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Europe-ACP relations

political

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Europe-ACP relations

The European Union development policy put in evidence the engagement of Europeans to solidarity with the poorest and deprived peoples of this world, in the context of a partnership which respect the democratic principles and the human rights. The European Union and its member states together constitute the principal source of Official development Assistance for the benefit for all the countries of the South. The EU’s effort to reduce the poverty and inequalities in development around the world are linked to the quest for peace and stability, the need for better management of global interdependence and risks and promotion of a kind of world development that is more compatible with European political and social values.



Poverty, which includes the concept of vulnerability, results from many factors. The Community is determined to support poverty reduction strategies which integrate these many dimensions and are based on the analysis of constraints and opportunities in individual developing countries. These strategies must contribute to strengthening democracy, to the consolidation of peace and the prevention of conflict, to gradual integration into the world economy, to more awareness of the social and environmental aspects with a view to sustainable development, to equality between men and women and to public and private capacity-building. These aspects must be taken on board by the partner countries and included in dialogue between the State and civil society.

The Community will concentrate on six areas which have been identified on the basis of the added value of Community action and of their contribution to poverty reduction: the link between trade and development, regional integration and cooperation, support for macro-economic policies and the promotion of equitable access to social services, transport, food security and sustainable rural development and institutional capacity-building. Attention will consistently be given to human rights, to the environmental dimension, to equality between men and women and to good governance.

The Community's development policy concerns all developing countries. As regards the allocation of resources, the least developed countries and low-income countries will be given priority, in an approach which will take account of their efforts to reduce poverty, their needs their performance and their capacity to absorb aid. Poverty reduction strategies will also be encouraged in middle-income countries where the proportion of poor people remains high. The Community and its Member States will coordinate their policies and programs in order to maximize their impact. In the context of country-by-country strategies, better complementarily will be sought both within the Union and with other donors. To ensure consistency, the objectives of Community development policy will be taken into greater account in the conduct of other common policies.

The Council supports the Commission in its efforts to manage the Community's external aid more effectively. Particular roles are played by the current restructuring of the Commission's departments, by the more important place being afforded to programming, by the orientation of programs towards results, by the development of an appraisal culture, by beginning the process of deconcentration and decentralisation, and by refocusing management committee tasks towards the strategic aspects of cooperation.

The difficulties of putting 'partnership' into practice should not call into question the value of this form mutual political commitment. The circumstances and huge challenges facing many ACP countries are good reason to preserve the strengths and qualities of the present relationship, in particular the predictability and contractual nature of the aid. But this political commitment must be made more explicit and more effective.

Were the European Union and its ACP partners ready to do this?

On the EU side, the political dialogue with the ACP countries must be part and parcel of its common foreign policy.

A more relaxed framework for dialogue where issues of good governance, democracy and human rights, and the consolidation and maintenance of the rule of law can be broached, along with the development of a genuine European conflict prevention and resolution policy, would seem to be preconditions for a more effective European policy. On the ACP side, commitment to push through institutional reforms and conduct economic, social and environmental policies reflecting the major undertakings made at the Rio, Vienna, Cairo, Copenhagen, Beijing, Istanbul and Rome international conferences, must be the foundation of the new partnership. The EU's aid activities, in common with those of other donors, can have major political repercussions for these countries; their relevance depends on a range of conditions, notably political conditions. The parties’ respective responsibilities in the context of these activities must be expressed in political terms.

If a mutual political commitment is made on this basis, the principal subjects of the proposed dialogue (such as domestic security issues, migration, the fight against drug trafficking, etc.) and most appropriate geographical configuration (global dialogue or dialogue tailored to groups of countries) must be established.

To understand the relations between Europe Union and African, Caribbean, Pacific countries it is necessary to know about their origins and subsequent evolution.

Community development aid policy has its roots in the association of the overseas countries and territories in 1957, the result of compromise between member states advocating a global approach to development and those arguing for a special relationship with Africa. The association was designed as a broad strategy encompassing both trade arrangements and development aid.

