RECOMMENDATION on the draft Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Republic of South Africa, of the other part, amending the Agreement on Trade, Development and Cooperation
1.2.2011 - (10297/2010 – C7‑0190/2010 – 2010/0119(NLE)) - ***
Committee on Development
Rapporteur: Eva Joly
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
on the draft Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Republic of South Africa, of the other part, amending the Agreement on Trade, Development and Cooperation
(10297/2010 – C7‑0190/2010 – 2010/0119(NLE))
(Consent)
The European Parliament,
– having regard to the draft Council decision (10297/2010),
– having regard to the draft agreement between the European Community and its Member States, of the one part, and the Republic of South Africa, of the other part, amending the Agreement on Trade, Development and Cooperation (7437/2008),
– having regard to the request for consent submitted by the Council in accordance with Article 217 and Article 218(6), second subparagraph, point (a), of the Treaty on the Functioning of the European Union (C7‑0190/2010),
– having regard to Rules 81 and 90(8) of its Rules of Procedure,
– having regard to the recommendation of the Committee on Development and the opinion of the Committee on International Trade (A7‑0018/2011),
1. Consents to conclusion of the agreement;
2. Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and of the Republic of South Africa.
EXPLANATORY STATEMENT
Background and procedure
The agreement to which Parliament is being asked to give its consent has had a relatively long gestation period, with quite some degree of procedural complexity.
An initial trade, development and cooperation agreement between the European Community (and its Member States) and the Republic of South Africa was signed in Pretoria on 11 October 1999 and entered into force on 1 May 2004 for an indefinite period[1].
Under the Article 18 and 103 review clauses, the agreement was to be reviewed within five years of its entry into force. The essentials of the review were drawn up by the two sides on 7 November 2005 at the meeting of the Cooperation Council, which is the joint body set up by the parties to take all decisions on matters covered by the agreement. The Commission subsequently proposed a negotiating mandate (June 2006). Not one, but two negotiating mandates were then given to the Commission by the Council (November 2006): one related to amending the agreement on the basis of Article 106(1) (amendment clause), allowing the Council to adopt any amendment proposed by any party to the agreement; the other allowed bilateral negotiations to be opened on revising the provisions of the agreement with regard to its political dimension and matters concerning justice, freedom and security.
During the subsequent twin-track negotiations, however, the two sides agreed, for the sake of coherence, to abandon the first set of negotiations - and thus the relatively flexible amending procedure - in favour of the second, which related to revision of the agreement, meaning that there would be a single new agreement - and not two such agreements - amending the original 1999 agreement. The negotiations on that agreement were taken up by the Commission on the basis of the Council's twin negotiating briefs in consultation with the two working parties authorised by the Council to assist the Commission in this task: the ACP Working Party and the Africa Working Group.
Pending the outcome of the negotiations on the Economic Partnership Agreement (EPA) with South Africa, the negotiations on trade and trade-related matters (Titles II and III, respectively, of the 1999 agreement) were suspended. In the customs field, however, it should be noted - for the sake of completeness - that in February 2010 the Commission adopted a separate proposal (COM(2010)0057) on a Union position within the Cooperation Council on the customs tariffs annexed to the 1999 agreement, to be applied by South Africa, bringing them into line with those laid down by the interim EPA and applicable to the other Member States of the Southern African Customs Union.
Outcome of the negotiations
The Agreement between the European Community and its Member States, of the one part, and the Republic of South Africa, of the other part, amending the Agreement on Trade, Development and Cooperation was finally signed in Kleinmond (South Africa) on 11 September 2009 (following on from the Council decision of 7 April 2008 on the signing of the revised agreement[2]).
