Communication from the Commission to the Council and the European Parliament - Guidelines for the negotiation of new cooperation Agreements with the African, Caribbean and Pacific (ACP) countries
Date: 1997-10-29
Institutions: European Commission
Subjects: ACP countries, EU policy, European Development Fund, Lomé Convention, cooperation policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.10.1997 
COM(97)537  final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

Guidelines for the negotiation of new cooperation agreements with the African, 
Caribbean and Pacific (ACP) countries 

Communication to the Council and the European Parliament 

Guidelines for the negotiation of new cooperation agreements with the African, 
Caribbean and Pacific (ACP) countries 

Policy guidelines for future EU-ACP relations 

INTRODUCTION 

1.  A NEW THRUST IN LINE WITH A CHANGING WORLD 

2.  REVITALISING  THE  PARTNERSHIP  WITH  A  NEW  POLITICAL 

CONTRACT: A STRATEGIC OPPORTUNITY 

2.1  The EU's motives responsibilities and common interests 

2.2  The Union's proposal 

2.3  Key issues for the negotiations 

3.  BRINGING  EU-ACP  PARTNERSHIP 

INTO  UNION'S  FOREIGN 

POLICY 

3.1  More resources for conflict  prevention and more effective  development 

cooperation 

3.2  A new political dialogue 

3.3  A new institutional basis for more effective  and open dialogue 

4  REFOCUSSING  COMMUNITY  POLICY  ON  THE  COMPLEMENTARY 
OBJECTIVES  OF  SUSTAINABLE  ECONOMIC  AND  SOCIAL 
DEVELOPMENT,  THE  ALLEVIATION  OF  POVERTY  AND 
INTEGRATION INTO THE WORLD ECONOMY 

4.1  Objectives of EU-ACP cooperation 

4.2  Three main priorities 

4.2.1 

Support  for  growth  and  policies  for  competitiveness  and 
employment 

4.2.2 

Support for social policies and cultural cooperation 

4.2.3  Regional integration 

4.3  Three horizontal guiding principles 

4.3.1 

Institutional development and helping build local capacities 

4.3.2  Adopting a gender-sensitive approach and reducing disparities 

between men and women 
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4.3.3 

Integrating  the  principles  of  conserving  natural  resources  and 
protecting the environment 

5.  OPENING  UP COOPERATION  TO ECONOMIC  PARTNERSHIP 

5.1  More ambitious economic and trade objectives 

5.2 

Strengthening regional integration 

5.3  Adapting the approach to the situation of the LLDCs 

5.4  Differentiated  agreements 

5.5  Compatibility with the WTO compatibility and the common agricultural 

policy 

6.  TOWARDS  NEW  PRACTICES  IN  FINANCIAL  AND  TECHNICAL 

COOPERATION 

6.1  Effectiveness 

6.2 

Simplified  instruments 

6.3  Allocating resources on the basis of needs and merits 

6.4  A change in the forms of aid 

6.5  More efficient  resource management 

7.  GEOGRAPHICAL  FRAMEWORK:  A  SINGLE  ACP  GROUP  WITH 

MARKED REGIONAL DIFFERENTIATION 

7.1  An overall agreement with differentiated  procedures 

7.2  Three levels of differentiation  reflecting  regional factors and integration 

prospects 

7.2.1  Cornerstones of a differentiated  political dialogue 

7.2.2 

Economic  cooperation  agreements  between  the  EU  and 
regional  subgroups 

7.2.3  A specific regional integration dialogue 

7.3  An  agreement  permitting  new  applications  for  membership  or  the 

extension of some provisions to other countries 

ANNEX: THE CONSULTATION PROCESS 

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Policy guidelines for future EU-ACP relations 

To meet the challenges of a changing international scene, the relationship between the EU 
and  the  ACP  countries  needs to  be recast  with  an eye to  the  21st  century.  The  public 
debate launched by the Commission  on the basis of its Green Paper has been intense and 
fruitful.  This  truly  interactive  process  has  already  revealed  the  foundations  for  a  new 
relationship able to cope with international and regional change. 

The participatory and transparent method adopted by the Commission in the discussion of 
a policy so tightly bound up with the building of Europe has laid the foundations for a new 
and open partnership, in which civil society, businesses, social-players and local authorities 
all  have  an  active  role.  The  Commission's  proposal  on  the  negotiation  of  new 
cooperation agreements with the ACP countries was born of this approach,  which means 
that it is inevitably broad in scope.  Yet the Commission remains persuaded of the need to 
simplify the future  agreements: when proposing negotiating directives, it will do its utmost 
to  reconcile  the  imperatives  of flexibility  and  efficiency  with  a multi-pronged,  integrated 
approach to cooperation. 

Post-colonial days are over.  The Union and the ACP countries have common interests to 
develop  and  a  strategic  opportunity  to  grasp  within  a  brighter,  more  ambitious  vision. 
This ambition  has inspired  the  Commission  to  propose  that  the  EU-ACP  partnership  be 
placed on a new footing enabling it to negotiate successfully  the requisite changes. 

There are five major policy guidelines: 

The first  involves giving the new partnership a strong political dimension.  This will 
involve greater  selectivity  in the management  of Community  cooperation,  more  effective 
and  open  dialogue  upstream  of  conditionality  and  a  new  overall  contract  based  on  a 
shared political vision. 

The EU-ACP  relationship  will  occupy  a new  position  on the  Union's  external  front.  It 
will serve the objectives of peace and stability and enable more resources to be channelled 
into  preventing  and  settling  violent  conflicts.  The  impact  of  the  new  EU-ACP 
cooperation  policy will be all the greater if it is backed up by a clear political will  on the 
Union's  part  to  observe  the  principles  of  complementarity,  coordination  and  coherence. 
The partnership will be underpinned  by the EU-ACP  relationship's  specific  achievements 
concerning  support  for  policies  promoting  human  rights  and  democratic  principles, 
consolidating  the  rule  of  law  and  good  governance.  The  new  development  model 
gradually emerging from  the major  international negotiations, which reflects an integrated 
approach  to economic, political,  social  and  environmental  factors,  will provide the frame 
of  reference.  An  enhanced  policy  dialogue  fostering  the  establishment  of  a  policy 
environment  conducive  to  legitimacy  and  effectiveness  of  governance  will  make 
development  cooperation  more  effective.  Recognising  the  close  links  between  a 
government's political will, its capacity to handle changing power relations in society and 
the actual prospects for  alleviating poverty,  improving education,  health  and the situation 
of women, and creating conditions for  sustainable development,  is vital if countries aided 
by  the  international  community  are  to  become  the  "owners"  of  their  development 
processes. 

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The  second  guideline  proposes  the  adjustment  of  Community  policy  to  make 
poverty alleviation the cornerstone of the new partnership.  This guideline reflects the 
thrust  of  the  public  debate  and  in  no  way  implies  any  narrowing  of  the  scope  for 
cooperation. 
It  refers  to  an  integrated  approach  to  poverty  considering  together 
economic  growth  factors,  in  particular  the  development  of  local  markets,  regional 
integration  and  integration  into the international  economy,  and  the  social  impact  of such 
growth.  Political  backing  for  a  framework  conducive  to  equal  opportunities  and  the 
emergence  of  an  active  and  organised  civil  society  will  be  part  and  parcel  of  such  an 
approach.  Special  attention  will  be  given  to  developing  private  enterprise,  notably  by 
backing  the  reforms  needed  to  remove  the  institutional,  regulatory  or  economic  policy 
barriers  that  so  often  handicap  the  development  of  the  formal  and  the  informal  private 
sector  in the ACP countries.  Similarly, the social dimension  of cooperation  will  have to 
be strengthened considerably by support for policies on employment, access to productive 
resources and basic social services (education  and health in particular)  and by systematic 
consideration  of  the  need  to  improve  women's  participation  in  economic,  political  and 
social  life.  The  design  and  operation  of  policies  to  protect  natural  resources  and  the 
environment  will have to be integrated  into every stage of cooperation.  Cooperation will 
also  be  guided  by  consideration  of  the  institutional  dimension  and  the  principle  of 
developing local capacity. 

