Plan to aid poorest nations faces rocky ride

Date: 19/10/00

By Peter Chapman

TRADE Commissioner Pascal Lamy's plan to grant the world's poorest countries duty-free access to Union markets is likely to run into opposition from protectionist member states once they begin scrutinising the proposals in detail, warn diplomats.

They say that even though foreign ministers gave their broad support to the European Commission's plans last week, southern EU governments - including France and Italy - will almost certainly raise objections when they examine the fine print between now and Christmas. "The general feeling is that the proposals are OK. But there is a problem of protectionism that needs to be overcome," said one official following talks on the issue at a meeting of national trade experts.

Under the Lamy blueprint, the EU would grant special status to the 48 poorest countries in the world. Only weapons are excluded from the proposal, which covers 919 different product lines exported by the poverty-stricken nations known as least-developed countries (LDCs). "There has been plenty of talk about how market access for poor countries is critical if we are to tackle their growing marginalisation in the globalising economy," said the Commissioner last month. "But talk is cheap. It is time we put access to our markets where our mouth is."

But diplomats say some EU governments have already voiced fears that the proposals would open the door to a flood of fraudulent imports from the beneficiary countries' other trading partners. "Some member states expressed concern about the possibility that non-LDCs would re-route products through LDCs, getting them into the EU duty free," said one. "They wanted to know how this could be stopped."

At last week's meeting of foreign ministers, the Commission pledged to put safeguards in place to keep track of imports, promising that 'unusual' shipments of goods which were not normally exported by the countries concerned would be examined. But diplomats say member states will seek further reassurances on this issue. "It is a bit vague," said one.

Arguments are also expected over Lamy's plan to include bananas and sugar within the scope of the proposals, although the relaxation of tariffs and quotas for these products, along with rice, would be phased in over three years. "Some member states said 'how can we decide on that when there are ongoing discussions about the EU's banana regime and a review of the sugar protocol?'" explained one diplomat, referring to disputes over regulations governing trade in the two sectors.

The list of the 48 poorest countries drawn up by the United Nations includes the Sudan, Mauritania, Niger, Yemen, Afghanistan, Nepal and Cambodia. Commission figures show that the Union is already the biggest importer of products in the world. In 1998, LDCs exported 8.7-billion euro worth of goods to the EU - more than half their global total.

Trade Commissioner Pascal Lamy's plan to grant the world's poorest countries duty-free access to Union markets is likely to run into opposition from protectionist Member States once they begin scrutinising the proposals in detail, warn diplomats.