Oxfam warns of dire consequences of EU's rushed trade deals
Oxfam International Press Release
10 December 2007
Interim trade deals between the European Union and some of the world's poorest countries in Africa, the Caribbean and the Pacific, will undermine regional integration and jeopardise future prosperity, said Oxfam today following the news that the Ivory Coast had joined the list of countries agreeing so called Economic Partnership Agreements with the EU.
So far fifteen countries from the total 76 negotiating have initialled interim agreements, covering trade in goods, which are envisaged as stepping-stones to fuller deals including rules on services, intellectual property and investment. The remaining members of the group are under enormous pressure to fall into line before the end year deadline.
The countries that have agreed initial deals include all five members of the East African Community (EAC), plus Zimbabwe, Seychelles, Lesotho, Swaziland, Botswana, Mozambique, Mauritius, Papua New Guinea, Fiji and the Ivory Coast.
Amy Barry, spokesperson for Oxfam on trade, said: "Under enormous pressure, poor countries have agreed deals that enable them to continue to sell products to Europe. But the texts have been rushed through and do not safeguard development.
"The Commission has portrayed the interim agreements as soft, not very binding and flexible but our analysis reveals some extremely concerning provisions that could destroy industry and livelihoods and do untold damage to the progress of regional integration, which ironically was meant to be one of the objectives of these deals in the first place."
The coverage of these agreements is very wide and disciplines are more stringent than required under World Trade Organisation rules. For example, developing countries are committing to remove tariffs on up to 97% of imports from Europe, with almost all cuts occurring within 10 to 15 years.
The safeguards in the deals fail to provide adequate protection for agriculture and fragile industries and space to use trade policy to promote development is eliminated. In addition, developing countries are obliged to negotiate on areas such as services and investment, and to give Europe the same preferential treatment they subsequently give to any third countries, such as China or Brazil.
While ACP countries are required to make such high levels of concessions, Europe makes no binding commitments on critical issues such as improving rules of origin, addressing its subsidies, or increasing development assistance.
"It is astounding that the Commission is prepared to push through such highly inequitable deals that will hurt poor farmers and undermine future development," said Amy Barry. "They are doing so in the face of concerns expressed not only by civil society, trade unions, farmers' and employers' organisations and research institutions, but also by international institutions like UNCTAD, the IMF, and the World Bank.
"Europe must desist from this madness and commit to do all they can to ensure countries are not made poorer by ill-thought out trade deals. Specifically, they must stop pressuring the remaining countries to sign, put in place measures to ensure no country will be worse off if they do not have an agreement by the end of the year, and agree to renegotiate the most concerning elements of the deals that have been initialled."
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Notes to Editors
- In the SADC EPA, 86% of Botswana, Lesotho and Swaziland's liberalisation will take place over two years; only 3 tariff lines are given a 10 year transition period; no products are allowed periods of anything approaching 25 years.
- For Mozambique, an LDC, there will be liberalisation of 80.5%, most of which is also to take place upon immediate entry into force of the agreement (currently only 12% of Mozambique's trade is at zero percent).
- In the East African Community EPA, 82% of the EU imports will be liberalised. Of this, 62% will be liberalised after 2 years (51% of this is currently at zero percent), and 80% after 15 years; only a final 2% of trade is liberalised over a period of more than 15 years.
- The gains from the EU's market access offer are undermined by of failure to substantially improve rules or origin, the retention of transition periods on sugar and rice, and strict safeguards that limit ACP access to EU markets. Without binding agreement on Rules of Origin, it is very difficult for the ACP to assess the worth of the EU's market access offer.
- Despite previous statements suggesting that EU export subsidies would be eliminated for those products opened by the ACP, there is no clause in either the EAC or the SADC deals to this effect. Moreover, there are provisions that explicitly allow the EU to continue to subsidise its own products.
- The 'most favoured nation' clause in these texts locks the ACP into giving the same treatment to the EU that they give to any other major trading partner such as the US, Japan, Brazil or China. ACP governments have strongly objected to this clause and there is no requirement in the WTO or Cotonou to include it.
- Most Interim EPA texts do not include any provision for reviewing tariff liberalisation commitments.
- Despite major problems of food security across the ACP, most EPA texts do include adequate measures to address the food insecurity problems that are likely to arise from trade liberalization
- These agreements will have a detrimental impact on regional economic integration, particularly in Africa.
- For example, SACU, the oldest customs union in the world, is currently divided with 3 countries having initialled an interim agreement with the EC, one country refusing to do so (Namibia), and another one (South Africa) applying a separate trade agreement with the EU.
- Countries who have not signed up in regions where other have will have to impose stricter border controls to guard against EU goods entering their markets, leading to defensiveness between neighbours and greater barriers to regional trade. It may turn out that in order to avoid this fragmentation, the only option for countries left behind would be to join up to an agreement.
Oxfam Ireland is an independent member of Oxfam International- a group of thirteen non-governmental agencies dedicated to fighting poverty and related injustice around the world.
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