EUROPEAN COMMISSION Strasbourg, 22.11.2016 SWD(2016) 380 final JOINT STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Accompanying the document Joint Communication to the European Parliament and the Council A renewed partnership with the countries of Africa, the Caribbean and the Pacific {JOIN(2016) 52 final}

{SWD(2016) 381 final}



Contents Acronyms Introduction 1. Problem definition 1.1 General problem 1.2 Specific problems and related drivers 1.2.1 Uneven patterns of development across Africa, the Caribbean and the Pacific 1.2.2 Europe's growing security concerns and untapped economic potentials 1.2.3 Insufficient recognition of deepened regional dynamics within and beyond ACP 1.2.4 Rising global challenges and challenged multilateralism 1.2.5 Insufficient inclusion for all stakeholders beyond national governments 2. Why the EU should act 3. Objectives 3.1 General objective 3.2 Specific objectives in response to the identified problems 3.2.1 Foster sustainable development in ACP countries 3.2.2 Enhance EU security and economic prosperity 3.2.3 Encompass evolving regional dynamics within and beyond ACP 3.2.4 Ensure stronger alliances in addressing global challenges

3.2.5 Strengthen inclusive participation of stakeholders at various levels 3.3 Overview of intervention logic 3.4 Consistency of objectives with relevant EU policies 3.5 Positions emerging from various stakeholders 3.6 ACP Group views 4. Policy options 4.1 Screening of all options 4.2 Description of the baseline scenario 4.3 Description of the selected alternative options Option 1. No partnership Option 2. New partnership with ACP countries Option 2.1: Revised common agreement (all ACP countries) Option 2.2: Separate regional agreements (Africa, Caribbean and the Pacific) Option 2.3: Three separate regional partnerships under a common umbrella. 5. Analysis of impacts 5.1 Identification of relevant impacts 5.2 Social impacts Sustainable and inclusive development Migration-development nexus Enhanced participatory approach to cooperation

5.3 Political impacts Peace and security Democratic governance and human rights Alliance building at the global level 5.4 Economic impacts Trade cooperation Macroeconomic stability, private sector development and investment returns 5.5 Environmental impacts Environmental protection and climate change 5.6 Budgetary and administrative impacts 6. Comparison of options 6.1 Introduction 6.2 Positive and negative effects of the policy options 6.3 Identification of the preferred option 6.4 Specific feature of the preferred option – legal format 6.5 Operational objectives 7. Monitoring and evaluation List of annexes Acronyms

ACP African, Caribbean and Pacific Group of States AOSIS Alliance of Small Island States APF African Peace Facility BEST Biodiversity and Ecosystem Services in Territories of European Overseas BRICS Brazil, Russia, India, China and South Africa CELAC Community of Latin American and Caribbean States COP21 Conference of the Parties – 21st Conference CPA Cotonou Partnership Agreement CSO Civil Society Organisation DAC Development Assistance Committee DCI Development Cooperation Instrument EBA Everything But Arms ECOWAS Economic Community of West African States EDF European Development Fund EPA Economic Partnership Agreement EPG Eminent Persons Group EU European Union FAO Food and Agriculture Organization GPEDC Global Partnership for Effective Development Cooperation GSP General Scheme of Preferences HIC High Income Country HR/VP High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the European Commission IA Impact Assessment ICT Information and Communication Technologies IMF International Monetary Fund IMO International Maritime Organisation IPOA Istanbul Programme of Action JAES Joint Africa-EU Strategy JCES Joint Caribbean-EU Partnership Strategy JMTC Joint Ministerial Trade Committee LA Local Authorities LDC Least Developed Country LIC Lower Income Country LMIC Lower Middle Income Country MDG Millennium Development Goals MEA Multilateral Environmental Agreement MFF Multiannual Financial Framework MSME Micro, Small and Medium Enterprises NSA Non-State Actors OCTs Overseas Countries and Territories ODA Official Development Assistance REC Regional Economic Community SAMOA SIDS Accelerated Modalities of Action SDG Sustainable Development Goals SIDS Small Island Developing States SME Small and Medium-sized Enterprises SSA Sub-Saharan Africa TEU Treaty on European Union TFEU Treaty on the Functioning of the European Union UMIC Upper Middle Income Country UNFCCC United Nations Framework Convention on Climate Change WTO World Trade Organisation Introduction The partnership agreement between the members of the African, Caribbean and Pacific Group of States of the one part and the European Community and its Member States, of the other part, signed in Cotonou on June 2000 is due to expire in February 2020. In light of existing provisions, negotiations between the parties must start by no later than August 2018, and the EU should reflect on how to best organise its relations with ACP countries. The partnership agreement is referred to as the Cotonou Partnership Agreement (CPA). Signed in 2000 as an evolution of previous agreements since the 1975 Lomé convention, the CPA has set a comprehensive list of policy goals and political values to be jointly pursued by the EU and partner countries across Africa, the Caribbean, and the Pacific, and is based on three complementary pillars (i.e. political dialogue, economic and trade cooperation and development finance cooperation), and managed through joint institutions. As such, it has provided the general framework for all joint initiatives promoted by the EU and ACP countries over the past 15 years, including regional development initiatives and the Economic Partnership Agreements (EPAs). The agreement frames the cooperation by defining the objectives, the principles on which the cooperation is based as well as the means and tools that will support the implementation. The CPA is mainly financed by the European Development Fund (EDF), an extra-budgetary fund consistent with the EU Multiannual Financial Framework composed of direct contributions from EU Member States, set up specifically to support the achievement of objectives agreed in the partnership. The number of participating countries (over 100 countries, forming a majority in the United Nations and representing around 1.5 billion people), its comprehensive scope, its joint management arrangements and its legally-binding nature give an idea of the magnitude and the relevance of the partnership. However, since 2000 the interests and ambitions of the EU and the ACP countries have evolved. The EU Global Strategy as well as the proposal for a new European Consensus on Development, as well as the internationally agreed 2030 Agenda on sustainable development and the Paris Climate Change Agreement, provide for the key references against which future relations with ACP countries should be framed. Moreover, the changing global context, and notably the deepening of regionalisation across Africa, the Caribbean and the Pacific, point to the need to review the scope of the EU-ACP partnership as well as its format. Furthermore, a number of lessons learned regarding the effectiveness and efficiency of the current partnership should be taken into account in the reflection on future relations. The goal is that of forging the best type of relationship after 2020 that allows the EU to effectively pursue its interests in an ever-competitive global arena. The impact assessment will accompany the Communication on the future relations of the EU with the ACP countries after 2020, and will serve as a basis for the subsequent recommendation and annexed negotiating directives. Changing context The global context in which the EU operates has undergone significant transformations since the signature of the Cotonou Partnership Agreement in 2000. The world is becoming more interdependent and interconnected, multi-polar, complex and with new security challenges. On the one hand, increased interdependence, technological advances and intensified trade have opened up new possibilities to accelerate economic growth for the EU. On the other hand, the persistence of situations of fragility and vulnerability, the uneven progress across the developing world and rising inequalities, the acceleration of terrorist and organised crime activities, the demographic boom (particularly in Africa), and continuing environmental degradation and climate change, pose serious challenges to social and economic stability in every part of the world, affecting the EU as well. Due to these increased interlinkages, there are stronger spill-over effects towards Europe (e.g. economic, irregular migration) than in the past. Furthermore, global challenges such as climate change have increased in importance, and the EU's capacity to influence the course of international affairs is affected by the rise of new powers (e.g. China). In this changed context, it becomes important for the EU to build even stronger and political relations with large group of countries, so to pursue effectively its interests. Another major trend over the last decades has been the intensification of regional dynamics. This has taken place as well within the ACP group of countries. These diverse regional dynamics are reflected in the reinforcement of regional and continental integration mechanisms, coupled with a strengthening – albeit at different degrees – of regional organisations. Africa, the Caribbean, and the Pacific also have increasingly been facing specific geopolitical, economic and development challenges. For instance, migration and security are central to the EU's relations with Africa, whereas climate change is of major importance in relations with the Caribbean and Pacific countries. A number of these relevant issues and opportunities for cooperation have been reflected in mutual partnerships between the EU and main existing regional fora, such as the Joint Africa-EU Strategy and the Joint Caribbean EU Partnership Strategy. Any future relationship must therefore take into account increased regionalisation dynamics and existing regional strategies within the group of ACP countries. Evaluation of the Cotonou Partnership Agreement (CPA) As evidenced by the evaluation, as well as the consultation process, significant progress has been made under each of the three pillars of the CPA. Firstly, the CPA has contributed to poverty eradication and to human development. Secondly, it has led to an increase in trade flows to and from ACP countries and to their integration into the world economy. Thirdly, it has supported the promotion of peace and security and the reinforcement of democracy and human rights across various ACP countries. On the other hand, there are two important issues where the record of the EU-ACP partnership has been mixed, and thus require further attention in order to fully address the evolving context in which the CPA operates. Firstly, EU-ACP cooperation in the international arena is considered weak, as the CPA was not designed to address global challenges or to be an effective platform to promote EU-ACP common interests at the global level. Notwithstanding this, EU-ACP cooperation has played a decisive role towards reaching the Paris Agreement on climate change, which indeed points to the enormous potential of an alliance of 100 countries in shaping international multilateral negotiations. Secondly, despite the growing importance of regional integration in the ACP world and the strong support provided by the CPA to continental and sub-regional actors, the CPA has not fully acknowledge that the three ACP regions have been facing a different set of challenges, impacting the EU in different ways. Similarly, despite diversification featuring prominently in the partnership, the CPA has not fully taken into account the increased heterogeneity of ACP countries. The evaluation has also pointed to the insufficient implementation of some provisions (particularly in the area of migration), to the fact that the joint institutions and specific ways of cooperation (e.g. co-management) have not worked as expected. Towards a new type of relations The changing global context calls for stronger and political relations that encompass regionalization and strengthen the EU's capacity to deliver global alliances. The purpose of this Impact Assessment is to determine which type of format (if any at all) is required to organise and govern relations with partners in Africa, the Caribbean and Pacific, as to enable the EU to best pursue its interests.

