Oxfam: Europe's self-interested trade polices will devastate poor countries

A series of leaks from Brussels show that the European Commission's trade polices are still largely driven by self-interest and a lack of concern for poor countries, despite its pro-poor rhetoric, said international agency Oxfam today.

The leaks reveal that Europe intends to impose deep and sharp cuts to its internal sugar price, push forward with rapid and reciprocal free trade agreements with African countries and re-impose quotas on Chinese textile imports. The EU is also supporting the US government in its efforts to delay reform of their extremely damaging cotton subsidies.

"These revelations show that the European Commission will happily take positions that directly and profoundly hurt poor people and deny them the chance to trade their way out of poverty," said Phil Bloomer, Head of Oxfam International's Make Trade Fair campaign. "We welcomed Commissioner Mandelson's public statements that trade must be a tool for development but these moves behind the scenes by member states and officials fly in the face of that commitment."

Late last night a letter from the European Commission was leaked to the Guardian newspaper in London. The letter, signed by top EU trade official, Peter Carl, criticizes the UK government for its stance on Europe's free trade deals with African countries - so called Economic Partnership Agreements (EPAs). It describes the UK position - which argues for greater flexibility for developing countries and a slower implementation period - as "unwelcome" and "contrary to the agreed EU position" and informs EC representatives that Mr. Mandelson will "press the UK for a revised UK line."

Bloomer: "The UK government came out before the election and said that they

thought EPAs should allow more flexibility for developing countries, should not demand full reciprocity on market opening and should not include the issues of competition, investment and government procurement. These were all very welcome points that would allow EPAs to promote poverty reduction. It's a scandal that Commission officials are pressuring the UK to revise its line."

In another leak last night, it was revealed that the European Commission wants to introduce steep price cuts for EU sugar over a period of two years. The proposals, to be published on June 22, will recommend cuts of 39% for white sugar and 42% for sugar beet. This will have a devastating effect on poor African countries that currently rely on access to Europe's markets at higher than world prices.

Bloomer: "If this price cut goes ahead, factories will close down, workers will lose jobs, families will go hungry, and some of the poorest countries in the world will be robbed of the sweeter future that sugar production could give them. The European Commission has failed to consider the needs of developing countries. This is a harsh, blunt reform package that will hurt the most vulnerable."

Europe has also indicated recently that it may re-impose quotas on Chinese

textile imports despite having had 10 years to prepare for the end of the quota system. Blocking exports from China would be bad for development. China has over 100 million people living in absolute poverty who, given decent working conditions and respect for basic labor rights, could gain significantly from increased international trade.

Bloomer: "This is evidence of blatant double standards. On the one hand,

the EU is pushing for more open markets, but on the other, they will happily erect more barriers if freer trade looks like it will hurt certain powerful member states."

In a final blow to the hopes of poor countries that stand to gain from pro-development reform of global trade rules, the EU has been supporting US

delaying tactics over the implementation of the WTO ruling against US cotton subsidies. Mr. Mandelson made a speech last month in Mali calling for urgent action on cotton and yet just days later his officials indicated in a closed meeting in Geneva that they would support longer implementation periods. With Africa losing $441M a year as a result of unfair cotton trade rules, delays such as this will cause significant suffering.

Bloomer: "We are only months away from the next WTO Ministerial in Hong Kong, which will be a crucial moment for determining whether this round of trade talks will deliver for development. With this selfish and short-termist approach the EU is threatening to jeopardize progress in the round and sabotage global efforts to reform trade rules so that they work for poor countries. If this is the sort of thing Europe is going to bring to the table in Hong Kong it will be a disaster."