6.4.6.     The special arrangements for the African, Caribbean and Pacific countries, from the Yaoundé and Lomé Conventions to the Cotonou Agreement

LEGAL BASIS

Article 310 (238) EC.

OBJECTIVES

After the expiration of the fourth Lomé Convention on 29 February 2000, the Partnership Agreement signed in Cotonou (Benin) on 23 June 2000 establishes a new framework for the future relations between the European Union (EU) and the African, Caribbean and Pacific (ACP) States. The Agreement has been concluded for 20 years with a clause allowing for revision every 5 years and a financial protocol for each 5-year period. Just like the Lomé Convention, the Cotonou Agreement aims to improve the standards of living and economic development of the ACP Countries and establish close cooperation in a spirit of complete equality. However, the new Agreement is different from the previous conventions as it has sought to embrace a wider range of issues outside traditional development. Its main aim is the eradication of poverty. The new Agreement is designed to regulate trade between the two groups of countries and their development strategies with a view to promoting the further integration of ACP States in the world trading system. It also reinforces the institutional and political dimension of their relations, with such fundamental aspects as human rights, democracy and good governance.

ACHIEVEMENTS

1. Historical overview

a. Part Four of the EEC Treaty, together with an implementing convention, governed relations between the EEC and the overseas countries and territories (OCTs). After these countries gained independence the 18 and later 19 African States, Madagascar and Mauritius (ASMM) became associated with the EEC under the two Yaoundé Conventions (1 June 1964 to 1 June 1969 and 1 January 1971 to 31 January 1975).

b. The Convention of Arusha (1 January 1971 to 31 January 1975) governed trade links with the three East African States (Kenya, Uganda and Tanzania). The agreement with Nigeria, signed in Lagos on 16 July 1966, was never ratified and did not enter into force.

c. Protocol 22 to the Acts of Accession of the United Kingdom, Ireland and Denmark offered the 20 Commonwealth countries in Africa, the Caribbean and the Pacific the possibility of negotiating with the EEC the organisation of their future relations. Other African states that were not members of the Commonwealth or the ASMM were also given the same option.

d. This led to the First Lomé Convention (28 February 1975 to 1 March 1980) which was signed on 28 February 1975 and came into force on 1 April 1976. The Second Lomé Convention was signed on 31 October 1979 for a period of five years and came into force on 1 January 1981. The Third Lomé Convention was signed on 8 December 1984 for a period of five years (expiry date: 28 February 1990). It entered into force on 1 May 1986.

e. The Fourth Lomé Convention was signed on 15 December 1989 for a period of 10 years (with the possibility of amending the Convention after five years) and came into force on 1 March 1990; the associated Financial Protocol was adopted for five years only. The amended Convention resulting from the mid-term review and the second Financial Protocol associated with Lomé IV were signed on 4 November 1995, and expired on 28 February 2000.

2. The arrangements under Lomé IV

a. Trading and trade cooperation arrangements Practically all products originating in the ACP States (99.5%) had free access to the Community. Reciprocal arrangements were not compulsory; the ACP countries were merely required to grant the EU most-favoured-nation status. The Stabex system (stabilisation of export earnings) guaranteed the ACP countries a certain level of export earnings by protecting the latter against the fluctuations to which they would normally be subject as a result of the functioning of markets or the vicissitudes of production. The system for mineral products (Sysmin) provided subsidies to deal with temporary production or export problems in the mining sector. Under Lomé IV the system covered eight minerals.

b. Industrial cooperation Designed to develop and diversify industrial production in the ACP States. Various types of action were covered: the development of research and technology, exchange of information, the carrying out of studies, the establishment of contacts between firms, the encouragement of business start-ups and the promotion of professional associations in the ACP States. These schemes were supervised by a Committee on Industrial Cooperation assisted by a Centre for Industrial Development (CID).

c. Agricultural cooperation Aimed at resolving problems connected with rural development and the improvement and expansion of agricultural output intended for domestic consumption and export. Particular emphasis was placed on food security, the role of women and the regional dimension of rural development. Actions included projects for integrated rural development or rural water schemes. A Technical Centre for Agricultural and Rural Cooperation was set up under the supervision of the Committee of Ambassadors. Food aid has been included with a view to assisting the ACP States in achieving food self-sufficiency.

d. Cultural and social cooperation Lomé IV took into account the cultural and social dimension, the promotion of cultural identities and intercultural dialogue and the utilisation of human potential, particular emphasis being placed on the role of women in the development process.

e. Human rights As a result of the mid-term review, a clause (Article 366a) was inserted under which aid to a State might be suspended, partially or totally, if it breached Article 5 (human rights, democracy and the rule of law) of the Convention.

