Thursday, 19 June 2008
Economic Partnership Agreements
I, too, welcome the Minister of State to the House and thank him for giving his time to discuss this issue. Economic partnership agreements are the trade agreements put in place between the European Union and the 76 developing countries in Africa, the Caribbean and the Pacific which are jointly known as the ACP countries. One in eight of the world's population lives in these countries, yet they have only 2% of the world's income. The aims of the economic partnership agreements are to promote poverty reduction, sustainable development and the gradual integration of ACP countries into the world economy.
It is vital that we put the mechanisms in place and ensure they work properly if we are to achieve equality across people, nations and continents. It is not clear, however, that the current regime will allow these goals to be achieved. The EU intends signing a number of new agreements at the earliest opportunity and it wants the initial draft agreements already signed by 35 countries to be formalised by the end of July. However, many people take the view that changes are needed to these draft documents before they are ready to be signed off. Will the Minister of State support changes to the documents to make them more effective and to ensure the purposes of the trade agreements are achieved?
The changes are needed for various reasons. Concerns have been expressed about the matter as it currently stands. For example, the draft agreements do not pass standard development tests. It is questionable whether they integrate economies regionally. The heads of a number of African states are concerned about this and want a review of the draft documents in front of the African Union before they are signed off in full. It is also uncertain that the agreements will help to develop new industries in ACP countries. Concerns have been expressed that not enough is being done to promote economic diversification.
The question also arises as to whether the agreements will provide full access to European markets. As the EU's exacting standards go further than international requirements, African imports of cereals and dried fruit containing aflatoxins, which cause liver cancer, have reduced by 50%. Statistics demonstrate, however, that only one life has been saved by this. It must be asked, therefore, whether these exacting standards are causing more deaths from poverty and hunger than they are saving lives on this continent.
The consensus is that the agreements will not deliver sufficient infrastructure in ACP countries. I had dinner with the Niger Minister for Finance in advance of December's summit in Lisbon between EU and African leaders. He expressed concern about the amount of funding being invested in infrastructure in his country. One way of promoting equality and reducing poverty is to ensure countries have adequate infrastructure but more work needs to be done in that regard.
These are some of the concerns being expressed in regard to the draft economic partnership agreements. We all want to see them benefit the developing world. Public opinion across Europe wants to make it easier for the Third World to develop, so we have to ensure the agreements do not adversely affect ACP countries. Will the Minister of State agree to push for an independent impact assessment of the draft agreements and for the EU to adopt unilateral preference schemes so that a country does not suffer if it does not sign up to an agreement? Will he restate firmly the Government's commitment to ensuring we meet our target of 0.7% of gross domestic product in aid to the developing world?
Michael Finneran (Minister of State with special responsibility for Housing, Urban Renewal and Developing Areas, Department of Environment, Heritage and Local Government; Roscommon-South Leitrim, Fianna Fail)
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I thank the Senator for raising this matter, which I am taking in the unavoidable absence of the Minister for Foreign Affairs, Deputy Martin, who is in Brussels, and the Minister of State with responsibility for overseas development, Deputy Peter Power.
Increased trade is central to sustained economic growth in developing countries. Trade, not just aid, is needed if the poorer countries are to escape from abject poverty. Economic partnership agreements, EPAs, are a new type of multilateral agreement which seek to combine both trade and wider development issues in a unified framework.
Members may be aware that EPA negotiations between the EU, represented by the European Commission, and six regional groupings of African Caribbean Pacific, ACP, countries began in September 2002. The mandate for their negotiation came from the legally binding Cotonou Agreement. The objective of economic and trade co-operation under this agreement is to foster the smooth and gradual integration of ACP states into the world economy. In this context, the EPA negotiations sought to achieve World Trade Organisation-compatible agreements by the expiry date of that organisation's waiver on 31 December last. Following protracted and difficult negotiations, only one of the original regional groupings — the Caribbean group — agreed a full EPA with the European Commission. Some 20 other ACP countries initialled interim agreements in smaller sub-groups or individually. A positive aspect is that this meant that trade disruption was avoided. The agreements provide full duty and quota-free market access on the EU side and a flexible and asymmetric liberalisation schedule on the ACP side.
During the negotiation process, Ireland consistently maintained that EPA negotiations should result in agreements that are supportive of ACP countries' development needs and their poverty reduction efforts. That will continue to be our position.
There is no doubt that EPAs which have been agreed offer opportunities for ACP countries. Years of EU trade preferences did little to improve the economic development of such countries. EPAs will put an end to ACP dependence on preferences, waivers and exclusions from the multilateral system. This dependence helped lock these countries into basic commodity trade for more than 30 years. In addition to duty and quota-free access, EPAs put in place simplified rules of origin. These were specifically negotiated to support the development of ACP industries that import materials to make goods for onward export to Europe. This is particularly beneficial in key sectors such as textiles, fisheries and agriculture.
It is envisaged that the interim agreements will act as building blocks to full regional EPAs. Regional integration allows efficiency gains through enlarged markets and increased competitiveness. In recent years, most ACP regional organisations have proposed trade integration and customs unions. Increased EU market access and support for regional integration through the EPAs is intended to bring about real trade growth and broad-based economic development in the ACP countries.
In April the African Union Conference of Ministers of Trade and Finance adopted the Addis Ababa declaration on EPA negotiations. This declaration reiterates that African EPA groups remain committed to conclude full development-oriented EPAs. However, it also highlighted certain contentious issues in the interim EPA agreements. The Minister of State with responsibility for overseas development, Deputy Peter Power, had this declaration in mind when he spoke on EPAs at the EU General Affairs and External Relations Council on 27 May last. The Minister of State underlined Ireland's position and stressed the need to acknowledge the concerns of our ACP partners and to be flexible in addressing them. He was pleased that the Council acknowledged the existence of problematic issues. The Council called on the European Commission to use all possible flexibility to take account of different needs and levels of development of the ACP countries and regions.
Ireland recognises that if ACP countries are to take full advantage of the trading opportunities afforded by EPAs, greater and more effective trade-related assistance should be made available to them. The EU has already pledged to increase collective Commission and member state expenditure in this area to €2 billion per annum by 2010. A large share of this increased expenditure will be devoted to the needs of ACP states. Ireland emphasised at all stages in the negotiations that this expenditure is not dependent on the signature of EPAs. Regional integration and EPAs entail adjustments and reforms in ACP economies and policies. Ireland wants to play its part and is committed to increasing its funding for aid for trade initiatives in the coming years.
I assure the House that the Minister of State with responsibility for overseas development is continuing to monitor closely the ongoing EPA negotiations. We want EPA agreements to be fair and balanced. To this end, Ireland is supporting a partnership approach between the European Commission and ACP countries.