TRADE TALKS INTENDED TO HELP PACIFIC ISLANDERS, SAYS EU'S RALHA

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SUVA, Fiji Islands (September 30, 2002 - PINA Nius Online)---Major trade partnership negotiations, which have just opened in Brussels, are part of wider efforts to improve living conditions of Pacific Islanders, a European official said in Suva.

They are also intended to help the Pacific Islands as a region benefit from integration into world markets, said Maria Ralha, of the Delegation of the European Commission for the Pacific.

Ms. Ralha, Counselor - Economics at the Suva-based delegation, was commenting on the African, Caribbean, Pacific (ACP)-European Union (EU) Economic Partnership Agreement negotiations.

These began with formal ceremonies in Brussels on Friday, and are due to be completed within seven years. They are a key component of the Cotonou Agreement, which continues the major aid, trade, and development partnership between the EU and the ACP group.

Ms. Ralha, commenting on differences between the new Cotonou Agreement and the former Lomé conventions, which were considered groundbreaking models for north-south trade cooperation, said:

"The trade component has been based since 1975 on the provision of non-reciprocal trade preferences. These grant duty free access to the EU market for nearly all products originating in ACP countries.

"These trade preferences have indeed permitted several ACP countries to increase their exports towards the EU market. However, overall the results have been disappointing.

"The group of ACP countries has been more and more marginalized not only in world trade but also as regards their share in EU total imports. Moreover, many ACP countries have not succeeded in diversifying their exports but still depend today on the same handful of mainly unprocessed export commodities as some decades ago.

"Therefore, when it came to negotiate the Cotonou Agreement between the ACP and the EU, it was agreed that a new and comprehensive approach to trade cooperation had to be taken."

She said the aim is to turn trade preferences into real benefits for trade, growth, and development. This is the underlying logic for the Economic Partnership Agreements, or EPAs, she said.

Ms. Ralha said one key factor is that these will be negotiated with regions, such as the 14-nation Pacific ACP group.

She said: "Regional integration is in our view a crucial stepping stone for greater integration into world markets and enhanced economic and political stability. Therefore EPAs will be regional so as to respond to specific needs but also to foster the integration dynamics."

Creating larger markets will also help attract investors to regions like the Pacific Islands.

The agreements will be World Trade Organization (WTO) compatible, providing both greater legal security and promoting integration of ACP countries into the world trading system, Ms. Ralha said.

The primary building bloc of an agreement will be the gradual establishment of a free trade area that could also include services, she said.

She said: "Even more importantly apart from market access, EPAs will provide for arrangements on all relevant trade related areas such as competition, standards, trade facilitation, production capacity, technical assistance and capacity building for trade negotiations -- to mention but a few.

"Overall, EPAs will combine in a coherent package all major issues of specific relevance for trade and development in the region concerned.

"Development cooperation will be closely associated with the trade arrangements and support their functioning and translation into benefits for development."

Ms. Ralha said that under the Lomé conventions beginning in 1975 there have been distinct benefits for the Pacific, such as fishery exports to the EU and to a much lesser extent agricultural products.

"One cannot forget of course to mention the special sugar preference applicable to sugar exports from Fiji," she said.

But she said it is clear that the Pacific countries, due to their geographical distance from EU markets, have much less trade in goods with the EU than other ACP regions.

"However, there may still be scope to expand trade in goods under an EPA that would provide enhanced market access or in the ever more important services sector," she said.

"Services are currently not covered under the ACP-EU trade regime but would indeed be so under the proposed EPAs.

"The Pacific region may find it useful to particularly look into this area and other parts of the proposed EPAs that would be of special benefit for the region."

She said the fact that trade between the Pacific and the EU is limited even after 20 years of Lomé preferences "illustrates that market access alone is not enough."

What could be examples of ways the Pacific ACP countries could gain from the EPA negotiations?

Ms. Ralha said: "I believe the first major gain for the region is the dynamics that have already developed and will still accelerate around the topic of deeper integration and the region’s future in the international trading system.

"Secondly, EPAs are an offer to be closely examined. There may be elements in there such as enhanced market access, a services agreement, agreements on trade related areas such as SPS (Sanitary and Phyto-Sanitary matters) etc. in combination with technical assistance which are of particular interest to the Pacific region.

(SPS includes help on issues such as establishing and verifying standards in areas like pest control and quarantine credibility.)

"Overall the benefit should be enhanced stability and transparency of markets, an improved business environment and increased opportunities for the private sector, growth, employment and ultimately poverty reduction.

"We are prepared to go for a thorough and joint examination with the region of all the EPA options, possible benefits and disadvantages to look for a solution that suits your needs.

"There are also a number of private-sector based initiatives taking place simultaneously, implemented either by the European Commission or by sister organizations.

"These look at other aspects of development, aiming primarily at improving the capacity of the private sector and thus generating jobs and higher revenues to Pacific Islands' companies."

Economic Partnership Agreements are intended as instruments for development, Ms. Ralha stressed.

Following Friday's formal opening, the negotiations will start this coming month at a technical level. They will be monitored and guided at a political level October/November in Brussels to exchange general objectives and principles of interest to all.

From next year it is expected that negotiations, or exploratory talks, will move to the regional level.

Pacific ACP states are: Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu.

European Union members are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, United Kingdom.

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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