3. The conclusion of the Cotonou Partnership Agreement

The negotiations on the ACP-EU Partnership Agreement began in September 1998 and were concluded in Brussels on 3 February 2000 by the ACP States and the EU Member States. A new separate agreement was signed with South Africa, following the protocol establishing South Africa's partial membership from April 1997. The ceremony of signature took place In Cotonou (Benin) on 23 June 2000.

The ratification process should be completed in a period of two years. Thereafter the new Agreement will enter into force. It will have a duration of twenty years. According to a decision of the Council of Ministers, the Agreement will be implemented provisionally - without awaiting the end of the ratification procedure - with the exception of provisions relating to the 9th European Development Fund.

The Cotonou Agreement, characterised by the term 'partnership', implies mutual commitment and responsibility, hence the emphasis given to political dialogue, including such issues as democracy, good governance and immigration and to a broad-based involvement of the civil society (4.1). The new Agreement also focuses on the sustainable economic development of ACP States and their smooth and gradual integration into the global economy through a strategy combining trade, investments, private-sector development, financial cooperation and regional integration (4.2). Development strategies focus on poverty reduction as central objective.

The Marshall Islands became the 76th ACP country, while other recent Pacific ACP countries, the Cook Islands, the Republic of Niue, the Republic of Palau and the Republic of Nauru have already signed the Agreement. The Federated States of Micronesia are expected to sign in the near future, bringing the number of ACP countries to 77..

4. Institutional and political dimension

a. Institutions
The joint institutions are the Council of Ministers, the Committee of Ambassadors and the Joint Parliamentary Assembly. The new Agreement renames the former Joint Assembly 'the Joint Parliamentary Assembly' in order to emphasise the parliamentary nature of this body. Included in the tasks of the Joint Parliamentary Assembly is the organisation of regular contacts, not only with economic and social actors as in the previous Lomé Convention, but also with civil society (art. 17). The main innovation as regards the Joint Council of Ministers is the broadening of its mandate to conduct an ongoing dialogue with social and economic partners and other elements of civil society (art. 15).

b. Actors of the partnership (art. 4-7)
One of the most significant innovations of the new Agreement is the inclusion of a chapter on the actors of the ACP- EU Partnership. The ACP countries recognise the complementary role of non-State actors in the development process. Thereby, non-State actors are informed and involved in consultation on cooperation policies and on the political dialogue. They are involved in the implementation of cooperation projects and provided with adequate support for capacity building.

The actors of cooperation include:

• State at all levels
• Non-State:
  • Private sector
  • Economic and social partners including Trade Unions
  • Civil society in all its forms, including NGOs

c. Political dialogue (art. 8-10)
The parties are to engage regularly in a comprehensive and balanced political dialogue conducted in a flexible manner at the appropriate level in order to exchange information, establish priorities and common principles. The objectives of the dialogue include regional cooperation, conflict prevention and peaceful settlement of disputes. Through dialogue, the parties contribute to the strengthening of democracy and sustainable development. (art. 11).
The dialogue covers all fields of cooperation laid down in the Agreement as well as questions of common interest, including environment, gender, migration and cultural matters.
It should focus on specific issues such as the respect for human rights, democratic principles, the rule of law and good governance, the arms trade, anti-personnel landmines, military expenditure, corruption, drugs and organised crime and ethnic, religious or racial discrimination. The EU provides assistance for capacity building to promote democracy, transparency, improved access to justice and more efficient law enforcement procedures.

d. Migration (art. 13)
The new Agreement establishes a framework for dealing with migration through the readmission clause: each ACP or EU State shall accept the return of and readmit any of its nationals who are illegally present on the territory of a EU or ACP State, at that State's request and without further formalities. The Agreement also includes a provision establishing non-discriminatory treatment of legally employed workers from ACP countries in EU Member States or of workers from the EU in ACP countries.

5. Trade and financial framework

a. A preparatory period for future trade arrangements (art. 36-37)
The new Agreement provides for a preparatory period of 8 years before moving to new WTO compatible trade arrangements. Formal negotiations for these trade agreements should start in September 2002 and enter into force by January 2008.
This means the dismantling of non-reciprocal preferential trade arrangements in favour of free trade Regional Economic Partnership Agreements (REPAs) with the EU. Between 2002 and 2008 the existing non-reciprocal trade regime of the IVth Lomé Convention is to be maintained.
From 2008 to 2020, two way free trade in goods and services will be phased in as WTO compatible trade arrangements will be agreed, which ACP are encouraged to join as a group, building on their own regional integration.
Free trade between ACP regions and the EU along with economic cooperation and support for ACP social developments, will lead to economic growth and poverty reduction.
The EU will streamline rules of origin and allow duty free access for all products from all Less Developed Countries (LDCs) between 2000 and 2005.
In order to better manage the new trade arrangements, a Joint ACP-EU Ministerial Trade Committee- shall be established (art. 38).

b. Trade related areas and investment
For the first time, the ACP-EU Agreement contains provisions (chapter 5) on trade related areas such as non-tariff barriers, including intellectual property rights and biodiversity, competition policy, standards, phyto-sanitary measures, environment and labour standards. Both parties underline the importance of the international agreement on Trade Related Intellectual Property Rights (TRIPs) and the Convention on biological diversity (art. 46).

