Time to tackle economic partnership agreement myths

 

Suggesting that EPAs are a danger to African development is wrong, argues Peter Mandleson.

No question in Europe's trade and development policy is more pressing than how we can use trade to help African, Caribbean and Pacific (ACP) countries build stronger economies and break their dependence on trade preferences and basic commodity trade. The key is to give greater confidence and more opportunities to local businesses, attract new investment and build strong regional markets that can compete globally.

The economic partnership agreements that the EU is negotiating with the ACP regions are designed to help do all three. To take a trading relationship that is currently based on dependency on a handful of commodities and turn it into one based on economic diversification and growing economies.

Yet the economic partnership agreements (EPAs) are often criticised, misunderstood and frequently misrepresented.

Colin Roche from Oxfam repeated some of the most persistent myths about these agreements on these pages last week. As we enter the crucial final months of the negotiation it is important to address the criticisms and tackle the myths.

The first is the claim that the EU is steamrolling ACP regions into completing negotiations this year. Our current arrangements favour some developing countries over others and as such are not permitted under World Trade Organisation rules from January 1st, 2008. We are not. EPAs are compatible with WTO rules. If we cannot put a new system in place by 2008 we will have to fall back on one of our other trade preference schemes, such as the generalised system of preferences, which apply to all developing countries.

However, we must be clear, none of the alternatives match the terms of an EPA.

The second myth is the claim that economic partnership agreement's won't be fair. That they will open ACP markets to EU trade at the expense of local businesses, and local growth. EPAs won't mean "free trade" between the EU and African Caribbean countries from January 1st next year, or any time soon.

The EU will remove all quotas and eliminate all duties on ACP imports. African, Caribbean and Pacific countries will be able to protect and exclude sensitive products and take advantage of long transition periods.

During this time the EU will provide very substantial technical and financial support to help with implementation of the new arrangements. The EPAs will stimulate local and regional markets and open new opportunities for local entrepreneurs.

There are claims that the EU is looking out only for its own commercial interests with EPAs. This simply does not stand up. EU trade with these regions is tiny. Even in the highly contentious area of investment, the EU's chief concern is putting in place the rules that will help countries attract the new capital which is so urgently needed. Ireland understands very well the benefits of foreign investment. The real benefits of EPAs are not in market access for Europe.

We all need African economies that are strong internally and economically integrated with their neighbours.

Certainly, the EPA negotiations force us to face up to difficult issues. We are rebuilding an economic relationship that has been in place for many years. But that relationship, based on preferences and commodity trade, has largely failed to deliver development.

Africa's dependence on trade preferences and a few basic commodities has seen it make little progress to match the dramatic development in Asia and Latin America.

It is time to take the bold step to something new. It is essential that there is strong debate over economic partnership agreements. But to suggest that EPAs are a danger to African development is simply wrong.

Peter Mandlesonis European Union Commissioner for Trade. His article is in response to last week's commentary on EU trade negotiations by Colin Roche of Oxfam Ireland