Proposal for a COUNCIL DECISION concerning the conclusion of the Cooperation Agreement between the European Community and the Lao People's Democratic Republic
Date: 1997-03-03
Institutions: European Commission
Subjects: Laos, cooperation agreement (EU), development aid, economic cooperation, market economy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  03.03.1997 
COM(97)79  final 

97/0062 (CNS) 

Proposal for a 

COUNCIL DECISION 

concerning  the  conclusion  of  the  Cooperation  Agreement  between  the  European 
Community and the Lao People's Democratic Republic 

(presented by the Commission) 

I. 

Background 

Summary 

Diplomatic  relations  between  the  Community  and  Laos  were  established  in 
1986, but Community  assistance goes back further,  to  1978. 

On  16 February  1994, Laos'  Foreign  Minister, Mr Somsavat Lengsavad,  wrote 
to  Mr  Delors  to  signal  his  government's  desire  for  closer  economic  and 
political  links  with  Europe,  particularly  when  it  came  to promoting  trade.  He 
also  indicated  that  his  government  wanted  to  begin  preliminary  talks  on  a 
cooperation  agreement with the Community. 

He pointed out that Laos wanted  to move from  a planned, centralized  economy 
to  a  market  economy.  He  referred  to  the  value  of  Community  assistance  for 
Eastern  Europe  and  the role  that  such  assistance  could  play  in helping  Laos  to 
cope with economic problems. 

Community  aid  to  Laos  has  increased  gradually  since  1986.  It  averaged 
ECU 25.6  million  per  year  between  1991  and  1995.  It  will  stand  at  about 
ECU  10 million  in  1996. Total aid so far has been ECU  152 million. 

Establishing  closer  relations  between  the  Community  and  Laos  is  entirely  in 
keeping  with  the  fundamental  principles  of  democracy,  good  governance, 
adherence  to human  rights, protection  of the environment  and  liberalization  of 
trade which the Community  advocates. 

On  the  strength  of  the  negotiating  directives  adopted  by  the  Council  on 
23 July  1996,  the  Commission  opened 
the  sole  negotiating  session  on 
7 November  1996. The parties initialled  an agreement the following  day. 

II.  What the parties stand to gain from a cooperation  agreement 

A  cooperation  agreement  should  bring  a  series  of  benefits  for  both  parties 
inasmuch  as  it  will  cover  aspects  of  development,  trade  and  economic 
cooperation  reflecting  the  changes  and  challenges  of  the  new  global  world 
order, the single market and the introduction  of a market economy  in Laos. 

It will  offer  an  opportunity  to strengthen  the human  rights  clause  on  which  all 
relations  with  Laos  hang,  and  improve  cooperation  with  the  private  sector  as 
well  as  the  climate  for  investors,  regional  cooperation  and  cooperation  in  the 
fields  of culture and environmental  protection. 

Cooperation  under  the  Agreement  could  also  make  it easier  for  Laos  to  adopt 
the multilateral  trading  system. It would  also bolster  the government's  position 
over  other  specialist  international  and  regional  organizations  such  as  the 
Mekong  Commission  or newer and more important groupings  like APEC. 

Z 

European  Community 

By  establishing  good  relations  with  Laos,  the  Community  will  improve  the 
outlook  for  balanced  development  in  a region  rich  in  natural  (and  particularly 
forestry  and hydroelectric)  resources. The conclusion  of  an agreement  between 
the  Community  and  Laos  would  also  benefit  relations  with  Vietnam  and 
Cambodia.  Laos  is due to become a full  member of ASEAN  in  1997, and  this 
will give it greater political weight in the region. 

The  Community  is  currently  helping  Laos'  efforts  to  make  the  transition  to  a 
market  economy  and  address  major  structural  problems  in  rural  development, 
energy,  human  resources,  environmental  protection  and  forestry  conservation. 
The  Community's  assistance  strategy  has  so  far  focused  on  promoting  food 
security  and reducing poverty. EC-supported  activities have helped  to  improve 
the country's economic  development. 

The  Agreement  also  helps  the  Community  tp  underline  the  importance  of 
protecting  human rights, particularly  the fundamental  rights of workers. 

Laos 

The  advantages  for  Laos  of  a political  and  economic  partnership  with  Europe 
will  take  the  form  of  greater  political  openness  to  external  market  forces  and 
greater  development  opportunities  brought  by  closer  links  with  the  European 
Community,  which  is  held  in  high  esteem  as  an  example  of  genuine 
democracy. 

Laos needs Community  assistance to make the transition  to a market  economy 
and develop economic and development strategies for the  future. 

Inadequate  physical  infrastructure  (roads,  railways,  telecommunications,  etc.) 
creates  obstacles  which  Laos  will  have  to  overcome  in  its  progress  towards 
economic  development.  It  also  needs  to  develop  its  human  resources  to  meet 
its economic  and social needs. 

Laos will  have the full  advantage of the various Community  policy  and  budget 
instruments,  particularly  in  cases  where  the  existence  of  a  cooperation 
agreement  is  a  condition  of  eligibility.  Use  of  the  Community  generalized 
preferences  (GSP) scheme could make it considerably  easier  to conclude  trade 
agreements  with  Laos  and  the  country  would  also  have  most-favoured-nation 
trading status. 

III.  Content of the Agreement 

The  Agreement  will  be  an  advanced  framework  cooperation  agreement  with  an 
emphasis  on  development  aid  and  economic  cooperation  in  the  broadest  sense  of  the 
term. 

