Economic Partnership Agreements: Motion.

Apologies have been received from Deputy Tony Gregory. I remind members to ensure their mobile phones are switched off completely, as they may interfere with the recording equipment.

The committee will consider the following motion referred to it by Dáil Éireann on 16 December 2008:

That Dáil Éireann approve the terms of three interim Economic Partnership Agreements:

(i) interim agreement with a view to an Economic Partnership Agreement between the European Community and its Member States, of the one part, and the Central Africa party, of the other part;

(ii) Agreement establishing a Stepping Stone Economic Partnership Agreement between Ghana, on the one part, and the European Community and its Member States, on the other part; and

(iii) Stepping Stone Economic Partnership Agreement between Côte D'lvoire of the one part and the European Community and its Member States of the other part,

copies of which were laid before Dail Eireann on Wednesday, 10 December 2008.

The Minister of State at the Department of Foreign Affairs, Deputy Peter Power——

Before we begin I wish to comment on a point of procedure. I hope the Minister of State, Deputy Power, is aware of the high respect in which I hold him and the officials. However, I am concerned that we are proceeding with the motion in this way. My view is that a decision of the Dáil was taken to refer the matters to the committee. It would be appropriate for the committee to refrain from considering the matter until we have had an opportunity of discussing the possible fit or collision of the trade and development issues that arise. I view this matter with great concern.

We have completed discussing a very valuable report which has the support of the committee and the Minister of State, and which refers to a new dialogue. The Minister of State will be aware that before we meet again at the end of January the matter of an interim agreement at European Union level with South Africa, Angola and Namibia, in addition to the three agreements before the committee today, will arise. The agreements will be regarded as done deals. However, the EU development aid ministers have called on the EU Trade Commissioner, Baroness Ashton, to allow flexibility. This is my concern.

I am in favour of referring these three interim agreements to the Dáil and refraining from making a final decision on the southern African campaign against child abuse and trafficking for sexual exploitation, SACO, agreement until Namibia has had a chance to make known its case. I am a democrat and I will give my reasons if we discuss the agreements substantially. However, I am concerned and it is inconsistent with giving countries on the other side an opportunity to consider the matter completely. One of the three countries has considered the matter, but the other two have not. Two of the countries have not given parliamentary assent to these agreements. This is not merely a procedural matter. If the committee decides to proceed I will give my view and make substantial points. However, I believe procedural issues remain to be resolved.

One might argue that the matter is urgent and that we should proceed because of the waiver. A waiver has been in place for one year and it will be exhausted. However, the Chairman should be aware that the waiver is related to the WTO. If the waiver is a WTO matter let the EU Trade Commissioner deal with it. If the Trade Commissioner wants to ride roughshod over an appeal for flexibility from receiving countries and development Ministers, let us discuss that too. However, I do not believe that we should be taking a shortcut that facilitates a certain version of trade that may be in contradiction to a development purpose. I would be less than honest if I did not say that at the outset. I say it with the utmost respect for the Minister of State and his officials, and their commitment to development.

I concur with the procedural issues raised by Deputy Higgins.

I will hand over to the Minister of State at this stage.

Without getting into the substance of it, I can understand where Deputies Higgins and Deasy are coming from. Having said that, I would make two points. The agreements we are discussing today have both a trade and development component to them. We may argue about the substance of both aspects and discuss them, certainly, but there is no doubt that there is a development component to it. The substance of our discussion, without going into the details, will revolve around that substantive issue — the extent to which the agreements will confer development potential on these countries, while at the same time dealing with the very real trade issues arising from the Cotonou Agreement, of which Deputy Higgins will be aware.

On the procedural point raised, the agreements are just that — agreements between sovereign governments and the European Union. The sovereign governments of the three countries we are talking about have agreed to the text we are agreeing to ratify today. That is a sovereign decision on their part. The Deputies may question the manner by which they have come to that sovereign agreement, but let us not discuss that at a procedural level. The impact of not signing or dealing with the agreements at this stage is very clear for all countries. What is at stake is that the EU and other countries will be in breach of waivers given by the World Trade Organisation. That is clear. As a country, we have signed up to an international rules-based trading system. Those are the rules and agreements which have been agreed at this stage, subject of course to ratification by our parliaments. They are agreements, however, between sovereign countries, so on a procedural point I suggest that it is perfectly in order to discuss their substance. Obviously, people will have different views on the substance of the agreements but on a procedural point I do not see why it should not fall for the committee to consider the substance of those agreements now.

That argument is correct in so far as they are international agreements, and an issue of signature on behalf of a sovereign government arises. I am not contesting that, but if we are forced to discuss them in this timescale and in this manner, I may have to oppose them later when we come to that. I do want to say in the strongest possible terms, however, that the behaviour of the Commission on this matter is one of extreme bad faith. The Cotonou countries and others have been told repeatedly that there is flexibility. I accept entirely the right of the process, but the pressure that is being placed on countries is unfair. In addition, there is dishonesty at the level of the European Commission, and I choose my words carefully. On the one hand, they are proceeding to seek regional agreements, while seeking interim ones on the other. I am not putting an unfair burden on the Minister of State but he is not in a position to say, for example, that these interim agreements will represent closure on items that were raised in the context of regional agreements. It is a cynical attempt by Baroness Ashton, as Commissioner, to railroad what she can get by way of trade over the expressed wishes of development Ministers at the European Council. It is quite outrageous, and I stand over that statement. The Minister of State knows the respect in which I hold him and his Department, but it would be wrong of me not to raise this matter.

