EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 1.10.2008 
SEC(2008) 2539 
  
COMMISSION STAFF WORKING DOCUMENT 
accompanying the 
  
COMMUNICATION ON REGIONAL INTE GRATION FOR DE VELOPMENT IN 
ACP COUNTRIES 
 
 
{COM(2008) 604} 
{SEC(2008) 2538}  
 
EN 2   EN TABLE OF CONTENTS 
List of Acronyms............................................................................................................... ......... 4 
1. The relevance of regional inte gration in a globalised world........................................ 7 
1.1. The global context........................................................................................................ 7 
1.1.1. The global economic context ....................................................................................... 7 1.1.2. Increasing attention to regional integration.................................................................. 8 
1.2. The increasing commitment of ACP c ountries to regiona l integration...................... 10 
2. The challenges facing regional integration in ACP countries.................................... 12 
2.1. The economic structure.............................................................................................. 12 
2.1.1. Dual economies, weak export base and insufficient complementarity...................... 12 
2.1.2. Vulnerability to economic and financial shocks ........................................................ 14 2.2. The need for (more effective) regional policies beyond trade ................................... 14 2.3. Inefficient and/or incomplete  infrastructure networks............................................... 16 
2.4. Weak regional governance......................................................................................... 17 3. Why does the EU care?.............................................................................................. 18 3.1. EU-ACP relations and regional integr ation: an ancient partnership.......................... 18 
3.2. More and better can be done ...................................................................................... 21 3.2.1. The need for a consolidated EU vision ...................................................................... 21 3.2.2. Setting out the objectives ........................................................................................... 22 4. Three possible approaches for EU support ................................................................ 24 4.1. Elimination of barriers to trade .................................................................................. 24 4.2. Policy co-ordination and co-operation for sustainable development......................... 26 4.2.1. Reducing physical barriers th rough infrastructure networks ..................................... 27 
4.2.2. Strengthening interdependence by acti on at macro-economic and micro-economic 
level.......................................................................................................................... .. 28 
4.2.3. Management of common resources or challenges ..................................................... 30 4.3. Developing political co-operation fo r effective regional integration......................... 31 
4.3.1. Regional cooperation for peace and stability:............................................................ 31 
4.3.2. Good governance as a regional good ......................................................................... 32 4.3.3. Harnessing the effects of migration ........................................................................... 32 
 
EN 3   EN 4.4. Comparing the approaches......................................................................................... 32 
4.4.1. Overview of advantages and drawbacks.................................................................... 32 4.4.2. The contribution of different appr oaches to EU policy objectives ............................ 40 
4.4.3. Finding the right mix.................................................................................................. 4 1 
5. EDF support to regional integrat ion: a mix of approaches ........................................ 42 
5.1. The 9
th EDF regional programmes............................................................................. 42 
5.2. The 10th EDF regional programmes........................................................................... 44 
5.3. Exploiting the synergies for inter-regional cooperation............................................. 45 5.4. Design of regional integration and EU support.......................................................... 46 
5.5. Risk factors .............................................................................................................. .. 47 
Annex 1: Overview of regional integration in ACP regions.................................................... 50 
Annex 2: Review of existing literature  on regional integration in ACP .................................. 64 
Annex 3: Stocktaking of EPAs  and regional integration ......................................................... 67 
Annex 4: EC financial support for regional integration........................................................... 70 
Annex 5: Overview of 9th EDF regional programmes (2002-2007) ....................................... 71 Annex 6: Evaluation of EDF Programmes............................................................................... 74 Annex 7: References ............................................................................................................ .... 77 
 
 
EN 4   EN LIST OF ACRONYMS  
ACP African, Caribbean and Pacific countries 
APF African Peace Facility APRM African Peer Review Mechanism  
ASEAN Association of S outh East Asian Nations 
AU African Union CACM Central American Common Market 
CARICOM Caribbean Community and Common Market 
CEMAC Communauté Économique et M onétaire de l'Afrique Centrale 
CEPGL Economic Community of the Great Lakes Countries CET Common External Tariff 
CFA Franc Communauté financière d'Afrique / Coopération financière en Afrique 
centrale Franc (currency) 
COMESA Common Market for Ea stern and Southern Africa 
CSME Caribbean Single Market Economy 
CSP Country Strategy Paper 
DRC Democratic Republic of Congo EAC East African Community 
EC European Community/ies 
ECCAS Economic Community of Central African States ECOWAS Economic Community of West African States 
EDF European Development Fund 
EIB European Investment Bank EPA Economic Partnership Agreement 
ERDF European Regional Development Fund 
FDI Foreign direct investment FTA Free Trade Area 
 
EN 5   EN IfS Instrument for Stability  
IGAD Intergovernmental Authority on Development IOC Indian Ocean Commission 
IRCC Inter-Regional Coordinating Committee 
MDG Millennium Development Goal MERCOSUR Mercado Común del Sur 
MNC Multi-National Corporation 
NAFTA North American Free Trade Association NEPAD New Partnership for Africa's Development NIP National Indicative Programme 
OCT Overseas Countries and Territories 
OECS Organisation of East Caribbean States PICTA Pacific Islands Countries Trade Agreement 
PIF Pacific Islands Forum 
REC Regional Economic Community RIP Regional Indicative Programme 
RISP Regional Indicative Stra tegic Development Paper 
RSP Regional Strategy Paper SACU Southern African Customs Union 
SADC Southern African Development Community 
SME Small and Medium Enterprises SOPAC South Pacific Applie d Geosciences Commission 
SPBEA South Pacific Board of Educational Assessment 
SPC Secretariat for the Pacific Countries SPREP South Pacific Regiona l Environmental Programme 
SPS Sanitary and Phytosanitary standards 
SPTO South Pacific Tourism Organisation 
 
EN 6   EN TBT Tariff barriers to trade 
UDEAC Union Douanière et Économ ique de l’Afrique Centrale 
UEMOA Union économique et monétaire ouest-africaine 
UNCTAD United Nations Conference on Trade and Development 
USP University of the South Pacific 
 
EN 7   EN 1. T HE RELEVANCE OF REGIONAL INTE GRATION IN A GLOBALISED WORLD  
1.1. The global context 
1.1.1. The global economic context Over the last decade, the globalisation proces s has gained further momentum, changing the 
global economic landscape and bringing the emergence of ne w economic powers such as 
China and India. Global trade and investment flows have grown much more rapidly than 
national economies, bringing about an unprecedented level of economic interdependence.  
In an increasingly complex web of ec onomic and political relations, economic 
interdependence has grown much more rapidly and deeper than the political cobweb. Not all 
actors – governmental or commercial – have been able to adapt and take advantage of the new 
course. In this respect, larger and stronger pl ayers have a significant advantage as they have 
retained (or gained) the ability not only to adapt to, but to actually shape, globalisation.  
This explains why globalisation has tended to ma rginalise the smaller and weaker states and 
companies, thereby increasing inequalities – bo th within countries an d between countries – 
between winners and losers. In this context, most ACP countries have not been in a position 
to harness globalisation to achieve their development object ives and, in pa rticular, to 
accelerate poverty reduction. As shown in tabl e 1 below, their share of world trade and 
investment has stagnated while developing countr ies at large have been  reaping the benefits 
of globalisation.  
Table 1: The position of developing countries and ACP countries in world trade and 
investment 
Indicator 1990 2006 
Developing countries' share of world trade  
Sub Saharan African countries' share of world trade  23.2% 
2.9%  34.7% 
2.7 %  
South-south share of world trade  
Sub Saharan African intra-regional trade as a share of world trade  7.6% 
0.1%  17.0% 
0.2%  
Developing countries' share of FDI flows 
Sub Saharan African countries' share of FDI flows  17.8% 
0.8%  29.1% 
0.9%  
Developing countries' share of FDI stock 
Sub Saharan African countries' share of FDI stock  20.5% 
2.0%  26.3% 
1.7%  
Source: UNCTAD 
This trend is not inevitable, as exemplified by th e recent surge of growth rates in Africa. This 
accelerated growth is, however, based to a larg e extent on a commodity boom that needs to be 
translated into long-term development. In any case, at the current pace, ACP countries would 
need much time to catch up with the most deve loped economies. It is also widely recognised 
that additional growth is need ed if developing countries are to meet the 2015 targets of the 
Millennium Development Goals (MDGs). Tabl e 2 below shows clearly  that sub-Saharan 
Africa is currently not on track to achieve an y of these goals. Accelerated growth is, in 
particular, a necessary – if not sufficient – condition for the centr al objective of poverty 
reduction is to be achieved.  
 
EN 8   EN Table 2: The Millennium Development Goals and selected indicators for Sub-Saharan Africa. 
Progress  Goal  
Sub-goal / indicator  1990 2004 
1. Eradicate extreme poverty and hunger 
Halve the number of people living on less than $1 per day 
(1990 – 2015) Halve the proportion of people who suffer from hunger (1990 – 
2015) Measured by the number of under 5s under age.  
46.8% 
 
33%  
41.1% 
 
29% 
2. Achieve universal primary education 
Ensure all boys and girls complete a full primary school course 
(measured by enrolment rate)  
54%  
70% 
3. Promote gender equality and empower women 
Measured by the share of women in single or lower houses of 
parliament  
7.2%  
16.5% 
4. Reduce child mortality 
Reduce by two thirds the mortality rate under 5  
185 per 1000  
166 per 1000 
5. Improve maternal health 
Reduce by ¾ the maternal mortality rate 940 per 100 000 920 per 100 000 
(2005) 
6. Combat AIDS, Malaria and other diseases 
Halt and reverse the spread of aids (measured by prevalence of 
AIDS in 15-49 year olds) 2%  
6% 
7.Ensure environmental stability 
Reduce by half the proportion of  people without access to basic 
sanitation  
 
68%  
63% 
Source: United Nations 
1.1.2. Increasing attention to regional integration 
The recent proliferation in the number of region al integration projects and the focus on their 
importance can be attributed to the fact that regional integration provides a response to the 
challenges of globalisation. Smaller states find th emselves in a weak position to attract global 
companies and to exert political influence an  international level. Regional integration 
provides smaller states with recognition and weight and increases their ability to better harness the benefits and negativ e impacts of globalisation.  
The EU itself is a prime example of this kind of response, where the internal market and 
common policies allow companies based in Europe to build up a strong regional economic 
base, while enabling Member Stat es to pool their sovereignty to address common challenges 
in a cooperative manner.  
While the concept of regional integration amon g developing countries has existed since the 
formation of SACU (Southern Africa Customs Union) in 1910, its rise in popularity began 
during the 1960s with the formation of organi sations such as CACM (Central American 
Common Market) and ASEAN (Association of S outh East Asian Nations). More recently, 
regional integration has become one of the domi nant features of inte rnational politics. The 
1990s saw the emergence of new organisatio ns such as MERCOSUR (Mercado Común del 
Sur – Southern Common Market) and the un ique NAFTA (North American Free Trade 
 
EN 9   EN Association), which joins develo ped countries (Canada and US) with a newly industrialised 
country (Mexico). Since the beginning of the 21st century, regional orga nisations have both 
expanded in membership and br oadened co-operation areas.  
ACP states did not stay out of this trend towards increased regionalisation. Across the ACP 
region, there are now some 20 regional integra tion arrangements and do zens of specialised 
regional cooperation organisati ons. Many of the ACP arrangements are focussing in the first 
place on achieving objectives relating to economic and trade aspects or cooperation 
This attraction for regional integration can  be easily understood and explained by the 
outcomes it is expected to bring in at least three areas  (see also annex 2 for a review of the 
literature on the benefits of  regional integration):  
– Through cooperation and institutionalisation of conflict prevention and the peaceful 
conflict resolution, regional cooperation helps stabilisation . Regional organisations play 
an increasingly important role  in conflict management, p eace-keeping and peace-building. 
They can play an important role  in helping to tackle the root  causes of conflicts as well as 
promoting and protecting human rights, building trust and thereby enhancing 
understanding among societies and cultures leading to rec onciliation in post-conflicts 
situations. By deepening inte rdependence, regional integra tion provides disincentives for 
countries or groups to act aggressively against neighbouring countries and populations. 
– By building up larger markets, creating harmonised and effective frameworks for 
economic operators, fostering the exchange of goods and resources, regional integration 
can foster economic development through economies of scal e and stimulation of 
investment. From an EU perspec tive, regional integration is a step towards integration into 
the global trading system by allowing efficien cy gains through enlarged markets and an 
open regional integratio n. It is, in particular, a means to  foster south-south trade in a 
context where many developing countries trade more with developed countries than with 
their neighbours. By being esse ntial for economic growth, regi onal integration is therefore 
a vehicle for accelerated poverty reduction. 
Box 1: Regional integration and growth 
Literature1 on regional integration and growth generally does not find a direct link between 
the two, but rather an indirect association, or so called "dynamic growth effects". Te Velde 
(2008) completed a study of regional integration and growth in ACP regions, and found positive effects on growth through regional integration in trade and investment. In 
particular, "regional integration is likely to increase aggregate growth  through the growth 
effects of increased trade and investment, and one supporting piece of  evidence is that 
exporting firms have higher productivity". Schiff and Wang (2003) similarly found that 
NAFTA imports raised Mexican productivity by between 6.5 and 7.5%.  
– Regional cooperation is also the best way to provide or protect "regional public goods"  
because it is more effective in addressing  challenges with a trans-national dimension. 
Expected effects of regional cooperation ar e i) the provision of "regional governance 
public goods" such as international ec onomic governance and regional institutional 
development; ii) the provision of "regional knowledge public goods" such as experience 
learning and information sharing; iii) overcom ing "other market and coordination failures 
                                                 
1 For all references to literature in this document, see Annex 7 and 
http://ec.europa.eu/development/icenter/repository /Regional-Integration-Report-18-09-2008_en.pdf   
 
EN 10   EN and coordinating activities with strong regiona l externalities" such as competitiveness 
challenges (ODI 2008). Typically, transmissible diseases and the fight against migratory 
pests, protection and management of natural resources (e.g. water, la nd) or migration are 
cross-border challenges that require cross-bord er cooperation if they are to be mitigated 
and if increased economic activity of a re gional scale is to be sustainable. 
Box 2: Regional public goods 
Public goods should be provided at a regiona l rather than national level if either the 
underlying problem cannot be tackled at national level, or if regional level intervention is more efficient.
2 Examples of potential regional public goods include: cross-border transport 
links, peace-keeping operations, fighting human trafficking, the fight against specific 
crimes (notably fraud and smuggling), infectious disease control, agricultural pests control 
and specific climate agricultural research (this could include food security).  
A natural problem with regional public goods is their source of finance. Countries are less 
keen to take loans to finance regional public goods with larger spill-over effects to other 
countries in the region, and multi-country loans are hard to manage in practical terms 
(Ferroni, 2001).  
  
1.2. The increasing commitment of ACP countries to regional integration 
The vulnerability of most AC P economies, their fragmentation and the resulting lack of 
resources requires action going beyond national bord ers. This is felt by ACP countries 
themselves as all belong to at least one form of regional cooper ation or organisation. They see 
this as a remedy to their inadequate economic  size with regard to  the globalizing economy 
and an opportunity to adopt a more strategic ap proach to their development and speed up their 
socio-economic transformation. It is also a powe rful means to stabilize their geo-political 
environment through fostering peace, reconc iliation and stability in their immediate 
environment.  
The importance of regional political  integration was exemplified in Africa by the 
establishment in 2002 of the African Union (AU). The AU in cludes all Afri can countries 
(except Morocco) with the ultimate aim of forming a "United States of Africa". Currently, it is 
involved in a variety of chiefl y political activities,  such as conflict prevention and peace 
keeping (e.g. Darfur), but economic and monetary  union is also part of its agenda and the 
African Regional Economic Communities (RECs) are regarded as stepping stones to this goal.  
In other regions as well, regiona l integration is seen as key. The Pacific region contains a 
number of organisations with  specific fields of co-ope ration (e.g. SPBEA and USP for 
education). In the Caribbean, 12 of the 15 CA RICOM members have progressed to a single 
market.  
There have been long-standing efforts to harness regional integration for economic  
development. These efforts have been further stepped up in recent year s, with many free-trade 
areas and customs unions under creation and a number of regions  designing plans for 
ambitious common policies (see Table 3 below and Annex 1).  
                                                 
2 For a more complete definition of regional public goods, see Ferroni (2001), P3 ff. and the original 
definition of international public goods by Kanbur (2001).  
 
EN 11   EN Table 3: Regional Economic Comm unities in the ACP: State of play of economic integration 
 
REC Integration reached 3 Integration planned4 
Caribbean  
OECS Single Market (through CARICOM) Economic Union (2009 
CARICOM Single Market (2006) Single Market and Economy (2008) 
Central Africa  
CEMAC Single currency (CFA Franc pegged to 
the Euro), FTA (1998) and Customs 
Union (1994)  Full FTA, Customs Union and Common 
Market (no fixed date) 
 
ECCAS FTA launched in 2004 and slowly 
implemented Customs Union (2011), Common Market 
(no fixed date) 
Eastern Africa  
EAC Customs Union (2005) Common Market (2012) 
COMESA FTA (2000) Customs Union (2008) 
Southern Africa 
SADC FTA (2008) Customs Union (2010) 
West Africa  
UEMOA Single currency (CFA Franc pegged to 
the Euro), Customs Union (2000) Common Market (no fixed date) 
ECOWAS Partial FTA and Customs Union Full customs union 2007 (delayed) 
Monetary Union (2009) 
Pacific  
PICTA FTA (2003) No further step planned 
 
Beyond trade and economic integration, many initia tives aim at pooling efforts and resources 
of ACP states to tackle common problems . 
In the Pacific, the Forum Fisheries Agency has developed an integrated approach in the 
management of fish, a vital economic resour ce for many countries. The Forum Fisheries 
Agency has provided state-of-the -art legal and economic advice for the conclusion of fishery 
agreements, surveillance of fishery activities in members' exclusive economic zones and for 
the development of a domestic tuna industry. Hi gher education has also traditionally been 
                                                 
3 Regional economic arrangements ar e often applied with distortions. 
4 REC integration plans are often changing. The proposed integration listed here is based on the most 
recent, readily available public information. 
 
EN 12   EN provided at the regional level in the Pacific as it was recognised as the most effective way for 
small countries to deliver univ ersity education to high standa rds, as demonstrated by the 
University of South Pacific (USP), the Fiji School  of Medicine, or the University of Papua 
New Guinea (UPNG) – all with highly-evolved distance education facilities in the non-
campus islands.  
In Eastern and Southern Africa, the Nile Basin Initiative (NBI) was officially launched in 
1998 by the ten riparian states. In a region that  is characterised by severe poverty and 
instability and where the allocation and use of N ile waters have long b een a source of serious 
tension, the participating states  agreed on a shared vision to achieve sustained socio-economic 
development through the equitable utilisation of, and benefit from, the common Nile basin 
water resources. To convert this vision into  action, multi-purpose infrastructure (for water 
supplies, hydro-electric power, irrigation systems) is being developed jointly to reduce 
vulnerability to droughts, to mana ge floods better, to ensure more water, more food and more 
electricity in a sustainable manner.  
In the same region, the COMESA Free Trade Agreement (FTA) has proved beneficial to 
intra-COMESA trade, with trad e growing at an annual averag e of 9% within COMESA and 
by 16% among FTA Member States between 2000 and 2007 – much more quickly than 
overall trade. A World Bank study concluded that the FTA has had a positive impact on 
growth in the members that joined the FTA,  on cross-border investment flows and on the 
development of intra-industry linkages, with  trade on semi-manufactured goods between FTA 
members overtaking trade of similar pr oducts with the rest of the world. 
In the Caribbean, although tropical storms a nd hurricanes are frequent and have a large 
adverse impact on the fragile economies of the region, the present regional capacity to 
determine how severe a particular weather condition will be, and the likely effect in a localised area is very limited. CARICOM, the Caribbean Meteorological Organization and the 
national disaster agencies deci ded to pool resources in order to promote a reliable warning 
system and to obtain the advanced technologies that will provide the information needed to improve the preparedness of the authorities and th e general public and thus help minimise loss 
of life and damage to property. 
2. T
HE CHALLENGES FACING REGIONAL INTEGRATION IN ACP  COUNTRIES  
Despite real progress and clear commitment to enha nce regional integration, a number of 
critical challenges remain if regional integratio n is to fulfil its development potential for 
ACP partners .  
2.1. The economic structure 
2.1.1. Dual economies, weak export base and insufficient complementarity 
Most ACP countries (especi ally those with fragment ed markets) suffer from dual economies ; 
that is to say small companies operate on a ve ry local level, while larger, predominantly 
foreign multinational corporations (MNCs) are either present on the larger markets of the 
country (goods not produced locally; business services) or operate in a de facto off-shore 
mode (goods produced but not consum ed locally – typically raw mate rial). The result is a lack 
of medium-sized enterprises able to operat e on a national, let alone  regional, level.  
 
