March 28, 2007

Coup affects EU negotiation

The illegal removal of the Laisenia Qarase-led Sosoqoqo Duavata ni Lewenivanua’s multi-party government could surely affect Fiji’s negotiation on theEuropean Union’s new economic partnership agreement (EPA). The EU has strongly opposed the military takeover on December 5, 2006. The EU has still not changed its stand and maintained the coup had not been in the best interests of the people of Fiji. It has called for the urgent and full restoration of democracy, as well as a return to civilian government as soon as possible. As a result of the takeover, the EU considers that there has been a violation of the essential elements of the ACP-EU Partnership Agreement (also known as the Cotonou Agreement), to which both the EU and Fiji are signatories.Where provisions of the essential elements of the agreement - regarding democratic principles, the rule of law and human rights - have been breached, a process is provided for under Article 96 of the Agreement whereby the authorities of the country concerned are invited for consultations, with a view to seeking solutions acceptable to both parties. If, following such consultations, acceptable solutions are not found, appropriate measures are taken. Such measures can include the suspension, or partial suspension of EU-funded aid programmes, including - in the case of Fiji - suspension of the assistance to the sugar sector that, prior to the coup, the EU had committed itself to providing. A letter was sent by the EU on February 27, addressed to the President of the Republic of the Fiji Islands, stating that it wished to conduct formal consultations with the Interim Government before any such measures were taken. The consultations are designed to give the Interim Government the opportunity to set out its plan for the return to democracy, as well as its future intentions as regards respect of the rule of law and of human rights. The Cotonou Agreement provides for the consultations to begin no later than 30 days after the issuing of the letter of invitation, and the consultation procedure should last no longer than 120 days. A first meeting is expected to take place, in Brussels very soon. The measures to be taken with regard to aid suspension will be decided by the EU only as a result of the conclusion of the consultation procedure.At a meeting with EU Trade Commissioner Peter Mandleson at Brussels last Monday (March 19) said the EPA was the way forward for the 78 African, Carribean and Pacific (ACP) countries.He said with the Cotonou Agreement coming to an end in the very near future, ACP countries had been given time to think of the EPA.In fact the EPA concept had been floated around in the last seven years.Mr Mandleson said non-governmental organisations (NGOs) had been quick to criticise the EPA but had offered no alternatives.
We had the opportunity of meeting with Oxfam International at their office in BrusselsOxfam said free trade agreements could impose radical tariff liberalisation, threatening the livelihood of small farmers and preventing governments from using tariff policy to promote manufacturing. Citing an example Oxfam said through the EPA. Europe proposes to oblige the poorest countries in the world to reduce a very large part of their tariffs to zero.
At the same time FTA’s do not address the adverse impacts of rich country subsidies on poor countries through dumping, or the plethora of non-tariff barriers that continue to impede access to rich country markets.Mr Mandleson says the EU wants to complete new trade agreements with ACP countries by the end of the year despite opposition from developing countries and NGOs. “This means we will have to significantly increase the tempo of negotiations in some regions,” said Mr Mandelson.The EU had talks with development ministers and representatives of 30 ACP states in Bonn, Germany.
The EU wants economic partnership agreements with the ACP to replace the preferential treatment it gives to ACP imports, which the World TradeOrganisation says is discriminatory and has to stop by the end of this year.The new pacts see the creation of six regional markets, the diversification of local economies and a gradual opening up of ACP markets for EU services and exports.ACP countries fear a market opening could damage existing economic structures and harm their economies, but Mr Mandelson said this would not be the case because there would be a lengthy transition period of years, in some cases decades.The trade commissioner said he expected a deal to be reached with Caribbean nations in July and with the other regions before the WTO deadline expires at the end of the year.Mr Mandelson said the EU had a responsibility to ensure that the ACP nations were “not left in the state of underdevelopment in which they currently find themselves.”He said they needed help to realise their potential.
The ways to achieve this were to invest more, improve integration of regional markets and increase access to EU markets, he said.
In addition to fears of economic hardship, the ACP countries also want the EU to provide them with more funds to introduce the reforms needed for the new pacts to become effective.Mr Mandelson warned the ACP nations that they risked being decoupled from the global economy and left on an island of steadily declining exports of natural resources. Promising a completely new partnership, he said that negotiations would be difficult because of fears of change as well as misunderstandings on both sides. On March 1, Pacific ministers met with EC Commissioners in Brussels to take stock of the progress of EPA negotiations between the Pacific and the EU and to provide political impetus and guidance for the next steps in the negotiation process. The Pacific delegation was led by Samoa’s Associate Minister for Trade Negotiations and the Acting Lead Spokesperson of the Pacific Regional NegotiatingTeam, Hans Joachim Keil, and included Minister Martin Tofinga of Kiribati. The EU was represented by its Commissioner for Trade and its Commissioner for Development, Louis Michel. Both sides recognised the special situation and features of the Pacific region and agreed that the architecture of an EPA must reflect this while ensuring WTO compatibility and meeting the deadline of December 31,the 2007. Both sides agreed that negotiations must be accelerated. In so doing, the immediate focus must be on making rapid progress concerning the key issues of interest to the Pacific, ie goods including rules of origin, fisheries, investment, development cooperation and services.The Pacific and the EC agreed on the importance of converging quickly towards mutually acceptable outcomes that would allow for an EPA to be concluded by the end of 2007. In Fiji’s case, a quick return to democratic rule will see the release of development funds.Funds have been on hold awaiting the Government’s presentation on the case here in the country. As a result of the takeover, the EU considers that there has been a violation of the essential elements of the ACP-EU Partnership Agreement Let us all hope, EU assistance to Fiji will not be affected.

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