30/6/2006
Mandelson to ACP Ministers: "The word partnership in Economic Partnership Agreement is not there by accident" Brussels, 28 June 2006

EU Trade Commissioner Peter Mandelson has this week  met Trade Ministers from the African Caribbean and Pacific countries in Brussels. He told Ministers at a meeting of the EU-ACP Joint Ministerial Trade Committee that the EU and the ACP regions must renew their commitment to the successful negotiation of Economic Partnership Agreements (EPAs).

Arguing that EPAs offer the best possible framework for a new generation of trade relations between the EU and the ACP countries, Mandelson said the EU was totally committed to producing flexible, development-friendly final agreements and that it looked to ACP countries to preserve their own commitment to reform. Insisting that meeting the 2008 WTO deadline to renew the trading agreements meant that the EU and the ACP needed to work together, Mandelson told ACP Ministers: "The word partnership in Economic Partnership Agreement is not there by accident".

A new approach for sustainable development…

Mandelson argued that a system of preferential access had not helped strengthen or diversify ACP economies and that the EPA process would help build strong regional markets in the ACP regions and integrate those markets in into the global economy. Mandelson said that although the full integration of ACP economies into the global economy is vital for their sustainable development, the EU was committed to ensuring - and defending in the WTO - sufficient flexibility "to protect fragile industries and build competitiveness".

Fears not justified…

Mandelson told Ministers that he believed that many of the fears associated with the EPAs were unjustified. He argued that there was no evidence and little likelihood that EU goods would flood ACP markets following eventual liberalisation because the real the level of protection of ACP tariffs is fairly low, the EU does not grow tropical crops and almost ninety percent of EU exports to the ACP are made up of complex high-end industrial goods.

Responding to worries that lowering tariff barriers would result in heavy revenue losses for ACP countries Mandelson said "we should treat these predictions with very great caution". He argued that studies suggesting heavy losses assume immediate and complete liberalisation and ignore the cumulative benefits of reform. He said that the EU would "ensure there is no sharp drop in Government income by timing and phasing tariff reductions". Mandelson argued that a move to funding government revenues through the fiscal returns from a growing economy would "finally break the dependence on unreliable and declining tariff revenues as source of income".

Mandelson also assured ministers that the EU was not pushing for an immediate agreement on setting a single tariff for integrated ACP regions and would not insist that external tariffs be set at the lowest existing levels.

Funds to help adjustment…

Although development funding is not a part of the EPA negotiation, Mandelson assured ACP Ministers that EPA's are a central priority in the 22.7 billion euro 10th European Development Fund. Mandelson also said that if amounts available were not sufficient to address EPA requirements, then funding could be reviewed. However Mandelson noted that financial assistance is a means to an end and could not replace effective reform and economic diversification in ACP regions: "Policy reform will drive trade, trade will deliver growth and Africa alone needs 7% growth per year to meet the Millennium Development Goals".

Background: What are EPAs?

Economic Partnership Agreements are the agreements that the EU is negotiating with the six African Caribbean and Pacific regions that will replace the trade chapters of the Cotonou Agreement when the WTO waiver that covers these agreements expires in 2008. The EPAs are intended to be broad agreements, helping build regional markets and diversify economies in the ACP regions and ultimately opening trade between the EU and these markets in a way that reflects regional sensitivities while integrating ACP economies into the global economy in a sustainable way.