EU not a Real Partner

by Joyce van Genderen-Naar

Published in Global Watch, April 2009 Joyce van Genderen-Naar is a lawyer and journalist from Suriname based in Brussels. She writes regularly about ACP-EU issues.

The ACP Working Group on Bananas chaired by the Ambassador of Suriname Mr. Gerhard Hiwat organized an ACP press conference on Monday 6 April 2009 in Brussels to inform the media about the serious implications that recent EU decisions will have for ACP banana producing countries, such as Belize, Cameroon, Cote d?Ivoire, Cape Verde, Dominica, Dominican Republic, Eritrea, Ghana, Grenada, Jamaica, Kenya, Madagascar, Eastern Caribbean States, St. Lucia, St. Vincent & the Grenadine, Suriname and Tanzania. The press was also addressed by the Ambassador of the Dominican Republic, Dr. Frederico Alberto Cuello Camilo and the representatives of Cameroon, Mr. Anatole Ebanda Alima, and of Côte d'Ivoire, Mr Philippe Mavel.

The Chairman started by saying that the EU is not a real partner and that the EU does not really know what partnership is, because a real partner would help to find solutions for problems resulting from measures they implement. The cooperation between the ACP and the EU/EC is based on a „Partnership Agreement?. The longstanding ACP-EU development partnership is in question, now the ACP is to lose both much of its vital existing tariff preference on bananas and much of the funds

2.originally promised by the EC to make possible the adjustments necessary for the ACP banana producing countries to cope with the consequences. This is the bad news the European Commission delivered to the ACP Ambassadors in these final days of the longstanding banana dispute at the WTO, ongoing since 1995.1 The EU will soon conclude with the Latin American Banana producing countries an agreement that will harm the production and export of bananas of ACP-countries.

The European Commission proposed on March 12, 2009, that the current tariff of 176 Euros/ton to MFN countries would be reduced by 2011 to 136 Euros/Ton, with a possibility of continuing its reduction to 114 Euros/Ton by 2019. This will facilitate further the access of bananas from the Latin American countries (MFN of Most Favored Nations), who today already own 80% of the European and nearly 100% of the North American markets of bananas. ACP banana producing and exporting countries have only a small share of 18% of the EU market and as good as no access to the USA market.

To compensate ACP banana producing countries for the negative effects of these concessions, the European Commission proposed an assistance package of barely 100 million euros for the period 2010-2013. Paradoxically, it is now encouraging ACP States to reprioritize the funds already committed under the respective National Indicative Programmes, Regional Indicative Programmes and other ongoing programmes for the implementation of necessary projects. So the promised funds for the banana reforms are gone.

1 ACP Press Release 06/04/09

Trade goals prevail on development
For the ACP it is obvious that the EC is choosing trade over development, that for the EC trade goals prevail over development objectives and that profits are more important than poverty eradication and the preservation of decent jobs in rural areas.

3 The ACP says that the EC is yielding to pressure for trade liberalisation regardless of the consequences for the development objectives set out in the Cotonou Agreements with ACP countries and the social and economic impact that such sudden and rapid changes will have on jobs and living standards in rural areas. Bananas for ACP countries are not only about trade, but also about the development of their countries.

In a Press Release dated April 6, 2009, ACP stresses that now the world is suffering from a global financial crisis, ACP countries can not afford to sacrifice their few sources of hard currency to the altar of free trade. According to ACP it might cause a food security crisis, since the ACP countries are all net-importing developing countries. Furthermore, ACP countries have repeatedly pointed out to the EU Commission that such substantial tariff cuts would have dire consequences for ACP export trade, for which the established preference is of vital importance.

ACP stresses that such rapid reductions are neither necessary nor justified. The sharp reductions proposed between 2009 and 2011 cannot be reconciled with any of the EU commitments towards ACP Countries, specifically the recently signed Cariforum-EC Economic Partnership Agreement which provides that tariff reductions should not only be "unavoidable" but "should be phased in over as long a period as possible". Moreover, there is no justification, in advance or in the absence of a Doha settlement, for imposing the whole programme of reductions to 114 euros, originally proposed in the context of the Doha negotiations.

The DOHA Round Talks collapsed in July 2008. Any agreement between the EU and the Latin American countries should be part of new Doha Talks in the WTO. For the moment the EC should not do more than is needed and that is just binding the tariff. ACP understands that the longstanding preferences will have to be moved, but that has to be done gradually so that ACP production and industries can become more competitive. For ACP it is difficult to see how any adjustment aid could deal in sufficient time with the problems arising from the deep initial cut proposed.

