EU in trade talks with developing nations

Trade and foreign ministers from Africa and the Caribbean and Pacific (ACP) bloc were doubtful if any progress would be made on dismantling trade barriers in upcoming talks with their European Union (EU) counterparts. "Unless the developed countries will agree to make some movement on agriculture - trade must not only be free, but it must also be fair," said the Barbados Minister of Foreign Affairs and Foreign Trade, Billie Miller, at the opening of the three-day meeting this week in the Botswana capital, Gaborone. Developing countries have complained bitterly that massive trade tariffs, as well as EU and US agricultural subsidies worth US $1 billion a day, are stifling the development of poor nations. The ACP group has argued that development issues should be central to the future of any ACP-EU Partnership Agreement, while the EU is pressing for detailed discussions on enhancing the competitiveness of production in ACP countries. The ACP-EU Partnership Agreement, signed in June 2000 in the Benin capital, Cotonou, aimed at ironing out trade inequalities between rich and developing nations. While the ACP countries were eager to see the reduction of agricultural subsidies to farmers in Europe and the United States, they have said that free trade, if introduced immediately, would expose them to stiff EU competition. There would be little incentive for ACP producers to diversify into more value-added products, or for investors to put money into developing new capacity, given the uncertainty of the market for products competing with EU imports from other developing countries, for instance in the Far East. Another concern was the inherent adjustment costs to ACP countries of opening their markets to EU exports, and the implications of eliminating tariffs - many of them rely heavily on import taxes for fiscal income. "We are also asking them [the EU] to set a ceiling to the amount of assistance to European cotton producers by decreasing subsidies by more than 80 percent, because cotton is the only product produced in the north and the south where the south is very competitive," ACP secretariat spokesman, Hegel Goutier, noted. "While we are still involved in discussions with developed countries, it is necessary to have funds to compensate cotton producers for market distortions caused by the subsidies," he said. "Cotton producers in ACP countries are the poorest of the poor." Representatives of the 79-member ACP group will hold talks with top EU officials from Thursday. The Gaborone talks are expected to address trade inequalities between the rich northern countries and developing nations. In March the EU approved aid worth US $300 million to improve water supplies and sanitation in ACP countries.