It is important to specify that the financing of the relations is not dealt with within the framework of this impact assessment. Reasons for this are the specific focus of the impact assessment on the way the relations should be best organised and the fact that the European Development Fund (EDF) is part of the discussion on the new set of financing instruments for external action due in 2020 under the new multiannual financial framework (MFF). No details on the amount and functioning of financing provisions are therefore discussed. However, in a few cases reference is made to specific aspects related to the EDF (e.g. budgetisation or specific procedures) if deemed relevant with respect to the potential impact of the different options. The impact assessment accompanies a Communication about the EU's future relations with the ACP countries to be adopted in November 2016. The Communication presents the preferred way forward, based on the outcome of this impact assessment, and includes the main building blocks proposed for a negotiating mandate. 1. Problem definition 1.1 General problem In an interdependent and multi-polar world, a range of challenges and opportunities related to countries in Africa, the Caribbean and the Pacific increasingly affects EU security and prosperity and should be adequately addressed. 1.2 Specific problems and related drivers The current CPA has provided a comprehensive framework shaping the relations between the EU and ACP countries, and has been instrumental in addressing human and economic development problems and promoting EU values. Yet, this type of arrangement may no longer be effective and efficient in fully addressing a range of new specific problems. Some of these problems originate from the global context in which EU-ACP relations are embedded; others emanate directly from the application of the CPA to the more specific EU-ACP context. Particularly, five specific problems have been identified. 1.The analysis of the global context shows that situations of fragility and inequality persist within the ACP countries. Although there has been clear progress in the area of human and economic development in ACP countries, achieved through a relevant contribution of the CPA, improvements have been insufficient and unevenly distributed. 2.Dynamics within ACP countries have a direct effect on the EU, posing serious challenges to its security and limiting opportunities for further prosperity In this respect, the CPA provisions foreseen to ensure EU security and facilitate EU investment in ACP countries have not worked as expected, leaving the EU exposed to such enduring challenges. 3.Although trends of increasing regionalisation have emerged across Africa, the Caribbean and the Pacific, the CPA has not been able to fully embrace the deepening of such regional dynamics. Therefore, its effectiveness has been hindered by the limited recognition of parallel partnerships existing with regions and sub-regions. 4.Increased global challenges call for more coordinated and ambitious collective action. So far, the EU and the ACP countries have not sufficiently exploited the potentials offered by stronger cooperation at the international level. 5.A full engagement of all stakeholders, beyond national governments, is required to address all the previously identified challenges. Unfortunately, the CPA contribution in fostering more inclusive processes across ACP countries has been considered inadequate. Below follows a more detailed description of the specific problems that challenge the current focus of the relationship and the way it is organised and governed. Each section starts with the description of the global context in which EU-ACP relations have evolved and the challenges that the EU has to face in order to effectively pursue its interests. The second part of each section outlines how the CPA has responded to the problem, and to do so it draws on the evaluation and, wherever possible, the consultation process. 1.2.1 Uneven patterns of development across Africa, the Caribbean and the Pacific Notwithstanding substantial progress, ACP countries remain confronted with significant challenges in terms of conflicts and instability, sustainable development, as well as patchy integration into the global economy. The CPA has been relatively effective in providing support to ACP countries across those areas, but has not fully addressed the root causes. As a result, a range of challenges persist and are expected to grow in the future. Persisting conflicts and fragilities Conflicts and situations of fragility are more dominantly present in ACP countries than other parts of the world. Despite the gradual reduction of armed conflicts, as many as 15 African states have actually witnessed an overall increase in political violence. Importantly, it has been estimated that by 2030 62% of the world's extreme poor will live in fragile and conflict-affected countries, 20 of which are in Africa, 5 in the Pacific and 1 in the Caribbean . Similarly, despite significant progress, democratic processes are still weak in many ACP states, which indeed are characterised by weak institutions, violations of human rights, widespread corruption, and reduced or reducing space for civil society organisations. Another serious source of instability is related to the rise of population. Between 2015 and 2050, Africa is projected to account for over half the growth in world population . This demographic boom calls for, on the one hand, substantial investment for the provision of basic social services, and, on the other hand, poses a set of crucial challenges, such as rapid urbanisation, growing inequality, competition for resources (particularly land and water), and high levels of unemployment. Support to peace and security have been one of the main areas of achievement of the CPA. Yet, such support has largely been directed at responding to specific crises, rather than addressing root causes of instability and fragility. Moreover, the increased prominence of regional organisations and policy frameworks in this area has led many to question the long-term relevance of the existing ACP-EU format. Similarly, the essential elements clause in the CPA – respect for human rights, democracy and the rule of law – combined with the appropriate measures mechanism in Article 96 CPA, is the most advanced compared to other EU agreements with third countries. Undoubtedly, political relations between the EU and the ACP countries, on the whole, have been strengthened. However, more efforts are needed to overcome the perception of structured political dialogue as instrument for criticising the ACP governments or as an obligation to be fulfilled in order to have continued access to EU funding, particularly for those highly dependent on EU aid and/or with closed political systems.