The Agreement will set out the objectives of EC-Laos cooperation. 

!1 

They will include: 

- 

the strengthening  and diversification  of economic  and  trade relations  by way of the 
reciprocal  granting of most-favoured  nation status for trade in goods, 

-  greater development  cooperation, 

- 

improving rural development  and the urban  environment, 

- 

improved  sustainable management methods for  forests 

Action  specifically  targeting the poorest sections of the population  will be founded  on 
respect  for  human  rights  and  democratic  principles  and  will  seek  to  achieve 
sustainable  development. 

The  body  of  the  Agreement  will  contain  provisions  on  the  various  fields  of 
cooperation  and cover: 

(i) 

trade cooperation; 

(ii) 

development cooperation; 

(iii) 

economic cooperation; 

(iv) 

cooperation  on  the  environment,  agriculture,  energy,  the  regional  field, 
science  and  technology,  chemical  precursors  and  money  laundering, 
infrastructure,  information, communication  and culture. 

An  appropriate  institutional  framework  must  be  set  up  to  ensure  the  proper 
functioning  and  implementation  of  the  Agreement.  In  particular,  this  will 
involve  a  Joint  Committee  of  the  kind  set  up  for  other  bilateral  framework 
cooperation  agreements concluded by the Community. 

The text of the Agreement  initialled  on 8 November is annexed. 

IV. 

CONCLUSION 

This  will  be  the  first  agreement  to  be  concluded  with  Laos,  and  it  reflects  the 
parties'  shared interest in lasting trade relations and development  cooperation. 

In  view  of  the  above,  and  in  the  light  of  (a)  the  Member  States'  desire  for 
stronger  links  between  the  Community  and  Laos  and  (b)  the  Commission's 
scrupulous  compliance  with  the  Council's  directives  for  the  negotiations,  the 
Commission  proposes  that,  the  Council  approve  the  proposed  Agreement 
between  the  Community  and  Laos  and  adopt  the  attached  proposal  for  a 
Decision. 

u 

Communication  to the Council 

Cooperation Agreement between the European Community and Laos 

Subject:  Cooperation  Agreement  between  the  European  Community 

and the Lao People's Democratic  Republic 

Proposal for a Council Decision concluding the  Agreement 

1. 

2. 

3. 

4. 

5. 

the 
The  annexed  proposal  concerns  a  Council  Decision  concluding 
Cooperation  Agreement  between  the  European  Community  and  the  Lao 
People's  Democratic Republic. 

This is a non-preferential  agreement and has no financial  protocol. 

The  Agreement  is  aimed  at  strengthening  and  diversifying  relations  between 
the Community  and Laos. Its legal basis is Article  113 and Article  130Y of the 
EC Treaty, in conjunction  with the first  sentence of Article 228  §2 and the  first 
subparagraph  of Article 228 §3. 

Negotiations  took place on 7 and 8 November  1996.  They  led to the  initialling 
of  an  agreement  between  the  Community  and  Laos.  The  initialled  text  is 
consistent  with 
the  negotiating  directives  adopted  by  the  Council  on 
23 July  1996. 

The  Council  is  therefore  requested  to  adopt  the  proposal  for  a  Council 
Decision  concluding  the  Cooperation  Agreement  between  the  European 
Community  and the Lao People's Democratic Republic, and to sign it. 

5 

Explanatory  memorandum 

1. 

2. 

3. 

4. 

5. 

By  its  decision  of  23  July  1996,  the  Council  authorized  the  Commission  to 
open  negotiations  with  the Lao  People's  Democratic  Republic  with  a  view  to 
concluding a cooperation  agreement and adopted directives to that end. 

The  negotiations  began  on  7  November  1996  and  were  concluded  by  the 
initialling,  the  following  day,  of  the  Agreement  between  the  European 
Community  and  Laos.  The  following  annexes  are  an  integral  part  of  the 
Agreement: 

a)  the declaration concerning Article  19 on non-execution  of the Agreement, 

b)  the joint declaration  on intellectual, industrial  and commercial  property, 

c)  the joint declaration  on the readmission  of citizens. 

The Commission considers that the initialled text is in line with the negotiating 
directives  adopted by the Council on 23 July  1996. 

The  European  Parliament  must  be  consulted  because  the  legal  basis  of  the 
Agreement  includes  Articles  113  and  130Y,  in  conjunction  with  the  first 
sentence  of  Article 228  §2 and  the first  subparagraph  of  Article  228  §3 of  the 
Treaty establishing the European  Community. 

With  a  view  to  the  signing  and  conclusion  of  the  Cooperation  Agreement 
between  the  European  Community  and  Laos,  the  Commission  proposes  that 
the  Council  approve  the  Agreement  and  adopt  the  annexed  proposal  for  a 
Decision. 

G 

Proposai for Council Decision 

concerning  the  conclusion  of  the  Cooperation  Agreement  between  the  European 
Community  and the Lao People's Democratic Republic 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles  113  and  130Y,  in  conjunction  with  the  first  sentence  of  Article 228  §2  and 
the first  subparagraph  of Article 228 §3 thereof, 

Having regard to the proposal from  the Commission, 

Having regard to the opinion of the European  Parliament, 

Whereas,  under  Article  130U  of  the  Treaty,  Community  policy  in  the  sphere  of 
the  sustainable  economic  and  social 
development  cooperation  should  foster 
development of the developing countries, their smooth and gradual integration  into the 
world economy  and the alleviation  of poverty  in these countries; 

Whereas  the  Community  should  approve,  in pursuit  of  its objectives  in  the  sphere  of 
external  relations, the Cooperation  Agreement between  the European  Community  and 
the Lao People's  Democratic Republic, 

HAS DECIDED AS FOLLOWS: 

Article 1 

The Cooperation  Agreement  between  the European  Community  and the Lao  People's 
Democratic Republic is hereby approved on behalf  of the Community. 