Impact of the Treaty of Lisbon and Parliament's consent
When the Treaty of Lisbon came into force, the European Union succeeded the European Community as the body required formally to approve the agreement. The purpose of the Council decision is therefore not only to approve the agreement on behalf of the European Union, but also to give official notification to South Africa that, as from 1 December 2009, the European Union, having succeeded the European Community, exercises all rights and assumes all obligations of the Community, in particular those deriving from this agreement. The provisions of the agreement revised in 2009 do indeed stipulate that the parties must notify each other when their respective approval procedures have been completed and that the revised agreement enters into force on the first day of the month following the month in which notification is given.
Technically, this agreement is an association agreement within the meaning of Article 217 of the Treaty on the Functioning of the European Union. Under Article 218(6) of that treaty, such an agreement may not be concluded (by Council decision) until after Parliament has given its consent.
It follows both from the Treaty (in particular Article 218 thereof) and from the Rules of Procedure (in particular Rules 81 and 90 thereof) that no amendments to the text of the agreement are admissible and that only the committee responsible (the Committee on Development in this case) may issue a recommendation to plenary either to adopt or to reject the agreement, plenary being required to take a decision, in a single vote, by a majority of the votes cast.
Content of the agreement
The purpose of the original agreement, signed in Pretoria in 1999, is to step up bilateral cooperation in a number of areas. It pursues a number of objectives: stepping up bilateral dialogue, supporting South Africa in its process of economic and social transition, promoting regional cooperation and the country's economic integration within Southern Africa and the global economy, and extending and liberalising bilateral trade in goods, services and capital. The agreement also establishes a regular political dialogue on issues of mutual interest at both bilateral and regional level (as part of the EU's dialogue with the countries of Southern Africa and the ACP group of countries). The agreement contains a good hundred articles - 109, to be precise - of which fewer than 20 (Articles 65-82) specifically relate to development cooperation, plus four articles on the financing of general cooperation. We should perhaps not hide the fact that, despite its title, the agreement seems to be more an economic and free-trade agreement than a development cooperation agreement. With regard to the latter, however, the bulk of our aid to South Africa is funded by the Union's budget by means of the financing instrument for development cooperation (DCI). The DCI for the period 2007-2013 has a budget of EUR 980 million for South Africa. The national indicative programme for the same period has two priority development-cooperation areas relating to South Africa: firstly, the creation of jobs in the informal economy and incorporating those jobs into the formal economy; and, secondly, the establishment of infrastructure facilities for the supply of basic social welfare services and for social cohesion. The programme points up the essential role of decentralising cooperation, meaning a high degree of civil society involvement in the development process. Alongside economic cooperation - an entire title of the agreement, Title IV, is given over to it alone - other provisions of the agreement cover a number of very important development-related areas of cooperation, such as social cooperation, on the basis of an organised dialogue focusing on freedom of association, workers' rights, children's rights, gender equality, combating violence against women, environmental cooperation, in particular on climate change, cultural cooperation, cooperation on combating drugs and money laundering, health cooperation and, in particular, the fight against AIDS.
The agreement, as it is a cooperation agreement, also set up a joint institutional structure by establishing a Cooperation Council, as referred to above.
The revised agreement signed in Kleinmond in 2009 makes a number of interesting changes to the original agreement, in particular- with regard to development - the following: disarmament becomes an essential element of the agreement - to be more precise - on a par with democratic principles, human rights and the rule of law, with cooperation on issues relating to disarmament and the non-proliferation of weapons of mass destruction being made an essential element of the agreement; the principle of aid effectiveness (as a development cooperation objective) and priority for operations contributing in particular, in the fight against poverty, towards achieving the Millennium Development Goals (MDG) have been added; a specific article on the MDGs has been inserted, too, in order to restate the parties' commitment to achieving them by 2015; emphasis is placed on the need to lay down our priority areas of development cooperation in multiannual programming documents jointly agreed by the parties, including joint documents accepted by the Union's Member States, in accordance with the Union's cooperation instruments; and non-state actors are recognised as cooperation partners eligible for financial and technical assistance (instead of 'non-governmental development partners and actors').
