EU move to block trade aid for poor

Peter Mandelson, Europe's trade commissioner, is seeking to persuade Tony Blair to revise Britain's pro-poor country stance on trade liberalisation, a centrepiece of the government's development agenda for 2005, leaked documents from Brussels revealed last night.

A letter from Peter Carl, the European Commission's top trade official, said Mr Mandelson - still a close confidant of the prime minister - was being used to reverse what Brussels condemned as 'a major and unwelcome shift' in the UK's approach.

The government insisted in March that negotiations for economic partnership agreements (EPAs) under way between the European Union and some of the world's poorest countries should not be used as a backdoor means to prise open their markets, but in a strongly-worded attack the commission said the policy was drafted in the run-up to the election following strong lobbying from development organisations.

Britain's approach, it added, had been influenced by 'celebrities and NGOs who are now pressing for action', and would have no impact on the commission's negotiation position.

News of the leaked letter prompted a strong response in Whitehall and from development organisations. A Department of Trade and Industry source said: 'Our position is based on principle. We regret that the commission has misunderstood our views and we will be taking this up with them.'

Gareth Thomas, a Department for International Development minister, said: '[Mr Carl] is wrong in his analysis. We are keen to make EPAs as development friendly as possible.'

A spokeswoman for Oxfam said: 'This is an example of the European Commission gagging pro-development member states. Tony Blair is trying to do something to help the world's poor and is being hampered by the self-interest of Europe as a trading bloc.

'The European Commission clearly wants to use EPAs as a tool to open markets and further its own interests. This is not good. EPAs in their current form would be detrimental to development. They are free trade agreements by any other name and are currently designed to get the most for Europe without the necessary consideration of the negative effects on weaker developing country partners.'

In his letter to EU heads of delegation in African, Caribbean and Pacific (ACP) countries, Mr Carl, director-general of the trade directorate in Brussels, added: 'We are discussing the implications of this paper with the UK.

'Peter Mandelson is taking up our concerns and will press for a revised UK line, noting that their statement is contrary to the agreed EU position and harmful for our common objective of promoting development through trade'. Trade sources in Brussels confirmed Mr Mandelson had had talks with the former trade and industry secretary, Patricia Hewitt, urging the government to take a more moderate line.

'On the whole, that is what the UK has done. Britain has not been pushing its position very hard,' one source said.

Brussels, he added, believed Labour had been unduly swayed by development campaigners and that the economic partnership agreements being negotiated with poor countries would fall foul of World Trade Organisation rules unless they contained commitments by developing countries to open their markets at some stage.

'The UK has adopted this approach in order to keep the NGOs on board ahead of the Gleneagles summit,' he said. 'That's understandable, but the government has bought too much into the NGO agenda.'

UK sources strongly denied last night that the government was backing down and noted that Labour's manifesto contained a commitment that poor countries be allowed to liberalise at their own pace. Britain has made better trade access to the west for poor countries one of its central demands for its G8 presidency in 2005, and has urged that poor countries be given a minimum of 20 years to liberalise their markets in return.

Mr Carl's letter said the UK stance 'could well make prog-ress with EPA negotiations more difficult by reinforcing the views of the more sceptical ACP states and raising the prospect of alternatives that are, in reality, impractical.'

A briefing note attached to Mr Carl's letter noted: 'The paper was drafted ... following strong lobbying by the UK NGO community and the publication of the UK Commission for Africa report ... the UK set up this commission to review African development in advance of the UK G8 and EU presidencies. The drive for a commission came from celebrities and NGOs who are now pressing for UK action.'

http://politics.guardian.co.uk/development/story/0,15709,1487226,00.html