The text of this Agreement is attached to this Decision. 

Article 2 

The  President  of  the  Council  shall  give the notification  provided  for  in  Article  21  of 
the Agreement.1 

Article 3 

The Commission,  assisted by representatives  of the Member States, shall represent  the 
Community  in the Joint Committee provided for in Article  14 of the Agreement. 

1  The date of entry  into force  of the Cooperation  Agreement will be published  in the Official  Journal 

of the European  Communities by the General Secretariat of the Council. 

•? 

Article 4 

This  Decision  shall  be  published  in  the  Official  Journal  of  the  European 
Communities. 

Done at Brussels, 

For the Council 

The President 

s 

COOPERATION AGREEMENT 

BETWEEN 

THE EUROPEAN COMMUNITY 

AND 

LAOS 

? 

COOPERATION  AGREEMENT 
between the European Community and the Lao People's Democratic  Republic 

THE COUNCIL OF THE EUROPEAN UNION, 

of the one part, and 

THE GOVERNMENT  OF THE LAO PEOPLE'S DEMOCRATIC  REPUBLIC, 

of the other part, 

hereinafter  referred  to as "the Parties", 

WELCOMING  the  increase  in  trade  and  cooperation  which  has  taken  place  between 
the  European  Community,  hereinafter  referred  to  as  'the  Community',  and  the  Lao 
People's Democratic Republic, hereinafter  referred  to as  'Laos'; 

RECOGNIZING  the  excellent  relations  and  ties  of  friendship  and  cooperation 
between  the Community  and Laos; 

REAFFIRMING  the importance  of further  strengthening  ties between  the  Community 
and Laos; 

RECOGNIZING  the  importance  the  Parties  attach  to  the  principles  of  the  United 
Nations  Charter,  to  the  Universal  Declaration  of  Human  Rights,  to  the  1993 Vienna 
Declaration  and  the Plan  of  action  of  the World  Conference  on  Human  Rights, to  the 
1995  Copenhagen  Declaration  on  Social  Development  and  the  associated  plan  of 
action,  and  to  the  1995  Beijing  Declaration  and  the  plan  of  action  of  the  4th  World 
Conference  on Women; 

REAFFIRMING  the  Parties'  common  will  to consolidate,  deepen  and  diversify  their 
relations  in  areas  of  mutual  interest  on  a  footing  of  equality,  non-discrimination, 
mutual benefit  and  reciprocity; 

DESIROUS  OF  creating  favourable  conditions  for  the  development  of  trade  and 
investment  between  the Community  and Laos, and the need to adhere to the principles 
of  international  trade,  the  purpose  of  which  is  to  promote  trade  liberalization  in  a 
stable, transparent  and  non-discriminatory  manner which  takes  account  of the Parties' 
economic  differences; 

RECOGNIZING  the  need  to support  the current  process  of economic  reform  in  order 
to guarantee Laos'  transition  to a market economy, with due regard for  the  importance 
of  the social development  which  should  go hand  in hand  with  economic  development 
rights; 
and 

commitment 

respecting 

common 

social 

the 

to 

Co 

RECOGNIZING  the  need  to support  the Laotian  government's  efforts  to  improve  the 
living  conditions  of  the  poorest  and  most  disadvantaged  sections  of  the  population, 
with a special emphasis on the status of women; 

CONSIDERING  the  importance  accorded  by  the  Parties  to  the  protection  of  the 
environment  at  all  levels  and  to  the  sustainable  management  of  natural  resources, 
taking account of the links between the environment  and development; 

HAVE  DECIDED  TO  CONCLUDE  this Agreement  and  to this  end  have  designated 
as their Plenipotentiaries: 

THE COUNCIL  OF THE EUROPEAN UNION, 

President 

Manuel  MARIN 

Vice-President  of the Commission  of the European  Communities, 

THE GOVERNMENT  OF THE LAO PEOPLE'S DEMOCRATIC  REPUBLIC 

Somsavath LENGSAVAD 

Minister of Foreign  Affairs, 

WHO, having exchanged  their Full Powers, found  in good and due form, 

HAVE AGREED AS FOLLOWS: 

Article 1 

Basis 

Respect for the democratic principles and fundamental  human rights established by 
the Universal  Declaration  on Human Rights inspires the internal  and  international 
policies of the Community  and of the Lao People's Democratic Republic and 
constitutes  an essential  element of this Agreement. 

