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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.
Recommendation:
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.
Recommendation:
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.
Recommendation:
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.
Recommendation:
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.
Recommendation:
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.
Recommendation:
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.
Yours sincerely,
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