In October 2006 the EU Commission launched its new trade policy called “Global Europe: Competing in the World”. It aims to link external trade policies which create market access for European business abroad to EU’s internal policies of creating a single market by an agenda of progressive liberalisation and deregulation. Because of the multilateral talks at the WTO being trapped in a dead end street, the EU embarked upon a new generation of bilateral and bi-regional agreements on trade and investment.

The criteria for the selection of new partners are 1) market potential and size 2) high level of protection against EU exports and investors. Asia with India, South Korea, ASEAN and China tops the list of attractive emerging markets.

This strategy results from the EU’s fear to loose shares of the world market to its competitors, the US, and increasingly China. The overall goal is to secure the competitiveness of European corporations in the emerging markets. Referring to this objective, EU Trade Commissionar Peter Mandelson has coined a slogan: ‘Big in Europe, big in the world’. At the same time he promises a levelled playing field and “win-win-situation” to the trade partners in Asia.

In line with their export-oriented growth strategy some Asian countries consider the opening of markets to be in mutual interest. They have a keen interest in access to the EU market, and in some of the WTO-plus issues, namely liberalisation of services and investment, and national treatment for their corporations in Europe.

However, from a civil society point of view many concerns about the development impacts of this aggressive liberalisation agenda have to be raised: whose needs, whose rights and whose interests can be safeguarded or enforced by speedy and deep market liberalisation in Asia? Are the envisaged bilateral and biregional FTAs tools to achieve sustainable development, social justice and gender equality, and poverty eradication?

These questions in mind I would like to share eight concerns raised by EU-based CSOs with regard to the potential implications and impact of the planned FTAs between the EU and Asian countries.

1) The Global Europe strategy marks a double shift in EU trade policies: a) it promotes a competition paradigm which subordinates and redefines the development objectives and the famous social model within the EU. It gives preference to competition over cooperation, to corporate-driven growth over development-oriented growth and public policies. b) for the sake of competitiveness the EU plans to focus on a WTO-plus agenda and gain a foothold in the so-called “new areas of growth”, such as trade in services, investment, government procurement, and intellectual property rights. Most of these issues were earlier rejected by the countries of the South because of their detrimental effects to development.

Now, trade liberalisation and growth in export are equated with development benefits without any evidence that they are actually pro-poor, and that the neoclassical assumption of trickle down of wealth will work out. The EU is in the process of cutting down its aid for human development and its anti-poverty-programmes for most Asian countries because it perceives them no more as developing but as threshold countries. It shifts assistance to economic cooperation and aid for trade. This reverses the means-end-relation: Earlier trade was perceived as vehicle for development. Now development aid becomes a tool for enhancing trade.

2) The EU Commission declared reciprocity of trade liberalisation a guiding principle for the negotiations with Asian countries. The principle of reciprocity marks a paradigm shift in trade relations between developed and developing countries. Reciprocity means the end to special and differential treatment of developing countries, and to preferential access for products from developing to developed countries (with the exception of LDCs). Demanding reciprocal trade liberalisation and forging equal trade rules between unequal trade partners disregards the existing economic disparities, special development needs, and the asymmetry which prevails in many sectors and areas. However, mechanisms like reciprocity and harmonisation of tariffs and regulations among unequal partners tend to privilege the stronger parties, countries and companies, and disadvantage the weak actors on the markets. Therefore the principle of reciprocity between unequal trade partners has to be called an anti-development principle and an impediment to fair trade and just distribution of wealth.

Therefore the principle of reciprocity between unequal trade partners has to be called an anti-development principle and an impediment to fair trade and just distribution of wealth.

3) The Global Europe strategy pays special attention to non-tariff-barriers and international regulatory convergence. Seeking the removal of domestic regulations which protect local industries against foreign investors, lifting of FDI restrictions on performance standards like local content requirements and dismantling of capital control means to limit the policy space of the partner countries [1]. It deprives governments of their right to use regulation as policy instrument for their development priorities. In this neoliberal logic, positive discrimination of vulnerable groups and preferences or protection given to weak sectors are considered to be trade distorting. This results in what the economist Ha-Joon Chang [2] called “kicking away the ladder”, the ladder to the development of competitive domestic industries, to food sovereignty, to protection of weaker sections of the economies.

4) If not protected local industries, small scale farmers, petty traders, small and medium scale enterprises, and women in the informal sector will be placed in direct competition with the much more advanced, powerful European corporations and will be crowded out to a large extent. Competitive pressure already led in a number of industries to deterioration of wages, to casualisation and precarisation of labour. When it comes to agricultural exports to the EU small producers e.g. female farmers are outcompeted by large agricultural exporters because they find it difficult to meet sanitary and phytosanitory standards. Thus the new trade regime works in favour of strong actors and large companies. It disadvantages small and weak actors in the market and threatens the livelihood of small producers, traders and workers.

5) This trade and investment policies by the EU are incoherent with the EU’s own development co-operation. As an example for this incoherence between trade policies and anti-poverty programmes I want to highlight women’s economic empowerment. Generations of women’s projects aimed at market integration through micro-finance and so-called income generation. Those women who manage to earn some income in the informal sector as home or village based manufacturers, petty traders or street vendors are now outcompeted by big retailers, supermarkets and imported goods. Liberalisation policies which don’t spare vulnerable sections and actors in the market undermine pro-poor development projects and generate new poverty. However, this new poverty and disempowerment of women lead to more migration of women, mostly as care workers in private households or hospitals, or as entertainment and sex workers. While under Mode 4 of service liberalisation the movement of professionals and high-skilled experts is discussed, care experts like domestic workers are not included and no migrant workers’ rights framework is attached to trade policies.