When we meet in the new year I would like this process of economic partnership agreements to be a substantive item on the agenda, but I will not allow that to be used as an excuse for these ones. If the Chairman decides to proceed, we can discuss these three agreements. However, it is wrong to stampede and ride roughshod over reservations that the Namibian Government has about that agreement. It would be foreclosed by February and is a matter of great urgency, so I will oppose that one as well.

I think we should hear the Minister of State's view on the subject.

I am happy to respond before going into the substance of the agreements. I will not labour the issues. First, Deputy Higgins said this might somehow bring closure, to use his word, but it is not intended to bring closure. Ultimately, it is intended in the fullness of time to have full economic partnership in the context of regional agreements. I think we would all agree that such agreements are very important for the development of regional areas. Second, and with respect to Deputy Higgins, Baroness Ashton did not proceed against the expressed opposition of development Ministers; quite the contrary. If one looks at the conclusions of the last General Affairs Council meeting, we said we approved the process and encouraged flexibility in all the negotiations and agreements. We have flexibility in this regard, which is greater than that shown under previous trade Commissioners.

Why then does she not meet the Namibians on their objections?

With respect, we are not discussing the Namibian issue today. That can be raised later. We are discussing the net issue of whether Ireland as a signatory to this agreement should examine its substance and decide whether it is in our interests and that of developing countries to sign them as well. I suggest we should have that substantive discussion now. I repeat the point, however, that one country, Côte d'Ivoire, has already signed and it is anticipated that the other two countries will sign within a short period.

At this stage, I would like to ask the Minister of State to begin his speech.

I will endeavour to be brief. Although it is not on the agenda, I would refer to the committee's earlier discussion with members of the hunger task force. I compliment the Chairman and other committee members on their initiative in bringing in the hunger task force team, led by its chairman, Mr. Joe Walsh. I did not have an opportunity to hear the discussion but I will read the official report. I welcome the engagement between the committee and the hunger task force because this will be a central part of our international aid and development policy in the months and years ahead. I look forward to engaging with the committee on that issue.

On the motion before the committee, I am happy to have the opportunity to discuss the motion which has been proposed by the Minister for Foreign Affairs. The motion asks Dáil Éireann to approve of three interim partnership agreements between the European Community and its member states, first with Central Africa, Cameroon being the only central African country to initial this agreement, second with Ghana and third with Côte d'Ivoire. I am grateful to the Chairman and other members of the committee for facilitating this motion at such short notice. The reason I seek the approval of the committee and that of Dáil Éireann to sign before Christmas is that the Côte d'lvoire has already signed its agreement at an official ceremony in Abidjan. The other two agreements are planned to be signed, by Cameroon and Ghana respectively, in the near future.

Economic Partnership Agreements, EPAs, are new instruments. They combine both trade and development. Increased trade is central to sustained economic growth in developing countries. Trade, not just aid, is needed if poorer countries are to escape from abject poverty. These three interim trade and development agreements aim to progressively remove barriers to trade between the European Union and Cameroon, Ghana and Côte d'lvoire. They also aim to enhance co-operation in areas related to trade. They seek to provide an open, transparent and predictable framework for goods to circulate freely. The aim is one of increasing the competitiveness of Cameroon, Ghana and Côte d'lvoire.

The three agreements now being discussed involve what is called "mixed competence"; that is to say they deal with issues some of which fall within the exclusive competence of the European Community — trade relations being the primary example — and some of which remain within the competence of the individual member states of the Union. A prime example of the latter is development co-operation with member states.

Where EU agreements with third countries involving mixed competence arise, they are negotiated on behalf of the European Community and the member states by the European Commission with the third countries concerned. They are then signed on behalf of the Community and the member states and finally, before they can formally enter into force, they are ratified by all parties, including by the individual member states, which process we are engaged in today.

These EPAs are a new type of multilateral agreement seeking to combine both trade and wider development issues in a unified framework. Committee members may be aware that EPA negotiations between the EU, represented by the European Commission, and six regional groupings of African, Caribbean and Pacific, ACP, countries began in September 2002. The mandate for their negotiation came from the legally binding Cotonou Agreement. The objective of economic and trade co-operation under this agreement is to foster the smooth and gradual integration of the ACP states into the world economy.

In this context, the EPA negotiations sought to achieve WTO-compatible agreements by the end of 2007 because the WTO had exceptionally allowed the EU and ACP states time to enter into new arrangements. In the event, following protracted and difficult negotiations, only one of the original regional grouping, namely the Caribbean group CARIFORUM, agreed a full EPA with the European Commission. Twenty other ACP countries initialled interim agreements in smaller sub-groups or individually. A positive aspect is that this meant that trade disruption was avoided, which is crucial for those developing and trading countries. Against this background the motion which Dáil Éireann has been asked to approve is:

That Dáil Éireann approve the terms of the three interim Economic Partnership Agreements:

(i) Interim Agreement with a view to an Economic Partnership Agreement between the European Community and its Member States, of the one part, and the Central Africa party, of the other part;

(ii) Agreement establishing a Stepping Stone Economic Partnership Agreement between Ghana, on the one part, and the European Community and its Member States, on the other part; and

(iii) Stepping Stone Economic Partnership Agreement between Cote D'lvoire of the one part and the European Community and its Member States of the other part.

which were laid before Dail Eireann on 10 December 2008.

