In a little more than two months’ time, the future course of global trade and development will be shaped at a meeting of trade ministers in Hong Kong.
This is when the final contours of the Doha Development Agenda, the current trade negotiations round, are likely to become clear. For some, the task at hand is simple: you just sweep away Europe’s and everyone else’s tariff barriers and the world can trade happily ever after.
I want trade to be put at the service of development. But turning aspiration into reality is complicated. Last week, I visited the Caribbean. For their trade ministers, justice is about the European Union not reducing its tariffs so that they continue to bene-fit from the preferential access and quota arrangements denied to other countries. In sugar and bananas, for example, this accounts for a large portion of their competitive advantage. Calls for sweeping reform of the EU’s common agricultural policy (CAP) strike apprehension rather than joy into their hearts.
The same double-edged consequences apply to the British government’s demand for an early end-date for agricultural export subsidies. Yes, I want to negotiate this. Yes, reducing trade-distorting agricultural subsidies is vital. This is a classic case where multi-lateral negotiation in the Doha round provides vastly more development bene-fit than unilateral action. But we should be clear that, in the short term, ending export subsidies may mean more expensive food imports in the rapidly growing cities of many developing countries.
Against this background, the European Commission wants to forge with our African, Caribbean and Pacific partners modern trade and development programmes that, over time, replace dependence on the commodity-based preference arrangements that are no longer sustainable under World Trade Organisation (WTO) rules. These economic partnership agreements (EPAs) are regarded with scepticism by some NGOs. The old-style preference regimes between Europe and developing countries have not provided a pathway out of poverty.
Our partnership agreements are an attempt to help move developing countries out of this straitjacket. They are about much more than preferential market access to Europe.
Under the EU’s Everything But Arms policy, all least-developed countries (including three-quarters of African countries) are being offered tariff and quota-free access to EU markets for everything, including agricultural products. African countries not in this category enjoy preferential access under the EU’s system of preferences.
Much as people may think other-wise, the CAP does not keep out the vast bulk of Africa’s agricultural exports, which is why 80% of sub-Saharan exports come to the EU. This is a record of market access that other developed countries, including the United States, Japan and Canada, have yet to match.
It is time they did.
But these progressive policies have not made poverty history. That is why EPAs have been designed to create the conditions for fostering sustainable development.
Gradual trade liberalisation, first within an African, Caribbean or Pacific region, then leading to a progressive integration of these regions into the global economy, will allow developing countries to seize international trade and investment opportunities. The progressive opening of these markets should be phased in, over a decade or more, and at a pace defined by each individual region according to their capacity to trade on world markets.
Crucially, alongside our economic partnership agreements, the EU will be helping African, Caribbean and Pacific economies diversify and develop by channelling development assistance to their productive base.
The EU is the world’s largest overseas aid donor, with â,¬46-billion or 55% of the total sum, an amount that Europe is committed to increasing until it reaches 0,7% of its gross national income by 2015. A significant portion of the aid destined for Africa, the Caribbean and Pacific is devoted to supporting regional integration and building capacities. For example, since 1994 the EU has provided â,¬400-million to help banana-producing countries in the Caribbean adapt and diversify.
This is the sort of non-ideological approach that developing countries demand. The Doha round will deliver for them as long as everyone does not prejudge the answers to their needs. — Â