Participants' Contributions
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COMMISSION EUROPÉENNE DIRECTION GÉNÉRALE VIII
DÉVELOPPEMENT

EU-ACP Negotiations
General State of Play

Task Force Negociations, 8.VII.99

 

Negotiations to renew the partnership between the European Union and the ACP countries got under way on 30 September 1998, after two years of in-depth debate with a wide range of public and private actors and with civil society on "life after Lomé". The negotiations are particularly important for a number of reasons.

First, they involve 71 developing countries, 39 of which are among the world's least developed. The importance of the negotiations is brought out all the more by the scale of the poverty, the consequences of a whole series of factors contributing to political, economic and social instability, and the challenge of sustainable and equitable human development.

Also, in the context of cooperation strategies being generally reorientated, the future of the Lomé Convention - as a unique model of contractual trade and cooperation between two groups of countries - is important in terms of North-South relations. Community policy is itself undergoing thorough review on the basis of conclusions reached by evaluations carried out externally and internally over the past few years and in the light of the political will in the EU to ensure that Member States' bilateral policies and Community policy complement each other better.

Finally, by publishing a green paper leading to a wide-ranging public debate on the future of EU-ACP relations (1), the Commission raised the expectations of various actors in both ACP countries and EU Member States.

An active development cooperation policy vis-à-vis the ACP countries is an important component of the EU's foreign activity. The debate on the green paper showed just how great was the desire, in Europe and in the ACP countries, not only to forge ahead with this partnership but also to deepen it. It also showed, however, the need for thoroughgoing reform. The Lomé Convention goes back to 1975. To be sure, it has undergone several phases of adaptation since. But the new international context (globalisation, end of the cold war, etc.), progress on European integration and changes within the ACP group all call now for a fundamental reappraisal of cooperation - its objectives, what form it should take and how it should operate.

These factors led the EU's Council of Ministers to give the Commission a negotiating mandate that breaks new ground in a number of areas (2). We are dealing in these negotiations with an important aspect of the EU's identity abroad. The task is important from this point of view: to move on from the past and fashion a new relationship grounded in a set of mutual commitments that is better suited to today's challenges and addresses everyone's expectations and aspirations.

Beyond the great international economic and political upheavals of the last twenty years, particularly linked to globalisation, recent events can only serve to confirm the relevance of the EU's proposals. The crisis in the south-east of Europe, the serious difficulties affecting the process of transition in Russia, the financial crisis that has shaken Asia, the vulnerability of Latin American economies - these all highlight the need to improve management and regulation worldwide and to set clear objectives and guidelines in the EU's bilateral relations with the various regions of the world.

The EU's proposals: grouped around five main themes

As the negotiations stand at present, there is agreement between the parties on a number of points that fleshes out these five guidelines. But there will have to be more discussions in several essential areas. An initial stocktake at just past the halfway point in the period set aside for these negotiations reveals some significant positive aspects, but also the main difficulties encountered by the negotiators.

In February, the negotiating meeting between ACP and EU ministers in Dakar marked a first stage in the negotiations. The ministers sent out a positive signal as to their desire to deepen the partnership between the two groups of countries and to examine what reforms were necessary to face up to new exigencies. They endorsed the work done by the ambassadors and the Commission in drawing up a list of the topics under negotiation comparing the respective positions of the two sides, and identifying the main points of agreement and areas where views differed. Work has since progressed on a series of topics and the negotiations have moved into a more concrete phase geared to the drafting of texts.

Towards a new long-term partnership agreement

The new agreement will be a global agreement for the long term, though with a definite expiry date. It will contain a revision clause and a financial protocol covering a 5-year period and will set out objectives, principles and practical arrangements to apply to any specific or regional agreements in the future.

The future partnership will be implemented by means of three interactive pillars: political dialogue, development cooperation and economic and trade cooperation.

The structure and text of the new agreement should make it simpler than the current convention, and more readable and accessible for all the partners and actors in the partnership.

The political foundations of the future EU-ACP partnership

The parties have defined the overriding objectives of the future partnership agreement as regards peace and security, respect for human rights and democratic principles, and reducing poverty. The development strategies should be guided by the central objective of reducing and, in time, eradicating poverty through an approach integrating the political, economic, social and environmental dimensions. The parties are also in agreement on four fundamental principles: the equality of the partners and ownership, participation, dialogue and mutual commitments, and differentiation.

