Global Economics

Mandelson Defends Third-World Free Trade


The EU's trade commissioner has defended his pursuit of free trade agreements with poor countries despite criticism from aid agencies and some UK officials.

Speaking at a meeting of the EU ministers in Luxembourg on Monday, EU trade commissioner Peter Mandelson dismissed concerns that free trade could damage the interests of the over 70 African Caribbean and Pacific (ACP) countries involved as "scaremongering," according to news agency DPA.

"We have no mercantilist objectives in these talks and we should reassure the ACP on this count," Mr Mandelson told ministers.

"There will be long transitional periods and increased development cooperation to smooth the adjustment process,' he said.

The EU started negotiating new agreements with ACP countries in 2002 after the WTO ruled that the existing preferential agreements for the mainly former colonies was illegal.

The deadline for the new agreements to be in place is the end of 2007 but some concern has been expressed that the EU is upping the pressure since the collapse of the multilateral WTO talks before the summer.

UK officials calls for changed approach

Ahead of Monday's meeting two British officials wrote to Mr Mandelson asking that the EU change its approach to trade liberalisation.

"We need to ensure the EPAs [economic partnership agreements] are genuinely development-friendly and not just about opening up developing countries' markets to the EU," said the letter by Gareth Thomas, Britain's international development minister, and Ian McCartney, minister of state for trade.

"Our concerns are that the negotiations haven't got as far as we think they should have done," the letter continued.

They are calling on Brussels, which can negotiate on trade issues on behalf of member states, to be more flexible and allow ACP countries an alternative if they do not want to take up a trade agreement.

In a similar vein, aid agency Oxfam last month published a report entitled 'Unequal Partners' in which is suggested that the EU was stepping up the pressure for free trade agreements with African and Caribbean countries

"Perhaps the biggest danger is that poor countries will be signed up to deals that stymie their opportunities and jeopardise future development," the organisation said noting that countries could lose key money-bringing instruments such as the right to impose tariffs.

Backing up his trade colleague, development commissioner Louis Michel on Monday said he did not think the British letter "matches reality" and noted that the commission has provided 1 billion and the member states have pledged an equal amount to offset fears about the cut in revenue due to loss in tariffs.


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