Market liberalisation harms poor countries, EPA opponents warn

Opponents of trade ­liberalisation are stepping up their criticism of the European Commission’s approach to economic partnership agreements (EPAs) with developing countries.

They want the EU to ­deliver on financial commit­ments to help developing countries trade better and to relax its insistence that they liberalise their markets quickly.

A mid-term review of EPA negotiations is under way and the agreements are the ­subject of a ­conference ­today (19 ­October) at the European Parliament, org­anised by the Socialist group.

Max van den Berg, a Dutch socialist MEP who will chair the conference, warned that internal and regional markets needed to be strengthened before developing countries lowered their tariffs and opened up their industries to competition.

"We’re not saying trade is a terrible thing but Africa needs a bigger share…You shouldn’t talk about ­opening up to Eur­ope ­until these countries are strong enough," said van den Berg, who is a vice-chairman of the Parlia­ment’s development committee.

In Brussels this week, Don McKinnon, the ­secretary-general of the Commonwealth, of which many developing countries are members, said the EU needed to be aware of the detrimental effect of poor countries opening their markets too quickly. "Our members do have a high level of ­sensitivity to what they can manage," he said.

McKinnon, who met Trade Commissioner Peter Mandelson, said the loss in revenue for developing countries from reduced ­tariffs could not be off-set by other sources. "There is no use saying diversify if they have nothing to ­diversify into. Often they don’t have a local tax system whereby income tax is properly ­collected."

The EU’s trade and ­development ministers met this week to discuss the trade negotiations. Ahead of the meeting, two British ministers expressed concerns about the way the Commission was conducting the talks, ­especially on how quickly developing countries were expected to open their markets. In an open letter, Gareth Thomas and Ian McCartney said: "The EU must…allow ACP [African, Caribbean, Pacific] countries as much time as they ­reasonably need to open their own markets, while providing effective safeguards to prevent unfair competition from subsidized European products undermining African products on their own doorstep."

The letter added that ­developing countries should not be forced to adopt rules on investment, competition and government procurements, a move which got mixed reaction in the Council because some member states and the Commission believe this is essential to bring developing states into the world economy.

The Council also discus­sed aid-for-trade, which would involve giving ­money to developing ­countries to help them strengthen their ability to trade through competition policies, customs and export practices and training ­officials. Van den Berg said he welcomed the commitment by the ministers to honour the pledge given last year for a €2 billion annual payment to developing countries from 2010. But he said the money should be delivered quickly. "We’re not looking for confirmation, we’re ­looking for the money to be put on the table," he said.

No new funding was pledged to offset financial losses that will result in the trade deals from changing practices and loss of revenue through ­reducing tariffs. Ministers said money from the aid-for-trade commitments could help with this loss and that member states individually were providing money to meet losses.

Opponents of trade ­liberalisation are stepping up their criticism of the European Commission’s approach to economic partnership agreements (EPAs) with developing countries.