EN 13   EN Firstly, this is an issue as medium-sized enterprises are essential for growth and 
competitiveness. Secondly, the dual ec onomy causes ACP countries to have a weak export 
base as demonstrated by the ratios of sectoral  import and exports between the ACP and EU 
shown in Table 4 below. While the ACP region runs a trade surplus with the EU, it clearly 
exports primary goods (78.8% of their exports ) and imports manufactured goods (74% of 
their imports).  
Table 4: EU / ACP trade by sector 2006 (excluding South Africa).  
Sector (Sub-sectors)  ACP Exports to EU ACP Imports from EU 
Primary Products 78.8 23.9 
Agriculture 25.4 13.1 
Energy 43.5 9.1 
Manufactured Products 20.4 74 
Machinery 0.8 28.9 
Transport 4.9 15.7 
Chemicals 1.5 10.8 
Source: European Commission  
The combined effect of this duality and weak export base is a poor complementarity of 
national economies  within a region, as economies find th emselves producing and exporting a 
narrow range of similar products. As  a result, trade integration is  very limited in ACP regions 
and, as shown in Table 5 below, trade with th e EU is generally larg er than with regional 
neighbours. CEMAC countries, for instance, conduct 1% of thei r trade between themselves 
and about 45% with the EU. In a number of case s, however, significant trade barriers still 
persist and reduce the trade poten tial or trigger informal trade flows which do not appear in 
official statistics. Table 5: ACP regions import and export shares for 2004 
Exports Imports 
Region Within 
region Other ACP EU Within 
region Other ACP EU 
ECOWAS 9.3% 1.2% 31.9% 10.5% 1.3% 37.0% 
CEMAC 0.8% 3.2% 37.8% 1.4% 8.2% 53.5% 
COMESA 9.2% 4.8% 29.9% 6.4% 2.7% 22.4% 
SADC 2.1% 4.5% 32.6% 2.5% 4.3% 23.3% 
Caribbean 8.9% 0.8% 20.0% 5.8% 1.4% 18.1% 
Pacific 0.6% 0.5% 15.4% 1.3% 0.8% 8.8% 
Source: CEPII  
 
EN 14   EN Where conditions for effective and credible inte gration are strengthened, trade stands a chance 
to take off. This is the case in EAC where Kenya's traditional exports to neighbouring countries exceed its traditionally dominant exports to Europe. 
The lack of diversification and complementarity is not only due to the aforementioned factors, 
but also to the continued ex istence of many regulatory, admi nistrative and physical trade 
obstacles between countries in the same region and to the narrowness of the national markets 
(itself an effect of limited purchasing power). As a consequence, contrary to developed 
economies, the potential gains and prospects of regional integration in ACP countries lie more 
in longer-term prospects than in the rati onalisation of existing production structures. 
2.1.2. Vulnerability to economic and financial shocks 
ACP countries are vulnerable due trade shocks  due to their reliance on a small group of 
products, exported to a limited num ber of export markets (as me ntioned above). Fluctuations 
in commodity prices are a cause of instabil ity for people's income, fiscal revenues and 
macroeconomic stability. One striking exampl e occurred in Ethiopia between 1986 and 87. A 
fall in the world price of coffee caused a 40% decrease in Ethiopia's terms of trade, ultimately resulting in a 6% decline in Et hiopia's real income. Foreign capit al inflows, most of which are 
short-term, make many AC P countries vulnerable to financial shocks
5. As financial shocks 
can also affect exchange rates, they ca n also prove disruptiv e for regional trade. 
2.2. The need for (more effective)  regional policies beyond trade  
From European experience, regional integra tion requires more than elimination of trade 
barriers to be effective and be neficial for all (business, consumers, workers, citizens). 
Regional integration should se rve the objective of sustai nable development and poverty 
reduction, and therefore be able to develop co-operation and address common challenges.  
These common challenges  may include negative externalities , in particular the environmental 
and social impacts of increased regional econ omic flows. Such challenges can often be 
tackled at a regional level th rough the provision of appropriate  regional public goods .  
Agriculture  is one example area; it remains the econom ic base for the majority of the poor in 
Africa and accounts for about a third of Africa’s  GDP plus the bulk of its employment. In 
view of this, the AU and NEPAD have launc hed the Comprehensive Africa Agriculture 
Development Programme (CAADP) to foster agricu ltural development. In its communication 
"Advancing African agriculture", the Europe an Commission, while recognising that the 
national level is where the most intense cooperati on will continue to ta ke place, expressed its 
view that in many areas (such as researc h, knowledge dissemination, trade facilitation, 
harmonisation of norm and standards, manageme nt of cross-border resources), action at 
continental and regional le vels can contribute to ag ricultural development.  
Regional integration can also make an importa nt contribution to food security. Most ACP 
regions have put in place regiona l food security strategies to e xploit the potentia l benefits of 
enhanced integration, notably in terms of trade (lowering the cost of inputs), infrastructure 
(sharing the costs of irrigation projects; improvi ng road and lowering the cost of transport), 
                                                 
5 It is worth noting, however, that commodity-related FDI inflows into some countries have increased in 
recent years. 
 
EN 15   EN market management (stocks, improved market information, regional ex changes) and control 
of animal and pest diseases.  
Migration  is a further area which can be addressed with policies at regional level. Growing 
mobility and migration leads may have destab ilizing effects in countries characterised by 
weak governance and lack of social safety nets; for example, more rapid spread of 
communicable diseases across borders or xeno phobic reactions. This challenge can best be 
met by regional cooperation and cross-border ac tions in support of national responses. 
Regional economic integration between poor a nd poorer countries may also lead to a 
concentration of wealth  in the lead economic area (regiona l power house) to the detriment of 
the poorest regions (Venables, 2000). In particular , integration will lead to increased FDI at a 
regional level, but this new inve stment may be focussed specifica lly within richer areas of the 
regional powerhouses, thus chal lenging the objective of poverty reduction for the region as a 
whole. This theory is backed up by empiri cal work on US and UK FDI in developing 
countries; it was found that countri es with a larger market, or those countries closer to the 
larger market, received more FDI (ODI, 2006). Po licies that aim to cushion potential losers 
are even more necessary in the case of "open" regional integr ation, where increased 
competitive pressure comes not only from the "powerhouse" in each region, but also from 
third parties. 
A further area which can benefit from wider regional policies is that of industry 
competitiveness and the business climate . Well-functioning integr ated regional markets 
benefiting from reduced transaction costs will  increase trade, strengthen competition, 
encourage innovation and provide ne w and better quality goods a nd services to more people. 
This is particularly important for fledgling SMEs that need incentives to trade across borders. By contrast, the lack of business support serv ices (inefficiency of financial markets, 
segmentation of services markets, etc) and of  industrial strategies with a clear regional 
perspective are limitations to the creation of  new businesses and the diversification of 
economic structures. 
However, for SMEs to fully benefit, it is ne cessary to ensure that the relevant financing 
systems, which provide SMEs with access to borrowing, are in place. The improvement of 
regulatory framework and business climate will also contribute to attract foreign direct 
investments (FDI) in a context of  local financial systems that fail to channel local savings to 
local investments. FDI is partic ularly valuable as/when it bri ngs not only growth but also 
much-needed productive capacities (skills,  technology, external ities, productivity). 
Furthermore, the need for increased R&D is being recognised by most leaders in developing 
countries as imperative for the diversificati on and upgrading of thei r economies. However, 
many of the results of R&D inve stment are only visible in th e medium- to long-term while 
national budgets are hard-pressed to tackle othe r development urgencies. This makes the case 
for regional instruments in R& D particularly appealing.  
Regional integration should also ensure macro-economic convergence and stability . ACP 
countries differ highly with re spect to their macroeconomi c indicators and policies. 
Strengthening the regional c oordination of macroeconomic policies and structural reforms 
will help build stronger regional markets and macro-economic stability, including low 
inflation, less volatile exchange rates, sound fis cal policies and sustainable levels of public 
debt. Economic governance plays also an important  role e.g. in the ma nagement of natural 
resources, fight against corr uption, modernizing and reforming public finance. Regional 
 
EN 16   EN coordination in these areas contributes to  securing stability and the smooth economic 
adjustment needed for growth and poverty reduction.  
Box 3: The challenges of monetary integration 
There are four monetary unions in ACP, covering a) four of the five countries of the 
Southern African Customs Union (SACU); b) the two economic and monetary unions in West and Central Africa that tied their common currency, the CFA fran c, to the euro; and 
c) the OECS in the Caribbean that tied their currency towards the US dollar (and 
previously the British pound). SADC, EC OWAS, EAC, COMESA and CARICOM also 
aim to establish monetary unions. All regions have agreed on programmes of 
macroeconomic policy coordination and co nvergence. In Africa, the overarching 
objective is to implement a monetary union an d a single currency by 2021 as agreed by 
the AU. Regional integration agreements ar e regarded as stepping stones towards a 
common currency for the continent.  
To date member countries have mixed results of macroeconomic convergence and 
therefore failed to reach their ambitious cale ndars for monetary integration. Incomplete 
trade integration, a weak business environment and underdeveloped financial sectors have remained problems. In ECOW AS, where the alignment of the UEMOA zone with the 
non-UEMOA members was originally envisaged by 2005, the heterogeneous economic 
structures of member states, notably of oil producer Nigeria as the biggest economy, and 
country-specific political and economic problems seriously constrained their ability to 
pursue consistent macro-economic policies. Another problem is the non-convertibility of 
currencies (except the CFA Franc) which hinders cross-border financial settlements (ODI, 2008). 
  
2.3. Inefficient and/or incomple te infrastructure networks 
The benefits of trade integration are hampered by weak tr ade facilitation infrastructure and 
systems, while natural handicaps (insular econo mies, landlocked countries) can be offset by 
regional cooperation.  
In its Communication on the EU-Afr ica Partnership on Infrastructure6, the European 
Commission has explained the need  to secure the in terconnectivity of th e African continent 
and its different regions. Desp ite slow improvement, transport costs remain high, much higher 
than in other developing regions, averaging 14 % of the value of all exports compared with 
8.6% for all developing countries, and higher still for many landlocked countries – Malawi 
(56%), Chad (52%) and Rwanda (48%). This  imposes a huge burden on cross-border trade 
and economic developm ent at large.  
 While the lack of energy remains a strong constr aint on growth, there is a wide convergence 
that energy resources can be optimally expl oited from a regional platform. Energy pooling 
and interconnectivity are addres sing the problem of unreliable a nd costly services. Increased 
cross-border energy cooperation and trade is essential for improving re liability, affordability 
and access. The potential of regional integration and cooperation is partic ularly large when, as 
is the case in Africa, energy resources are subs tantial but require massive investment to be 
used.  
                                                
 
6 Interconnecting Africa: the EU-Africa Partnership on Infrastructure, 13 July 2006, COM(2006)376 final 
 
EN 17   EN 2.4. Weak regional governance 
There are three main causes of weak regional governance. Firstly, regional institutional 
capacities are not sufficient . The agendas for regional integr ation of most ACP regions are 
fairly ambitious and/or precise, but implementa tion is weak and hampered by the coordination 
ability of regional organisations and/or na tional governments. For example, the CEMAC 
Commission employs only 39 employees and 61 execution agents for, yet the ambitious 
integration agenda proposes to unite 35m  people across 6 countries. While improving 
capacity should be a primary objective, it is al so important that ACP states design the most 
appropriate regional integration agendas with a realistic degree of ambition that will work 
best in the specific regional ACP context. 
Secondly, a wealth of regional organisations  exists (see Annex 1) . The RECs often have 
overlapping agendas, mandates and memberships and / or too weak structures and political 
weight. In Africa, a rationalisa tion exercise of the RECs is being undertaken by the African 
Union and NEPAD and the long-term aim is con tinental integration (e.g. a continental free-
trade area in Africa).  
However, the question remains as to how far this rationalisation process can actually go and 
what progress can be achieved in the short term  given the differences in focus that sometimes 
exist between the AU formally recognised or ganisations and the ac tual capacities and 
mandates to deliver on an active economic and functional cooperation (see Table 
below).Table 6: Overview of African regional organisations 
 Focus EC-ACP co-operation 
 Eco. Fun. Pol. Eco. Fun. Pol. AU 
recognised 
West Africa        
UEMOA 
(Benin, Burkina Faso, Cote d'Ivoire, Guinea-Bissau, 
Mali, Niger Senegal, Togo)  X   O    
ECOWAS 
(UEMOA + Cape Verde, Gambia, Ghana, Guinea, Liberia, Nigeria, Sierra Leone) X  X O  O O 
CILSS 
(Burkina Faso, Cape Verde, Chad, Gambia, Guinea Bissau, Mali, Mauritania, Niger, Senegal)  X   *   
Central Africa        
CEMAC 
(Cameroon, Central African Republic, Gabon, 
Equatorial Guinea, Rep. Congo, Chad)  X X  O    
ECCAS 
(CEMAC + Angola, Burundi, DCR, Sao Tome)  X X X O * O O 
ESA        
IGAD 
(Djibouti, Eritrea, Ethiopia,  Kenya, Somalia, Sudan, 
Uganda)   X X  O  O 
EAC 
(Burundi, Kenya, Rwanda, Tanzania, Uganda)  X  X O Cap  O 
IOC 
(Comoros, La Reunion, Ma dagascar, Mauritius, 
Seychelles)   X   Cap   
COMESA 
(EAC – Tanzania, IGAD – Somalia, IOC – La 
Reunion, + Angola, DCR, Egypt, Malawi, Swaziland, Zambia, Zimbabwe) X X  O O  O 
Southern Africa        
SACU 
(Botswana, Lesotho, Namibia, RSA, Swaziland)  X   *    
SADC 
(SACU + Angola, DCR, Ma dagascar, Mauritius, 
Malawi, Mozambique, Tanzania, Zambia, Zimbabwe)  X X X O O O O 
North Africa (non-ACP)        
 
EN 18   EN AMU 
(Algeria, Libya, Mauritania, Morocco, Tunisia)   X    O 
Inter-regional        
CENSAD 
(Benin, Burkina Faso, Burkina Faso,  
Central African Republic, Co moros, Côte d'Ivoire, 
Djibouti, Egypt, Eritrea, Gambia, Guinea, Guinea-Bissau, Ghana, Libya, Liberia, Mali, Morocco, Niger, Nigeria, Senegal, Sier ra Leone, Somalia, Sudan, 
Chad, Togo, Tunisia)
  X     O  
Notes:  
Eco. : Economic integration X Key focal area 
Fun. : Functional cooperation X Minor focal area 
Pol. : Political cooperation O Area of EC-ACP co-operation 
Cap. : Co-operation in capacity building * Minimal EC-ACP co-operation 
Finally, there is  insufficient ownership and diversity of stakeholders . Putting in place trade 
liberalisation and integration pol icies, plus broader co-opera tion requires strong political 
commitment to regional integration, a strong in stitutional and legal system, the awareness of 
all stakeholders (e.g. business, tr ade unions, civil society) and th e convergence of their views. 
These pre-conditions do not alwa ys exist in ACP countries. Th e processes rely too often on 
general declarations by national le aders, without in-depth owners hip by a wide range of actors 
such as national politicians, administrations, pa rliaments, business and non-state actors. The 
results of the public consultation back up the id ea that broader stakeholder participation is 
required. 
3. W HY DOES THE EU CARE ? 
Progress and difficulties in ACP regional integrati on are of strong interest for the EU. One of 
the objectives of EU development policy is to help developing countries to integrate into the 
world economy, together with the sustaina ble economic and social development of 
developing countries and the fight against pove rty (Article 177 EC Tr eaty). The EU sees 
regional integration as a vehicle for smooth integration into  the global economy and therefore 
lends its support to regional integration in de veloping countries. This is a long standing 
feature7 of EU policy and that is partic ularly the case for ACP countries. 
Conversely, the economic, social  and environmental challenges facing ACP regional efforts 
may weaken efforts to reduce poverty and to  foster sustainable development of ACP 
countries, and eventually counter act action supported by the EU. 
3.1. EU-ACP relations and regional inte gration: an ancient partnership 
Conceptually, there are several ways of conduc ting relations with third countries. These can 
be held principally in multilateral fora, on a bilateral basis with each  individual country, or 
with regional groupings of countries arrange d according to political, geographical or other 
interests. These levels are, of course, not mutually exclusive.  
The EU-ACP relationship is, for historical reasons, not run primarily on a multilateral basis. 
A long-standing relationship, it formally be gan in March 1957 with the signature of the 
Treaty of Rome, which made speci al allowances for the then- called Overseas Countries and 
Territories (OCTs) of the European signatori es of the Treaty. Since then, these countries 
                                                 
7 Communication on European Community support for regional economic integration efforts among 
developing countries, COM (1995) 219 final, 16.06.1995. 
 
EN 19   EN became independent, but provisions were made to  preserve the special economic relationships 
inherited from the past and to promote their economic and social development. Hence a first 
generation of association agreements with largel y francophone former colonies in the form of 
two "Yaoundé Conventions" (1963 and 1969), and later, following UK accession in 1973, a 
second generation of agreements, the "Lomé Conventions" (1975, 1980, 1985, 1990) extending this special relationship to former Briti sh colonies in Africa, the Caribbean and the 
Pacific.  
Therefore, since the origins of the EC itself, a special relationship between Europe and 
the ACP countries as a group has been developed . It encompasses trade arrangements, 
economic and technical assistance, developm ent assistance and, in creasingly, political 
dialogue and the protection of fundamental rights.  For a long period of time, these successive 
conventions, that gradually expanded into  new areas, remained the most far-reaching, 
elaborate and complex North-Sout h contractual agreement, and were held as the flagship of 
EU development policy and external relations. 
This special relationship with a group of developing countries remains at the core of EU 
development policy. It is recognis ed as such by the EC Treaty itself (Article 178(3)). Even 
when the EU was critically looking at the expe rience of the past and exploring new ways for 
the future
8, the multilateral option which would repla ce any bilateral arrangements with the 
ACP as a group or individually or  regionally – i.e. going back on 40 years of sp ecial EU-ACP 
relations – was not contemplated.  
EU relations with ACP countri es have traditionally been conducted within a collective 
framework, the successive Lomé and Cotonou c onventions, but in practice, mainly at the 
national level. This is the case for most Co tonou instruments: Politi cal dialogue takes place 
mainly with national governments; developmen t assistance has been mostly spent through 
National Indicative Programmes (NIPs) that respond to national Country Strategy Papers 
(CSPs); under Cotonou and until 31 December 2007, EU-ACP trade relations were governed 
by a unilateral EU trade regime to wards ACP countries individually. 
However, a purely  bilateral relationship with each indivi dual country is an option that has 
been discarded for a long time. Countries of th e ACP group, and in particular of each of the 
sub-regions – Sub-Saharan Afri ca, Caribbean, Pacific – have common political, economic, 
social and geographic characteristics that make cooperation with them as regions or as a 
group more effective: genera l political undertakings shared  by all; a single financial 
instrument (the European Development Fund) a nd the same financial procedures; and shared 
goal to reduce poverty and integr ate into the world economy th rough a number of key policy 
areas (such as economic and financial coopera tion, human and social development, improved 
governance).  
This is why regional integration has been supported by the EU-ACP partnership 
agreements already since the second Lomé Convention (1979)9. The regional dimension of 
                                                 
8 Commission Green Paper on Relations between the European Union and ACP Countries on the eve of 
the 21st century – Challenges and Options for a new Partnership, COM(1996)570 final, 20.11.1996 
9 Article 133 of the Lomé II Convention already established that "in the implementation of the financial 
and technical cooperation, the Community shall prov ide effective assistance fo r attaining the objectives 
which the ACP States set themselves in the contex t of regional and inter-regional cooperation. This 
assistance shall aim to:  
 
EN 20   EN the EU-ACP cooperation is seen as a necessary  complement to its national component. In 
effect, the general objectives of EU -ACP cooperation as set out in the Cotonou agreement 
(Article 19) are poverty  reduction, sustainable development and integration into the world 
economy as the overarching aims of the partne rship. In order to achieve them, regional 
integration and cooperation is one of the fundamental areas of interest of the Cotonou 
agreement. Among the overall obj ectives of the partnership, " regional and sub-regional 
integration processes which fo ster the integration of the ACP countries into the world 
economy in terms of trade and private inve stment shall be encouraged and supported " 
(Article 1). To this effect, " cooperation support shall aim to:  
(1) foster the gradual integration of the ACP States into the world economy;  
(2) accelerate economic cooperation and develop ment both within and between the 
regions of the ACP States;  
(3) promote the free movement of persons, goods, se rvices, capital, labour and technology 
among ACP countries;  
(4) accelerate diversification of the economie s of the ACP States; and coordination and 
harmonisation of regional and sub-re gional cooperation policies; and  
(5) promote and expand inter and intra-ACP trade and with third countries ." (Article 28).  
In addition, protection of the environment and na tural resources, as well as enhancing the role 
of non-state actors, are cross-cu tting issues that should also be pursued at regional level 
(Article 32). 
This makes the EU a unique partner of ACP as most other bilateral or multilateral actors of 
development policy have, until now, not placed  the same emphasis on regional integration. 
Indeed, some have virtually no operations at regional level.  
USAID has regional programmes in all areas of  Sub-Saharan Africa plus the Caribbean, and 
works with a variety of part ners including RECs such as EAC and ECOWAS across a range 
of areas relevant to regional integration. These regional pr ogrammes have been in existence 
for several years. Aid for regional projects in 2007 totalled $72m for West Africa, $30m for 
Southern Africa, $28m for East Africa, $15m for Central Africa, $316m for "Africa regional 
aid" and $15m for the Caribbean.  
                                                                                                                                                         
a) accelerate economic cooperation and development both within and between  the regions of the 
ACP States;  b) accelerate diversification of th e economies of the ACP States;  
c) reduce the economic dependence of the ACP States on imports by maximizing output of those 
products for which the ACP States in question have real potential;  d) create sufficiently wide market s with the ACP States and neighbouring States by removing the 
obstacles which hinder the development and integration of those markets;  
e) promote and expand trade between the ACP States and with neighbouring third countries; f) maximize the use of resources and services in the ACP States;  
g) strengthen organizations set up by the ACP States to promote regional cooperation and 
integration; h) implement specific measures in favour of th e land-locked and island countries, notably in 
respect of transport and communications." 
 