The fact that many countries gained their independence after the first five years of the association agreements laid down in the Treaty, did not bring any fundamental change in the thinking behind cooperation. The member states moved by solidarity and a wish to assume their responsibilities as much as by a concern to defend their economic and geopolitical interests in the ages of Cold War decided to continue their cooperation in the framework of the two successive Yaoundé Conventions (1963-1969 and 1969-1974). They were a natural follow-up to association.

During 1957-1974, period of Euro-African relations, the important share of Community aid went to French-speaking countries of Africa. After 1970 the accession of the United Kingdom, the international situation and the desire to develop a global aid policy combined to bring an important change in Community aid policy. European anxiety at the first oil crisis, the fear of raw materials shortage and desire to hold on to valued overseas markets, united with geo-strategic interests and a residual sense of responsibility for the colonial past to produce the first partnership between the Community and the ACP countries. The European Commission has become the world's fifth largest donor of development aid - and therefore one of the most important - in the 2000's. Together with aid from its member states the EU provides more than 50 % of all aid going to ACP countries. The sources for EU Commission aid are the EU Budget for non-ACP countries, the European Development Fund for ACP countries and the European Investment Bank (EIB). An additional but separate amount is provided to the ACP through the EU budget in form of Food and Humanitarian Aid. The ACP countries are no longer the main beneficiaries as in the 70ies and 80ies, but receive only a share of 24 % plus parts of the aid to NGOs and Food and Humanitarian Aid.

As aid volumes to the ACP have increased over the past decade, the ACP program has lost some of its importance in the overall EU program (decline from 67 % of total allocable aid disbursements in 1986-1990 to 42 % in 1991-95). However, the absolute amount of funds available for the ACP countries increased from Lomé I (ECU 3462 million) to Lomé IV bis (ECU 14625 million). During these 25 years the number of ACP states also increased. This development is partly the result of changing policies and large commitments made to the central and eastern European countries. While in 1970-1974 13 of the top 15 aid recipients were ACP countries (all from Sub-Saharan Africa and all but one francophone), in 1994-1995 this had fallen to 7 (only 3 of those 7 highest ranking ACP states being francophone). A study (IDC, 1999) has also found that aid levels to the least developed countries have continuously decreased, which is somehow in contradiction to the statement that poverty reduction is the overall aim of EU aid as stated in the Maastricht Treaty.

Lomé Convention

In 1975, the European Community signed the first Lomé Convention with a group of 46 independent states. At Lomé II Convention (1980-1985) 57 states signed, at Lomé III Convention (1985-1990) were 65 states and 70 (with Eritrea) ACP states at fourth Lomé Convention (1990-2000). The Lomé Convention very soon became a model of cooperation for development and the amount of aid provided has continued to grow. The Lomé Convention remains the largest collective cooperation agreement between the countries of the North and those from the South.

The first Lomé Convention was at the time a unique example of cooperation the colonial dependencies, development assistance was extended and reformed: the non-reciprocity became the core of principle and the paternalism was replaced by the concept of partnership. This concept reflects an approach to cooperation based on concerted commitment in pursuit of shared objectives. Principles such as collective negotiations (between the two groups of countries and covering several aspects of cooperation), the dialogue with individual ACP countries made possible by the joint institutions and the contractual and predictable nature of the funding provided have become the foundation of European aid policy under the Lomé Conventions.

The financial aid is implemented via the European Development Fund which receives direct five-yearly contributions from EU Members States. ACP countries are also eligible for European Investment Bank own resources. The European Development Fund is an adaptable and flexible financial tool that has expanded over the years.

Successive conventions have enabled the partners to adapt aid objectives and instruments without ever questioning the overall framework or the strategy pursued. These adjustments have nevertheless provided an opportunity to draw practical lessons from the successes and failures of the past and to incorporate the intervening changes in development thinking.

