EC: NGOs Distort LDC's Trade Views

Holy moley, the world is awash with a glut of trade news these days. Of course, I try to do the best I can to keep IPE Zone readers up to date. What we have here is the European Commission (EC) accusing NGOs like ActionAid and Oxfam of souring African nations on trade deals in general. In case you missed it, today was the NGO-sponsored "International Stop Economic Partnership Agreements" day (click on Oxfam link).

If you will recall, the EU for the longest time had preferential trade agreements with former colonies under the ACP (Africa, Caribbean, Pacific) grouping. However, the formation of the WTO subsequently led to the ACP becoming untenable for obvious reasons. The current Cotonou Agreement with the ACP is scheduled to end in 2007. It was originally designed to phase out preferential arrangements with the EC, with the now-reviled Economic Partnership Agreements (EPAs) being negotiated to come into effect from 2008 onward. NGOs have been playing the devil's advocate here, implying just how the Wicked Witch of the West has done Africa wrong with EPAs. From my POV, these ACP countries have had more than enough time to adjust. Moreover, prices of agricultural products are quite high nowadays--just as those of other commodities are. It's time for these ACP countries to take globalization by the horns, subdue it, and quit whining about the unfairness of it all. Let's start with the EC accusation about NGOs:

The European Commission accused non-governmental organisations on Thursday of "playing poker" with Europe's former colonies by urging them to reject new trade pacts.

The 78 African, Caribbean and Pacific rim countries making up the so-called ACP group and the European Union are struggling to clinch new agreements by the end of the year, when current preferential market access is due to expire.

To mark the five years since the negotiations were launched, many pro-development pressure groups mobilised on Thursday to protest against the new so-called economic partnership agreements.

NGOs such as ActionAid and Oxfam have accused the European Commission of threatening development of ACP countries by allegedly strong-arming them to sign the new trade pacts.

In an open letter to NGOs, EU Trade Commissioner Peter Mandelson and Development Commissioner Louis Michel said: "Calling for an end to ... negotiations when there is no credible alternative is playing poker with the livelihoods of those we are trying to help."

In a reaction to the letter, Oxfam said in a statement: "The (Commission's) claim that they are being flexible is belied by their behaviour in the negotiations."

The NGO added that the EU "continues to insist on the deadline and reiterate demands in areas such as services, investment and government procurement, that would have negative implications for development."

With the year-end deadline looming ever larger, the EU sought in April to boost the negotiations with an offer to scrap all tariffs and quotas on ACP countries' exports with the exception of sugar and rice.

The agreements are supposed to help ACP countries develop while they diversify their economies and meet WTO requirements that they allow for some opening of their markets to European goods and services.

Meanwhile, protests have broken out today in Kenya, Ghana, Mozambique, Cameroon and elsewhere (with the presence of NGOs, natch):

Kenyan activists and farmers on Thursday protested in the streets of Nairobi against what they said were unfair trade partnerships pushed by the European Union.

Protests were held in several African capitals to mark the fifth anniversary of the start of negotiations for Economic Partnerships Agreements (EPA) between the EU and African, Caribbean and Pacific rim countries (ACP), a spokesman for ActionAid said.

In Nairobi demonstrators crushed farm products and waved banners that read "Fight Poverty... Say No to EPAs".

The EPAs are trade pacts that are set to replace the current preferential trade agreements between Europe and its former colonies, which were deemed illegal by the World Trade Organisation and expire by year's end.

In a statement, the ActionAid organisation charged that Europe's "use of strong-arm trade politics will deny food rights and undermine good governance in the world's poorest countries."

The preferrential trade pacts between Europe and the ACP were initially designed to ensure a steady flow of supplies from former colonies.

Many poor countries argue that they will no longer be able to compete if they lose their special tariffs on exports to EU countries.

"Small scale farmers have systematically been driven out from the export markets in sectors like horticulture leaving only the big players to enjoy the boon," ActionAid said.

"A reciprocal free trade agreement will worsen this situation while limiting the capacity of our governments to protect agriculture especially for majority small scale farmers who produce most of the staple food."

Events and protests aimed at raising awareness on the implications of the new trade pacts were also held in Ghana, Mozambique, Cameroun and several other of the 78 ACP countries.

On a somewhat related note--on which I actually agree with--Oxfam is jumping the gun in asking the likely next IMF chief Dominique Strauss-Kahn to consider giving developing countries more say in IMF affairs:

Oxfam on Thursday called on the likely new head of the International Monetary Fund, Frenchman Dominique Strauss-Kahn, to institute reforms giving greater weight to the developing world.

"Mr. Strauss-Kahn should actively support changes to the way the IMF is managed, so that all developing countries get a fair say in the decisions of the institution," said Elizabeth Stuart of Oxfam International...

"The question of whether to give a bigger voice to poorer members has been dragging on for too long and must be answered now," said Stuart.

"Measures currently on the table would deliver woefully short of a meaningful reform," she added, referring to a reform under way of the voting rights and quotas for the 185 IMF member countries...

Stuart noted that Strauss-Kahn recently has emphasized the importance of such reform and the need for the IMF to adapt to a rapidly changing world.

"This is welcome, but he'll need to set the tone from day one in the position to make it happen," Stuart said.

"Where countries have achieved macro-economic stability, the Fund should simply pull out ... All developing countries ought to be able to decide their own future economic policies," she said.