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GUEST COMMENTARY: Trade and Aid Negotiations with Europe Set to Get Tougher

Posted by kinchendavid on September 30, 2006

By Sir Ronald Sanders

The admission to membership of the European Union (EU) on Jan. 1, 2007 of Bulgaria and Romania, albeit with conditions, will make it tougher for the African, Caribbean and Pacific (ACP) countries to negotiate advantageous Economic Partnership Agreements (EPAs) with the EU. These negotiations began formally in 2003 and the EU would like to complete them by 2008.

Of the 15 countries that comprised the EU up to 2004, eight had colonial relationships in ACP countries and three (Britain, France and the Netherlands) continue to have overseas territories in the Caribbean.

Therefore, up to that time a limited desire remained among key players in the EU to “look after”, several countries in the ACP.

After 1995 when Austria, Finland and Sweden joined the EU, the majority of members of the Union had already begun to move away from the attitude of benefactor to the ACP.

By 2004 when the EU expanded to embrace 10 new members among which were Lithuania, Poland, Slovakia, Slovenia and Estonia, any residual collective sentiment toward the ACP countries all but disappeared.

The new members had no history of colonial relationships with the ACP countries and felt no particular moral obligation to develop anything more than reciprocal trade and investment relations with them.

Indeed, they were far more interested in what membership of the EU could do to improve their own economic circumstances than in the relationship between the EU and the ACP.

They had witnessed the economic transformation that EU development aid brought to Ireland, Spain and Portugal, and they wanted to benefit in the same way.

A tougher relationship between the EU and the ACP countries has become very apparent and was painfully evident at the ACP-EU Joint Council meeting in June this year when major differences surfaced between the two groups of countries.

Among those differences were: opposing approaches to tariff liberalisation and market access; the creation of an effective funding mechanism to support the proposed Economic Partnership Agreements between the EU and ACP countries; and giving tangible expression to the concept of development in the proposed EPAs.

The ACP Council was so unhappy with the negotiating directives that the European Commission (EC) was given by the EU Council of Ministers that it adopted a decision expressing “disappointment and apprehension” over how EC negotiators were dealing with delivery of development objectives in the proposed EPA’s.

All this is likely to get worse after Bulgaria and Romania join the EU on January 1st.

A Council of 27 members, nineteen of which feel no particular responsibility for the ACP – and certainly feel that they owe them no debt – will not be accommodating to ACP demands.

In any event, a 27 member Ministerial Council is stymied by its own size – only consensus decisions are likely to carry, and the consensus is unlikely to favour a “benefactor” attitude to the ACP.

Bulgaria and Romania have a combined population of 30 million with per capita wealth that is only one-third of the EU average.

Both countries are expecting that EU development aid and investment, including US$10.2 billion of farm aid alone, will improve the social and economic conditions in their countries. The last thing they want is more EU resources directed away from them to the ACP, and they will undoubtedly want their own contributions to ACP funding to be kept to the minimum.

They also want to see greater EU focus for the Black Sea region of which they are a part. That greater focus may come at the expense of attention to the ACP.

Bare statistics indicate that the majority of Caribbean countries have a higher standard of living and a bigger per capita income than Bulgaria, Romania and other former Eastern European countries that joined the EU in 2004.

The task of convincing officials in these countries that the EU should continue to give the ACP special treatment will not be easy.

And it is not a task that can be left to the former colonial powers in the EU; they would simply be told by the new EU members that they were not beneficiaries of that colonial relationship.

A large part of the argument has to urge recognition that, in the interest of global stability, a rich region of the world, like Europe, should contribute meaningfully to the development of less well off regions in Africa, the Caribbean and the Pacific.

But, ACP countries also need to demonstrate that they are implementing measures that will adjust their own economic circumstances making them less dependent on special treatment in the years ahead.

ACP governments should be taking an early initiative, and visits to the Bulgarian and Romanian capitals should be scheduled soon.

* * *

Sir Ronald Sanders is a business executive and former Caribbean Ambassador to the World Trade Organisation who publishes widely on Small States in the global community. Responses to: ronaldsanders29@hotmail.com


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