Accessibility links

Breaking News

Deadline for African, EU Trade Deals Looms

The deadline is approaching for new trade deals between the European Union and nearly 80 countries in Africa, the Caribbean and the Pacific. African leaders and economists worry the new deals, which are designed to get rid of preferential trade arrangements, could destroy some of the continent's young or emerging businesses. Kari Barber reports from Dakar.

The World Trade Organization ruled that Economic Partnership Agreements established decades ago with some of Europe's former colonies, violate the WTO's rules by establishing preferential tariffs for the mostly impoverished countries. The WTO set a December 31 deadline for the EU to reach new trade deals with the African, Caribbean, and Pacific countries.

The new deals would wipe out the preferences and in effect raise tariffs on goods sent to Europe.

Some African governments and regional and international organizations, including West Africa's economic body, ECOWAS, are calling for an extension.

They are concerned the new trade deals would open up African markets to an influx of cheap goods from Europe, making it more difficult for their own industries to grow.

Speaking from an EU meeting in Brussels, Emily Jones, a policy analyst with the non-governmental organization OXFAM, says African exports to Europe from the 78 countries would suffer while their own markets would be opened to European products.

"While opening up to trade is definitely a good thing, you only need to open up once you have something to sell and once you can compete," said Jones. "By opening up before you have a strong industrial base, you are likely to destroy jobs and destroy industries rather than create them."

Jones says the deadline for reaching new Economic Partnership Agreements should be extended to allow the African countries in the group more time to negotiate a deal that would benefit them and also protect their industries.

A spokesman for the European Union development commission, John Clancy, says the deadline is set by the World Trade Organization and the EU cannot change it.

He says doing away with tariffs in Europe that have given preference to some countries in Africa, the Caribbean and Pacific is necessary to grow trade relations between them and Europe.

"In a sense it is a fight against red tape," said Clancy. "This kind of red tape that strangles trade and prosperity for these countries."

He says, in the long run, free trade will benefit both sides. He says the EU plans to provide more development money to counteract the short-term financial impact that new economic partnership agreements, or EPAs might have.

"It is not as if from one day to the next there are suddenly EPAs without any financial support coming from the European Union," said Clancy. "There is financial support, and that has always been a key part of the EPAs from the outset."

He says the EU will include about $3 billion additional in aid from now until 2010, and regular development funding is also expected to increase.

Senegalese economist Moubarak Lo says Europe is in a difficult position as it tries to reconcile a desire to help Africa with a need to retain its competitiveness in world markets as China's economic influence grows.

"What is the position of Europe in the negotiation? It is difficult for them, because they have to support African countries while also protecting their interests," said Lo.

While the EU says it is powerless to change the December 31 deadline, it has talked about negotiating partial trade agreements to allow trade to continue while full agreements can be hammered out later in 2008.