It should also be noted that seven new articles have been inserted for seven new areas, relatively well mapped out, for cooperation with South Africa: combating weapons of mass destruction and their means of delivery, by signing and complying with the relevant international instruments, on which a regular political dialogue is also to be established; combating terrorism; combating money laundering, terrorism financing and organised crime; combating the manufacturing of, and trade in, small arms and light weapons and the accumulation of them; the prevention of mercenary activities; unwavering backing for the International Criminal Court and its work to put an end to impunity and to enforce international justice; cooperation on migration is also to be the subject of regular political dialogue - the new, specific article on this is very detailed - as is, in this context, the linkage between cooperation and development (including, but not confined to, strategies aimed at reducing poverty, improving living and working conditions and creating employment, participation of migrants in the development of their home countries, cooperation to strengthen capacities, particularly in the health and education sectors, to offset the negative impact of the South African 'brain drain' on sustainable development in South Africa, and legal, expeditious and cost-effective ways for expatriates to transfer remittances to the country).
Obviously, from a development perspective, extending cooperation to these many new areas is a point in the revised agreement's favour; and, moreover, extending cooperation in this way, which was provided for in the original 1999 agreement as simply a possibility, is what both sides wanted (since they had reached agreement on the Joint Action Plan implementing the South Africa-European Union Strategic Partnership). However, your rapporteur prefers to take a more nuanced view of the revised agreement, whose overall conceptual approach and layout still seem rather overfocused on commercial, economic and free-market concerns to the detriment, perhaps, of an even more robust and overarching development approach, which she would have preferred, even though she welcomes the new provisions on development which have been inserted into the revised agreement, in particular as regards combating poverty, aid effectiveness, the MDGs and linkage between migration and development.
Recommendation by the rapporteur
In the light of the above, your rapporteur suggests that the Committee on Development recommend to Parliament that it consent to conclusion of the agreement, and calls for the new development-related provisions in the agreement and the new cooperation arrangements it provides for to be applied in full and, when the agreement is implemented, to be closely monitored in the light of Article 208 of the Treaty on the Functioning of the European Union, i.e. in line with the Union's development cooperation objectives, which the Union must take account of in all the policies that it implements which are likely to affect developing countries, the primary objective being to reduce and, in the long term, eradicate poverty.
OPINION of the Committee on International Trade (17.1.2011)
for the Committee on Development
on the draft Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Republic of South Africa, of the other part, amending the Agreement on Trade, Development and Cooperation
(10297/2010 – C7‑0190/2010 – 2010/0119(NLE))
Rapporteur: Niccolò Rinaldi
SHORT JUSTIFICATION
South Africa's trade relations and development cooperation with the European Union are governed by the Trade, Development and Cooperation Agreement (TDCA), which was signed in October 1999. The TDCA was partially implemented in 2000 and fully implemented in May 2004, before the establishment of the Committee on International Trade.
Therefore, the original TDCA with South Africa was under DEVE competencies. Under the last legislative term DEVE was responsible for the reports on two additional protocols deriving from the accession of the new Member States.
The TDCA is a comprehensive agreement that establishes a ‘free trade area’. It largely deals with the movement of goods but there are provisions related to services and investment as well as other issues such as government procurement, competition policy and intellectual property. The trade provisions are complemented by a comprehensive development assistance envelope.
The TDCA aims to ensure better market access to the EU for South Africa and access to the South African market for the EU. At the end of the TDCA transition period, around 95% of South Africa exports to the EU will be fully liberalised, while most of the remaining products enjoy advantageous tariff preferences under the GSP.
With the aim of protecting vulnerable sectors of both parties, certain products have been excluded from the TDCA and others have been only partially liberalised. For the EU, these are mainly agricultural products while for South Africa they are essentially industrial products, in particular certain motor vehicle products and certain textile and clothing items.
The Agreement sets out a detailed set of rules of origin and contains a bilateral safeguard clause from products found to cause or threaten to cause serious injury to the other contracting party's industry.