The EU argues that it is urgent to conclude an agreement with the Latin American countries because the EC lost all the complaints that the Latin American countries and the USA since 1995 have filed in the WTO against the EC and its preferential

4 tariff for the ACP countries. The EC wants to put an end to this ongoing battle as soon as possible. What the ACP wants is more time to become more competitive and financial compensation for the loses they will be suffering. The EC told the ACP that they should use the funds of their National and Regional Indicative Programmes to address the negative impact of the EC measures. These funds however are already allocated for other projects and programmes in the ACP countries. So this is not an adequate solution.

Strong versus weak lobby
Besides the ending of the ongoing legal battle in the WTO another argument is given why the EC is not listening to the ACP. It is about lobbying: some EU representatives say that the Latin American countries have a good and strong lobby and that the ACP countries do not lobby enough, which is not helping them. The ACP does not agree with this argument and says that the EC is sufficiently aware of the problems the ACP is facing; the EC has enough information and knows exactly what the ACP is proposing.

There is no need and no money to pay expensive lobbyists like the Latin American countries and their multinationals do. Which raises the question if it is just and normal that the interests of poor countries become less important when their lobby is not strong enough. What a strange argument. Even stranger when a Member of the European Parliament argues that it is about democracy and that the stronger the lobby is the more they will be heard. It seems like the survival of the fittest. What about poverty eradication and sustainable development of poor countries, what about support for their sensitive industries and export markets based on existing agreements such as the ACP-EC Partnership agreement and the Economic Partnership Agreement (EPA)?

35 out of the 77 ACP countries concluded and signed an EPA with the EC in 2007/2008 to safeguard their interests and their duty free access to the EU-market. They wanted to prevent that they had to pay taxes for their products to enter the EU market as from January 1, 2008. That was their main reason to close the EPA with the EC, a full EPA for the 15 CARIFORUM-countries in the Caribbean and interim agreements for 18 African countries and 2 Pacific countries. The ACP-EC banana

5 issue is a first and disappointing test case and puts the whole meaning of the EPA into question. EPAs should not be rushed 42 ACP countries (29 in Africa and 13 in the Pacific) did not sign an agreement with the EC and are still negotiating with the EC. In March 2009 Claude Maerten, Head of unit DG Trade - D2 -„EPA I? and Elisabeth Tison, Head of unit DG Development - D3 - „Central Africa region and Great lakes?, wrote an article about the State of Play of the EPA negotiations with Central Africa and stated2 :

2 EPA negotiations with Central Africa:
The state of play Claude Maerten, Head of unit DG Trade - D2 -‘EPA I’ and Elisabeth Tison, Head of unit DG Development - D3 - ‘Central Africa region and Great lakes’;

“Although progress on the EPAs is necessary, it should not be rushed. There are strategic issues at stake for the ACP and it is important to match the content of the partnerships under negotiation to the specific needs of each region. This takes time, particularly because the regional negotiation format requires substantial co-ordination efforts on the ACP side.

But there are still common objectives, whatever the pace of negotiations, which are to: (i) help meet Cotonou Agreement goals, particularly sustainable development and support for regional integration; (ii) strengthen supply capacity and diversification within economies and hence promote greater integration into the global economy; and (iii) ensure WTO compatibility, particularly in relation to the degree of liberalisation necessary to comply with the definition of “substantially all trade” in GATT article XXIV.

The EU has no wish to exercise pressure at the risk of obtaining agreements that might not meet the specific needs of each region”.

6 Different approach
This seems to be a total different approach from the EC compared to the concluding of the EPA and interim EPAs in December 2007 with the 15 Cariforum Countries, the 18 African and the 2 Pacific countries. The position of the EC is now that the EPAs should not be rushed. So the 42 Countries in Africa and the Pacific can take their time to negotiate a good agreement and to prevent the mistakes of the ACP countries that already signed.

They did not conclude nor signed a EPA in December 2007 because they were not sure about the impact of the EPA for their economies and for coming generations and their future. They wanted to have more time for discussions with all the stakeholders in their countries, more research and data. So the negotiations between the four regions of Africa, the Pacific region and the EC have continued since January 2008. Progress has been made with some regions like Central Africa, draft texts are available, but no EPA has yet been signed. No ACP-EU Heads of States Meetings

The ACP Heads of States have sent a request for a meeting to the European Council to discuss the EPAs and other ACP-EC-partnership issues at the highest level. This is not the first time they are officially requesting such a meeting, but like before their request has been refused with the argument that the dialogue should take place in the institutions the ACP-EC-Partnership Cotonou Agreement provides for, such as the ACP-EC-Council of Ministers. It is not understandable why ACP and EU-Heads of States should not meet each other on regularly basis and discuss what is important for their cooperation and their countries. This is not promoting real ACP-EC-partnership and cooperation nor bridging the gap between North and South, EU and ACP. Brussels

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