Limited and unsustainable development Progress on sustainable development continues to be patchy across ACP countries. Despite the good progress registered since the adoption of the MDGs, Sub-Saharan Africa remains the world's poorest region with more than 40% of the population still living in extreme poverty in 2015. The situation is not likely to improve: in fact, it is projected that the world's extreme poor will be increasingly concentrated in Africa. Many ACP countries still lag behind on key components of human development, yet again with noticeable inter-regional and intra-regional differences. More specifically, women and girls face strong inequalities in terms of access to social services as well employment opportunities. Although ACP countries currently figure among the lowest greenhouse gas producers, a steep growth in energy demand in the next decades , particularly in Africa, is expected to increase dramatically the polluting potential of the region. Moreover, the ACP countries are also home to a large share of the world's biodiversity and are particularly exposed to environmental degradation. In many countries, ecosystems and species are being destroyed or degraded under the pressures of growing global demand for land and commodities, large-scale pollution driven by economic and demographic growth and unsustainable consumption and production patterns. For instance, population growth is increasingly straining the world's limited supply of fresh water. The Cotonou Partnership Agreement has been essential in the promotion of human and social development across ACP countries, by supporting poverty reduction and addressing the needs of most vulnerable people. Nonetheless, much needs still to be done in a range of areas. For example, the CPA has hardly succeeded to put in place growth distribution policies, based on access to assets and not only to services by the poor . Also, strong commitments towards women's rights were not always matched by its organisational capacity to deliver, which resulted in country strategy objectives, programmes and dialogue that did not sufficiently consider a balanced gender approach. In terms climate change and environment sustainability, the CPA has contributed to raising awareness, yet the scale and duration of efforts has been largely insufficient to reverse environmental degradation and counter the powerful drivers underpinning it. The challenge is therefore to establish partnerships that address the needs of middle-income countries, including rising levels of inequalities, and fully support cross-cutting issues of environmental sustainability and gender equality. Incomplete and patchy integration into the world economy Economic performance in the ACP region has been remarkable, yet results differ by country and over time. In particular, most countries in Africa have experienced sustained economic growth since 2000, with growth rates often exceeding 5% per year, making this region among the fastest growing ones in the world. By contrast, the Caribbean and the Pacific regions have grown at rates below the world average . Part of the explanation resides in the increase in trade with the rest of the world, which trebled in the period 2000-2014. Intra-ACP trade flows, however, have remained relatively low, with an array of technical barriers and behind-the-border obstacles weighing on regional integration efforts. Moreover, many economies are dependent on primary commodities and are vulnerable to shocks, and on average are significantly less diversified than other developing countries, often due to their small size, geographical remoteness or landlocked situation. As a result, the ACP group has become very diverse, comprising some of the world's most resource-rich countries, some of the fastest growing countries and some of the poorest countries in the world. The Cotonou Partnership Agreement has supported specific actions towards a greater integration of the ACP States into the world economy and, in fact, ACP-EU trade has steadily grown since 2000. The ACP as a group has maintained a trade surplus with the EU over these years; the EU remains by far the main investor in Africa, well ahead of China and the United States. The CPA, nevertheless, has not fully been able to increase diversification and reducing commodity-dependency across ACP economies. Further efforts are therefore required to strengthen long-term sustainability of economic performance across different types of ACP countries. 1.2.2 Europe's growing security concerns and untapped economic potentials The interdependence between the EU and ACP partner countries is resulting in a range of new challenges and opportunities for EU citizens and businesses. This is the case for increased security issues and migration affecting EU societies. At the same time, more advanced ACP economies offer a range of new opportunities in terms of returns of investments. As further described in the next sections, the CPA has provided certain specific provisions to address such challenges and potentials, but has not been sufficiently effective in fostering these direct EU interests in its relation with ACP countries. Security concerns expected to grow A growing number of concerns, most of which originate in partner countries, are potentially threatening EU security and stability. These threats certainly include conflicts beyond the EU borders and international terrorism, but also other forms of organised crime, such trafficking of human beings, weapons and drugs, as well as piracy and cybercrime. Deteriorating security in several regions of sub-Saharan Africa, such as the Sahel or the Horn, pose a direct threat to Europe as Africa's immediate neighbour and main investor and trade partner. The EU also shares a number of security concerns (e.g. drug trafficking, organised crime) with the Caribbean and the Pacific. All these threats are by their nature transnational and therefore call for increased cooperation with third countries in order to improve vigilance and cease the activities of terrorist organisations. The CPA has included some specific provisions related to international terrorism, proliferation of weapons of mass destruction and the International Criminal Court. Yet, in light of recent escalation of international terrorism and various forms of organised crime, closer cooperation and more systematic and effective use of mechanisms established as well as use of more stringent mechanisms should be considered. Increasing migration flows Increasing pressure from higher levels of irregular migration to the EU borders is likely to stay with us over the coming decades, especially from Central Asia and Sub-Saharan Africa (West Africa and the Horn), in case of not adequate management of those growing flows. At the same time, migration represents an opportunity for countries in the EU, particularly those that face the prospect of ageing and rapid population decline. Current trends in ageing of European population are expected to continue in the future, resulting in greater decline of available active labour force with severe challenge for the EU economic performance as a whole. The Cotonou Agreement has provided a general framework for cooperation between EU and ACP countries in the area of migration, supporting dialogue, addressing human right issues including fair treatment of legally residing ACP nationals, and attempting to tackle the root causes of migration. However, implementation of specific provisions of the CPA (Article 13) has been weak and concrete migration related initiatives are mostly dealt with in bilateral or specific regional cooperation formats. Expiration of the CPA in 2020, though, may leave an unwanted vacuum. Untapped potentials for economic cooperation It has been estimated that in the next 10-15 years, 90% of the world's growth will come from outside Europe, so the EU has every interest in making sure that its companies remain competitive and are able to access new markets and benefit from these sources of growth. For instance, statistics on internationalisation show that only 13% of Europe's small and medium-sized enterprises (SMEs) are exporting beyond EU borders . The EU's strategy for its own development – the Europe 2020 strategy – is based on close relationship with the business and relies on private sector investments in many areas. Advanced ACP economies have a role to play as EU strategic partners to achieve with greater success the EU's own growth, jobs and investment agenda through trade and investment or through sector cooperation . The Cotonou Partnership Agreement has been instrumental in fostering trade cooperation between the EU and the ACP. ACP-EU trade has steadily grown since the signature of the CPA in 2000, regardless of the global financial and economic crisis, and trade flows with the ACP more than doubled in the period 2000-2014. The CPA, by contrast, has been less successful in generating investment opportunities in sectors that are vital for growth and job creation. ACP countries remain in need of a transparent, stable and rules-based business climate. The Economic Partnership Agreements (EPAs) contribute to respond to such needs by creating a stable and predictable framework for trade relations. 1.2.3 Insufficient recognition of deepened regional dynamics within and beyond ACP Within the ACP Group there has been a growing differentiation of economic, political and social development patterns, in particular between "booming" middle-income countries and least developed countries and fragile states. Importantly Africa, the Caribbean, and the Pacific have increasingly been facing specific geopolitical, economic and development challenges. For instance, migration and security are central to the EU's relations with Africa, whereas climate change is crucial for Caribbean and Pacific countries. Some of the issues of pivotal relevance for the EU require stronger involvement of a range of actors placed outside the ACP region. This is the case when addressing relevant migration and security issues, which in Africa requires the involvement of Northern African partners, not part of the ACP group.

The Cotonou Partnership Agreement has recognised and supported the increased role of regional formats. Importantly, the EU and ACP countries have developed a number of policy frameworks and agreements based on regional dynamics (notably the Joint Africa-EU Strategy , the Joint Caribbean-EU Partnership ). These regional dynamics, including countries beyond ACP, are not fully reflected into the current CPA approach, thus limiting its effectiveness in a range of crucial policy areas (e.g. migration, poverty eradication, and fight against terrorism). 1.2.4 Rising global challenges and challenged multilateralism Globalisation increases interdependence amongst all actors, often pursuing different values and agendas. Effective global governance requires the ability of all parties to foster policy dialogue and reach consensus around key common interests. Increasing pressure of global challenges, therefore, calls for strong international cooperation (e.g. action on climate change, conflict resolution or free world trade). The mounting political and diplomatic influence of emerging powers such as China, Brazil or India, notably in developing countries, affects the EU's capacity to promote and diffuse its political values. Mobilisation of multi-lateral alliances is therefore an essential tool to foster EU values and goals at the global level. The EU is committed to rules-based effective multilateralism, with the United Nations at its core. Regional groupings and structural alliances within the UN context are becoming more important in a multi-polar world, but have sometimes competing agendas affecting the EU. Outcomes of international negotiations are not always fully in line with EU interests or ambitions. Against this background, as shown by the negotiations at the COP21 on climate change, focus should be on building strategic alliances with partner countries on topics of common concern (e.g. climate change, blue economy, fight against illicit financial flows) where the ACP might have potentially more common interests with the EU than with the G77. Recently, ambitious global action has been undertaken to address global challenges. In this respect, the 2030 Agenda for Sustainable Development has set the framework for collective action for the next 15 years, and the Paris Agreement under the United Nations Framework Convention on Climate Change agreed in December 2015 has solidified international cooperation for climate change and provided a way forward towards a more sustainable future. Nonetheless, a major and recurring limitation in today's global governance architecture is the gap between ambitious commitments taken in various international fora on a series of global issues and their implementation, including accountability mechanisms. Again, strong alliances with partner countries are required to avoid the lack of implementation. The Cotonou Partnership Agreement was not initially designed to tackle global challenges. Successive revisions, however, have introduced provisions on issues that transcend national borders (e.g. peace and security, migration, terrorism, climate change). Moreover, the EU-ACP interactions on global issues have materialised in the adoption of many joint resolutions, declarations or statements on issues such as food prices, global financial crisis, aid effectiveness, climate change, post-2015 global development framework. However, often these joint positions have not translated into concrete actions. On some global challenges of interest to the EU the ACP contains the large majority of, but not all, members of other international alliances (e.g. LDCs, SIDS). Crucially, the negotiations at the COP21 on climate change have shown that building strategic alliances on topics of common concern positively affect outcomes in international negotiations. 1.2.5 Insufficient inclusion for all stakeholders beyond national governments Civil society organisations and local authorities, along with parliaments, are essential in building and consolidating the foundations for broad-based democratic ownership of cooperation policies and processes that are at the basis of inclusive and sustainable development. However, their effective contribution is hindered by the lack of organisational and human capacities and resources. Moreover, limited possibilities for dialogue still prevail in many countries where space for civil society organisations is reduced or reducing as a result of an increasing number of restrictions. The Cotonou Partnership Agreement has provided a framework for a broad and inclusive relationship that goes beyond national governments, by recognising the role of parliaments, local authorities and non-state actors (civil society, private sector, trade unions) in development. It has formalised their role both in the conduct of political dialogue and in the programming and implementation of cooperation programmes. However, the level of participation of several of these actors has been too limited and varies largely from one country to another. In a number of countries, EU support has been particularly successful in contributing to strengthening NSAs and in developing their capacity to participate in policy dialogue with government. The lack of common understanding of the role of NSAs and agreed rules for a regular dialogue are often pointed out as the main shortcomings of the CPA. The CPA's effectiveness for promoting participatory action has been criticised, mainly because of the gap between principles and practises and the fact that mechanisms for ensuring full participation in the partnership have essentially been established on an ad hoc basis. Insufficient efforts have been put to ensure more transparent and inclusive governance systems, including greater and real involvement of democratic institutions (i.e. local, national and regional), CSOs and the private sector. As a result, the role of non-state actors and local authorities as political interest groups, and not only implementing partners, has not been sufficiently acknowledged. 2. Why the EU should act The legal basis for an international agreement is provided in Articles 209(2), 212(3) and 217 of the Treaty on the Functioning of the European Union. They specify that the Union may conclude with (developing) third countries and competent international organisations any agreement helping to achieve the objectives referred to in Article 21 of the Treaty on the European Union (TEU), which is part of the common provisions on the Union's external action, and in Article 208 of the Treaty. On that basis, the EU may conclude agreements establishing an association involving reciprocal rights and obligations, as well as cooperation agreements with third countries other than developing countries (as the case might be for some ACP countries). The challenges and opportunities faced by Europe, as described in Chapter 1, demand a comprehensive and joined-up approach. Thanks to its broad set of instruments and critical mass, the EU is well placed to confront the challenges and seize the opportunities ahead. Coordinated action by the EU as a whole has an added value that, in terms of policy and financial leverage, is bigger than the sum of individual EU Member States (MS) actions. EU added value in this respect has been demonstrated in the CPA evaluation. Given the broad policy scope and the number of partners involved, a similar comprehensive approach is unlikely to be achieved by EU MS alone. Furthermore, the global network of EU delegations ensures a political presence in countries where some Member States are not present. In addition, some policy areas are of exclusive EU competence, notably trade. EU action will thus achieve better results than if Member States were to act individually. In addition, a number of mechanisms are in place (e.g. joint-programming), allowing for EU MS to take direct action on specific areas in specific countries or regions if better placed than the EU. This initiative pursues directly the Union's objective in external action as in Article 21 of the Treaty on European Union and contributes to the political priority of 'EU as a stronger global actor'. The specific external action political priorities are further defined by the EU Global Strategy and the EU Consensus for Development which is currently being reviewed, as well as relevant sector EU policies. The main objectives are to guarantee security and to build resilient societies beyond the EU through the implementation of the Sustainable Development Goals, as well as to provide for more effective global governance. These strategies take into account the international commitments made through the 2030 Agenda and the Paris Agreement on Climate Change. As stated by the EU Global Strategy, to attain these priorities the EU needs to engage with others and revamp its external partnerships, in a responsible way. In the pursuit of the EU goals, it has to reach out to states, regional bodies and international organisations. It has to work with core partners, like-minded countries and regional groupings. It has to deepen its partnerships with civil society and the private sector as key players in a networked world. 3. Objectives 3.1 General objective The general objective is that of shaping relations with partners in Africa, the Caribbean and the Pacific as to best achieve the EU's strategic interests.

