Bridges Weekly Trade News Digest • Volume 10 • Number 40 • 29th November 2006
ACP Lawmakers Unhappy With EPA Talks, As Brussels Turns Down Explicit Aid Link
Economic partnership agreement (EPA) negotiations were high on the agenda at a meeting of lawmakers from the European Parliament and African, Caribbean, and Pacific (ACP) countries in Barbados from 20-23 November. Meanwhile, leaked documents suggest that Brussels is rejecting ACP demands to include detailed aid promises in the text of a future EPA accord.
The two sides have been struggling to stay on track to conclude the talks in time for the end-2007 expiry of a WTO waiver allowing the EU to maintain unilateral trade preferences for ACP exports under the 2000 Cotonou Agreement. That accord foresaw the replacement of the non-reciprocal trade preferences by two-way EPAs between the EU and each of the six ACP regions by 2008. However, the EPA negotiations have become bogged down amidst widespread discontent among ACP countries, which argue that the EU’s proposals go unacceptably beyond WTO rules to cover issues such as investment and competition, and would leave their fragile industrial markets vulnerable to a flood of imports (see BRIDGES Weekly, 5 July 2006, http://www.ictsd.org/weekly/06-07-05/story2.htm). EU officials have countered that ACP countries will benefit from liberalising their economies.
Aid to help ACP countries adjust to international competition arising from the EPAs has loomed large in the negotiations. The 77-member group includes many of the world’s most vulnerable economies: small islands, least developed countries, small economies and landlocked states. Many ACP ministers have called for development support mechanisms to accompany the EPAs, including long implementation periods and increased support for regional integration as well as to address structural impediments and supply side constraints.
At the ACP-EU parliamentary assembly, Barbadian Foreign Minister Dame Billie Miller, who chairs the ACP ministerial trade committee, warned that much work remained to be done in the negotiations. She reiterated the ACP group’s desire to see increased structural support along with easier market access, noting that both were essential for those countries to successfully integrate into world trade. In a gesture of discontent with the EPA negotiations, several ACP delegates successfully blocked a resolution on East African human rights that was broadly supported by their EU counterparts.
In Barbados, Glennis Kinnock, European MP and co-president of the assembly, affirmed that ACP states’ concerns over development support were being taken seriously.
However, the Financial Times reports that recently-leaked internal European Commission documents indicate that Brussels actually opposes making assistance a formal part of the EPAs.
In a bluntly worded letter to Fijian Trade Minister Kaliopate Tavola, two Commission officials stated "in your draft EPA submission, detailed development co-operation provisions form an integral part of the text. As you know, this is not acceptable to us." The same newspaper indicated that a separate document demonstrated the Commission’s opposition to a review clause sought by the East and Southern African bloc of ACP states, which would allow them to suspend market opening after ten years if the EU failed to keep its promises on aid.
While Brussels argues that liberalisation should not be contingent on "undefined development targets," ACP countries are believed to be wary of offering concrete market opening commitments in return for non-binding promises of assistance that may go unrealised. Some other trade observers oppose including aid promises in the eventual text of the EPA agreements for a different set of reasons: they argue that doing so would effectively make development aid conditional on liberalisation.
Meanwhile, WTO Director-General Pascal Lamy urged the parliamentarians via videoconference to push for the concessions necessary to break the impasse in the Doha Round negotiations, reminding the ACP states of the benefits awaiting them from expanded international trade.
ICTSD reporting; "Amazing ACP/EU Meeting," CARIBBEAN BROADCASTING CORPORATION, 23 November 2006; "Brussels Rejects Moves to Link Aid With Trade," THE FINANCIAL TIMES, 28 November 2006; "Dame Billie Calls for EPA ‘Fix’," THE NATION NEWSPAPER, 23 November 2006; "Dame Billie: EPA’s Only Game in Town," CARIBBEAN BROADCASTING CORPORATION, 22 November 2006; "Lamy Asks Parliamentarians to Support Relaunch of Full Negotiations," WTO NEWS, 23 November 2006; "Opening of the 12th Session of the ACP-EU Joint Parliamentary Assembly," ACP SECRETARIAT PRESS RELEASE, 21 November 2006; "The Implications of an Economic Partnership Agreement," SWAZI OBERVER, 21 November 2006; "Think Again!…Kinnock tells ACP/EU Assembly It’s Time for Radical Rethink," THE BARBADOS ADVOCATE, 21 November 2006; "Unequal Partners," OXFAM NEW ZEALAND, 21 November 2006.