English

AFRICA – EUROPEAN UNION: TRADING UP

Nov 27 2009

Catherine Ashton (*)

BRUSSELS, Nov (IPS) Faced with the first truly global economic crisis in the era of globalisation, developed countries have been focused on mitigating the effects on our own economies. One could be excused for thinking that in all of this, development goals have been forgotten. They have not, and the European Union (EU) for one is as committed as ever to giving the developing world a fair deal – including on trade.

This means the best possible market access, the means to make use of it, and the time to adjust to new global realities.

Experience has shown us that countries make the most of their economic potential if they are able to participate in international trade. We need to create an open and fair trading environment with equal opportunities for all, while also taking into account the difficult situation that many developing countries find themselves in. The EU is committed to this goal, both on the multilateral stage and in our bilateral relationships.

First and foremost, the European Union is pushing hard for the conclusion of the Doha Development Agenda talks. Some may have forgotten what the second ‘D’ in ‘DDA’ stands for, but we have not. Doha promises a package of trade concessions that will provide significant new market access for developing countries, and will sharply reduce trade-distorting subsidies to rich countries’ farmers. Poor economies will have to offer little or nothing in return.

The EU has also gone further than any other major developed economy in offering unilateral access to its markets, through its Generalised System of Preferences (GSP), which includes duty-free, quota free access for LDCs. At the same time, we have worked with African, Pacific and Caribbean (ACP) countries to put our relationship on a new footing. New agreements, dubbed Economic Partnership Agreements (EPAs) intend to protect and improve ACP access to EU markets, promote regional integration and accelerate development and poverty reduction in the ACP regions.

Over half of EU imports come from developing countries and we import more agricultural products from them than all the other major developed economies combined. Over two thirds of our developing country imports pay no duty whatsoever. Still, significant potential is wasted, as countries are plagued by poor infrastructure, excessive regulation, and low capacity. They often cannot trade efficiently with their neighbours, never mind with rich powers on the other side of the world. The EU Aid for Trade Strategy agreed in October 2007 has proven important in channelling more and better EU support into trade facilitation and other areas such as infrastructure and capacity building for developing countries.

The other side of integrating into the global trading system is of course opening up one’s own economy and ensuring a smooth adjustment to the realities of global trade. Services are now the largest sector in most of the least developed countries, and global supply chains stretch across borders. Many leaders of developing countries realise that adjusting trade relations to deal with these new realities is key to their future success, as it increases competitiveness and attracts investment. They are also of course aware that this is a monumental task that will take some time. The EU understands this too, and we want to support developing countries in making a gradual transition, at the right pace.

This has been the case in EPAs for instance. Given the task at hand, it was perhaps inevitable we would need more time than originally thought. There have been some misunderstandings and some mistakes made, but with hard work and goodwill on both sides I believe we have created the right basis to move forward. We now have packages that create a sustainable, future-oriented economic partnership while giving ACP countries the flexibility they need to protect their vital interests.

As we move further towards economic integration, there are surely many hurdles ahead. Nobody has a perfect plan for this, certainly not the EU. What we do know however is that we need to create a new and sustainable model for our economic relations. This will require flexibility and patience, but also the resolve to move forward rather than just tread water. (END/COPYRIGHT IPS)

(*) Catherine Ashton is the EU Trade Commissioner. On Nov 19 she was appointed EU High Representative for Foreign Affairs.

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