They are quite voluminous documents and I have copies of the agreements here with me before the committee.

The agreements provide full duty and quota free market access on the EU side for the three countries concerned. For Cameroon, Ghana and Côte d'lvoire this means no EU duties or quotas for any products other than short transition periods for sugar and rice. It also means long-term security for traders and investors with no more waivers, time limits or period renewals. Unlike the system they replace, they meet World Trade Organisation rules and they are safe from legal challenge.

The agreements also provide for a flexible and asymmetric liberalisation schedule over 15 years by Cameroon, Ghana and Côte d'lvoire. Asymmetric in this context means that the ACP countries do not have to liberalise their import regime as much or as fast as the EU.

Cameroon and Ghana will liberalise 80% and Côte d'lvoire 81% of imports from the EU by the end of this period to comply with Article XXIV of the General Agreement on Tariffs and Trade, which is the 1996 agreement which led to the formation of the WTO. Certain agricultural as well as non-agricultural processed goods were excluded from liberalisation by the developing countries concerned. The main criterion for these exclusions was the desire to protect certain existing industries or infant industry and maintain fiscal revenues. On liberalisation schedules for Cameroon, Ghana and Côte d'lvoire, I would also highlight that the development co-operation provisions in each of the interim agreements seek to build trade capacity and address adjustments involved for the three countries. They provide for measures to mitigate any negative effects on local industry, livelihood and Government income.

The development co-operation provisions also seek to support the other elements of the agreements which will facilitate trade expansion in Cameroon, Ghana and Côte d'lvoire. These are provisions on customs and trade facilitation, technical barriers to trade, and animal and plant health measures. The agreement with Cameroon contains an additional provision on forestry governance and trade in timber and forest products to address the specific interests of that country.

I turn to the issue of aid for trade at this stage. I recognise that if these African countries are to take full advantage of the trading opportunities afforded by these interim EPAs, then greater and more effective trade-related assistance should be made available to them.

The EU has already pledged to increase collective Commission and member state expenditure in this area to €2 billion per annum by 2010. A large share of this increased expenditure will be devoted to the needs of ACP states. Ireland will continue to play its part in funding aid for trade initiatives in the coming years. Most members would agree that Ireland is very much at the forefront in Europe at promoting aid for trade.

Members of this Committee are carefully watching the EPA process and I value their input to date. The next step is that these interim agreements will act as building blocks to full regional EPAs. This is already the case with CARIFORUM in the Caribbean which signed a full comprehensive EPA in July 2008.

Regional integration will allow efficiency gains through enlarged markets and increased competitiveness, not unlike the experience in the European Union and the European Economic Community over the past 30 years or so. I take this opportunity to assure committee members that I have acted on their concerns and those expressed by non-governmental organisations regarding some aspects of the ongoing negotiations towards full EPAs.

I have corresponded with the new EU Trade Commissioner, Baroness Catherine Ashton, to highlight the need for a flexible approach to be adopted in these negotiations. I had the occasion to meet her in Brussels at last month's General Affairs and External Relations Council, GAERC. I highlighted the need for the flexibility available under current WTO law to be used fully in the ongoing negotiations and the need to ensure an ACP-led, development-friendly approach to any negotiations on trade in services and other trade-related issues. I welcomed the Commissioner's initiative to intervene and meet representatives from each of the ACP countries. I was pleased with the final conclusions of the ministerial meeting in Brussels, which Ireland had an important part in shaping. They stressed the importance of ACP ownership and input in deepening regional integration for development in ACP countries.

The conclusions also highlighted the role of EPAs as instruments for strengthening regional integration and the Council's commitment to a flexible approach to the conclusion of full regional EPAs in agreement with ACP partners and with due regard for their political choices, development priorities and administrative capacities.

I emphasise the importance of adopting these interim economic partnership agreements from the perspective of these three African countries. They provide them with an open and transparent trade framework for their traders and investors, safe from legal challenge.

I thank the committee for its time and I hope it will be able to recommend to Dáil Éireann that the motion proposed be approved. I would be happy to take any questions and engage constructively with the members of the committee.

When only one of the original groupings the Caribbean group made the agreement, what were the reasons the other five did not? What were the main stumbling blocks in that regard? Are politicians in Cameroon and Ghana opposed to this agreement?

The CARIFORUM countries have a long tradition of economic partnership. However, this does not approach the degree or depth of such partnership that has existed in Europe for many decades. They operate as a general economic bloc. It is not a fully liberalised trading area but a great deal of trade does take place among the countries in question. Furthermore, they have developed their capacity to a greater extent than many countries in the other five ACP blocs to which the Deputy referred.

The CARIFORUM countries have decided, as an expression of their sovereignty, and as a result of their desire for greater regional economic integration, to come together and form an economic agreement. It is not really our responsibility to question their sovereign decisions in this regard. However, they are obviously of the view, individually and collectively, that it is in their interests move towards a more liberalised trading arrangement with the European Union. In my opinion, they look to the EU as an example of the potential which can be unleashed, over a period, by countries working together — while respecting the dynamics of their individual economies — in economic free trade areas. They also realise that a rise in trade among regional groups has the ultimate effect of increasing economic activity. Ireland is a testament to that.

