Summary: June 8, 2005: Peter Mandelson, EU Trade Commissioner, DDA: "The Round for Africa" Statement to the Third African Union Conference of Ministers of Trade (Cairo)
Mandelson urges African Trade Ministers: make Doha the "Round for Africa"
In this statement to Trade Ministers of the African Union in Cairo on June 8 2005, EU Trade Commissioner Peter Mandelson:
- Sets out his vision of how the European Union and the African Union should seek to work together in the Doha Round. He argues: "We need a progressive approach. Progressive in the sense that gradually we assist Africa's integration to the world trading system. Progressive also in that our recognition of the special needs of Africa that means we do not behave as if we think liberalisation and market opening is a magic wand. This is the principle that underlies our approach with African
regions through the Economic Partnership Agreements".
- Sets out how the four core negotiating areas of the negotiations - services, agriculture, non-agricultural market access and trade facilitation - can serve Africa's ambition of a successful integration in the global economy. He argues that the Doha Round can be "the Round for Africa".
- Details progress in the take up of earlier commitments from the EU to a broader development agenda of: simpler origin rules, early agreement on special and differential treatment in the WTO, early implementation of the Doha round results on cotton, the wider extension of Everything But Arms, and an increase in trade related aid.
- Puts forth a "second instalment" for this agenda in the Round for the benefit of Africa, to put rules on intellectual property geographical indications and the needs of small and vulnerable countries at the service of development.
- Urges African Ministers to engage with the round in an ambitious way: "I am convinced that this Round can boost trade and development, and therefore reduce poverty. It is the best chance we will have in trade policy in the next ten years to do this. So I ask you to have confidence. To mingle ambition and pragmatism. To both demand and commit to stronger rules. To seek support and assistance. And to lobby for better access for your goods and services".
Excellencies, Honourable Ministers, Ladies and Gentlemen
Let me start be expressing my gratitude for your hospitality today. It is a privilege to be with you.
This afternoon I would like to share with you my vision of how our two Unions - the European and the African - can forge a common approach to the Doha Round, and a common agenda for development and growth.
The issue before us is how can the Doha Round fulfil that promise - how it can put trade at the service of Africa's development? Will trade and development flow from ambitious liberalisation, and stronger trade rules, or will your needs be served by lowering ambitions, by modest market opening and by more flexibility in the rules? My answer is that we have to be both radical and pragmatic. The relationship between trade and development is complex. One size does not fit all. But the starting
point must be a reasonable dose of ambition.
We need a progressive approach. Progressive in the sense that gradually we assist Africa's integration to the world trading system. Progressive also in that our recognition of the special needs of Africa that means we do not behave as if we think liberalisation and market opening is a magic wand.
This is the principle that underlies our approach with African regions through the Economic Partnership Agreements. These are an innovative development instrument; using trade as an engine of economic growth. But today, I want to focus on the Doha Round.
As far as agriculture is concerned, you are probably divided between those who seek more access to rich markets and the dismantling of their farming subsidies, and those who want to maintain existing preferences or benefit from lower priced imports of subsidised food. Our task is to square that circle. We can only do that by working together.
Export subsidies in whatever form will of course disappear, that is agreed, but the process will be phased. Domestic support will be reduced further and crucially, made less trade distorting, and that will help your producers. Tariffs will be reduced and quotas enlarged, but preferences will not disappear. Europe's sensitive products are also Africa's preferential products. Africa, for its part, will not be called on to liberalise beyond Africa's capacity to compete. That, in my book, is the
meaning of special and differential treatment.
I am fully aware of the impact the reform of the EU sugar regime will have on some African countries. There is no alternative to a reform since our sugar regime is no longer sustainable and has come under severe internal and external pressure. This is why we started a dialogue with the ACP countries to agree on concrete flanking measures to help them to adjust to change. Proposals will be going before the Commission in two weeks time.
For NAMA the same considerations apply. It may not be obvious at first sight, but here too we do have, basically, the same goals. Europe is not asking for a significant contribution to the round by the G90 countries: the July framework suggests that you increase your level of tariff bindings. No or little market opening is expected. But the Round does offer the prospect for many African countries of greater market access opportunities into the markets of advanced developing countries. Those are
the markets with the biggest potential. Yet today, 70% of tariffs paid by developing countries are to other developing countries! Only 10% of Africa's exports are to other developing countries.