The innovations that have given the Lomé Convention its pioneering character include the system for offsetting losses of export earnings introduced in the 1970’s and, more recently, 1990’s negotiated approach to structural adjustment. Regardless of their future relevance, both instruments were applications of the latest in development thinking at the time. With the end of the conflict between East and West, the Convention was also one of the first cooperation agreements to acquire an explicitly political dimension in the shapes of human rights clause, which since 1995 has been extended to encompass the application of democratic principles, the rule of law and good governance.

The alteration made to conditionality in the revised fourth Lomé Convention and the principle of two-trances programming, which limits the automatic nature of programmable aid allocations also reflect a major change in the Community’s approach to aid policy.

Programmable aid concerns the National Indicative Programmes which determine for each ACP state the development programmes and projects to be carried out and the financial aid available for purpose. At regional level, there are the Regional Indicative Programmes.

As laid down in the Convention an individual amount of aid is allocated to each state. Its size of it is determined automatically and depends on objective criteria of a geographic, demographic, and macroeconomic nature (GNP per capita, economic growth, external debt, etc.). Programming also earmarks Structural Adjustment Facility. NIP, RIP and SAF together constitute programmable aid.

Non-programmable aid, on the other hand, is granted to ACP countries on a case-by-case basis. It is conditional and relates to circumstantial requirements, necessities and impera­tives. There is a series of specially designed mechanisms for this purpose, including:

• STABEX which compensates for collapses in export earnings due to falls in world prices

• SYSMIN - a similar safeguard for the benefit of enterprises in difficulty in the mining sector

• Risk Capital, which aims to encourage the development of public and private Small and Medium Scale Enterprises. Risk capital loans, which are reimbursable, have increased substantially during the time of the Conventions. They are increasingly being made to the private sector

• Emergency humanitarian aid to refugees and returnees, a constantly growing portion of the EDF

Certain types of EDF financing can take the form of co-financing with either ACP partners themselves, other national or international donors or NGOs. The success achieved by this type of action since the 1980s is proof of the ability of the EDF to mobilize aid and of the political credibility of the European Union’s development policies.

STABEX is the first North-South system that breaks with traditional commercial rules such as classic, preferential trade agreements.

This mechanism of support is concerned exclusively with agriculture and covers a total of 49 agricultural and fishing products. Its purpose is simple: to compensate by direct financial aid for losses of earnings by ACP States.

In practice, STABEX aid focuses on a small number of key products. Between 40 % and 60 % of the funds are paid out in favour of a dozen products, including coffee, cocoa, cotton, tea, peanuts, oil-producing plants and bananas. Even though this aid, for the greater part, goes to half-a-dozen African countries exporting on a large scale, STABEX still provides for around 40 beneficiaries in total, the majority of which are Less-Developed Countries (LDC) and countries that are landlocked or islands.

Eligibility conditions were relaxed under Lomé IV and the principle of partial reim­bursement of payments to the more advanced beneficiary countries was abandoned. STABEX transfers have consisted entirely of grants since 1990.

The STABEX funds are not given directly to affected farmers but to the governments. The aim of these mechanisms is to contribute significantly to the establishment of a sounder economic base in the beneficiary countries and to contribute to the economic and social progress of the populations of those countries by helping them to safeguard their purchasing power. As both the producers and the state via export and other taxes is negatively affected by a fall in export earnings it is reasonable that both are compensated. So far funds are allocated through the government either to the sector where the loss occurred or to diversification, for example the processing of raw materials. The flexibility of the system allows for various uses such as measures to improve the competitiveness of agricultural sectors but also general macroeconomic reforms, improving rural infrastructure, projects in the field of telecommunications and electricity supply and even food and refugee aid. This reflects also the fundamental changes in the Lomé IV Convention as in the first five year period of Lomé IV the STABEX funds were used for import programs, support for structural adjustment programs (SAP), infrastructural programs, marketing activities, support for marketing boards and price stabilization, and support for diversification activities