(( 

Article 2 

Objectives 

The  main  objective  of  the  Agreement  is  to  provide  a  framework  for  enhancing 
cooperation  between  the Parties,  within  their respective  areas of jurisdiction,  with  the 
following  aims: 

(a) 
to accord each other most-favoured-nation  treatment on trade in goods 
in all areas specifically  covered by the Agreement, save as regards  advantages 
accorded by either Party within the context of customs unions or free  trade 
areas, trade arrangements with neighbouring countries or specific  obligations 
under international commodity  agreements; 

to promote and intensify  trade between the Parties, and to encourage 

(b) 
the steady expansion  of sustainable economic cooperation, in accordance  with 
the principles of equality  and mutual  advantage; 

to strengthen  cooperation  in fields  closely related to economic  progress 

(c) 
and benefiting  both Parties; 

to develop lasting trade relations and diversify  trade between  the 

(d) 
Community  and Laos, to achieve a lasting opening-up of markets to a degree 
which  is compatible with the Parties'  economic situations and the assistance 
which Laos will need in the light of its application  to join the. WTO; 

to contribute to Laos'  efforts  to improve the quality of life  and 

(e) 
standards of living of the poorest sections of its population, together with 
measures using rural development to combat poverty  in the countryside  and 
assistance with  achieving the transition  to a market economy  and  developing 
human resources in a number of sectors of the economy; 

to encourage job creation  in both the Community  and Laos, with 

(f) 
priority  being accorded to programmes and operations which could have a 
favourable  effect  in this respect.  The Parties shall  also exchange views and 
information  on their respective initiatives  in this field,  step up and  diversify 
their economic  links and establish conditions conducive to job  creation; 

(g) 
to take the requisite measures to protect the world, regional  and 
national  environments  and manage natural resources  sustainably,  taking 
account of the link between the environment  and development. 

(i 

Article 3 

Development cooperation 

The  Community  recognizes  Laos' need for  development  assistance  and  is prepared  to 
step  up  its  cooperation  in  order  to  contribute  to  Laos'  own  efforts  to  achieve 
sustainable  economic  development  and  the  social  progress  of  its  people  through 
concrete projects  and programmes  in accordance  with the priorities  set  out  in  Council 
Regulation  (EEC) No 443/92. 

In accordance with the abovementioned  Regulation on cooperation  with the Asian and 
Latin  American  (ALA)  countries,  assistance  will  be  targeted  mainly  at  the  poorest 
sections  of  the population.  In cooperation,  priority  will  be given  to  schemes  aimed  at 
alleviating poverty,  and  in particular those likely to create jobs, foster  development  at 
grassroots  level  and promote the role of women  in development.  The  Parties  will  also 
encourage the adoption  of appropriate measures to pr&vent and combat  AIDS  and  take 
steps  to  increase  grassroots  development  and  education  on  AIDS  and  the  operational 
capacity  of the health  services. 

Cooperation  between  the Parties  will  also  address  the problem  of  drugs  to  encourage 
and enhance training, education, health care and the rehabilitation  of addicts. 

The  Parties  acknowledge  the  importance  of  human  resources  development,  social 
development,  the  improvement  of  living  and  working  conditions,  the  development  of 
skills  and  the  protection  of  the  most  vulnerable  sections  of  the  population.  Human 
resources  and  social  development  must  be  an  integral  part  of  economic  and 
development  cooperation.  Appropriate  consideration  shall  therefore  be  given  to 
training  objectives  addressing  institutional  needs  and  specific  vocational  training 
activities aimed  at enhancing the skills of the local  workforce. 

In the light of the danger to human  life  and the obstacles to development  presented  by 
unexploded  objects  (UXO),  the  Community  will  examine  initiatives  suited  to 
addressing this problem. 

Community  cooperation  will  be  concentrated  on  mutually  agreed  priorities  to  ensure 
that  assistance  is  effective  and  lasting.  In  the  interests  of  greater  effectiveness, 
development  cooperation  activities  shall take account of the need for  coordination  and 
cooperation  with  Laos'  other  partners,  including  the  World  Bank  and  IMF. 

(J 

Article  4 

Trade cooperation 

1. 

The Parties confirm  their determination: 

(a) 

(b) 

(c) 

to  take  all  appropriate  measures  to  create  favourable  conditions  for 
trade between them; 

to  do  their  utmost  to  improve  the  structure  of  their  trade  in  order  to 
diversify  it  further; 

to  work  towards  the  elimination  of  barriers  to  trade,  and  towards 
measures  to improve transparency,  in particular through  the removal  at 
an  appropriate  time  of  non-tariff  barriers,  in  accordance  with  work 
undertaken  in  this  connection  by  other  international  bodies  while 
ensuring that personal data are suitably protected. 

2. 

In  their  trade  relations,  the  Parties  shall  accord  each  other  most-favoured 
nation treatment in all matters regarding: 

(a) 

customs  duties  and  charges  of  all  kinds,  including  the  procedures  for 
their collection; 

(b) 

(c) 

regulations,  procedures  and 

the 
clearance, transit, warehousing and transhipment; 

formalities  governing  customs 

taxes  and other  internal  charges  levied  directly or indirectly  on  imports 
or exports; 

(d) 

administrative formalities  for the issue of import or export  licences. 

3. 

Paragraph  2 shall not apply to: 

(a) 

advantages accorded by either Party to states which are fellow  members 
of a customs union or free trade area; 

(b) 

advantages  accorded  by  either  Party  to  neighbouring  countries  with  a 
view to facilitating  border trade; 

(c)  measures which either Party may take in order to meet its obligations 

under international commodity  agreements. 

(V 

4. 

Within their respective spheres of competence, the parties shall undertake: 

(a) 

(b) 

to  improve cooperation  between  their  authorities  in customs  matters, in 
fields 
and 
harmonization  of  customs  procedures  and  administrative  assistance  to 
combat customs  fraud; 

simplification 

vocational 

including 

training, 

the 

to  exchange 
advantages, 
cooperation. 

information  on  markets 
including  public  procurement, 

likely 

to  provide  mutual 
tourism  and  statistical 

5. 

