Hylton

BRUSSELS, (Reuters):

Developing countries fear the European Union (EU) is too focused on opening up their economies in new deals between Brussels and Europe's former colonies that are intended to ease poverty, Jamaica's foreign minister said yesterday.

The EU's executive commission and the nearly 80 countries of the Africa, Caribbean and Pacific (ACP) group are entering a critical phase of talks over new trade and investment deals, called Economic Partnership Agreements (EPAs).

"We are concerned that (EU) negotiators are extremely focused on market access for the EU with little attention to market building or the development component of the EPAs," Jamaican Foreign Affairs and Trade Minister Anthony Hylton said.

Core details

"Development must remain the priority," he told a conference on the talks, which were launched nearly four years ago and are now homing in on core details ahead of an end-2007 deadline.

That is when the EU's existing system of privileged treatment for imports from ACP countries must be scrapped after being ruled illegal by the World Trade Organisation.

Brussels says the EPAs offer "a road out of dependency" and are a development tool, different from its attempts to strike free trade agreements in other parts of the world.

Public contacts

But many ACP countries are worried about the EU's calls for them to allow foreign companies into their service sectors and to bid for public contacts as well as cut tariffs for imports.

"We believe that if you simply have liberalisation without the appropriate mechanisms for response you'll be decimated," Hylton told Reuters on the sidelines of the conference.

Caribbean nations also wanted to develop a regional market among themselves before opening up to bigger economies, he said.

European trade chief, Peter Mandelson, speaking at the same conference, stressed Brussels would not abuse poor countries, but reforms would stimulate growth and spur development.

"There is no question of forcing the ACP to accept rules that they don't want," he said. "Let me be equally clear, rules are vital for investment. They offer predictability, stability and confidence without which investment will not take place."

After 30 years of EU trade privileges, most ACP countries only exported a few basic raw materials, leaving them on "a shrinking island of commodity trade," Mandelson said.

As well as the EPAs, the EU and its commission have promised 2 billion euros ($2.5 billion) a year from 2010 in aid-for-trade to developing countries, many of them in the ACP group, which would boost their capacity to export.

Mandelson urged developing countries to focus on policies rather than the amount of aid they stood to get.

"As long as the debate focuses on the size of the financial envelope rather than the policy reforms it is intended to pay for, I am frankly sceptical the long-term results will be there," he said.