The  third  major  guideline  proposed  by  the  Commission  concerns  opening  up 
cooperation  to  economic  partnership.  The  impact  and  relevance  of  the  Lomé 
preferences  have been insufficient  to generate a real dynamic in a prospective view. More 
ambitious objectives, and in particular the steady integration of the ACP countries into the 
world  economy,  and  the  need  to  breathe  new  life  into  EU-ACP  economic  and  trade 
relations call for a shift towards a more balanced approach involving a genuine partnership 
reflecting  the  mutual  interests  of both  parties.  This  approach  entails  the  negotiation  of 
regional  or  subregional  economic  cooperation  and  partnership  agreements  linked  to  the 
overall EU-ACP partnership agreement. 

These regionalised  agreements will seek to develop close cooperation  in a series of areas 
ever  more  crucial  to  the  development  of  international  economic  and  trading  relations. 
There will be greater cooperation  on, for  example, technical, health  and safety  standards, 
basic  labour  rights,  environmental  measures,  investor  protection,  intellectual  property 
rights,  trade  in  services,  competition  policy  and  access to  public  contracts.  Agreements 
will  also  include  preferential  trade  arrangements,  with  reciprocity  gradually  being 
introduced for ACP countries or groupings that want it, taking account of the criteria laid 
down by the European  Council  concerning  such issues  as compatibility  with WTO rules 
and the common  agricultural  policy.  These agreements will be implemented  gradually, in 
support of regional integration processes and in phase with them. This enhanced economic 
partnership  will  take  account  of  each  partner's  level  of  development,  with  particular 
attention to the least-developed countries (LLDCs), for which the EU plans to extend and 
harmonise market access arrangements  (for all LLDCs, ACP or otherwise). 

The fourth  guideline  concerns  the  practical  procedures  for  managing  financial  and 
technical  cooperation, which  need  a complete  overhaul.  The major  achievements  of 
the  Lomé "culture"  in terms  of  contractuality,  security  and  predictability  are  assets  that 
need to be preserved.  However, shortcomings in the way they have been put into practice 
combined with the increased  demands for  efficient financial management  and the need  for 
differentiation  highlighted  in the  Green  Paper  mean that  a complete  overhaul  is needed. 

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Such an overhaul  entails the simplification  and rationalisation  of cooperation  instruments; 
it  also  involves  refocusing  Community  support  on  sectoral  approaches  encouraging  the 
countries  concerned  to  make  reforms  their  own  and  gradually  converting  Community 
funding  into  direct  budget  aid.  This  development,  which  depends  on  a  number  of 
conditions,  reflects  the  principle  that  each  country  has  chief  responsibility  for  its  own 
development.  It  also presupposes  a system  of resource allocation  based  not  only on the 
needs  of the  countries  concerned  but  also  on their  merits within  a framework  of  rolling 
programming, which must be restored to its central position in the cooperation process.  It 
calls likewise for more decentralised and efficient  management. 

The  fifth  guideline  preserves  the  ACP  as  a  group  while  introducing  considerable 
geographical  differentiation.  This principle of keeping  the  ACP group  intact  emerged 
quite  clearly  from  the  debate  on  the  Green  Paper.  Both  governments  and  civil  society 
expressed  a strong  sense of solidarity,  which is bound  to be emphasised  at the  Libreville 
summit of ACP Heads of State and Government. 

The  EU  must  heed  this  expression  of political  will.  Besides  proclaiming  the  ACP  as  a 
political entity, it reflects the value of EU-ACP relations in a world that is now multipolar. 
Yet there is a need for  differentiation  reflecting  the regional  dimension  of  economic and 
trade cooperation,  the increasing role of regional  integration  as a factor  for  development 
and, more generally, the need to adjust  to the facts  of life  and the  specific  circumstances 
of  the  ACP  group's  various  components  by  conducting  dialogue  and  cooperation 
activities at the most  appropriate  level.  This is why the Commission is proposing  a new 
overall agreement with the ACP countries, with differentiated  procedures and agreements. 
The future  agreements will also have to  be flexible  and  open  enough  to  respond  to  new 
needs and opportunities. 

The  EU-ACP  negotiations  scheduled  to  open  next  September  will  involve  a  key 
aspect  of the  European  Union's international  identity.  The challenge  is to  convert 
the legacy of the past into a strategic opportunity. 

INTRODUCTION 

Relations  between  the  European  Union  and  the  ACP  States  are  on  the  verge  of 
unprecedented  change,  a  change  of  which  all  must  weigh  up  the  challenges  and 
opportunities.  As revised by the  agreement  signed  in  Mauritius on 4 November  1995,  the 
fourth  Lomé Convention  provides  for  negotiations  to  open  in  September  1998  "in order 
to  examine  what  provisions  shall  subsequently  govern  relations between  the  Community 
and  the  Member  States,  on  the  one  hand,  and  the  ACP  States,  on  the  other."1  These 
negotiations  offer  the  partners  a  unique  opportunity  to  move  into  the  next  century  and 
invest their relationship with new ambition and increased chances of success. 

In preparation for this deadline and with this objective in mind, the Commission  launched 
a  wide-ranging  public  debate  by  publishing  a  Green  Paper.2  It  did  so  in  view  of  the 
changes that have taken place on the international scene, the transformations under way in 
the  ACP  countries,  a  Europe  in  constant  evolution  and  a  critical  review  of  past 
cooperation. 

The  debate  has  been  conducted  in  consultation  forums  organised  by  the  Commission  in 
every  Member  State  and  the  three  main  ACP  regions3  and  at  seminars  and  conferences 
convened  by  non-governmental  organisations,  the  private  sector,  trade  unions  or 
development-studies  centres.  There  have  also  been  many  written  contributions.  The 
European  Parliament  and  the  Economic  and  Social  Committee  have  addressed  many  of 
the  key  issues  raised  in  the  Green  Paper.4  The  ACP  countries  too  have  conducted 
national and regional consultations for the purpose of reaching their own positions. 

The  debate  has  been  intense,  sometimes  heated  and  often  decisive  in  pinpointing  the 
constraints  faced  by  the  different  parties,  the  challenges  ahead  and  the  strategic  options 
for meeting them. It has marked a movement  away from twenty-five  years of  cooperation 
towards the organisation of a new relationship reflecting  a changing world. 

In the light  of the debate,  this paper proposes broad policy  guidelines for future  relations 
between the European Union and the ACP countries.  It will be followed  by a proposal  for 
negotiating  directives  reflecting  these  guidelines,  possibly  amended  to  take  account  of 
positions expressed in the Council, the Parliament and the other institutions. 

1  Article 366 of the fowta Lomé Convention. 
2  COM(96)570 final  of 20 November 1996  entitled "Green Paper-on relations between th« European 
Union  and  the  ACP countries  on  the  eve  of  the  21st  century:  Challenges  and  options  for  a  new 
partnership". 

3  A list of consultation forums organised at the initiative of the Commission can be found in the annex. 
4  European  Parliament  report  on  the  Green  Paper:  PE  223.237; Opinion  of the  Economic  and  Social 

Committee on the Green Paper: CES 775/97. 

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1.  A  NEW THRUST IN LINE WITH A CHANGING WORLD 

In  its  Green  Paper  the  Commission  briefly  retraces  the  history  of  relations  between  the 
Union  and  the  ACP  countries.  It  recalls  the  origins  of  the  Community's  development 
policy, which dates back to the association  of the overseas  countries  and territories with 
the  Community  in  1957, the background  to the  signing  of the first Lomé Convention  in 
1975  and  subsequent  changes to  it.  The Green Paper  also places this  relationship  in the 
context  of  developments  in  other  areas  of  external  action,  among  them  the  new 
framework  for  partnership  with the Mediterranean  non-member  countries,  growing  links 
with  Latin  America  and  the  new  Asia  strategy.  It  underlines the  universal  nature  of the 
Union's external relations, but also their differentiated  nature. 

A critical  review  of the  fruits  of  past  cooperation,  based  in  particular  on  the  evaluation 
studies carried  out  according to the  criteria  drawn  up by the  OECD's  Development  Aid 
Committee,5 showed the strengths and weaknesses of Lomé. Community cooperation  has 
generated  considerable  funding  -  most  of  it  concessional  -  and  helped  improve  living 
conditions in the ACP countries. Founded  on the principles of partnership,  contractuality, 
predictability and security, the Lomé Convention has incontestably provided  an unrivalled 
framework  for  cooperation  between  two  groups  of  countries.  It  has  been  a  proving 
ground  for  new ideas. But  like all forms of cooperation,  it has had its shortcomings. The 
principle  of partnership  has proved  difficult  to  carry through.  Dependence  on  aid,  short-
termism  and  the  pressure  of  crises  have  increasingly  overshadowed  relations.  The 
recipient  country's institutional  environment  and economic and  social policy have often  a 
major  constraint  on  the  effectiveness  of  Community  cooperation.  The  Union  must  bear 
some  responsibility:  its  procedures  have  also  limited  the  effectiveness  of  its  aid.  The 
impact of trade preferences  has been disappointing on the whole. The effectiveness  of aid 
practice  has  also  been  diminished  by  a  lack  of  flexibility,  the  difficulties  of  the  joint 
management  system  and  the  near-automatic  way  in which  a  large  part  of  the  resources 
have been granted. 

