Conference of African Ministers of Finance, Planning and Economic Development
Speech delivered by Ambassador Sigurd Illing, Head of Delegation of the European Commission in Uganda
Kampala, Uganda
22 May 2004
Mr. Chairman,
Honourable Ministers and Governors,
Excellencies
Ladies and Gentlemen,
I would first of all like to present the apologies of Mr. Falkenberg, Director in DG Trade, who had been designated by Mr. Pascal Lamy, the EU Commissioner for Trade, to represent him at this important conference. Unfortunately, he had to cancel his participation today at very short notice. Unforeseen circumstances in the negotiations between the EU and Mercosur have prevented him from discussing with you the opportunities and challenges for Africa under a global trading system. Adequately replacing a high level trade official and experienced trade negotiator in such discussions is not really possible. What I can do is to convey to you a number of key messages from an EU perspective, which you might take into account in your deliberations.
The EU has a long-lasting and stable trade relationship with Sub-Sahara Africa under the Lomé/Cotonou Agreements. Preferential access and special trade protocols, such as for sugar, have been the cornerstones of this relationship. As a consequence, the EU has been and remains by far Africa’s most important trading partner. However, unilateral preferences have clearly not been sufficient – after all we have experienced a decline of the ACP market share in the EU over the last 20 years.
In 2001 the EU put in place “Everything But Arms” which provides for complete and permanent duty and quota free market access to the EU for all LDCs. Experience so far is mixed: on the one hand certain countries and sectors were able to benefit and increase trade flows; for example this is the case for various vegetables in West Africa or sugar in Southern and Eastern Africa; on the other hand EBA is not enough. There are still non-tariff barriers to trade, but also supply side constraints, political instability, governance issues and lack of confidence by investors. These are key reasons why trade and economic development have not taken off despite such a favourable market access regime as EBA.
The launch of negotiations of Economic Partnership Agreements between the ACP countries and the EU was therefore an important step beyond simple market access. This was part of the Cotonou vision to enable ACP countries “to manage the challenges of globalization and to adapt progressively to new conditions of international trade”. The ACP-EU trade and economic cooperation, of which EPAs are going to be the flagship, seeks to build on ACP regional integration initiatives. In doing so, the EPA can assist in locking in the achievements of those initiatives and enhancing their implementation. With the launch of regional negotiations with West Africa, Central Africa and Eastern and Southern Africa we are now in the phase of bringing existing constraints to the negotiating table and will look at them afresh under a South-South and Sough-North at the same time.
A third level of EU activity, and certainly of key-importance to Africa, concerns the multilateral trading system and the Doha Development Agenda. It is clear that there is a very strong sense of resolve to make progress on the Doha Development Agenda between now and July. A much more positive atmosphere has emerged in recent times. On this basis, EU Commissioners Lamy and Fischler sent a letter on 9th May to all WTO Members to sketch the key areas where more movement is needed to agree on framework modalities by July. In a nutshell this is what they propose on the main areas.
ˇ On agriculture, there is a historical opportunity for a breakthrough. The responsibility for showing the lead clearly lies with the major subsidizing countries in the developed world. For example, the objective of eliminating all forms of export support is no doubt one shared by the great majority of members. If an acceptable outcome emerges on market access and domestic support, the EU would be ready to move on export subsidies. At the same time, there must be full parallelism on all forms of export competition including export credits, food aid and state trading enterprises. Very important in this context will be early action on cotton, which is vital to many developing countries.
ˇ On Non-Agricultural Market Access (NAMA), we suggest that negotiations focus on a simple, general and ambitious formula for market opening accompanied by a short set of qualifications or exceptions in country or product terms. We have now all accepted the principle of “less than full reciprocity”, but this needs to be made operational. Developing countries should undertake commitments in line with their importance in world trade.
ˇ Negotiations in services are lagging very seriously behind, even though this is a huge potential area of growth, not only for developed but also for developing countries. Services negotiations need to move from second into third gear. It will be inconceivable to conclude the DDA without a significant level of new and substantial commitments on services.
ˇ On the Singapore issues, there seems to be growing support for negotiating trade facilitation as a Single Undertaking. The EU would, of course, be ready to launch negotiations on this issue. As regards investment and competition, there is clearly no consensus to begin negotiations. This leaves the question of transparency in government procurement, where the picture is less clear, but we are ready to join the consensus on this question if such a consensus develops.
ˇ On development questions, the EU proposed on agriculture and NAMA that the least developed countries and other weak or vulnerable developing countries in a similar situation – essentially the G90 – should not have to open their markets beyond their existing commitments, and should be able to benefit from increased market access offered by both developed and advanced developing countries. For purposes of encouraging domestic reform, these countries should increase their tariff bindings to a reasonable level, which would increase predictability.
These ideas have received a positive reaction in Paris, at the OECD Ministerial and at the General Council in Geneva on 17 May. This is encouraging. We are committed to achieving concrete results by July. As Commissioner Lamy put it “the WTO volcano is erupting again”.
A final
statement: trade measures are essential – but much more needs to be done in parallel
to provide for the necessary supply side response in poor countries. We are completely aware of this and therefore
support activities like the Integrated Framework for LDCs, and the mainstreaming of trade
related assistance in country strategies, such as the PRSPs. In Eastern and Southern Africa alone, the EU has
committed about
€700 million for trade and business related assistance, mostly in regional and
national programmes. We are convinced that
bilateral, regional and multilateral trade policies have to go hand in hand with private
sector support and sectoral development strategies to make a real difference.
Ambassador Sigurd Illing
Head of Delegation of the European Commission in Uganda