Verbatim report of proceedings

Wednesday, 28 November 2007 - Brussels

17. Economic partnership agreements (debate)

  President. – The next item is the Commission statement on Economic partnership agreements.

  Ján Figeľ, Member of the Commission. − Mr President, I welcome this opportunity to explain where we are in the economic partnership agreement (EPA) negotiations. I am glad to note that the strategy proposed by the Commission in its communication of 23 October was endorsed by the Council last week. As Commissioner Mandelson said to Parliament’s Committee on International Trade last week, we have turned a corner in these negotiations.

These negotiations are moving very quickly. Let me give you a sense of where we stand at this moment. In East Africa, a stepping-stone agreement has been initialled with the East African Community: Kenya, Uganda, Rwanda, Burundi and Tanzania. We are very close to an interim deal with the Indian Ocean countries in the context of the Eastern and Southern Africa grouping.

In the Southern African Development Community, we have initialled a stepping-stone agreement with Botswana, Lesotho, Swaziland and Mozambique. Angola will join as soon as it is able. South Africa and Namibia will decide on their participation in the next day.

Regarding the Pacific region, we are working in parallel on an umbrella agreement for the region as a whole and specific agreements on market access to safeguard the immediate interests of those countries which account for the region’s trade with the European Union. I expect agreement on those to be announced very shortly.

In the remaining regions, the picture is less clear. For West Africa and Central Africa, meetings are taking place with so-called ‘subgroups’. It is possible that we will be able to conclude interim agreements on goods with the countries most affected, which could then be enlarged to full EPAs with the whole region in 2008. That will, of course, depend on the wish of those concerned to take this route and to present WTO-compatible market access agreements.

In the Caribbean region, we have an agreement on nearly everything but, crucially, not on trade in goods, where the region’s proposal falls well short of what can be defended in the WTO. Negotiations are continuing, but we now need a clear political decision from the region to unlock the negotiations by producing a WTO-compatible market access schedule.

In all regions, we are taking a pragmatic and flexible approach to achieving what remains our objective for these agreements: full EPAs with four regions. This will modernise our trade relationship and put it at the service of development, so full agreement with four regions is our objective.

We have made significant progress in recent days, but we cannot today guarantee that there will be an agreement including new WTO-compatible trade arrangements with all ACP countries.

WTO compatibility is the essential component of all agreements, whether they are full EPAs, stepping-stone agreements, or even goods-only deals. Without this, we can only offer the generalised system of preferences.

Next week, the General Affairs and External Relations Council will decide on the EC regulation to implement the market access which has been offered to the ACP. It is the best ever offer in a bilateral agreement: full duty/quota-free access, with transition periods for only two products – sugar and rice.

We will continue to do everything possible to reach agreements. Our offer is on the table and the moment any ACP state provides a WTO-compatible offer to complete a deal, we can move quickly to propose to the Council that it should benefit from the EPA market access regulation.

We have indicated our willingness to work with subregions, if that is what the ACP states wish. We have agreed to continue negotiating beyond 1 January 2008 on other issues, like services, investment and other trade-related areas, which are such an important part of the development component of these agreements. We have delivered on our commitment to provide trade arrangements equivalent to or better than Cotonou to any country reaching an agreement with us. We have offered to open our markets fully and match the goods trade offer with generous services offers.

What we cannot do is extend the Cotonou trade regime while we continue negotiations. In the absence of an EPA, we have made clear that we cannot and will not propose solutions which are illegal or insecure.

Our ACP partners will need support to implement the agreements and make the necessary adjustments and reforms. This is why the Commission is working to ensure that the European Development Fund will make ‘aid for trade’ in the context of EPAs a priority. It is why we are working closely with Member States so that they bring additional money in the context of the newly-adopted EU aid-for-trade strategy.

We know that concluding these negotiations means taking difficult political decisions, but we welcome the leadership shown by those ACP regions and countries which have decided to join us in initialling EPA agreements. We will continue to support them as they implement the commitments they have made and as we work together to ensure that this is a trade relationship that genuinely contributes to their development.

  Robert Sturdy, on behalf of the PPE-DE Group. – Mr President, after seven years of negotiations, to say that we are not where we should be is perhaps an understatement. I am not sure that is correct to say that we have turned the corner.

