ANC trade expert Rob Davies sees the EU moving away from aid and trade packages towards reciprocal deals with African-Caribbean-Pacific countries. Lynda Loxton reports
Developing countries are becoming increasingly concerned about an apparent bid by the European Union to link negotiations on a free trade agreement with South Africa to the future of the Lome Convention.
African National Congress trade relations expert Rob Davies told the Mail & Guardian there appeared to be an attempt to move away from the aid and trade packages contained in the Lome Convention between the EU and African-Caribbean-Pacific (ACP) countries to reciprocal trade relations.
Davies, who recently attended a workshop of the European Centre for Development Policy Management, said the EU was drafting a green paper on Lome after 1999/2000 when the current Lome accord expires.
“It is concerned with the various options in the changing global context,” says Davies.
“These included a strong dose of Euro-realism. We were told that public opinion was no longer in favour of aid and that the ACP group had fallen several pegs down the ladder of priorities for the EU.”
At the same time, many countries were asking whether World Trade Organisation (WTO) rules on trade agreements allowed for the kind of non-reciprocal preferences provided through Lome.
As a result, several suggested the proposed free trade area with South Africa “might become the sort of pre-figurer of broader EU-ACP relations and there is the idea that the whole concept of aid, non- reciprocal trade concessions to the ACP group in particular, may no longer be feasible,” Davies said.
Instead of “solidarity” arrangements with developing countries, the EU now seemed to want “partnerships” — where it could give as well as take benefits.
“There are a few problems with that,” says Davies. “Non-reciprocal concessions have been very important for several ACP states … and the removal of those preferences would have devastating consequences on their economies.”
Several marginalised countries also did not have the capacity to trade freely with huge blocs such as the EU without wiping out their industries altogether.
Davies said his group recommended at the workshop that “the South African proposal was not a model, and that there were a number of problems anyway in the proposal for South Africa. The idea of extending that to Tanzania, for example, was just a non- starter.
“We recommended that the current Lome preferences should be continued at least as they are, and preferably better, and that this should be a basic platform that is available to all the ACP countries,” he said.
Attention should also be given to boosting the capacity of least developed countries to produce goods for trade.
If other developing countries not included in the ACP complained about discrimination as a result of this, “some consideration should be given to admitting other least developed countries into the same regime”.
If countries wanted to negotiate free trade areas, it should be on the premise of this basic platform.
Davies said he did not know “to what extent this is going to feed into the green paper, but there is clearly a debate going on about the future of the Lome Convention”.
The trends were already alarming. The mid-term review of Lome Four resulted in a disappointing contribution to the European Development Fund and reinforced the impression that aid flows generally were decreasing.
Davies said the green paper was expected to be released within the next three months. “This stresses the importance of the South African negotiations as a trailblazer or precedent-setter,” he said.
These negotiations have been stalled by the EU’s apparent determination to let the demands and fears of its own producers dominate negotiations rather than taking those of South Africa into consideration as well.
“Unofficially we are being told that the EU mandate was the product of very tight negotiations and South Africa should not imagine it could stray too far from this,” said Davies.
This was despite reassurance to the contrary by EU political leaders.
While there appeared to be some willingness in the WTO to countenance Lome-like concessions and benefits, some EU countries were more concerned about their immediate neighbours in the Mediterranean and Eastern Europe. They argued that these needed special packages more urgently if Europe was not to attract even more economic migrants.
Davies called this “negative inter-dependency” argument short-sighted, mainly because the further marginalisation of some ACP countries could lead to a Liberia-type situation in many of them.
That would provoke intense instability and “picking up the pieces will cost the international community” more in an increasingly globalised economy.
“ACP countries are going to have to lobby extremely hard to maintain a basic relationship that is not without its problems but which, if substantially modified in another direction, could be quite seriously negative,” Davies said.