UK must challenge "damaging" EU trade deals - agency

Christian Aid is calling on the British Government to push for a comprehensive review of "serious, damaging flaws" in trade agreements it said had been "forced upon" a number of developing countries in recent weeks by the European Union.

The UK must also take the lead in challenging the way the European Commission negotiates such deals, known as economic partnership agreements (EPAs), to ensure further damaging commitments are avoided, said the organisation.

"Countries were pressurised to agree the deals by threats that they would otherwise face stiff tariffs when accessing European markets," says Tzvetelina Arsova, Christian Aid's Africa economic policy officer.

"The picture that is emerging from the deals is deeply troubling. There are serious, damaging flaws that place major obstacles in the path of economic development for poorer countries."

She went on to chide the UK Government over doing "little to rein in the EC's behaviour" despite raising major objections to the way in which the EC was pursuing the EPAs nearly three years ago.

"As a result, EU mercantilist interests have replaced development aspirations and objectives," said Arsova. "In order to redeem itself, the UK Government must now show leadership in demanding a fundamental review of the deals signed. As they stand, poor countries will simply get poorer."

Christian said that nearly 80 African, Caribbean and Pacific (ACP) countries had been put under enormous pressure to sign EPAs to replace trade deals dating back to the colonial era that are not in accordance with World Trade Organisation rules.

The "frenetic haste, intense pressure and lack of proper scrutiny of negotiations in a number of parts of the world meant that countries were not able to assess, let alone defend, what would be best for their future development," the agency added.

Caribbean countries signed up en bloc to comprehensive agreements covering not just trade, but investment and the provision of services. A number of African and Pacific countries refused to sign, saying they needed more time to negotiate, while others have signed interim deals covering trade only.

In the Caribbean, where a full EPA was signed just before Christmas, Shantal Munro-Knight, senior programme officer at the Caribbean Policy Development Centre, a Christian Aid partner based in Barbados, said: "We are very disturbed that the EPA was signed before anyone in civil society was even allowed to look at the text.

"We were given no clear idea of what economic risks our governments have exposed us to, so that we could develop an appropriate intervention strategy. We have consistently called for more transparency in the process, but clearly this has not been taken on board.

"Traditionally the Caribbean exported sugar, bananas and other agricultural products to Europe. Now Europe wants us to open up our markets to them. It is not that we are saying we never want competition, but we need some time and investment to build capacity."

An examination of the interim deals signed by a number of African countries reveals that, despite EU claims to be acting in good faith, the effect of EPAs on a number of economies could be devastating, the aid agency warned.

It is particularly concerned that countries had signed the EPAs at the cost of efforts to establish regional economic integration, an important development strategy, meaning that poorer countries could now find themselves at an economic disadvantage against stronger neighbouring economies.

The EU's insistence on being given "most favoured nation" status will also make it impossible for those that signed to choose more strategic trading partners in future, Christian Aid said.

The interim EPAs also contain no provision for the elimination of EU export subsidies or the reduction of other forms of EU agricultural subsidy. Subsidised EU products will be "dumped" on ACP markets as is already happening in West and Central Africa with poultry, onions, tomato paste and wheat based products.

Christian Aid said that continuing EPA talks in 2008 present a chance to revisit the damaging aspects of the interim agreements.

"Contentious clauses and provisions not compatible with the development goals of ACP countries should be opened up for renegotiation," said Arsova. "But we also expect that in 2008 EC will push hard for deals in areas of greatest commercial and strategic interest to Europe - such as investment, services and government procurement.

"These issues have long been controversial in trade deals. Their re-emergence in EPAs could deprive ACP governments of the right to manage foreign investment effectively, jeopardising the poor's access to critical services - such as sanitation and power - and preventing small local businesses and marginalised groups from accessing lucrative public contracts.

"The UK needs to stand firm on its commitment that these topics should be kept out of the remit of EPAs, and it must support the sovereign right of ACP countries to determine their own policies, and steer their own course of economic development and regional integration."