The  Green  Paper's  main  premises have been  borne  out  by the  fruitful  and  wide-ranging 
debate that followed  its publication: 

-  Significant  changes in the world scene have affected  the relationship between the Union 
and  the  ACP  countries  in  particular  the  rapid  globalisation  of  trading  and  financial 
systems with its opportunities and dangers, the technological revolution and the advent 
of the "information  society",  the geopolitical  upheavals  caused  by the  collapse  of the 
Eastern Bloc and the recognition of principles of sustainable development  for the sake 
of future generations. 

-  The Union's role in the world  is developing  as its integration  process advances and it 

moves towards an unprecedented enlargement. 

-  A  root-and-branch  reform  is  needed  to  adapt  the  Convention  to  the  late  1990s, 
especially  to  help the  ACP  countries  raise  living  standards  and  slot  into  international 
trade. 

OECD/DAC "Principles of Effective Aid" 

-  The  ACP  countries  are  changing  fast.  Though  economic  and  political  instability 
continues to cause major  problems, the opportunities  and signs of the emergence  of a 
"New Africa"  are becoming ever more apparent.  Démocratisation processes are under 
way  in many  countries  and  must  be  sustained  and  reinforced.  Economic  reforms  are 
beginning to produce their first fragile  but promising results. The change of régime in 
South  Africa,  regional  integration  efforts  in West,  Southern  and  East  Africa  and  an 
opening-up to new outside partners are new tendencies that are helping change the face 
of Africa.  Closer relations with neighbouring regions are opening up new horizons for 
the  Caribbean,  a  region  that  now  sees  its  future  ties  with  the  Union  as  a  vital 
diversification  of its external relations. The small island economies of the Pacific,  so far 
from  their  nearest  neighbours,  are  seeking  to  maintain  meaningful  relations  with 
Europe. 

The debate  on  the  Green  Paper  has itself been  a milestone  in  the  overhaul  of  EU-ACP 
relations. It has in particular revealed the existence, on the part of both the ACP countries 
and the Member  States of the EU,  of a strong will to  revitalise the partnership.  What  is 
new is that  this desire has been  manifested  by a broad  spectrum  of agencies: along with 
the  usual  non-governmental  development  organisations,  business  federations,  trade 
unions,  local  authorities,  youth  associations  and  academic  circles  have  made  plain  their 
interest in a new form of EU-ACP cooperation, hoping to play their part both in the  field 
and when it comes to establishing political priorities. 

As the European Parliament emphasises in its report, the debate on the future  of the Lomé 
Convention  has already  helped  alter  its content  by revealing  new thinking  on both  sides 
and bringing to the fore  key issues of development  policies and development  aid that  are 
all too often  overshadowed by current events and emergencies. 

2.  REVITALISING  THE  PARTNERSHIP  WITH  A  NEW  POLITICAL  CONTRACT:  A 

STRATEGIC OPPORTUNITY 

2.1  The EU9s motives responsibilities and common interests 

As the  world's  leading  trading  partner,  the  main  source  of  development  aid,  a  pole  of 
stability and the most advanced  example of regional  integration, the Union is duty-bound 
to  develop  a  responsible  approach  to  the  regions  of  the  South,  especially  those  most 
vulnerable to poverty and marginalisation. In "Agenda 2000" the Commission emphasises 
that  "the  European  project  will  remain  credible  only  if it  responds  to  the  growing  calls 
from  its  citizens  for  greater  unity  and  more  effective  ways  of  building  and  defending 
peace,  stability  and  prosperity  on  the  European  continent  and  throughout  the  world."6 
Development cooperation is a vital aspect of this response. 

Effectiveness  demands that the European Union perform  a key role: making sure that the 
development  policies of the Member  States and the Community complement  each  other; 
improving  coordination  both  at  the  levels  identified  by the  Council  (policies,  operations 
and  international  forums)  and by adopting a common  overall  strategy  in respect  of ACP 
countries; and keeping EU trade, fisheries,  agricultural  and other policies consistent with 

COM{97)2000 gf 15 My  1997 "'Agenda 2000: For a stronger wider Union' 

the objectives  of development.  The new  EU-ACP cooperation  policy must be backed up 
by a clear political will with regard to these three principles. 

Post-colonial  days  are  over  and  it  is  time  to  stop  thinking  in  terms  of  donors  and 
recipients.  The  EU  and  the  ACP  countries  have  common  interests  to  defend.  Their 
relations must: 

-  become a factor for peace and stability, helping tackle the deep-seated causes of violent 

conflict; 

- 

in coordination  with the other donors, help attain internationally  recognised  objectives 
of sustainable development,  and in particular  the alleviation  of poverty.  The EU-ACP 
partnership  will  see  one  of  the  Union's  chief  contributions  to  the  international 
community's efforts  to achieve the objectives laid down for human development, and in 
particular in the strategy adopted by the OECD's Development Assistance Committee;7 

-  promote a development model that guarantees human rights and social progress; 

- 

improve  the  management  of  global  risks  and  interdependence  in  the  fields  of  the 
environment, various forms of trafficking,  migration, health etc. It is in the interests of 
both the EU and the ACP countries to use their intercontinental relationship to enhance 
cooperation,  especially  in  areas  where  international  cooperation  is  making  slow 
progress; 

-  foster  mutually-advantageous  economic  development.  Africa,  where 

recent 
improvements in economic management front have seen medium-term growth  forecasts 
revised upwards, is clearly a potentially important partner. 

As well  as wishing  to  avoid  threats  to  the  security  and  well-being  of the  North  arising 
from  their  lack  of  development  (violent  conflict,  migratory  pressure,  rising  extremism, 
drugs,  pandemics,  AIDS  etc.)  the  Union  therefore  also  has  good  positive  grounds  for 
pursuing  its cooperation  with the  ACP countries  and  adjusting  it  to  a radically  different 
situation. To do so, it and its partners must agree terms for a new and inherently political 
contract. 

2.2  The Union's proposal8 

The Union will be offering  the ACP countries  a long-term  commitment  in the form  of a 
partnership. Based on the principle of ownership, this partnership will involve: 

-  a strong political dimension and in-depth dialogue; 

-  help  with  the  establishment  of  a  political  environment  fostering  equal  opportunities, 
good  governance  and  conciliation  procedures  permitting  the  peaceful  settlement  of 

7  OECD/DAC  paper  of  May  1996  on  the  role  of  development  cooperation  on  the  eve  of  the  21st 

8 

century 
For simplicity's  s?ke, This document generally uses the term "the Unie:;", but the contracting  parties 
are, cf course, the Community and its Member States. 

-9 

conflicts  of interest  and enshrining dialogue  and the participation  of civil  society  as the 
norm; 

-  help with the implementation  of reforms  and financial  and technical  support  for  sound 

and responsible policies; 

-  systematic  consideration  of  need  for  institutional  development,  with  the  objective  of 
developing  the  capacities  of  the  public  sector  (including  local  authorities)  and  the 
private  sector  alike  not  only  for  the  conception,  analysis  and  implementation  of 
development  strategies but for the organisation of civil society in general; 

-  a stronger social dimension to cooperation; 

-  a new strategy for the development of the private sector; 

- 

including environmental considerations at every stage of cooperation; 

-  enhanced  economic  cooperation  in  the  mutual  interest,  with  cooperation  being 
extended  into  a  series  of  trade-related  areas  and  focused  on  integration  in  the  world 
economy, 

- 

the  expansion  of  cooperation,  especially  in  the  fields  of  scientific  and  technological 
research and the Information  Society,  in the light of new opportunities; 

-  a more active partnership including consultation of economic and social players; 

- 

the principle of regionalised  cooperation within the framework  of an overall  agreement 
with the ACP countries; 

-  appreciation  of  the  factors  that  make  our  ACP  partners,  particularly  the  small  island 

economies, vulnerable; 

-  differentiation  of  the  procedures  and  priorities  for  cooperation  in  the  light  of  the 
partner's level of development, needs and long-term development  strategy.  This will in 
particular mean an increasing  concentration  of the Union's  activities.  In other words, 
the Union will not be doing everything everywhere:  it will expand the range of possible 
cooperation  sectors  while  focusing  its  activities  in  a  given  country  or  region  on  a 
limited  number  of  priorities.  The  way  in  which  resources  are  managed  will  also  be 
geared to developing the partner country's capacities; 

-  a quest for greater efficiency,  a simpler convention  and easier access for new  agents  of 

cooperation. 

