Stop Unfair Trade Deals between Europe and ACP Countries
01.02.2007: Offener Brief von über 180 europäischen NROs an die Bundeskanzlerin Angela Merkel
No to EPAs Demonstration, Weltsozialforum 2007
Dear Chancellor Angela Merkel,
During 2007 you have far reaching influence on shaping European Union (EU) policies as holder of the EU presidency and as host of the G8 summit. In your address to the German Parliament on December 14th 2006, you stated your intent to focus on a genuine partnership between poor developing countries in Africa and the EU. During your presidency you have a historic opportunity to ensure that trade agreements of the EU with developing countries contribute to the eradication of poverty and promote sustainable development in many of the world’s poorest countries. Within the framework of the Cotonou Agreement, Economic Partnership Agreements (EPAs) are currently being negotiated between the EU and 75 African, Caribbean and Pacific (ACP) countries. These countries have repeatedly voiced their concerns about the impact of the proposed agreements on their economies, environment, on regional integration initiatives and the livelihoods of their people. The current proposals are likely to keep millions of people in poverty, cripple developing countries' fledgling industries, damage the environment and severely reduce their policy space for autonomous trade and investment policy decisions. Rather than pushing ACP countries to accept comprehensive free trade agreements, the EU must offer fair alternatives that enhance the potential for development of ACP countries. In 2007, Germany has many opportunities to help eradicate poverty in ACP countries. Civil society organisations from the EU and the ACP therefore ask you to use the EU presidency to ensure that EU Member States take the following recommendations into consideration:
1. Offer alternatives
The European Commission has been pursuing very stringent negotiation schedules and has pushed the negotiations regarding trade and development cooperation with ACP countries towards reciprocal Free Trade Agreements. According to the Cotonou Agreement, the EU is obliged to offer ACP countries alternatives to EPAs should countries not be in a position or willing to conclude an EPA. Still, there has been no serious consideration of alternative options to Free Trade Agreements, making it difficult for ACP countries to make informed choices as to what their best options would be.
A range of alternatives to EPAs should be examined urgently, in compliance with Article 37.6 of the Cotonou Agreement. This must include arrangements without reciprocal market liberalisation, without Singapore Issues, and without WTO-plus provisions, particularly in relation to intellectual property and services. In order for ACP countries to have a true choice of options, various alternative scenarios of cooperation should be jointly elaborated.
2. Take the time pressure off negotiations
The EPAs negotiations are scheduled to be completed before the end of 2007 so that they can enter into force on 1 January 2008. However, less than a year before the deadline, the ACP countries can still not oversee the complex consequences that EPAs would have for their economies because of a lack of solid impact assessments and the fact that a number of fundamental issues remain unresolved. For this reason an increasing number of ACP countries have already stipulated at least a three-year extension of the negotiations and also depending on future developments within the WTO.
EU Member States and the European Commission must seriously consider the request for extending the negotiations in order to live up to their promises under the Cotonou Agreement: "The ACP States shall determine the development strategies for their economies and societies in all sovereignty … .” In the same vein, sufficient time needs to be given for the consolidation of regional integration processes (see below). EU Member States and the European Commission should in any case urgently elaborate an interim regime of equivalent ACP-market access to the European Union to guarantee the continuation of ACP exports to the EU should the negotiations not be completed by the end of 2007.
3. Maintain non-reciprocity and the right to protect
Under the Everything but Arms (EBA) Initiative, Least Developed Countries (LDCs) have duty-free market access for the vast majority of their exports into the EU. For the remaining developing countries in the ACP, however, it is unlikely that market access will be expanded much beyond the preferences they already had under the Lomé Conventions and without an agreement or proper transitional arrangements in place, they stand to loose even these important trading opportunities. So far, it seems unlikely that the barriers that undermined the effectiveness of preferential agreements will be removed. Even with an EPA, it is likely that ACP exporters will continue to face stringent rules of origin, ever-increasing sanitary and phytosanitary standards (SPS), and tariff escalation and residual tariffs on key value chains. While market access is unlikely to substantially improve and is anyway subject to increasing preference erosion, ACP countries are being asked to give up valuable policy space to protect local agricultural production or infant industries if they have to eliminate tariffs on almost all EU imports.
