Video guest: Josephine Mwangi

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Monday, 21 May 2018
PES Conference on Fair Trade
European Parliament, Brussels, 22 June 2005- Extracts fromf the speech of Peter Mandelson, EU Trade Commissioner
“Fair trade is one of the key tools both to enhance sustainable development and to fight poverty”. I fully subscribe to this statement of the International Fair Trade Movement. Fair Trade has shown that those working in difficult conditions in commodity-dependent and poor developing countries can aspire to a better life for themselves and their families. If today world leaders are focussing on the unacceptable poverty that still scars the lives of hundreds of millions, you can take some credit for that interest. Not every consumer looks at the supermarket shelf and wonders which coffee will do most to make the world a better place. But many do. I don’t think it an exaggeration to say that it’s largely thanks to the voluntary initiative, commitment and enthusiasm of the Fair Trade movement.
Fair Trade teaches us that consumers are not condemned to be only bargain-hunters. The healthy, sometimes startling, growth of Fair Trade product sales in many EU countries shows that consumers do take account of considerations about conditions of production. The reaction of large retailers and corporate interests shows that they too are sensitive - supremely sensitive - to this dimension of consumer behaviour. Fair Trade has set an agenda and has raised our awareness – a factor which no serious player can afford to ignore. This is quite an achievement. But what lessons can be drawn from Fair Trade for policy making – and that puts me on the spot.
The key lesson is that trade is not just about the dismal science of economics: it is especially not about saying that the laws of comparative advantage ensure that trade is at all times, in all cases, to the benefit of all. Trade is about people, their livelihoods, their families, sometimes their survival: Fair Trade reminds us of that strongly, and I am happy to continue the dialogue that Fair Trade movement has opened with me. It’s good for me to be reminded of that.
Alternative trade structures bring real benefits to participating producers. But it would in my view be wrong to jump to the opposite conclusion that conventional trade is automatically exploitative, unfair and wrong. I said earlier that trade policy is not just economics. But when you look at a commodity like coffee it’s clear that downplaying economics does not allow you in some way to suspend the laws of economics. If coffee prices rise, desperately poor people will plant coffee bushes. Three years later there will be too much coffee and prices will fall. The only part of that process which we have a chance of stopping today is the existence of desperate poverty – not the cyclical rise and fall of prices. Fair trade takes the direct route to a better tomorrow by offering price guarantees, and much besides. But for the Fair Trade solution to be a global solution we would have to ensure that only Fair Trade coffee was sold. Let me tell you one thing: powerful as the Commissioner for Trade is, some things are still beyond my powers!
The trade policy I pursue takes the slower route: working with the grain of economics to get to the heart of the problems by eliminating poverty. Trade policy is about using trade to make poverty history. Colonially-directed terms of trade may have contributed to impoverishment in the past. Trade opening – making use of comparative advantages in a global context - has worked in the recent past to lift hundreds of millions out of poverty. The fact that not all have been so lifted means that we have to do more.
In trade policy, we pursue a variety of routes to contribute to poverty reduction and global justice. First, there is the important multilateral agenda in the WTO. The current multilateral round of negotiations, the Doha Development Agenda, is in my view the most important tool to spread benefits from trade liberalisation more evenly among all trading partners, including the Developing Countries. I want this round to be a success, and I want to use it to bring Developing Countries closer to the world trading system in order that they can benefit from it.
The EU has set a clear pro development and progressive liberalisation agenda for the multilateral round: The EU will not push for tariff cuts for weak and vulnerable countries as part of the Doha Round. As regards market access for goods and services, we will allow Developing Countries to open sensitive sectors at a pace determined by their capacity and their development needs. I have called for WTO negotiators to reach early agreement on the exact form such special and differential treatment may take. On cotton, I proposed accelerated Doha Round agreements on reducing support for cotton producers in the richer industrialised countries and fair rules for African producers.
Second, as far as the bilateral agenda is concerned, the EU is reviewing its rules of origin to make them more development friendly and to help Developing Countries to exploit market access to the EU. The Commission has called on the G8 to provide much higher levels of trade development assistance and will contribute to this. We have also suggested that all other developed countries extend quota and tariff free access to all least-developed countries as the EU does under its Everything But Arms preferential access scheme.