Over the last few weeks some ACP members have grown increasingly uneasy at the prospects of the limited – as the Commissioner himself described it – GSP tariff regime that awaits them on 1 January should they not sign up to an EPA agreement. The European Commission claims to have been successful in its pursuit of an interim agreement with both individual states and subregional groups. As the Commissioner said, it signed with the East African group yesterday, while the SADC signed last week – but without South Africa and without Namibia! What sort of economic agreement is it that misses countries out? It is reported that the Commission is pushing West Africa into an agreement without Nigeria, which is one of the biggest countries in Africa and has huge trade negotiations on the table with the European Union. What is the long-term effect of these so-called framework agreements being signed? What about regional integration? As far as I can see these are breaking up the very regions described in my report that are what EPAs are all about.

Parliament’s resolution, prepared by a political group, sets out clearly the need to look forward to these now fast-moving negotiations. We may not like these arrangements, but the deadline is almost upon us and at the moment there are no alternatives. The Kigali Declaration was extremely heavy and critical. Our resolution today in Parliament is forward-looking, and I hope that we can look forward.

As their name suggests, EPAs are a stepping stone to full and comprehensive trade relations between the EU and the ACP. I am disappointed that the PSE Group has decided not to vote on them.

I leave the Commissioner with one final thought. In the United Kingdom there is a saying which goes there are three great lies in the world: ‘the cheque is in the post’; ‘it was not my fault’; and ‘I am from the European Union and I am here to help’.

  Harlem Désir, on behalf of the PSE Group. – (FR) Mr President, Commissioner, we cannot help noticing that the way in which negotiations were conducted by the Commission has failed to secure signature of genuine EPAs before the scheduled date. Here I agree with Mr Sturdy: the interim agreements call into question the regional groups that had been created and formed the basis of discussions to sign these EPAs.

Far from strengthening links and trust between Europe and ACP states, negotiations have aroused great concern. There is concern in relation to losses of public resources: the Senegalese President recently told the press that between 35% and 70% of African budgets were made up of customs tariffs: Nigeria is set to lose 800 million euros, for instance.

There is concern in relation to the consequences of liberalisation for fragile sectors of ACP economies, which will have to face competition from European businesses. There is concern in relation to the requests to include a number of subjects in the second phase, which do not correspond to WTO obligations. Here I am thinking of services, investment, public markets and the rules of competition. There is concern in relation to the threat of introducing higher customs tariffs in 2008 for non-LDC ACP states as a kind of blackmail forcing them to accept any agreement.

I feel we need to give ACP-EU relations a new lease of life and get negotiations back on the tracks of the main Cotonou principles. EPAs are development instruments. Liberalisation is not an end in itself. The aim of EPAs is to strengthen ACP economies to help them move into the world economy.

No ACP state should be worse off after an EPA than before it was signed. The signatories must benefit from a preference system at least as favourable as before any EPA signature. Agreements must be based on the interests of the ACP states and their economic diversification.

The rules of origin must be clarified to ascertain the extent to which they will benefit from any new market access measures we put forward, and genuine mechanisms for financial compensation must be implemented. The message in the Kigali Declaration by members of parliament in ACP states and in Europe must be understood. The date of 31 December is not as fatal a blow as the one you dealt.

  Gianluca Susta, on behalf of the ALDE Group. – (IT) Mr President, ladies and gentlemen, we in the ALDE Group backed the request from the leader of the Socialist Group to postpone the vote, in an attempt to reach a broader agreement on the text of the resolution.

We likewise share the concerns and hopes summarised in the concluding document of the Kigali meeting. EPAs are an important tool of development, regional integration and poverty reduction. EU action in this globalised world of ours must pursue these goals. Free trade, the WTO rules and even EPAs are not an end in themselves but tools at the service of world trade.

Nevertheless, we must also acknowledge that the legal void arising from the expiry of the Cotonou Agreement puts the ACP countries themselves at serious risk; there is much more at stake than whether or not these agreements are legitimate in the light of WTO rules and decisions.

We too hope that the negotiations underway in the six regions can be concluded rapidly, and that the resumption and successful conclusion of the more complicated Doha negotiations on the reform of world trade can provide a clear-cut framework in which the developmental needs of the poorest countries can be better met, including in terms of EU-ACP relations.