Côte d'lvoire has already signed the agreement. The Government of Ghana postponed signing the agreement as a result of the elections there. However, it is anticipated that it will sign in the near future. The Government of Cameroon indicated that it would be obliged to consult further with its citizens. That is a position we respect. People have different views on matters of this nature, which is only to be expected. It is similar to the position in Ireland, where people have different views in respect of deepening economic co-operation with Europe. It is anticipated that the remaining two countries will sign the agreement in the near future.

The Minister of State referred to the position relating to Cameroon. Will he outline the nature of the opposition to this agreement in that country?

I would not refer to it as opposition. Countries must make sovereign decisions and there will obviously be opposing views in individual countries. Non-governmental organisations, many of which originate in donor countries in the developed world, are active in the states to which I refer and their representatives articulate a certain point of view in respect of economic partnership agreements. Ultimately, it is a matter for individual countries or regional groupings to decide on the pace at which they wish to proceed.

With regard to which blocs have not proceeded to full economic partnership agreements, I return to the reasons I outlined in respect of the Caribbean countries — which have a history of economic co-operation and, relative to other states, a greater capacity to form regional groupings of this nature and to negotiate collectively — which decided, of their own free will and volition, that it is in their interests to move towards a full economic partnership agreement at this stage. Those are the only reasons I would offer in this regard.

I may be able to provide an answer in respect of certain aspects of the question posed by Deputy Deasy. I am in favour of regional groupings and also of the economic capacity of such groupings. I am more than aware of the economic capacity of a regional grouping in the Caribbean.

An economic partnership agreement has been concluded with the Caribbean countries. However, it would be wrong to regard this agreement as a template to be applied in respect of other regions. There are good reasons for this and these vary in the context of the different regional groupings. I would welcome it if the Minister of State provided an assurance that the Caribbean regional agreement will not be used as a template for other agreements. I am not sure, however, that he can provide such an assurance and I do not want to place a burden on him in this regard.

The Minister of State indicated earlier that these agreements "provide for measures to mitigate any negative effects on local industry, livelihood and Government income". In some respects, that statement provides the answer to Deputy Deasy's question because it highlights some of the main reservations and objections of some of the African countries.

Earlier this afternoon, the joint committee had an excellent meeting at which the report of the hunger task force was discussed. I stated at the meeting that one examines these agreements and poses questions on development. However, we must go further and focus those questions on food security, local marketing, substitution, import strategy, etc. The agreements must be tested in order to discover whether they are consistent what we discussed in the context of the hunger task force report. I intend no reflection on anyone, but I am of the view that the process relating to and the substance of these agreements are in contradiction to that.

Our distinguished former colleague, Mr. Joe Walsh, for whom I have such respect, refers in the hunger task force report to a new dialogue and new forms of partnership. It is not encouraging that the partnership agreement we are discussing is being proceeded with when two of the countries involved have not signed up to that agreement, while the other has signed but not ratified it. There is an inconsistency here.

NGOs in Europe and Ireland have discussed this matter. Approximately 30 such organisations have expressed opinions and they are not satisfied with the conclusions that have been reached. Three major NGOs in Ireland — Oxfam, Trócaire and Comhlámh — have expressed reservations. The Minister of State was extremely honest in suggesting that this is an attempt to move past the waiver that facilitated a legal system that is represented by the WTO. It is here my difficulty lies. The WTO engaged in a debate on development. In many of the discussions with the European Union on the regional groupings, I perceive an attempt to achieve what was rejected, in an organised way, at WTO level by the developing countries. This raises other issues. My response to the current African situation differs from that of the over 50 countries that constitute the continent of Africa. I would not require of any country that it not have the capacity to use different forms of tariff and assistance, including seeds, implements and so forth, to achieve food security.

The suggestion that language which comes from, with respect, Baroness Ashton and others about asymmetrical responses which means one can require more of the richer side of the bargain, have not, to my mind, been met in good faith. I will come to the point as I do not wish to speak at length. I would like to make a number of statements, on which the Minister of State can prove me wrong, if he wishes. Indeed, I would like to be proved wrong.

These interim agreements, no more than general economic agreements, have not been development or hunger task force proofed. They are vague. I have not had time to study them because when I last discussed this issue I was doing so in the context of trade. I do not understand what is meant in the agreements by "substantially all trade" which is porous in terms of vulnerability for the other signatory.

The principal problem is a lack of protection for the domestic production of essential and necessary goods. I am speaking about those countries wherein one is trying to achieve food security and surplus, which involves storage and refrigeration, and trying to get to market with the valuable assistance of mobile telephones in relation to markets and margins. Should one be able to achieve this without European Union exports?

I recall seeing on sale in Africa some time ago chicken pieces, in frozen form, from Germany, which had the greater portion of the market in one of the countries at the same time as that country was being prevented from giving State assistance to producing chicken farming in its own capacity. This is the type of outrage I have in mind. I wish Baroness Ashton were here giving her trade lecture. Perhaps the committee will invite her to attend in February when we will be discussing the southern African agreement.

