New proposals to push ACP countries into global market

Date: 15/01/1998

By Mark Turner

EUROPE's former colonies will have to face global market conditions by 2005, if EU governments endorse European Commission plans for a complete overhaul of relations with Africa, the Caribbean and the Pacific in the next millennium.

Senior sources say that ACP Commissioner João de Deus Pinheiro is likely to call for trade agreements with groups of ACP countries to come into force five years after the current Lomé Convention expires, ending three decades of privileged market access.

Officials claim the proposals, due to be unveiled later this month, mark a radical departure from existing policy and will help ease Europe's less developed partners into the global trading system.

But development organisations have expressed serious misgivings about the plan which, they claim, dangerously overestimates the ability of developing countries to adapt.

Although the transition period is two years longer than the Commission suggested in the preliminary guidelines it published last year, the Brussels-based non-governmental organisation (NGO) liaison committee says it still "appears unrealistic".

"Trade has a vital influence on the fight against poverty and on sustainable economic and social development," warned committee secretary James Mackie in a letter to Philip Lowe, head of the Commission's Directorate-General for development (DGVIII). He added: "Discussions and proposals to date give us the impression that the Commission has not given due consideration to those aspects."

ACP Secretary-General Peter Magande was reluctant to comment at this stage, but expressed concern at the prospect of facing global competition without sufficient preparation. "We want to have free trade, but it is still unclear what measures will be taken during the transition period. How will Europe help us get ready for this?" he asked.

Lowe insists that the Union is not abandoning its southern partners. "The EU should help the ACP countries by giving them assistance to meet international standards of commerce, helping them to adapt their structures to liberal trade conditions and by stimulating their trade with the Union," he said.

The EU will also keep certain preferences under commodity-specific trade protocols and allow further transition periods of up to a decade after 2005.

On the face of it, the Commission has little choice.

Its World Trade Organisation (WTO) partners are growing increasingly critical of inter-regional bloc trade preferences, and fired a clear warning shot across the EU's bows with their recent ruling that its banana regime contravened international trade rules.

The Commission this week proposed the absolute minimum it felt it could get away with to answer WTO concerns - a new import licensing system but almost no change to its banana quotas - but may find it hard to do so next time the issue surfaces.

Critics of the proposed new EU-ACP relationship believe that the Commission has not taken into account a new degree of flexibility shown by the WTO in helping the world's poorest countries to integrate into the global market-place.

"We believe there is much more room for manoeuvre," said Myriam Vander Stichele from the Transnational Institute in the Netherlands.

Stichele is particularly concerned that the proposals misjudge the special requirements of southern countries. "Free trade is not needed for Africa. What is really needed is a good chapter on trade cooperation," she said.

Despite these criticisms, DGVIII insists its proposals will help to haul the ACP out of the poverty trap which has crippled it for so long, something that trade preferences failed to achieve.

"This is a real, real opportunity," said Lowe. "Every country is calling for a new start to development policy. These countries need trade and inward investment. We must help them create the conditions to achieve that. If there are as many businessmen in Africa as we see economists in conferences, the region could have a glittering future."

Feature looks at draft European Commission proposals to replace the current Lomé arrangements.