We are aware, however, that the ACP negotiations are proceeding slowly and that the reform of world trade, which would also have the merit of revitalising multilateralism in world trade, is flagging.

Feasible solutions should therefore be pursued in a pragmatic manner. To this end we believe that the Commission’s chosen strategy of a two-stage approach – namely first interim agreements relating only to trade and then a more general agreement – serves to avoid an interruption in the flow of goods at favourable rates, as provided for at Cotonou, which could be very detrimental to the ACP countries.

  Frithjof Schmidt, on behalf of the Verts/ALE Group. – (DE) Mr President, Commissioner, it was astonishing to hear you talking about the negotiations as though nothing had gone awry and everything had gone swimmingly for the Commission.

In the last few months, we – here in Parliament – have pointed out on several occasions that the Commission has overburdened the negotiations with the ACP countries. We pointed out that an agreement on goods was enough to meet the WTO conditions and that an agreement on the Singapore issues was not essential. This criticism fell on deaf ears in the Commission; indeed, the Commission brushed our criticism aside. Your abrupt change of course towards interim ‘goods-only’ agreements is too little, too late. ‘Goods-only’ at this stage is a confession of failure caused by your own lack of insight. It would have done you more credit had you admitted self-critically for once that your negotiating strategy was a mistake.

The second big mistake was the way in which the negotiations were conducted. They were obviously conducted as if they were simply about an ordinary free trade agreement, not a development-based framework agreement. The ACP countries were unanimous in complaining that they were put under pressure, and this testifies to the miserable atmosphere at the negotiations. We heard this message very clearly in Kigali, and I must say to the Commission that the tone of negotiations is very important too, not just the substance.

It is vital to avoiding making yet another big mistake. We now need a solution for those non-LDC countries which do not feel able to sign up at present. We must avoid a collapse of trade relations, so we need a proposal for a transitional arrangement for 2008.

  Helmuth Markov, on behalf of the GUE/NGL Group. – (DE) Mr President, Commissioner, the Commission’s negotiating strategy was completely wrong; in fact, it was a catastrophe. It was based on the ‘Global Europe’ strategy, which is all about market access for Europe’s major transnational corporations.

I have always wondered what this approach has to do with partnership agreements. Partnership means something completely different. Partnership means respect for the country which needs to carry out economic and social development. A partnership agreement must foster respect for the fact that the provision of development aid must not be linked to the conclusion of an EPA. Economic partnership agreements have to take account of the development of the weak, and weakest, countries. No country, if it does not sign, should be in a worse situation than it is already. That is fair partnership and that is an approach based on solidarity. The Commission was miles away from that. I think it is a good thing that, under pressure from many sides, it is now starting to pursue a different strategy, although I am very sceptical about this when I see how it is acting with Mercosur, ASEAN and the Andean countries, where it is still pursuing the same old way of thinking.

We Europeans seem to be saying, ‘this is what is going to happen, take it or leave it’. I repeat, that has nothing to do with partnership. I was rather annoyed – in fact I was appalled – by what happened here today, that we could not use the Kigali decision as a basis, even though it was endorsed by all the Members who were in Kigali. Parliament should have given this delegation its support by endorsing the decision.

(The President cut off the speaker)

  Maria Martens (PPE-DE). – (NL) Mr President, EPAs are a controversial theme in Africa and are increasingly developing into one in Europe. This issue involves fundamental differences of insight concerning the possibility of fighting poverty by means of sustainable economic growth in ACP countries. It is clear that purely financial aid has not made a real contribution to the reduction of poverty. We believe that these trade agreements can offer a window through which we can get away from a long history of barely effective aid. The global trade with ACP countries has decreased. It is now less than 1% and the Millennium Development Goals have not been achieved in Africa. The situation must change. Europe has a moral duty to help the ACP countries grow economically and to increase trade with them. The EPAs must make a contribution to this.

Mr President, the benefits of trade and economic integration are evident, particularly in an increasingly globalised world. Competition, a good climate for investment, market access, and working factories are essential for economic growth in ACP countries. We must be flexible and pragmatic, but within the framework of the World Trade Organization. The signing of the completed trade agreements is no longer expected by the deadline of 1 January 2008. Some countries in East and South Africa have, however, reached interim agreements. These are goods-only agreements. They cannot be called a step towards regional development. We must quickly start supplying technical support to strengthen these countries and then eventually reach a complete agreement, including, for example, services.

