EU, OXFAM LOCK HORNS OVER PACIFIC TRADE

Commentary

By Barry Coates

Since the collapse of World Trade Organization talks in July 2006, vulnerable Pacific governments are coming under increasing pressure to negotiate trade deals with powerful countries and regions such as the European Union.

Trade negotiations are pushing Pacific governments to liberalize their economies, despite the potentially damaging impact this might have on agriculture, fisheries, land rights, small business and local communities.

The European Union has responded to civil society criticism about their Pacific trade negotiations with an attack on Oxfam New Zealand. The head of the European Union’s delegation to the Pacific, Roberto Ridolfi, challenges Oxfam to provide evidence that the European Union negotiators are pursuing a deal in their own interests. Oxfam responds with examples and calls on the European Union to change their negotiating position.

Oxfam’s response to the European Union:

Thank you for your Open Letter to Oxfam New Zealand, responding to the growing debate in the Pacific region over current negotiations for an Economic Partnership Agreement between the European Union and Pacific members of the African, Caribbean and Pacific (ACP) group. I appreciate the time that you have taken to comment on the paper "Reorienting Economic Growth in the Pacific" that I presented at the Pacific Civil Society Forum in October.

I should start by reiterating Oxfam’s position that we welcome the European Union’s engagement in the Pacific, particularly its development cooperation program. Our concerns relate to trade negotiations under Economic Partnership Agreements between the European Union and Pacific countries and not the broader role that the European Union plays as a development partner.

In your Open Letter, you challenged a number of statements made by Oxfam on European Union trade policy. You have asked for evidence to support Oxfam New Zealand’s statements. Some of that evidence is presented below, under each of the statements that you are contesting:

Contested statement: "The European Union is pursuing an agreement that prioritizes access for foreign companies over opportunities for Pacific people."

Evidence: We believe there is overwhelming evidence to support the fact that the European Union is prioritizing access for foreign companies at the expense of the Pacific. The most recent example of this evidence has been the European Commission’s draft proposal on services, which forms a key part of the Economic Partnership Agreement negotiations. This draft, submitted to the European Union’s 133 Committee (the group of officials that coordinates European Union trade policy) in late November, rejects the attempts by Pacific negotiators to introduce specific development measures into the services negotiations.

The Pacific trade negotiators made proposals in June this year that would have provided development safeguards to ensure that public services are not subject to pressures for privatization. This would allow Pacific governments to introduce measures to guarantee access to essential services for all Pacific people, and withdraw commitments when these hinder development. These proposals have been rejected in the European Commission’s draft paper.

The Pacific negotiators made proposals for more Pacific people to be allowed to work in the European Union, which would provide valuable employment opportunities and remittances. The European Union’s response is contained in the letter of October 20 to the Pacific’s lead negotiator, Senator Kaliopate Tavola from the European Commission’s Deputy Director for Trade, Karl-Friedrich Falkenberg and the Director General for Development Stefano Manservisi. They respond; "Let us be clear that your ambitions in this area go far beyond the possible offers that we will be able to make in the end." The letter continues with an offer to "…facilitate your contacts with our Member States."

Therefore, with one hand, the European Union is calling on the Pacific to make enforceable commitments to open up services sectors to foreign companies, without the safeguards called for by the Pacific, while on the other hand, in areas where there are potential opportunities for Pacific people, the European Union offers nothing more than to set up a meeting.

Other examples of evidence include the European Union’s refusal (contained in the letter from Mr. Falkenberg and Mr. Manservisi) to accept the Pacific’s proposals for an agreement on investment that includes responsibilities of foreign investors towards Pacific communities and the society where they invest. This would have the effect of giving priority to the rights of foreign investors over rights to development.

The Pacific has also called for reform of the European Investment Bank and other institutions so that they provide finance that supports sound development, rather than large scale inappropriate projects. In its letter, the European Union has reiterated that they "will not be able to re-define what we already jointly agreed in Cotonou on investment related cooperation and the functioning of related institutions."

A further example is the European Union’s refusal to negotiate a Pacific regional fisheries agreement (in the letter from Mr. Falkenberg and Mr. Manservisi), preferring to negotiate with one small country at a time, rather than the combined negotiating power of the region as a whole, so as to get a better deal for European Union fishing companies through bilateral deals.

Finally, the same letter reiterates the European Union’s demands to include government procurement in the Economic Partnership Agreement, which potentially opens up opportunities for European Union companies while narrowing the ability of Pacific governments to foster the development of local business. The European Union’s insistence on this point is despite the Pacific’s specific exclusion of this in their draft proposal.

Contested statement: "The European Union is seeking sweeping liberalization that would negate provisions for special and differential treatment of developing countries that have been negotiated separately through WTO agreements."

Evidence: The World Trade Organization (WTO) agreement on services (GATS) is a far reaching (covering a huge range of services as diverse as health, education, water supply, communications, transport, distribution and retail, finance and tourism) and complex agreement, with key terms still undefined. Developing countries have been given special and differential treatment in the WTO services agreement (GATS Article V) that allows them flexibility in the types and extent of their commitments.

