EU ministers set to approve free-trade deal
Publication: Business Authority
Paper Section And Page: 10
Paper Date: Mon, Feb 26, 2001
Category: Business Authority
Byline: Paul Ames
BRUSSELS - European Union (EU) foreign ministers are expected to agree Monday on a deal to open up their markets to almost all goods from 48 of the world's poorest countries.
The EU head office said its proposal would be a major step in making global trade fairer, but humanitarian groups complain the deal has been reduced to near insignificance because of opposition from Europe's farm lobby.
The so-called "everything but arms" initiative is set to phase out duties and quotas on all imports into the EU except military goods from the least developed nations including Sudan, Afghanistan, Haiti and Somalia.
However, pressure from farmers has forced the EU's head office to postpone the date when it will open its market to the most sensitive products: bananas, sugar and rice.
The delay has infuriated aid organisations that said it would significantly weaken the impact of the deal, since those are some of the items that could have the biggest impact on the poorest economies.
"We are very disappointed that the proposal was watered down," Penny Fowler of the relief agency Oxfam said Thursday.
"I suppose it's better than nothing ... but it doesn't offer much hope for the poorer nations getting a fair deal."
Since many of poorest nations' products already enjoy free entry into the EU, the agreement - if approved - will only bring quick benefits to three major exports - beef, cheese and corn, Fowler said from Oxfam's headquarters in Oxford, England.
It's not certain that even the weakened deal will be cleared by EU ministers. France and Spain have objections and want to delay the opening of rice, sugar and banana markets still further.
Together those two nations cannot prevent the deal going through when the ministers vote, but if they can muster the support of wavering Greece and Portugal, the EU's complex voting rules mean they could block it.
Backers of the proposal were confident an agreement could be struck.
"It's a sharp, concrete and clear proposition and I hope that we'll be able to make a decision at the meeting in Brussels (on) Monday," said Leif Pagrotsky, trade minister of Sweden, which will chair the meeting.
The original plan put forward by the European Commission called for the removal of all trade restrictions on all goods except arms by the end of this year. Under the revised proposal, restrictions on bananas will be phased out between 2002 and 2006, those on sugar and rice from 2006 and 2009.
Sugar, rice and banana producers in the EU fear that if quotas and duties are removed too quickly, prices would plummet due to oversupply, rendering their own products uncompetitive and leading to large-scale job losses.
Many EU nations have major beet-sugar industries; Italy, Spain and Greece have significant rice production, and bananas are grown in French, Spanish and Portuguese islands in the Caribbean and Atlantic.
However, Oxfam said the scale of production and commercialisation in the poorest nations would make it impossible for them to flood European markets with cheap goods.
The EU is already the largest importer of goods from the world's 48 poorest nations.
According to its own figures, the EU imports some 9 billion euros ($8.2 billion) worth of goods from the group compared to 5.6 billion ($5.1 billion) by the United States and 942 million ($856 million) by Japan.(AP)