  Glenys Kinnock (PSE). – Mr President, my Group recommends, as others have said, that, in the interests of credibility and authenticity, Parliament establish a position which reflects what was unanimously agreed at our Joint Parliamentary Assembly and was reflected by the Kigali Declaration. I believe that it is both a moderate and balanced document, which represents lengthy and successful negotiations between all our political groups – including, of course, Mr Sturdy’s political group, as he made reference to it – and with the ACP.

I have never encountered the kind of pressure that the ACP has faced during these negotiations, especially as they are threatened with being severely disadvantaged by Europe’s GSP tariff regime. It is that threat that has caused the emergence of new regional groupings, and we will possibly see bilateral agreements, for example with Côte d’Ivoire. These subgroupings which the Commissioner has talked about are not something that we should see as a great achievement, but rather as something that threatens regional integration and is causing massive regional tensions amongst the ACP.

Mauritius, Seychelles, Madagascar and Comoros have agreed a subregional EPA; West and Central Africa have put forward no market access offers and so face GSP. South Africa and Namibia, in the SADC, seem to have reached a red line they cannot cross and are being asked to include most-favoured-nation clauses which would oblige them to give the EU any market access they may concede in the future to other countries. The Pacific, of course, is also not experiencing the best of negotiations and it is unlikely that any countries other than Fiji and Papua New Guinea will sign or initial.

Intransigence and a lack of flexibility have clearly alienated the ACP, especially when they realise that the Commission is pushing for agreements from the ACP that it has not sought from others, and colleagues from the Committee on International Trade will confirm this. Both technically and politically, the ‘goods-only’ agreement has proved impossible, even for the Caribbean. The capacity of the Caribbean is greater than of any other region. Only last week, they said that what was on offer was simply not tenable for them.

Surely, the Commission must now step back, take the pressure off and reassess how it can ensure that we do not do the unthinkable and throw the non-LDCs to the wolves. The willingness of both sides to continue negotiation in good faith should be communicated to the WTO in order to avoid the trade disruption which failure to sign an EPA by the deadline would cause.

The EU must make the required internal legislative changes to permit the continuation of the current trading arrangements. Subsequently, the EU and the ACP could work together to ensure that there is no opposition or challenge in the WTO.

We, as Members of the European Parliament, simply cannot return to our constituencies, wherever they are in Europe, and say that vulnerable ACP states are going to be treated in this way when they are already agreeing amongst themselves that they are being asked to agree economic partnerships that they see as being harmful to their economic interests.

  Margie Sudre (PPE-DE). – (FR) Mr President, Commissioner, I wish to inform you of the serious concerns expressed in recent months by overseas communities in relation to EPAs.

The EPAs cannot amount to mere free trade agreements under the auspices of the WTO, nor can they jeopardise the already fragile economies of our overseas communities. They ought to represent a genuine partnership to create a new economic and trade framework favourable to development in all such territories. The geographic location of overseas communities in close proximity to many ACP countries places them at the centre of the preferential reciprocal agreements with these countries.

I am well aware that the outermost regions and overseas countries and territories (OCTs) making up Europe’s overseas territory concern only six EU Member States and that obviously issues in these territories are largely unknown. Nevertheless, the particular situation of the outermost regions is known and must be taken into account much more specifically within these negotiations on the basis of Article 299(2) of the EC Treaty. Additionally, OCTs next to ACP countries must also be given a special focus in terms of respect for the association agreements which already link them to the EU by virtue of this Article.

I thank you for supporting the amendment I intend to table in a bid to secure an intelligent balance between regional integration of overseas territories and their European links. Although negotiations may be difficult, particularly concerning protection of local markets and the list of sensitive products, I trust the Commission will find a respectful compromise between the specific interests of outermost regions and OCTs and of ACP countries.

