World Development Movement Launches Report
The World Development Movement, a Non Governmental Organisation, Campaigning to tackle the root causes of poverty yesterday launched a new report titled 'Raw Deal' cautioning all to beware of bilateral trade with the European Union (EU)
The new Report presents evidence from existing European Union's unfair trade agreements with Mexico and South Africa showing how they have hindered rather than helped development.
According to the Report, the benefits of signing a free deal with the EU sits firmly with European businesses, rather than developing countries.
Assessing the development of impacts of two existing EU bilateral trade agreements with South Africa and Mexico, the new report 'Raw Deal' showed how one sided these deals have been in favour of the EU.
Launching the report, the Trade Policy Officer of the World Development Movement, Vicky Cann, said 'highlighting the damaging impacts of EU bilateral trade agreements is critical at a time when the EU is pushing to open markets in over 100 developing countries with these deals' adding that the 'EU's trade deals are unfair and hurt the poor.'
She explained that, 'the aim is to open up markets of developing countries for the benefit of European multinationals companies which hinders rather than helps the developing of poor countries'
The Trade Policy Officer observed that it was hard to believe that Europe seeks to open up markets of developing countries at the time of rocketing world food prices to heavily subsidised European exports putting their own farmers out of business and undermining food security
Vicky Cann pointed out that the report in its first half looks at the EU-South Africa trade agreement created in 1999 and shows how the EU negotiated 'special treatment' for itself by agreeing to cut tariffs on just 25 per cent of the goods South Africa actually exports to the EU while getting South Africa to cut tariffs on 40 per cent of the goods the EU exports to South Africa.
'The report shows how the agreement reduces tariffs on agricultural and industrial goods well beyond South Africa's World Trade Organisation (WTO) commitments and how these reductions have already led to an increase in imports from the EU which are having a negative impact on South Africa's current account balance.' She said
She added that the report also briefly examines the impact of the EU-South Africa trade agreement on Botswana, Lesotho, Namibia and Swaziland because of South Africa's membership of the Southern Africa Customs Union with these countries.
Touching on the EU-Mexico trade agreement the report showed that although the North American Free Trade Agreement (NAFTA) resulted in a large expansion in trade and foreign investment in Mexico, it did not translate into improved economic performance.
'If anything, economic growth has fallen, employment has not increased and wages have remained low.' Small farmers have been devastated by US subsidised agricultural imports; two million people have had to leave the land as the price received for growing maize-corn has collapsed.' The Trade Policy Officer underscored.
In a statement, a reprehensive from the Third World Network in Ghana Gyekye Tanoh, called for the evaluation of weather or not the Economic Partnership Agreement will lead to outcomes that are improvement on the cases that have been looked up in South Africa and Mexico.
He said the 'EPA will cause trade diversions where trade between two parties is diverted to a third party adding that studies have shown that direct effect of the EPA will be a direct blow to regional integration in the form of trade diversions.'