Trade in raw materials and commodities- MEPs concerned about supply

In a report adopted by the European Parliament on trade in raw materials, MEPs express their concern that increasing demand for raw materials on world markets and the trend to restrict free access to raw materials in third countries by trade distorting measures may undermine the EU's competitiveness. MEPs would like to see developing countries benefiting from the extraction of natural resources on their territories. China's increasing demand and its role in Africa is once again pointed out.

MEPs underline that access to raw materials and commodities is vital for the EU economy, due to its lack of domestic supply. The House urges the Commission to address the issue of free and fair access to raw material markets in the framework of the World Trade Organisation (WTO), while fully respecting restrictions based on developmental grounds for least developed countries (LDCs).

Concern about the trend to restrict free access to raw materials in third countries by trade distorting measures is underlined. The report asks the Commission to negotiate non-discriminatory access to raw material markets in return for access to energy-saving, renewable and resource-efficient technologies in all bilateral negotiations on free trade agreements.

LDCs and MDGs

The House regrets that many developing countries and in particular LDCs have been locked into the production and export of raw materials and commodities whose volatile prices have been declining over the long term, constituting a serious impediment to the alleviation of poverty as well as the realisation of the MDGs.

Increasing commodity prices have contributed to significant improvements in the external accounts of some developing countries, dependent on primary commodities, also says the report. MEPs support current efforts in developing countries and in particular in LDCs to diversify their economies and develop economic activities at more advanced stages of the production process.

The European Union has already phased out its tariffs on agricultural products from the LDCs (through the Everything But Arms initiative) and from many ACP countries (through Economic Partnership Agreements), according to the European Parliament.

MEPs also urge the Commission to use aid-for-trade as a tool for development as well as strengthen existing mechanisms for transfer of technology. Promoting transparency of revenues stemming from raw materials via programmes like the Extractive Industries Transparency Initiative (EITI) process is advocated.

The report calls on the Commission to review its compensatory finance scheme, FLEX, to ensure it is responsive and effective in supporting developing countries and in particular LDCs.

World food crisis

On the food crisis, MEPs are concerned that a growing proportion of the earth's resources are used for livestock raising and reaffirmed the right to food. They acknowledge that speculation plays a significant role in the setting of prices of raw materials and commodities with increased volatility as a consequence.

MEPs recommend that measures are taken on a European and international scale in order to ensure moderate prices as an immediate way out of the food crisis. The House demands increased levels of humanitarian aid to alleviate the food crisis which is threatening the lives of 100 million persons.

The House rejected a call for a moratorium on agrofuels. On Thursday, the EP will on a resolution on rising food prices in the EU and in developing countries.

China

Lastly, the House points out that the new trading policy of some emerging countries, especially China, searching for raw materials worldwide, in particular in Africa, is having a major and negative impact on the European Union's access to commodities in this continent, because of an approach based on one-to-one relations between states and neglecting references to human rights, corporate social responsibility and environmental and social standards.


Further information:
- Trade in raw materials and commodities
- Text, as adopted by the EP, will be available here (click on 20 May)



Contact:
Thomas DUDRAP
E-mail address : thomas.dudrap@europarl.europa.eu
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Richard FREEDMAN
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