Third, as far as ongoing negotiations are concerned, I am ready to explore with our trading partners the potential for including in agreements specific incentives targeted at improving market access for fair trade products. The Economic Partnership Agreements are a good test case for this since the promotion of Fair Trade is already included in the Cotonou Agreement.
With regard to our future fair trade policy agenda, I will not present you a “Fair Trade Action Plan” here and now. But I would like us to engage in a debate both within the different services in the Commission – because this goes far beyond trade policy and DG Trade only – and between the COM and the Fair Trade Movement to jointly describe how we act more coherently.

I see several issues for this future debate: First, we need to assess whether we need a Fair Trade standard. The Fair Trade movement has done a good job in organising itself with the Fair Trade Organisation mark and the Fair Trade Labelling Organisations International mark. I also appreciate the various genuine efforts being made by mainstream retailers and other independent certifiers to offer consumers assurance on supply chain conditions. I can not tell European consumers which label is the right one and how they should spend their money.

Second, we should look at possibilities to foster Fair Trade in our procurement laws. I do not know at this stage to what extent this will prove possible, but I can assure that I want a discussion about its feasibility.
Third, we need a single contact point in the Commission on Fair Trade. This is key if we are to act more coherently in the future.
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The revised Cotonou Agreement will be signed tomorrow in Luxembourg by the EU and 76 countries from Africa, the Caribbean and the Pacific. The new provisions cover a broad range of issues, including a provision for a strengthened political dialogue and references to the fight against terrorism, cooperation in countering proliferation of weapons of mass destruction and the International Criminal Court (ICC).

“The signature of the revised agreement is yet another important step to strengthen the privileged relationship between the European Union and countries in Africa, the Caribbean and the Pacific. The global agreement represents a balanced package which improves upon the efficiency and quality of our partnership and reinforces our common commitment to the Millennium Development Goals. Poverty reduction remains at the heart of the revised Agreement, while the continuation of sustainable, long-term financing and inclusion of important security and political dialogue provisions render our partnership even more effective”, stated Louis Michel, Commissioner for Development and Humanitarian Aid, at the occasion of the ceremony.

The signature of the revised Agreement will be followed by a process of ratification. In order to allow for early application, transitional measures will allow the majority of the revised provisions to enter into force upon signature. However, the provisions relating to the new financial resources can not take effect before the entry into force of the next multi-annual financial framework. In this context, the EU has committed to maintaining a threshold of financing at least equivalent to that of the 9th European Development Fund, taking into account inflation, growth and the effect of enlargement to 10 new Member States.

The Cotonou agreement sets out the strategic framework for relations between the EU and countries in Africa, the Caribbean and the Pacific. It was signed on 23 June 2000 at Cotonou in Benin. The Cotonou Agreement focuses on poverty reduction as its principal objective, to be achieved through political dialogue, development aid and closer economic and trade cooperation.

The revision process took place in accordance with Article 95 of the Cotonou agreement which provides for a revision clause allowing the Agreement to be adapted every 5 years (with the exception of the provisions on economic cooperation and trade which are subject to a separate procedure). At the end of February 2004, ACP and EU partners notified the provisions each party wished to revise. The negotiations were formally launched at an ACP-EU Council of Ministers meeting in Gaborone in May 2004 and were concluded on 23 February 2005.
Friday, 24 June 2005
Members of Parliament's Agriculture Committee gave a cautious response to plans to overhaul the EU sugar market presented by Commissioner Mariann FISCHER BOEL on Wednesday. Drastic price cuts for various products are on the cards as well as transitional measures to restructure the industry, which is being asked to become more sustainable and competitive, in line with the reform of the common agricultural policy.

On prices, Mrs Fischer Boel is proposing a cut of 39% over two years from 2007 for sugar (to €385.5/tonne) and of 42.6% for sugar beet (to €25.05/t). Her predecessor, Franz Fischler, was planning cuts of only 33% and 37%.

The Commission also wants an overall decrease in production, with compensation of 60% of the price cuts. And it envisages setting up a voluntary restructuring plan lasting four years, to be funded through a levy on quota holders. Degressive payments of €730/t in the first year, €625/t in the second, €520/t in the third and €420/t in the fourth will paid to factories to encourage them to close. Part of the funding will also go to beet producers. The African, Caribbean and Pacific countries, which currently benefit from the EU guaranteed price system, will have a special aid plan with €40 million in funding for 2006.