Criticism of STABEX

With regard to developmental impact concerns the record of the STABEX scheme appears weak since it has major limitations:

1. Slowness of disbursement: Although STABEX was intended as a quick-disbursing instrument, the Framework of Mutual Obligations (FMO) and its attached conditions required a considerable planning effort and have increased negotiating time. Considerable delays in transfers caused by cross-checking of statistics and lengthy negotiations, long drafting and implementation periods,  complex mechanisms and procedures of transferring funds are among the main reasons for criticism. In addition to the problem, the slow acceptance of the FMO, the suspension of payments in case of non-adherence to suspension clauses and slowness of some countries to open foreign currency accounts have contributed. There is evidence that the time between signing the transfer agreement and disbursement has steadily increased. Between the calculation of losses and the disbursement more than two years can be needed in extreme cases.

2. Little effects with regard to the stabilization goal: Due to its product-by-product approach and delays in disbursement STABEX becomes an imperfect counter-cyclical instrument, therefore limiting its effectiveness. Studies suggest that stabilization effects were in no cases larger than 10%, and in some cases they even had a destabilizing effect, due to long and increasing time lags between decrease in export earnings and disbursement. Furthermore, the number of products included in the scheme is limited and processed agricultural goods (in particular those that fall under the Eli's common agricultural policy) are not included.

3. Lack of funds: Extreme falls in prices cannot be compensated, because of limited funding (inadequacy of funds allocated for the STABEX scheme), and a long term decline of commodity prices is not compensated for. The lack of funds, especially in the 1980's has been one of the main reasons for criticism in the past, although this trend has recently been stopped. Since 1995, for three years in a row, eligible STABEX claims could be covered in their entirety from the resources available for the respective years, something that had never happened since the entry into force of the fourth Lomé Convention. However it should be noted that this was mostly the result of high commodity prices during this time, and might not last long.

4. Obstruction of diversification and reforms. STABEX impedes a long-term securing of export earnings, e.g. by diversification of exports or formation of local markets. The fixing of dependency thresholds however, results in reluctance to engage in necessary diversification efforts. It discriminates against activities that are not supported by STABEX, for example processing of raw materials, with the result, that the benefiting countries concentrate even further on the production of STABEX -goods instead of trying to reorganize their economic structure to other sectors. Dr. Robert Kappel (professor at the University of Leipzig, teaching 'Economics and Politics in Africa' at the Institute of African Studies) frequently criticized that this leads to a further manifestation of monocultural structures and a distortion of the allocation of resources in favour of an incoherent economic structure. He concludes that STABEX has m fact contributed to a commodity dependent export structure.



5. Distorting incentives: As the calculation of STABEX payments in principle only takes into account the exports of a certain good towards the EU trade with the other region is distorted. To use STABEX as an insurance against falls in export earnings these exports have to be concentrated to the EU, to make sure the basis for the calculation of tosses is high. On the other hand if no fall in the world market price is expected in the near future there is an incentive to redirect exports to other countries. If this trade is not reported (e.g. informal trade to neighbouring countries) a country could benefit from STABEX payments although no loss occurred.

6. Utilization of funds: A lack of institutional capacity by the EU to monitor the implementation of STABEX utilisation, and the fact that utilisation of funds is in the hands of government bureaucracy, have resulted in the undesired effect that the producers of commodities often are not the beneficiaries of the transfers. Although the use is agreed in the FMO because of the fungibility of aid the resources could be spent by the government for other purposes. As this usually raises the demand for domestically produced goods such as construction or transport it will lead to an increase in prices relative to the export goods. Therefore the farmers can be worse of as they also have to pay more for their j demand, especially when they receive only a little fraction of the compensation funds. By stabilising the foreign exchange situations of ACP countries STABEX, however, had an indirect impact in promoting the capacity of these states to implement their structural adjustment programmes.

