Europe: Fair Trade Businesses Challenge EU Commissioners

Thirty companies and trade associations from Europe and Africa have written an open letter to EU Commissioners Peter Mandelson and Luis Michel to express their concern about the EU?s threat to increase import tariffs for African Caribbean Pacific (ACP) countries.

The increase will be activated if new trade agreements, called European Partnership Agreements (EPAs), between European and ACP countries are not in place by the end of 2007.

The letter
The letter aims to alert the EC Trade and Development Commissioners that the decision would have a serious impact on the economies of countries from which they source.

Fair trade companies from across Europe and African fair trade producers have asked for a guarantee that the tariff will not be increased in January 2008 and that alternative solutions to EPAs are developed after a full examination of their impact on the economies of ACP countries.

The letter states: ?As exporters from ACP countries and importers into EU countries, many of our businesses would be directly affected should the EU raise tariffs on ACP imports?The potential threat of tariff increases may already (or will soon) be affecting importers's; decisions about contracts for 2008 in sectors with longer lead times. This could jeopardise the share of ACP exports in the European market – built up over decades – with resultant negative impacts on ACP workers, for example, the 500,000 people employed in Kenya?s horticulture sector.?

Reciprocal free trade agreements
EPAs are presented as ?reciprocal free trade agreements? between the EU and 76 countries within the ACP block of less developed countries, but the liberalisation of trade could have a negative impact on ACP countries which cannot compete with strong and well-established European economic systems. Through EPAs, the EC wants to impose investment liberalisation, guarantee protection for European corporate property, and increase "intellectual property" rights.

Analysis from the UN and others underlines that the EU?s current EPA proposals would threaten millions of jobs in ACP manufacturing and agricultural sectors, and reduce government revenue from import tariffs by between 10 and 20 per cent in countries like Gambia, Senegal and Ghana.

Italy's associations
Giorgio Dal Fiume, president of Altromercato consortium one of the largest fair trade organisations in Italy and one of the letter?s signatories, explains: ?Fair trade associations and consortia cannot forget that their choices depend on international policy choices.

?EPAs are proposed to be as a ?reciprocal free trade agreements? between the EU and 79 of ACP countries, but, actually, they exploit unfair power relations between the EU and ACP countries. No negotiations have taken place and the ACP countries haven?t had the opportunity to express their position.

?ACP countries are asking to postpone the deadline by which EPAs become effective. At the same time EU should give them time, should listen and respect their requirements.

?Development of ACP countries is not linked to their capacity to enter in the free market but, on the contrary, in the possibility to protect their internal market, to provide staple foods and to support small and medium enterprises and farms.

?Unfortunately it will be very hard EU will change its position because it depends on global economical system and what is more, this is a too wide and complex an issue to involve easily civil society movements?.

UK's associations
A spokesperson from Traidcraft, one of the UK?s largest fair trade organisations and also a signatory to the letter said: ?The announcement by Mandelson and Michel is just another example of the Commission?s attempts to twist the arm of the ACP, tactics that are becoming more and more open as the deadline looms. The EC?s claims that they are legally obliged to deliver EPAs or revert to GSP (Generalised System Preferences), which all parties agree will be even more harmful to the ACP, are simply untrue. It has been shown in several studies that the GSP+ system could preserve many advantages of the Cotonou system but be WTO compatible, at least while something better is worked out. Indeed, the Seychelles has already requested this option, but had received no answer. Clearly the EC are more interested in having something to show for the years of negotiations than in what is good for ACP development ? meant to be the basis of these agreements from the outset.

?Clearly the ACP negotiators need more time. Already ECOWAS (Economic Community of West Africa) has said they will miss the end of year deadline, and several other regions have indicated they could only sign a goods agreement, not including all their members. But Regional integration is the only way to sustainable trade in the long-term and we fully support the ACP?s right to decide what kind of agreements they want from these ?partnerships?, and to have the time necessary to do this?.

Traidcraft says: ?European civil society has a crucial role to play in these final months. We need EU member states to step in and stop this inexorable pressure from the EC. And so we urgently need citizen pressure on national governments and parliaments. You can visit www.epa2007.org for the latest actions and links to organisations working on EPAs around Europe. If we stand firm together with the ACP, we can ensure EPAs live up to their original aims to promote, instead of undermine, development in the ACP.?

More info:

• www.epa2007.org
• www.european-fair-trade-association.org/Efta/index.php
• www.altromercato.it/it/
• www.traidcraft.org.uk