EN 21   EN Canada has a "Pan African" programme which pr imarily supports institutions in building their 
capacity and structure. The support is limited to financial support a nd the organisations 
themselves must propose (and then implement) pr ojects with a regional impact. CIDA quotes 
the African Union as a partner fo r this program. None of the RECs appear to be partners at 
present, and there is no direct focus on regional integration.  
Japanese assistance to Africa is limited to a handful of countries, an d does not include any 
clear regional development initiative. Assistance  to the Pacific is more developed but still 
does not appear to contai n any regional aspects. 
The World Bank has recently adopt ed its "Regional Integration Assistance Strategy for Sub-
Saharan Africa". On regional integration, the EU seems to be "leading by example" since the 
concepts and ideas developed in  this document are very much in line with what the EU has 
been doing for long on regional integration. 
Overall, the trend towards an increased focus on the regional level is now established as 
witnessed by the number of important develo pment partners who are developing regional 
strategies This fact, in itself, confirms the n eed for further regional in tegration in the current 
global climate. 
3.2. More and better can be done 
While development co-operation is a shared competence between the EU and its Member 
States, the EU has a key ro le to play in supporting re gional integrat ion through its 
development policy. The EU's own experience with regional integration makes it a natural 
partner for regional organisations  in ACP regions and it has de veloped significant experience 
and expertise in dealing with regional organi sations and regional matters in developing 
countries. In addition, as in all areas of development cooperation, the EU has a key role to play in the co-ordination of Member Stat es' efforts to increase aid effectiveness. 
The EU has been very responsive  to the trend towards enhanced  regional integration in ACP 
countries. Many recent EU in itiatives and policies seek to support this pr ocess, in particular: 
the regional strategies for Africa (October 2005), the Caribbe an (March 2006) and the Pacific 
(May 2006), and the Joint EU-Africa Strategy of December 2007; the negotiation of region-
to-region Economic Partnership Agreements (EPAs) ; the EU-Africa Infrastructure Partnership 
focused on network interconnectiv ity; the programming of the 10th European Development 
Fund (EDF) and the increase of Regional I ndicative Programmes (R IPs) therein; the 
promotion of dialogue and cooperation with European outermost regions and overseas 
countries and territories (see Annex 7 for the full references of these documents).  
3.2.1. The need for a consolidated EU vision 
However, more can be done to make this partnership between the EU and ACP more 
effective. There is need for a consolidated visio n, at EU level, of regi onal integration from a 
development point of view, as we ll as the necessity to better id entify key challenges and tools 
in order to make EU policies in  support of regional in tegration more effective. Three issues 
are critical in this regard. 
First, there is a need to deepen the approach to regional trade integration , and adapt it to 
today's trading reality. While it remains essen tial that tariff and non tariff trade barriers be 
lifted on a regional level, and to support ACP capacities to do so, it is also important to reflect 
 
EN 22   EN on the most appropriate ways to  fulfil the Cotonou objectives to cooperate in other areas of 
regional dimension, such as trad e in services (including mari time transport and information 
and communication technologies), competiti on policy, intellectual property rights, 
standardisation and certification, customs legi slation and procedures, and sanitary and 
phytosanitary standards. 
Second, it is necessary to develop a more consiste nt and articulated EU vi sion of the role of 
policy cooperation  in a number of areas which are essential to bring forward the concept of 
sustainable  regional integration and pr otection of regional public  goods (agriculture, food 
security, environment and natura l resources management, disast er risk management, health, 
higher education, research and development, ru les aspects of business development). There is 
also a need to establish a better linkage with  the key political ingr edients for sustainable 
regional integration, notably  peace and security. In all these areas, it is important to identify 
what needs to be done at which institutional leve l (continental, regional, national) and what is 
the role of the regional level. 
Finally, it is appropriate to review the tools  with a view to enhancing their complementarity 
and efficiency. Policy tools at EU level are diverse (development policy, trade policy, 
political dialogue), and the most appropriate po licy mix needs to be developed to ensure its 
efficiency as well as its adequacy with varied regional realities. These tools need also to be 
complementary and coordinated with EU Memb er States and other donors' activities in 
support to regional integration, in order to devel op the principles of aid effectiveness also in 
the context of regional interventions. The 10th EDF Regional Strategy Papers (RSPs) will 
provide the basis for th e Commission and EU Memb er States to support regional integration 
in a coordinated fashion. 
3.2.2. Setting out the objectives 
A reinforced EU-ACP partnership in suppor t of regional integration should pursue the 
following objectives: 
– Reinforce the link between regional inte gration/cooperation and growth generation . The 
objective is to strengthen the impact of accelerated and deeper market integration  (and 
of all forms of regional cooperati on) on growth and poverty reduction.  
– Reinforce the sustainability  of the outcomes of increased  economic integration. This 
means reinforcing cooperation with a view to protecting and delivering key regional 
public goods . This implies strengthening support for th e integration agenda  of the various 
regions and for their regional policies aiming to deliver these public goods.  
– Strengthen the efficiency of regional governance , both at regional level and at national 
level. This requires a more streamlined organisation  of regional agendas, increased 
capacity building  at regional and national level, and broader stakeholder participation  
at regional and national level. 
– Strengthen political dialogue and joint understanding  between the EU and ACP countries 
and regions on the merits and objectives of re gional integration, notably on the basis of EU 
experience. This means going beyond deliv ering financial assi stance and develop new 
ways of working together  toward more regional integration 
 
EN 23   EN Enhanced efforts to achieve the above objec tives should also pursue more operational 
objectives, notably: 
– Maximise the efficiency of the new generation of the 10t h European Development Fund 
(EDF) programmes , and in particular the regional pr ogrammes, with a view to better 
leveraging regional economic development throu gh clearly identified priorities for regional 
intervention, based on the regions' own age ndas and a review of past implementation 
methods an increased coordi nation of EDF programming; 
– Identify key issues for supporting the implementation  of a major element of the EU-ACP 
relationship, i.e. the Economic Partnership Agreements (EPAs). The EPAs are aimed at 
strengthening regional inte gration by building upon, suppor ting and fostering existing 
integration processes. There are challenges that need to be addr essed as regards the 
capacity of ACP economies and structures to implement and adjust to the EPAs.  
– Enhance the efficiency of EU assistance  (including outside ED F) with increased 
coordination and complementarity of Comm unity, Member States and other donors' 
support. Regional programmes (RIPs) will serve as a basis for this coordination. On the basis of the European Consensus for Development, improving coordination between EU donors is a key objective for EU development policy – and a key to its success.  
Figure 1: Problem tree linkin g general objectives, challenge s and specific objectives 
                
 
(a)
Integration of ACP 
states into world 
economy(b)
Accelerate ACP 
inter and 
intraregional 
economic co-
operation (c)
Free factor 
movement(d1)
Accelerate 
diversification 
of economies(e)
Promote inter 
and intra ACP 
trade with 3rd
countries
General Objectives Challenges Specific Objectives
From Cotonou Identified in Section 2        For new policy guidelines   
Efficiency in governance
Streamline Organisations
Capacity building
Broader stakeholder 
participation(d2)
Harmonise 
policies
Strengthen EU / 
ACP dialogue(i)
Weak 
complementary 
partner economies
Deeper market 
integration through 
integration-growth 
link(iv), (v), (vi)
Weak governance
Weak institutional capacity 
Excess of ROs
Insufficient stakeholder 
ownership & diversity(iii)
Poor infrastructure 
networks
Reinforce 
sustainability and 
key regional public 
goods(ii)
Policies not 
effective outside 
trade
Key
Primary relationship
Secondary or indirect relationship(a)
Integration of ACP 
states into world 
economy(b)
Accelerate ACP 
inter and 
intraregional 
economic co-
operation (c)
Free factor 
movement(d1)
Accelerate 
diversification 
of economies(e)
Promote inter 
and intra ACP 
trade with 3rd
countries
General Objectives Challenges Specific Objectives
From Cotonou Identified in Section 2        For new policy guidelines   
Efficiency in governance
Streamline Organisations
Capacity building
Broader stakeholder 
participation(d2)
Harmonise 
policies
Strengthen EU / 
ACP dialogue(i)
Weak 
complementary 
partner economies
Deeper market 
integration through 
integration-growth 
link(iv), (v), (vi)
Weak governance
Weak institutional capacity 
Excess of ROs
Insufficient stakeholder 
ownership & diversity(iii)
Poor infrastructure 
networks
Reinforce 
sustainability and 
key regional public 
goods(ii)
Policies not 
effective outside 
trade
Key
Primary relationship
Secondary or indirect relationshipKey
Primary relationship
Secondary or indirect relationship
 
EN 24   EN 4. T HREE POSSIBLE APPROACHES FOR EU SUPPORT  
Considering that the regional in tegration agenda is set by the ACP countries themselves, EU 
support must aim specifically at supporting the regional integration process in ACP 
countries,  i.e. helping ACP regions reach the goals they have set for themselves. Ownership 
is a central principle of the partnership between the EU and ACP countries and regions. The 
EU is therefore not in a position to make choi ces about regional integration in ACP countries. 
In a context of limited financia l resources, it can, however, decide, among the choices made 
by ACP regions, which approach it will support as  a priority in order to best achieve the 
objectives presented in Section 3.2. 
Conceptually, three approaches for EU support to regional integration in ACP countries can 
be envisaged: elimination of barriers to trade; policy coor dination to foster sustainable 
development; political cooperation to ensure the effectiveness of  regional integration. They 
are presented here as separate concepts becau se each one has specific results that it is 
important to evaluate. In reality, policies are a complementary and mutually reinforcing mix 
of these three approaches, as shown in section 5. This mix is, and will remain, different in 
each region, as it depends on a region's own priorities.   
4.1. Elimination of barriers to trade10 
This approach is what has most often been referr ed to as "regional inte gration" and defined as 
the reduction of policy  barriers to the movement of goods, services, capital and persons with 
the elimination of tariff and non-tariff barriers to trade, the removal of ob stacles to investment 
from regional partners and the facilitation of pa yments at the centre. This approach was the 
main focus of the 1995 Commission Communicat ion, and is reflected in Article 29 of 
Cotonou agreement on "regional economic integration"11. It heavily build s, although not 
exclusively, on trade policy and trade agreements between regional partners. 
There is still plenty of scope for more eff ective trade integration in ACP countries. While 
regional agendas are ambitious (see Annex 1), implementation generally lags behind. There 
is, in particular, a potential for progre ss to be made in the following areas: 
                                                 
10 This approach is usually referred to in the academic  literature as "negative integration". This is a neutral 
p h r a s e  t h a t  i s  u s e d  ( o f t e n  i n  a n  E U  c o n t e x t ,  b u t  not exclusively) to describe the form of integration 
based mainly on the reduction / abolition of barriers, as opposed to "positive integration", which implies 
the approximation or harmonisation of laws and standards. These expressions being descriptive, they do not convey any judgement on the merits of either form of integration. 
11 "Cooperation shall, in the area of re gional economic integration, support:  
a. developing and strengthening the capacities of:  - regional integration institutions and organisations set up by the ACP States to promote regional 
cooperation and integration, and  
- national governments and parliaments in matters of regional integration;  b. fostering participation of Least Developed Countries (LDC) ACP States in the establishment of 
regional markets and sharing the benefits therefrom;  
c. implementation of sectoral refo rm policies at regional level;  
d. liberalisation of trade and payments;  
e. promoting cross-border investments both foreign and domestic, and other regional or sub-regional 
economic integration initiatives; and  f. taking account of the effects of net transitional costs of regional integration on budget revenue and 
balance of payments." 
 
EN 25   EN – Effective implementation of all regional trade liberalisation commitments  (FTAs, 
customs unions) at national level is essential for the benefits of regional integration. As 
highlighted in the public consultation, this is  the prime area where regional integration can 
deliver benefits and help attain developmen t objectives. Protectionism and concerns about 
national sovereignty need to be overcome for these benefits to accrue. Regional trade will 
spur local competition as cheaper imports from  regional partners will lower the price of 
agricultural and industrial inputs, as well as  of household products. As far as customs 
unions are concerned, the correct implemen tation of external regional duties is as 
important as the free circulati on of goods as it allows the re gion to protect its industry and 
agriculture as appropriate, to collect public revenue (sometimes, as in UEMOA, for the 
benefit of regional organisation) and to mainta in the delicate regional balance of costs and 
benefits from openness to the rest of the world.  
– Services : most ACP regions have not advanced much in liberalising services between 
themselves. As a result, there are currently no real regional markets for services. Wherever 
regions engage in building up such regional mark ets, however, they are likely to draw very 
large benefits – if commitments are effectiv ely implemented. Indeed, whereas services are 
essential to any economy, regardless of its leve l of development, the service sector remains 
underdeveloped in most ACP countries and th e excessively high cost of services can 
sometimes increase the cost of industrial products by as much as 20%. Establishing more 
transparent, stable and liberal regional ru les on sectors crucial to development could 
considerably reduce the excessive costs curr ently borne by both businesses and consumers. 
This is, in particular, the case for infrastructure service sectors such as telecommunications, transport, banking and insurance, which are vital to the competitiveness of all businesses. The importance of lowering obstacles to regional trade in financial services was highlighted in th e public consultation as a crucial way of 
improving the business climate.  
– Investment : investment is key to growth and development. Lowering or abolishing 
regional barriers to investment can str ongly contribute to a more dynamic regional 
economy. Easier cross-border investment within  a region acts as a multiplier of more open 
regional goods and services ma rkets. Free capital movement within a region improves the 
allocation of capital and helps attracting FDI by offering improved security to investors, be 
they regional or outsiders. Solid and transparen t regional rules are particularly important to 
rebalance economies and attract investment outside the traditio nal fields of mining and oil. 
– Customs and trade facilitation : Complex, diverse and inadequate customs procedures 
represent an important obstacle to trade, especi ally to intra-regional trade, in developing 
countries. This is particularly true in relati on to transit procedures. As result of delayed 
deliveries, African countries tend to increas e their inventory holdi ng. Firm surveys among 
9 African countries found that firms hold, on aver age, the equivalent of three months of 
input needs, which imposes heavy and unnece ssary costs on them. These reforms should 
be carried out at regional level but appropr iate capacities are needed  in national customs 
administrations to ensure a smooth implementation on the ground. 
– Technical barriers to trade  (TBT): beyond SPS (see box below), TBT are an important 
impediment to regional trade. Lack of st andardisation leads to  otherwise unnecessary 
controls and restrictions to the free circulation of products, thereby reducing in practice the 
advantages of regional economic integration. So me of these technical barriers may indeed 
be designed to restrict competition and favour  local producers – at the cost of local 
 
EN 26   EN consumers. The adoption and effective impl ementation of regional technical rules and 
standards is thus an important step to increase regional trade flows.  
Box 4: Sanitary and Phytosanitary Standards (SPS) 
The experience of the EU shows how regional integration in SPS can be of assistance to 
development. Unharmonised SPS act as a signifi cant trade barrier, as trade in food and 
livestock is subject to costly checks and ce rtification at borders. Harmonisation therefore 
brings the benefits expected from trade integration including less price distortion, and higher 
quality through competition. Harmonised SPS can al so have wider effects. They provide a 
mechanism for addressing food safety on a regional level. Plant and animal disease 
eradication is a potential regional public good as disease, by definition, cross borders. 
Naturally, to reach a high level of SPS integratio n requires not just harmonised policies, but 
also strong capacity at both regional and national level. 
 
The Economic Partnership Agreements  (EPAs) have to be seen under this approach as an 
important contribution in support of regional eco nomic integration. They are an innovation as 
the previous trade instrument used (unilateral preferences granted by th e EU) could not foster 
regional integration: the Cotonou trade regime was grante d to ACP countries on a national 
basis for their imports to the EU. EPAs are di fferent in that they are negotiated with ACP 
regions and trade not only between ACP and the EU but also within ACP regions.  
To date (see Annex 3 for furt her details), the comp rehensive EPA concluded with Cariforum 
has had a positive impact on regional integration in the Caribbean as the negotiating process itself has allowed the region to build common positions and to strengthen its own ambitions. The final text covers not only trade in goods, but  also technical barrie rs to trade (TBT), 
sanitary and phytosanitary measures (SPS), inve stment, trade in services and e-commerce, 
competition, intellectual property and public pr ocurement, thereby allowing the region to 
develop and strengthen its own rules in all these important trade-related areas.  
In all other regions, the commitment to a co mprehensive regional EPA has been renewed at 
the highest political level and negotiations are still going on. It has been noted, however, that 
the negotiations have had an accelerating eff ect on a number of regional projects – for 
instance the finalisation of the ECOWAS Common External Tariff (CET). Nevertheless, in order to exploit the regional potential of the EPAs, it remains a priority to conclude the negotiations.  
4.2. Policy co-ordination and co-operation for sustainable development
12 
This approach focuses on what could be ca lled the deeper policy aspects of regional 
integration. It is fully reflected in  Article 30 of the Cotonou Agreement13 and builds on other 
                                                 
12 As far as laws, regulations and standards are concerned, this approach covers what is referred to in the 
academic literature as "positive integration" (see footnote 10).  
13 "1. Cooperation shall, in the area of regional c ooperation, support a wide variety of functional and 
thematic fields which specifically address common problems and take advantage of economies of scale, 
including:  a. infrastructure particularly tr ansport and communications and safety  thereof and services, including 
the development of regional opportunities in the area of Information and Communication Technologies 
(ICT); b. the environment; water resource management and energy;  
c. health, education and training;  
 
EN 27   EN types of cooperation often referred to  as "functional cooperation", i.e. cooperation in policy 
areas which create the framework conditions for long-term development and sustainable 
interdependence of the economies . These address the physical  barriers to intra-regional 
economic flows as well as supporting the interdependence  of the economies managing 
common  resources or challenges.  
ACP regions and countries are more and more eager  to go in this direct ion. They have put, or 
are putting, in place a number of initiatives and policies which deserve to  be supported but are 
still at varying stages of development. 
4.2.1. Reducing physical barriers through infrastructure networks 
Regional cooperation on infrastructure is essential to ensure the interconnection of national 
networks. Completing the " missing links " between national networks is vital for roads and 
telecommunications as they are preconditions for intra-regional trade (see Figure 2). This is 
also the case for border posts . There are also large benef its to be expected from 
interconnection of energy  networks: larger electricity netw orks are more stable and more 
reliable and pooling resources a llows conducting larger projects (e.g. dams) for the benefit of 
the whole region.  
Most of key growth constraints have a regional dimension, and if they were overcome, growth 
would likely increase by 2-4 percentage points.  There have been various studies examining 
the economic rates of return on infrastructure pr ojects, concluding that these rates tend to be 
high – but a regional functional ap proach is often needed to materialize the gains. Some 
striking examples: 
– There is at present a severe shortage of electricity-genera ting capacity in Uganda. This 
could have been overcome through the use of effective regional electricity grids.  
– There are also regional constraints to rail. Uganda’s imports and exports make heavy use 
of the port in neighbouring Mombasa. The Ug anda-Kenya railways operate under a private 
franchisee which needs more effective regiona l approaches towards safeguarding a stable 
investment environment in order to stimulate more investment. The rail link was broken at 
the time of conflict in Kenya with big effects for Uganda.  
– In case of Mozambique, higher road user char ges due to the country’s non-membership of 
COMESA have resulted in a re duced frequency of use of th e Beira Corridor for Zambian 
transit goods. Due to non-implementation of the COMESA Yellow Card Insurance 
Scheme, transport costs in the Beira Corridor are 5-10% higher than in  other corridors of 
the region. 
Figure 2: Trans-African Road Transport Corridors 
                                                                                                                                                         
d. research and technological development;  
e. regional initiatives for disaster preparedness and mitigation; and  
f. other areas, including arms control, action against drugs, organised crimes, money laundering, bribery 
and corruption." 
 