7. Imbalance of distribution: There is a tendency to favour middle- and high-income countries in the allocation of funds. As a result STABEX has little impact in terms of redistribution. The reason for this imbalance is that STABEX is based on trade and export goods and not on criteria for underdevelopment. If one considers only those countries that receive STABEX payments a positive correlation between the per capita income an per capita STABEX payments can be found. However if all ACP countries are included this correlation disappears. Efficient distribution policies are therefore not fostered by the STABEX mechanism.

SYSMIN - Following the example of STABEX, the fifth EDF (Lomé II) created SYSMIN to take account of the difficulties of ACP states dependent on earnings from mineral exports to the EU.

The list of products, or product groups, covered by this mechanism was at that time limited to six: bauxite / aluminium, copper / cobalt, iron, tin, phosphates and manganese. Aid was granted to states requesting it in the form of special reimbursable loans if their financial dependence threshold with regard to the mineral exports concerned reaches at least 15 % (10 % for the LDC). The initial aim of SYSMIN was only to re-establish the 'economic viability' of mining undertakings, normally in the public sector, in situations of temporary crisis.

SYSMIN has not been able to compensate for long-term falls in (export) earnings, too. Similarly to STABEX it has rather given incentives for increasing the production of SYSMIN-goods and hindered diversification. Kappel sees SYSMIN as a subsidy to low productivity and non-competitive mining projects, enabling the EU to import minerals below world market price. A number of countries are benefiting over-proportionally, as four countries receive 2/3 of available funds (Kappel, 1997). The 1998 DAC review found also 'little evidence that SYSMIN has made a positive impact on the ACP countries generally'

Lomé IV has enlarged and simplified its operation (a seventh product -uranium- has been added to the restrictive list) and aid is now accorded in the form of grants. The fund is also better endowed: ECU 480 million compared with ECU 253 million in the sixth EDF.

These subsidies can be on-lent by the ACP countries to mining companies which need to be modernized or made more profitable with a view to preventing future crises.

EU Aid - Lomé I - IV

ECU/Euro million

Lomé I

Lomé II

Lomé III

Lomé IVa)

Cotonou

2000-2007

1975-80

1980-85

1985-90

1990-95

1995-2000

EDFb)

of which

3072

4724

7400

10800

12967

13500

Grants

2150

2999

4860

7995

9592

Special loans

446

525

600

-

-

Risk capital




99

284

600

825

1000

STABEX

377

634

925

1500

1800

SYSMIN

-

282

415

480

575

EIB loan resources

390

685

1100

1200

1658

1700

Totalc)

3462

5409

8500

12000

14625

15200

Source: Susanna Wolf, Dominik Spoden- “Allocation of EU Aid towards ACP – countries” page 3, ZEF-Discussion Papers on Development Policy, Bonn, March 2000

a) The Lomé IV Convention runs 10 years (1990-2000) but the Financial Protocols to the Lomé IV Convention run for two 5-year periods (1990-1995 and 1995-2000). The Suva Convention will run for 20 years and the ninth EDF for 7 years. It will be supplemented by the outstanding balances of previous funds.

b) The numbering of EDF’s causes confusion. EDF’s 1-3 related to the Yaoundé Conventions, EDF 4 to Lomé I, EDF 5 to Lomé II, EDF 6 to Lomé III and EDFs7 and 8 to Lomé IV.

c) Excluding OCT (200 ECU million, of which 165 ECU million through EDF and 35 ECU million through EIB).

In a rapidly changing global and regional environment, the ACP countries have to face up to many challenges: halting their economic marginalization and integrating into international trade, implementing the domestic, political, economic and social changes needed to build a democratic society and a market economy, and creating the conditions for sustainable development and poverty alleviation in a context of still high population growth.

