The Week in EuropeBy David Jessop
 In just over two weeks time Ministers from the European Union (EU) and the group of 77 African Caribbean and Pacific states (the ACP) will gather in Brussels. There they will embark on a trade negotiation that will last at least five-years that has as its objective the eventual creation of five or more free trade areas between Europe and the regions and sub-regions of the ACP.

 

Despite the apparent calm on the surface, the ACP is far from ready for these negotiations.

 

The original intention agreed in January 2000 and enshrined in the Cotonou Convention was to have two-year preparatory period during which both sides would determine the way in which they would proceed.

 

This has occurred belatedly and in general terms but it has been apparent for some months now that the European Union and the ACP as a group are approaching the negotiations from radically different perspectives. More alarmingly and in contrast to previous ACP negotiations with Europe, much of the ACP group seem particularly ill-prepared and in private divided as to how best to proceed on essential matters of detail.

 

For its part the EU has produced a negotiating mandate that proposes the specific areas in which Europe intends to negotiate as a series of free trade arrangements. It accepts that the negotiations for so called Economic Partnership Agreements (EPAs) will have a development impact. Despite this, Europe seems to see this as secondary to the creation of new trade relationships that are compatible with World Trade Organisation rules and in line with those that it has with non-ACP developing nations. It argues that as long as there are certain safeguards, substantial transition periods and coverage of most products the effect on ACP nations will be developmental. 

 

The ACP has also produced a document. This contains only general guidelines and has a radically different perspective. It speaks not of the detail of a trade negotiations but instead focuses on the philosophy of development, the role of trade in this process and the inequities and difficulties that most ACP nations face in the trade liberalisation process.

 

Some critics argue that the generalities in the ACP position are simply a papering over unreconciled differences of opinion as to how to proceed. While there may be some truth in this, the bigger reality is that the ACP document reflects a very real and serious divergence of opinion between the EU and ACP that could make unrealisable any expectation of rapid progress towards a detailed trade negotiation. 

 

What the EU and the ACP do agree is that the negotiations should be undertaken in two phases. The first phase will focus on matters of general principle while the second phase will address the detail of trade liberalisation on a region and product specific basis. However, they do not agree exactly how long each phase should take. The European Union is suggesting that it is quite possible for the first and second phases to proceed in parallel with the detailed regional trade negotiations beginning as early as January 2003. Most, but not all, of the ACP say this is impossible and that the second phase can only follow when phase one is complete.

 

In part this confusion arises from the radically different starting points of the EU and ACP but it also reflects an alarming range of differences within the ACP group as to the objectives of each region and when they should be pursued.

 

To some extent Europe created this disarray. Either deliberately or with little thought about the consequence for the ACP, Europe extended under its ‘Everything but Arms’ initiative duty-free and quota free access on a non-reciprocal basis for most products from the least developed countries including those in the ACP. The effect of this was to cause damage to ACP solidarity by causing nations such as Haiti or Rwanda to find themselves in regional groupings that were about to negotiate reciprocal free trade arrangements with Europe that they neither want nor need. The result is confusion. For example any eventual agreement between Caricom and the EU would either cause Haiti to renounce its valuable non-reciprocal relationship with the EU or leave Caricom. Unless that is the EU were to agree some new mechanism to allow an exception for any least developed nation in a customs union with more developed ACP nations.

 

There are also further unreconciled complications as there are certain aspects of the ACP trade relationship with Europe that involve all of the regions of the ACP. The most significant of these involves the sugar protocol. Although this has a legally different status and could in theory stand alone as an arrangement it is coming under indirect threat from beyond Europe. During August, Australia and Thailand threatened to join Brazil at the WTO to challenge the EC’s sugar regime in an alarming parallel to what happened to bananas. The implication is that just as the ACP is agreeing to break up by region their trade arrangements with Europe, it may find itself having to fight a battle with Europe and at the WTO on a single commodity on an all ACP basis. 

 

A further problem revolves around the fact that all of the ACP regions are at different stages of preparedness for the negotiations. The effect is that the ACP group as a whole has yet to decide on a whole range of issues central to prosecuting successfully a trade negotiation. 

 

The Pacific has established a regional negotiating mechanism that is not prepared to move to a second phase negotiation until the first stage is complete. It also has internal tensions, as there are some small Pacific states that are not interested in any free trade arrangements.

 

In contrast it seems that West Africa through its regional organisation, UEMOA, is prepared to begin as early as next January detailed negotiations on the creation of an Economic Partnership Agreement although ECOWAS and Nigeria have not reached any agreement on allowing any regional body to negotiate on their behalf. In other parts of Africa the situation is equally confused with a lack of clarity as to the legal status of some of the groups, or whether there is a clear mandate to negotiate from a single perspective or what geographical configurations will be used.

 

Some of these issues will be resolved before negotiations begin but there is a looming apprehension that if the ACP is unable to reconcile its differences and maintain its traditional solidarity in the detail it may have little future utility as a trade grouping.

 

David Jessop is the Executive Director of the Caribbean Council and can be contacted at [log in to unmask]

September 13th, 2002 

 




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