An ambitious formula for the NAMA negotiations will be the best one for Africa, as it will deliver those new opportunities. By contrast, you should be wary of proposals like those at present tabled by Brazil and India, which would eliminate all industrialised country tariffs. This sounds appealing. But in fact your preferences in our markets would disappear in one crude blow. And at the same time this proposal would provide not one iota of new market opening in the advanced developing
economies. A double whammy against Africa.
Of course, tariffs are not the only barrier to Africa's trade. Non tariff barriers are significant and I am committed to doing what I can to make sure that non tariff measures hold you back as little as possible. First, by negotiating them down in the Doha Round. Second, by helping developing countries to increase their capacity to meet standards. Third by reviewing the standards themselves.
Training and capacity building are key if developing countries are to play a role in setting international standards. I am also ready to discuss the standards Europe applies to ACP exports in the EPA framework and to consider with you where elements of flexibility can be built in.
This month I will also launch the second phase of the EU export helpdesk: this will now include online information on EU and Member States' import requirements including SPS standards and technical regulations, as well as internal taxes such as VAT. This move will boost transparency for exporters to the EU.
Services are becoming the backbone of many of our economies, and there is no reason why this cannot one day be the case too in Africa. There is massive untapped potential on the continent for the development of new service sectors, and with them employment.
So far progress on services in the Doha Round is depressingly slow. Egypt, Kenya, Gabon and Mauritius have made market opening offers by the end of May deadline. I salute that. But no other country on the continent has. I urge you, in your own interest, to make offers, notably in those sectors that are crucial for your trade and economic performance: transport and logistics, construction, professional services, financial services and telecommunications. I understand the sensitivities and there
is no question of the rest of the world pressurising Africa to act against its own interests. The EC is providing Africa with aid in making those offers. If African countries further liberalise key sectors in a balanced and progressive way, and attract foreign investment into them, this will have a major impact on development, and help reduce dependence on primary products and basic manufacturing.
Progress on Trade Facilitation can be particularly positive for Africa and the G90. The fact that your experts met to debate this yesterday, and are forging an African position, is a good sign. Trade facilitation is becoming one of the quiet success stories of the Round. It is a truly win-win issue. Better customs systems mean higher revenues and better controls, lower trading costs and shorter delays. Getting rid of unnecessary procedures can chop as much as five per cent from the costs of
doing business, and I suspect even more in Africa. That is more than the tariffs on industrial goods in developed countries.
All WTO members recognise that trade facilitation is a public good. Again, there is no north-south divide here. Countries as diverse as Switzerland and Rwanda are coming together to make joint proposals.
The EU has worked hard with many of you, particularly the landlocked, to identify which new rules will best help your companies get goods through customs, out of ports, and into markets. I have also insisted on giving priority to trade facilitation and customs reform in our aid programmes for Africa. If we can only halve the time it takes to turn around a ship in the port - that is the equivalent of building a second port! Building up Africa's trade and infrastructure will be one of the
flagships of European trade policy for the next four years.
So I hope that the African Union will today come out with a strong statement in support of these negotiations, one that recognises that we need both strong rules and strong aid commitments to go hand in hand - to the end of the Round and beyond. A positive message from you will enable me to secure more aid on this.
So that is my message. Four key negotiating issues of the Doha Round that can help Africa: Agriculture, NAMA, Services, Trade Facilitation. I urge the African Union to step up its activism on all these issues and to commit to working with the EU in a systematic way in Geneva and in our capitals to take forward a common vision.
The end of July will be a significant moment in which we will all take stock of progress. This must be more than a photograph or a checklist. It must be a serious and honest reflection on where we are converging and where we are still divided. It must also set out the roadmaps to Hong Kong, where we should reach agreement on the specific figures for market access, and the broad terms of future rules.
Beyond the core negotiating subjects in the Round, there is of course a wider development agenda. When I was in Mombasa, I set out my ideas on this in a five point plan for trade and development, with Africa in mind. Simpler origin rules, an early harvest on special and differential treatment in the WTO, early implementation of the Doha round results on cotton, multilateral application of Everything But Arms, and an increase in trade related aid.