The widening gap between developing countries in general, and within the ACP group in particular, is undoubtedly a crucial factor. Political and economic transition has gone further in some countries than in others and the EU's efforts will be gauged in terms of its ability to ease the constraints on the development of the ACP countries while supporting the factors of change emerging in a growing number of countries. Above all, in more political terms, they will be judged by whether policy for the ACP countries, especially sub-Saharan Africa regains a strong sense of purpose. The negative image that many have of a continent that has lost its way does not reflect the real Africa. Africa is not all of a pattern. The unprecedented political developments and the recent improvement in growth performance in some countries, stemming chiefly from better management of economic policy and the implementation of structural reforms, are promising signs.

In most ACP countries the economic and institutional environment has not usually been propitious to the development of a competitive private sector, the growth of investment or diversification of production, and so they have not been able to take advantage of all the opportunities offered by the special preferences granted under the Lomé Convention. ACP exports to the EU have been no exception to those countries' generally poor trade performance and their share of the EU market has declined appreciably. Although the situation varies markedly from one country or region to another, the European market still accounts on average for more than 40% of ACP sales.

For the future, there are various options involving one or more trade regimes. They should be assessed in terms of their implications for ACP-EU relations and whether they can help the ACP countries diversity their external economic relations and avoid the risk of growing marginalization.

More than ever before, the private sector is recognized as the major driver of sustainable economic growth and human development. For the African, Caribbean and Pacific (ACP) countries of the Lomé Convention, private sector initiatives is at the centre of efforts to improve competitiveness, boost jobs and create prosperity. The private sector is in the forefront of the fight against poverty.

As developing countries around the world move towards the market economy, those which have done most to liberalize and privatize their economies are generally those who now show the highest growth rates and the greatest reductions in the numbers of the poor.

As a result of liberalisation at national level, of the integration of financial markets, and as modern communications shrink distances, the economy is 'globalising'. In this process, state-sponsored development is giving way to private sector development. For the ACP countries, as for others, this means a new form of partnership between the private sector and the state.



Governments are giving up their role as owner or operator of state enterprises and are beginning to transfer these to the private sector. Controls and restrictions on private producers of goods and services are being reduced and streamlined, encouraging new enterprises to enter the market, and existing ones to expand. As restrictions on private enterprise are removed, small and medium-sized enterprises (SMEs), tradepeoples, shopkeepers and crafts workshops represent a great potential for dynamic expansion and job creation.

The essential task of government is to create the framework of stability - political, institutional, legal as well as economic - in which private enterprise can flourish in a socially and ecological acceptable way, and in which poor people benefit from widening economic opportunities. Its second priority is to provide the essential infrastructures which private investors, both domestic and foreign, need. The challenge for ACP authorities is to convince the private sector, both indigenous and foreign, first of all of the credibility of their commitment to an equitable market economy and secondly of the sustainability of their effort.

To do this, many ACP countries have followed Structural Adjustment Programmes, introducing fiscal and financial reforms, freeing exchange rates, liberalizing the economy and creating a pro-business environment.

Economic reforms have been accompanied by measures to improve the investment climate. The majority of ACP states are now more receptive to foreign direct investment as a means of transferring know-how, skills and financial resources.

The ACP States, particularly sub-Saharan Africa have seen a fell in their share in world trade despite preferential market access regimes and extensive trade support programmes financed under the successive EDF funds. Preferences will count for less as a consequence of the Uruguay Round. The ACP’s could therefore be under a threat of ever greater marginalization in world trade.

The Lomé Convention therefore urges the European Community and the ACP States to give high priority to the development of trade with a view to accelerating the growth of the ACP State economies and to integrating them into the world economy in a harmonious and gradual manner. In recognition thereof adequate resources should be devoted to the expansion of ACP trade.

EDF 7 provided ECU 70 million, and EDF 8 provides ECU 85 million, to finance trade development in ACP countries in addition to National Indicative Programme and Regional Indicative Programme for this purpose.

The Commission is in response to this adopting a more strategic approach to trade development which moves away from simple trade promotion projects focusing nearly exclusively on marketing aspects, to the key issue of competitiveness which covers all phases in the product ion and distribution chain. This approach requires an integrated and private sector oriented approach, based on in depth needs assessments ('trade health checks'). It will proceed via carefully selected actions to develop efficient, fair and dynamic local markets and to enhance the commercial capacities of private sector players within them. Programme ownership by stakeholders, projects limited in time and as far as possible based on the concept of cost sharing are crucial success factors in the new strategy.