The new Agreement gives added importance to support for investment and the private sector. Cooperation in investment will include:

• measures to create and maintain stable investment conditions, encouraging EU private investment in the ACP States;
• investment support through long term financial resources; and
• investment risk guarantee schemes.

c. Financial cooperation
The overall amount of EU financial assistance for the first five years of the Agreement is 15.2 billion Euros: 13.5 billion from the 9th European Development Fund (EDF) and 1.7 billion from the European Investment Bank in the form of loans. To this is added 10 billion.
Under the European Development Fund, 10 billion Euros in grants is earmarked for supporting long term development. 2.2 billion will be allocated to the Investment Facility to be managed by the European Investment Bank, with 1.3 billion for regional cooperation.
It has been agreed that the ACP will define the regions eligible for support.
The Investment Facility replaces the Lomé IV risk capital and interest rate subsidy schemes. It aims at helping businesses in ACP countries by supporting sound private companies, privatisation, providing long term finance and risk capital, and strengthening local banks and capital markets.

d. Resource allocation and programming
The new Agreement introduces significant changes to programming procedures and resource allocation. ACP states should now identify eligible non-state actors and the resources allocated for non-state actors as part of their National Indicative Programmes. Resource allocation to ACP countries will be based on both needs and performance. Each ACP state and region will receive an indication of the resources it may receive over a 5 year term. In addition to mid-term and end of term reviews of National Indicative Programmes, ACP and EU authorities will jointly carry out an annual review to identify causes of delay in implementation, and propose measures to improve the situation. Following mid-term and end of term reviews the EU may revise resource allocation to ACP States according to their needs and performance.
Resource allocation will consist of two main elements: an allocation for macroeconomic support, programmes and projects and an allocation for unforeseen needs, such as emergency assistance.

e. Export revenue stabilisation
The new Agreement replaces Stabex and Sysmin with a system for supporting short-term fluctuations in export revenue. Resources for this will be drawn from the National Indicative Programmes. Support may be provided if a worsening in public deficit coincides with a loss of overall export earnings or a loss of export earnings from all agricultural and mineral products. LDCs benefit from a more favourable threshold on export losses required for triggering support (art. 68).

f. Debt relief
Outside the ACP-EU framework, the ACP countries agreed to an EU proposal to use up to 1 billion Euros from uncommitted EDF funds to support ACP Highly Indebted Poor Countries. On a case-by-case basis, uncommitted resources from past indicative programmes will be used for debt relief. Technical assistance on debt management will be provided to ACP States (art. 66-67).

ROLE OF THE EUROPEAN PARLIAMENT
The EP is kept regularly informed by the Commission of the implementation of the Lomé Convention and the ACP-EU Partnership Agreement. However, it has few powers in respect of the allocation of aid as the EDF is not included in the budget. Nevertheless, it must grant an annual discharge in respect of the operations financed under the EDF.

The EP contributes significantly to ACP-EU cooperation through the work of its Committee on Development and Cooperation and through the ACP-EU Joint Assembly, now named the Joint Parliamentary Assembly, which has a fundamental role to play in the development and strengthening of relations between the EU and its ACP Partners.

The Joint Assembly was created out of a common desire to bring together the elected representatives of the EC - the Members of the EP - and the representatives of the ACP States which have been partners to the successive cooperation agreements. Meetings take place twice a year. Each year the EP adopts a resolution expressing its views on and concerns about the work of the ACP-EU Joint Assembly and on ACP-EU cooperation.
In its resolution on the results of the ACP-EU Joint Assembly in 1999, the EP underlined the need to incorporate the EDF into the Community budget to enable Parliament to control the allocation and implementation of funds, and called for a separate budget for the Joint Assembly so that it might successfully undertake its parliamentary activities.
The EP supported the creation of regional monitoring and mediation structures aimed at preventing ethnic, social, economic and religious tensions, and involving civil society in the political dialogue.
The EP called for ACP trade preferences to be maintained within the WTO and for modifying WTO norms so as to give priority to poverty eradication and sustainable development.

18/10/2000