Political dialogue will play a central role in future relations between the EU and the ACP countries. The dialogue will be deeper and wider than at present; it will address all issues of common interest and all problems linked to the objectives of the partnership. The joint institutions will have a more effective role to play in this respect. The dialogue will be conducted with the requisite flexibility and at the most appropriate level, particularly the regional level.

Particular attention in the future partnership will be given to policies for consolidating peace and preventing and resolving conflicts. There will be an ongoing dialogue on consolidating democratisation processes and the reforms necessary to strengthen respect for human rights and the rule of law, and these will be a priority for Community support.

Discussion is continuing on the essential elements which will be at the heart of the partnership. The EU has proposed that good governance be included among the essential elements, alongside respect for human rights, democratic principles and the rule of law.

Whilst reaffirming their backing for the objective of good governance, the ACP countries believe that the concept is ill-defined and may lead to arbitrary decisions. Inevitably, this discussion is linked to the conditions for implementing the non-execution clause. Talks are continuing on this point and various avenues have been mapped out which may lead to a shared definition of good governance. The EU has invited the ACP side to put forward proposals as to the parameters to be used for assessing the quality of governance in a country. These discussions are being followed very closely by the public in Europe and in the ACP countries. It will be important to find a balanced solution.

Development strategies centred on the objective of reducing poverty

The conclusions from the big UN conferences on sustainable development and on the rights and needs of the individual will be a touchstone in future cooperation between the EU and the ACP countries. In practical terms, cooperation will be conducted according to the principles of country-by-country differentiation and the participation in their own right of civil society and the private sector as actors in the development process.

Against this background, future ACP-EU cooperation will seek to promote sustainable economic growth in the ACP countries based on the development of the private sector and leading to new employment. Particular attention will be given to social and human development with a view to the equitable distribution of the fruits of growth among the various sections of the population and improved access to education, health care and other essential services.

Agreement has been reached on the importance and necessity of supporting regional cooperation and integration, both as a stepping-stone towards integration into the global economy and as a factor in growth and reducing economic and social disparities.

The parties agree on the need to take account of gender issues so that equality between men and women is promoted in all fields covered by the partnership, be they political, economic or social.

The promotion of ecologically-responsible growth with a view to sustainable development will be integral to cooperation policies and programmes.

Priority will be given to the building of public and private actors' capacities, to support for political and institutional reforms - pre-conditions for consolidating democratic processes and establishing efficient, competitive market economies.

On all of these subjects, the two sides in general have very similar views as to what makes up the different areas of support. The dialogue needs to be deepened, however, in order to set out in the new agreement a genuine strategic framework that unambiguously reflects the central objective of reducing poverty, consistent with sustainable development and the integration of the ACP countries into the world economy.

This is an important political aspect of the negotiations. In the preparatory debate on the green paper, these questions aroused the interest of all the actors consulted.

Such an approach should also help with making the texts simpler than they are at present by restricting it to general guidelines in each of the areas it covers and consigning to secondary texts the more detailed aspects and the specific measures to be taken.

The trade issue

Further discussion will be needed on the EU's proposals for stimulating new flows of goods and investment through regional economic partnership agreements. For the EU, the trade issue should be addressed from the point of view of establishing a policy framework covering all trade policy instruments and economic development strategies, in order to help trade grow and create a climate conducive to private investment. This pre-supposes arrangements that are realistic, i.e. WTO-compatible, and flexible, i.e. make allowances for the economic and social constraints of the ACP countries. This is the thinking behind the EU's current proposals (5) .

The parties have not yet got as far as agreeing on this new approach.

They have agreed, however, on five important points :

  1. the current system of non-reciprocal preferences cannot be maintained indefinitely. Its maintenance for a limited period must ease the transition to new arrangements that will be compatible with GATT provisions;
  2. the objectives and principles of the new arrangements will be set out in the Convention;
  3. changes in trade arrangements should be based on regional integration processes under way among the ACP countries;
  4. the future partnership must allow an integrated approach covering trade, cooperation in trade-related areas that addresses constraints linked to supply and demand, and improving competitiveness in the ACP countries;
  5. the principle of differentiation will be applied, with LDCs receiving special treatment. The EU has committed itself to improving access arrangements for all (ACP and non-ACP) LDCs from 2000 onwards, with most products being liberalised by 2005.