6) Shrinking policy space and shrinking tariff revenues due to tariff cuts have an adverse effect on national budgets, public services and public utilities. Additionally, the EU asks for opening up government procurement and does not exclude essential services from its liberalisation demand. Although most Asian trade partners clearly indicate that they don’t want to open up government procurement, the EU Commission - being subject to heavy lobbying in Brussels - promotes the interests of European service and multi-utility corporations at the expense of people’s need for essential services. Liberalisation of “environmental services and goods” implies privatisation of water and energy supply which has lead to an increase of prices e.g. in the Philippines, and distorted poor people’s access to basic services. This is detrimental to poverty reduction and a threat to basic human and women’s rights and social security.

7) Intellectual Property Rights in the agricultural and pharmaceutical sector are very critical for poor people’s survival strategies. Patenting of living organisms like seeds in agriculture means a threat to the production systems of farmers and disappropriates them of the most important livelihood resources and biodiversity. IPRs claimed by TNCs clash with local people’s property rights, with their indigenous knowledge systems and their right to share seeds. In the case of Monsanto’s BT cotton in India this resulted in high indebtedness of cotton farmers and thousands of suicides. Enforcement of intellectual property rights for pharmaceutical products such as compound drugs against HIV/AIDS or the termination of compulsory licensing would prevent production of generic equivalents and keep prices high. However, for poor people access to public health care and affordable drugs is a question of life or death.

8) All these issues are negotiated in secrecy. The whole process lacks transparency and democratic legitimation through consultation of parliaments and civil society. While business confederations from both sides get privileged space to lobby, there is a lack of participation of civil society and representatives of small scale farmers, small producers and traders, trade unions of informal workers, and women’s and migrants’ organisations. The only occasion when civil society representatives from the grassroots and NGOs are invited to voice their interests is the discussion of the Trade Sustainable Impact Assessment commissioned by the EU. However, our experience with TSIAs up to now is that a) the core of the TSIAs is an assessment of the economic and growth sustainability, b) that civil society involvement is dominated by the private sector and business community, and c) the findings of the TSIAs and the related concerns raised by NGOs did not influence or change trade policies thereafter. Thus, the SIAs are rather a showpiece for the social, environmental, gender and ethical commitment of the EU than a democratic and participatory instrument to inform the negotiations.

These are eight reasons why EU-based development, human and women’s rights networks oppose the proposed trade and investment agreements with Asian countries in their present form and process.

We advocate fair trade and economic cooperation policies between the EU and Asian countries based on the following seven benchmarks to be observed by the EU:

1) EU trade and investment negotiations must be transparent, participatory, and involve democratically elected institutions at national level as well as a full range of stakeholders from civil society, in particular representatives of the most vulnerable groups.

2) Instead of reciprocal trade liberalisation, EU trade and investment policies must establish a fair and equity-oriented trade regime with rules and regulations which take into account the social and economic disparities between and within the countries through differential approaches and preferential treatment.

3) People’s needs and rights - and not corporate rights -, poverty eradication and fair distribution should be the ultimate reference points for development and trade policies instead of just adding sustainable development and decent work as non-binding norms which get finally subordinated to the competitiveness and business paradigm.

4) EU trade and investment policies must respect policy space of other governments regarding domestic regulation to protect domestic markets, promote development objectives and build up social security systems and affirmative action towards vulnerable groups like poor and single women, indigenous people, unemployed, the elderly etc..

5) EU trade and investment policies must exclude essential public services from its liberalisation agenda and must not subordinate essential services which are in common interest to profit interest.

6) EU trade and investment policies must respect the development objective of food sovereignty and the livelihoods of small farmers and fishers who constitute the majority of economic actors in ASEAN countries, and include special safeguard measures in agriculture. Additionally, the EU must dismantle its own protectionism and trade-distorting subsidies in agriculture.

7) Intellectual property rights with regard to health and agriculture should be taken out of FTAs, patents must not be given on living organisms.

To wind up I would like to stress that the recent aggressive push by the EU for EPAs and FTAs with ACP countries – another interregional approach between unequal partners - had adverse effects: instead of regional economic integration the regions got divided and disintegrated, instead of closing development gaps they got widened. European CSOs and networks wish to dialogue and network with CSOs in Asia in order to prevent that people on both sides get divided up, and the new FTAs would turn them all into efficient competitors on the global markets instead of working together for social and ecological justice.

Since until now, the EU Commission did not indicate that it learned a lesson from the present crisis and would reconsider or stop its liberalisation agenda, we feel an even more urgent need to network across the continents and clearly state that these FTAs are not in people’s interests but in corporate interest only. They are part and parcel of the neoliberal system which is systemically flawed, and generates more inequalities, new poverty and one crisis after the other. It is exactly the whole neoliberal system we want to change, and therefore we should reject the FTAs in a well coordinated, transcontinental advocacy and resistance campaign.