Poor countries threatened by EU push to sign free trade deals

Published: 16 January 2008

We are disappointed that the EU has succeeded in pressuring so many African, Caribbean and Pacific countries to initial free trade deals, which we fear may have negative implications for development in some of the world's poorest countries.

Developing countries were forced to choose between guaranteeing existing exports to the EU on the one hand, and safeguarding small farmers' livelihoods and future economic growth on the other. It was an impossible choice.

Those countries that have initialed interim deals have done so under enormous pressure, with their backs against the wall. The negotiation process has been undemocratic and untransparent, with the European Commission resorting to threats and brinkmanship to get countries to fall into line. Member States that opposed the Commission did too little too late.

The resulting piecemeal deals, where individual countries in certain regions have initialed while others haven't, threaten to undermine regional integration, which is acknowledged to be vital for economic growth. Ironically regional integration was meant to be an objective of these agreements in the first place.

The deals may also lead to job losses, a drop in vital tariff revenue, and damage to industrial growth prospects. In many cases, they go way beyond what is required by the World Trade Organization.

Looking into 2008, Oxfam believes it is important for countries that have initialed interim deals to be given the chance to renegotiate problematic clauses. The deals were finalized in haste, without sufficient time to analyze the potential implications of the provisions being agreed. Legal advice received by Oxfam says that there are "no legal restrictions on renegotiating an initialed text prior to signature, except that the new text must be notified to the WTO."

If the deals cannot be altered, countries would have every right to consider refusing to sign and ratify them.

Those countries that have not yet initialed should be given time to agree deals that will boost their development and prevent further damage to regional integration. The option of extending the existing Generalized System of Preferences (GSP+) to all ACP countries as an alternative to reciprocal free trade deals should be revisited.

The EU has done significant damage to its reputation as a fair negotiating partner and friend to developing countries. 2008 will determine whether they will be branded permanently as development villains, or whether they can show sufficient flexibility to make sure that the potential damage and economic disruption faced by ACP countries does not occur.

Developing countries showed enormous resolve and unity in the face of colossal pressure. They should continue to demand decent treatment and fair deals that give them the chance to lift their people out of poverty though trade, rather than undermining it.

Contact Information

For more information, please contact Amy Barry on +44 (0)1865 472313 or +44 (0)7980 664397