Call to drop trade barriers to 70 low-income countries

Date: 31/10/01

By David Cronin

The World Bank is advocating that the EU's decision to scrap barriers to imports of most products from the 48 poorest countries should be extended to all low-income states.

Describing the Union's 'Everything But Arms' [EBA] initiative as a "major positive signal", the bank's senior trade expert Bernard Hoekman said the EU and other leading industrial countries should provide the same preferential access to their markets for the 70 recognised low-income countries such as India, Pakistan and Indonesia.

But Hoekman cautioned that further commercial openings should be combined with increases in aid and investment to enable poor states to meet Western food safety and environmental standards. "The market is demanding much higher standards so there are huge investment requirements," he told European Voice. "But all this is being done on an ad hoc basis. We need a more concerted effort."

In a report published today (31 October), the bank argues that one of the main objectives of the new round of talks expected to be launched at the World Trade Organisation conference in Doha should be to lower the barriers faced by poorer countries. If all leading industrial states emulated EBA, then the revenue accruing to poor states from exports could rise by some 10, it estimates."Broadening this access for the 49 least-developed countries to the 70 low-income countries would provide an important impetus to trade-led development in those countries that need it the most," the study adds.

Nevertheless, the report is quite critical of the Union's support regime for its own farmers. The Common Agricultural Policy (CAP), it contends, has led to a surge in wheat exports, hurting low-cost producers which would otherwise be in a position to sell crops to Europe. It singles out Argentina as a country which "may be suffering from [the EU's] trade distorting subsidies". The bank also argues that the Union's policy of granting duty-free access to its markets for banana growers from the African, Caribbean and Pacific (ACP) bloc, while imposing tariffs and quotas on their counterparts from Latin America, is "an inefficient and expensive way to provide aid".

One result of the policy, it says, is that bananas are about two-thirds more expensive in the EU than in the US. EU consumers therefore have to foot a bill of €6 for every euro of aid that is transferred to ACP producers through the higher fruit prices here.

The World Bank is advocating that the EU's decision to scrap barriers to imports of most products from the 48 poorest countries should be extended to all low-income states.

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/01/828&format=HTML&rapid=0&language=EN&guiLanguage=en http://europa.eu/rapid/pressReleasesAction.do?reference=IP/01/828&format=HTML&rapid=0&language=EN&guiLanguage=en

http://www.worldbank.org/prospects/gep2002/ http://www.worldbank.org/prospects/gep2002/

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