EN 28   EN •  
 
4.2.2. Strengthening interdependence by ac tion at macro-economic and micro-economic 
level 
At different levels (macro, meso and micro), economic policy coordination  is seen as 
important. Most regional organisations pursue an agenda of economic policy integration, but 
success requires objectives to be set and mechanisms for their implementation which are adequate for the region-specific context. Coor dinating macroeconomic and structural policies 

 
EN 29   EN is important to avoid cross-border spillovers within regional economic communities that can 
be detrimental to the pro cess of trade integration.  
At a more micro-economic level, reinforcing productive capa city building and improving 
business competitiveness and climate  is key. The main weaknesses of the private sector in 
the ACP regions (in terms of productive capacitie s, financial services and competitiveness) 
should be tackled at different levels: compa ny, national and regional. The relevance of the 
regional dimension, however, still seems to be underestimated by the main public and private 
actors Beyond the trade aspects of integration, ot her actions are relevant at regional level: 
improvement of the regulatory environment (s uch as company law, industrial standards, 
competition laws), strengthening of productive capacities, development of financial markets 
and improvement of financial regulations, prom otion of inter-enterprise co-operation. Box 5 
shows that many of the issues for reducing the cost of doing business have a regional/cross-
country dimension as we ll as a national one. 
Box 5: The cost of doing business  
Obstacles to doing business in the SADC were identified by ASCCI Regional 
Business Climate Survey in 2007. Many of them (marked *) are directly related to 
regional integration or the lack thereo f. They were ranked as follows : 
- Crime, theft and corruption 
- Customs regulations, procedures and 
bureaucracy (*) 
- Exchange rate fluctuation  - Lack of market information  
- Lack of affordable and reliable 
transportation (road, air transport and ports) (*) 
- Economic and regulatory policy 
uncertainty (*) - Lack of transparency of rules and 
regulations  
- Trade tariffs and customs charges (*) 
- Legal environment (enforcement of 
contractual and property rights) - Business licensing and operating 
permits 
- Access to land 
- Access to and cost of finance (*) - Business culture 
- Skills and expertise  
- Communication restrictions (*) - Insurance 
- Visa regulations (*) 
- Import-export licensing (*) - Phyto-sanitary and veterinary 
regulations (*) 
- Domestic content (*) 
In particular, institutions responsible for implementation and resp ect of international 
standards, like specialized technical centres  and laboratories, c ontrolling, auditing and 
certification bodies and training ins titutions are inexistent at national level - because of a lack 
of critical mass - or are small and do not possess the necessary cap acities to support the 
companies, which, in consequence, affects their competitiveness.  
Box 6: The potential of regional cooperation in R&D 
In the area of research and development, wh ile policies should be adapted to national 
capacities and specificities, the regional level is important to coordinate efforts, pool 
resources and exploit economies of scale.  It can assist in important areas for 
development such as consumer protection, food security, health care and 
environmental sustainability. This is why the African Union Commission has 
launched a Science and Technology Consolidated Plan of Action. Regional cooperation is also essential to launch large projects, such as the African Space 
Agency. 
Regional economic integration has also an impact on companies R&D policies and 
therefore competitiveness. Literature sh ows that increased competition could 
stimulate investment and enhanced efforts to improve a company’s technological 
competitiveness, and better access to inpu ts might promote ou tsourcing activities. 
 
EN 30   EN The empirical analysis shows that the impact on R&D investment after having joined 
a regional trade agreement is driven by product markets rather than by factor 
markets. Thus, regional integration promotes increased investment in companies’ internal R&D as well as increased purchase of external R&D. 
Moreover, the current situation is characterise d by a fragile framework of inter-enterprise co-
operation at different levels. In this context, support for development of regional networks of 
business intermediate associations and promo tion of regional inter-en terprise co-operation 
and investment can be more efficient than actions undertaken only at country level.  
Finally, the development of a fi nancial sector of a regional  dimension would improve the 
conditions of access to credit institutions for AC P companies, in particular SMEs, and would 
therefore contribute to the improvement of their competitiveness. 
4.2.3. Management of common resources or challenges 
Tackling challenges of a trans-national dimension at regional level can be more effective than 
national policies alone, or a necessary comp lement to maximise their efficiency. 
This is the case to improve food security : better-functioning regional markets for food and 
agricultural inputs, regional aler t systems, improved regional tr ansport infrastructure and the 
constitution of regional stocks  can all provide a contributi on to improved food security.  
On agriculture , the regional – and, as far as Africa is concerned, contin ental – levels can 
provide a significant value added,  notably on: the strategic integration of agriculture in 
development agendas; agricultural research (improved synergies, access to knowledge); 
policy harmonisation between the various levels; livestock deve lopment and disease control ; 
and risk management. 
Similarly, in response to the serious deve lopment and cross-border challenges of 
communicable diseases , notably HIV/AIDS, malaria and tuberculosis, ACP countries are 
cooperating at regional levels in policy develo pment and horizontal te chnical collaboration. 
On HIV/AIDS, both SADC and CARICOM have, with support of the European Commission, 
implemented regional support programmes for responses to the pandemic.  
Environmental issues and climate change  generally have an impact across borders, not the 
least because natural re sources are often shared, and shou ld therefore be considered as 
regional public goods. In the ar ea of climate change there are particular arguments for 
regional cooperation to deal eff ectively with adaptation and rela ted subjects such as disaster 
risk reduction: research on dr ought resistant crops, early wa rning for floods and droughts, 
insurance mechanisms, for instan ce, can all better func tion at regional level. Hence there are 
sizeable benefits from regi onal cooperation and policy coor dination in the area of 
environment policy. A number of RECs have real  responsibilities in this  area but there has 
also been a tendency towards the ad hoc cr eation of separate specialised agencies. 
Finally, there is an argument to deal with increasing disparities (cohesion)  at regional level. 
Regions are increasingly considered to be the appropriate level to reconcile economic 
openness with social cohesion. Regional policies are also lik ely to increase a sense of 
solidarity within a region. Two aspects are present here. The first is the impact of regional 
integration on the weaker territories. As e xplained above, regional economic integration is 
likely to bring about an increased concentratio n of wealth in a limite d number of countries 
 
EN 31   EN and regions. A cohesion policy at regional leve l is the way to rebalance the benefits of 
regional integration and to suppo rt the legitimacy of the proce ss, in particular – but not 
exclusively – when the strengt hened and (relatively) weakened territories are located in 
different countries.  
The second aspect is the imp act of regional integration on th e weaker social groups. Regional 
integration is strengthened by cross-border soci al regulations, redistri bution mechanisms and 
the articulation of regional social rights, as  well as by cross-border cooperation in health, 
education and social protection po licies. Policies to address i ssues of cross-border migrant 
labour are of particular  importance. Regions may adopt a nu mber of instruments to enhance 
the social dimension of their region includi ng laws, funds and intra regional social policy 
dialogue.  
4.3. Developing political co-operation  for effective regional integration 
This third approach examines what conditions ar e required in order for regional integration to 
be effective. It is reflected in Article 30 of Cotonou Agreement14 and essentially concerns the 
political factors  surrounding regional integration, such as: 
– The actual and potential relationship among  partners: existen ce of genuine common 
interests, trust and interdependence; compatible  historic, cultural and political patterns;  
– The internal political and econom ic situation in partner coun tries: sovereignty, political 
commitment, peace and security;  
– Factors facilitating the success of regional integration: rule of law, democracy and 
democratic governance.  
The above factors are regarded more and more as important areas of intervention by the EU, 
and EU support is highly valued by ACP pa rtners, but action remains stove-piped, 
disconnected from the continental political fram ework. There is also a need for coherence, 
especially since there are high expectations of ACP partners and a positive impact on development is expected in this area. It is particularly the case of the three following areas, in which ACP regions are increasingly active. 
4.3.1. Regional cooperation fo r peace and stability: 
The drivers of, and threats to, s ecurity, vary in nature and in  geographical impact. Responses 
to security threats depend on political ma ndates and frameworks. However, it is 
acknowledged that political or ci vil instability or conflict in one country can have serious 
destabilizing effect in nei ghbouring countries. Preventing them  and/or tackling them through 
regional cooperation or intervention is increasingly recognised as necessary.  
For the African continent, this is done thr ough the continental political  frameworks for peace 
and security in Africa. The EU is supporti ng these efforts through the Africa-EU Peace and 
Security Partnership within the Joint Africa-EU  Strategy. The activities of the related Action 
                                                
 
14 "3. Cooperation shall help promote and develop a regional political dialogue in areas of conflict 
prevention and resolution; human rights and democratisation; exchange, networking, and promotion of 
mobility between the different actors of development, in particular in civil society." 
 
EN 32   EN Plan require regional engageme nt and support for their implem entation as well as for the 
coherence of policies at continental level.  
In the Pacific, threats to stability are intra-stat e rather than inter-state and mainly due to the 
very recent accession to independence of most  Pacific ACP countries, highly fragmented 
ethnic mix in most Melanesian countries, in alienable land tenure systems and population 
pressures. The Pacific Islands Forum adopted a collective security declaration in 2000, in 
Biketawa, Kiribati, which was invoked in 2003 with regard to the So lomon Islands, and in 
2004 with regard to Nauru, and allowed the Forum to assist with the post-December 2006 coup return to democracy in Fi ji. In accordance with the EU St rategy for the Pacific adopted 
in July 2006, the European Uni on is strengthening its region-to -region political relationship 
through an annual Ministerial- level political dialogue. 
4.3.2. Good governance as a regional good 
Strengthening good governance is essentia lly a matter for national governments and 
institutions. However, there is also recognition that th ere are mutual benefits of a dialogue at 
regional level on progress made in various countries so as to  spread the bene fits of improved 
governance.  
The African Peer Review Mechanism  (APRM) is a mutually agreed instrument voluntarily 
acceded to by the member states of the African  Union (AU) as a self-monitoring mechanism. 
The mandate of the APRM is to encourage conf ormity in regard to political, economic and 
corporate governance values, codes and st andards, among African countries and the 
objectives in socio-economic development within the AU socio-economic programme: the New Partnership for Africa's Development (N EPAD). More than half of the AU’s 53 
countries (29) have formally joined the AP RM by signing the Memorandum of Understanding 
on the APRM. This shows that an increasing number of African countries are committed to governance reforms to create favourable conditi ons for sustainable development and that 
African-owned mechanisms have an important contribution to make to  improve governance.  
4.3.3. Harnessing the effects of migration 
Intra-regional migration or, mo re precisely, intra-regional la bour-mobility is part of the 
collective history and culture of many develo ping countries. In the past, this phenomenon 
went largely unnoticed by policy makers, both in  ACP countries and in the EU. With the 
increasing importance of migration issues on th e EU policy agenda, the call for 'well managed 
migration' has appeared at the forefront of cooperation and dialogue with ACP countries, not 
only in connection with migration movements to  the EU, but also in its intra- and inter-
regional ACP context. Since 2006 – the launch of the EU Global Approach on Migration – 
important conferences were held (Rabat, Trip oli), regional processes aimed at management 
and facilitation of free movement of people we re strengthened (notably in ECOWAS), and 
many national and regional migration manage ment capacity building initiatives were 
launched. 
4.4. Comparing the approaches 
4.4.1. Overview of advantages and drawbacks  It is important to sketch out the advantages and drawbacks of the various possible approaches 
of EU support to regional integration, even from  a theoretical point of view, as the analysis 
 
EN 33   EN needs to ensure that a reinforced partnershi p in this area will effectively deliver on the 
objectives of accelerating and deepening market integration in support of growth and poverty 
reduction; protecting and delivering key regional  public goods in view of reinforcing the 
sustainability of regional integr ation; strengthening the efficien cy of regional governance; and 
enhancing political dialogue and joint understa nding between the EU a nd ACP countries with 
regard to regional integration. 
The following analysis tries to identify, from a qualitative point of view, the main economic, 
social and environmental effects that can be expected of different approaches, while also 
citing empirical studies and examples from  both ACP and non-ACP regional integration 
experiences. These effects are considered in is olation, and therefore only the effects of an 
increased focus of EU support on  the chosen option are consid ered. However, a number of 
drawbacks arising from one approach may be minimised if a number of  policies are put in 
place, either at regional or national level. Conve rsely, in order for the advantages of an option 
to accrue, accompanying policies need also to be put in place. 
The starting point is the curr ent situation. Depending on the st arting point in a given region, 
advantages and drawbacks from focussing EU s upport on a given approach will be different.  
The time horizon is important, and cannot easily  be accommodated in an overview. A number 
of policy actions at regional le vel may have significant costs in the short-term but large 
benefits in the longer term. Th is is typically th e case of economic reforms deriving from 
regional integration: while the benefits of the abolition or diminution of tariffs should be 
delivered to a large number of people over the long-term, they will almost inevitably hurt a 
small number of protected s ectors in the short-term.  
This being said, the three possible approaches – elimination of barriers to trade, policy co-
ordination and co-operation for sustainable de velopment, and political co-operation - have 
distinctive economic, social and environmenta l advantages and drawbacks. These can be 
summarised as follows:  
Eliminating barriers to trade  has many important economic a dvantages, but the balance is 
less clear in social terms and rather negative in environmental terms. The imbalance between 
large expected economic advantages and signifi cant social and environmental drawbacks may 
raise concerns about the sustainability of the first approach if appropriate measures and 
policies are not in place to redress or prevent th em. This is even more important given that the 
economic benefits will not be delivered in the short-term but in the medium- to long-term.  
Table 7: Elimination of barriers to trade – Advantages and drawbacks 
 Advantages Drawbacks 
Economic The reduction or removal of tariffs will result 
in lower prices for goods imported from 
other countries in the region, both for producers (including exporters) and for 
consumers. 
The reduction or removal of tariffs can lead to increased government revenue through 
increased imports, production and 
consumption (tariffs, direct and indirect taxes) 
Larger, more integrated markets are open to Infant industries or sm all local companies in 
weaker member economi es may suffer from 
the increased compe tition from stronger 
member economies or from multinational 
corporations (MNCs) 
In the short-term, the loss of revenue from the removal of tariffs may cause funding 
problems for governments unless fiscal 
reform is implemented  Effective implementation of both SPS and 
international standards may have negative 
 
EN 34   EN more competition, which will lead to higher 
productivity, lower prices and increased 
quality (if the right conditions / legal framework on competition are in place and 
enforced)  
Larger, more integrated markets will attract more FDI, with a positive impact on 
productivity  
Cross-border flows will increase, which will 
foster specialisation, improve the division of 
labour and allow the development of larger 
regional companies, with associated 
productivity gains  
The removal of barriers to trade, standardisation and computerisation of 
procedures reduces corruption in trade 
matters. effects on certain traditional products and 
production processes, affecting the livelihood 
of certain communities  
Social There is the potential for a rise in the 
importance of border regions, fuelled by 
increased cross-border flows. 
Standard of living should rise as the costs associated with the transit of goods falls, 
which should contribute to poverty 
alleviation, particularly in land-locked countries. 
Employment (and possibly salaries) will 
increase in industries th at grow because they 
produce more (as a result of increased 
exports or enhanced ov erall growth) and in 
industries that generate a higher productivity. This should contribute to poverty alleviation. 
The effective implementation of SPS will 
improve food safety. 
The removal of trade barriers can have 
benefits for food security as agrifood products should more easily reach regional 
markets. The freer movement of people may involve 
problems: people migrating to wealthier 
areas, thus generating agglomeration; easier 
cross-border movement could allow unrest and security problems to cross borders; 
diseases (e.g. AIDS) can spread more easily 
along trade corridors. Regional disparities may increase as regions 
with greater potential profit from the new 
economic opportunities, while poorer regions stagnate.  
Sectoral disparities may increase as 
economic sectors with greater potential profit from the new economic opportunities, while 
other sectors stagnate. 
In the short-term, there is a risk that food 
flows more to richer and/or urban regions 
across borders, thereby adding to food insecurity in poorer and/or rural regions.  
Environmental The harmonisation of SPS provides the 
opportunity to tackle animal and plant diseases on a regional level if supporting 
policies are implemented with sufficient 
organisational capacity There is the potential for damage to the 
environment as a result of increased economic activity. Examples are: increased 
air pollution; strain on water resources; 
reduction of biodiversity; overuse of resources, illicit trade (ex. timber). 
 
 
What does empirical evidence say? 
– In the non-ACP regions of the EC and Mercos ur, regional integrati on was found to have 
raised intra-regional trade by 65% and 150% re spectively. However, th e mere reduction or 
elimination of tariffs on intra-regional trade will have fewer effects if the potential for intra-regional trade is small, as is the case in  Africa, where intra-regional trade covers only 
a small percentage of total trade, partly due  to similar trade and production structures (in 
addition to informal, un-reported trade). It is therefore assumed that the ACP countries will 
mainly gain when moving toward s deeper regional integration. 
– RTAs encourage extra-regional FDI flows and for some regions intra-regional FDI, though 
it is not always clear whether this is becau se of trade or investment agreements. For 
 
EN 35   EN example, one study found that the increased market size of a "Maghreb" region would 
increase FDI stocks by up to 165% for its me mber countries. One particular study found 
that membership of a region per se does not in crease FDI, but that regions with sufficient 
trade and investment provisions will help to attract inwards investment, with investment 
provisions in particular being e ffective as they provide positive signals to fore ign investors. 
Because ACP regions (e.g. COMESA, ECOWAS) are only at the beginning of including 
investment provisions compar ed to other regions (e.g.  NAFTA and MERCOSUR) the 
costs of non-integration in terms of attracting FDI can be considerable. 
– Studies also show that different countries w ithin a region experience different FDI related 
effects. This difference reflects variations in the relative size of the industrial sectors 
among member countries, but also the degree to which economic integration, directly or 
indirectly, increases the loca tional advantage of a country  relative to other member 
countries.  
– Migration provisions in the ACP are most a dvanced in the CARICOM. As a result, the 
stock of Caribbean migrant workers within the region increased by 18% between 1990 – 
2000 And CARICOM nationals acc ount for over one-half of all flows within the region 
(52%). Intra-regional migration has responded well to a relaxation in migration provisions 
in the Caribbean. 
– A study of manufacturing firms in three ACP countries (Benin, Mala wi and South Africa) 
found that exporting firms as a whole have higher productivity levels  than domestically 
focused firms. The destination of export was not important for the productivity of firms in 
Benin and Malawi, while in S outh Africa, firms exporting intr a-regionally were found to 
be more productive than those exporting to the rest of the world. The implication of these 
findings is that increased trade and investme nt from regional integration will increase 
aggregate growth.  
– There are a number of factors that may conditi on whether regional integration is associated 
with convergence or divergence of incomes am ongst its members (but the size of the group 
is not relevant): integration of monetary policy, harmonisation policy, different institutions 
and trading rules; labour mobility; macr o economic convergence; presence of a sub-
regional development finance institution; and competitive advantage.  
– While empirical evidence is slightly variable, it generally points to the fact that there is not 
a strong link between regional in tegration and income convergence. One particular study 
of 46 African countries assessed the level and rate of the c onvergence of income for the 
members of SADC, COMESA, ECOWAS, CEMAC and UEMOA. The link between 
regional integration and income  convergence was found to be low. Three explanations 
were given for this. First, the slow grow th of output, productivity and accumulation of 
production factors; second, the low levels of intra-regional trade, the bias towards 
commodity trade and the low factor mobility; and third, the limited inflow of FDI which 
further constrained capital accumulation. 
The above is comforted by the main findings of the Sustainable Impact Assessments (SIA) 
conducted in the context of the EPA negotiations (these can be found on the following website: www.sia-acp.org
). As EPAs aim at fostering intr a-regional trade through a range of 
trade and trade-related measures, they are directly contributing to the elimination of trade 
 
EN 36   EN barriers as identified under Approach 1. Out of  the twelve main recommendations highlighted 
in the SIA15, the following are particularly relevant:  
"1. The EU and ACP countries should strive to ensu re coherence between EPA negotiating configurations and 
overlapping efforts at regional integra tion and should ultimately pursue, at  regional level, strategies for the 
developing key economic and industrial sectors and fo r promoting sustainability. 
6. The EPAs should contribute to a stable climate fo r FDI and encourage FDI and regional investment that 
support sustainability through, inter alia, including means of cooperation to achieve compliance with the 
enforcement of environmental and soci al regulations at the national level. 
7. EU-ACP cooperation on standards s hould focus on addressing obstacles to trade, main taining high levels of 
protection for consumers and the envir onment and assisting ACP countries to develop their own national and 
regional approaches to SPS and TBT. 
8. The EU should engage in ongoing cooperation with the ACP in several areas related to trade facilitation 
including, inter alia, customs, transportation, te chnology, business information and human resources. 
9. Development cooperation sh ould focus on priority need s for diversification of pro duction and exports towards 
higher value-added products, with an emphasis on reinforcing economic and industrial sectors impacted by the 
EPAs, while ensuring the sustai nability of new development. 
10. Development cooperation should focus on technical assistance to co llect information an d data on trade and 
sustainability to support sound policy development. 
11. Development cooperation s hould focus on capacity building to prom ote sustainable devel opment in both the 
private and public sectors, with an emphasis on traini ng, research and developme nt, and a sound regulatory 
framework." 
These recommendations point to two important directions:  
– To enhance the benefits of EPAs  and minimise their potential cost, there is a strong need 
for accompanying measures  at regional and national level.  
– Development cooperation should be broad-based and cover areas well beyond trade , in 
particular regional rules for busine ss and sustainable development.  
Policy cooperation and coordination  in a number of key areas goes some way towards 
neutralising the sustainab ility issues raised in approach 1. Like the fi rst approach, the second 
approach brings many economic benefits. Nevert heless, in order to fully reap the economic 
benefits of approach 2, certain preconditions , which are largely encompassed by approach 1, 
are necessary. While negative soci al and environmental impacts are not on the same scale as 
under approach 1, there are still some issues, though social issu es are of a more short-to-
medium term nature. 
Table 8: Policy co-ordination and co-o peration for sustain able development  
 Advantages Drawbacks 
Economic Improved regional rules of economic 
governance will bring further incentives for intra-regional trade, with the associated 
benefits in terms of lower prices for Environmental protection programmes may 
restrain the economic opportunities of certain communities.  
In the short-term, certain local businesses 
                                                 
15 See PriceWaterhouseCoopers (2007): Page 9 ff. 
 
EN 37   EN consumer goods and agricultural and 
industrial inputs. 
Improved regional infrastructure will bring down the costs of consumer goods and 
agricultural and industrial inputs  
Infrastructure hubs and corridors can be drivers for economic development (creation 
of industry clusters with high positive 
externalities). Larger and deeper regional financial markets 
will improve access to capital and improve 
the allocation of financial resources. 
Improved competitiveness and the 
implementation of international standards increase the export potential, fuelling 
economic growth.  
Macroeconomic and monetary co-operation provides a more stable and investment-
friendly environment, attracting FDI 
Improved, harmonised statistics at regional level provide a sounder basis for decision-
makers, both at national and regional level, 
thereby reducing the risk of policy failures (inadequate action).  may have difficulties to conform to new 
standards. 
Social Redistribution initiatives will limit migration 
flows and levels of disparity. 
Food security should be improved through co-operation in early warning systems. 
Co-operation on non-transport infrastructure 
matters should provide some communities with new amenities (access to energy, clean 
water), increasing their standard of living. 
Tackling human diseases in common will 
improve results.  New infrastructure projects, plus corridors 
and hubs can lead to the displacement of 
people as land is needed for the new project (the displaced are more likely to be poorer 
rural communities). 
Macroeconomic and monetary co-operation could have negative effects in the short term 
for certain groups (difficulty with price 
adjustments, understanding new currencies). 
The experience of many African countries 
with currency re-numeration demonstrates these issues (e.g. Ghana – the recent Cedi re-
numeration).  
 