3.2 Specific objectives in response to the identified problems The specific objectives define how the EU should best organise and govern its relations with ACP countries with the view to promoting EU security and prosperity, and providing more effective global governance, taking into account the changed global context and the lessons learned from the CPA evaluation. 3.2.1 Foster sustainable development in ACP countries A strong European Union requires action towards the achievement of the sustainable development goals across ACP countries (and beyond). Major efforts are needed to tackle the intertwined challenges of eliminating poverty, improving well-being and ensuring that such progress is sustainable. The EU has committed to implementing the 2030 Agenda, both internally and in its external policies: all its policies and instruments should therefore be fully in line with this new framework. 3.2.2 Enhance EU security and economic prosperity A strong European Union requires resilient states beyond its borders. Many threats and challenges to which the EU and its Member States are directly confronted find their origin in other parts of the world. At the same time, growing markets in ACP countries provide economic opportunities for EU businesses. The EU should therefore ensure that future relations with ACP countries support addressing growing security concerns and seizing untapped economic opportunities. 3.2.3 Encompass evolving regional dynamics within and beyond ACP A strong European Union calls for more tailored actions in support of regional dynamics, with the view to better targeting regional specificities. In this regard, cooperation with formal and ad-hoc regional formats must be pursued in order to serve interests more effectively on economic matters and in the areas of peace and security and migration. 3.2.4 Ensure stronger alliances in addressing global challenges A strong European Union requires the ability of building strategic alliances with the view to tackling the rise of global challenges and strengthening the role of the EU in the international arena. More specifically, the EU must be able to better draw on the diplomatic capital that reinforced cooperation with ACP countries could offer in various international contexts and ensure that ambitious commitments at the global level do not fall short at the implementation stage. 3.2.5 Strengthen inclusive participation of stakeholders at various levels A strong European Union implies an enhanced ability to build multi-stakeholder partnerships. More specifically, the EU must ensure more inclusive involvement of a range of different actors, including civil society organisations, parliaments, local authorities, as well as the private sector. In doing so, the EU will support the achievement of the Sustainable Development Goals, and at the same time provide for more transparent and inclusive governance systems. 3.3 Overview of intervention logic The table below provides an overview of the main elements of the intervention logic. Through an analysis of the evolving context and the evaluation of the current EU-ACP partnership, the general and specific problems (Chapter 1) are identified. These problems, together with the EU interests, form the basis for setting the general and specific objectives (Chapter 3). As to best reach these objectives, different possible options in organising and governing the relations with the ACP countries (Chapter 4) are explored. Table 3.1 Overview intervention logic 3.4 Consistency of objectives with relevant EU policies The specific objectives listed above are all consistent with the objectives and principles of the Union's external action as set out in the EU Treaty on European Union and President Juncker's priority of the EU as a stronger global actor. They are aligned with the political priorities defined by the EU Global Strategy and EU development cooperation policy, as set by the proposal for a new European Consensus on Development and the Agenda for Change, as well as in sector policy areas (e.g. human development, private sector development, climate change). Moreover, the objectives are in line with the EU commitment to Policy Coherence for Development (PCD), as they take into full consideration the interests and needs of developing countries, including the group of LDCs. 3.5 Positions emerging from various stakeholders

Problems and objectives identified in this Impact Assessment have been largely discussed by stakeholders through a range of formal and informal exchanges promoted through time, including a public consultation. A general consensus has emerged on the fact that some changes must be made to the existing Cotonou Partnership Agreement. Many stakeholders have put forward the need to support ACP partners in the implementation of the Sustainable Development Goals and jointly act to address global challenges including climate change. The importance to strengthen EU interests, specifically in the areas of security and migration, has been mentioned by several EU Member States. A shared request also emerges for a greater inclusion of non-state actors, as well as local authorities and parliaments, in the implementation of the partnership. Looking at key aspects on how a future relationship should be organised, some stakeholders call for a renewed and improved partnership, other suggest that ACP-wide agreements are no longer reflecting regional dynamics, and many are in between these two opposite viewpoints. Still, a general consensus emerges on the need to take into account regional dynamics and the evolving regional partnerships at regional and sub-regional levels. A less homogeneous position emerged on the inclusion of new non-ACP possible partners, with some suggesting the need to fully include non-ACP LDCs and Small Islands Developing States (SIDS), and other (often the case for Member States) mostly keen on focussing on the sole ACP countries in case of a renewed agreement. Importantly, many stakeholders in favour of a renewal of the EU-ACP partnership underline the fact that the legally-binding nature of the agreement has been instrumental to its implementation and as such should be still considered in the future. 3.6 ACP Group views Over the past few years, the ACP Group has launched a series of initiatives with regard to its own future and that of the ACP-EU partnership. At the ACP Summit in 2012, the ACP Heads of State and Government have affirmed that they are determined to 'stay united as a group' , while at the same time acknowledging the need to reposition and transform itself into 'a dynamic and effective inter-governmental organisation fully responsive to the global challenges of an unsettled and multi-polar 21st century' . The most recent ACP summit held on May 2016 in Port Moresby, Papua New Guinea, has reiterated the added value of the ACP as Group to address internal challenges as well as in playing an increased role in the international arena. The summit outcome document states that the strength, unity and solidarity among their States is an essential element in sustaining the future of the countries in a changing world of challenges and opportunities, by becoming influential players in shaping more sustainable global governance. It also specifies the objectives of 'improving the living standards of its people through good governance, preservation of peace and security, social justice, entrepreneurship, building capacities in the private sector, […] sustainable development as well as through South-South, North-South and Triangular Cooperation'. The view of the ACP countries on the future relation with the EU after 2020 is particularly addressed in the PNG Summit Waigani communiqué, with three key messages. The communiqué states that the ACP-EU partnership provides a good basis that should be consolidated through an established, comprehensive, and legally-binding framework . It further expresses specific commitment to the principles of subsidiarity, complementarity and proportionality in order to more effectively complement the efforts of the international community as well regional economic communities and regional integration organisations in the pursuit of sustainable development. It seeks as well to leverage the ACP Group's strength in numbers and outreach to participate in, and contribute more effectively to, global governance institutions and fora. 4. Policy options 4.1 Screening of all options The evolving global context, the shortcomings identified in the CPA evaluation and the updated EU interests, have casted doubts upon whether the current EU-ACP partnership could be the best format to meet the new objectives. Starting from the current CPA as the baseline scenario, several alternative options have been considered taking into account the consultation process and a mapping of stakeholder positions (see section 3.5 and 3.6). Each of these options has been preliminary matched against the five specific objectives. As explained further, it immediately emerged that some fell short in allowing meeting one or more objectives and therefore they could not be selected for further assessment. Other proposals, by contrast, have been deemed more likely to meet, to different degrees, the five objectives and therefore have been subject to full assessment. Alternative options considered A first alternative to the baseline scenario implies no EU action at all. The assumption is that the absence of a single formalised agreement between the EU and the 79 ACP countries when the existing partnership expires in 2020 represents the best way to reach the envisaged objectives. In support of this, some stakeholders have claimed that the three ACP regions have not enough in common that holds them together as they have increasingly been facing different sets of problems. Moreover, the argument runs, the EU-ACP framework has gradually lost relevance, in that substantive decisions that pertain to ACP countries are taken in other contexts. Importantly, continental/regional organisations with allegedly more political authority and legitimacy have been playing a more prominent role in the three continents – and this trend will be likely reinforced in the future. Therefore, adopting a specific partnership with such a diverse group of countries may not be an efficient policy choice. A second alternative takes into account the fact that a number of features have made the EU-ACP partnership a successful model for a contractual relationship. This approach, therefore, supports the idea of preserving a comprehensive partnership comprising a number of inter-linked areas of cooperation, but at the same time proposes to significantly adapt it to the new reality and align it to the new objectives. The goal is to move EU-ACP relations beyond a mainly development perspective towards a stronger political partnership, based on shared values and mutual interest, which could ensure more security and prosperity for the EU. This scenario of new partnership, building on the evaluation outcomes and the consultation process, includes three sub-options, which differ in terms of the extent to which they take into account the intensification of regionalisation dynamics and enable the association of new partners to best meet the envisaged objectives. Alternative options discarded A number of additional options have emerged across the consultation process and/or have been advanced by relevant stakeholders in various contexts. Each of these proposals has undoubtedly some merits but, due to evident limitations in the achievement of all identified objectives, has not been further considered for assessment. Ad hoc agreement with thematic approaches This option implies that the EU would take a thematic approach, targeting specific challenges (e.g. peace and security, migration, climate change, food security) in specific groups of concerned countries, thus abandoning the existing EU-ACP framework. In doing so, this option could help promote various EU interests on ad-hoc basis, but would prevent the adoption of comprehensive approaches towards a broader range of partner countries. It would result in a loss of the positive aspects of the CPA highlighted by the CPA evaluation (e.g. commitment to agreed principles and values, coherent approach, structured political dialogue). It would also weaken the role of the EU at the global level in that it assumes that partner countries would positively respond to the invitation of the EU to work together on specific areas of interest to the EU. Finally, it would meet the opposition of the ACP countries. Partnership with Least Developed Countries only This option proposes to bring together the LDCs that belong to the ACP group and those that do not (situated in Asia). In doing so, it would facilitate targeted actions (most notably on aid and trade) for this poorest group of countries in the world. However, it would fail to support the EU in the achievement of a broader range of EU interests (i.e. security, migration) in a larger group of countries (e.g. middle-income countries). It would also weaken the role of the EU at the global level by reducing the scope for strategic alliances with a larger group of countries. Similar arguments can be made for specific policies towards SIDS or MICs.

