Leaked Documents Show EU Digging In

BRUSSELS, Dec 12 (IPS) - The charity Christian Aid has cited leaked documents to say that the European Union (EU) will push developing nations to privatise services such as water, healthcare and banking at the trade ministers meeting in Hong Kong this week.

Christian Aid says it has obtained leaked copies of five EU confidential-request documents which expose the EU's desire to ensure that European services companies "gain access to fragile financial and public utilities markets" in some of the poorest nations.

"The leaked documents show beyond doubt that the EU is determined to thrust aggressively for the liberalisation of vital services such as banking, insurance, mail, water, environmental services and all kinds of retailing," the group said.

The charity says the EU is also demanding that poor countries deliver up areas such as legal services, freight transport, architectural services, restaurant services and travel agencies, and warns that many of these "intrude" into sectors where the state has traditionally played a "pivotal role either for free or at reduced fees" for the poor.

"The deal that developing countries will be offered in Hong Kong is likely to harm rather than benefit them, according to the majority of African countries. If this deal stays on the table, Christian Aid will urge poor countries to walk out rather than sign up to a damaging agreement," the group said in a statement Monday.

"It is clear from the documents we have seen and from a poll of African WTO delegates that the EU in particular is proving a massive obstacle to progress," it added.

Christian Aid says the EU has also failed to make significant cuts in agricultural subsidies, so poor countries are unlikely to gain anything from the talks starting Tuesday.

Trade ministers from 148 member countries of the WTO will meet in Hong Kong to attempt agreement on the stalled Doha Development Round of trade talks, named after Doha in Qatar where the talks were launched four years back.

The negotiations are aimed at freeing up trade in a range of sectors from agriculture to manufactured goods and services.

Developed nations want developing countries to open up their markets to industrial goods and services in exchange for any concessions on agriculture.

Agricultural tariffs and subsidies are the main obstacles to a new international trade agreement. EU tariffs on agricultural produce from developing countries raise the price of those products. At the same time, subsidies handed out to European farmers artificially lower the price of European agriculture produce. This makes most agricultural goods from developing countries uncompetitive.

A recent Christian Aid poll showed that two-thirds of African trade delegations believe their economies would suffer if they accept what is currently on offer, while 90 percent of those questioned rejected the EU claim that this is a pro-poor round of development talks.

The poll also highlights a renewed determination by smaller African countries to resist pressure from the EU and United States to sign up to an agreement that is not in their interests.

More than half of the respondents said they would be prepared to halt the negotiations if they object to what is on offer. This echoes the WTO summit in Cancun in 2003, when poor country delegations walked out, and the talks collapsed.

"We will wait until the last minute until we finally call on developing countries to walk away from the WTO talks because we want to give the EU every opportunity to make an offer that is good for development," Claire Melamed, Christian Aid head of trade policy, told IPS Monday.

"But the last minute is fast approaching, and the EU has to make a dramatic U-turn in the last 48 hours before the ministerial starts. The chances of that happening are very small," she added.

The EU came under renewed fire Monday as EU commissioner for trade Peter Mandelson insisted Monday that the bloc would not offer any new concessions on agriculture. He said his final offer of a 46 percent cut in farm tariffs was a "significant" reduction.

"I come to Hong Kong to do business with my partners and I hope that others have come to do business with me. This doesn't mean I will be tabling a new agricultural offer. I don't believe that this is what the round needs now from Europe, even if we had the latitude to do so," he said.

"It is therefore for others to come up with first or better proposals on the key areas of negotiations," he added.

U.S. trade representative Rob Portman put the responsibility for success of the meeting on the shoulders of the EU.

"The key to development is market access; agriculture access is the top challenge and we think that we need to make more progress here. The U.S. made a bold agricultural proposal in October that is yet to be matched by others, including the European Union," he said.