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EU agrees joint position for Doha, but leaders’ eyes are on Washington
13 November 2008
European Union Development and Foreign Affairs ministers gathered in Brussels this week – on the 10th and 11th of November – have finally approved the EU joint position that will guide Europeans through the negotiations in the run up to the Financing for Development conference in Doha at the end of this month (29th November to 2nd December). The position comes somehow late in time, only two weeks before the start of the conference in Doha, thus seriously burdening the much needed European push to make this conference a success. Although the Europeans claim that the draft position has already informed the negotiations at the United Nations in New York during the past few weeks, the reality is that the outcome of the European efforts to get their act together on financing for development issues is less than optimal, and unlikely to play the leading role that the EU managed to play in the recent High-level Forum on Aid Effectiveness that took place at the beginning of September in Accra.
Moreover, the ministerial meeting took place just a few days after EU Heads of States discussed the EU proposals for the G20 Summit on the international financial crisis. It is obvious that the EU is clearly investing much energy in the quickly pulled-together summit on the international financial crisis in Washington DC on 15 November. EU Finance Ministers came together on 4 November to discuss the French proposal for the Union’s position for this Heads of State meeting in Washington. Tellingly, the discussions did not include a single consideration of the development impact of the financial crisis or the need to address the development implications of the crumbling international financial architecture.
Weak acknowledgment on the impact of the financial crisis on developing countries
The EU position for Doha deals with the development impact of the financial crisis very weakly. It does acknowledge that international financial stability is a global public good. Yet in addressing current initiatives to address the financial crisis, it only states that ‘The EU will make sure that the interests and needs of developing countries are duly taken into account.’ (Para 47) Such a commitment is hypocritical in the face of ongoing plans to place the discussion on future financial architecture within an exclusive club of rich countries and emerging economies spearheaded by the G20 and in which the EU participates.
Lack of firm commitment to deliver on aid levels
Although restatement of the EU commitments on aid volumes is welcome (take the ODA to 0.56% of GNI by 2010 and to 0.7% by 2015), the ministers failed to commit to producing multi-annual timetables by 2010. The text only “encourages Member States concerned to work on national timetables, by the end of 2010, to increase aid levels…towards achieving the established ODA targets.”
On effectiveness of aid, the text commits to “actively implement the Accra Agenda for Action”, including bringing special attention to predictability of aid, mutual accountability and “a revised approach of conditionalities.” Language on the latter is rather weak and a step backwards compared to the rather progressive language adopted in the EU joint position for Accra. Notwithstanding, it is welcome that the text mentions the “necessity for appropriate policy space” for developing countries to design their own development strategies.
Closing down European tax havens?
Language on tax justice is rather weak, failing to properly address the problem of tax evasion and avoidance by multinational companies operating in developing countries. The text acknowledges the importance to “fight against corruption, tax evasion and illegal financial flows”, but it only mentions international conventions against corruption and to recover stolen assets. While compliance with these conventions is important, the EU position fails to recognise that actually two thirds of illicit flows flying out from developing countries are actually related to commercial activities.
The Council Conclusions also fail to pick one of the main demands of civil society on the issue of tax justice: upgrading the UN tax committee to an intergovernmental body. The text supports strengthening this body, but this slight terminological difference entails a big difference in terms of the European position on this matter. Ultimately, it is apparent that the EU relies on the OECD to address tax related issues – an international organisation which is obviously biased towards the rich countries’ interests and whose work on tax issues has failed so far to put forward proposals that would properly enable developing countries to develop tax systems which would allow them to retain a fair share of the profits made by companies operating in these countries.
The EU ministers, though, succeed in agreeing upon the need to “combat tax evasion and tax heavens and (are) ready to consider the feasibility of an International Compact to this purpose.” This is obviously great news, and European civil society will be monitoring closely how the EU works, first and foremost, in combating the numerous tax havens under EU jurisdiction.
Debt, falling off the ministerial agenda
On debt issues, the text fails to include any language which suggests there is a still a debt problem or that the mechanisms of debt relief (e.g. the Paris Club) are not totally capable of addressing this problem. The main thrust of the text focuses on ensuring that developing countries are encouraged to borrow sustainably. This being said, the EU’s Council Conclusions prove to be not as retrogressive as the position that the EU is defending in New York for the official outcome document for the Doha Conference. In the context of these negotiations, the EU seems to be promoting a world-wide step backwards in its attempts to include language that would make debt sustainability (and not MDG achievement) the ultimate goal of debt cancellation.
Contrary to many debt campaigners calls, the EU has also failed to call for the development of an international orderly and fair debt work-out mechanism and to recognise the need to address the illegitimate debt that many developing countries are still paying back.
The text keeps the proposals of a debt work-out mechanism, which is re-titled as “debt restructuring mechanism”. However, the concept lacks any real potential first from changing the language from "to consider inter alia" to "supports discussions, if relevant" – which is obviously weaker – and, more importantly, by removing any mention of the UN in these discussions (leaving it as the remit of Paris Club and BWIs) and removing mention of "mediation or arbitration mechanisms".
Commitment beyond Doha will depend on political will
Even in its commitment to support a strong monitoring process for the Monterrey Consensus post-Doha, the EU’s position is contradictory to say the least. While it encourages the improvement of existing follow-up mechanisms, rather than taking the lead with concrete measures to achieve this, it postpones discussion for next year’s ECOSOC Spring meeting. This is a forum that the EU has itself indicated its disappointment in due to the lack of high-level commitment and failure to produce clear outcomes (indeed, it is not even a forum that issues an agreed resolution, so it is unclear how reforms proposed therein would translate into political action).
We wonder how committed the EU is to the success of the Doha Conference and the realisation of the Monterrey Consensus on a longer term. The fact that many European leaders quickly shuffled around their agenda to make sure that he attends the 15 November G20 Summit – or have been sadly begging to be invited – while they never seriously considered participation in the Doha Review Conference that has long been on the international agenda is sufficiently telling.