Partnership with African countries only This option proposes to bring together all countries in Africa, which are currently covered under different instruments and policies. In doing so, it would enable a more coherent, continental, approach towards both sub-Saharan and North Africa countries as well as South Africa and would help achieve some goals in certain policy areas (particularly on peace and security and on migration). These benefits, however, are also present in alternative options considered. This option would result in no agreement with countries in the Caribbean and Pacific and would lead to the loss of the positive aspects of the CPA highlighted by the CPA evaluation (e.g. commitment to agreed principles and values; coherent approach; structured political dialogue). More importantly, by reducing the scope for strategic alliances with a larger group of countries, it would weaken the role of the EU at the global level. This option would encounter opposition of the Caribbean and Pacific regions. 4.2 Description of the baseline scenario The baseline scenario assumes the continuation of the status quo (that is, the CPA as it currently stands) after 2020. In fact, the preparatory process and the evaluation have revealed that the CPA has obtained significant results as compared to its objectives. However, the uneven development of countries, the increased prominence of regional actors and policy frameworks, the rise of a number of global challenges, the threats to inclusive governance processes suggest not only that the current CPA would no longer be fit for purpose when it expires in 2020, but also that without significant changes the problems identified in Section 1 would worsen. Furthermore, the evaluation has pointed to a number of weaknesses with regards to principles and values, some implementation mechanisms to promote EU interests, and the system of co-management that require attention. The current CPA settings, based on a single agreement without regional diversification, would also ingenerate further inconsistencies with respect to the different regional priorities and objectives as defined in Africa, Caribbean and the Pacific. On the one hand, in fact, the 2007 Joint Africa-EU Strategy (JAES) has given significant prominence to political aspects (notably peace and security, migration) and sustainable development. On the other hand, in the 2012 Joint Caribbean EU Partnership Strategy (JCES) and the 2006 Strategy for a Strengthened Partnership with the Pacific Islands (SfPI), emphasis has been placed on issues such as climate change, environment, disaster management and sustainable energy, reflecting the specificity and needs of these regions and their environment-related vulnerabilities. When projected into the future, the baseline would largely fail to address a range of challenges across the identified specific objectives. It would fail to fully incorporate the changing development paradigm built around the Sustainable Development Goals (Objective 1). Moreover, it would be insufficient to deal with increased migration pressures and would not be able to promote strongly enough private sector development and EU investments abroad, thus failing to answer to the growing EU concerns for enhanced security and prosperity (Objective 2). It would also be inadequate to deal with the increased regional dynamics and heterogeneity between ACP countries (Objective 3). Importantly, the evaluation has pointed to the fact that the CPA was not designed to deal with global challenges. Despite its potential to engage with ACP countries on a range of areas of mutual interest, an update of the existing provisions and ways of working would be necessary to effectively tackle global challenges and build alliances in international fora (Objective 4). Finally, the CPA evaluation has shown that EU-ACP relations have suffered from the existence of overlapping policy frameworks, at time ineffective political dialogue, and limited involvement of non-state actors (Objective 5). Should the existing CPA be extended when it expires in 2020, some problems of a more operational nature (e.g. funding mechanisms, joint institutions, NAO system) outlined in the CPA evaluation would make the EU-ACP partnership more ineffective. 4.3 Description of the selected alternative options The description of the proposed alternative options is structured as follows: 'What' section – which looks at the scope and goals being pursued; 'Who' section – which looks at the involvement of existing partners (i.e. ACP countries) and key stakeholders (i.e. continental and regional organisations, non-state actors, local authorities, parliaments); 'How' section – which looks at the set-up of the relations, potential extension to new partners, reform of institutions and procedures, and legally-binding nature in case of partnership. Option 1. No partnership This option assumes that no specific partnership is required after 2020, as the existing EU policy and strategies are well suited to fully achieve the five objectives. Future relations with the ACP countries after 2020 will be based on existing EU thematic and regional initiatives and the application/implementation of international agreements subscribed by the EU and its partner countries. What The policy of EU relations with the ACP countries is based on the combination of existing documents/strategies, some taking a thematic, others a geographic approach. Amongst those: The new EU Global Strategy adopted in June 2016, providing a clear political framework, with guidelines for action, while remaining sufficiently flexible to respond to changing realities. The envisaged revision of the European Consensus on Development providing the EU's vision on international development, the alignment with the Sustainable Development Goals and the evolving global agenda on development effectiveness. Existing trade policies will be applied to the ACP countries as well as the external dimensions of existing EU policies on many areas such as agriculture, research, education, etc. The three regional strategies for Africa, the Caribbean and the Pacific, proposing specific actions tailored to the different geographical contexts, as discussed in the baseline.

Who EU relations with the 79 countries that currently form the ACP group will break up into the groups covered by the different strategies that the EU has adopted for the three regions: 48 African countries will fall under the 2007 Joint Africa-EU Strategy; 16 Caribbean countries under the 2012 Joint Caribbean EU Partnership Strategy; 15 Pacific countries under the 2006 EU Strategy for a Strengthened Partnership with Pacific Islands. Some ACP countries would cluster around existing means of implementation. In particular, the 39 states that belong to the LDCs group would continue to benefit from the special provisions on trade (Everything But Arms initiative) and aid (i.e. on the basis of the differentiation principle) dedicated to this specific group of countries. National governments will remain the primary interlocutors of the EU, but regional organisations of the Caribbean, Pacific and within Africa may keep gaining prominence. Relations with key stakeholders will fall under the general approach that the EU has taken towards civil society organisations and local authorities . How In the area of development cooperation, three possibilities can be envisaged, although there is currently no legal or political basis for these and much will depend on the discussions for the next Multi-annual Financial Framework: 1. The existing European Development Fund could possibly be continued as an intergovernmental agreement among Member States to finance the geographic cooperation with ACP countries (in which case the current system would continue to exist outside the EU Budget); 2. The ACP countries would be covered by the successor of the Development Cooperation Instrument (DCI) – if co-legislators so decide on the basis of a proposal from the Commission – in which case the relevant budget would need to be substantially increased (the total resources of the current EDF amount to EUR 30.5 billion for the years 2014-2020); 3. A new instrument under the EU budget for cooperation with ACP countries could be created. As is already the case today, ACP countries would be eligible for cooperation under other external financing instruments under the Union's general budget (e.g. thematic programmes under the DCI, Instrument contributing to Stability and Peace, Human Rights and Democracy Instrument), supposing they continue after 2020. As for trade, ACP-EU trade relations have been gradually moving from a specific non-reciprocal trade regime to WTO-compatible Economic Partnership Agreements. Apart from EPAs and the related Market Access Regulation, there is no specific trade policy instrument for the ACP, but they are treated on par with other countries at the same level of development through the EU's Generalised Scheme of Preferences (GSP) which includes the Everything But Arms (EBA) for the LDCs. As for political affairs, relations with the ACP countries from Africa and Caribbean will be based on existing political declarations: the Joint Africa-EU Strategy and the Joint Caribbean EU Partnership Strategy. An important limitation to address is the fact that no such framework is currently in place for the Pacific countries. Further developments would also be required, with respect to the capacity of existing regional fora, to ensure the stronger decision-making mechanisms needed to effectively replace the current CPA structures. Political dialogue with countries will therefore be based on ad-hoc arrangements, with no legally-binding commitment available in the absence of the overall CPA framework. The current provisions of Article 8 and Article 96 CPA (essential elements clause and appropriate measures) would cease to exist. In the area of peace and security, the African Peace Facility (APF) is the most important instrument for the promotion of peace and security in Africa. It was created on the basis of Article 11 of the CPA, since it allowed dedicating EDF money to cover military or defence-related expenditure, while this was considered not possible under the EU budget (Article 41.2 TEU). Without its legal (CPA) and financial (EDF) framework the APF would cease to exist. With regard to the institutional and procedural shortcomings highlighted in the CPA evaluation, no particular change would be considered under this option as the whole EU-ACP framework would disappear altogether (including joint institutions, joint management, etc.). Table 4.1 Overview of Option 1 Option 1 What General principles derived from: EU Global Strategy European Consensus on Development/Agenda for Change External dimension of EU existing policies Geographic strategies Who Partners ACP countries but not as a group Stakeholders General principles for relations with: NSAs, LAs, and parliaments from ACP countries Continental/regional organisations How Procedures Existing procedures Architecture No agreement with ACP group Existing strategies for Africa, Caribbean, and Pacific regions