Environmental Joint management of natural resources 
should increase sustainability. Pooled 
resources can be managed more effectively 
(e.g. fisheries, water, forests, energy, dams). A co-operative approach to regional 
infrastructure will prevent the overuse of 
certain routes and the environmental damage which accompanies such overuse. The environment may be damaged through 
new infrastructure projects (e.g. 
deforestation) unless environmental impact 
assessments are carried out.  
 
What does empirical evidence say? 
– There is a dynamic relationshi p between trade agreements a nd other type of cooperation: 
countries that cooperate most extensively w ith each other on trade are also each other's 
favoured partner for non-trade related cooperation. Therefore, trade cooperation paves the 
way for further cooperation in areas such as infrastructure cooperation, regional 
environmental protection or other political integration. 
– While regional integration could improve the liquidity, efficiency and competitiveness of 
African countries, it needs to be carried out at the right pace and in a pragmatic way. 
 
EN 38   EN National financial markets must be developed before starting to integrate them. African 
financial markets could, however, benefit fr om closer cooperati on including cross-border 
listings and enhanced exchange of information and technology. 
– Assessing the macroeconomic indicators with in the ACP, most authors do not find 
convincing evidence of increasing convergen ce of basic macroeconomic indicators; a 
prerequisite to move towards a monetary union. There is a positive correlation between 
infrastructure provision and trad e and growth. An increase of one standard deviation (from 
the mean) in the communications infrastructure  raises the volume of  trade by roughly 11 
percent, compared to a 7 percent effect on transport infrastructure and a 2 percent effect on 
trade for tariffs. For least developed countries  (LDCs), transport is more important than 
communications. The effects of communications infrastructure on trade grows as a country 
reaches the middle income range. Upgrading a primary road network connecting the major 83 urban areas in sub-Saharan Africa would expand overland trade by around US$250 billion over 15 years. The new Central African  network, linking Cha d, the Central African 
Republic and Cameroon, is expected to save US $86m per year. In the case of the Kenya-
Uganda transit corridor (linking Mombasa with Kampala) the average transit time had been 
reduced by 10 days to 15 days. 
– As a result of regional liberalisa tion, truck utilisation in southern Africa has almost similar 
ratios as European haulers (8,000 to 12,000 km/m onth). In Central and West Africa, on the 
other hand, the utilisation is as low as 2,000 km/month. For Zambia, the regional liberalisation of trucking serv ices has reduced transportation costs, increased foreign 
(mainly South African) investment in the trucking industry, and increased the overall 
competitiveness of trucking services.  
– There is no alternative to regional cooperation for African countries when it comes to 
energy supply. The continent’s energy resource s are concentrated in few countries where 
weak infrastructure and political conflicts make it difficult to access the resource. DRC and 
Ethiopia are accounting for about 60% of Sub-Saharan Africa’s  hydroelectric potential but 
need to be linked to the economic centres of their region in order to  attract investment, 
enabling them exploiting their resource. The threshold of 400 MW, which is regarded as 
necessary for effective thermal power gene ration, is only met by 14 countries in Sub-
Saharan Africa. 
– Water is a scarce source in many ACP countries , and it is increasingly leading to conflicts. 
Effective regional management of water resources will therefore help to prevent conflicts. Cooperative development of water resources o ffers great opportunities to unlock economic 
growth and promote regional integration. On sh ared river systems, the use of water in a 
country can profoundly affect the quality and quantify of available water in downstream 
countries. Riparian countries must search fo r sustainable solution can allow the equitable 
sharing of the scarce resource. 
– Enhanced intra-regional trade and cooperatio n could avoid using emergency protective 
measures, such as export bans, and stabilise prices. While the consumer benefits of trade 
liberalisation are well-known ther e is also evidence that intr a-regional trade liberalisation 
does not necessarily harm small-scale agricu ltural producers. In Senegal, higher tariffs 
have not resulted in higher prices for farm ers but were absorbed by the rent-seeking 
behaviour of traders and parastatals.  
 
EN 39   EN – For land-locked countries the management of grain reserves is likely to be more cost-
effective on a regional basis than national stock holding 
– Informal agricultural trade is estimated at well above 20% of tota l Sub-Saharan African 
trade. Most informal trade is carried out to exploit the differences between national prices and international/regional pri ces and would be largely obsol ete by free intra-regional trade 
and a regionally harmonised agricultural polic y. Reduced prices in turn, are likely to 
stimulate the demand of poor consumers, thus inducing positive growth effect. From the Government’s point of view the incorporation of  informal trade into registered trade flows 
is also desirable. 
Developing political cooperation to en sure effective regional integration  has large economic 
benefits, as it provides the preconditions for ot her policies. Most notably, peace and security 
are an essential requirement for further development, and hence for approaches 1 and 2 to be 
effective. Conversely, peace and security coopera tion at regional level is most likely to be 
successful if countries are bound together by str ong common interests, so that approaches 1 
and 2 also appear to be benefici al for approach 3. Yet, it should  also be considered that peace 
and security are also influenced by national and international factors that  cannot be controlled 
through action only at regional level. For this re ason, while approach 3 is vital to sustainable 
development, its benefits are less certain and no amount of support can  guarantee that they 
will be delivered in a sustainable manner.  
Table 9: Developing political co-operation for effective regional integration  
 Advantages Drawbacks 
Economic The long-term economic cost of wars can 
hardly be overestimated.  
Peace and stability provide an environment 
favourable to economic activity and economic growth.   
Social Deepened cross-border co-operation may 
help to reduce political tensions and helps 
building mutual trust. 
The prevention of conflicts has many 
positive social effects: saving lives, stopping migration and displacement, preventing 
weaker groups being victims of war (e.g. 
children soldiers, rape of women). Political cooperation can prevent crime, 
insurgency and terrorism. 
Greater civil society participation allows the population to both identify with the region, 
and shape its future Deeper political integration at a regional 
level may lead to changes/evolutions of 
national identity/culture to which some 
fractions of society may have difficulty to 
adapt. 
Environmental Improved stability prevents the illicit use of 
natural resources as a source of revenue for civil conflicts (e.g. “ war diamonds”)  
All areas Deeper co-operation fuels the potential for 
regional organisations to increase their 
capacity, allowing them to be more effective in all areas.  
  
What does empirical evidence say? 
 
EN 40   EN – The probability of forming an FTA is 15 times higher in democracies than in autocracies, 
and for economic unions it is almost 50 times higher. Democratic leaders have a stronger 
incentive to join regional integration arrangem ents and to move towards deeper integration 
than leaders in autocracies. The devel opment of common democratic values and 
institutions is in turn regarded as crucial for regional integration. 
– There is a positive correlation between countries’ engagement on a multilateral level and 
regional cooperation. 
– Civil war reduced GDP growth by 2.2% on averag e – often leading to negative growth in 
African countries with low pre-conflict growth rates.  
– While only a small percentage of spending on regional peacekeeping missions ends up in 
the local economy, the amount is enough to  boost very low income countries. 
4.4.2. The contribution of different approaches to EU policy objectives 
The respective contribution of the three approach es to the four main policy objectives (growth 
generation, sustainability, regiona l governance and political di alogue) is very uneven as 
highlighted in Table 6 below: Approach 1 contri butes most to growth generation; Approach 2 
is most beneficial for sustainability; and Appr oach 3 has a potentially strong contribution to 
improved governance and political dialogue.  
Table 10: The respective contribution of the thre e approaches to the EU  policy objectives  
 Growth 
generation Sustainability Regional 
governance  Political dialogue 
Elimination 
of barriers to trade +++ -- ++ + 
Policy co-
ordination and co-operation  + +++ + ++ 
Political co-
operation n.a. + ++ +++ 
More specifically: 
– Elimination of barriers to trade has a very strong potential for supporting growth  
since it focuses on the abolition of the (many)  existing barriers to business and therefore 
allows countries to reach a high er growth potential. It is al so expected to help regions 
deliver on their own agendas of improved eco nomic governance at re gional level, thus 
directly contributing to improved regional governance . However, it contributes rather 
negatively to the objective of  reinforcing sustainability  as it does not address the 
externalities produced by enhanced growth and increased economic integration. There may 
also be some drawbacks in the area of governance , as it may also high light the conflicts 
and overlaps between existing regional agendas.  This is also why its contribution to a 
 
EN 41   EN strengthened political dial ogue within the ACP regions and between the EU and ACP 
regions will vary: it may foster the realisati on among ACP countries th at a rationalisation 
exercise is much needed; it may also s pur the competition between various regional 
organisations and bring the EU into debates that need to be settled by the regions themselves.  
– Policy co-ordination and co-operation for sustainable development
 will contribute to 
growth generation  through better common rules for business development and common 
policies that remove the obstacl es to physical integration (e nergy, transports ). However, 
the main contribution of this option lies in the strongly improved sustainability  of 
outcomes of increased regional integration.  By making economic integration more 
environmentally and socially sustainable, it a llows its benefits to be maximised over the 
long term, thus making regional in tegration more desirable for ci tizens and more  politically 
sustainable. Its benefits for the efficien cy of regional governance  are more contrasted: on 
the one hand, there is the risk that new regional organisations will be created to deal with new policy areas, thereby increas ing the institutional complexity ; on the other hand, policy 
coordination in a wider range of policy area s – ranging from environmental policy to 
cohesion policy – will foster policy dialogue within the regio n, and allow such dialogue to 
be developed also with the EU, which has a strong experience and expertise and where a 
strengthened dialogue on  policies could prove mutually beneficial.  
– Political co-operation,  by contributing to political stability will contribute to improved 
economic conditions and to make the benefits of  approaches 1 and 2 more sustainable. Its 
contribution to growth and sustainability could therefore be very large  in theory. In 
practice, there are likely to be more limited since EU support is ju st one element in a 
highly complex political environment. In many other cases, EU instruments may be 
insufficient or inadequate to av ert a crisis. Approach 3 has a strong potential for 
reinforcing the efficiency of regional governance . Indeed, improved governance is at its 
core, although essentially at national level. In  practice, the regional dimension should 
probably be upgraded in the assessment of nati onal good governance in  order to reinforce 
the contribution of the nationa l level to effective regional  governance. Moreover, it is 
unclear to what extent the EU can contribute to the streamlining of regional organisations. 
Supporting regional integration on key security, stability and governance issues could also 
strongly contribute to a deeper and broader political dialogue  between the EU and 
ACP countries, by putting this agenda at the heart of the region-to-region relationship and not limiting it to the national leve l as is currently the case. 
The three approaches have been considered in isolation for analytical purposes. In practice, 
however, they are not mutually  exclusive "options". Indeed, they can and should be 
combined, so that the benefits of the various approaches are added while the benefits of one 
approach are allowed to offset the drawbacks of the other.  
4.4.3. Finding the right mix 
The above analysis highlights that a "mix of approaches” may actually deliver on the 
expected benefits . This will also crucially depend on th e specific situation of each region in 
terms of regional integration and of the main f eatures of past and curre nt EU intervention in 
this region.  
 
EN 42   EN Some conclusions can, however, be drawn from the analysis above. First, given the strong 
expected benefits in terms of growth, wh ich is a condition for development and poverty 
reduction to ta ke place, continuing to focus EU support to regional integration on the 
elimination of barriers to trade appears essential.  
Second, the analysis also clearly de monstrates that this focus needs to be complemented by a 
strengthened support to the two other approaches  for:  
– The benefits of increased trade  integration to be maximised : infrastructure is a case in 
point: even if the political, le gal and administrative conditions for regional free trade are in 
place, intra-regional trade will no t take off if the physical infrastructure has not kept pace; 
– The drawbacks of trade in tegration to be minimised : the environment is the most obvious 
example. Supporting enhanced regional econo mic integration may have detrimental 
environmental consequences if a common regional policy for the sustainable management of resources is no simultaneously supported; 
– And regional integration to be economically, socially, environmenta lly and politically 
sustainable .  
5. EDF
 SUPPORT TO REGIONAL INTEGRATION : A MIX OF APPROACHES  
Overall, over the period 1996 to 2007 covering the 8th and the 9the European Development 
Fund (EDF), a total of €3.2 billion has been s upporting projects with a regional focus (see 
Annex 4). The main area for support has been  sustainable development with €1.2 billion, 
followed by infrastructure development ( €777 million) and business development (€524 
million). These three areas can be considered as  falling under approach 2 as presented above, 
while support to regional integrated markets (corresponding to approach 1) received €501 
million. 
5.1. The 9th EDF regional programmes 
Unsurprisingly given the diversity of regional situations and the multiplicity of policy tools, 
current regional intervention is a mix of the three conceptual approaches outlined above. 
Within the realm of the elimination of barriers to trade , the current intervention contains a 
strong focus on economic integration.  
Although the emphasis differs from one region to  the other, approach  1, as evidenced in 
Annex 5, Part 2, has been the overall main focus of 9th EDF RIPs. Economic and trade 
integration is a focal sector in all regions, with a foreseen share of regional expenditure 
ranging from 25-30% in Central Africa to as  high as 75-90% in th e Caribbean. Regional 
assistance under approach 1 encompasses in particular the strengthening of regional 
organisations for the formulation and implem entation of regional economic integration 
commitments. Capacity-building for EPA ne gotiations is mentioned in all regional 
programmes and is an important part of this ap proach, as it concerns the external dimension 
of regional integration.  
Intervention also includes all-ACP instrument s, such as the Trade.com Facility Programme 
(€50 million under the 9th EDF). The specific objective of this programme is to improve the 
 
EN 43   EN capacity of ACP countries and regional organisa tions to design and implement their own trade 
strategies and effectively participate in international (multilateral or bilateral) trade negotiations. 
There is also considerable activity in the field of  policy co-ordination and co-operation for 
sustainable development , although the regional focus varies.  
With regard to business development, the focu s is on 5 areas with accompanying tools. These 
are: (1) the macro-economic / regulatory en vironment (BIZ-CLIM), (2) investment and 
business partnership (PRO-INVEST), (3) Financial market development (EIB), (4) non-financial services for SMEs (CDE, PRO-INVEST ), and (5) Micro business and micro finance 
(CGAP). However , assistance at regional level is low, w ith efforts scattered over a number of 
programmes in different areas,  with differing implementation and hence varying effects (see 
also Annex 5) 
Support of infrastructure has had a limited regiona l dimension, although this is the main area 
of intervention of the 9
th EDF country programmes. This support concentrates on co-
ordination and harmonisation rather  than a fully blown infrastr ucture development plan, and 
the current transport intervention strategy has been considered as ineffective at regional level 
(see also Annex 5). In Africa, the EU-Africa Infrastructure Partnership, launched in 2007 and 
accompanied by a new Trust Fund funded by the EC, the EIB and several Member States, 
aims at strengthening EU suppor t to infrastructure networks of a continental and regional 
dimension and is specifically designed to suppo rt the African Union – NEPAD Infrastructure 
Plan. It provides a framework for better inte rconnecting countries to countries, regions to 
regions and Africa to the rest of the world, th us considerably boosting  the attention to the 
regional dimension of infrastructure development. 
Further areas of intervention vary between different ACP regions, but tend to be the 
development of plans and regional capacities fo r the sustainable management of natural 
resources. Concerning the 9th EDF RIPs, this is in particular the case in ESA, where natural 
resources take up 15 to 25% of the regional, in Central Africa, where the sustainable 
management of natural resources is the second focal sector with 20 to 25% of the budget and 
in the Pacific, where fisheries is the th ird focal sector, with 17% of the budget.  
Current intervention in the domain of political co-operation  is essentially limited to the 
streamlining of regional organisations, efforts to develop good governance and the support to 
regional stabilisation mechanisms.  
The EU approaches governance in a comprehens ive way, with an emphasis on the ability of 
states to deal with their core functions and to deliver to citizen s in an efficient, responsive, 
accountable and transparent way. Supporting political will for reform and stimulating country-owned governance reforms through dialogue and incentives has be en a central feature 
of ACP-EC cooperation,  with the recent "Governance Incentive Tranche" under the 10
th EDF. 
In a number of cases, partner governments have considered regional inte gration as a priority 
for reform and have therefore committed to spec ific reforms in this area. These reforms will 
be monitored through permanent political dial ogue with partner countries and the periodic 
reviews foreseen in the Cotonou Agreement. 
The African Peace Facility (A PF - €440 million) was created under the EDF to provide the 
African Union and other African regional organisa tions with the resources to mount effective 
 
EN 44   EN peace-making and peacekeeping operations. It is  the EU’s way of backing the emerging 
African resolve to deal with conflicts on the continent with African solutions. The APF has 
funded four African peace ope rations: the AU Mission in Sudan (AMIS, nearly €300 million); 
the AU Mission in Somalia, AMISOM (€15 m illion); the FOMUC mission in the CAR (€23,4 
million) and the AU Mission in Comoros (AMI SEC, €5 million). The APF has also backed 
capacity-building activities at the regional and sub-regional level in the areas of conflict 
prevention and crisis management  (around €35 million in total). 
The Instrument for Stability (IfS) consists of  a crisis response component (€100 million in 
2007) and a longer-term component (€40 million in  2007) addressing proliferation and trans-
regional threat. Thematically, th e measures supported so far cover a broad range of issues, 
depending on the specific needs of each conflict / post-conflic t situation. A number of 
programmes currently underway support regional peace-buildi ng capacity, for instance the 
AU operation AMISOM in Somalia (€5 million) and the AU-UN mediation in Darfur (€ 3 
million).  
The above includes the assessment received from  independent evaluations. Such independent 
evaluation also highlighted  a number of weaknesses in the broader regional intervention 
strategy used for the 8th and 9th EDF (Annex 5): 
– The Commission faces a " choice of partner " dilemma, i.e. with which regional 
organisation to work. This  is closely linked to capacity constraints  in implementing 
regional policy due to weak institutions.  
– While the Commission is contributing to regional level governance objectives , the overall 
effect of this intervention on sust ainability is no t always clear.  
– The participation of non-state actors  at regional level is mi ssing from current regional 
interventions, though this is complicated by th e fact that most non-state actors think on a 
local or national level, rather  than on a regional level. 
– Efforts towards economic integration are considered as not tackling poverty  satisfactorily 
at regional level.  
– The articulation / mutual reinforcing between the national programmes and the 
regional programmes  can be improved. 
– More focus should be placed on effective local and regional capacity-building.  
5.2. The 10th EDF regional programmes16 
The 10th EDF regional programmes are the primary instrument of EC support to ACP regional 
integration. While the overall EDF s ubstantially increased from the 9th to the 10th EDF, the 
regional envelope almost doubled to €1.78 b illion, reflecting EU-ACP consensus on the 
importance of regional integration for development.  
                                                 
16 See Commission Staff Working Paper SEC(2008)xxx of 01.10.2008 for more details on the Regional 
Strategy Papers and the content of the Regional Indicative Programmes. 
 
