Eradicating poverty through trade

For almost three decades African, Pacific and Caribbean (ACP) countries benefited from the Lomé conventions, which allowed agricultural, mineral and manufactured exports from these countries to enter the European Community free of duty. Among the most notable benefits of these conventions has been the preferential trading access for products such as sugar and bananas.

However, these agreements were deemed incompatible with World Trade Organization regulations. Consequently in 2000 a new treaty was reached – the Cotonou agreement – which provided for regional trade agreements to be concluded by the end of this year between the European Union and the poorer groupings of ACP countries. Those agreements would permit them to continue to benefit from beneficial trading arrangements but would require them to open up their markets to European goods and services by removing duties and other restrictions over a phased period.

Critics of these new agreements argue that they will cause domestic markets in ACP countries to be flooded with lower-cost European goods, some of which are highly subsidised.

Another concern was that the Economic Partnership Agreements (EPAs) focus more on trade and less on development. This was raised at the recent Commonwealth Heads of Government Meeting held in Kampala, Uganda, from 23 to 25 November 2007.

This biennial meeting of Commonwealth leaders therefore called upon the EU and the ACP group “to put in place EPAs that constitute effective tools for poverty eradication and sustainable development and contribute to the achievement of the Millennium Development Goals.”

Heads of Government also urged in their Kampala communiqué that EPAs “take due account of capacity constraints, the need for adequate accompanying measures to be provided on a predictable basis to meet, inter alia, adjustment costs and other potential vulnerabilities and the safeguarding of policy flexibility.”

The Commonwealth Secretariat has been assisting member states ensure they get a good deal out of the EPAs, placing trade experts in Commonwealth ACP countries to build their capacity to negotiate for better trading deals. In addition, the Secretariat has been facilitating high-level interactions between ministers from both the EU and ACP regions to enable the two sides to meet and discuss the issues before the signing of the new EPAs.

“If there is more political interaction, it would benefit relations and contribute to a better understanding of issues on both sides,” said Edwin Laurent, Head of Trade at the Secretariat’s Economic Affairs Division.

In 2008, one key focus for the Secretariat will be to continue helping countries that have signed to implement the trade deals. Support will also be provided to those that have not signed up but need help in their ongoing negotiations with the EU.

Other plans in the forthcoming year relating to trade include assisting member countries that want to draw up new fishing agreements, notably, countries of Southern and Eastern Africa and the Pacific.

Key Links:

• Economics and Trade