I have been speaking of the right to food, food security and one's right to be free from hunger. I do not see these agreements as being anything other than impediments in this regard. The notion is, with respect, that they do not interfere with the income of a particular country in terms of tariffs, which are not less than 15% of total Government income, imposed by the three countries involved. The suggestion that these are neutral in terms of the income of a particular country does not stand up.

My concern is this. The WTO is the context. This is followed by the response to the WTO waiver and the failure to achieve regional agreements because within the regions people are getting more organised in terms of objections. This is followed by a series of initialling and signings of sub-groups and individual countries. I am concerned about the status of these agreements in regard to the follow-on regional agreements or for example, if peoples' hearts are bleeding for the Caribbean region. The Caribbean region trades with Canada and other parts of the world. One could find that agreement is an obstacle in this regard. That template is one that reduces the capacity to trade in a multilateral way.

I have been involved for a long time in the development area. All of the people who have differed or agreed with me have difficulties in terms of accepting the dispute resolution mechanism in regard to the WTO. Yet this is the model for dispute resolution in the agreement. The point is this might be legally neat but if defective in respect of the context of the WTO — and this has been pointed out by dozens of countries — it is wrong here also. My wish is that these agreements would be withdrawn from us. The Minister of State has, out of courtesy, brought with him the full text of the agreements.

I could say a great deal more in regard to intellectual property, public procurement and other issues raised. However, issues such as food security, food production, indigenous markets and indigenous industry concern me. These agreements are like the last gasps of a model that has failed. They are the result of thinking in regard to economic partnership agreements from a model that has collapsed. The Minister of State and many of us have been to Africa and other countries. As people have their nervous breakdowns about banks in the western world, they continue to wonder if they could have another Keynesian moment. Africa, Asia and South America were not given one. This is about paths to development and the maximum space and capacity for countries that are developing to choose those paths. For that reason, I will have to vote against these agreements.

It is refreshing to have a non-neoliberal left wing testing of this motion. That test has put the Minister of State in a situation whereby if and when this goes through the Dáil it will have been Deputy Michael D. Higgins-proofed, if not development-proofed and otherwise.

There has been much talk about collapsed models. Earlier, when reviewing the hunger report, we considered the situation in Malawi and Vietnam. These are models included in the report which show that significant improvements have occurred during the past number of years. One would hope that this was not alone a result of aid but of trade.

Perhaps, if possible, the Minister of State will quantify for us the benefits and advantages for the EU and the three countries concerned in regard to trade. How will they benefit and what are the disadvantages? Will they suffer as a result in terms of trade? What will be the advantages to these countries if they sign up to these agreements? Will their situations be improved and, quantitatively, by how much? Will there be intra-group benefits as a result of their association with this economic partnership in terms of their being allowed to trade with each other, thus developing economically? Will there be improved opportunities for global fair trade type organisations to purchase, thereby bringing benefit to those countries?

Deputy Higgins said the agreements have been signed but not ratified, and I respect that. The democratic process is valuable and is something we respect. We would like to see the democratic process gone through. Will the Minister of State address that issue and satisfy us that the democratic process is being used with regard to how these countries are dealing with the matter?

It is good to see the Minister of State here again and I compliment him on his interaction with this committee. He has attended the committee a number of times and has always provided clear, direct answers to our questions.

I have received some correspondence on the matter of the interim European partnership agreements, EPAs, and have a few questions. I am sure the benefits of these agreements have been stress tested and quantified. Is it possible to project in monetary or trade terms or to quantify for the three countries included in the interim EPAs what increase in trade they will have with the European Union?

I am interested in one area in particular. The main provisions mentioned existing industries in these countries. I am particularly interested in emerging industries or markets in the three countries. I note that the first main provision of the agreement is the creation of an initial framework and partnership for development. I presume this includes the development of new industry. There is clear mention of e-commerce and similar areas where a number of these countries are behind European standards. What focus is there on this area in the interim EPAs? Is there any focus on developing new markets and diversifying industry in the three countries mentioned?

I apologise for being absent earlier, but I had to attend another committee meeting. Will these agreements have any impact on ECOWAS, the economic community of the west African states and, if so, what impact? What is the relationship between ECOWAS, the European Union and Ireland and how do these agreements fit in with the development of ECOWAS?

I think the Minister of State has covered the main questions from the NGOs. One question is why two international treaties are being proposed to the Oireachtas before they have been signed by all parties. Members also asked what impact these treaties with Ghana and Côte d'Ivoire have on existing regional integration processes in west Africa and why poor countries have been asked by the European Union to sign agreements, in the area of investment and other areas, that they have previously rejected at the World Trade Organisation. Would the Minister of State like to make any further comment on those questions?

I will endeavour to answer the many questions asked. We have the basis of a good discussion because people come at these agreements from different angles. Deputy Higgins asked the fundamental questions about the relative advantages for both parties in this agreement, be it the European Union or the three countries signing. He spoke about the historical context of the agreements.

We must try to understand the historical context before we can fully understand the agreements and what drives both the European Union and the west African countries involved in this case to sign these agreements. These agreements have been freely entered into by sovereign governments. Why have they done this when the option is there, as sovereign countries, not to do so? The answer is found in the historical context. Traditionally, a number of European Union states had colonies that traded throughout the world and these European states maintained a preference system for these former colonies. Those preferences worked to the benefit of those countries and worked both ways, which was well and good for them.