  Erika Mann (PSE). – (DE) Mr President, Commissioner, ladies and gentlemen, I think that what will be important is to use the next few weeks to shape the agreement so that everyone can be happy with it. It is an agreement of great importance and it has immense symbolic resonance. It is not just about negotiating a free trade agreement for the regions and countries of Africa and bringing them closer to Europe. It is also about producing an agreement for a real development round, which fights poverty and genuinely shows that the European Union is in a position to negotiate an agreement in a way which puts the African countries at their ease and helps them feel a bond with the European Union.

There are several points which are important, as you yourself said, and you mentioned a number of them. We must ensure that the regional agreements genuinely benefit the countries concerned. We must ensure that the non-LCD countries also get an agreement and are not left out, and we must ensure that all the countries can develop in the right direction. The agreement which you proposed, in the form of a two-step approach, must also guarantee that no one is left out, so that ultimately, we are genuinely moving in the right direction, which is still not guaranteed today.

Mr Markov, we should utilise the opportunity available to us now as a result of not adopting the resolution tomorrow, in order to reach a consensus in Parliament, and I think we have enough points of convergence for that to happen.

  Ján Figeľ, Member of the Commission. − Mr President, I should like to thank all who contributed to this interesting debate. I am sure that we see it as an ongoing process. I am not part of it directly or personally but, for an agreement, you need goodwill on both sides and for many partners to agree.

As I said in my introductory statement, we are working in a pragmatic and flexible way. Those who are ready or willing to follow the same approach follow not to the detriment of the others, but for the gradual achievement which is important for all regions and for international trade as a whole.

There were some questions or criticisms about the tone of the negotiations. I want to assure you that it is in a spirit of partnership. We take into account, in this spirit of partnership, the development objectives and the constraints on our partners.

Some questions were about goods-only deals. The stepping-stone agreements lead towards comprehensive EPAs and these are supportive of ACP development and regional integration. So we are not losing sight of the overall picture and overall needs of our partner countries and regions.

I do not want to repeat many of the points I made at the beginning, but the process continues. Sometimes a deadline brings pressure to find a solution during the last few days or weeks, and we are making real progress. I quoted many names and countries where we have recently initialled stepping-stone agreements, and we will continue doing so, but our interest is really in finding solutions.

Processes will continue, because there is more than one stage in this situation. As I said, after 1 January, we will continue working on issues like services, investment and other trade-related areas.

I believe that the General Affairs and External Relations Council next week will support the proposal for a regulation of the Community to implement the market access which has been offered to the ACP. As I said, it is the best ever offer in a bilateral agreement. We are being not only open but also very constructive. The strategy the Commission proposed, and I tried to describe, was fully confirmed by the Council – all 27 countries – and, in this spirit of partnership and this constructive manner, we will continue.

The objective is really a fully-fledged economic partnership agreement. This will be a catalyst for regional integration. Once the first-step agreements are concluded, we will continue towards this objective. Nobody is left out or forgotten in this process. We not only have in mind, but support very actively, the least developed countries.

I think that is all I can say for now, either in response to questions or by way of confirmation, but I am sure that this House will come back to this point in the coming weeks and months, because this is also about the timing of our agreements.

  President. – I have received four motions for a resolution⁽¹⁾ pursuant to Rule 103(2) of the Rules of Procedure. The debate is closed.

The vote will take place on 12 December 2007.

Written statements (Rule 142)

  Gay Mitchell (PPE-DE), in writing. – We have reached a critical period for the economic partnership agreements (EPAs). A WTO-compliant agreement is crucial for the non-least developed ACP countries.

It is unfortunate that a relationship of trust between the two sides has not always been evident. No country should feel pressurised into entering an agreement. The Commission should have done more to make the negotiations more inclusive.

The EU is the most important trading partner for most ACP countries.

The EU imported goods worth a total of EUR 28 billion from the ACP countries in 2004. This amounts to double the amount of development assistance that was made available through the ninth EDF to the ACP region, from 2000 to 2007.

Trade, and not aid, is the key for sustainable economic growth and development. While no one can deny that many ACP countries face considerable challenges, if the EPAs are framed correctly they should be seen as an opportunity for the ACP.

The European Union should be fully supportive of the development agenda that shall accompany any EPA agreement.

Interim deals should be put in place to ensure that there will be no disruption to trade and that the livelihood of millions will not be put at risk.

(1) See Minutes.