EN 45   EN The new RIPs will respond to the identified challenges and provide a mix of the three 
approaches outlined above. They will:  
– Provide, in all regions, support for regional mechanisms to foster peace and stability , 
prevent and manage conflicts, and fight securi ty threats (such as organised crime), thus 
furthering a broadly-defined regi onal human security agenda. In West, Southern and East 
Africa, EDF support will help st rengthen the regional pillar of  the pan-African architecture 
of peace and security. 
– Pay particular attention to regional economic integration , with almost 75% of the 
indicative appropriation (i.e . €1.3 billion) likely to be  devoted to this area. 
– Within the regional economic integration agenda, focus on specific regional priorities , 
with an emphasis on the completion of more integrated markets; the development of 
productive capacities; and the improvement of  infrastructure networks and enhanced 
regional cooperation for the promotion of sust ainable energy policies. There will be a 
particular focus on EPA support measures: almo st half of the Caribbean RIP would be 
allocated to their EPA commitments. 
– Reflect the diversity of ACP regions  in terms of their priorities for sustainable 
development. This applies, in particular, to the sec ond focal sector in th e Pacific (fisheries) 
and in Central Africa (forestry). Support for f ood security and agriculture is foreseen in 
West Africa, and for land, water and marine  resources management in East Africa. 
– Support good regional governance , with an emphasis on capacity-building for non-state 
actors.  
5.3. Exploiting the synergies for inter-regional cooperation  
Regional integration projects should not be de veloped in isolation from their immediate 
environment. In designing their strategies, ACP regions should be invited to reflect on the 
potential for increased cooperation with neigh bouring regions/partners, that the EU could 
support. This particularly concerns: 
– Cooperation across ACP regions : this applies to Africa and th e fact that economic, social, 
environmental or political ties  do not stop at the borders of a particular country grouping: 
desertification should, for instance, be tackle d across the Sahel regi on, not within regional 
boundaries. There is therefore a need to take into account and eventually favour initiatives 
that will address challenges th at are common to two regional groupings, or will facilitate 
cross-border cooperation. This will require we ll identified needs, and well coordinated and 
sequenced support, but in many cases will be mo re efficient than two separate sets of 
intervention.  
– ACP – EU Outermost regions collaboration: the EU is a long sta nding supporter of inter-
regional cooperation, not the l east through the support of its regional and structural funds. 
The Commission Communication "Strategy for the Outermost Regions: Achievements and 
Future Prospects" of 12 September 200717 calls on the ACP, the outermost regions and the 
                                                 
17 Commission Communication on  a Strategy for the Outermost Regions: Achievements and Future 
Prospects, COM(2007)507 final, 12.09.2007 
 
EN 46   EN Oversees Countries and Territories to " implement the specific possibilities and 
practicalities of a concerted EDF and ERDF  programming with parallel co-financing 
arrangements, with a view to cooperation sc hemes at national and regional level".  
– Territorial cooperation programmes, funded under the former INTERREG initiative, have 
been set in all outermost regions to s upport cooperation with ACP and OCTs in the 
Caribbean, Indian Ocean and West Africa.  These programmes include committees 
entrusted with the collaboration between ED F and ERDF managers in order to better 
coordinate financial programm ing and facilitate parallel financing of common projects. 
– New links between ACP – EU Oversees  Countries and Territories (OCTs): The 
Commission's Communications on a renewed part nership with the Caribbean and Pacific 
emphasised the added value of new synerg ies between these ACP regions and other 
partners of the same region. With regard to OCTs, the Commission's Green Paper on the 
future EU-OCT relations invite d the OCTs and their Member States to examine how, in the 
context of increased regional in tegration that is taking place in the different regions where 
OCTs are located, OCTs could increase thei r trading relationship with neighbouring (ACP) 
countries, while ACPs regions could be invite d to accept that an OCT participates in 
regional integration if that OCT and its Member State so request. Another area of increased 
synergies is the sharing their "European" know -how and knowledge in a number of areas 
of interest of neighbouring (developing) countries.  
5.4. Design of regional integration and EU support 
Whichever the approach for EU support as desc ribed above, a key parameter to be examined 
is the design of regional integration, i.e. the model followed, its architecture and its 
governance structures. Amongst th e various issues are:  
– Intergovernmentalism vs. supranationalism : the EU does not interfere with the choices 
made by its partners on whethe r their cooperation en tails maintaining th e full exercise of 
national sovereignty or sharing (some specific as pects of) sovereignty. It is clear, however, 
that the effectiveness of a number of polic ies is predicated on the acceptance that 
sovereignty is to be shared – i.e. that the de cisions taken collectively are to be loyally and 
effectively applied by all regional partners. An im portant realisation in this respect is that, 
in a globalised world, pooling sovereignty is in creasingly the only way to actually exercise 
this sovereignty. 
– Configuration, full inclusiveness or variable geometry : the EU supports the choices made 
by partners, who should decide on regional c onfigurations, the moda lities of political and 
economic integration and whether some c ountries in a region may progress towards 
(shared) objectives and more far-reaching commitm ents quicker than others. In so far as 
this may have implications for the achievemen t of development goals and the effectiveness 
of the relations with the EU (e.g. financial or trade cooperati on), the EU should be ready to 
share expertise and advice on how best to address divers ity within a region while 
encouraging deep and, over time , fully inclusive integration.  
– Whichever approach is chosen, the number and relationships  between various regional 
organisations should be manageable and clear , and institutions should have realistic and 
contradiction-free mandates as well as adequate  (human and financial)  resources to fulfil 
 
EN 47   EN these. As these aspects are of direct relevan ce for the effectiveness of EU support, the EU 
has an interest in sharing expertis e with ACP partners on these issues. 
– Subsidiarity  is a key guiding concept. Not only is it in  ACP partners' interest to deal with 
issues as close as possible to the population c oncerned and at the leve l that will maximise 
the efficiency of the activity, but it is of di rect application also for EU interventions, 
especially when they include financial suppo rt and a decision whether to intervene at 
country, regional, continental or all-ACP level. 
The design of regional integration as chosen by ACP partners is bound to have an impact, in 
particular, on the design of EU policies  toward regional in tegration in ACP countries and, in 
particular, on the following aspects:  
– Articulation between the national and regional levels of support : the type of intervention 
and the desirable balance be tween regional and national support are affected by the 
integration model chosen by a region for a part icular policy. In any case, the national level 
is essential for the effective implementation of regional commitments. This may not have 
been sufficiently taken into account in past interventions. 
– Global EU approach : Given that the EU (the European Community and its Member 
States) is collectively and by far the largest donor of development assistance, uniting all 
EU Member States behind a common concept can make the difference in enhancing the 
EU-ACP partnership on regi onal integration and specifically in improving the 
effectiveness of EU fi nancial support for regional inte gration. An EU concept of support 
for regional integration will help support regiona l priorities, avoid inconsistencies in the 
institutions / projects funde d, allow a critical mass to be  reached and efficiency and 
effectiveness to be increased. 
– Strategic approach : a more strategic approach could enhance the effectiveness of EU 
support. This would, for instance, imply that  regional considera tions – positive and 
negative externalities for regi onal integration, leverage  effect in boosting further 
cooperation and integration – become more impo rtant factors in the se lection of projects, 
both at regional and national level.  
5.5. Risk factors  
There are many risks and uncertainties. Political instability , at national or regional level, is 
clearly the single largest risk for regional integration. Indeed, it can easily wreck regional 
integration as the benefits of in tegration will turn into drawb acks. This was demonstrated in 
recent years in Ivory Coast, where instability has had important consequences on neighbouring countries that were economically ve ry much linked to I vory Coast, such as 
Burkina Faso. This is why the importance of  approach 3 increases with the degree of 
integration reached: in addition to its direct benefits, it also helps reaping / preserving the 
expected benefits of approaches 1 and 2.  
Policy failure  is another risk. Although this is inhere nt to any policy acti on, the potential for 
policy failure may be larger for action at region al level, especially if and when governance 
and implementation capacities are low. Even where the value added of acting jointly at 
regional level is well-established and where th e policy itself is well-designed, its impact may 
be less positive than the sum of national actions . If countries are insufficiently committed to 
the common tackling of diseases, this can lead to  a worse situation than if countries were to 
 
EN 48   EN tackle diseases alone. This is why implementa tion capacities, both at regional and at national 
level, are essential.  
 
EN 49   EN  
 
EN 50   EN ANNEX 1: OVERVIEW OF REGIONAL INTEGRATION IN ACP  REGIONS  
1. Caribbean  
Regional Integration in the Ca ribbean is mainly through the Caribbean Community, or 
CARICOM18 as it is more widely known. CARICOM  was established in 1973 by the Treaty 
of Chaguaramas which was revised in 2001. CARICOM 's three main objectives are: 
economic co-operation, co-ordin ation of foreign policy and f unctional cooperation including 
health, education, youth, sports, science and ta x administration. The Caribbean Single Market 
and Economy ( CSME ) contributes to deepening the in tegration process, based on both 
market and economic integration. To support th is process, the Treaty of Chaguaramas was 
revised and now contains nine chapters  covering the major areas of the CSME . When 
completed, the CSME will provide for the free movement of goods, services, capital, labour and right of establishment within the Comm unity and harmonised laws and regulations 
affecting commerce. The Single Market co mponent of the CSME was introduced by 
Barbados, Belize, Guyana, Jamaica, Suriname  and Trinidad & Toba go in January 2006. The 
OECS  countries (Antigua & Barbuda, Dominica, Grenada, St. Kitts & Nevis, St. Lucia and 
St. Vincent & the Grenadines) signed up to th e CSME in July 2006. A Regional Development 
Fund to assist in mitigating negative impacts of OECS  participation in the CSME was also 
agreed.  
The CARICOM  trade policy is to remove remaining internal barriers through progressive 
movement towards a maximum harmonized ta riff, further harmonization of customs 
procedures and establishment of a customs union. A Common External Tariff (CET) has been 
introduced. Quotas remain as we ll as allowed tariffs on some agricultural an d other products, 
which will have to be removed by the e nd of 2008. A corresponding policy of legal, 
institutional and judicial  reform is intended to create an appropriate enabling environment for 
these moves. The Caribbean Court of Justice (CCJ) was established in 2006. 
The Caribbean States that make up the Orga nization of the Eastern Caribbean States 
(OECS )
19 (all of whom are members of CARICOM ) constitute in some ways an inner circle 
of Caribbean economic/monetary integration, and ha ve, since the colonial era, a long tradition 
of cooperation. In more recent times, the natu re of the cooperation has taken on a more 
functional and developmen t-oriented character. OECS ' main objective is economic 
integration among its member states, and they  have a single currency and an Eastern 
Caribbean Central Bank, exercise common mone tary and exchange rate policies, share a 
common Supreme Court, jointly regulate the te lecommunications sector, cooperate on some 
issues of public procurement and collectively gove rn their airspace. In the medium-term, they 
intend to further this functional and econom ic integration. The organisation has begun 
technical work with respect to creating regi onal support systems and mechanisms for the 
police and prison services, creat ing centres of medical and su rgical specialization across 
                                                 
18 The CARICOM  Member States are: Antigua/Barbuda, Baha mas, Belize, Dominica, Grenada, Guyana, 
Haiti, Jamaica, Montserrat, St. Kitts/Nevis, Saint Lucia, St. Vincent/the Grenadines, Suriname and 
Trinidad/Tobago.  CARICOM ’s Associated Members are: Anguilla (1998) ; Bermuda (2003); British 
Virgin Islands (1991); Cayman Islands (2002); Turks and Caicos Islands (1991 
19 Antigua and Barbuda, Dominica, Grenada, Montserrat,  St Kitts and Nevis, St Lucia and St Vincent and 
the Grenadines. Anguilla and the BVI are associate members. 
 
EN 51   EN Member States and establishing an Economic  Union, with free movement of productive 
factors.   
The next circle is the Caribbean Forum of ACP States, also known as CARIFORUM20, 
which was created in 1992 by inter-government al agreement, as a political group including 
not only the CARICOM  Member States, but also what were  then the new signatories to the 
Lomé Convention, namely, the Dominican Re public, Haiti and Suriname although the latter 
two have since acceded to CARICOM . Cuba is also now a member state of CARIFORUM , 
although it is not a signatory to the Cotonou Agreement. The CARIFORUM  mandate is to 
manage and coordinate policy dialogue between  the Caribbean region an d the EU, to promote 
integration and cooperation in the Caribbean and to coordinate the allocation of resources and 
manage the implementation of Regional Indi cative Programmes financed by the European 
Development Fund and regional pr ogrammes financed by member states of the EU and any 
other source. The EU-Caribbean Economic Partnership Agreement (EPA) was concluded on a CARIFORUM  wide basis. 
Hemispheric relations are important to CARICOM /CARIFORUM , as part of its global 
integration objectives. In that regard, the regi on is committed to effective participation in 
hemispheric and/or bi-lateral processes. The hemispheric strategies include strong technical 
and political representation, securing special and differential treatm ent and transitional 
measures, design and implementation of measures  to cushion the impact of adjustments, 
monitoring of parallel negotiations and consis tency with other multi-lateral negotiations. 
All Caribbean countries are also part of the Association of Caribbean States  (ACS ). 
                                                
 
20 CARIFORUM includes all the Cari bbean ACP States, namely all the CARICOM Member States except 
Montserrat (which is an OCT) plus the Dominican Republic and Cuba. 
 
EN 52   EN CubaBahamas
Haiti
Dominican
RepublicJamaica
Belize
Barbados
Trinidad and Tobago Guyana SurinameSt Kitts & NevisAntigua & BarbudaMontserrat
St LuciaBritish Virgin Islands
Grenada
St Vincent 
& GrenadinesAnguilla
DominicaCaribbean Regional Economic Communities
CARIFORUMCARICOMOECSCARIFORUM : Caribbean Forum
CARICOM : Caribbean Community
15 members (shown) plus 5 associate members; Anguilla, Bermuda, 
British Virgin Islands, Cayman Islands, Turks & Caicos. 
OECS : Organization of Eastern Caribbean States
 
EN 53   EN 2. Central Africa 
The landscape of regional integration in the Central African region consists of three, 
overlapping, regional groupings: the Economic a nd Monetary Community of Central Africa 
(CEMAC); the Economic Communities of Ce ntral African States (ECCAS); and the 
Economic Community of the Great  Lakes Countries (ECGLC).  
The Economic and Monetary Community of Central Africa ( CEMAC21) replaced the Union 
Douanière et Économique de l'Afrique Centra le (UDEAC) in 1994. The main objective of the 
Community is to reinforce the process of regi onal integration in support of development. The 
monetary union built aro und the CFA Franc, which was origin ally pegged to the French franc 
and is pegged to the eu ro since 1999, worked well during the thirty years of cooperation under 
the UDEAC, but this union remained largel y disconnected from regional economic 
cooperation on non-monetary issues. 
Four institutions were created in 1994: the Economic Union of  Central Africa; the Monetary 
Union of Central Africa; the Parliament of the Community; and the Court of Justice.  
The CEMAC Treaty foresaw a three step inte gration process for the economic union: 1999-
2004, 2005-2009 and 2010-2014. The main objectives of th is process are the establishment of 
a common market for the free movement of goods , services, capital and persons (this includes 
a customs union) the elaboratio n of community legislation in  the area of economics and 
finance and provides the impetus for macro- economic convergence between member states; 
the coordination of national policies through jo int action (by sector: agriculture, animal 
husbandry, fisheries, trade, tourism, energy, environment, transports and 
telecommunications), the coordi nation of trade rela tions with other regions, and community 
action on horizontal issues such  as education and research. 
There is, however, an important gap between the existing body of legislation, which is quite 
comprehensive, and the state of implementation of Community decisions. In several areas, the 
current results are still very far from achieving the objectives. For example, despite the agreement on the free movement of CEMAC citizen s, a number of countries in the region 
continue to require an entry visa for CEMAC citizens. However, the Community as a whole 
does not have a system of sanc tions with which to address th e non application by its member 
states of community legislation. 
Currently the Community is in the middle of a reform proce ss launched in 2005 to improve 
the efficiency of the community institutions. In particular the reform will create an 
independent Commission which will be in a better position to animate the regional integration process. 
The second organization in the region, the Econ omic Community of Ce ntral African States 
(ECCAS ) is made up of the same CEMAC six count ries plus the Democratic Republic of 
Congo (DRC), São Tomé e Principe, Angola a nd Burundi (Rwanda left the organization 
during 2007). Given the weight of DRC, the demographic, po litical and economic importance 
of the region covered by this organization is significant. 
                                                
 
21 Cameroon, Central African Republic, Republic of Congo, Equatorial Guinea, Gabon, Chad 
 
EN 54   EN The integration process has been slowed down by the number of conflicts that many countries 
have faced. During the late 1990s, seven of the eleven  countries were in  such a situation, 
which led to a crisis in the or ganisation, which only restarted its  activities at the end of the 
1990s, notably in the area  of conflict prevention. 
ECCAS has adopted a trade libe ralization scheme; the free trad e area has been launched in 
2004 and is slowly implemented.  
The Economic Community of th e Great Lakes Countries ( ECGLC-CEPGL ), created in 
1976, consists of the DRC, Rwanda and Bur undi. After many years of paralysis, the 
organization has been officially re-launched in 2007 in the hope of rest oring trust between the 
three countries. The main obj ectives of CEPGL are to pr omote security and economic 
development through developing economic activ ities of common interests in the energy, 
environmental and rural development sectors. 
3. East and Southern Africa 
Regional integration in the East and Southern African region is a complex picture. There are 
four main Regional Integrati on Organisations, with signifi cant overlap between them. The 
regional economic integration process in the ESA region was first institutionalised in the late seventies and evolved into the formation of the four organisations that were given mandates to 
address specific issues but ultimately w ith common development objectives. The 
organisations concerned are CO MESA, EAC, IGAD and IOC.  
The Common Market for East ern and Southern Africa ( COMESA
22) was created in 1994 by 
the treaty of Lilongwe, with an objective of promoting regi onal economic inte gration within 
the region, by developing trade and investment . COMESA launched its Free Trade Area in 
2000, currently with currently with thirteen me mbers, and is preparing to establish its 
Customs Union in 2020. COMESA has programmes in trade and transport facilitation, trade 
in services, free movement of persons and inve stment. Cross-cutting areas and other issues 
include gender policy, conflict prevention an d a COMESA Court of Justice. The General 
Secretariat is the main institution and has a technical and consultative role on the Treaty's 
application, whose interpretati on is subject to the ruling of the Court of Justice. 
Since October 2000, tariffs have been abandoned between several ESA States23. This free 
trade area is the greatest success of the region and trade has increased rapidly between the 
member countries (+30% the two first years) as  a result. Of the 19 ESA countries, there are 
currently 13 of them in the Free Trade Area, with others committed to joining at specified and times. Since then a medium term Strategic Pl an for 2007-2010 has been adopted by the Heads 
of State and Government in December 2006. In terms of regulatory and policy framework, the 
major challenges to be addressed by COMESA  in establishing a Common Market are the 
setting up of a COMESA Common Investment Area and the application of the principle of the 
Free Movement of People while at the same tim e ensuring that all those measures actually 
benefit all the stakeholders, and ultimately cont ribute to poverty eradic ation in the region. To 
this end COMESA Mid Term Strategic Plan encompasses private sector development, 
investment promotion and infrastructu re development among other things.  
                                                
 
22 Angola, Burundi, Comoros, Democratic Republic of  Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, 
Madagascar, Malawi, Maurice, Uganda, Rwanda, Seychelles, Sudan, Swaziland, Zimbabwe, Zambia. 
23 Djibouti, Egypt, Kenya, Madagascar, Malawi, Maurice, Sudan Zambia, Zimbabwe 
 
EN 55   EN The Eastern African Community ( EAC24) has undergone a rapid pr ocess of both widening 
and deepening since its rebirth in 1999. EAC now has five memb er states. This membership 
obliges EAC countries to maintain close and productive relationships with other regional 
organizations to whom its members also belong while aiming for rationalisation of 
membership where needed – the principal partners in this respect are COMESA, IGAD and SADC. Like COMESA, EAC pursues a regional in tegration agenda and also plays an active 
part in the agenda of the African Union and its institutions. 
The key integration milestone in EAC’s recent history was the agreement of the Customs 
Union protocol, which came into force in 200 5. The principal components of the customs 
union  agreement are a Common External Tariff on imports from third countries, duty-free 
trade between the EAC member states and common customs procedures. The agreed external 
tariff follows the tariff-escalation principle, w ith different rates. The removal of duties on 
trade within the Customs Union has the effect of reducing protection against competitors within the region, particularly creating gr eater openness of the Tanzanian and Ugandan 
markets to imports from Kenya. Negotiations have  now started to establish a common market 
in EAC by 2012, and to evolve to a monetary  union according to a similar schedule. In 
addition, discussions have been undertaken in th e last three years on ‘fast tracking’ the final 
component of the integration co ntinuum, political federation.  
The recurrent droughts, during the 1970s and 1980s, led in 1986 to the creation of the 
Intergovernmental Authority on Drought an d Development (IGADD) by the General 
Assembly of the United Nations. Its objective was to fight against water shortages, and aimed 
in the long term at improving coop eration between the member States
25. However its role 
remained limited, due to a lack of financ ing and tensions between several countries. 
The 1996 Nairobi summit led to a deep refo rm of the institution, which became the 
Intergovernmental Authority for Development ( IGAD ). The main objectives of the 
organization are to work at a regional econo mic integration, meaning a wide free trade 
agreement; to reach and sustain food security; and to prevent conflicts within the region. 
The main achievements of recent years were fo cused on security issues, including mediation 
in Sudanese and Somali conflicts . Four projects were actually  developed: an ICT project 
involving EAC, COMESA and IOC; the IGAD  livestock policy initiative; a programme 
concerning the development and economic inte gration of women; and the IGAD climate 
prediction and application centre.  
The Seychelles, Madagascar and Mauritiu s created the Indian Ocean Commission ( IOC ) in 
1984. For Réunion, France joined them in 1986, and now contributes 40% of the 
organization's budget. The constitutional Agreemen t of Victoria covers a wide variety of 
cooperation areas (diplomatic, economic and comm ercial, agricultural a nd fishing, cultural, 
scientific, educati on and justice).  
Since its creation, IOC has b een involved in projects con cerning natural resources and 
environment protection. The challenge the deep ening of economic integration faces is the 
high heterogeneity in the levels of developmen t (2 LDCs, 2 Intermediate Income Countries 
and an island considered as developed). 
                                                 
24 Burundi, Kenya, Tan zania, Uganda, Rwanda. 
25 Eritrea, Ethiopia, Djibouti, Ke nya, Sudan, Somalia, Uganda. 
 
EN 56   EN Implementation of activities in the ESA regi on is through the Inter-Regional Coordinating 
Committee – (IRCC), which was established to ensure better coordination in the implementation of programmes a nd contribute to the harmonizati on of policies in line with 
the recommendations of the AU. Two delivery mech anisms are used to channel the funds to 
the ESA IO region: Contribution Agreemen ts and Financing Agreements. Regional 
mechanisms such as the COMESA Fund and ot her equivalent mechanisms under other RECs 
will be used as much as possible to channel funds.  
4. Southern Africa 
Southern Africa has two regional economic comm unities, the Southern African Development 
Community
26 (SADC) and the Southern African Customs Union27 (SACU). The Southern 
Africa region is composed of a highly diverse set of countries -in terms of size, level of 
development and economic specialisation- and is  marked by the prominent weight of South 
Africa. South Africa represents more than 70%  of the region's GDP (2007), accounts for 60% 
of intra-SADC trade and is the first investor in the region. Since its democratization in 1994 
the country has exerted a growing influence in the region whilst at the same time seeking to 
operate in consensus with its neighbours. 
The Southern African Development Community (SADC)  is an intergovernmental 
organization that was founded in 1992 on the basis of the former Southern African 
Development Co-Ordination Conference (SAD CC). The SADC integration project has 
evolved along two parallel track s: a trade integration track (a  market-driven economic project 
with an emphasis on trade and investment) and a development integration track (a politically-
driven process that deals with political and security issues). 
Most positive results have been achieved on trade integration. The SADC FTA came into 
effect in January 2008. By the end of the year, 85% of all product lines should be trading with 
zero tariffs, whereas the remaining 15%, includi ng sensitive products, wi ll be duty-free by the 
end of 2012. SADC's ambitions for deeper inte gration in the future are outlined in the 
Regional Indicative Strategic Development Plan (RISP) that sees the FTA as a first step 
towards the establishment of a customs union in 2010 and a common market in 2015.  
The Southern African Customs Union  (SACU) was created in 1910 and is considered the 
oldest functional customs union in the worl d. The founding agreements were significantly 
revised in 2002 in order to deepen the engage ment between South Africa and the four other 
member States and set up a more democratic and ambitious integration project. The main 
features of the revised agreement are a refo rm of SACU's decision making bodies, the 
adoption of common policies and strategies, an d the support of more balanced development 
between member countries.  
The biggest changes of the reform affected SACU's governing instituti ons, particularly the 
SACU Council of Ministers where decisions are taken by consensus. External trade negotiations are also to be conducted by SACU as a single entity since 2002.  
                                                
 
26 Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, 
Mozambique, Namibia, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe. 
27 Botswana , Lesotho, Namibia, Swaziland and South Africa. 
 