In  return,  the  EU  expects  of  its  partners  a  commitment  to  pursue  or  initiate  credible 
reforms and good governance in the political,  economic,  social and environmental spheres. 
This  new  contract  will  involve  not  only  greater  selectivity  in the  management  of  aid but 
more dialogue upstream of conditionality. 

10 

2.3  Key issues for the negotiations 

For the Union the key issue will be to  give EU-ACP  relations  a new  role in its external 
relations  and  ensure  that  its  political,  trade  and  development  cooperation  activities  are 
consistent not only with each other but with internal policies too. 

For  all concerned,  the main challenge  of these  negotiations  will be to  carry  through  the 
necessary  changes with  an eye to  the future.  The negotiations  must  produce  agreements 
that are innovative enough, without destroying past achievements. 

The new partnership with the ACP countries must mark the shift from a situation  rooted 
in  the  past  to  a  strategic  opportunity.  Accordingly,  the  Union's  offer  should  be 
characterised  politically by a partnership  that  is in every  sense closer  and  geographically 
by its global and regional aspects. 

3.  BRINGING EU-ACP PARTNERSHIP INTO UNION'S FOREIGN POLICY 

3.1  More  resources  for  conflict  prevention  and  more  effective  development 

cooperation 

Once thought  neutral in its impact on the ACP countries' political environment,  EU-ACP 
cooperation  is now seen  as having a clear political  dimension: the  new partnership  must 
reflect  this  fully.  The distinguishing  quality  of  Community  action  is increasingly  seen  as 
lying  in  the  complementarity  of  its  three  facets:  the  political  dimension;  economic 
partnership; ambitious social development measures. 

Political dialogue will have to be enhanced for two fundamental  reasons: 

•  Development  cooperation  must  serve  the  objectives  of  the  common  foreign  and 
security  policy  (Article  J. 1 of  the  Treaty  on  European  Union).  More  specifically,  it 
must  "preserve  peace  and  strengthen  international  security",  addressing  the  causes  of 
poverty  and  inequality  -  potential  sources  of  conflict  -  by  helping  improve  social 
cohesion and fighting marginalisation. 

It is in this context that greater priority for preventing conflict  and consolidating peace 
acquire  particular  resonance.  The  EU's  recently  adopted  guidelines  on  preventing 
conflict  in  Africa  are  specifically  aimed  at  helping  develop  the  capacities  of  African 
organisations (OAU and  subregional organisations) to act.9  But they also provide  for 
the coordinated  and consistent use of every means available, among them development 
cooperation  and  support  for  policies to promote human rights, democracy,  the rule of 
law and good governance. Development cooperation must nevertheless retain  sufficient 
It cannot 
independence to maintain continuity in the pursuit  of long-term  objectives. 
be  chopped  and  changed  without  endangering  its  effectiveness;  situations  of  political 
instability  warranting  a  reaction  in  terms  of  the  management  of  development 
cooperation  will therefore  have to  be assessed  to  see whether  they  are  temporary  or 
likely to last. 

Council  common  position  of 2 June  1997 and  SEC(96)332 Council  common  position  of 2 June  1997 
and  SEC(96)332  on  the  European  Union  and  the  issue  of  conflicts  in  Africa:  re-establishing  peace, 
crisis prevention  and  beyond. 

-  11 -

The Union's crisis prevention action will also benefit from the Treaty's new provisions, 
which include (a) the establishment  of a policy planning and early warning unit to alert 
the Council to incipient  crises and (b) greater cooperation  with the Western European 
Union, particularly over the prevention and management of crises. 

Specific  cooperative  measures  must  also  be  implemented  to  improve  the  security 
environment  at  both  global  and  regional  level.  On  the  basis  of  the  first  projects 
currently  being  carried  out,  such  measures  could  address  non-proliferation,  arms 
control, illegal arms trafficking  and land mines. 

• 

Deeper political  dialogue must  also serve to  make cooperation  more effective.  Unless 
there  is a political  will on the part  of the governments  of the countries concerned,  no 
outside  aid  can  really  significantly  affect  human  development  indicators  or  economic 
growth. 

The  need  to  tighten  the  links  between  socio-economic  and  political  action  is  made 
increasingly  apparent  by  the  new  development  agenda  emerging  from  the  major 
international  negotiations,10  one  geared  not  only  to  meeting  basic  needs  but  to 
guaranteeing human rights in the political, social and cultural spheres. 

Because they imply fundamental  changes in social  structures  and power  relationships, 
issues  such  as  the  alleviation  of  poverty,  the  efforts  called  for  in  the  education  and 
health  sectors,  the  need  to  promote  the  status  of  women,  consideration  of 
environmental  factors,  demography  and  its  impact  on  migration,  and  urban 
development  issues  cannot  be  handled  from  a  purely  technical  and  economic 
standpoint. 

The support - which the EU will be proposing to step up - for the organisation  of civil 
society and the development of the capacities of a broad spectrum of private-sector and 
social  movements,  the  encouragement  to  introduce  transparent  machinery  for 
consultation and dialogue, will constitute another significant  new political dimension. 

3.2  A new political dialogue 

For  all these  reasons, the  Union will be proposing to  its  ACP  partners  that  the  political 
dialogue  be  conducted  in  greater  depth  and  that  its  scope  be  extended  to  encompass 
whatever  are the issues of the day. Without wishing to  pre-empt  discussions by drawing 
up an exhaustive list, the following  issues will be addressed  not in isolation but within an 
integrated approach reflecting the multiple links between them: 

-  Human rights, democratic principles and the rule of law are now an essential element of 
EU-ACP  relations.11  As  regards  the first two,  which  have  been  essential  features  in 
every agreement  concluded  by the EU with a non-member  country  since  199512  - the 

10  See in particular the Agenda for Development (UN, June  1997) and the summary  of the  conclusions 
of the  major  international  conferences:  "The  World  Conferences,  Developing  Priorities  for  the  21st 
Century", UN briefing papers, 1997. 

11  Articles 5 and 366a of the revised Lomé Convention. 
12  On  29 May  1995  the  Council  adopted  a  standard  formula  for  human  rights  clauses  in  Community 
agreements  with  non-member  countries;  this  formula  includes  a  suspension  clause  allowing  the 
Community to react immediately in cases of human rights violations. 

- 1 2-

universality  and  indivisibility  of  all  human  rights  was  affirmed  by  the  Vienna 
Conference13.  This  means  that  human  rights  must  be  linked  to  policies  for  social 
progress,  access  to  education,  reducing  disparities  between  men  and  women,  respect 
for  minorities  etc.  Full  compliance  with  the  international  conventions  governing 
humanitarian protection and operations is a key condition for preserving any real scope 
for  humanitarian  operations in ACP countries.  A strict  approach  in terms both  of the 
principles and their application on the ground is vital in this area. 

Respect  for  democratic  principles  does  not  imply  a  single  universal  model.  Every 
society has the right to chose its own route to democracy in the light of the particular 
circumstances  in  its  own  country.  But  that  choice  must  include  the  fundamental 
features  of  representative  democracy:  the  separation  of  powers  guaranteeing  the 
independence of the judiciary, the right of citizens periodically to elect or sanction their 
political leaders and their right to free access to information  and freedom  of expression. 

The  observance  and  working  of  the  rule  of  law,  and  in  particular  the  fairness, 
performance,  accessibility and transparency of the legal system are fundamental  to both 
human  rights objectives  and economic  and  social  development  objectives.  In  all these 
areas  partners  will  have  to  commit  themselves  to  according  special  attention  to  the 
situation  of women,  promoting  their  equal  status and  helping them  play a frill part  in 
political life. 

Only a real  dialogue based  on ongoing  analysis and taking account  of cultural, social, 
economic  and  political  developments  on the ground  coupled  with the  implementation 
of  constructive  schemes  will  permit  the  development  of  an  effective,  progressive 
approach rooted firmly in the facts of life in each country. 