Tourism: a Growth Sector:

Tourism is an important factor in the economic development of many ACP countries and has become a principal source of jobs and hard-currency earnings for a number of them. It is also an activity where the private sector will in future play a larger role than in the past.

The European Development Fund has earmarked more than Ecu 136 million for the development of the tourism sector over the past ten years. Its financial assistance has spanned a range of activities from small-scale funding for tourism fairs and the extension of national parks to large- scale regional development programmes. These have focused mainly on the Caribbean, Pacific and Indian Ocean regions.

The tourism sector is sometimes criticised in ACP countries for not being sufficiently integrated into the local economy or for not making the best use of local resources. Some past EC projects, carried out in association with public authorities in beneficiary countries, achieved mixed results.

ACP-EU Industrial and Business Fora:

The European Commission funds the organisation of regular industrial fora where private sector businesspeople from the ACP countries and the EU Member States get together to discuss in possible joint ventures and other types of cooperation between them.

The fora are sponsored by major ACP regional organisations and are run in collaboration with the Centre for the Development of Industry (CDI).

A key feature of the fora is to give participants the opportunity to arrange one-on-one meetings to facilitate private discussions and negotiations on pre-identified and selected business opportunities in the ACP region concerned and in targeted sectors of the economy.

ACP and European businessmen have become familiar with the cross-sectoral fora held every two years for the West African and Central African regions. This approach has been complemented in recent years by a more focused sectoral approach. The first such fora were the Southern Africa mining forum held in Lusaka in 1994. It was followed in 1995 by a Central African Construction material forum in Libreville and a West-African agro-industrial forum in Dakar.

Cotonou Convention

The arrival of the new millennium witnessed a significant change in ACP-EC relations. The Lomé IV Convention expired on 29 February 2000 and a new partnership agreement was signed in Cotonou, Benin, on 23 June 2000. It entered into force on 1 April 2003. This agreement establishes a new approach and represents a new stage in the partnership whilst retaining the main instruments of the partnership (institutions, financial instruments, etc.). It aims to strengthen the political dimension of the partnership, to provide new flexibility and to entrust the ACP states with additional responsibilities. Under the Cotonou Agreement, new trade agreements compatible with the WTO rules will be negotiated (negotiations for the new regional economic partnership agreement began in October 2003 with the Economic and Monetary Committee of Central Africa and the Economic Community of West African States). Trade between the two parties will thus be liberalised, putting an end to the system of non-reciprocal trade preferences and enabling the ACP states to participate fully in international trade. Nonetheless, the current system remains in force during the transitional period, until 2008 at the latest.

Over the years, many new ACP states have joined the Partnership, which totals 78 today. The Cotonou Agreement identifies the least-developed ACP states which, in certain cases, benefit from special treatment. It should be noted that in December 2000, Cuba became the 79th member of the group of ACP states. However, Cuba still does not participate in the new partnership agreement.

Key elements of the Cotonou Agreement are clearly under pressure from the declarations and documents produced by the European Union in recent years. The Strategy for Africa states, inter alia, The EU areas considered prerequisites for attaining the Millennium Development Goals (peace and security and good governance), areas that create the economic environment necessary for achieving the MDGs (economic growth, trade and interconnection) and areas directly targeting the MDGs (social cohesion, decent work, gender equality and environment). These objectives should be supplemented, especially for those countries closer to the EU, by support for economic integration and political cooperation with the EU. Taken together, these measures constitute the EU’s common, comprehensive and coherent response to Africa’s development challenges.

