‘Liberalise trade in poor countries’

By David Cronin

Date: 13/04/06

MEPs willl next week urge the European Commission to rethink its position on promoting trade liberalisation in poor countries.

The international trade committee in the European Parliament is to consider a report at its 18-19 April meeting stating that the EU has been "dismantling nearly all instruments" aimed at stabilising the price of commodities, especially in African, Caribbean and Pacific (ACP) countries.

German left-wing MEP Helmuth Markov, the report's author, said that Stabex, the EU-funded scheme aimed at ensuring price stability in the developing world, had been abandoned because it was not yielding sufficient results, whereas other schemes had been scrapped as they were found incompatible with rules set by the World Trade Organization.

Markov is calling on the Commission to put in place a fresh system to ensure price stability. This was especially crucial, he argued, to deal with the hardship faced by coffee growers, given that the price of coffee had plummeted in recent years. Although twice as much coffee has been exported from producing countries in recent years as in the 1980s, the countries themselves are receiving less than half what they received for coffee two decades ago, according to estimates by the United Nations Development Programme.

He cited a Christian Aid study concluding that trade liberalisation had cost sub-Saharan Africa EUR 224 billion over the past 20 years. Opening up fishing to competition for large-scale industrial boats was undermining the livelihoods of the world's 40 million artisanal fishermen, he said.

He called for the Commission to recognise that poor countries had a right to shield their own industries from outside competition during the current round of talks on signing economic partnership agreements with the ACP bloc.

"Trade can be an important tool for development and poverty reduction," said Markov. "No country can reach a certain level of development without opening its trade to others. But when liberalisation takes place under pressure and too quickly, it results in de-industrialisation, the destruction of the environment, increasing dependence and the acceleration of impoverishment."

Peter Mandelson, the European commissioner for trade, recently expressed a commitment to "progressive liberalisation", based on "the appropriate level of liberalisation that different developing countries can bear". This would involve the EU providing aid so that poor countries can increase their share of world trade, he said.

During the 2005 G8 summit in Gleneagles, Scotland, Commission President José-Manuel Barroso undertook to provide EUR 1bn per year in trade-related assistance for poor countries.

Commission officials say it is not yet clear where the money for the increase proposed by Barroso can be found.

Article anticipates a debate at the International Trade Committee in the European Parliament (INTA), meeting on 18-19 April 2006 on a report drafted by German left-wing MEP Helmuth Markov stating that the EU had been 'dismantling nearly all instruments' aimed at stabilising the price of commodities, especially in African, Caribbean and Pacific (ACP) countries. The report called on the European Commission Markov to put in place a new system to ensure price stability.

Christian Aid: In depth: Briefing Paper: The economics of failure. The real cost of 'free' trade for poor countries. June 2005 http://www.christian-aid.org.uk/indepth/506liberalisation/Economics%20of%20failure.pdf

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