EN 57   EN The revenue-sharing arrangement is another central feature of SACU. The new formula 
consists of a customs component, an exci se component and a development component. 
Customs revenues are distributed according to  each country's imports but the compensation 
formula de facto entails a sizeable subsidy by South Africa to the other members, for whom 
these transfers represent between 30% and 60% of their public budgets. 
Future work for SACU includes moving towards completion of its internal market, including 
through the elimination of existing non-tariff barri ers and tackling the implications of rules of 
origin agreements that some members have esta blished with third countries. SACU's internal 
agenda also comprises the adoption of co mmon frameworks in areas like fiscal 
harmonization, customs procedures or competiti on policy, although no dates have been set for 
these objectives. 
5. Western Africa  
Western Africa is probably one of the most in tegrated regions within the ACP, with two 
organisations dominating the regional landscap e: the Economic Commun ity of West African 
States (ECOWAS) and the Economic and M onetary Union of West Africa (UEMOA). 
The Economic Community of West African States ( ECOWAS ), created in 1975, is made up 
of fifteen States28. According to its foundi ng treaty, ECOWAS is th e overall framework for 
integration in Western Africa, with the UEMO A Treaty built into the objectives of ECOWAS. 
The initial objectives of the Treaty were th e implementation of an economic and monetary 
union, settling a regional market for the whole West  Africa, complete with free movement of 
goods and people. 
Four priorities form the political agenda  of ECOWAS: institutional strengthening; 
establishment of a common market, and especi ally the creation of a free trade area and a 
customs union; harmonization of economic and fina ncial policies with a view to establishing 
a monetary union; and conflict pr evention and political dialogue. 
From an institutional point of view, in addition to the creation of a Court of Justice and a 
Parliament, the Secretariat was reorganised and transformed into a Commission. Its powers 
were strengthened and its operational procedures improved. 
The ECOWAS treaty foresees the progressive es tablishment of this common market between 
the member States, including the free circulatio n of goods, services, ca pital and people. The 
Heads of States Conference decided to im plement the Free Trade Area by 2004 and the 
customs union by 2007 but these decisions have  not been fully implemented yet. Free 
movement of people is regulated by a 1978 pr otocol. Whereas neither visas nor residence 
permits are officially required anymore, cont rols and administrative procedures remain. 
ECOWAS also developed severa l sector programs, concerning inter alia  infrastructures, 
agricultural policy, energy, teleco mmunications, and private sector development, in order to 
create the common market. However, ECOWAS still suffers from a lack of human and financial resources to effectiv ely coordinate implementation. 
                                                
 
28 Benin, Burkina Faso, Cape Verde, Ivory Coast,  Gambia, Ghana, Guinea Conakry, Guinea Bissau, 
Liberia, Mali, Niger, Nigeria, Senegal, Sierra Le one, Togo. Mauritania left the Community in 1999. 
 
EN 58   EN Harmonization of economic and financial policie s constitutes an intermediate objective 
towards a fully-fledged monetary union. In this  context, the countries which are not members 
of the UEMOA (except Cape Verde and Liberia)  decided to establish a second monetary 
union, which is then supposed to join the UEMOA zone, thereby creating a big ECOWAS 
monetary union (the currency will be the ECO).  
In the political area, ECOWAS is developing a conflict preven tion and management strategy, 
as well as a standby forces approach. Through its peacekeeping interventions and mediations 
initiatives in the region, ECOWAS has contri buted to the stabilisation of the region and 
gained credibility fo r conflict prevention. 
The West African Economic and Monetary Un ion (UEMOA) is an organisation of eight 
states29 established in 1994 after the devaluation of the Franc CFA, with the objective of 
promoting economic integration among member c ountries of ECOWAS that share the same 
currency, the CFA Franc. UEMOA is a cust oms union, and a monetary union, pegging the 
CFA franc to the Euro, which has several objectives:  
– Creating a common market : consolidating the custom s union created in 2000 and 
eliminating all non tariff barriers to the free movement of goods. 
– Greater economic competitiveness,  through open and competitive markets, along with the 
standardization, and harmonization  of national legislation concerning public tenders, 
intellectual property, fi scal policies, and consumers' po licies. In addition much progress 
has also been done in order to  harmonise legislations with the aim of ensuring the free 
circulation of persons, services and capital.  
– The convergence of macroeconomic policies : member states signed in 1999 a 
Convergence and Stability Pact , which aims to ensure convergence of macroeconomic 
policies on the basis of a numb er of convergence criteria.  
– The coordination of sectoral policies , for example in agriculture, environment, 
telecommunications, infrastructu res, industry. A number of th ese sectoral policies have 
been adopted and are in the process of being implemented. 
The Commission of the UEMOA has, through in creased donor support, developed important 
technical and administrative capacities, an d has thus been the driving impulsion in 
strengthening and further deep ening economic integration be tween its member states. A 
special solidarity fund, the 'Fonds d'Aide à l' Intégration Régionale' was created in the 
UEMOA treaty, in order to finance the balanced  land settlement of the community territory, 
and its interconnectivity, while re ducing regional discrepancies. 
UEMOA adopted a "Programme Economique Régi onal" (PER) in 2006, in order to further 
deepen regional economic integration, and to re inforce the regional gr owth strategy for the 
2006-2010 period. It aims at implementing over 60 infrastructure project s, a common market, 
macroeconomic convergence and business developm ent, which will ultimately improve the 
visibility and utility of  regional integration.  
                                                 
29 Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal, Togo. 
 
EN 59   EN The UEMOA has the exclusive power to negotiate trade agreements on beha lf of its members, 
and was mandated to conduct EPA negotiations alongside ECOWAS.  
UEMOA and ECOWAS have decided to implement an "accelerated strategy of the integration 
process in West Africa", which provides for a consultation and conve rgence process between 
both regional organisations.  
In order to ensure the harmonisation and co ordination of policies and programmes, the 
Presidents of both Commissions meet twice a year to establish the common political and 
economic orientations and a jo int ECOWAS and UEMOA Technica l Secretariat has been set 
up. As an important result of this Committee,  ECOWAS has adopted the UEMOA's common 
external tariff (CET) in the framework of the customs union. 
 
EN 60   EN Cameroon
Central African Republic
Gabon
Equatorial Guinea
Rep. Congo
Chad
Dem. Rep.
CongoSão Tome and Principe
BurundiECOWAS
UEMOA
EACECCAS
CEMACCOMESA
IOC
SADC
SACUCape Verde
Gambia
Ghana
Guinea ConakryLiberia
Nigeria
Sierra Leone
Benin
Burkina FasoIvory CoastGuinea BissauSenegal
Mali
Niger
TogoDjibouti
Eritrea
Ethiopia
Sudan
Rwanda
Madagascar
MauritiusComoros
Seychelles
Botswana
Lesotho
Namibia
South AfricaSwazilandMalawi
Zambia
ZimbabweTanzaniaEgyptLibya
KenyaUgandaSomalia
MozambiqueIGADLa Réunion African Regional Economic Communities:
CEMAC: Economic and Monetary Community of Central Africa 
COMESA: Common Market for Eastern and Southern Africa
EAC: Eastern African Cooperation
ECCAS: Economic Community of Central African States
ECOWAS: Economic Community of Western African States
IOC: Indian Ocean Commission
SACU: Southern African Customs Union
SADC: Southern African Development Community
UEMOA: Economic and Monetary Union of West Africa
IGAD: Intergovernmental Authority for DevelopmentAngola
 
EN 61   EN 6. Pacific 
The Pacific region has a number of regional organizations, coveri ng a wide range of areas of 
cooperation between the islands. 
The Pacific Islands Forum is the premier regional policy- making body of the self-governing 
states in the Pacific. Established in 1971, its  membership includes 14 of the Pacific ACP 
countries30 together with Australia and New Zeal and. As regards security, the Biketawa 
Declaration  of 2000 establishes a framework for Foru m intra-state security cooperation, 
which calls for Forum Foreign Affairs Ministers to meet as part of an ad hoc crisis 
management mechanism for the region. 
The Forum is served by its Secretar y-General, supported by the Forum  Secretariat. The 
Secretariat’s overall objective is to service the member states and to promote Pacific regional cooperation, particularly on economic and tr ade matters. It also acts as the Forum’s 
administrative arm, implementing its decisions, including delivering development assistance 
to Member States. In the case of trade-related assistance, it can also act as an implementing 
agency. 
The Forum Secretary-General is al so the permanent Chair of the Council of Regional 
Organisations in the Pacific (CROP) , which brings together the Forum Secretariat and nine 
other Pacific regional organisations: Pacific Forum Fisheries Agency ( FFA ); Pacific Islands 
Development Programme ( PIDP ); Secretariat for the Pacific Community ( SPC ); South 
Pacific Applied Geoscience Commission ( SOPAC ); South Pacific Regional Environment 
Programme ( SPREP ); South Pacific T ourism Organisation ( SPTO ); University of the South 
Pacific ( USP ); South Pacific Board for Educational Assessment ( SPBEA ); and Fiji School of 
Medicine ( FSchM ). 
The October 2005 meeting of Forum Heads of State and Government made two important 
decisions aimed at strengthening regional coope ration. Leaders approved an agreement giving 
the forum legal personality  under international law. They also approved the Pacific Plan  and a 
roadmap for its implementation. This decision repr esents the culmination of a process started 
in 2003, at the initiative of the New Zealand Forum Chair, aimed at strengthening Pacific 
regionalism. The Plan, covering the years 2005-2015, has been presented as a dynamic 
framework for strengthened regional cooperati on and integration. However, the effective 
realization of the Plan is taking longer than it should. 
Presently, regional cooperation in the Pacific is  neither broad nor dee p. Reasons include the 
geography of the region, the fact that many Pacific countries are still relatively young as 
independent states and therefore particularly se nsitive about issues pertaining to sovereignty, 
as well as the asymmetry betw een Australia and New Zealand on the one hand and the Pacific 
ACP countries on the other. 
The Pacific Islands Countries Trade Agreement ( PICTA ) entered in force in April 2003. 
Eleven out of fourteen countries have ratified
31 it. Notification and rules of origin 
                                                 
30 Australia, Cook Islands, Federated States of Micr onesia, Fiji, Kiribati, Nauru, Niue, New Zealand, 
Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Republic of the Marshall Islands, Tuvalu 
and Vanuatu. 
31 Cook Islands, Fiji, Kiribati, Nauru, Niue, PNG, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu. 
 
EN 62   EN requirements have been fulfilled. Six countries have made formal announcements on their 
readiness to trade under PICTA. Some domestic legislation is nonetheless still required for 
trade to begin in most coun tries. An outright PICTA cust oms union is thought to be 
inappropriate by island leaders. The Forum Tr ade Ministers have officially launched the 
negotiation of a trade in servic es Agreement as an extension to PICTA in March 2008. The 
aim is to conclude this Agreem ent by the end of the year 2008. 
FTA negotiations with Australia and New Zealand may begin this year under the  Pacific 
Agreement on Closer Economic Relations ( PACER, of which PICTA is the first stage). A 
key feature of PACER is the ongoing Regional Trade Facilitation Program . To date, eleven 
Forum countries, including Australia a nd New Zealand, have ratified PACER. 
The Melanesian Spearhead Group32 (MSG ) was founded in 1994 and revised in October 
2005. The new approach has shifted to a negative  list of products (rather than the present 
positive list) on which tariffs are scheduled to be  phased out over a period of 1 to 8 years. A 
services annex has yet to be developed. The MSG brings together by far the biggest ACP economies of the Pacific but is more of a po litical counterweight to Australia and New 
Zealand in a Forum context th an an effective trade bloc. 
                                                 
32 PNG, Fiji, Solomon Islands, Vanuatu 
 
EN 63   EN   
Micronesia
Papua New GuineaSolomon IslandsMarshall Islands
Australia
New ZealandVanuatu
FijiPalau
Tuvalu
TongaTokelau
New CaledoniaFrench 
PolynesiaGuam
American
SamoaCook IslandsKiribatiNauru
NiueSamoaNorthern Mariana Islands
Wallis & FutunaPitcarin
IslandsPIF / PARTA
PICTASPC
Pacific Regional Economic Communities
PIF / PARTA : Pacific Island Forum / Pacific Regional Trade Agreement
16 listed members plus 2 associate members: New Caledonia and French Polynesia
PICTA : Pacific Island Countries Trade Agreement
12 signatories as of November 2006. SPC: Secretariat for the Pacific Community
Not strictly an economic comm unity. Intergovernmental co-
operation.
MSG : Melanesian Spearhead GroupMSG
 
EN 64   EN ANNEX 2: REVIEW OF EXISTING LITERATURE ON REGIONAL INTEGRATION IN ACP 
The following is a summary of a study commissi oned to the Overseas Department Institute 
(ODI) by the European Commission for the pur pose of this Background Document, entitled 
"Regional integration in ACP - A review of the literature". The report is available at 
http://ec.europa.eu/developm ent/icenter/repository/Regional-Integration-Report-18-09-
2008_en.pdf  
The literature review focuses on literature on  broader regional integr ation; not just the 
removal of barriers to trade, but also polic y co-ordination and functional co-operation. 
The theoretical effects of the removal of barriers to trade  are well documented, and 
empirical evidence largely backs them up. The removal of tariffs  leads to increased trade, 
creating favourable conditions for growth. However,  if the potential for intra-regional trade is 
low, tariff removal alone will not be as effectiv e a tool. There are several so-called "dynamic" 
effects from the removal of barriers to trade. An  increase in FDI flows is one of these effects, 
with FDI flows from outside the region increasing in particular as a result of the removal of 
barriers to trade. There is the risk that thes e FDI flows will be concentrated on the larger 
markets in the region, or countries neighbouri ng these larger markets. Other "dynamic" 
effects include increased competition, knowledge spillovers from research and development, and eventual economies of scale.  
Removing barriers to trade theref ore has an indirect positive effect on growth through the 
mechanisms of trade, FDI and technology tran sfer. However, it is not clear if regional 
integration alone promotes convergence among me mbers. A specific tool which can help the 
convergence of members in an RTA is the speci al differential treatment of less developed 
countries; SACU implements such a system with  restrictions permitted for some of the poorer 
members. 
In the area of policy co-ordination , theoretical effects are again well documented, though 
unfortunately ACP-specific based evidence is more limited. Co-operation on investment rules 
boosts FDI, in particular extra- regional FDI; this view furthe r builds on the finding that the 
removal of barriers to trade has a similar effect. There are some  sceptical views on investment 
rule co-operation in a regional context and thes e highlight the need fo r countries to reach a 
certain level of development and governance for the benefits to outweigh the possible costs.  
Theoretically, the free movement of labour is m eant to lead to the equalisation of wages 
within a region. Empirical evidence points to increased migration as a result of the free 
movement of labour. Outside the Caribbean, there is, however, little prog ress in this field.  
Harmonised standards should have positive long term effects by allowing firms to increase 
exports or enter value chains, although in the s hort term effects could be negative for local 
firms having to comply with standards, and consumer prices in th e region. ACP countries 
have not yet co-ordinated standards. 
Functional economic co-operation , including regional public goods , is a broad area and can 
often add more value to re gional integration than tr ade liberalisation alone.  
Financial market integration can  contribute to economic growth  through addressing the lack 
of liquidity that many small countries have, and also by increasing intra-regional capital 
 
EN 65   EN flows. There are plans to integrate the stock ma rkets of Southern and Eastern Africa but no 
experience in the ACP overall. Studies point th at, due to the need of complex regulation, 
integration in this area needs to occur at the right pace. 
Monetary integration provides fi nancial stability and reduces transaction costs. There are 
already four monetary unions w ithin the ACP. Outside the existing monetary unions in the 
ACP, the required convergence of macro-econo mic indicators for a monetary union appears 
not to exist.  
Businesses need to rise to the challenge of the international trading environment. To meet this 
challenge, business co-operation and R&D at regional level can help. There are an increasing 
number of regional business a ssociations in ACP countries. 
Poor infrastructure is an important impediment to  intra-regional trade. Effective regional co-
ordination would reduce the time of transit and uncertainty for traders. Both theory and 
examples from ACP countries show that the re sults of better regional infrastructure are 
reduced transport costs. These reduced transport costs sow the seeds for increased intra-regional trade. A lack of regiona l co-operation acts as a constrai nt to growth. Co-operation in 
energy and water leads to economies of scale; regional co-operation c ould be particularly 
effective in ACP countries, where most individu al markets are not big enough to benefit from 
this effect. However, few regional ACP power  grids are currently fully functional.  
Regional co-operation in the area of land, fi sheries and forests should both promote the 
sustainable use of resources and combat illegal usage. Co-operation in the area of agriculture 
can help with the issues of  food sovereignty and food security. Four ACP regions are 
currently in the process of implementing region al food and agricultural trade strategies but 
effects are no measurable at his stage. 
Increased migration poses challenges related to the spread of communicable diseases in 
particular, and improved regional disease mana gement is likely to increase the growth 
prospects of African countries. Migration itself also requires  management; while healthy, 
integrated migrants can be a valuable resour ce to the host country, many African countries 
have difficulties to manage heavy migration flows. 
Social cohesion policies have the advantage of reducing disparities within a region, and 
preventing the "race to the bottom" with labour wages. ACP regions are less advanced than 
rest of the world regions in the field of so cial policies. Some ACP regions do use trade 
measures to deal with social issues, and some progress has been made in the 
institutionalisation of  social dialogues. 
Finally, there are several benefits of political co-operation . Political integration may be a 
pre-requisite for economic integration (e.g. th e EU); it may accompany economic integration; 
or it may be a result of economic integration. An example of the last is the case where higher 
income from economic integration promot es the understanding between countries.  
A political advantage of enteri ng a regional integration agreement is the joining of interests 
into one stronger, united voice for trade ne gotiations. A strong motivation for political 
integration is that of peace and security. Pe acekeeping operations can kick-start an economy 
at a vital time. In the ACP regions, security components are increasingly included in regional 
integration programmes, and several organisati ons have emerged as conflict managers and 
peace keepers. It is worth noting that "lead nati ons" such as South Africa and Nigeria have a 
 
EN 66   EN complicated role in the peace keeping process; on one hand, they have the necessary resources 
to lead such missions, but on the other hand, w eaker countries can find the military power of 
such countries a threat.  
 