Like  the  rule  of  law,  good  governance  is  as  crucial  to  social  development  and 
alleviating  poverty  as  it  is  to  building  up  investment  and  the  private  sector.  In  the 
revised Lomé Convention, this concept,  now a leitmotif in the international  debate on 
development  aid, refers  to the transparent  and  responsible  management  of a country's 
resources (human, natural, economic and domestic and external financial  resources) for 
the purposes  of economic and social development.  It  encompasses  fighting  corruption 
and is fostered  by participative approaches. The European and ACP partners will have 
to agree on the principles they wish it to include; the EU's position will be informed by 
the Commission's recent communication concerning a policy on corruption both inside 
and outside the Union14 and international initiatives in the matter (G7 etc.). 

This should  lead the EU to  suggest  to  its partners that  good  governance be made an 
essential element of the future  agreement, just like the three (described  in the previous 
paragraph) already enshrined in the revised Lomé IV. 

Another  important  topic  will  be  preventing  and  settling  conflicts.  The Union  will  act 
within the relevant international or regional forum  and seek to prevent conflict  as early 
as  possible  or  restore  peace.  Other  issues  addressed  will  include  controlling  and 

13  World Conference on Human Rights, Vienna, 1993. 
14  COM(97)192  of  21  May 1997.  The  Commission  advocates  three  lines  of  action  in  the  sphere  of 
development  cooperation:  preventive  measures  (help with  the  improvement  of the  legal  framework, 
procedures, public procurement etc.) as part of the development  strategy; special programmes to deal 
with corruption; the inclusion of a "good governance" clause in every cooperation agreement. 

- 1 3-

limiting the buying and selling of arms, combating illegal arms trafficking,  banning and 
clearing land mines and meeting needs in the area of civic and legal education. 

-  Issues relating to justice and home affairs  in the Union (the third "pillar"), among them 
immigration,  drugs and cross-border  crime and trade in human beings will be  another 
area. 

-  Sectoral  policies  backed  by  Union  aid  will  include  support  for  research  and 

technological innovation. 

-  The resources deployed to alleviate poverty will be covered. 

-  Topics  of  general  or  regional  interest  (global  and  regional  efforts  to  protect  the 
environment, intercontinental migration, illegal trafficking  and multilateral negotiations) 
will be discussed. 

-  Regional  cooperation  and integration,  which are powerful  factors  for  stability, will be 
discussed  in terms both  of preventing or settling conflicts  and  of economic and  social 
development. 

3.3  A new institutional  basis for more effective  and open  dialogue 

Political  dialogue  thus  becomes  the  third  instrument,  a  vital  complement  to  aid  and 
economic cooperation. As the expression of a positive approach to conditionality,  it is the 
very lifeblood  of a revitalised  relationship between  mature and  responsible partners who 
honour their commitments, i.e. a partnership between equals. 

The  arrangements  for  the  political  dialogue  will  have  to  be  as flexible as  possible,  the 
ultimate aim being tangible results. Depending on the importance and interest of the topics 
on the agenda, dialogue should be (a) multilateral, regional or bilateral and (b) political or 
technical. In many areas, efficiency  demands that the dialogue be conducted  at regional or 
subregional meetings attended by members of the government and parliamentarians. 

The quest for efficiency  will also entail a review of the way the joint institutions work - in 
order  to  give them  a new  regional  dimension  - taking  their  own  proposals  as a  starting 
point. 

4.  REFOCUSSING  COMMUNITY  POLICY  ON  THE  COMPLEMENTARY  OBJECTIVES  OF 
SUSTAINABLE  ECONOMIC  AND  SOCIAL  DEVELOPMENT,  THE  ALLEVIATION  OF 
POVERTY  AND INTEGRATION INTO THE WORLD ECONOMY 

4.1  Objectives of EU-ACP cooperation 

The commitments made by the European Community, the Member States and many ACP 
countries at United Nations conferences  on social development, the environment,  equality 
between  men  and  women,  population  and  food  security  constitute  the  new  frame  of 
reference for the dialogue on policies and for EU aid operations. The Rio and Copenhagen 
summits  in  particular  mark  a turning  point  in that  they  have  produced  a  new  vision  of 
development  combining economic,  social and environmental dimensions. The connections 
between  reducing  poverty,  combating  discrimination,  especially  against  women,  and 
protecting  the  environment  and  acting  responsibly  for  future  generations  have  been 

- 1 4-

highlighted.  The  importance  of  making  decisive  progress  in  the  areas  of  primary 
education, basic health care and other essential  services has been recognised.  The Agenda 
for  Development  recently adopted by the United  Nations reflects  this approach geared  to 
improving  living  conditions,  and  also  recognises  its  fundamentally  political  dimension.15 
The entire process is founded  on the principle that  the countries concerned  have primary 
responsibility for their own development. 

The ACP countries' own strengths and weaknesses in the face of a changing international 
economy  likewise  highlight  the  need  for  fundamental  improvements  to  their  economic 
environment, for  a climate more conducive to the development  of the private sector.  The 
importance of the informal  sector or "poor people's economy", with its job- and income-
generating  potential  and  capacity  for  social  and  economic  innovation,  also  warrants 
special  support  to  help  achieve  sustainable  improvements  to  living  and  working 
conditions.  The  fact  that  many  countries  are  heavily  dependent,  particularly  through 
agriculture,  on  natural  resources,  combined  with  current  climatic  instability  also  means 
that environmental issues must be given due priority. We must also recognise the strategic 
value  of  more  systematic  support  for  developing  skills  and  facilities,  particularly  in  the 
spheres of science and technology. 

In view of the objectives laid down by the TEU for  Community development  policy,16 the 
new  priorities  laid  down  by  the  Council  in  recent  years17  and  the  quantitative  and 
qualitative  objectives  fixed  by  the  main  donors  in  the  OECD,18  the  Union  will  be 
proposing  that  its  partners  give  special  priority  to  poverty  alleviation  by  enhancing  the 
social dimension of cooperation  and, at the same time, focusing  on improving factors  for 
growth, competitiveness and employment. 

Though  it  is  for  the  governments  and  peoples  concerned  to  choose  their  development 
policies, these policies are increasingly interdependent. Mutual interest and reciprocity are 
therefore 
the  driving  forces  for  closer  cooperation,  be  it  economic,  social  or 
environmental.  Improving  living  and  working  conditions  in  the  developing  countries  is 
now  a  priority  for  the  Union's  action  abroad.  The  Union  is  not  seeking  to  export  its 
model,  it  is simply  sharing  its experience.  At  a time of internal  and  external  change,  the 
EU itself is having to  come to terms with the need to  adapt  in order to  sustain its social 
choices, defend  its social  model and reconcile the principle of competition  as a force  for 
economic progress with the solidarity necessary to social cohesion. The EU is looking for 
a  new  way  of  linking  the  economic  and  the  social,  with  social  policy  contributing  to 
economic performance, jobs and competitiveness. 

It  is against  this background  that  the  complementarity  of the three  overall  objectives  of 
Community cooperation has be safeguarded.  Alleviating poverty, which is a vital objective 
of  any  partnership  with  the  ACP  countries,  must  be  part  of  a  wider  policy  pursuing 

15  Agenda for Development, UN General Assembly, June 1997. 
16  Article  130u:  "the  sustainable  economic  and  social  development  of  the  developing  countries,  and 
more particularly the most disadvantaged among them;  [their] smooth and gradual  integration  ... into 
the world economy; the campaign against poverty...". 

17  Conclusions  and  resolutions  on  social  and  human  development,  equality  between  the  sexes 
(November  1995),  priorities  for  health,  education  and  training,  food  security,  alleviating  poverty 
(December  1993),  structural  adjustment  support, 
the  relationship  between  emergency  aid, 
rehabilitation and development. 