The TDCA includes provisions aiming at avoiding anti-competitive practices and recognises the need to provide adequate protection for intellectual property. Moreover the TDCA provides for close cooperation in a wide range of fields linked to trade, including customs services, the free movement of services and capitals, and harmonisation of rules and standards.
Since the entry into force of the TDCA, EU trade in goods with South Africa has steadily increased. The EU is South Africa’s most important trade partner: in 2009, the EU was the destination for about 34% of total South African exports and the source of around 35% of total South African imports.
Notwithstanding the global economic crisis in that same year, the value of SA exports to the EU amounted to € 14.96 billion and that of SA imports from the EU to € 16.1 billion.
A review process was included in the TDCA. In accordance with Articles 18 and 103 of the TDCA, which calls for the review of the agreement within five years of its entry into force, a 2004 mid-term review took place after which the parties decided to revise the provisions of the agreement.
In 2005, the Joint Cooperation Council established the broad lines of the future revision of the TDCA, covering further liberalisation of trade, minor adjustments to the title on Development Cooperation, updating the wording of several provisions concerning economic cooperation and cooperation in other areas and the addition of new provisions on such matters as terrorism, the International Criminal Court, weapons of mass destruction, mercenaries and small arms.
The Amendment does not contain major trade-related aspects because the revision of the provisions on trade and trade-related matters was suspended pending the outcome of the Economic Partnership Agreement negotiations.
Your Rapporteur would like to underline the importance of the relationship between South Africa and the EU and the implications for South Africa if the revised TDCA was not ratified or if ratifications were delayed.
In fact, the TDCA is highly beneficial for South Africa. South Africa and the EU entered into a Strategic Partnership in 2007 which is a political plan to accompany the TDCA.
Successful senior level cooperation forums have been established in various sectors, like science and technology, with the aim of implementing further forums in additional sectors, like customs cooperation and education.
Your Rapporteur encourages South Africa to use the so-called flexibilities built into the TRIPS Agreement in order to be able to provide essential medicines at affordable prices, such as compulsory licences and the mechanism provided by Article 30 thereof, and insists that the EU should not negotiate pharmaceutical-related TRIPS-plus provisions affecting public health and access to medicines, such as data exclusivity, patent extensions and limitation of grounds of compulsory licences.
The EU is an important strategic and trade partner for South Africa with approximately a third of South Africa’s trade being with the EU. South Africa is also currently one of only nine (including Brazil, India and China) strategic partners for the EU and the only African state to date to have signed a Strategic Partnership Agreement with the EU.
Your Rapporteur would also like to stress that there is nothing seen as being controversial in the revised sections of the TDCA which would justify the postponement of ratification.
South Africa also faces various opportunity costs if ratification does not take place or if delayed for an indefinite period of time. Not only can the postponement disturb the current cooperation between South Africa and the EU, a complete non-ratification of the Amendment can lead to a loss in potentially more beneficial and deeper cooperation between the two partners.
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The Committee on International Trade calls on the Committee on Development, as the committee responsible, to propose that Parliament give its consent.
RESULT OF FINAL VOTE IN COMMITTEE
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Date adopted |
17.1.2011 |
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Result of final vote |
+: –: 0: |
22 0 0 |
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Members present for the final vote |
William (The Earl of) Dartmouth, David Campbell Bannerman, Daniel Caspary, Christofer Fjellner, Bernd Lange, Emilio Menéndez del Valle, Vital Moreira, Cristiana Muscardini, Niccolò Rinaldi, Helmut Scholz, Peter Šťastný, Keith Taylor, Iuliu Winkler, Pablo Zalba Bidegain |
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Substitute(s) present for the final vote |
Josefa Andrés Barea, Francesca Balzani, Catherine Bearder, José Bové, Salvatore Iacolino, Syed Kamall, Jarosław Leszek Wałęsa |
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Substitute(s) under Rule 187(2) present for the final vote |
Elie Hoarau, Marietje Schaake |
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