Option 2. New partnership with ACP countries This option assumes that a new partnership agreement between the EU and the countries of Africa, the Caribbean and the Pacific would be adopted. The framework of general principles of EU external action and specific EU policies discussed above in the case of 'no partnership' are fully applicable to this scenario as well. But a partnership agreement goes further in the sense that the partner countries agree and commit to working together towards certain objectives. Looking at the 'new partnership' option, there are three sub-options identified with the view to best meet the five specific objectives. All sub-options differ in the same way from the baseline scenario with respect to new content ('what') and actors ('who') considered. Nonetheless, in order to achieve the objectives the three sub-options differ in their organisational design ('how'). Descriptions of 'what' and 'who' hereby are therefore applicable to all sub-options, while the 'how' is detailed for each sub-option. What The new partnership departs from the scope of the CPA, focused primarily on poverty eradication and integration of ACP countries into the world economy, to promote a partnership with more encompassing objectives, based on shared values and mutual interests. Importantly, the EU would be expected to better promote its economic and political interests more clearly than the current CPA. In line with Objective 1, this option is aligned to the goals internationally agreed as part of the 2030 Agenda, and proposes a more targeted yet diversified approach to sustainable and inclusive development in ACP countries. The promotion of human and social development will continue to feature prominently, but the new partnership will differentiate actions across different types of countries. In line with Objective 2, this option includes a number of more stringent provisions to promote EU security and prosperity (while preserving the key values and principles of the CPA). These provisions are expected to tackle rising security challenges for the EU, particularly in the area of international terrorism and organised crime and to tackle migration challenges through return and readmission and provision of possibilities for legal migration. Moreover, they will set the right conditions for increased EU investment, particularly by small and medium-sized enterprises, to address the fact that various stakeholders want to see more economic opportunities from the EU's new relations with ACP countries. Who The new partnership will include the current 79 ACP countries but, as explained further, it allows for reaching out to new members, notably to the nine non-ACP member of the group of LDCs (total LDCs is 48); the six non-ACP members of the group of SIDS (total SIDS is 37), and the 5 countries in Northern Africa (total Africa is 53). As regards the latter, this should not impact on their neighbourhood status and association agreements with the EU. The purpose of such geographical extension is to create the most appropriate geographical scope for engagement with a group of countries to reach the five objectives. Governments in partner countries will continue to be the main interlocutors for the EU at the national level. However, in line with Objective 5, the new partnership will take a more comprehensive approach and advance the principle of democratic ownership by effectively involving other actors besides central governments (and in doing so, it will respond to one of the main criticisms emerging from the consultations and the evaluation, that these actors have been inadequately involved). The new partnership will thus improve mechanisms to allow for greater participation of different types of non-state actors, such as civil society and economic and social partners, including the private sector and trade union organisations, in development planning as well as political dialogue. It will also include new provisions to facilitate the further involvement of other state-linked actors, notably regional organisations, national parliaments, and local authorities. How Three alternative variations to the new partnership option are considered to see the extent to which the objectives are more likely to be met either with all ACP countries, or rather through more regionalised approaches (Objective 3). At one side (Option 2.1) some stakeholders, as well as the evaluation, have pointed to the fact that the current format rather than being dismantled should instead be improved. In their view, this option offers a familiar framework, which has been able to deliver significant results and, once scope and procedures are upgraded, it would be capable of reaching all five objectives. At the other side, a large number of stakeholders claim that the heterogeneity of ACP countries, the increased prominence of continental and regional organisations, and the fact that important decisions have been taken in (competing) frameworks beyond the current EU-ACP partnership call for a radical change. In their views, the new partnership should embrace deepened regionalisation dynamics to address problems at the most appropriate level. The IA looks into the extent to which EU-ACP relations would have to be fully regionalised (Option 2.2) or whether some objectives – expectedly Objective 1, 2, and 5 – are better pursued at regional level and other objectives – expectedly Objective 4 – at all-ACP level (Option 2.3). More specifically: Option 2.1: Revised common agreement (all ACP countries) This option preserves the current institutional design, as a means to address a broader range of objectives (WHAT) and stakeholders (WHO) with respect to the current baseline, with one agreement to be signed only at all ACP countries' level. However, it will no longer be structured along the three pillars that have characterised the CPA. Instead, it will include a first section identifying common values, principles and actors, and a second section specifying a wide range of cooperation areas applicable to all ACP countries and some new provisions for collaboration in the international arena (Objective 4). Option 2.2: Separate regional agreements (Africa, Caribbean and the Pacific) This option entails three separate agreements with three regions (Africa, Caribbean, and Pacific). Also in this case, each new regional partnership will go beyond the three pillars of the CPA. Moreover, it will include a first section identifying common values, principles and actors, and a second section specifying a targeted number of areas of cooperation tailored to regional specificities, as well as some provisions for a potential collaboration in the international arena (Objective 4). Option 2.3: Three separate regional partnerships under a common umbrella.

