| Sports |
EU must not threaten Pacific islands
By EILEEN KOLMA
IN an recent article headlined
“Economic Partnership Agreements: tackling the myths”, the
European Union’s trade commissioner, Peter Mandelson, sought to
justify the EU’s position on agreements being negotiated with the
African, Caribbean and Pacific (ACP) group of countries.
However, there has been increasing concern, both in Europe and the
ACP, that the proposed Economic Partnership Agreements (EPA) may
harm, rather than promote, development. This concern was amply
demonstrated on April 19 when groups in more than 20 countries,
from Fiji to Germany, staged protests, made presentations to EU
delegations, and undertook media stunts to raise awareness of the
high stakes involved in these negotiations. These issues are vital
for PNG’s future.
The commissioner, in his article, made several assertions that
require some examination and response. First, he asserted that the
EU “isn’t steam rolling ACP regions into having these negotiations
completed by the start of next year” but that “if we don’t have
the new system in place we will have to fall back on alternative
with less-generous market access”.
However, the Cotonou Agreement that sets out the rules on how
these negotiations should proceed, states if a country does not
sign an EPA, then the EU must “provide these countries with a new
framework for trade which is equivalent to their existing
situation and in conformity with WTO rules”. Therefore, to say
that a failure to sign an EPA will mean that “we will have to fall
back on alternative with less-generous market access” is in breach
of the Cotonou Agreement.
The EU must live up to its Cotonou promises and not threaten the
ACP with worse access than is currently the case. This is
particularly important for processed fish exports from PNG that
would face hefty tariffs if preferences were removed.
Second, Mandelson argues “our real challenge is not signing EPAs
on time but signing EPAs that deliver development”. There is no
argument here. This is why the EU should recommit now to guarantee
that preferences will not expire at the end of this year, thereby
allowing time for negotiators to reach an agreement that will be
pro-development. Not to do so would threaten the livelihood of
thousands of Papua New Guineans.
Third, Mandelson has promised that if the EPA is signed, “the EU
will completely open its market to ACP exporters. No more duties,
no more quotas, full stop”. This offer is very close to what is
currently the case, and so the EU is required by the Cotonou
Agreement to deliver it anyway. Unfortunately, there are still
problems with this offer, such as restrictive Rules of Origin (ROO)
that make it difficult for the ACP to make the most of access to
the EU market.
ROO determine whether products exported from a country are deemed
to have “originated” in that country and so are eligible for
duty-free access. In PNG, for instance, restrictive ROO mean that
even fish caught within our economic zone and canned here are not
necessarily deemed to have come from PNG, and so must pay a high
tariff rate.
The EU must listen to the ACP’s concerns on this issue and put in
place a system to help countries take advantage of trading
opportunities offered by the EU. The Pacific negotiators have
proposed a simplified system for ROO, but there is no positive
response from the EU.
Fourth, Mandelson contends that the EU is not “looking out only
for its own commercial interests” and that “even in the highly
contentious area of investment, the EU’s chief concern is putting
in place the rules that will help ACP countries attract the new
capital they urgently need”. While the Pacific is keen to
encourage investment, it is difficult to understand why the EU has
refused to make existing lending organisations such as the
European Investment Bank (EIB) and the Centre for the Development
of Enterprise (CDE) more suitable for the small and medium-sized
enterprises that characterise Pacific businesses.
This gives the impression that the EU is more interested in
helping its own companies than those in the Pacific. The EU has
also rejected an agreement proposed by the Pacific that sets tough
rules on corruption, ensures that foreign investors have binding
responsibilities towards the societies in which they invest, and
prohibits lowering of labour and environmental standards in order
to attract investment. The EU now seems to be saying that it does
not want an investment agreement after all if it is not one that
focuses solely on the protection of foreign investors.
Fifth, the letter states that “the EU is backing EPAs with real
money” and has made “commitments to increase Aid for Trade”. The
EU’s involvement in the Pacific as a donor has been invaluable,
and is a helpful contributor to the reduction of poverty in the
region. Unfortunately, the costs of an EPA are likely to be
significant, and it is important that existing funds are not
diverted from vital projects such as investment in infrastructure,
education, etc, to compensate for the EPA.
Pacific negotiators have argued that existing funding is only
enough to maintain existing aid levels, and have called for
additional funding that is tied to liberalisation commitments made
in the EPA. The EU has refused to tie new funding to new
commitments made by the Pacific.
Lastly, Mandelson argues that it is “essential there is strong
debate over EPAs but we must not fall into the trap of calling for
a halt or a delay” and that he is “acutely aware of Europe’s
historical links to the ACP”. As the Pacific Islands Forum has
noted, “the importance of what we are doing with the EU cannot be
exaggerated because we are rewriting the trading and commercial
rules that have governed relations between the Pacific and the EU
since independence. What will emerge from these negotiations will
shape the economic future of an entire generation … if we agree to
an EPA with the EU that does not serve our economic interests, the
implications for our economic development will be very grave
indeed, and as a result, the stakes in an EPA negotiation are
high”.
It is precisely for this reason that the negotiations must not be
rushed, considering that the terms of any deal with the EU are
likely to be replicated with the region’s largest trading
partners, Australia and New Zealand. It is time the EU stopped
threatening Pacific countries with the spectre of raised tariff
rates after December 2007, and started listening to legitimate
concerns over the direction of these negotiations, with a view to
finding a solution that will really help the two parties move
forward in a genuine partnership.
Note: The writer is Oxfam International’s
country programme director for PNG.
 
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