6. 

Laos  shall  improve  conditions  for  the  adequate  and  effective  protection  and 
enforcement  of  intellectual,  industrial  and  commercial  property  rights  in 
conformity  with  the  highest  international  standards.  To  this  end,  Laos, shall 
accede  to  the relevant  international  conventions  on  intellectual,  industrial  and 
commercial  property2 to which  it is not yet a party.  In order  to enable Laos to 
fulfil  the abovementioned  obligations, technical assistance could be envisaged. 

Within  their  respective  areas  of  jurisdiction  and  insofar  as  their  rules  and 
regulations  permit,  the  Parties  shall  agree  to  consult  each  other  on  all 
questions, problems, or disputes which may arise in connection  with trade. 

Article 5 

Environmental  cooperation 

The  Parties  recognize  that  the  only  way  to  improve  environmental  protection  is  to 
introduce appropriate environmental  legislation, implement  it effectively  and  integrate 
it into other policy areas. 

The  main  objective  of  environmental  cooperation  is  to  enhance  the  prospects  of 
sustainable  economic  growth  and  social  development  by  placing  a  high  priority  on 
respect for the natural environment  including: 

(a) 

(b) 

(c) 

the drafting  of an effective  environment policy  involving  appropriate 
legislative measures and the resources needed to implement  it. It shall cover 
areas including training, capacity building and the transfer  of  appropriate 
environmental  technology; 

cooperation  in the development of sustainable and non-polluting  energy 
sources, as well as solutions to urban  and industrial pollution  problems; 

protection  of the environment (especially  in regions with fragile  ecosystems), 
a 
while 

source  of 

developing 

sustainable 

tourism 

revenue; 

as 

2 

See Declaration  (Annex II). 

(S 

(d) 

(e) 

(f) 

environmental  impact assessment as part of the preparation  and 
implementation  of any reconstruction  or development  project; 

close cooperation  to achieve the objectives of environmental  agreements to 
which both Parties are signatories; 

conservation  of existing primary forests, with the particular aim of putting an 
end to illegal logging, and sustainable development of new forest  resources by 
raising the profile  of forestry  bodies and involving local  inhabitants. 

Article 6 

Economic  cooperation 

Within  the  limits  of  their  respective  areas  of jurisdiction  and  the  financial  resources 
available,  the  Parties  undertake  to  foster  economic  cooperation  to  their  mutual 
advantage. 

This cooperation  will be aimed at: 

(a) 

(b) 

(c) 

(d) 

(e) 

if) 

developing the economic environment in Laos by facilitating  access to 
Community  know-how  and technology; 

facilitating  contacts between  economic operators and taking other measures to 
promote trade; 

encouraging, in accordance with their legislation, rules and policies, public-
and private-sector investment programmes in order to strengthen  economic 
cooperation, including cooperation  between enterprises, technology  transfers, 
licences and  subcontracting; 

facilitating  the exchange of information  and the adoption  of initiatives, 
fostering  cooperation  on enterprise policy, particularly  with regard to 
improving the business environment  and encouraging closer contacts; 

reinforcing  mutual understanding of the Parties' respective economic 
environments  as a basis for effective  cooperation. 

undertaking  activities  in the fields  of standardization, metrology  and quality-
assurance in order to promote international  standards and quality  assessment 
and to facilitate  trade. 

|6 

In the above fields  the principal objectives  shall be: 

to assist Laos in its efforts  to restructure its economy by creating the 
conditions for  a suitable economic environment and business climate; 

to encourage synergies between the Parties'  respective economic sectors, and 
in particular their private sectors; 

within  the Parties'  respective areas of jurisdiction,  and in accordance with  their 
legislation, rules and policies, to establish  a climate conducive to private 
investment by improving conditions for the transfer  of capital  and, where 
appropriate, by supporting the conclusion  of agreements between the Member 
States of the Community  and Laos on the promotion and protection of 
investment. 

The Parties  will  together  determine, to their mutual  advantage, the areas  and  priorities 
for economic cooperation programmes and activities. 

Article 7 

Agriculture 

The  Parties  undertake,  in  a  spirit  of  understanding,  to  cooperate  in  the  agricultural 
sector and examine: 

(a) 

the scope for developing trade in agricultural  products; 

(b) 

sanitary, phytosanitary  and environmental  measures, and the results thereof, 
along with assistance to avoid obstacles to trade, taking into account the 
Parties'  legislation; 

(c) 

the possibility  of assisting the government of Laos in its efforts  to  diversify 
agricultural  exports. 

Article 8 

Energy 

The  Parties  recognise  the  vital  importance  of  the  energy  sector  for  economic  and 
social  development,  and  are prepared  to  step up cooperation  by  means  of  dialogue  in 
the field  of energy policy.  This  dialogue  will  take  due  account  of  the  main  objective, 
resources. 
namely 

the  sustainable  development  of  Laos'  energy 

to  ensure 

If 

Article 9 

Regional cooperation 

Cooperation  between  the  Parties  may  extend  to  activities  under  cooperation  or 
integration  agreements  with  other  countries  of  the  same  region,  provided  the  said 
activities are compatible with those agreements. 