18  OECD/DAC paper on the role of development cooperation on the eve of the 21st century, May 1996. 

- 1 5-

sustainable  development  by  means  of  economic  growth  and  job  creation,  ending 
discrimination  against  women,  access  to  education  and  health  care,  and  preserving  and 
improving  the  environment.  As  the  latest  Human  Development  Report  emphasises,  the 
debate on the relationship between economic growth and the alleviation of poverty - a key 
issue during the consultations on the Green Paper - is to some extent a red herring in that 
it draws attention away from the two most important  questions, namely how to  speed up 
growth and how to create a growth model geared to alleviating poverty.19 

These  considerations  and  the  consultations  on  the  Green  Paper  suggest  that  alleviating 
poverty  in  its  various  forms  -  in  terms  both  of  social  and  human  development  and 
protecting the natural resources on which the poor depend  - should be placed  at the very 
heart  of EU-ACP  cooperation  in an integrated  approach  addressing both  the  factors  for 
economic growth  and the  social  impact  of such growth.  The establishment  of a political 
environment  fostering  opportunities  for  all members  of society  and  the  emergence  of an 
active civil society will be part and parcel of this approach. There must be recognition and 
backing  for  the  role  of  the  private  sector  (both  formal  and  informal),  the  State,  local 
authorities and sections of society organised  into trade unions, associations,  cooperatives 
and other groupings. The Union's action must foster  the development  of the capacities of 
these  different  agents  and  the  improvement  of the  institutional  framework  necessary  for 
social  cohesion,  the working  of a democratic  society and  a market  economy  founded  on 
concertation.  The State must  pay particular  attention  to the proper  operation  of markets 
and take action to remedy their failures. Lastly, the Community has a specific  contribution 
to  make in  support  of the  processes  of regional  integration  and  cooperation,  which  are 
recognised  as  being  conducive  to  development  and  as  an  often  crucial  step  towards 
integration into the international economy. 

These guidelines establish a new strategy for  cooperation and new priorities.  Cooperation 
will  be  differentiated,  i.e.  the  focal  sectors  will  be  chosen  from  a  wide  range  of 
complementary  sectors in the light  of a country's  needs, potential  and  political will, with 
priority  going  to  sectors  where  the  Union's  activities  can  add  more  value  than  another 
donor. A tight link must also be established between the enhanced political dimension and 
cooperation;  in this context,  preventing violent  conflict  and  the need  to  tackle  the deep-
seated  causes of such conflict  will also influence  the  choice  of priorities.  Such activities, 
which  cannot  be  exhaustively  listed  in  advance,  will  focus  on  three  main  priorities 
(growth-competitiveness-employment,  the  social  and  cultural  dimension  and  regional 
integration)  and  satisfy  three  essential  criteria  (capacity  development,  gender  issues  and 
environmental principles). 

4.2  Three main priorities 

4.2.1  Support for  growth and policies for  competitiveness and employment 

j sing  employment  and  access  to  productive  resources  are  vital  to  any  lasting 
reduction in poverty and tackling exclusion. The pledges made in Copenhagen lay down a 
series  of  highly  relevant  objectives  in  this  domain.  Increased  investment  and  the 
development  of  a  dynamic  private  sector,  both  in  the  formal  sector  and  the  "poor 
people's"  economy,  are  essential  to  speeding  up  growth  in  rural  and  urban  areas  alike, 
broadening the basis of that growth and increasing employment.  Jobs will be all the more 

19  UNDP, 1997. 

- 1 6-

secure and  sustainable - and thus more likely to bring about  a real  improvement  in living 
conditions  -  if they  are  accompanied  by  an  improvement  to  the  competitiveness  of  the 
economies concerned. Particular  account must be taken of the status of women and their 
opportunities for taking part in economic life and sharing the benefits of growth. 

With a view to restoring the confidence of economic operators and fostering job creation, 
the Union's cooperation will include support for: 

- 

the  implementation  of  predictable  and  credible  macroeconomic,  trade  and  sectoral 
policies,  creating  an  environment  favourable  to  private  investment  (internal  and  from 
abroad)  and  taking  express  account  of  the  objective  of  employment.  Monetary 
cooperation  may  also  be  proposed  in  this  context,  especially  in  relation  to  the 
technological 
introduction  of  the  euro; 
infrastructures  will also be fostered; 

the  establishment  of  economic  and 

-  administrative, institutional or legislative reforms aimed at improving conditions for the 
development  of a competitive  private  sector,  and  for  the establishment  of a legal and 
social framework conducive to the informal  sector's gradual integration into the formal 
economy, as well as arrangements to ensure that the environmental aspect is taken into 
account; 

- 

the development of financial  systems and greater access to financial services; 

- 

- 

- 

the  creation  and  development  of businesses,  especially  those  with  great  potential  for 
job  creation  but  no  access  to  production  factors  (technologies,  financing  etc.)  or 
markets,  in  particular  SMEs,  microenterprises  and  cooperatives.  The  financial  and 
technical aid administered  by the European  Investment  Bank (EIB) and the Centre for 
the  Development  of  Industry  (CDI)  will  complement  the  aid  administered  by  the 
Commission in these areas; 

the improvement of education and training systems contributing to greater  productivity 
in both formal and informal  sectors; 

labour policies and institutions, particularly with regard to information  and training, the 
implementation  of.legislation  affording  workers a suitable level of protection and basic 
rights,20  improvements  to  health  and  safety  at  work,  non-discriminatory  practices, 
especially in respect of women, and improvements to the social dialogue. This support 
will have to take account of the need to sustain a suitable flexible labour market; 

-  reforms  and  policies  aimed  at  improving  access  -  especially  for  the  most  vulnerable 
groups  -  to  productive  resources,  e.g.  the  right  to  own  and  work  land,  capital  and 
credit,  education  and training, technology,  information,  transport  and  communications 
services. 

Outside  the  framework  of  EU-ACP  relations  as  such,  a  more  ambitious  international 
approach is needed to the developing countries' external debt problems, which very much 
determine the outcome of the efforts  of heavily indebted countries in the areas of growth, 
competitiveness and employment. 

20 

ILO Conventions on the right to organise and collective bargaining, the prohibition of forced  labour, 
child labour, non-discrimination. 

- 1 7-

4.2.2  Support for  social policies and cultural cooperation 

Another  priority  of future  EU-ACP  cooperation  will be to  improve the  quality  of  social 
services  and  reduce  inequalities  in  access  to  health  care,  education,  water,  housing  and 
other  essential  services.  The  Union's  approach  will  be to  help  the  partner  countries  (a) 
maintain  and gradually increase funding  for the major  social  sectors  and  (b) adapt  social 
services and  systems of social protection to  changes in economic conditions, local  needs 
and  the  specific  demands  of  a  country  or  region.  Decentralised  cooperation  will  be 
particularly  important  here  and  will  have to  be  increased.  In  all  these  spheres,  the  EU 
attaches  particular  importance  to  reducing  the  gap  between  men  and  women.  Targeted 
operations,  especially  for  the  poor,  will  be  considered  only  where  political  conditions 
prevent a broader approach to the mechanics of social progress. 

The main areas of cooperation will be: 

-  support  for  general  and  sectoral  policies promoting access to basic services - primary 
education,  basic health  care, water,  urban housing - in coordination  with  the Member 
States and other donors; 

-  support for policies on food  security and improving access to foodstuffs  by maintaining 

local production, as well as for responsible management of water resources; 

-  support for demographic policies; 

-  support  for  schemes  aimed  at  mutualising  risks  and  building  up  social  development 
funds  permitting  decentralised  and  participatory  management  by the agencies eligible. 
Such funds may be organised nationally or locally and serve either social promotion or, 
more generally, the people's economy. Making partners aware of their  responsibilities 
through the use of monitoring and evaluation criteria will be a fundamental  principle; 

-  strengthening  participation  and  developing  social  dialogue  in  both  the  broad  sense 
(between  all  significant  forces  in  civil  society)  and  the  narrow  sense  (between 
employers and trade unions). This support will take its cue from the ILO Conventions 
on trade union freedom  and collective bargaining rights, basic labour rights identified  at 
the  World  Summit  on  Social  Development  which  the  Commission  has  proposed  to 
promote in all agreements with non-member countries;21 

-  cultural  cooperation  through  schemes  fostering  the  recognition  of  cultural  identities 
and  intercultural  dialogue  and  the  consideration  of  this  dimension  in  all  Community 
operations. 

4.2.3  Regional integratim 

Regional  integration  is  often  a  necessary  step  towards  integration  into  the  wider 
international  economic  system.  It  enables  national  economies  to  diversify  and  fosters 
economies  of  scale.  The  Community  has backed  various  forms  of  regional  cooperation 
since  the  first  Lomé  Convention,  and  has  steadily  stepped  up  its  support  for  regional 
integration.  This type of operation is specific to the Community,  enabling other  countries 

21  COM(97)724 on the follow-up to the World Summit on Social Dc\ 

to  benefit  from  the  experience  of building  Europe  and  the  know-how  accumulated  in a 
number of areas. 

