Lisbon and Development

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I have previously argued here that the military implications of the Lisbon Treaty constitute an argument for a NO vote on 2 October.  I now want to argue that the implications of Lisbon for ‘developing countries’ in Africa, Asia and Latin America would be negative – and that this constitutes another strong argument for a NO vote.

But, pro-Treaty commentators will argue, Lisbon says that the EU promotes “sustainable economic, social and environmental development of developing countries, with the primary aim of eradicating poverty”.  Indeed, it goes further and, for the first time, commits that “Union development cooperation policy shall have as its primary objective the reduction and, in the long term, the eradication of poverty”.  Some development NGOs feel that this means the EU is legally committed to reducing poverty.  But the devil is in the detail: specifically, what policies reduce poverty?  The EU, along with other neoliberal organizations like the World Bank, argues that liberalization and full integration of poor countries into the global economy is the route to development and poverty reduction.  Critics see these policies as routes to immiseration.

When we move past the rhetoric and examine the record, the EU’s claim to be a development-friendly body does not stand up.  The EU has sought to defend the interests of European agribusiness at the World Trade Organisation against the interests of developing country agricultural exporters.  The EU has aggressively pursued services market access for European corporations through the medium of the General Agreement on Trade in Services, even demanding access to the service markets of some of the poorest countries on the planet.  It has used trade agreements, such as those with South Africa and Latin America’s own common market, to similarly push the interests of European companies.

And this unedifying record would get even worse in the future if Lisbon were to come into force. The Treaty commits the EU “to the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers”.  Elsewhere, the Treaty says that  “all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited”; so a poor country could not try to deal with a financial crisis by imposing capital controls (as Malaysia did successfully in the late 1990s) without facing EU sanction.  At a time when the damage done by free movement of capital is apparent to everyone, the EU wants to give that free movement the status of holy writ.

Another important provision of Lisbon concerns the extension of EU’s common commercial policy to cover trade in services, commercial aspects of intellectual property rights and foreign direct investment.  For the conclusion of trade deals in these areas, Qualified Majority Voting would be applied at Council of Ministers level, with the possible exception of aspects of trade in cultural and audiovisual services and of trade in health, education and social services, where unanimity might be required in certain circumstances, though the degree of protection this would afford such services is likely to be minimal. QMV would be the norm and a national veto – even in the area of education or health services – very much the exception; by thus extending liberalization into new areas of the European services market, the EU would be able to offer these as quid pro quo ‘bargaining chips’ to non-EU countries, thus strengthening the ability to negotiate services market access for European companies in those other countries’ markets.  In this way, a global liberalization agenda – further commercializing service provision, at home and abroad – would be advanced.

These concerns have been recognized by some NGOs, including those in the coalition Trade Justice Movement:

“Our primary concern is that the Treaty currently appears to prioritise trade liberalisation over a pro-development trade policy as the guiding principle for the EU’s common commercial policy. Given the acknowledged dangers of prioritising trade liberalisation in this way, language in the Treaty should have prioritised a pro-development trade policy…  We are also concerned at the proposed extension of the European Commission’s competence to cover investment, intellectual property and additional aspects of the trade in services. Given the problems of transparency and accountability…, we are concerned that extending the Commission’s competence into new areas will be particularly harmful if trade policy is not guided by pro-development objectives.”

But we know from the record to date that trade policy will categorically not be driven by pro-development objectives so these new Treaty provisions will be used in the same way as the existing ones – to drive forward liberalization.

A point that has been used by pro-Treaty advocates is that, because Ireland has gotten the ‘concession’ of each state retaining its own commissioner, the post of a Commissioner for Development (which currently exists) is now safeguarded.  The Development Commissionership would probably have been one of those dropped if the Commission size had been shrunk.  But what does this say about the EU, that it would have axed the Development brief?  What does that imply about its ‘commitment’ to development?  In any event, the presence of a Development Commissioner in the past has not altered the anti-development trade agenda of the EU.

Lisbon is bad for developing countries and should be voted down accordingly.

Image of  the protests outside the office of Tánaiste Mary Coughlan in Kildare St, Dublin, last year against The World Trade Organisation (WTO) talks is courtesy of the Irish Times.

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