UK urges Brussels to relent over new trade rules for poor nations

Original Publication Date: 
15 October, 2006

Poor countries must not be forced into opening markets or obliged to accept new rules governing foreign investment and competition law, the UK has told the European Commission.

The warning came ahead of a meeting today in Luxembourg of European Union trade and development ministers to discuss European aid and trade policies towards developing countries. The EU is renegotiating a long-standing scheme that gives special access to European markets to exports from more than 70 poor countries from the Africa, Caribbean and Pacific (ACP) grouping, mainly former European colonies.

British intervention comes in an open letter to Louis Michel, EU development commissioner, and Peter Mandelson, trade commissioner, from Ian McCartney, UK trade minister, and Gareth Thomas, development minister.

"We are concerned about the current state of the negotiations and want to see these agreements deliver real benefits to ACP countries," the letter says.

Ministers from ACP countries are concerned the EU is trying to insert rules into the deals to protect foreign investors and constrain competition law and public procurement practices in order to open up their domestic markets to EU companies.

Such measures, known as "Singapore issues" after the ministerial meeting where they were first proposed a decade ago, were thrown out of the Doha round of multilateral talks at the World Trade Organisation by developing countries.

Ministers are also worried that they will have to open rapidly their own markets to EU exports.

The letter from the UK echoes ACP concerns: "The EU must also allow ACP countries as much time as they reasonably need to open their own markets, while providing effective safeguards to prevent unfair competition from subsidised European products undermining African products on their own doorstep."

The letter adds: "Nor do we think it is acceptable to oblige ACP countries to negotiate rules on investment, competition and government procurement unless they specifically request it."

Mr Mandelson yesterday said he understood the concerns that ACP countries had about trade and stressed it was one part of a wider development programme, including aid to help the poor countries integrate in the global economy. The trade dimension of the talks " . . . is creating inevitable anxieties, which the negotiator on the EU side is listening and responding to".

Mr Mandelson said that "issues such as investment, competition and government procurement actually form part of jointly agreed road maps" with ACP countries, adding that he shared the UK's desire for flexibility about how quickly they opened their own markets.

The UK says the Commission must come up with alternatives for any ACP countries that decide not to sign the agreement offered. Discussions about reform to the trade preference programme began in 2002, forced by WTO rules that declared the existing preference scheme illegal.