The  EU  will  be  offering  ACP  partners  engaged  in  regional  integration  a  cooperation 
strategy involving: 

-  support  for  regional  economic  integration  schemes  (coordination  of  macroeconomic 
policies and investment schemes, trade liberalisation and customs cooperation etc.); 

-  support  for  regional  cooperation  schemes  concerning  infrastructure  (especially  inland 

transport and port infrastructure),  the environment, health, research etc.; 

-  building  up  the  capacity  of  regional  organisations  and  national  governments  to  act 
effectively  on  economic,  social,  political  and  environmental  matters,  among  other 
things by promoting codes of conduct, standards etc.; 

-  for  a transitional  period,  taking  the  effects  of  integration  on  budget  revenue  and  the 

balance of payments into account when assessing funding needs. 

Support  for  regional integration will also be central to the trade policy and the  economic 
cooperation agreements covered in Chapter 5. 

4.3  Three horizontal guiding principles 

4.3. J  Institutional development and helping build local capacities 

Systematic  attention  will  be paid  in EU-ACP  cooperation  to  institutional  aspects  and  to 
building  local  capacities  for  the  design  and  implementation  of  appropriate  reforms  and 
policies.  With  its  explicitly  political  agenda  and  long-term  mutual  commitments,  the 
partnership  proposed  by  the  EU  constitutes  an  appropriate  framework  for  supporting 
institutional development, the establishment of the mechanisms needed for  social dialogue, 
the  national  or  local  organisation  of  economic  and  social  sectors  and  civil  society  in 
general, and the reinforcement  of democratic and participative structures generally.  South-
South and North-South exchanges of experience will also be encouraged. 

Capacity building in the ACP countries will be one of the criteria governing the choice of 
practical cooperation arrangements. 

The EU will in particular try to help: 

- 

improve the  capacities  of the  State  and the  public  sector.  Priority  will  go  to  reforms 
carried  out  in the  course  of démocratisation  and the  consolidation  of the  rule  of law 
(working  of judicial  systems,  the  legislature  etc.),  reforms  aimed  at  improving  the 
efficiency  of the public sector (administrative decentralisation,  role of local  authorities 
and  other  local  bodies,  etc.),  supervising  the  market  economy  (application  of 
commercial  law,  competition  policy,  protecting  investments,  stability  of  the  financial 
system,  etc.),  good  governance  (public  procurement,  management  of  public  finances, 
etc.), fighting  crime and drugs.  Priority will also be attached  to  developing  capacities 
for  the  analysis  and  drafting  of  economic  and  social  policies  and  sustainable 

19 

development  strategies  (a  principle  accepted  at  the  UNGASS  conference22), 
formulating  and  implementing  policies  to  foster  the  development  of  research  and 
investment  in technology.23  The Community will  also provide  assistance for  consumer 
legislation  which,  as  well  as  reinforcing  the  rule  of  law,  will  help  protect  consumers' 
health  and  economic  interests  and  improve  their  access  to  information  and  education 
and their right to organise.24 

-  reinforce  the private  sector's capacities in terms of human, financial and  technological 
resources  in  support  of  economic  diversification  strategies.  Particular  priority  will  be 
accorded  to  institutional  support  for  organisations  representing  business,  vocational 
training,  increasing  research  capacities  and  the  use  of  information  technologies 
(improvement  of telecommunications  services,  development  of  new  services  and  new 
applications),  which  can  do  much  to  improve  access  to  education,  develop  research 
networks and increase productivity and competitiveness;25 

-  back  the  organisation  of  civil  society  and  strengthen  existing  social  players. 
Cooperation could help them gather their forces  - without  undermining their quest  for 
new  methods  of  representation  and  dealing  with  the  authorities  -  and  encourage 
exchanges  of  experience,  in  particular  on  a  South-South  or  regional  basis.  Besides 
human  rights  associations,  trade unions,  consumers'  associations  (which  contribute  to 
better  understanding  of  food  hygiene,  the use  of  medication,  the  household  economy, 
health  and  sustainable  consumption),  trade  associations,  producer  associations, 
women's  associations,  youth organisations,  children's  organisations  and  environmental 
protection movements will also benefit; 

- 

the  use  of  local  know-how,  which  will  be  developed  in,  for  example,  EU-ACP 
networks. 

4.3.2  Adopting  a gender-sensitive  approach  and  reducing  disparities  between  men  and 

women 

Gender  disparities  influence  economic  life  at  every  level from the  microeconomic  to  the 
macroeconomic.  They  figure  prominently  in  every  analysis  of  poverty.  Development 
policies generally fail to take sufficient  account  of the respective roles of men and women 
in the management of human and natural resources. 

Redressing  gender  disparities  must  become  one  of  the  key  stated  objectives  of  human-
centred  development.  For  the  Union,  this  dimension  is  integral  to  the  development 
process,  crucial  not  only  to  fairness  and social justice but to  economic  objectives  and the 
effectiveness  of development and cooperation policies. 

22  Jaw  19*7. 
23 

In line with the guidelines included by the  Commission  in  its recent Communication  on  "Scientific 
and technological  researen - A stratejpc part of the European Union's development  cooperation with 
developing  caajntrias'* - COM (97)174 final of 25 April 1997. 

24 

In line with the CoHMoifision's viewpoint in its communication of 31 October  1995 (COM(95}319). 

25  See also COM(97)351 of  15 July  1997 on the EU's role in the information  society and development. 

- 20 -

Given the pledges made at  Union26 and international  level,27 future  EU-ACP  cooperation 
will have to comply with the principles governing the integration  of gender issues into all 
macroeconomic,  sectoral  or  project  assistance.  The  situation  of  women  will  receive 
special attention  in every area of EU activity,  and especially  support  for job  creation and 
social policy. 

"Mainstreaming"  (i.e.  the  systematic  integration  of  gender  issues  into  every  area  of 
activity) will not, however, preclude positive measures for women in areas where they can 
help reduce a particularly  significant  gap between the sexes. The Union will give priority 
to  reducing  disparities  in  access  to  essential  services,  and  in  particular  education  and 
health,  respect  for  sexual  and  reproductive  rights,  and  the  reduction  of  inequalities 
affecting  access to economic resources and the labour market.  Specific  attention will also 
be given to  gender  issues in emergency  operations  and the  subsequent  rehabilitation  and 
development phases. 

4.3.3  Integrating  the principles  of  conserving natural  resources  and  protecting  the 

environment 

The Earth  Summit  was  a milestone  in the  international  debate  on  environmental  issues, 
calling for  a change in attitudes  and  an integrated  approach  to  environmental,  economic 
and  social  aspects  of  development.  In  line  with  its  commitments,  the  EU  is  trying  to 
develop  principles  and  new  practices  conducive 
to  economically,  socially  and 
environmentally sustainable development. 

These principles and practices will have to be brought  into planning, implementation  and 
evaluation in every area of development cooperation, with particular attention to: 

-  capacity building and the improvement of environmental assessment practices; 

- 

- 

- 

the  links  between  alleviating  poverty  and  environmental  problems,  including  the 
redistributive aspects of fiscal instruments; 

increasing  internalisation  of  environmental  costs  when  supporting  economic  reform, 
taking social and environmental impact into account; 

the  establishment  of  effective  public/private  partnerships,  notably  for  the  transfer  of 
clean technologies; 

-  specific  schemes  in  some  sectors,  with  priority  going  to  water  resources,  energy 
efficiency,  desertification, urban development,  sustainable forestry  management and the 
preservation and sustainable management of biological diversity and fishery resources. 

Particular attention will also be accorded  to  small island countries threatened  by climatic 
change. 

26  COM(95)423  of  18  September  1995  on  the  integration  of  gender  issues  into  development 

cooperation; Council resolution of December 1995. 

27  Fourth  World  Congress  on  Women  (Peking,  September  1995)  and  World  Summit  on  Social 

Development (Copenhagen, March 1995). 

- 2 1-

5.  OPENING UP COOPERATION TO ECONOMIC  PARTNERSHIP 

EU-ACP trade cooperation has not really fulfilled  its objectives. The ACP countries' trade 
performance  has  generally  been  disappointing  and  Community  businesses  have  shown 
relatively  little interest  in them.  There are many reasons for  this, and  shortcomings  in the 
Lomé Convention's trade arrangements are not  high on the list.  Analysis of the  situation 
does, however,  show that EU-ACP trade cooperation  has failed  to  fulfil  its potential  and 
that  a more dynamic approach  to  developing  economic  partnership  between  the EU and 
the ACP countries would help both benefit  more from their special relationship. 

