EU approves 'Everything but Arms' initiative

The European Union today approved the European Commission's groundbreaking proposal to eliminate quotas and duties on all products except arms from the world's 48 poorest countries in the world. The EU Council of Ministers, meeting in Brussels, agreed to the plan which will make the EU the world's first major trading power to commit itself to opening its market fully to the world's poorest countries. Welcoming the move, European Trade Commissioner Pascal Lamy told a press conference: 'It's a worldwide first. At the end of the day, we will have 100% access, with no exclusions, except of course for arms. We have delivered on our fine words. This sends a signal to the rest of the world that we are serious about getting the most disadvantaged to share in the fruits of trade liberalization". Mr. Lamy paid tribute to United Nations Secretary-General Kofi Annan, who had personally written to EU Heads of State to encourage them to support the measure. Swedish Trade Minister Lief Pagrotsky, who chaired the meeting of EU ministers, said: 'We hope this will put pressure on other countries to follow our example.'

Whilst duty and quota elimination for essentially all products will take effect on 5 March 2001, the full liberalization of sugar, rice and bananas agreed today, will be phased in during a transition period. Duties on fresh bananas will be reduced by 20% annually starting on 1 January 2002 and eliminated at the latest on 1 January 2006. Duties on rice will be reduced by 20% on 1 September 2006, by 50% on 1 September 2007 and by 80% on 1 September 2008 and eliminated at the latest by 1 September 2009. Duties on sugar will be reduced by 20% on 1 July 2006, by 50% on 1 July 2007 and by 80% on 1 July 2008 and eliminated at the latest by 1 July 2009.

However, in order to compensate for the delay in liberalization for these products, the EU will offer immediate and real market access to the 48 countries which the United Nations defines as the world's least developed nations, through the creation of duty-free quotas for sugar and rice, based initially on the best figures for LDC exports during the 1990s, plus 15%. These will increase by 15% each year during the interim period.

The package is intended to improve trading opportunities for LDCs significantly, while giving time for EU countries to adapt to changes required in the Common Agricultural Policy for those with an interest in the three most sensitive products and taking into account the limitations imposed by the EU budget. The EU has also taken account of the constraints of other developing countries, traditional suppliers of these products to the EU, which are at present undergoing a difficult economic restructuring process.

The Commission has pledged that it will monitor imports of rice, bananas and sugar carefully and apply safeguard measures if necessary to prevent damaging surges. There will be monitoring to verify respect for rules of origin, as well as anti-fraud measures. The Commission will report to the Council in 2005 on the impact of trade within the EU and for LDCs, as well as on African, Caribbean and Pacific countries.

The decision to proceed with the 'Everything But Arms' initiative proves that the EU had heard the message developing countries had delivered in Seattle, Lamy added. The failure to start a new round of world trade negotiations there in December 1999 was due largely to the developing world's perceived exclusion from the benefits of liberalization. The EBA initiative was at least a start in correcting this, Lamy said: 'This is what the EU had to do to enhance its credibility.' The Council's decision is thus a sign of political goodwill in the run-up to the UN Conference on Least Developed Countries, which the EU will host in Brussels in May 2001, and the fourth World Trade Organization Ministerial Conference, due to be held in Qatar in November. This is expected to agree on a broad agenda to launch a new round of multilateral trade negotiations in which the interests and concerns of the developing countries will have to be addressed.

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• EU differential treatment of developing countries in the WTO (4/12/2002)
• Commissioner Lamy's remarks on Doha Round at IPA (6/11/2002)
• EU Presidency Statement - Globalization and interdependence (1/11/2002)
• EU Presidency Statement - UN Decade for the Eradication of Poverty (30/10/2002)
• Commissioner Nielson's Speech on post-WSSD (25/9/2002)
• The EU and Financing for Development (16/9/2002)