There was also a drastic simplification of instruments so that ACP governments now had to deal with just one instrument the National Indicative Programme. Linked to these changes in EDF management the CPA also proposed to enhance the role played by National Authorising Officers (NAOs), the senior government minister or official in each ACP country who held responsibility for the use of EDF funds, and the NAO offices that supported them away from an essentially technical and financial managerial role towards a more strategic one.

Initially, the Cotonou Agreement defined governance in a rather narrow, technocratic way, regarding it primarily as referring to the efficient and transparent management of resources by public institutions. Over time, however, the EC perspective on governance has evolved into a holistic, overarching concept, embracing broader state-civil society relations, human rights and democratization, the rule of law as well as public sector reform and decentralisation. In a few years, it has moved to the top of the ACP-EU agenda.

The Cotonou Agreement has a strong focus on the political dimensions of partnership, attaching importance to political dialogue, governance, and peace and security issues. At 20 December 2006 in Maastricht the participants in the ECDPM Seminar on the Cotonou Partnership Agreement concluded their reflections with a panel discussion on the future of the Cotonou Partnership Agreement (CPA). The participants expressed cautious optimism on progress achieved by the CPA, but also expressed their worries and concerns regarding the ongoing negotiations on EU-ACP Economic Partnership Agreements and a perceptible 'ownership deficit' on the ACP side.

Panellists were positive regarding the overall niche and added value of the Cotonou Partnership: the improving political dialogue between the partners, also with regional entities; the Agreement provides a valuable overall framework within which Africa and Europe can dialogue and cooperate at a continental level – it has helped make Africa-Europe relations “warm, cordial, and growing”.

The Cotonou Agreement introduced the performance based review process as well as multi-annual ‘rolling’ programming. Efforts have also been made to decentralise decision making, rationalise complex administrative and financial procedures and to introduce new aid modalities such as budget support.

Taking up peace and security elements in policies and programmes has enabled the EU to give more comprehensive responses to complex demands, especially in Africa where it works closely with the African Union. The recent elections in DR Congo demonstrate what can be achieved when the EU makes a comprehensive use of its instruments: the Commission financed infrastructure, organised election observation, supported the police and military forces, and provided troops in support of the UN peace keepers.

It  is very important to improve the use of aid. To increase effectiveness the interlinkages between the various instruments and especially between aid, trade and investment issues have to be taken more into account. For example, aid for private sector development will be more effective, if the opportunities of private enterprises are also enhanced by favourable and secure trade provisions. The offer to maintain the current tariff preferences until new deals will be settled in 2008 is therefore a step into the right direction. It is also crucial that new actors are involved in the practice of co-operation, such as the ACP Business Forum and civil society. In the Cotonou Convention this is foreseen in the form of information and consultation on development strategies and policies, access to some of the financing, involvement in the implementation of development projects and programmes, and capacity building. More involvement of the civil society in the various facets of the partnership (political, social, economic and trade) should ensure that their capacities are strengthened.

Sources:

1.  Martin Holland – The European Union and the Third World; Basingstoke Palgrave, 2002;

2.  Enzo Grilli – The European Community and the developing countries; Cambridge University Press, Cambridge, 1993;

3.  Susanna Wolf, Dominik Spoden – Allocation of EU Aid towards ACP-Countries; Bonn Zentral für Entwicklungsforschung, 2000;

4.  *** - EU-ACP Cooperation; European Commission, Brussels, 1995;

5.  *** - Green Paper on Relations between the European Union and the ACP Countries on the Eve of the 21 Century; European Commission, Brussels, 1997;

6.  ***- European Community Support for the Private Sector in ACP Countries; European Commission, Brussels, 1997

7.  *** - ACP-EU Partnership Agreement signed in Cotonou on 23 June 2000; Directorate-General for Development, Brussels, 2003.

8.  www.cidse.org/docs/200701290944205477.pdf

9.  http://cotonoupartnership.blogspot.com/

10.  http://ec.europa.eu/trade/issues/bilateral/regions/acp/index_en.htm

11.  http://www.fern.org/media/documents/document_3516_3517.pdf








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