This option foresees one agreement with ACP countries, but has two components: i) an overarching umbrella listing common values, principles and interests, and identifying avenues for cooperation in the international arena (Objective 4); ii) three separate regionalised partnerships with countries in the three regions (Africa, the Caribbean and the Pacific), detailing specific priorities for the three regions, with the view to better tailoring actions to specific contexts. The three options vary in terms of how they facilitate reaching out to new partner countries and the extent to which such outreach help address one or more aspects of the five objectives. More specifically, countries in North-Africa have increasingly become crucial to addressing migration issues as well as other challenges to stability that have spill-over effects on the EU (Objective 2). Opening up to the non-ACP members of the groups of LDCs and SIDS could help promote a more targeted and coherent development approach based on different types of country vulnerabilities (Objective 1). Importantly, reaching out to the three groups (i.e. countries in North Africa, LDCs and SIDS) could provide the EU with additional diplomatic capital to tackle global challenges and promote its interests and values in various international fora (Objective 4). The three options share a number of features as well, specifically the fact that they are legally-binding and that they will be subject to significant operational and administrative improvements. The evaluation and the consultation process have highlighted the fact that the legally-binding nature of the CPA has been instrumental to achieving a number of goals. In particular, it has ensured stability and predictability, has facilitated the respect of the essential elements of the partnership through enhanced political dialogue, and has guaranteed a platform for the enforceability of international trade agreements, which is crucial for generating confidence in investors. Moreover, the new partnership sets to make adjustments to some of the current tools and instruments. This responds to various contributions to the consultations and to the recommendations of the CPA evaluation, which have pointed to the complexity of management rules and procedures as obstacles to effectiveness and efficiency. For instance, the general principles of co-management – which has proven important for planning and implementation of development assistance – will be preserved, but the National Authorising Office (NAO) system will be reviewed to streamline procedures and enhance partner ownership. In the same vein, changes will be made in the existing joint institutions, with the view to facilitating closer collaboration in areas that cut across countries and better engagement between the EU and the ACP countries in international contexts. Table 4.2 Overview of Option 2 and its sub-options Option 2.1 Option 2.2 Option 2.3 What Promoting sustainable and inclusive development Enhancing EU interests of security and prosperity Encompassing regional dynamics Tackling global challenges Who Partners ACP countries LDCs, SIDS, North Africa countries Stakeholders Empowered NSAs, LAs, and parliaments from ACP countries Stronger engagement with continental and regional organisations, and possibly third countries, and private development actors How Procedures New procedures (i.e. improved co-management, stronger political dialogue) Architecture 1 agreement for all ACP countries 3 agreements with the three regions (A, C, P) 3 regional partnerships (A, C, P) under a common umbrella 5. Analysis of impacts 5.1 Identification of relevant impacts The general and specific objectives led to the identification of a number of options to organise and govern the relations with ACP countries. These options have political, social, economic, environmental and administrative impacts in many domains, which are described below. The different domains looked into for each type of impact are those deemed as critical under the specific problems section. Table 5.1 Relation between objectives, policy options, and areas of impacts Objectives Policy Options Areas of Impacts General Specific Shape relations with partners in Africa, the Caribbean and the Pacific as to best achieve the EU's strategic interests Foster sustainable development in ACP countries Enhance EU security and economic prosperity Encompass evolving regional dynamics within and beyond ACP borders Ensure stronger alliances to address global challenges Strengthen inclusive participation of stakeholders at various levels Baseline: CPA Option 1. No partnership with ACP countries Option 2. New partnership with ACP countries Option 2.1. Revised common agreement (all ACP) Option 2.2. Separate regional agreements (Africa, Caribbean and Pacific) Option 2.3 Three regional partnerships under a common umbrella Social Sustainable and inclusive development Migration-development nexus Enhanced participatory approach to cooperation Political Peace and security Democratic governance and human rights Alliance building at the global level Economic Trade cooperation Macro-economic stability, investment returns and private sector development Environmental Environmental protection and climate change Budgetary and administrative The assessment is conducted only on those domains that are expected to show variation in terms of change across the various options. In a number of other important domains the choice of the option is not expected to produce significant change vis-à-vis the baseline scenario and therefore no assessment is carried out. The analysis of the various types of impact will then be used in Section 6, to ascertain which of the options best meets the objectives according to the criteria of effectiveness, efficiency and coherence. Specificities amongst Options 2.1, 2.2 and 2.3 are provided only when (and to the extent which) they are relevant for the analysis of the specific impacts to be assessed. 5.2 Social impacts Sustainable and inclusive development The adoption of 2030 Agenda, and the related 17 Sustainable Development Goals, has marked a substantial change in development thinking and practices. By integrating the three dimensions of sustainable development (social, economic, and environmental) and by advancing a universal approach, it has crystallised the idea that current challenges are affecting all countries and all should contribute to its implementation through collective action. To support the implementation of 2030 Agenda, the Addis Ababa Action Agenda (AAAA) has called on the international community to put in place a diversified set of measures – certainly official development assistance but also other private sources, including domestic resource mobilisation in developing countries. The implementation of 2030 Agenda is expected to generate substantial direct social impacts, with respect to eradication of poverty, access to health, sanitation and education services, as well as fighting of inequalities and gender discrimination. Indirectly though, due to its multi-dimensional approach, it is also expected to have a significant environmental impact, by urging parties to take concrete actions fighting climate change and environmental degradation, as well as economic impact, by setting the conditions in place for sustainable economic growth. The CPA has contributed to making substantial progress on human and social development, but has been less successful in tackling the root causes of poverty and inequality. Moreover, it has not been able to ensure a diversification of approaches, nor has it acted as a catalyst for mobilising a wide range of development funding resources. To be consistent with 2030 Agenda, the CPA should cater for more flexible and differentiated – but also tailored – partnerships for countries and regions, allowing for a wide spectrum of cooperation possibilities.

Option 1 The absence of a partnership does not mean that the EU will no longer engage on sustainable development with its ACP partners. The EU has committed to implement 2030 Agenda (SDGs) through its internal and external policies, ensuring Europe's economic growth and social and environmental sustainability, taking into account the Europe 2020 review. This strategy is to be presented in 2016. Nevertheless, this option presents some significant weaknesses, which may slow-down the achievement of the 17 SDGs. First and foremost, it will discontinue and likely damage an established relationship with a large number of countries that are crucial for a more effective implementation of the 2030 Agenda. Second, the abandonment of an established partnership with a diverse group of developing countries such as the ACP group – which cuts across key groups such as LDCs, SIDS, MICs – will significantly reduce opportunities of coalition-building to tackle global challenges in multilateral fora. Third, the lack of comprehensive approach cutting across different policy areas will increase the risk that the social pillar is treated separately from other sectors rather than integrated within all interventions in order to maximise the contribution of these interventions to people's lives: indeed human development contributes as well to growth and to peaceful societies. Finally, since challenges cannot be solved by individual states alone, mobilising and engaging all stakeholders (civil society and private sector) in collective action is needed: the lack of a formalised partnership which includes the most comprehensive framework for non-state actors does not give the possibility of creating these much needed multi-stakeholder partnerships. In sum, the EU's attempt to implement the 2030 Agenda could be significantly undermined if activities were to fall under different partnerships and instruments. Option 2 A new partnership will build on the significant achievements of the CPA on human and social development and on shared international commitment of EU and ACP countries to achieving sustainable, resilient and inclusive development. The new ACP-EU partnership is therefore meant as an strong framework to implement the general EU vision in an integrated manner by bringing together, in one single comprehensive agreement, (i) the economic, social and environmental aspects of the 2030 Agenda, as well as the additional political dimension characterising the long-standing ACP-EU relations; and (ii) the necessary means of implementation to effectively achieve each of the 17 SDGs. More specifically, the significant update of new content and scope of the new partnership vis-à-vis the baseline scenario will allow it to be more responsive to different ACP countries' needs through enhanced differentiation; ensure the involvement of all stakeholders, which are crucial to create multi-stakeholder partnerships; and serve EU interests, e.g. in international fora and by creating more opportunities for European firms in the delivery of global public goods. Furthermore, a more diversified range of means of implementation in line with the Addis Ababa Action Agenda will be expected to turn the future ACP-EU Partnership into a strong vehicle to deliver on the 2030 Agenda. The new partnership, by embracing the concept of differentiated partnership, is expected to be a significantly positive force in supporting the implementation of the 2030 Agenda through concrete actions, demonstration effects and mutual lesson learning. This option enables flexible and tailored partnerships for/with countries and regions, allowing for a spectrum of cooperation possibilities across the various sub-options: Options 2.1 and Option 2.3 would offer the possibility to implement thematic action (e.g. human development, food security); Options 2.1 and Option 2.3 would offer the possibility to act on the basis of levels of development and vulnerability (e.g. LDCs, SIDS, fragile states, MICs); Options 2.2 and Option 2.3 would offer the possibility to take the aspects of regionalisation into account, with or without an overarching chapter: the establishment of three regionalised partnerships would allow EU cooperation to be tailored to the needs and specificities of each region, taking into account the specific vulnerabilities and capacities of the respective countries and regions. In sum, the existence of a new partnership would represent a strong political commitment by all stakeholders (governmental and non-governmental), necessary to translate global vision into concrete and action-oriented cooperation. By further reinforcing existing cooperation efforts and strategically targeting global challenges, new opportunities will be created to define and promote common interests for the EU and ACP partners in areas of high political relevance. Migration-development nexus By investing in the development-migration nexus and legal migration opportunities for potential workforces, migration can have a positive impact on the social and economic development in the EU and the ACP countries. Both South-North and South-South legal migration open up opportunities for migrants in terms of better employment and higher incomes. This can enhance development in the host countries and countries of origin, and can in turn reduce irregular migration pressure on other ACP countries and the EU. The greatest impact will be attained if migration provisions also take into account the contextual factors in both the country of origin and the host country, such as effects of remittances, integration policies for immigrants and risks and consequences of brain-drain dynamics Facilitating legal migration can help addressing demographic challenges in Africa and the EU. While the EU might experience scarcity in labour forces in the future, high population growth in several African ACP countries is expected to generate surpluses in workforces. Better prevention, better migration management and fight against irregular migration will lessen security risks and human suffering related to irregular migration, and reduce migration-related crimes such as human trafficking and migrant smuggling. Acknowledging and addressing climate change related migration will be important to mitigate and pre-empt negative effects on development in affected counties and counter possible increased migration pressures on the EU and ACP countries. Migration dynamics, opportunities and challenges differ substantially in and between the three regions, and differences are equally substantial between regions within Africa. Several migration-related issues, for example, are severely affecting some African countries such as massive forced displacement due to conflict; violence and human rights abuses; and the problem of human trafficking and migrant smuggling. The latter is also problem in the Caribbean and Pacific. The African region is particularly relevant for the EU since the large majority of ACP migrants coming to the EU are African. The United Nations High Commissioner for Refugees global trends report states that migration pressure on EU Member States is likely to rise over the coming years, especially from Sub Saharan Africa. Demographic trends in Africa are also increasing migration pressure in African ACP countries and EU member states. The CPA, in its Article 13, provided a basis for political dialogue between the EU and the ACP in the area of migration. It also deals with issues such as human rights, fair treatment of legally residing ACP nationals, tackling root causes of migration, irregular migration as well as return and readmission. It contains the obligation – on both sides – to readmit their nationals who are illegally present on the territory of the other party, without further formalities, and provide them with appropriate identity documents for that purpose. The implementation of Article 13 was uneven and led to uneven results, whilst bearing in mind differences in contexts between the Caribbean and Pacific regions and Africa. In particular, the legal obligation to readmit its own nationals has in practice seen unsatisfactory implementation and uneven cooperation from African countries. Recent developments highlight the importance to review the agreement in the area of return and readmission in order to strengthen the relevant provisions and make them more operational.

