21/1/2005
Peter Mandelson European Commissioner for Trade, Economic Partnership Agreements: putting a rigorous priority on Civil Society, Dialogue Group, Brussels, 20 January 2005

Key themes

A new focus is needed on the EU’s Economic Partnership Agreements (EPAs) with ACP countries:

"EPAs need to change so as their development focus is strengthened. They should become explicitly what they really are: trade and development tools. They are not classical, hard nosed, free trade agreements of the sort that developing blocks negotiate between them."

EPAs are a tool of “progressive trade opening”:

"The trade opening or “market access” part of these agreements is not at their forefront: it comes towards at the end, after regional integration has kick-started growth, after long transition periods, after Europe has invested aid and support in these least developing countries’ capacity to trade. The transition periods for market opening will be as long as required, based on the actual needs identified in the negotiations. We are not going into the negotiations saying – for every step we take, for every Euro we grant in aid, we insist on an equivalent return to us in market access for the EU."

The EU will establish a mechanism for ensuring that the EPA process tracks important development benchmarks:

"I have decided to go further, and put the EPA process under continuing review. We will set up a new review mechanism to ensure that at every stage in the negotiations, we really do put development first."

I’ve been keen, since I took office, to find the opportunity for an in-depth exchange of views with you on the new arrangements that we are putting in place for partnership between the countries of Africa, the Caribbean and the Pacific, and the European Union.

These agreements are a new step in Europe’s long standing relationship with the ACP dating back to the Lomé conventions. It has always been a special relationship. The Economic Partnership Agreements we are negotiating now are the only means of maintaining that special relationship for the future under WTO rules. The target is to reach these Agreements by the start of 2008, before the end of my mandate.

EPAs are potentially a crucial, hugely positive contribution that Europe can and must make to trade and development. I am convinced of that. The purpose is the successful integration of the ACP economies in the global economy – and by that I mean putting the ACP on a ladder of prosperity that ends the grinding poverty which is the daily experience of so many ACP citizens. Until now, the EU-ACP relationship has simply not delivered on trade. It has adhered to the status quo and to a cycle of dependency. As result, these countries are not getting their fair share of the benefits of global economic integration.

At the same time, I am very aware that these EPAs have come in for much criticism in the NGO community. Some consider there is nothing for it, but that they should be scrapped. They see Europe in making the case for changes and the accompanying measures needed to help make adjustment, as simply placing unfair demands on the ACP. In my view, this is wrong, but the debate is worth having – and proves the value of the kind of civil society dialogue in which we are engaged today. I have been clear to my own people in the Commission that these criticisms must be fully acknowledged and taken into account.

And I very much value your role in bringing to our attention, and that of an increasingly aware public, alternative perspectives, on what is wrong and what is now to be done.

I do not agree the EPAs should be scrapped. But I do think that they need to change so as their development focus is strengthened. The negotiations on the EPAs are now entering their second, “region to region” phase. They should become explicitly what they really are: trade and development tools. They are not, classical, hard nosed, free trade agreements of the sort that developing blocks negotiate between them.

I am issuing, on the occasion of our meeting today, a background paper on the EPAs which, I hope, addresses the concerns that have been voiced so far. This paper expresses my views on what these agreements must now be about.

First, that they should be geared towards South/South economic integration, region by region. The EPAs are there to build markets in the ACP, primarily for the ACP’s own benefit, not aggressively to open them to us! Regional integration on the basis of stable and predictable rules is the determining factor in promoting investment: the pivotal condition for successful development.

Second, they should be about progressive trade opening. And there is a deliberate double meaning in my use of ‘progressive’. The trade opening or “market access” part of these agreements is not at their forefront: it comes towards at the end, after regional integration has kick-started growth, after long transition periods, after Europe has invested aid and support in these least developing countries’ capacity to trade. The transition periods for market opening will be as long as required, based on the actual needs identified in the negotiations. This is not something that needs to be defined in advance and in a vacuum. There is no fixed timetable for liberalisation – only a flexible timetable that depends on each region’s progress, sector by sector. This timetable is something to be defined in partnership with the ACP regions themselves, taking account of their specificities, their development progress, and their respective economic structures. And there will be a high level of asymmetry vis-à-vis the EU in the opening of their markets. We are not going into the negotiations saying – for every step we take, for every Euro we grant in aid, we insist on an equivalent return to us in market access for the EU.

Third, they are about strengthening the ability of the ACP to tap into market opening. This means reducing, through well targeted development support, capacity constraints and helping to overcome poor economic and social infrastructure. This is the only way to ensure an economic response from the fledging private sector, in these countries, to the opportunities of the global economy.

Economic capacity building must come first in the EPA negotiations. This is what is laid down in the road maps now agreed with all the 6 ACP regions.

But now I have decided to go further, and put the EPA process under continuing review. We will set up a new review mechanism to ensure that at every stage in the negotiations, we really do put development first.

I discussed this in my meetings with the ministers from CARICOM in Guyana at the beginning of the month. I would propose to establish a mechanism to monitor on a publicly available basis, the roll out of our development and trade related assistance. The aim is to check at regular intervals whether or not the assistance we are offering is delivering the right results. For example, is aid for infrastructure enabling ACP producers to get their goods to our markets in a timely way? Are the programmes in place to ensure they satisfy the EU’s exacting product standards?

The Caribbean reaction was positive, and I now want to offer this commitment to all the ACP regions, formally, and get this new mechanism in place.

This means that I’m going to establish, together with fellow Commissioners, and primarily of course Louis Michel, a dedicated structure of people to review the status, the needs and the possible bottlenecks across the whole range of programs and projects that constitute our EPA-related assistance. Our main priority will be to make sure that the financial envelopes available under the Cotonou agreement will be used up to their limit, in support of the capacity building and support that ACP countries need.

This is not about making the progress of our talks conditional on any specific, quantitative – and inevitably artificial - benchmark. It is about delivering in practice on the ground by getting the most out of our existing development tools.

This will require a greater focus on priority areas in our assistance: on competitiveness and diversification programmes linked to the EPA, including private sector development and infrastructure, as well as on institutional capacity building.

This review process must be undertaken in full partnership with the ACP. This is why I want to propose to our ACP partners that the new structure we will now put in place within the Commission has proper formal links to the regional preparatory task forces that we have already established in each of the 6 EPA regions. I am determined that the link between trade negotiations and development cooperation is going to work in practice on the ground.

To this end, I have written to the ACP Secretary General. I will seek the support and agreement of ACP ministers for this reinforced approach to the development component of our negotiations. I also think that we should deal systematically with the development dimension of the EPAs when Ministers meet at political level in the course of the negotiations.

I intend this to be a new start for the EPAs – to give the negotiations a new impetus – and to ensure that from now on, until the final implementation of what we will negotiate by 2008, development concerns have pride of place.