Focus on EU/ACP trade conference in Addis Ababa

Trade talks between some of the world’s poorest countries and the EU will open on Monday amid renewed calls for an end to crippling trade barriers and subsidies. Members of the 78-nation strong African, Caribbean and Pacific group (ACP) are meeting in Ethiopia with top EU officials to address the issue of improving trade relations. Among key issues at the four-day conference is expected to be the EU’s new trade commodities deal that aims to improve the lot of Third World countries. The EU has announced that it wants to "tear down trade barriers", and has offered a new trading package that recognises subsidies on commodities as a problem. But critics argue that simply recognising problems is not enough. They say new or promised trade deals offer little in the absence of massive reductions in the EU’s crippling farm subsidies, which total US $140 million a day. Third World nations complain bitterly that EU and US subsidies effectively bar them from competing in lucrative markets of the Western world. And Oxfam International, which is campaigning under the Make Trade Fair banner, says subsidies and tariffs skew the marketplace in favour of the powerful EU trading bloc. "The EU is very good at analysing the problem, but very bad at coming up with concrete solutions to the crisis," said Sam Barrett of Oxfam International. "Tariffs and subsidies are effectively controlling the way markets work – the way you let some commodities in and keep others out. "It is very rich of the EU to say 'open up your markets' while they pull up the drawbridge on theirs," added Barrett ahead of the four-day ACP trade talks. He told IRIN that ACP countries were being hit by massive cotton subsidies in the US and by sugar and dairy subsidies handed out by the EU to its own farmers. Some African countries rely on the cotton sector to supply as much as 39 percent of their export earnings; 15 million workers are employed by this sector alone in Africa. Sugar subsidies cost EU taxpayers and consumers $1.5 billion each year. "The EU needs to do much more to challenge the US to radically reform its cotton subsidies," Barrett said, stressing, however, that "Europe should not use the cotton issue as a smokescreen to hide its inaction on sectors where EU subsidies are the real problem, such as sugar and dairy products". The EU and other international donors hope new trade strategies will help Africa meet some of the 2015 Millennium Development Goals (MDGs) set by the UN. The EU’s Trade Commissioner Pascal Lamy arrived in the Ethiopian capital, Addis Ababa, on Friday for the talks. He argues that trade – and not just aid – plays a key role in development. "Development is the objective, trade one of the tools," he said in a statement released by the EC in Addis Ababa. AFRICA'S FALLING GROWTH RATES But with economic growth rates having slipped across the continent from 4.3 percent to 3.2 percent last year, the MDG anti-poverty goals appear to be even further out of reach. Analysts now estimate that by 2015, a staggering 345 million people in Africa will live in extreme poverty – just $1 a day – up from 100 million when the MDGs were first set. Africa's economy, worth around $600 billion, has also seen foreign direct investment drop over the last year to just $6 billion from $14 billion. Overseas development assistance has been falling in the last decade; a global downturn, poor investment from abroad, and drought have all taken their toll on economic progress. Moreover, and even more crucially for the current trade talks, exports have dropped from 10 percent of the world’s market 50 years ago to just 2.7 percent today. The ACP represents more than 650 million people and includes 40 of the world’s poorest countries, many of them dependent on commodities for their economies. The talks will be between parliamentarians from ACP countries and their EU counterparts. Whereas the ACP-EU Joint Parliamentary Assembly talks have no formal power, they do exert a growing influence, particularly on Lamy. Oxfam argues that the talks bridge the gap between the EU and its poorer trading partners. "This brings the EU out of their ivory tower in Brussels, and brings them face to face with the big problems faced by some of the poorest countries in the world," Barrett said. COMMODITIES SLUMP Among key issues up for discussion will be commodities like cotton and coffee. Coffee is the second-most traded commodity in the world after oil, and plays a vital role in the economies of 50 developing countries. In Ethiopia, whose main export crop is coffee, some $800 million over five years has been has been wiped out from the government’s coffers because of a slump in prices. "Coffee is something that we think the EU should be putting a lot of energy into resolving and easing the suffering of coffee farmers and their families," Barrett stressed. Although the EU does not impose barriers or offer subsidies Oxfam wants action on addressing the global coffee glut that is keeping prices down. Coffee farmers are also trying to ensure that both the parliamentarians and EU trade officials take note of their plight. "We want them to realise the misery that millions are living in because of the slump in coffee prices," Yosef Worku from one of Ethiopia's largest coffee union’s told IRIN. "Our voices must be heard," added Yosef, whose 160,000 union members grow coffee in Yirga Chefe in southern Ethiopia. Oxfam is hoping that a "Big Noise" campaign launched on Friday will raise awareness of the world’s poor, and in particular Ethiopia’s coffee farmers. Moreover, a petition, expected to gain 5 million signatures in Ethiopia, will also be launched at the ACP meeting to be held at the UN conference centre in Addis Ababa. CONCERN OVER BILATERAL DEALS Oxfam has also raised concern over the tailor-made individual country-to-country trade negotiations that the EU has launched, with Burundi, Comoros, Djibouti, the Democratic Republic of the Congo, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia and Zimbabwe already having brokered agreements. "We are concerned that these deals are being negotiated individually," Barrett noted. "If they negotiate as a collective, then they cannot be bought off or influenced." A statement from the EC in Ethiopia issued on Friday said €700 million (about US $896 million) had already been committed to further enhancing trade-related activities. Lamy argues that the deal represents "a big step" towards deepening and accelerating economic integration between Africa and the EU – its largest trading partner. The EU says that under the agreement it will be prepared to further open its markets to ACP products and relax other trade barriers. It also argues that economic integration will help prevent risks of renewed conflicts on the war-ravaged continent. Lamy’s visit – on his way to the World Trade Organisation’s mini-summit in Kenya – indicates the growing importance the EU places on the relationship with the ACP and its parliamentans. But, as Yosef from the coffee farmers' union stresses, what is needed is action not words.