EC's WTO demands contradict UK Minister's 'no forced liberalisation' pledge

The latest set of proposals by the European Union at the World Trade Organisation which seeks to impose extreme levels of liberalisation on the developing countries is in stark contradiction to a recent speech made by the Trade Minister of the United Kingdom, which presently holds the Presidency of the European Union. This begs the question: Who really speaks for Europe?

"My first priority for Hong Kong is that we must not force liberalisation on developing countries," said Alan Johnson, the UK's Secretary of Trade, in a speech in London on 20 October. "This is a development round. We must make sure that this is true. Developing countries must have flexibility to plan development in line with their own national priorities.

"We can't demand shock treatment liberalisation from them, when we have cherished old fashioned protectionism for ourselves."

Explaining what he meant by rejecting forced liberalisation, Johnson said: "We won't demand concessions from least developed countries" and for other developing countries "we must not prevent them engaging in deals that could offer huge opportunities. Instead, we should pursue policies that require less liberalisation from them than we concede to them; and ensure that they have the flexibility to plan and sequence liberalisation in line with national development plans."

Johnson did not link any EU agriculture offer to liberalisation in the South. On the contrary, he concluded his speech this way: "So, these are the three areas which I think can form the basis of a deal at Hong Kong. No forced liberalisation on the poorest countries. Big steps to cut trade distorting agricultural subsidies in the developed world. And abolishing all developed countries' trade distorting agricultural export support by 2010."

Since the UK holds the EU presidency, Johnson chairs the meetings of Ministers of EU states on trade policy issues.

However, nine days later, on 28 October, the EU's Trade Commissioner Peter Mandelson, who is also British, announced the EU's latest proposal on agriculture, in which he made clear that a condition for its offers is that the developing countries take on extreme liberalisation commitments in services and non-agricultural market access (NAMA). If these EU demands are accepted, even in dilute form, they would threaten the business and the very survival of local manufacturing and services firms in developing countries.

Mandelson's demand for NAMA is that the developing countries slash their industrial tariffs using a Swiss formula with a coefficient of 10, which means that all their tariffs, except for a few, will be reduced to a range of 0-10%.

For example, tariffs that are now 10% would be brought to 5%;