Poor nations need trade accords with EU to grow

EU

European Union Trade Commissioner Peter Mandelson defended an overhaul of agreements with poor nations in Africa and the Caribbean, saying new deals are needed to limit reliance on volatile commodities and boost exports.

The EU is the biggest market for most of the 79 countries in Africa, the Caribbean and the Pacific, Mandelson said. Existing trade arrangements under the Cotonou Agreement, which includes lower, or zero, tariffs for ACP nations\\\' import, expire on January 1, 2008, and have been under negotiation since 2002. With prices falling for commodity exports such as sugar, coffee and cotton, „the benefits of preferential access are eroding fast and the risk, the looming risk, is that ACP economies will be stranded outside a global economy on a shrinking island of commodity trade,” Mandelson said in a speech in Brussels yesterday. Two-way trade with the former colonies was worth €55 billion ($69 billion) in 2004, according to the European Commission, the EU\\\'s executive arm. A quarter of exports from the ACP nations were petroleum products, and 11% of the total was diamonds, the commission says.

EU imports of commodities from the world\\\'s 49 poorest countries, excluding sugar, bananas and rice, have been tariff-free since 2001. Development agencies such as Oxfam International and Traidcraft, a UK-based charity that advocates reducing poverty through trade, say new EU-ACP accords „will have a devastating effect” on poor nations, „damaging fledgling industries and destroying hopes that trading companies and farmers can bring wealth to poor communities.” Earlier this week, the EU agreed to donate €2 billion of aid to developing economies, honoring a pledge the 25-nation bloc made in December. The aid is designed partly to help ACP governments prepare to carry out the market-access agreements they\\\'re re-negotiating with the EU. „There is no link more politically emotive than the link between trade and development,” Mandelson said. „We\\\'ve been accused of not listening. We\\\'ve been accused of ignoring ACP concerns again and again,” but „we are partners, the ACP and the EU, not combatants.” (Bloomberg)

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