Article 13 does not reflect the EU's comprehensive approach to migration enshrined in key EU policy documents on migration, such as the Global Approach to Migration and Mobility and the European Agenda on Migration, including as well the EU Communication on Enhancing Legal Avenues to Europe and the EU Action Plan on Integration. Option 1 In the absence of a partnership, several available mechanisms remain to organise dialogue and cooperation in the area of migration between the EU and the African ACP countries. These alternative agreements are tailored to local realities and allow for differentiation in partners. Such alternative mechanisms include other key partners such as North African countries, ECOWAS and the African Union Commission. In 2006 for example, the Rabat process was established to address irregular migration from Sub-Saharan Africa to Europe through the West-African migration road. A year later, the Africa-EU Migration, Mobility and Employment partnership was launched, focussing on areas such as fighting trafficking in human beings, remittances, diaspora, mobility and labour migration, international protection and irregular migration. The Khartoum process, launched in 2014, established a dialogue between the EU, nine African countries in the Horn of Africa and the African Union Commission. In 2015, a political declaration and action plan was adopted at the Valletta Summit on Migration by several African countries and the EU on all the key migration areas. There are no alternatives available for cooperation between the EU and the Pacific region. For the Caribbean, the EU-CELAC structured dialogue on migration provides a framework to exchange best practices and build capacities, but does not cover comprehensive cooperation mechanisms. While the implementation of Article 13 of the CPA, in which the migration principles are captured, has been uneven, discontinuing the agreement would mean abolishing key principles and legal obligation agreed upon between the EU and 79 countries, without any immediate alternative approach to agree on these commitments with direct partners. These principles cover fair treatment of third country nationals, non-discrimination, addressing root causes of illegal migration and readmission of nationals who are illegally present on the territory of the other party. Even though the scope of the article does not cover all dimensions of the migration issue, it provides a solid ground for cooperation and dialogue, even for alternative formats of dialogue within ACP-EU relations. Option 2 This option, entailing a widening of scope in terms of content, uses as a starting point the agreed Article 13 of the current CPA, but develops it to make it both more comprehensive and more stringent. In doing so, it allows for a more holistic approach towards migration, better addressing objectives put forward in the relevant EU policy documents. The new approach can also incorporate relevant parts of the 2030 Agenda for sustainable and inclusive development. The EU and ACP countries were unable to include this holistic approach on migration in the 2010 revision of the CPA, but several actions afterwards indicate that the parties are willing to strengthen cooperation. For instance, a joint declaration was adopted and several sessions on migration-related issues were held in Brussels, resulting in recommendations endorsed by the ACP-EU Council of Ministers. In addition, it was explicitly stated that results of the dialogue should feed into the revision of the Cotonou agreement. The outcome of the public consultation also indicated that a more holistic approach should be applied. Furthermore, since migration issues go beyond ACP borders, with a key role for Northern Africa countries which often serves as a transit for migrants from Sub-Saharan Africa, the involvement of Northern Africa in the new partnership would be particularly relevant. Option 2.1 would allow preserving the commitment of all EU and ACP countries on adopting a holistic approach to migration. However, it would be more difficult to take the strong regional specificities into account under this option. Options 2.2 and Option 2.3, by contrast, would allow moulding the agreement to the region-specific migration opportunities and challenges in Africa, the Caribbean and the Pacific, which might in turn enhance the positive economic and social impact. Security issues related to irregular migration and migration-related crime will also be better addressed. The public consultation also indicated that migration issues are better solved at the regional level. Enhanced participatory approach to cooperation Greater and better inclusion of a wide range of stakeholders is essential for achieving sustainable and inclusive development, as they allow identifying the specific needs of people affected by various policy interventions. Stakeholder participation is also crucial in achieving significant political impacts (by promoting human rights and supporting democratic governance), economic impacts (for example by encouraging and monitoring public-private partnerships), and environmental impacts (as they ensure greater commitments by all relevant stakeholders in developing and implementing sustainable environmental practices). Through time, however, the space for democratic engagement for non-state actors across ACP countries has shrunk. The role of civil society has been increasingly challenged by new restrictive legal frameworks, whilst the role of parliaments and local authorities has been threatened by an increasing trend of centralisation of power and even authoritarianism across various ACP countries. The CPA has provided a framework for a broad and inclusive relationship that goes beyond national governments, by recognising the role of parliaments, local authorities and non-state actors (civil society, private sector, trade unions) in development. It has formalised their role both in the conduct of political dialogue and in the programming and implementation of cooperation programmes. The consultation process has confirmed that the provisions for stakeholder engagement have made the CPA a unique framework in the field of international cooperation. These actors have indeed been supported in complementing the state in partner countries in the delivery of goods and services for better human and social development. At the same time, their advocacy role has remained limited and there is a growing request for further involvement in political dialogue through the adoption of specific mechanisms. Similarly, local authorities have been mostly designated as partners for service delivery, rather than as relevant stakeholders to be fully involved in CPA decision-making processes. Based on the consultation of stakeholders, an urgent need to further involve the private sector has become manifest. Option 1 Under this option, the lack of a formalised partnership with the ACP countries means that the role of these actors would be significantly reduced, since the mutual rights and obligations would no longer be defined in any legally-binding agreement. The impact will therefore be lower than the baseline. Doing away with multi-decade efforts to ensure a systematic inclusion of key stakeholders in ACP-EU relations would send a wrong political message to ACP governments, as well as NSAs/LAs/parliaments' organisations. Although it could be improved, in its current shape and in some countries, the CPA appears as a political incentive at country level to involve these actors in the development process. As mentioned earlier, the CPA, for the first time, provided a framework where key actors were recognised as partners. Removing this framework could possibly imply serious drawbacks and further marginalise them. Multi-stakeholder partnerships are also at the heart of the new universal 2030 Agenda and are seen as a way to achieve results, and therefore could appear counter-productive to put an end to a political agreement capacitated to strengthen this dialogue. Option 2 The new partnership would build on the provisions of the existing CPA, taking into account several recommendations made during the stakeholder consultation, particularly by civil society organisations. The inclusion of more stringent mechanisms for a more active involvement throughout the development process will have a direct positive effect on sustainable and inclusive development, across a number of different policy areas.

It would allow involving stakeholders in a comprehensive way in the different policy areas. Positive political impacts are expected through their involvement in peace building and tackling the root causes of state fragility. The further involvement of local authorities and NGOs within and beyond the urban areas, which has been a major critique, will have a significant impact in the local implementation of the 2030 Agenda. The involvement of the private sector is also expected to contribute to filling funding gaps, improving on delivery of goods and services, encouraging innovation and promoting business partnership between ACP and European actors. Besides service delivery, the new provisions would allow NSAs to act as a catalyst for change and foster an enabling environment for better interactions between citizens and state, ultimately enhancing democratic accountability, especially in those countries which are restricting policy space for non-state actors. This option is expected to achieve greater impacts if compared to the baseline scenario. 5.3 Political impacts Peace and security Peace and security have become areas of strategic importance in ACP-EU relations. On the one hand, it is widely accepted that development and security policies are closely interrelated: countries involved in conflicts or facing threats to political stability suffer from reduced progress towards human development and experience significant economic slow-downs (or collapse), which has obvious social consequences. On the other hand, instability in ACP countries has major negative implications for Europe in terms of increased threats to security related to migration flows, organised crime, trafficking of people, drugs, and weapons, as well as in terms of missed economic opportunities for European firms, thus significantly reducing the prospects for foreign direct investment in ACP countries. The CPA has been instrumental in the areas of conflict prevention, peace-keeping and peace- building at country, regional and continental levels. Indeed, the African Peace Facility has provided a strong direct support for the resolution of a number of crises in Africa and has significantly contributed to the enhancement of the AU and some RECs capacities in preventing and reacting to threats to stability. At the same time, as highlighted by several contributors to the public consultation and to the expert round tables, the CPA has been less effective in tackling the root causes of state fragility, for example by strengthening and better enacting the security-development nexus, and to ensure coherence between the various security-related instruments, institutions and policies. Importantly, the three regions face substantial different peace and security challenges, and these differences appear as well within Africa itself. Furthermore, the challenges in Africa, affecting directly the EU, are going beyond the borders of the ACP, most notably North Africa. In this regard, the existing format does not allow to significantly take this diversification into account and provide for more tailored approaches and platforms of dialogue to the specific region. It does not profit from the increased role that continental (i.e. AU) and regional (e.g. ECOWAS) organisations have in addressing peace and security in the three regions. Option 1 Under this option, provisions on peace and security for ACP countries will fall under the Joint-Africa EU Strategy and the Joint Caribbean EU Partnership Strategy, which provide general political frameworks for EU engagement in these areas, whereas the Strategy for the Pacific does not. The lack of a formalised partnership for ACP-EU relations implies that the EU would have to rely on ad-hoc strategies with the aim of implementing its comprehensive approach to security. Moreover, crucial existing commitments to fighting international terrorism and preventing the proliferation of weapons of mass destruction (as well as the reference to the International Criminal Court and the Statute of Rome), would be lost. An important problem to solve concerns the APF: should the EDF cease to exist, some potentially difficult change is required as the Treaty of Lisbon (Article 41.2 TEU) excludes expenditures arising from operations having military, or defence implications from being financed by the EU budget. The ongoing consideration of a potential future EU instrument for capacity building in security and development (CBSD) is particularly looking into this issue. Option 2.1 This o