25-26 March General Affairs Council

Date: 28/03/1996

EUROPE may one day have a free trading zone with South Africa. EU foreign ministers finally gave the Commission the go-ahead to begin negotiations with Pretoria to open both sides' markets. But they said their offer would exclude 38&percent; of South Africa's agricultural products. Commission officials privately said they doubted Pretoria would accept negotiations on that basis and would probably decide that it did not constitute free trade. Ministers avoided the subject of Mexico, over which a similar debate is raging.

A ROW over how far the EU should open its telecoms market to international competition has been defused, with member states agreeing to improve their offer to the World Trade Organisation (WTO) if and when other countries upgrade theirs. The bloc has come under increasing pressure in recent weeks to put a more substantial offer on the table, notably from the US, which wants restrictions lifted on foreign ownership in Belgium, Spain, Portugal and Greece. But ministers from those four countries resisted the pressure, insisting that the EU should not play all its cards before first winning some concessions from others. However, they said they remained open to widening the Union's offer in the future.

EU governments are threatening retaliation against Bosnians who will not submit to peace. Ministers expressed concern over new violence, heightened tension and the exodus of Bosnian Serbs from Sarajevo. They said that EU aid would be strictly linked to whether the belligerent parties respected the commitments under the Dayton peace accord. A planned conference of international donors on 12-13 April in Brussels would be cancelled, they said, unless all sides release the prisoners they still hold this week. They also asked International High Representative Carl Bildt to propose additional sanctions against parties who have not fulfilled their peace treaty obligations.

THE Union will consider Bildt's request that the EU should offer trade accords and customs agreements to Croatia, Bosnia-Herzegovina and the former Yugoslav Republic, ministers said. The Commission was asked to study the idea.

EU administration of Mostar will continue and ministers named former mayor of Valencia Ricardo Perez Casado as the successor to outgoing administrator Hans Koschnick. Perez Casado is due to stay in Mostar until December to oversee the installation of a joint Muslim-Croat town administration.

MINISTERS said exploratory discussions with the Palestinian authorities and Syria were proceeding nicely, and asked the Commission to submit a proposal to start negotiations on new Euro-Mediterranean cooperation accords with Palestine and Damascus. Ministers also asked the Commission to conclude negotiations quickly with Egypt, Jordan and Lebanon.

THE customs union with Turkey still faces hurdles as Greece continues to block EU funding attached to the accord. Ministers had been expected to receive their Turkish counterpart, but it was agreed his visit would be useless while the money remained blocked. Early in the day, Athens appeared ready to drop its objections and release the money, but after long discussions with the Italian presidency, it retained its veto on the funds.

MINISTERS signed an interim trade and cooperation accord with Belarus, but under a reserve due to political developments in the country, which only two days earlier had announced plans for a 'union' with the Russian Federation. Belarus Prime Minister Mikhail Chigir said a treaty with Russia would still preserve Belarussian independence, but that Belarus' ties with the EU would be “coordinated with the Russian Federation”. Chigir said stable and profitable ties with the EU would enable Belarus to repay its gas and oil debts to Russia.