EU races for ex-colony trade deal

By Paul Kirby
EU reporter, BBC News

Imports of bananas from ACP countries are free of duty

EU foreign ministers meeting in Brussels on Monday will hear if there has been any progress towards a new trade accord with former colonies in Africa, the Caribbean and the Pacific (ACP).

Almost 80 countries have preferential deals with the EU, covering products ranging from Guyana's sugar to bananas from the Windward Islands, Cameroon and Ivory Coast.

While bananas from ACP states enter the EU with no duty to pay, bananas which originate in Latin America command a duty of 176 euros (£125) per metric tonne.

Such preferential treatment for the former colonies has raised the hackles of Ecuador and Costa Rica - among others - who object that it infringes the rules of the World Trade Organisation (WTO).

December deadline

For the past seven years, the ACP countries have had a waiver, a seven-year WTO opt-out, that gives them time to come up with a more appropriate deal.

No set of developing countries has ever received an offer... like that from any source, at any time, anywhere in the world Peter Mandelson EU External Trade Commissioner

That waiver runs out on 31 December 2007 and the goal for the EU is a series of Economic Partnership Agreements (EPAs) which would allow the free flow of goods and services between states.

The fear is that the EPAs would also cut countries' import tariffs (reducing important revenues) and force them to open their markets to international competition, threatening local industry and driving down prices.

The European Trade Commissioner, Peter Mandelson, says the ACP countries are being offered unprecedented terms.

"We will give the ACP countries five years to prepare, 10 years to make the changes," he said.

"No set of of developing countries has ever received such an offer and a basis for a trade agreement like that from any source, at any time, anywhere in the world."

'Ideological straitjacket'

That is not quite the view of the African, Caribbean and Pacific nations.

Guyana's ambassador to Brussels, Patrick Gomes, complains that Peter Mandelson does not want to see their side of the story and suggests the commissioner has been "caught in an ideological straitjacket", insisting on an unnecessary timetable.

Patrick Gomes says the deadline shouldn't be so rigid

"We are really uncomfortable, feeling the pressure of the deadline," he says.

"Given the level of complexity, we need more time: two to three months. The WTO would understand the extenuating circumstances."

But some of the Caribbean states may find they are in danger of being left behind.

As the EU trade talks have been split into six separate regional groups, some deals have already been hammered out. Kenya announced last week that the East African states had secured a one-year interim agreement that addressed their concerns.

A Kenyan official said the deal would include a 25-year transitional period to prevent any loss of revenue and preserve 1.5 million jobs.

Other countries still some distance from a deal are not yet convinced.