By contrast, in its draft services proposal the European Union is calling on the Economic Partnership Agreement to provide "reciprocal liberalization of trade in services." There is no mention of special and differential treatment in their proposal, and no sign that it has been provided for in any of the provisions in the draft agreement. The provisions in the Pacific’s draft proposal that would have provided special and differential treatment have been rejected in the European Union’s draft services proposal.

Other evidence includes the European Union’s position calling for a stringent interpretation of the WTO requirement that regional trade agreements have substantial coverage of goods trade. This would lead to most Pacific countries being required to make substantially deeper tariff cuts under the Economic Partnership Agreement than would be required under the special and differential treatment provisions in WTO Doha negotiations.

Contested statement: "The European Union is trying to divide the Pacific on fisheries, preferring to forge individual agreements with Pacific countries, while professing to support regional cooperation processes."

Evidence: The most recent evidence is provided in the recent European Union letter, which states that the European Union cannot negotiate "separate sectoral stand alone agreements" outside the Economic Partnership Agreement. The rejection of a regional agreement comes despite European Union assurances that it seeks to support regional trade processes. However, it has three bilateral fisheries deals in the Pacific (with Federated States of Micronesia, Kiribati and Solomon Islands), and renewed its agreement with Kiribati as recently as July 2006. At that time the European Union said it was part of a "future network of fisheries agreements." This clearly implies the European Union is seeking to negotiate more bilateral deals, rather than a regional agreement.

The Pacific has argued that the best way to reap greater benefits from the region’s enormous tuna resource is to act together. As tuna are highly migratory fish, this makes sense not only for conservation of the resource, but also in terms of the region’s development of fisheries industries. The European Union suggests that most of the elements of a regional fisheries agreement could be tackled within an Economic Partnership Agreement, but this would effectively de-link the granting of European Union fishing rights, a key negotiating asset for the Pacific, from negotiations on industry development in the Pacific and access for Pacific fish products to the European Union market.

Pacific negotiators are determined to maintain Pacific solidarity despite the European Union’s attempts to divide them through bilateral deals, and met on 13 November 2006 to approve a draft proposal for a Fisheries Partnership Agreement with the European Union.

Evidence on each of these issues extends far beyond the examples given above. A more complete report is available on Oxfam New Zealand’s website entitled "Slamming the door on development: Analysis of the European Union’s response to the Pacific’s Economic Partnership Agreement negotiating proposals."

There are two additional points in your letter that merit a response. Your letter states that you are aware "of Oxfam’s generally anti-globalist stance." This is by no means true. Oxfam supports opportunities for countries to trade, as long as it is under rules that are fair and environmentally sustainable.

However, we do oppose trade that exploits people and contributes to poverty and injustice. We oppose unjust trade rules that give priority to rich nations and their multinational companies ahead of rights for citizens, respect for their cultures and conservation of their environments. We oppose trade agreements that are negotiated without input from Parliamentarians and civil society. We oppose negotiations that are not based on sound and objective assessment of their likely impacts. For these reasons, we have deep concerns over current Economic Partnership Agreement negotiations. This is not an anti-globalist stance. It is a pro-development stance.

Finally, we hope that the European Union will listen to concerns, not only from Oxfam, but also from many others. Over 60 Pacific civil society organizations met in June this year to discuss trade issues, and jointly agreed on a communiqué, which has been sent to you. In your letter, you expressed concern that you did not have an opportunity to refute the concerns raised in our presentation. We hope that there will be far more public debate around Economic Partnership Agreements over the next year and would be pleased to participate in a public meeting on Economic Partnership Agreements at any stage.

This communiqué was also endorsed by the Pacific Civil Society Forum in October. Sharp criticism has also come from Pacific governments. The Pacific’s lead trade negotiator, Senator Kaliopate Tavola said on November 12: "At the beginning of negotiations, we expected a lot of the idea of Economic Partnership Agreements becoming a tool for development. But as things stand now, the agreement is threatening to overwhelm our fragile economies."

There is clear evidence that a fundamental change in the European Union’s negotiating position is needed, and is being called for by Pacific governments and civil society. We therefore call on you to use your influence to achieve an agreement with the Pacific that has just and equitable development at its heart.

[Barry Coates is the Executive Director of Oxfam-New Zealand, part of Oxfam International, an international confederation, comprised of 13 independent non-government organizations dedicated to fighting poverty and related injustice around the world. The confederation of 13 organizations works together with over 3,000 partners in more than 100. The thirteen Oxfam organizations are based in: Australia, Belgium, Canada, France, Germany, Great Britain, Hong Kong, Ireland, The Netherlands, New Zealand, Quebec, Spain and the United States. A small Oxfam International secretariat is based in Oxford, UK, and the secretariat runs advocacy offices in Washington DC, New York, Brussels and Geneva. The name "Oxfam" comes from the Oxford Committee for Famine Relief, founded in Britain during the Second World War in 1942. This group of Oxford citizens campaigned for grain ships to be sent through the allied naval blockade to provide relief for women and children in enemy-occupied Greece.]

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