Without  excluding  any  area,  special  consideration  may  be  given  to  the  following 
activities: 

(a) 

technical  assistance (services of outside consultants, training of technical  staff 
in certain practical  aspects of integration); 

(b) 

promotion  of intraregional  trade; 

(c) 

support for  regional  institutions, projects  and initiatives for  which  regional 
organizations bear  responsibility; 

(d) 

studies concerning  regional  links, transport and communications. 

Article  JO 

Science and technology 

The  Parties,  according  to  their  respective  policies,  their  mutual  interest  and  within 
their  respective  areas  of  jurisdiction,  may  promote  scientific  and  technological 
cooperation. 

Cooperation  will  involve: 

the exchange of information  and experience at regional  (Europe-South-East 
Asia) level, especially  on the implementation  of policies and programmes; 

the promotion  of lasting ties between the Parties' scientific  communities; 

the stepping-up of activities aimed at promoting  innovation  in  industry, 
including  technology  transfers. 

Cooperation  may  involve: 

the joint  implementation  of regional  (Europe-South-East  Asia) research 
projects  in areas of mutual  interest, facilitating,  where appropriate, the active 
involvement  of enterprises; 

the exchange of scientists to promote the preparation  of research projects  and 
high-level  training; 

18 

joint  scientific  meetings to foster exchanges of information  and interaction  and 
to identify  areas for joint research; 

the dissemination  of results and the development of links between  the public 
and private sectors; 

evaluation  of the activities  concerned. 

The Parties'  higher education  institutions, research  centres  and  industries  will  play  an 
appropriate part in this cooperation. 

Article 11 

Chemical drug precursors and money  laundering 

Within  their  respective  areas  of jurisdiction  and  the  legislation  applicable,  and  taking 
into  account  work  done  by  the  relevant  international  bodies,  the  Parties  agree  to 
cooperate  in order  to prevent  the diversion  of chemical  drug precursors,  and  agree on 
the need to do all in their power to prevent money  laundering. 

The Parties will  also consider  special  measures  against the cultivation, production  and 
trafficking  of  drugs,  narcotics  and  psychotropic  substances,  and  measures  to  prevent 
and reduce drug abuse. 

This cooperation  may include : 

measures to promote other forms  of economic  development; 

the exchange of relevant information,  subject  to personal data being duly 
protected. 

Article 12 

Physical  infrastructure 

The  Parties  recognise  that  the  present  shortcomings  of  Laos'  physical  infrastructure 
constitute  a serious  constraint  to private  investment  and  to economic  development  in 
general.  The  Parties  therefore  agree  to  encourage  specific  programmes  for  the 
rehabilitation,  reconstruction  and  development  of  Laos'  infrastructure, 
including 
transport  and communications. 

'7 

Article 13 

Information, communication and culture 

The  Parties,  within  their  respective  areas  of  jurisdiction,  and  in  the  light  of  their 
policies  and  mutual 
information, 
communication  and  culture  to  improve  mutual  understanding  and  strengthen  existing 
ties  between  them.  Appropriate  support  may  also  be  provided  for  the  promotion  of 
new initiatives in the following  areas: 

interests,  will  cooperate 

the  fields  of 

in 

(a) 

preparatory  studies and technical  assistance for the conservation  of the cultural 
heritage; 

(b) 

cooperation  in the field  of the media and audio-visual  documentation; 

(c) 

the organisation  of events and exchanges to improve cultural  understanding. 

the 

recognise 

importance  of  cooperation 

fields  of 
The  Parties 
telecommunications,  the  information  society  and  multimedia.  Such  cooperation  may 
include the exchange of information  on the Parties' respective regulations  and  policies 
for  telecommunication,  mobile  communications,  including  the  promotion  of  Global 
society,  multimedia 
Navigation  Satellite  Systems 
telecommunications  technologies, networks  and telematic  applications  (e.g.  transport, 
health, education  and environment). 

information 

(GNSS), 

the 

the 

in 

Article 14 

Institutional  aspects 

1. 

The Parties agree to establish  a Joint Committee, whose tasks are: 

(a) 

(b) 

(c) 

to ensure the smooth working and proper application of the Agreement  and of 
the dialogue between the Parties; 

to make suitable recommendations for promoting the objectives  of the 
Agreement; 

to establish priorities for potential operations in pursuit of the  Agreement's 
objectives. 

The  Joint  Committee  shall  be  composed  of  representatives  of  sufficient 
seniority  of both Parties.  It shall normally meet every other year, alternately  in 
Vientiane and in Brussels, on a date fixed  by mutual  agreement.  Extraordinary 
meetings may  also be convened by agreement between the Parties. 

to 

3. 

4. 

5. 

6. 

The  Joint  Committee  may  set  up  specialized  sub-groups  to  assist  it  in  the 
performance  of its tasks  and to coordinate the formulation  and  implementation 
of projects  and programmes under the Agreement. 

The  agenda  for  meetings  of  the  Joint  Committee  shall  be  determined  by 
agreement between the Parties. 

The Parties agree that it shall  also be the task of the Joint Committee  to ensure 
the proper functioning  of  any sectoral  agreements concluded,  or which  may be 
concluded, between  the Community  and Laos. 

The  organizational  structures  and  the  rules  of  procedure  of  the  Joint 
the  Parties. 
shall  be  determined  and  agreed  upon  by 
Committee 

Article 15 

Future developments 

1. 

The  Parties  may,  by  mutual  consent  and  within  their  respective  areas  of 
jurisdiction,  extend  this  Agreement  to  expand  cooperation  and  add  to  it  by 
means of agreements on specific  sectors or activities. 