Any future trade arrangements must provide at least equivalent value access to EU markets for ACP countries. Furthermore, these negotiations provide an opportunity to address issues such as simplifying preferential rules of origin, that have limited ACP countries’ capacities to use preference schemes, including EBA, to increase and diversify their exports. In order to respond to the development needs of ACP countries, including the protection of small farmers, local markets and infant industries, job creation and the promotion of rural development, and to guarantee the necessary policy space for these governments to pursue their own development strategies, the EU should not demand reciprocal market opening by the ACP. Any future trade agreement would have to entail adequate and easily applicable safeguard mechanisms and would need to allow for the continuation of tariff protection on a far greater share of their imports than the EU is currently prepared to accept. Furthermore, rules of origin, including those under the EBA initiative, need to be reviewed and simplified, as a matter of urgency.
4. Promote self-determined regional integration processes
Art. 35.2 of the Cotonou Agreement reads: "Economic and trade cooperation shall build on regional integration initiatives of ACP States, bearing in mind that regional integration is a key instrument for the integration of ACP countries into the world economy.” However, regional integration is still at early stages in most ACP regions. Structural weaknesses continue to hamper the development of economies of scale and intra-regional economic integration while current negotiating configurations in some cases undermine existing regional integration initiatives. Additionally, the clustering of LDCs and non-LDCs within the same negotiating groups will actually increase regional tensions rather than promote closer regional cooperation given the wide disparities of potential costs and benefits of new EU trade agreements for structurally unequal countries within the same grouping.
Any future trade arrangements between the EU and ACP countries should foster, not undermine indigenous regional integration processes, respecting the pace and political priorities chosen by ACP regions. Trade cooperation should support ACP countries’ existing policy priorities and autonomous initiatives to build and consolidate their own regional and interregional markets as well as fully respect regional development strategies.
5. Unconditional exclusion of new trade-related issues and WTO-plus provisions
The EU exerts pressure on ACP countries to start negotiations on new trade-related issues including investment, competition and government procurement. Yet ACP countries have repeatedly stated that they reject negotiating rules deals on these issues with the EU. Equally the EU is stipulating more liberalisation in the services sector and more stringent intellectual property rules than agreed in the WTO. Negotiating on these issues further stretches limited ACP negotiating capacity and does not take into account the lack of regional positions, policies and institutions on these issues in particular. These trade related issues govern countries’ policy choices which determine their ability to discriminate in favour of local entrepreneurs, select and manage the presence of multinational corporations, and even to regulate to achieve social and environmental objectives.
The EU should stop insisting on the inclusion of new issues including investment, competition policy and government procurement as well as of WTO-plus provisions for services and intellectual property rights in any trade arrangement with ACP countries. If countries wish to include any of the trade-related themes these should follow an explicit over-arching development perspective without reducing the necessary policy options for ACP countries.
6. Ensure Transparency and Civil Society Participation
The Cotonou Agreement calls for the participation of civil society organisations "in order to encourage the integration of all sections of society … into the mainstream of political, economic and social life”. It states that "non-State actors shall … be informed and involved in consultation on cooperation policies and strategies, on priorities for cooperation especially in areas that concern or directly affect them, and on the political dialogue". However, civil society organisations, particularly those representing the most affected and vulnerable sections of society, are often not consulted with regard to key policy options, let alone the content of negotiation texts.
In compliance with the Cotonou Agreement, the European Commission, EU Member States, and ACP governments should hold comprehensive consultations with civil society organisations due to their "complementary role of and potential for contributions … to the development process” and especially with the representative organisations of farmers and workers as the sectors most heavily affected by the envisaged trade agreements.
We have also forwarded this letter to your colleagues Heidemarie Wieczorek-Zeul, Federal Minister for Economic Cooperation and Development and Michael Glos, Federal Minister of Economics and Technology.
Mor more information please go to www.epa2007.de