However, no mention has been made of those countries that do not enjoy favourable or preference market access to the European Union or Europe generally. What is the situation with regard to those countries? Many of them have been severely disadvantaged and discriminated against because they are not in the position of the many countries with free and open market access. That is unfair on those countries, many of which are ones in which we have development interests. They are discriminated against unfairly and cannot get their products into Europe while countries with an historical or colonial relationship with Europe can. They are not being allowed to develop in the way they should because of the unfair trading environment.

Arising from the 1996 GATT agreement, the World Trade Organisation has told both the European Union and the G77 countries to sort out the situation because that sort of historical preference cannot continue forever, to the disadvantage of other developing countries. While that system provides an advantage to some countries, it disadvantages others. Therefore, they must create a level playing pitch. As a result, the G77 countries and the European Union entered into the Cotonou agreement in 2000, whereby they mutually agreed to bring this process along within a seven-year timeframe so as to eliminate the unfair discrimination against some developing countries, not the least developed countries, but others that did not have this preferable trading environment or relationship with Europe.

For a variety of reasons, in those seven years, the unfair discriminations were not ironed out. Difficult decisions then had to be made because both the European Union and the G77 countries were coming towards a situation where they were in breach of agreed world trading rules, the GATT rules to which the whole world had agreed in 1996. As Deputy Higgins pointed out, the World Trade Organisation gave a waiver in 2000 to the European countries for seven years so that they could get their house in order, at which stage countries who did not have favourable or preferential market access to the European Union could rightly cry foul and say a level playing pitch had not been created for them. In this context the European Union had to ensure that those people who did not have favourable market access would be somehow brought into an equal playing environment. That is the context for the economic partnership agreements.

Nobody would claim those agreements are perfect, but let us look at the alternatives. One of the questions posed by Deputy Higgins was what the other options are and how we could proceed. The other option is that we just simply ignore an international rules-based trading system. By doing that we would continue with the discrimination that has been in operation heretofore, and continue also to disadvantage many developing countries. That would create a totally unequal development environment in many African, Caribbean and Pacific countries. We have always subscribed to a rules-based international trading system as a central part of our policy, be it the rules of the European Union, which we have always sought to uphold, or global rules. We either obey those rules or we do not. The agreements are an attempt to obey those rules.

Regarding the specific questions that have been asked, such as why we would ratify the agreements when two of the three countries we are discussing have not signed them, every agreement is an agreement between two parties. If countries adopt the position that they will not sign an agreement unless the European Union does so, there will be no agreement. The fact is that once we ratify the agreements it is a matter for the other countries to do so, of their own free will. The strong signals are that they will because they want to conclude the agreements.

The other points that were raised by Deputies Ardagh and O'Brien were whether the agreements had been stress tested and what are the benefits. I do not like the term cost-benefit analysis, but we can examine the benefits for both countries and the cost to them. We must look at the current trading environment without those agreements. The fact is that up to 20 years ago African countries had almost 6% of world trade. That has now been reduced to 2% because the international trading environment has not been good to them. We need to start afresh and introduce a different trading environment. While the economic partnership agreements are not perfect, they open up new markets for those countries. Without the agreements they would not have access to European markets or the European Union would impose tariffs and there would not be quota-free access, as there is for many countries currently under the waiver.

Deputy Higgins inquired about dispute resolution. There are dispute resolution provisions in the agreements. As to whether the disputes can be resolved to the mutual benefit of both parties, it is a matter for both parties to use their capacities to overcome disagreements. If one examines the detail of the agreement, there is capacity for revocation if one country feels the dispute resolution process is unfair or has not worked to its benefit. As with all international agreements, if one party feels that the agreement is ultimately unfair it has the right to pull out of it, although we would not like to see unilateral action. However, that option remains in place.

Deputy Ardagh inquired about the intra-group benefits. I can only cite the benefits that have accrued to all European countries by greater economic co-operation from 1957 to today. There are benefits to the liberalisation of trade between like-minded countries. That is not to say we should have complete liberalisation across the globe but within regions where there has been trade liberalisation that has increased trade. Every aspect of research over many years suggests one thing, namely, that if one provides an environment in which trade can increase between countries on a regional or global basis it becomes the ultimate driver for the relief of endemic poverty. Constant flows of aid by itself can never provide the ultimate resolution to the endemic problems of hunger and malnutrition that the committee discussed earlier. The ultimate way to resolve such problems is to allow those countries to generate economic activity in their own right, to trade their way out of difficulties. I do not say that will happen overnight. We are talking about decades.

I can make an analogy between Ireland and some developing countries. Everything is relative. Thirty or 40 years ago Ireland was an insular country outside an economic trading bloc. We were not trading with Europe. All of our trade was with the United Kingdom. We were very much the poor man relative to Europe. We were very much a developing country but we made the decision to engage in an economic partnership agreement with Europe and that has brought immeasurable benefits. We would all subscribe to that view. People had disagreements about whether Ireland should engage in that way with Europe, and still do to this day, as was apparent last June. There will always be differences of opinion but the consensus view is that economic partnerships are beneficial. The Caribbean countries have had good experience of it, and members are aware of fledgling partnerships in developing countries such as the east African partnership. That is a recognition by countries that breaking down economic borders is for the mutual benefit of all members of a partnership. These agreements have been described as the building blocks of those regional partnerships. I hope that answers Deputy Ardagh's question. I hope also that I have answered Deputy O'Brien's question on mutual benefits.