2.  Within  the  framework  of  this  Agreement,  either  Party  may  put  forward 
suggestions  for  expanding  the  scope of  the cooperation,  taking  into  account  the 
experience  gained in its application. 

Article 16 

Other Agreements 

Without  prejudice  to the relevant  provisions  of.the Treaties establishing  the European 
Communities, neither this Agreement nor any action taken thereunder shall in any way 
affect  the powers  of  the Member  States  of  the European  Union  to undertake  bilateral 
activities  with  Laos  in  the framework  of economic cooperation  or to conclude,  where 
appropriate, new economic cooperation  agreements with Laos. 

Article 17 

Facilities 

To facilitate  cooperation  under this Agreement, the Laotian authorities  will grant to 
Community  officials  and experts the guarantees and facilities  necessary  for  the 
performance  of their duties.  The detailed provisions will be set out in a separate 
exchange of letters. 

<U 

Article 18 

Territorial  application 

This  Agreement  shall  apply,  on  the  one  hand,  to  the  territories  to  which  the  Treaty 
establishing  the  European  Community  applies  and  under  the conditions  laid  down  in 
the Treaty  and, on the other, to the territory of Laos. 

Article 19 

Non-execution of the Agreement 

If either Party considers that the other Party has failed  to fulfil  an obligation under this 
Agreement,  it  may  take  appropriate  measures.  Before  so  doing,  except  in  cases  of 
special  urgency,  it  shall  supply  the  Joint  Committee  with  all  relevant  information 
required  for  a thorough  examination  of the situation  with  a view  to seeking  a solution 
acceptable to the Parties. 

In  the  selection  of  measures,  priority  must  be  given  to  those  which  least  disturb  the 
functioning  of  this  Agreement.  These  measures  shall  be  notified  immediately  to  the 
Joint  Committee  and  shall  be the subject  of consultations  within  the Joint  Committee 
if the other Party  so requests. 

Article 20 

Annexes 

The Annexes to this Agreement shall form  an integral part thereof. 

Article 21 

Entry into force and renewal 

1.  This  Agreement  shall  enter  into  force  on  the  first  day  of  the  month  following  the 
date  on  which  the  Parties  notify  each  other  of  the  completion  of  the  procedures 
necessary for this purpose. 

2.  This  Agreement  is  concluded  for  a  period  of  five  years. 

It  shall  be  renewed 
automatically  from  year  to year unless  one  of  the Parties  denounces  it  six  months 
before  its expiry date. 

Article 22 

Authentic texts 

This  Agreement  is  drawn  up  in  duplicate  in  the  Danish,  Dutch,  English,  Finnish, 
French,  German,  Greek,  Italian,  Portuguese,  Spanish,  Swedish  and  Lao  languages, 
each text being equally  authentic. 

U 

Done at Brussels, 8 November 1996 

The Council of the European Union 

The Lao People's Democratic Republic 

The Commission of the European Communities 

1-3 

Annex I 

Declaration on Article 19 - Non-Execution of the Agreement 

(a) 

The  Parties  agree,  for  the  purposes  of  the  interpretation  and  practical 
application  of  this  Agreement,  that  the  term  'cases  of  'special  urgency'  in 
Article  19  of  the  Agreement  means  a  case  of  the  material  breach  of  the 
Agreement by one of the Parties.  A material  breach  of the Agreement  consists 
in: 

-  repudiation  of  the  Agreement  not  sanctioned  by  the  general  rules  of 

international  law; 

-  violation of essential elements of the Agreement set out in Article  1. 

(b) 

The  Parties  agree that  the  'appropriate  measures'  referred  to  in  Article  19 are 
measures  taken  in  accordance  with  international  law. 
If  a  Party  takes  a 
measure  in  a  case  of  special  urgency  as  provided  for  under  Article  19,  the 
other Party may avail itself  of the procedure relating to settlement of disputes. 

lH 

Joint Declaration on Intellectual, Industrial and Commercial  Property 

Annex II 

The  Parties  agree  for  the purposes  of  this  Agreement  that  'intellectual,  industrial  and 
commercial  property'  includes  in particular protection  of copyright  and  related  rights, 
patents, 
topographies  of 
integrated  circuits,  geographical  indications,  as  well  as  protection  against  unfair 
competition  and the protection of undisclosed  information. 

industrial  designs,  software,  brands  and 

trademarks, 

u 

Joint Declaration on the readmission of citizens 

The European Community recalls the importance that its Member States attach to the 
establishment  of  effective  cooperation  with  third  countries  in  order  to  facilitate  the 
readmission  by  the  latter  of  its  nationals  unlawfully  residing  on  the  territory  of  a 
Member State. 

The  Lao  People's  Democratic  Republic  undertakes  to  conclude  agreements  for  the 
readmission  of Laotian  citizens  in  such  a situation  with  those Member  States  of the 
European Union which request it. 

uia-

FINANCIAL  STATEMENT 

PART I:  FINANCIAL  IMPLICATIONS 

1. 

Title of Operation: 

Cooperation  Agreement between the European Community and the Lao People's 
Democratic Republic. 

2. 

Budget Headings Involved: 

- Part A (see Point  10) 

- Part B (see Annex) 

3. 

Legal Basis: 

The  European  Parliament  must  be  consulted  because  the  legal  basis  of  the 
Agreement  includes  Articles  113  and  130Y,  in  conjunction  with  the  first 
sentence  of  Article 228  §2 and  the  first  subparagraph  of  Article  228  §3 of  the 
Treaty establishing the European  Community. 