Commissioner Fischer-Boel defended these cuts, saying there was a need to "work for the long term" and not "take the risk of re-opening the issue" in a few years' time. Any failure to reform would have an impact on the entire European sugar industry, she added, as the market is gradually opened from July 2006 to the least developed countries (LDCs), whose prices are much lower than EU guaranteed prices.

MEPs were wary about the proposals, which will be debated at a public hearing on sugar on 13 July in Brussels. Parliament's rapporteur on the subject, Jean-Claude FRUTEAU (PES, FR), already believes the reform is likely to pose problems to the producer countries and that "measures must be taken to preserve the EU from the triangular trade" (whereby the LDCs would re-sell at EU-guaranteed prices the surpluses of other, cheaper, sugar producing countries). Friedrich-Wilhelm GRAEFE zu BARINGDORF (Greens/EFA, DE) fears that the reform will "sound the death knell of the sugar beet industry" and that it represents a first step towards "total liberalisation of the market", paving the way for "the entire world's sugar to flood into Europe".

22.06.2005 Committee on Agriculture
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Thursday, 23 June 2005
The European Commission today proposed far-reaching reforms to the Common Market Organisation for sugar. The changes will enhance the competitiveness and market-orientation of the European Union sugar sector, guarantee it a viable long-term future and strengthen the EU’s negotiating position in the current round of world trade talks. They will modernise the current system, which has remained largely unchanged for around 40 years. The new system will continue to offer preferential access to Europe’s sugar market for developing countries at an attractive price well above the world market level. African, Caribbean and Pacific countries which traditionally export sugar to the EU will benefit from an assistance programme, also adopted by the Commission today. The Commission reform proposals include a two-step cut totalling 39% in the price for white sugar; compensation to farmers for 60 percent of the price cut through a decoupled payment - which would be linked to the respect of environmental and land management standards and added to the Single Farm Payment; a voluntary restructuring scheme lasting four years to encourage less competitive producers to leave the sector; and the abolition of intervention. The ACP assistance plan will earmark € 40 million for 2006 and pave the way for further assistance. The Commission hopes for a political agreement on the proposals at the Agriculture Council in November.
An assistance scheme for ACP countries

Attention must be given to the needs of developing African, Caribbean and Pacific countries for which Europe has traditionally been a crucial market. Post-reform, Europe will remain an attractive market place for some of the countries which have guaranteed access to the EU market under the Sugar Protocol.

However, the Commission is also proposing an assistance scheme for the African, Caribbean and Pacific countries which traditionally export sugar to the EU. It recognises that the reform is a major challenge not only for EU beet and sugar producers, but also for many ACP suppliers. In order to respond to the diversity of situations of the different countries, the Commission’s assistance scheme proposes to cover a broad range of social, economic and environmental actions.

Under the Sugar Protocol, eighteen ACP countries export sugar to the EU, and may be affected by price reductions on the EU market. The commitment of the Commission to assist them in the adaptation process was integrated in its Communication of July 2004, and expanded in an “Action Plan” produced in January, as a basis for dialogue with the ACP.

The Commission proposes to start implementing the assistance scheme as soon as 2006, as early investments in these countries will maximise their chances of successful adjustment. Since the complexity of restructuring and diversification processes requires a sustained effort, 2006 assistance should be integrated into an eight year scheme. An initial budget of € 40 million has been earmarked for 2006. Ffurther long term assistance will be secured for the period 2007-2013.

Considering the differences between the ACP countries, a broad range of support options is being offered, to be tailored in each country to the needs identified by the stakeholders, and integrated into a long term, comprehensive, sustainable strategy. The types of assistance have been designed with particular attention to the effectiveness of implementation.
The EEA consolidated its contribution to the European Community's sixth environment action programme in a number of areas in 2004: climate change; nature and biodiversity; environment and health and quality of life; and natural resources and waste. In addition, the EEA developed further its information systems and networks. Other policy areas have been supported through contributions to sustainable development and sectoral integration; support to the European Parliament and meetings of the Council of Ministers; and initiatives in the wider world. The EEA has also provided support to member countries and to the European Commission, both as clients and through partnerships.