The Week in Europe
by David Jessop
On February 26 European ministers agreed to the European Commission's (EC)
'Everything but Arms' initiative and so took a decision that will have a
profound effect on the future of the Caribbean region.
While the overall initiative is welcome - it recognises the plight of the
poorest countries - it will have a serious impact on employment in every
more developed ACP nation producing sugar, rice and bananas.
The measure has the effect of modifying unilaterally existing preferential
arrangements. It does so by extending duty and quota free access immediately
for all products entering the EU from the world's least developed countries
(LDCs). Only in the case of sugar, rice and bananas will full implementation
be delayed until 2006 (bananas) and 2009 (sugar and rice). Despite this,
special quotas for all three sensitive commodities will be opened
immediately at levels which suggest that Caribbean and other ACP producers
will loose from the end of this year as increasing and significant shares of
their European market.
The decision by the EU Council of Ministers came after weeks of
inter-European argument about the need for special measures for the three
commodities in order that LDC exports would not disrupt prices and stability
in the carefully controlled European market.
But despite Caribbean and ACP protestations that under the terms of the
Cotonou Convention signed in June 2000 they must be consulted, the EU
chooses not to see this as an issue. Rather, the intense debate that took
place involved EU states demanding concessions in order that their own
largely wealthy metropolitan agricultural producers were not disadvantaged.
As a result, more developed ACP nations now have to try to salvage what they
can through the hapless process of arguing after the event that impact
studies on the effect on ACP commodity producers must be undertaken and
discussed.
For the more developed ACP nations the impact will be simple and direct.
Explaining this the Mauritius Prime Minister has informed European leaders
that the initiative will initially transfer highly needed benefits from
vulnerable small island states to the least developed countries. Then at a
later stage, markets will be disrupted with dire consequences for all
including the French Départements d'Outre Mer.
ACP sugar producers have amplified this. They suggest that the way in which
the EU decision is structured means that the negative impact will wholly be
borne by more developed ACP sugar producers, and it will be "the poor, not
the rich, who bear the brunt of an initiative to help the poorest".
As far as rice and bananas are concerned, the situation is little different.
In both cases, the market will be progressively disrupted as the new
arrangements, largely designed to protect European producers, result in less
competitive ACP producers being displaced from the EU market.
For the Caribbean, the EU's decision on 'Everything but Arms' can be seen as
nothing other than a disaster. It is part of a sequence of trade decisions
whereby the EU uses wider trade policy considerations as the justification
to set aside existing preferential arrangements. In this context it is to
encourage the poorest developing countries to accept the opening of a new
WTO trade round. This latest decision is not unique .It follows similar
unilateral action to liberalise or reorganise the EU market for rum and
bananas without properly assessing the impact on commodity dependent
preferential suppliers or to determine a basis for compensation.
If there is any message in early 2lst century history, it is that powerful
trading blocs will liberalise irrespective of the consequences for
developing countries and then only under pressure consider a basis for
compensation or amelioration of the effects.
Despite this, the region and its producers cannot be excluded from blame.
For too long Caribbean industries and governments have behaved as if
protocol arrangements with Europe will continue forever. The reality is that
nothing is forever. Unless industries develop early, creative, practical,
forward-looking solutions with government, the region will always find
itself reacting after the event and disadvantaged.
Caribbean Governments and regional institutions seem to have failed to
understand that the world has changed. Unless powerful lobbyists, the
Diaspora and other interested parties are funded and mobilised in support of
well-considered strategies where decisions are being taken, the region will
continue to loose.
On the horizon are a number of key trade negotiations. These include a new
world trade organisation round which looks set to begin later this year.
This year will also see the probable acceleration of the process to
establish a Free Trade Area of the Americas. This will almost certainly be
the most important element in the forthcoming summit of the Americas in
Quebec in April. Further trade negotiations are set for Brussels and
Geneva.
Despite this, how well prepared is the region? It is one thing to indulge in
rhetoric, letter writing and concern about process and quite another to
achieve positive results based on a coherent well-delivered strategy. While
tourism and the service sector may well represent the future of the
Caribbean, politicians will find before very long they will reap the
whirlwind of social unrest if they allow traditional industries to collapse
before a full transition can be made to a newer Caribbean economy.
The EBA decision in Brussels should indicate in the starkest possible terms
that world trade is now moving against the interests of regions such as the
Caribbean. While resources are limited, future generations will not forgive
today's politicians if they do not rapidly develop a coherent and integrated
strategy to deal with these the biggest threats the region has ever faced.
David Jessop is the Executive Director of the Caribbean Council for Europe.
And can be contacted at [log in to unmask] March 2nd, 2001
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