The parties have also stressed the importance of working together closely in the WTO to defend the future trade arrangements.

The two sides carried out a joint study of options under the Community's Generalised System of Preferences (GSP). Three separate courses of action were explored, but the conclusions are very clear: none would produce an ideal solution. If the GSP were to be applied in its current form, the consequences in terms of the loss of preferences would be considerable. Improving the GSP would do more to help the other beneficiary countries.

Given the structure of their exports, introducing criteria for differentiating between GSP countries would lead to a more advantageous system in comparison with the current GSP for only a very limited number of ACP countries - quite apart from the difficulty of drawing them up and agreeing on them at international level.

The GSP probably has the advantage of being a more transparent system in that it fixes a preferential margin in relation to most-favoured nation (MFN) treatment without quantitative limits. On the one hand, however, it is not negotiated, which undermines the idea of a partnership; on the other hand, an element of instability would be introduced by the fact that it is autonomous and graded according to progress on competitiveness in different sectors of activity.

The Commission has carried out impact studies on the EU proposal to negotiate economic partnership agreements with the various regional sub-groups. The conclusions obviously vary from one region to another. Overall, however, none of the studies challenges the relevance of such agreements as a means of promoting the integration of the ACP countries into the world economy. They also show that this is essentially a political choice linked to the objectives of whatever development policies are adopted. The state of advancement of several regional integration processes could no doubt put a question mark over the timetable envisaged by the EU, but the feasibility of the proposal is not in dispute.

Given the progress on liberalisation, however, and the full range of options tied to the principle of differentiation (particularly as regards the LDCs), we should be thinking here in terms of gradually evolving processes.

Towards simpler instruments and a reform of programming

The parties agree on the need to rationalise instruments by grouping them together. The complexity of the current system poses obvious problems in terms of efficiency and the coherence in the management of Community aid. This will not, however, mean reducing the scope of Community financing in the ACP countries: the Community will continue to support macroeconomic and structural policies and reforms, sectoral policies, capacity building, technical cooperation projects and programmes, and humanitarian aid (when this cannot be financed under the budget set aside for the purpose). Also, in a new departure, the new arrangements for the management of the European Development Fund will allow the Community to contribute to debt relief measures taken under international initiatives.

Further discussion is needed, however, on the EU's proposal for dropping the current Stabex and Sysmin instruments. The EU has clearly stated its intention to maintain the principle of additional allocations for countries that suffer sharp falls in earnings from exports of basic agricultural and mining products. These will not take the form of automatic compensation, however; the way of calculating them will need to be revised. The additional resources should be directed to support for macroeconomic and sectoral reforms under the overall facility envisaged for development support.

Another new departure is the possibility of shifting Community support towards direct budgetary assistance and moving gradually away from the "projects and programmes" approach, subject to certain conditions which still need to be discussed.

The parties have signalled their agreement in principle on establishing an Investment Facility to give more effective and visible support to private sector development.

The sides have started to discuss reforming the programming process and establishing a rolling system of programming, making for more flexible management of cooperation. There is also agreement in principle that arrangements for resource allocation should take account not only of each country's needs, but also its policy performance. Nevertheless, discussion is still needed on the criteria and the arrangements for evaluating performance.

Discussions are also going on on the principle of a system based on indicative multiannual amounts and no longer on guaranteed entitlements. The predictability of community funding would in any case be maintained.

Although they involve discussions that are often very technical, these negotiations are basically political: it is a question of transforming what has long been a model for cooperation into an effective partnership in which each party's responsibilities are clearly recognised.

(1) COM(96)570 final, 20 November 1996: Green paper on relations between the European Union and the ACP countries on the eve of the 21st century - challenges and options for a new partnership.

(2) See summary of EU proposals in the 1998 Annual Report of the European Commission Directorate for Development - "The challenges of the post-Lomé negotiations".

(3) Rio de Janeiro, Vienna, Cairo, Copenhagen, Beijing, etc.

(4) Shaping the 21st Century: the Contribution of Development Cooperation - OECD DAC, 1996.

(5) See 1998 Annual Report - "The challenges of the post-Lomé negotiations", in particular the section entitled "From trade preferences to economic partnership ...".

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