Deputy O'Brien inquired also about developing new markets in those countries. That is an excellent question. If one goes through the documents in detail, part of the agreements on the development side are not just about trade; they impose obligations on the European Union in terms of providing aid for trade to develop the capacities of countries to increase access to markets regionally and also to improve infrastructure within countries so that it will increase trade within countries in the same way that improved infrastructure has helped Ireland.

Another question was about food security. One cannot divorce these agreements from food security and hunger, which the committee was discussing earlier. It is my firm conviction that there is a clear relationship between food security and the agreements working, as we hope they will. If one considers the individual agreements, Article 20 of the Ghana agreement contains food security protection provisions. The same is true of Article 25 of the Cameroon agreement and Article 20 of the Côte d'Ivoire agreement. They have bilateral safeguards to ensure food security and to prevent damage through import surges to which Deputy Higgins referred.

Deputy Higgins also raised the issue of chicken and other meats. I accept that of the three agreements, the schedule negotiated by Côte d'Ivoire is front-loaded. However, liberalised EU imports into this market are mainly the sort of goods it does not produce itself, for example, pumps, generators, turbines — the sort of things it needs to develop its own indigenous industry. That also includes boats, aircraft, cars and certain chemicals it needs to improve its own industries. An indication of Côte d'Ivoire's negotiating capacity is that it has reached an agreed position.

Côte d'Ivoire, as members will know, is a major agricultural producer. Chicken is excluded, as was mentioned, along with other meats, tomatoes, onions, sugar, tobacco, beer, worn clothes, cement, malt, gasoline and certain cars. All this takes place within the environment of WTO rules, because the agreements are still WTO-compatible. The existing trading regime is not compatible with the world trading system, which was agreed in GATT in 1976. All 77 countries and Europe were given a waiver to get their house in order over a seven-year period. That did not happen during the seven-year period, and the world trade provisions will kick in, to the disadvantage of many developing countries. In an effort to create a level playing field with a development dimension, the European Union and these three individual countries have come to an agreement which will ensure that there is no shock to the trading system that currently exists between the three and Europe. This will inevitably come into force after the seven-year waiver expires. That is just a fact, and those agreements provide a safeguard against the shocks for those three countries which would inevitably occur.

I hope I have answered all the questions.

The Minister of State did not answer my question on the Economic Community of West African States, ECOWAS.

I beg Deputy O'Hanlon's pardon. In relation to ECOWAS, negotiations towards a full EPA for west African states continue. They provide for west African countries, particularly those in ECOWAS, to ensure the benefits from full regional economic partnership agreement, which will marry with an ECOWAS external tariff. West African ministers noted at their meeting in November that the common external tariff and the implementation of the customs union is an absolute priority in the region and a prerequisite for the liberalisation of access in relation to EC countries. It is not a perfect situation, however.

If one takes Côte d'Ivoire, for example, recently its trade and development minister, Mr. Kone, made the point that the EPAs had prompted it into reforming its whole internal trading system, which it believes it would have to do anyway. He made it clear that the EPAs provide it with opportunities rather than difficulties. As with all agreements, people make compromises and concessions in order to get what they want. Each agreement represents the compromises of each individual country with the EU. If there were a uniform agreement, the same rules would apply to all three countries. In the event, an argument could be made against them. However, the fact that three countries have individually negotiated separate agreements and provisions in relation to their own indigenous industries is significant. For example, the timber industry in Cameroon is very important in that country. It has negotiated certain safeguards and asymmetric liberalisation in relation to those industries. That is an example of the detailed provisions that each country has agreed to.

The Minister of State mentions the Côte d'Ivoire, for example. To take up Deputy Ardagh's point, the net benefits and costs of liberalisation in each of the three cases have been costed by independent development bodies at European level. On the suggestion that the shock is eliminated, in the case of the Côte d'Ivoire which is the example given, the Minister of State correctly points out that it is front-loaded in relation to the shock. Therefore it is in the first period that most of the consequences will occur. The question is very simple. There are net fiscal losses to the country involved.

If a country such as the Côte d'Ivoire suffers in fiscal terms, this will have implications in relation to its spend on health, education and all other areas where overseas development countries are in partnership with receiving countries. The three countries differ in relation to where the impact of liberalisation will be felt. I am not asking the Minister of State to make an impossible statement, but I do not believe anyone could say they are fiscally neutral or derive a net benefit. A fundamental rule of economics is the relationship of the larger trading area to the smaller economy and so forth. In the short term the countries involved are almost guaranteed to experience fiscal losses. That has immense developmental implications for all members of the committee, and indeed for the Minister of State.

I want to make clear that I am in favour of a rules-based system. However, the rules have not been agreed at WTO level. I am also in favour of regional co-operation, but it depends on the type of inter-regional co-operation available. Regarding the impact on these three countries, I have not seen evidence to indicate that there will be a benefit. I recall that when I first joined this committee a long time ago we looked at the net losses being suffered by African countries in relation to GATT agreements. The losses ran into hundreds of millions. I should like an opinion on that.

My opinion would differ from that of Deputy Higgins. He says that the rules have not been agreed at WTO level, and I disagree. They have. They were agreed in 1996, and those——

I have no problem there.