EN 67   EN ANNEX 3: STOCKTAKING OF EPA S AND REGIONAL INTEGRATION  
At the end of 2007, the negotiations with the fifteen CARIFORUM countries were 
successfully concluded. The Agreement comprises all ACP countries in the Caribbean region 
and covers all subjects originally identifie d for negotiations. This Agreement will promote 
integration in the Caribbean with regard to trade in goods, services, investment and a wide range of trade related areas.  
The Caribbean EPA follows the two principl es applied by the region's own integration 
process, namely, those of variable geometry  and differentiation , which allow taking into 
consideration the different levels of devel opment and integration ex isting in the region. 
Within the EPA the region has committed to remove tariffs on 80% of EU imports over 15 years, while certain products are excluded from liberalization and others are liberalised within 
a 20-25 years timeframe. The Agreement in cludes commitments on customs and trade 
facilitation, such as the introduction of a single administrative document in Cariforum 
countries. In the area of sanita ry and phytosanitary standards (S PS) and technical barriers to 
trade (TBT) the Parties agreed to  cooperate so as to increase the capacity of the region to 
apply internationally re cognised standards.  
The Caribbean EPA also contains a comprehens ive section on Investme nt and Services as 
well as on specific rules on E-commerce. On bot h services and investment the Agreement 
aims at fostering predictability and transpar ency. In the area of services, liberalisation 
commitments focus on sect ors that are expected to have a positive development impact, areas 
in which CARIFORUM states are looking for FD I or new technologies as well as sectors 
important to create economic opportunities including in out-sour cing. Special reservations 
have been maintained for sma ll and medium sized enterprise s and public services remain 
excluded. In addition the EPA in cludes provisions aimed at figh ting against corrupt practices 
of investors, as well as binding provisions on non-lowering of standards in the environmental 
and social fields and for cultural diversity laws and regulations.  
Finally the Caribbean EPA contains also a co mprehensive set of trade related rules e.g. on 
intellectual property rights (IPR s), the protection of  personal data, government procurement 
(focusing on transparency), on competition pol icy, and social and environmental aspects.  
Further extensive information on the contents of  the Caribbean EPA and its expected benefits 
can be found at the website of the Ca ribbean Regional Negotiation Machinery: 
http://www.crnm.org. 
Outside the Caribbean in all other ACP regions, interim agreements were concluded  that 
basically focus on trade in goods
 and also contain to a varyi ng degree certain trade related 
rules  while rendezvous clauses foresee the nego tiation of the still missing EPA elements 
relating to rules, services and investment, ove r coming months. Except for the agreement with 
the East African Community (EAC) where all members are part of the interim EPA, the 
interim agreements generally include only certai n but not all members in  each region. Hence, 
they are still incomplete and need to be turn ed into comprehensive EPAs over coming months 
in order to release their full potential for regional integrati on. In this cont ext and in all 
regions, the commitment to do so by the e nd of 2008 (by mid 2009 in the cases of EAC and 
West Africa) has been re-affirmed  by the ACP and EU sides.  
 
EN 68   EN In addition it should be noted that in a number of regions and partly in anticipation of full 
EPAs, discussions and concrete steps towards deeper integration are already ongoing . In 
West Africa for instance, a regional policy framework for competition was defined and an external tariff set for countries of the West African Economic and Monetary Union 
(WAEMU), while in the Pacifi c discussions about a regional services agreement and the 
establishment of certain trade related rules are progressing.  
Rules of origin  (RoO) are important for allowing cu mulation between produ cers in different 
ACP countries and hence they are important for the integration of produc tion processes within 
and between regions particular in Africa. Th e EPA RoO are based on the Cotonou rules with 
certain substantial improvements in the areas of  agricultural products, fishery products and 
textiles. They were designed such that a maxi mum of integration potential will be ensured 
within and among the various regions.  
In all regions, EPA related support  is key in helping with the EPA process, implementation 
of commitments and regional inte gration. This important  topic is covered separately in the 
document.  
The interim agreement with the East African Community  (EAC)
33 focuses on an agreement 
on trade in goods but al so contains a regional chapte r on fisheries and provisions on 
institutional arrangements. Despite the fact that it is as yet only an interim agreement, it already develops a very high degree of regiona l coherence since the agreement is concluded 
with all five EAC members acting as a cu stoms union. Thus liberalisation commitments 
towards the EU are identical for all EAC countries and consolidate the internal cohesion process of the grouping. Since EAC members have also linkages with the Eastern and 
Southern African group (ESA) and the Southe rn African Development Community (SADC), 
close coordination between the EAC, ESA and SADC processes is needed as well as a 
variable and flexible approach to develop the integration aspects of th e wider region gradually 
and in harmony. Rendezvous clauses in the inte rim agreement foresee negotiations towards a 
full EPA comprising all relevant EPA elements by mid 2009. 
In the Eastern and Southern African grouping (ESA)  group, six members
34 have initialled 
the interim EPA which focuses on an agreement on trade in goods but also  contains a regional 
chapter on fisheries and institutions as well as development cooperati on. Rendezvous clauses 
foresee the negotiations towards a full EPA cont aining all other EPA elements by the end of 
the year. Negotiations on SPS/TBT, Trade faci litation and a Dispute Settlement Mechanism 
are already far advanced, nego tiations on services, investment , agriculture and development 
are ongoing as are discussions on other import ant issues such as tr ade related rules for 
example on sustainable development, transparency in public procurement and competition law.  
Five countries
35 in the Southern African Develo pment Community (SADC)  group have 
concluded an interim agreement which focuses on trade in goods. The agreement also contains regional rules on SPS and TBT, trade facilitation, institutions and development 
cooperation. Rendezvous clause s foresee the continuation a nd conclusion of negotiations 
                                                
 
33 Kenya, Tanzania, Uganda, Rwanda, Burundi 
34 Mauritius, Comores, Seychelles, Madagascar, Zimbabwe; Zambia also initialled but does not take part 
in the goods agreement. 
35 Botswana, Namibia, Lesotho, Swaziland, Mozambique. 
 
EN 69   EN during 2008 to establish a full EP A containing all relevant issues. Most members in the region 
are highly interested in particular in progres sing towards a services and investment agreement 
as part of the full EPA.36 As regards the regional coverage and in addition to the five countries 
that concluded the interim agreement, Angola has also actively engage d in the negotiations. 
Finally South Africa is equally part of the SADC EPA negotiation group but has not signed 
the interim agreement. Following a period of consideration of its position, it has however 
recently re-opened negotiations on trade in go ods. To tap the full EPA potential to boost 
regional integration and developmen t, it is highly desirable that  South Africa will be part of 
the full EPA.  
In Central Africa  an interim EPA was concluded with only one country in the region, i.e. 
Cameroon containing trade in goods, trade faci litation, SPS and TBT clauses, institutional 
arrangements and development cooperation. The re gion has recently indicated its eagerness to 
move forward towards a full EPA containing all elements and comprising all members of the 
region.  
In West Africa  interim agreements were concluded w ith two countries in the region, Côte 
d'Ivoire and Ghana. The contents comprise tr ade in goods, facilitation, SPS, TBT, institutions 
and development co-operation. At Heads of States  and Government level, the entire region 
has decided to resume negotiations and aim at concluding a full EPA by mid 2009.  
In the Pacific,  an interim agreement was concluded with the economically most important 
countries Papua New Guinea and Fiji. The interim arrangement contains a trade in goods agreement, rules on trade facilitation, SPS and TBT, institutional arrangements and a 
rendezvous clause to conclude a full EPA in 2008. A slow and careful resumption of the 
negotiations involving the whol e region is currently ongoing. The region is particularly 
interested in negotiating a se rvices agreement within an EPA and in particular in 
arrangements for the temporary movement of la bour and is currently c onsidering its options. 
In parallel to negotiations with the EU, disc ussions in the Pacific on the establishment of 
regional arrangements in services and certa in trade related rules are also ongoing.  
                                                
 
36 All except Nambia.  
 
EN 70   EN ANNEX 4: EC FINANCIAL SUPPORT FOR REGIONAL INTEGRATION  
Initial commitments on projects with a regional focus in ACP countries for the 8th and 9th EDF (covers multi-
country, regional and national programmes between 1996 and 2007) (million euros)   
Region Regional 
Integrated 
Markets Business 
Development Infrastructure Sustainable 
Development Regional 
Governance TOTAL 
Inter regional (sub-total)  134,35  276,453  119,45  818,506  29,723  1378,482 
West Africa (sub-total)  121,8  2,485  167,15  86,873  123,9  502,208 
Regional  121,8   34,7  79,  123,9  359,4 
Guinée     6,4   6,4 
Mali   2,485  132,45  1,473   136,408 
Central Africa (sub-
total)  28,5  5,5  196,24  43,15  13,1  286,49 
Regional  28,5    38,15  8,1  74,75 
Cameroun    5,5     5,5 
Cameroun - Tchad    138,24    138,24 
Great Lakes      5  5 
RCA    55    55 
ROC     5   5 
Rwanda/Regional    3    3 
ESA (sub-total)  122,6  6,412  210,496  127,835  3,532  470,875 
COMESA  122,6   21  18   161,6 
East Africa     3   3 
Ethiopia-Djibouti    50    50 
IGAD      1  1 
IOC     35,5   35,5 
Kenya    6,412  119,996   1,532  127,94 
Somalia, Ethiopia & 
Kenya    4  4 
Uganda    19,5  67,335  1  87,835 
SADC (sub-total)  19,09  45,27  39,2  45,514  7,95  157,024 
Regional  19,09  45,27  39,2  45,514  7,95  157,024 
Caribbean  63,5  184,044  45,005  41,836  5,73  340,115 
Regional  37     2,63  39,63 
CARIFORUM     8,787   8,787 
Barbados   107,584  13,755  13,399  3,1  137,838 
Dominican republic  5  5     10 
Dominica    0,55    0,55 
Guyana     0,45   0,45 
Haiti - Dominican 
Republic   45     45 
Jamaica   21,5  26,46     47,96 
Suriname    30,7    30,7 
Trinidad and Tobago     19,2   19,2 
Pacific  11,2  4  0  70,276  4,19  89,666 
Regional  11,2  4   52,576  4,19  71,966 
PALOP     17,7   17,7 
Entire ACP Total  501,04  524,165  777,541  1233,99  188,124  3224,861 
Source: European Commission  
 
EN 71   EN ANNEX 5: OVERVIEW OF 9TH EDF  REGIONAL PROGRAMMES (2002-2007) 
1. Eastern and Southern Africa 
Main strategy: economic liberalis ation (trade and tax policy) and investment promotion in 
order to remove supply side constraints. 
There are three main areas of focus in the RIP: 1. Economic integration and trade  – 45 to 55% of the budget. The focus is on supply 
capacity, using public sector tools. In particul ar, there are attempts to eliminate overlapping 
and conflicting programmes and encourage the econom ic integration of states. Action in the 
field of economic integration ta kes into account the need to prepare for the negotiation and 
implementation of the EPA. 
2. Transport  – 15 to 25% of the budget. Intervention in this area consists of a master-plan 
focussing on investment opportunities and priorities.  
3. Natural resources  – 15 to 25% of the budget. Natural resources are to be tackled at 
regional level. Sustainable management plans for natural resources are to be developed. 
No specific intervention for HIV/ Aids is planned although it was identified as a key hindering 
factor for the region. 
2. Southern Africa 
Main strategy: export led growth and economic  liberalisation, plus the promotion of the 
supply side. 
There are two main focuses in the RIP 1. Economic integration and trade  – 35 to 45% of the budget. Th ere is a specific focus on 
supply capacity and public sector tools. The aim is to encourage foreign investment for export 
led growth. The need to prepare fo r the EPA is taken into account. 
2. Transport and infrastructure  – 35 to 45% of the budget. The EU is to provide assistance 
from its experience with trade facilitation. The NIPs contain considerable infrastructure 
investment, and the RIP will attempt to co-ordinate this investment.  
Non-state actors are also to be  involved on a regional level.  
3. West Africa 
Main Strategy: UEOMA and ECOWAS are the key partners. The aim is to assist the long 
term convergence of these two key partner organisations. This includes assisting the 
harmonisation process in order that goods and people can circulate fr eely through transport 
investment.  
1. Economic integration  – This includes assisting the formation of the ECOWAS customs 
union and the free circulation of goods in the West  Africa area; in partic ular, there is help 
 
EN 72   EN with the continuous dialogue process. Assistance for private sector development is a further 
element. Considerable help will be offered to improve institutional capacity. Assistance with 
preparation for EPA negotiations will be offered. 
2. Transport and infrastructure  – The target area is the ha rmonisation of national policies 
and a focus on the facilitation of circulation (n on-physical barriers, s ecurity, etc). The NIPs 
focus on investment in the inter-regiona l sections of the transport network. 
3. Experience sharing  – particularly on public health, further education and research. 
4. Conflict prevention  
4. Central Africa 
Main strategy: the consolidation of a Central Af rican regional space and the integration of this 
space in to the world economy. 
1. Economic integration  – 25 to 30% of the budget. The main aim is deeper regional 
integration to increase growth and reduce pove rty. Regional organisations  should be made to 
work more effectively. Assistance will be pr ovided towards creating a customs union and 
common market, and also in the convergence of economic policies. Private sector assistance 
will be provided and non-state actors will be involved more. Assistance will be provided to 
assist with transition and restru cturing required from the EPA. 
2. Transport and telecommunications  – 35 to 40% of the budget. The aim is to improve 
land-based transport networks. This includes  the improvement of CEMAC's competence on 
transport, analysis of obstacles  in conjunction with the priv ate sector, the definition of a 
regional network and the development of an open and competitive telecommunications market.  
3. Sustainable management of natural resources  – 20 to 25% of the budget. The 
ECOFAC
37 programme will be continued. RAPAC38 will be made autonomous and able to 
manage money. Assistance will be provided to make the nati onal conservations plans both 
regionally integrated and managed by an existing regional organisation. Several 
environmental conventions shoul d be implemented (e.g. Kyoto). 
5. Pacific 
1. Regional integration  – 31% of the budget. The key focus is the strengthening of capacities 
for regional integration. This includes the strengthening of negotiating capacities in the 
context of the WTO and EPA. Assistance is to be provided for the mutual removal of tariffs. 
Help will be offered to private sector companies so that they can fully benefit from new opportunities. Technical assistance will be given with public financial administration and tax.  
2. Human resource development  – 28% of the budget. Techni cal and Vocational Education 
and training is included in the NIPs. The RIP is to assist bot h with basic education and TVET 
at regional level. 
                                                
 
37 Conservation et utilisation rationnelle des ECOsystèmes Forestiers d'Afrique Centrale.  
38 Réseau des Aires Protégées d'Afrique Centrale. 
 
EN 73   EN 3. Fisheries  – 17% of the budget. The focus is the st rengthening of regional institutions for 
fisheries. 
6. Caribbean 
The creation of a harmonised regional economic space to improve competitiveness and 
integration to world economy will use the majo rity (75 – 90%) of the budget. This general 
objective focuses more specifically on regional economic integration, integration into the 
world economy, and economic repositioning allowing the region to take advantage of new opportunities (with a specific focu s on SMEs). The preparation fo r negotiation of EPAs also 
falls within this category. 
 
EN 74   EN  
ANNEX 6: EVALUATION OF EDF  PROGRAMMES  
1. Evaluations of 9th EDF Regional Strategies and Programmes 
Four of the six RIPs under the 9th EDF have been evaluated by external consultants. The 
following recurring themes have been identified : 
– Regions are not clearly defined (multiple RTA membership / delimitations of regions) 
hence there is a "choice of partner" problem for the EC. 
– Transport intervention at a regi onal level is not effective. 
– The RIPs and NIPs are often not coherent. 
– Poverty issues are not be ing tackled satisfactoril y at a regional level. 
– Capacity constraints to implement regiona l policy exist due to weak institutions. 
– There is the need to involve non-government al actors on a regional level. However, in 
general terms, such actors tend to  think more on a local level. 
More specifically, below are presented the highlights of the evaluation reports for the 
concerned regions: 
Caribbean  
Source: Evaluation of the Commission's Regional Strategy for the Caribbean. April 2005 - Evaluation of past 
and present intervention = chiefly 8th EDF effectiveness and 9th EDF strategies. 
– No policy dialogue exists for a long-term vision  of regional integrati on. Institutions set up 
by the Commission are deemed not sustainabl e and still require external assistance. 
– Regional intervention is effectiv e in the areas of trade, cult ural identity, product identity, 
regional marketing, tertiary e ducation and crime prevention. 
– Poverty and gender issues are not being tack led in a regional integration context. 
– Roles and responsibilities are not clearly mark ed out for actors on the Caribbean and EC 
sides. CARIFORUM has helped, but lacks th e necessary capacity to ensure regional 
strategic objectives are achieved.  
– The regional approach is being taken, but does not pay enough attention to specificities of 
the Caribbean. 
– The RIP and NIP are considered not coherent. 
 
EN 75   EN SADC 
Source: Evaluation of the Commission's  support to SADC: Regional Level. October 2007. - An evaluation for the 
period 1996-2007, chiefly analysing 8th and 9th EDF effectiveness. Some projects from 6th and 7th EDF were still 
active.  
– Regional intervention does not tackle the multip le membership problem, e.g. in relation the 
EPA. 
– There is a focus on capacity building activi ties to help SADC, the aim being to make 
SADC capable of managing its own aid. Currently SADC ownership of regional 
programmes is not strong and SADC member  states do not sufficiently support SADC 
national committees. 
– Transport intervention is working at a nati onal level but not at a regional level. The 
liberalisation reforms of SA DC states are limiting the e ffectiveness of transport 
intervention. 
– EC support is increasingly poverty orientate d, but does not appear to be effective. 
HIV/AIDS regional strategies are in place but appear not to be working. 
There is a need to look at the long term aspect of food securi ty, and to look at it on a regional, 
not a national level. 
– Non State Actors generally are not able to focus on regional issues. 
– The NIP and RIP are considered as not always coherent. 
– Delegations with regional respons ibilities need to consider more the regional aspects. 
Central Africa 
Source: Evaluation de la Stratégie Régionale de la CE en Afrique Centrale. December 2006 - An analysis of the 
effectiveness of past experience (8th EDF) and ongoing experience at the time of writing (9th EDF). 
– NIP – RIP coherence is considered w eak, particularly for poverty reduction. 
– Central Africa is not clearly delimited as a re gion. There is therefore the lack of a clear 
regional partner for the EU. 
– Transport intervention on a natio nal level is strong, but it is not having a significant effect 
on intra-regional exchanges. 
– Natural resource intervention has been successful , but is not sustainabl e, and does not have 
enough support from national governments. 
– Citizens do not rec ognise the region. 
Pacific 
Source: Evaluation of the Commission's support to the AC P Pacific Region. September 2007 - An evaluation for 
the period 1997-2007 (implementation up to 2005 analysed) - 8th and 9th EDFs. 
 
EN 76   EN – General assistance is seen as weak in the area of poverty reduction; intervention 
specifically for poverty reducti on has not been programmed. 
– There is a lack of coherence between RIP and NIP. Regional and national strategies have 
been designed separately. 
– Environmental and natural resource assi stance is considered not sufficient. 
– Commission’s intervention in regional integra tion and trade is genera lly quite recent and 
therefore could not be assessed at  the time of writing the report. 
2. Issues relevant for regional integratio n in thematic evaluations of support 
Governance 
Source: Thematic Evaluation of EC Support to Good Governance. June 2006 
– Governance is included in regional level co -operation agreements and RSPs at a policy 
level.  
– The EC is contributing to region specific gove rnance objectives, but the overall effect (on 
systemic change) is not clear, nor is the sustainability of the contribution. 
Private Sector Development 
– Source: EC Support for Private Sector Development. December 2005. 
- There is no methodical process for selecti ng an area of intervention, which limits the 
effectiveness of interventions. - Activities are not designed so as to improve the competitiveness of the private sector in a 
sustainable manner. - There is no systematic attempt to maximise complementarities between areas of intervention 
or to ensure coherence between  private sector development a nd other sectors or other EU 
policies.  
Co-ordination, complementarity and coherence. November 2007 
– No effects on policy at a regional level have been identified.  
Développement rural et agricole. June 2007  
– No effects on policy at a regional level have been identified.  
Co-ordination of trade building capacity  in partner countries. February 2006  
– No effects on policy at a regional level have been identified. 
 
 
 
EN 77   EN ANNEX 7: REFERENCES  
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Lisbonne, 8-9 December 2007.  
European Commission (1995), Economic Co mmunity support for regional economic 
integration efforts among developing countries, 16 June 1995, COM (1995) 219 final 
European Commission (2003), European Community  co-operation with third countries: The 
Commission's approach to future  support for the development of the business sector, 19 May 
2003, COM (2003) 267 final 
European Commission (2004), A stronger partne rship for the outermost regions, 26 May 
2004, COM (2004) 343 final 
European Commission (2005), EU Strategy for Africa: Towards a Euro-African pact to 
accelerate Africa’s development, 12 October 2005, COM (2005) 489 final 
European Commission (2006a), An EU-Caribb ean partnership for growth, stability and 
development, 2 March 2006, COM (2006) 86 final 
European Commission (2006b), EU relations w ith the Pacific islands – A strategy for a 
strengthened partnership, 29 May 2006, COM (2006) 248 final 
European Commission (2006c), Interconnecti ng Africa: the EU-Africa partnership on 
infrastructure, 13 July 2007, COM (2006) 376 final 
European Commission (2007a), A dvancing African Agriculture - Proposal for continental and 
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European Commission (2007b), Strategy for th e Outermost Regions: Achievements and 
Future Prospects, 12 September 2007, COM (2007) 507 final 
Ferroni, Marco (2001), Regional public goods in official development assistance, Inter-
American Development Bank, Occasional paper 11, November 2001 
Kanbur, Ravi (2001), Cross-Border Externalit ies, International Public Goods and Their 
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Oversees Development Institute (2008), Regi onal Integration in ACP – A Review of 
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Venables, Anthony J. (2000), Winners and Lose rs from Regional Integration Agreements, 
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