instruments of justice is needed.

This is also at the heart of Agnes Aboum, WCC, speaking at a VENRO meeting in Bonn referring to the pan-African vision of Mother Africa of 1945: African liberalisation has to happen at three levels: at the level of political liberalisation (end of anti-apartheid regime), economic liberalisation (our current struggle) and cultural and spiritual liberalisation (to come). A prerequisite for economic liberation and economic justice is debt repudiation and proper cancellation of illegitimate and unsustainable debt. Economic liberalisation needs critical social transformation and rebalancing of gender relations that is new policy frameworks for equity and equality in development. Any aid for trade schemes need to focus on trade for people and better livelihoods. Africa is not a beggar but wants to take the opportunities and space to engage and operate justly with dignity and respect.

The new Commission staff working document on Global Europe: Competing in the world (SEC (2006) 1230) outlines an aggressive trade agenda prioritising the harmonisation of regulatory approaches and high quality rules, seeks to seize markets in vertical integration of production, supports upmarket products across the whole range of EU exports including agricultural products supported by the Common Agricultural Policy. FTAs are designed to help drive EU competitiveness and competing with the US and Japan, Korea and other global players in delivering or imposing a modern trade policy regime in accordance with the EU’s own trade rules and regime. New FTA need to be comprehensive and ambitious and should include far reaching liberalisation of trade in services covering all modes of supply. The EU would be putting itself to a disadvantage if it is not seeking to improve investment conditions in bilateral agreements and to promote regulatory convergence with all trading partners.

This is clear language and demonstrates the subordination of ACP countries interests to the EUs agenda of conquering new emerging and promising markets mainly in Asia and Latin America and harmonising trade rules according to its interests.

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Source: EU News 3 November 2006 (APRODEV, CIDSE, Caritas Europa)

See the euforic dossier on ACP trade