Those are the rules of the game now. I do not know when a WTO agreement will be completed, but as an aside the capacity that development countries have for negotiating and adopting a very strong position was very evident to all multilateral parties at the unsuccessful Geneva negotiations in late July. However, the rules of the game are in place — I disagree with Deputy Higgins on that. But for the waiver, those rules, if they had been operated as they should have been, would have worked in an enormously prejudicial way towards these countries. When one talks about the cost benefit advantages, I respectfully suggest one is ignoring the cost that would accrue to all developing countries if the EU, by obligation under WTO rules when the waiver runs out, has to impose tariffs and quotas. That is the cost to the developing countries, I would suggest.

Take the Côte d'Ivoire agreement as one specific case. Certain aspects of it were front-loaded and negotiated by them, because some of the liberalised imports related to industries in which they have no capacity whatsoever. It is not as if the indigenous economy, such as the automotive industry in Ghana, is going to be swamped, or their capacity to build industrial machines, etc. They are not going to be swamped and they have agreed to that. However, as a concession on their part, they have negotiated exclusions for chicken, meat, tomatoes and onions where they do have capacity. There is asymmetric liberalisation over a ten or 15 year period in the case of Côte d'Ivoire, but that is the way they have negotiated — in the full knowledge that without an EPA, the WTO rules would kick in to their detriment.

A constant concern is that because their needs are so great, they would sign up under duress because they need very badly what they are getting. However, what will they lose by doing so? We can presume they will not be in the car industry, for example, but they could develop other industries for which they would agree to allow full, free, front-loaded imports.

And technology transfer.

Technology transfer is one issue. It is a fear of those kinds of outcomes. When one is not involved, one cannot know what the potential is for those countries.

I do not detect any pressure on the countries to sign these agreements, other than the pressure which would be brought to bear when the WTO rules apply to their disadvantage.

There is a question of when that is fair and when it is not. If that pressure is on them, it is not fair that they should give in on issues which they might not otherwise have to. When one is at the bottom of the scale, one cannot have any flexibility. I agree with the Minister of State but I understand the real fears and concerns. When one is at the bottom of the ladder, to get up five rungs is a huge improvement. Why should a country refuse a chance to go up five rungs if this would give it that chance?

I know Deputy Michael D. Higgins would always be concerned about big international corporate bodies which move in and take over because they have the marketing strength or developmental strength to do so. That is always a worry in those circumstances. From our earlier meeting with the Hunger Task Force, we know these countries have to first develop small co-ops if they want to get anywhere. We know bigger co-ops are better and more effective but that is not the state these countries are at. Women are doing much of the work and certain inputs and outputs are required. As we used to say in Ireland many years ago, if two blades of grass grow where one grew before, that is a big gain.

We have to protect these countries from the whirlwind of those who come in and can wash over them, having done all those things in the past. These countries have considered the situation and they are in favour. However, somebody needs to watch out for them in the bigger, more open market which they expose themselves to.

Fifteen years passes very quickly. The Minister of State is quite a young man. I am a bit older and I see how quickly the years pass. The fact the Hunger Task Force was here——

We traded our fishing industry for beef and milk.

Let us not get into that now, although the Deputy is not far off the truth.

That is where the concern is. It means that even when these are agreed, there has to be a watchdog so they are not undermined in certain areas or overwhelmed.

I accept the wisdom that comes with years. I assure the Chairman that Ireland is recognised as being very much to fore, certainly in an EU context, as an advocate for developing countries — I speak from personal experience. In these negotiations, which are operating under the expiry of the waiver in that environment, Ireland, with three or four other countries, has been pushing consistently for a flexible approach by the EU and to have a strong development dimension to the agreements.

I accept we must watch out for these countries. Perhaps we should be discussing one country at a time at three separate meetings. To take Côte d'Ivoire, there will be issues as to the way in which it can adapt to accommodate the new agreement which is driven by these external circumstances. However, in the next five years, Côte d'Ivoire will get €218 million from the EU, which is agreed, to enhance its systems and enable it to improve its capacity, infrastructure and trading capacity. It is a two-way street.

Nobody would claim that any of these agreements is absolutely ideal but we are not operating in an ideal environment due to agreements and historical issues from previous GATT and world trade negotiations. However, I assure the committee we are very much to the fore in making sure the development component of the agreements is strong, while recognising it is in everybody's interest to have the agreements concluded as soon as is reasonably possible.

I understand Côte d'Ivoire will get over €200 million over the 15-year period but it will lose approximately €150 million in the first five years through the impact of liberalisation, which is front-loaded. Perhaps I am wrong on that.

One cannot calculate the benefits that will inevitably come from increased trade. For example, Vietnam was in a not dissimilar situation 15 or 20 years ago and we can see how it has traded its way up. Ireland has benefited more than most countries from increased liberalisation and increased trading opportunities. Those sorts of issues are hard to quantify. Whether we have ideological or practical views on this — while Deputy Higgins may not agree, I am he sure he will acknowledge this — all multilateral agreements for the past 40 years have been moving towards a more liberalised, open, free trading system which has on the whole benefited most countries, of which Ireland is a prime example.

Are the terms of the draft report agreed?

The terms of the draft report are agreed. Deputy Higgins's dissenting vote is noted.