British Promise Subsidies To ACP Countries

by Robert Lee, for LawAndTax-News.com, London

08 November 2006

British PM Tony Blair told Commonwealth ACP countries meeting in London last week that they would be getting additional subsidies of US$200m a year from 2007 to 2013 as part of a compensation package following reductions in sugar and banana prices insisted upon by the WTO.

The Commonwealth Secretariat had brought together Ministers representing the 6 regional ACP blocks negotiating current preferential trade arrangements in a two-day meeting on 1 and 2 November 2006 together with key EU negotiators. The current ACP-EU Cotonou Agreement, which gives trade preferences to ACP countries is set to expire at the end of 2007.

But it's unclear whether this is really new money. Last month, in an effort to resolve difficult EU-ACP negotiations, the EU proposed economic partnership agreements (EPAs) with the 70 plus ACP developing countries, which would combine increased development aid with extended liberalization periods. Predictably, no-one liked what they saw.

EU member states didn't exactly rush forward to find the EUR$2bn that the Commission wants to offer. And the ACP countries have been saying for years that EU aid is much promised but often delivered slowly or not at all. Mr Blair's promise is probably part of the EUR2bn.

The German Presidency, set to begin in January, will focus on the ACP dossier, according to German Minister for Development Co-operation Mr Heidemarie, who met the ACP ministers on their way to London.

"The Minister is determined that the Economic Partnership Agreements (EPAs) process should be given the highest priority during the presidency of Germany for the first six months of next year," said Dame Billie Miller, the Barbados Minister of Foreign Affairs and Foreign Trade.

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