Description of Operation: 

General  objective 

Framework agreement for economic, trade and development cooperation. 

Duration and arrangements for renewal 
Initially five years, renewable each year  thereafter. 

Classification  of Expenditure or Revenue: 

Non-compulsory expenditure. 

Differentiated  appropriations. 

The projects launched under the Agreement will generate no specific revenue. 

4. 

4.1 

4.2 

5. 

5.1 

5.2 

5.3 

6. 

Type of Expenditure: 

6.1 

Grant up to  100%:  Yes. 

7. 

Financial Impact: 

7.1  Method  of  calculating  total  cost  of  operation  (relation  between  unit  and  total 

cost) 

The cost  per operation  for  most of  the budget headings possibly  concerned  will 
be decided and calculated on a case-by-case basis. 

7.2 

Itemized breakdown of cost: not applicable. 

z* 

8. 

Fraud prevention measures: 

The  Laotian  authorities  and  the  Commission  will  apply  the  normal  control 
measures  when  implementing  the Agreement,  as provided  for  in each  financing 
agreement and contract. 

9. 

Cost-benefit analysis: 

9.1. 

Specific  and quantified  objectives: target population 

To be defined  on a case-by-case basis. 

9.2.  Grounds for the operation 

To be defined on a case-by-case basis. 

9.3.  Monitoring and evaluation of the operation 

To be defined  on a case-by-case basis and included  in each  financing  agreement 
and contract. 
Administrative expenditure (Section III, Part A. of the Budget): 

10. 

Deployment  of  the  necessary  administrative  resources  will  depend  on  the 
Commission's  annual decision on the allocation of resources, taking into account 
the  number  of  staff  and  additional  resources  authorized  by  the  budgetary 
authority.  The  allocation  of  supplementary  resources  is to be  considered  in  the 
context  of  priorities  to  be  decided  by  the  Commission  within  the  limits  of  the 
funds  available under the budget for the year in question. 

10.1  Impact of the number of posts: 

Type of post 

Staff 
to  be  assigned 
managing the operation 

to 

Permanent 

Temporary 

Source 

Duration 

Existing resources 
in the DG or 
department concerned 

Additional 
resources 

officials  A 
or  temporary 
staff 

B 

C 

TOTAL 

2 

1 

1 

2 

_ 

-

IB 

1C 

2 

_ 

-

-

I? 

10.2  Overall financial impact of human resources 

Amounts 

Method of calculation  (ECU) 

Officials 

Temporary  staff 

Other resources 

(indicate budget heading) 

TOTAL 

The cost of the human  resources required will be covered  by existing resources. 
The estimated annual cost for titles Al, A2, A4 and A5 is ECU 300 000. 

10.3 

Increase in other administrative expenditure as a result of the operation 

Budget heading 

Amount 

Method of calculation  (ECU) 

A 2510 

(Joint Commission) 

TOTAL 

pm 

pm 

The  agreement  will  be  managed  and  monitored  by missions, the cost  of  which  will  be 
covered by existing resources. 

The estimated  annual cost for article A130 is ECU 35 000 (6 officials  per year from  the 
Directorates-General  and  departments  concerned);  it  also  includes  attendance  at  the 
meeting in Laos every other year. 

^ 

ANNEX 

1. 

Title of Operation 

FINANCIAL  STATEMENT 

2. 

a) 

Negotiation  of a Cooperation Agreement between the European  Community  and 
the Lao People's Democratic Republic. 

Budget Headings Involved 

Budget  headings  whose  application  is  conditional  on  the  existence  of  a 
Cooperation  Agreement: 

B7-870 

Commercial and economic cooperation agreements with third 
countries. 

b) 

Other budget headings whose application  is not conditional  on the existence of a 
cooperation  agreement: 

B6-7211 

Cooperation with third countries and international  organizations 

B7-210 

Aid to help the populations of and emergency food  aid for 

developing countries and others hit by disasters or serious crises 

B7-217 

Operations to help refugees  and displaced persons 

B7-212 

B7-872 

Aid towards self-sufficiency  for refugees  and displaced persons 
in Asia and Latin America 
Promotion of Community investment in developing countries of 
Asia, Latin America, the Mediterranean  and in South Africa by 
economic cooperation and trade agreements 

B7-300 

Financial and technical cooperation with Asian developing 
countries l 

B7-301 

Economic cooperation  with Asian developing countries ' 

B7-6000 

Community contribution towards schemes concerning 
developing countries carried out by non-governmental 
organizations 

B7-6200 

Environment in the developing countries 

B7-6201 

Tropical  forests 

1  Under the "Asia" strategy  to be adopted by the budgetary  authority. 

5-4 

B7-6211 

B7-631 

Health programmes and the fight against HIV/AIDS in 
developing countries 

Aid for population policies and programmes in developing 
countries and follow-up to the conference on population and 
development 

B7-641 

Rehabilitation  and reconstruction measures for the developing 

countries 

B7-702 

Human rights and democracy in the developing countries 

B7-643 

Decentralized cooperation in the developing countries 

B7-6210 

North-South cooperation schemes in the context of the campaign 
against drug abuse 

3  L 

ISSN 0254-1475 

COM(97) 79 final 

DOCUMENTS 

EN 

il  oi 

Catalogue number  :  CB-CO-97-072-EN-C 

ISBN  92-78-16296-5 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

5"b