LUXEMBOURG EU trade chief Peter Mandelson urged EU governments Monday to boost development aid, as promised, to help him conclude market-opening trade talks with poor nations that are to slowly replace their dependency on handouts with economic opportunities.
Mandelson is negotiating "economic partnership" deals with 78 poor nations divided into six groups. Due to be concluded in 2007, the talks have stalled amid squabbles over market access, good governance and aid levels. Addressing a European Union development ministers meeting, Mandelson said the EU must send a strong signal to the nations of the African, Caribbean and Pacific group, known as the ACP, that development aid "is there if you come to the negotiating table." The accords foresee gradual market openings in parallel with EU funding for good governance and reforms in developing nations so as to spur trade among them. Mandelson and EU Development Commissioner Louis Michel dismissed a complaint from Britain that the EU wants poor nations to swallow new rules on foreign investment and competition law to benefit European companies and investors. The ACP nations are mostly ex-European colonies. The EU has promised them a doubling of aid to 2 billion (US$2.5 billion) 2010.Half is to come from the EU budget, the other half from the 25 EU governments. But officials said the latter have to date only committed to just over 200 million (US$250 million)
"We have to be ready to support (developing nations) more strongly than we are today," said Finnish Development Minister Paul Lehtomaki, who chaired the EU ministerial meeting. "Aid for trade is a stepping stone to sustainable development, building the capacity to trade.Implementing our new commitments will reinforce Europe's commitment to putting trade at the service of development," said Mandelson.
He said money will be available to help countries prepare new trade policies, benefit from trade opportunities and adjust to the changes they bring. The EU faces a 2008 deadline, set by the World Trade Organization, to undo its web of preferential trade conditions and replace it with deals that gradually open and build markets in ACP nations. By opening their markets, these nations are bound to lose income as high custom duties fall away. The EU is ready to offset those losses but "EU governments must give shape to their promises" of more aid, said Michel. In a joint letter to Mandelson and Michel, British Trade Minister Ian McCartney and Development Minister Gareth Thomas wrote, "The EU must ... allow ACP 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.
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ACP countries have nothing to gain from the partnership agreements, agreed the Johannesburg-based relief group ActionAid International Monday. "The EU stubbornly tries to make us believe that a fast-paced free trade agreement and a so-called aid-for-trade package, are the main ways to find our way out of poverty," it said. Speaking to reporters, Mandelson said ACP nations were being asked to implement trade liberalization "over a long period of time ... There is no desire to force an opening of ACP markets.
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In his address to the EU development ministers, he said the next few months are "critical for the EU's trade and development agenda," especially while broader world trade talks remain suspended due to disputes over market access and agricultural subsidies. The regional agreements face opposition in the EU, especially France, as it would force Europe to open its market to agricultural produce from the ACP.
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