I am pleased to report that three months on, a lot of progress is being made on this agenda. The Commission has launched a root and branch review of its preferential origin rules, with the guiding principles of simplification, cumulation, and relaxation. Origin rules must be synchronised to our trade and development policy objectives. They must make it easier for African countries to use the preferences we give, help Africa to move up the value chain, and help Africa's industries to integrate.
I have asked for impact assessments on the key sectors: agriculture, fisheries, textiles and clothing, to ensure that new rules proposed are the best for your economies.
On SDT, I am pleased that in the WTO we have agreed to fast track the requests of the least developed countries. All of us here are equally committed to completing that work in July. Let's work hard to meet that deadline.
On cotton, there has been a good response from the rest of the world to the views I expressed in Mali in March. It is a difficult issue for the US are we need to understand the complexity of their situation. The best way we satisfy the WTO mandate on cotton is to agree that the changes to cotton tariffs and subsidies should be significant, and the reforms should be implemented immediately as part of the single undertaking - in other words in 2007 if the Round ends, as we hope, at the end of
2006. The EC has also in parallel launched its cotton initiative with the African cotton producers to tackle the supply side, with financial support.
On Everything but Arms, the call for other countries to follow the lead of the EU is getting louder. I hope that the ground is shifting. Other industrialised countries have a moral obligation to open their markets fully to the exports of the least developed countries, and they need to be courageous enough to reject the protectionist pressures of their domestic industries. President Barroso and I will use the G8 Summit and the UN review of the Millennium Development Goals to press the economic,
development, and moral case for EBA by all developed countries.
Finally, aid for trade. Last week the EU Members States decided to follow the Commission's proposal and to nearly double the money spent on the EU's development support from now to 2010 - attaining 0.56% of GDP in 2010 and 0.7% in 2015. I feel a real sense of pride in this commitment
I believe that a considerable part of these additional funds should go to "aid for trade", helping to put poor, soundly governed countries in Africa on a much more positive development path. Yesterday, with fellow commissioners, I discussed how we can take that idea to the G8 Summit.
As the Commission for Africa rightly noted, trade plays a key part in promoting development. But it has to form part of a broader agenda - the expansion of supply capacities, the removal of bottlenecks which cripple trade and industry, better governance, stability and transparency, and of course infrastructure.
My trade and development agenda for Africa however does not stop here. I want to use this platform in Cairo, in Africa, to announce further plans. What I see as a second "instalment" ahead of Hong Kong.
First, the European Commission has decided to seek an end to the impasse on TRIPS and access to medicines. I have submitted to the EU Member States a proposal to amend the TRIPS agreement to reflect the decision taken on access to medicines. It is vital in my view, both for producers and for the populations needing access to vital medicines, to have the stability of a permanent change to the WTO rule book. This is an issue on which we must try to reach consensus. We can only do so by
understanding sensitivities and constraints for all sides and ensuring we reflect the spirit of our earlier agreement on this. This is how I will approach this issue ahead of Hong Kong.
Second, I have proposed extending the scope of geographical indication to new products including those of developing countries. These proposals mean stronger WTO rules that will serve both the trade and the broader development goals of African and other developing countries. I hope you will support them.
Third, I have continued to press for special recognition to be given in the DDA to the needs of the small and vulnerable economies. The EU has worked with the Small Economies group in Geneva to help them articulate their unique problems and needs, and to find solutions in the WTO. That work is starting to bear fruit in the form of proposals from the small economies to mainstream their particular concerns - on vulnerability, on revenue dependence, on commodity concentration, on lack of
resistance to external shocks - into the DDA negotiations themselves. I welcome that, since it is mostly in the negotiations that their problems can be addressed.
Colleagues, ladies and gentlemen, I am convinced that this Round can boost trade and development, and therefore reduce poverty. It is the best chance we will have in trade policy in the next ten years to do this. So I ask you to have confidence. To mingle ambition and pragmatism. To both demand and commit to stronger rules. To seek support and assistance. And to lobby for better access for your goods and services.
The EU wants to work in partnership with the African Union on the final phase of the Doha Round. I personally want to take a lead, and I commit to do this. 2005 is a key year for trade and development. It is the year in which we will evaluate progress on the Millennium Development Goals. With the G8 meeting in July, it could and should be a turning point for Africa. I ask you to share my ambition for the Doha Round as being, in the end, the Round that ensured Africa's progressive integration
into the global economy. If we can achieve that it will be the Round for Africa.
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