New urgency

By Steve Schifferes
Economics reporter, BBC News

It has been one year since many African, Caribbean and Pacific (ACP) nations balked at signing a new trade deal with the EU. Now, with world trade talks stalled and the world economy in crisis, there is a new push to complete the deal.

On Tuesday the new EU trade commissioner, Baroness Ashton, held informal talks with representatives of the EU’s former colonies under the auspices of the Commonwealth Secretariat to try and make progress.

"I would rather nothave to negotiate trade deals during an economic downturn"
Baroness Ashton, EU Trade Commissioner

Q&A: EU-ACP trade deal

The EU wants to get the new deals signed in the first quarter of this year, after a legal deadline of 31 December 2007 fell by the wayside.

Up to now, many of the former colonies have objected to signing the new agreements, called Economic Partnership Agreements (EPA), because they required them to open their markets to EU products in return for preserving their ability to freely send goods to the EU.

Speaking to the BBC, Commonwealth Secretary General Kamelesh Sharma said that he hoped both sides would show renewed flexibility and offered help “to move key global issues in a positive direction”.

New urgency

Mr Sharma said that he detected a new urgency as poor countries are concerned about the impact of the slowdown on their domestic economies.

Among the dozen trade ministers attending Tuesday’s talks were those from South Africa and Nigeria.

These two countries have previously expressed concern about the EPA deals.

These concerns include many issues which have also proved contentious in the world trade talks, such as the pace and speed of economic liberalisation, the opening up of new sectors such as services, and the so-called Singapore issues (such as competition policy, government procurement, and investment).

On offer

The EU says that it is prepared to allow developing countries to delay opening their markets for up to 15 years.

And it is also prepared to exempt “sensitive areas” and introduce “safeguard clauses” to protect areas like food production and infant industries.

Baroness Ashton told the BBC that the EU wanted to improve port facilities and telecommunications in developing countries and was prepared to offer substantial aid for this purpose. This would make it easier for developing countries to gain from trade.

Poor countries also want additional help to adjust to the effects of the world recession, and the EU says that it will put 2bn euros (£2.1bn) yearly into Aid for Trade programmes.

However, Emily Jones, a former policy adviser to Oxfam, said that the EU’s tough line in earlier negotiations had alienated many ACP countries.

And she said that the agreements were still far from putting development at the heart of their agenda, and could even make it more difficult for poor countries to industrialise.

If their infant manufacturing sectors are opened to competition from bigger companies from the EU, they may find it hard to succeed, activists argue.

“The mood music (from Baroness Ashton) has changed, but there is no change yet to the mandate from the member states ( of the European Union),” added Colin Roche of Oxfam International.

Rising protectionism

While the economic crisis may have added to the urgency of trade talks for developing countries, it could also harden the positions of rich countries.

Baroness Ashton admitted that she “would rather not be having to negotiate trade deals during an economic downturn”.

One of the biggest uncertainties in trade is the attitude of the new Obama administration towards the issue.

Baroness Ashton said she would “love to be able to take part in a new round of world trade talks in the summer” and hoped to meet the new US trade representative, Ron Kirk when he is confirmed by Congress.

But some of the rhetoric during the election campaign suggests that reviving the Doha trade talks might not be a US priority.

Further discussions on the issue are likely at the G20 summit of rich and poor nations which is scheduled to take place in the UK in April.

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This article is from the BBC News website. © British Broadcasting Corporation