5.1  More ambitious economic and trade  objectives 

It will not be possible to enhance the EU-ACP economic partnership without  abandoning 
the traditional approach to trade - centred on a system of unilateral preferences - in favour 
of a more balanced approach characterised by a genuine partnership and taking account of 
the parties' mutual interests. 

Such an approach calls for ambitious objectives, which for the Union involve: 

-  encouraging and assisting the gradual and harmonious integration of the ACP countries 
into the world economy, including both the development of their trading capacities and 
their ability to attract domestic and foreign investment; 

-  creating  a  new  trading  dynamic  and  strengthening  Europe's  presence  in  the  ACP 
countries  by  enabling  EU  businesses  to  tap  into  those  countries'  comparative 
advantages; 

- 

inviting  the  ACP  countries  to  cooperate  with  the  EU  in  international  economic  and 
trade negotiations. 

Achieving these objectives will depend on the capacity of the future partnership to: 

-  consolidate  regional  integration  processes  as a step  on the  way to  global  integration. 
The  EU  proposal  will  have  to  take  account  of  the  will  for  integration  displayed  to 
varying degrees by countries in sub-Saharan Africa,  the Caribbean and the Pacific  and 
developments  in integration  processes.  This  inevitably  introduces  a dynamic  element 
into the future economic partnership, which will have to be implemented gradually; 

- 

technical,  health  and  safety  standards,  basic 

improve  the  ACP  countries'  capacity  to  handle  other  trade-related  issues,  including 
compliance  with 
labour  rights, 
environmental  measures,  investment  protection,  protection  for  intellectual  property 
rights, trade  in  services,  competition  policy,  consumer  policy  and  access  to  public 
procurement,  all  of  which  are  set  to  play  an  increasingly  crucial  role  in  international 
trade.  Closer cooperation in these areas will therefore be necessary; 

trade  and 

-  stabilise  the  ACP  countries' 

investment  policies,  enhancing 

their 
predictability  and  contractuality  for  businesses  and  potential  investors.  The  future 
economic partnership must enable the ACP countries to rely on an economically strong 
and  reliable  partner  as they  reform  their  economies,  strengthen  the  transparency  and 
credibility  of  such  reforms  and  ensure  the  consistency  of  their  trade  and  economic 
policies  while  they  do  so.  It  must  help  generate  more  business  interest  in  the  ACP 
countries,  foster  domestic  and  foreign  investment  and  the  transfer  of  know-how  and 

- 2 2-

technology,  thereby  increasing  the  ACP  countries'  competitiveness  and  aiding  their 
gradual and smooth integration into the world economy. 

5.2 

Strengthening regional integration 

The  EU's  ultimate  objective  should  therefore  be  to  conclude  economic  partnership 
agreements  with  each  of the three ACP regions  (Africa,  the  Caribbean  and  the  Pacific), 
taking account of the ACP countries' political commitment to regional integration. 

This objective  can only be achieved  gradually,  starting with the negotiation  of  economic 
agreements with regional  subgroups engaged  in a process of integration  and,  in  a limited 
number of cases, individual countries belonging to no regional grouping but satisfying  the 
necessary conditions concerning size, level of development and administrative capacities. 

The  areas  to  consider  are West  Africa,  Central  Africa,  southern  Africa,  East  Africa,  the 
Caribbean  and  the Pacific.  It would, of course, be  for  the ACP countries  themselves  to 
choose the regional structures with which the EU negotiates. 

The  progress  of  regional  integration  processes,  and  in  particular  the  degree  of 
liberalisation  within  these  integration  areas  and  whether  they  establish  a  common 
commercial  policy,  will  nevertheless  determine  the  timetables  for  negotiations.  In  any 
case, given the current  state of regional integration, the EU's partners could include such 
groupings as UEMOA, UDEAC, the SADC, EAC and CARICOM.  Initiatives under way 
in the Pacific (the South Pacific Forum) do not permit a regional partner to be identified  at 
this stage, but cooperation opportunities could be explored. 

5.3 

Adapting the approach to the situation of the LLDCs 

An approach  aimed at enhancing the economic partnership would  obviously  have to take 
account of each partner's level of development, constraints and capacities. 

What  this  means  is that the  EU  should  maintain  the  current  arrangements  when  dealing 
with the least-developed countries (LLDCs) and extend them wherever possible.  In other 
areas related  to trade, it  should  avoid  seeking commitments  that  are beyond  the LLDCs' 
economic  and  institutional  capacities.  However,  this  necessary  differentiation  between 
LLDCs  and  other  countries  should  not  be  at  the  expense  of  the  regional  integration 
processes  under  way.  Many  ACP  LLDCs  belong  to  customs  unions  or free-trade areas 
with which it would make sense to conclude economic cooperation  agreements involving 

2 3-

a  degree  of  reciprocity.  The  benefits  of  taking  part  in  an  area  of  enhanced  economic 
cooperation with the EU  should  outweigh  any interim costs of liberalisation.  Reciprocity 
would,  however,  require  a  greater  adjustment  effort  from  these  LLDCs,  efforts  which 
would have to be taken into account when assessing their needs and give rise to extra help 
in  the  form  of  flanking  measures  (transition  aid,  macroeconomic  assistance,  sectoral 
assistance etc.). 

5.4 

Differentiated  agreements 

Enhancing the economic partnership would therefore  involve the negotiation of a number 
of  agreements:  an  overall  EU-ACP  agreement  and  a  series  of  economic  cooperation 
agreements between the EU and regional  subgroups including trade provisions providing 
for differing  degrees of reciprocity and appropriate timetables. 

Such negotiations would be difficult  to carry through in the period laid down by the Lomé 
Convention.  It also has to be recognised  that  enhancing the economic partnership would 
gradually  change  the  ACP  countries'  rights  and  obligations.  It  would  therefore  make 
sense to plan several stages of negotiations. 

The  first  stage  (1998-2000)  would  see  the  negotiation  of  the  framework  or  overall 
agreement.  The  second  would  see  the  negotiation  of  regionalised  agreements. 
In  the 
interests of both the partners and the EU,  such regionalised  agreements could,  subject  to 
the  proviso  in 5.5  below,  take the form  either of economic  cooperation  agreements  (not 
totally  reciprocal)  or  economic  partnership  agreements  (reciprocal,  including  free-trade 
areas).  This second  stage  should  not  exceed  three  years from  the  expiry  of the  current 
Convention (2000-2003). 

The content of these agreements would be as follows: 

-  The  overall  agreement  would  establish  the  parties'  commitment  to  the  gradual 
enhancement  of their  economic  partnership.  It  would  specify  the  ultimate  objective, 
which  would  be  to  reach  economic  cooperation  agreements  with  the  three  ACP 
regions, and name the regional  subgroups  and non-LLDC  ACP countries  undertaking 
to negotiate economic cooperation  or partnership agreements during the  second  stage 
of negotiations.  It would establish the general framework  for these agreements and, as 
far  as  possible,  the  overall  timetable  envisaged. 
It  would  provide  for  the  eventual 
harmonisation  and  fusion  of  these  agreements  in  the  light  of  progress  towards 
integration in the three ACP regions. 

The overall agreement would also contain common provisions concerning trade-related 
areas,  which  would  then  be  expanded  on  in  the  future  regionalised  agreements. 
Industrial cooperation and trade promotion schemes could also be developed under the 
overall agreement. 

It  would  propose  that  all  non-LLDC  ACP  countries  retain  current  preferences 
throughout the three-year negotiating period. 

Where non-LLDC  ACP countries  did  not  wish to  commit  themselves to  negotiations 
aimed  at  introducing  an  element  of  reciprocity  into  their  relations  with  the  EU, 
negotiations  broke  down  or  initial  commitments  were  not  fulfilled,  it  would  allow 
countries to continue to benefit  from trade preferences under the GSP on expiry of the 

24 

three-year  period.  It  would  likewise  lay  down  the  terms  of  access  for  LLDCs  not 
belonging to  a regional grouping involved in negotiations with the EU  on the basis of 
the current acquis and the Council decision of 2 June  1997 in favour  of the LLDCs (in 
follow-up  to  the  LLDC  action  plan  adopted  at  the December  1996  WTO  ministerial 
conference  in Singapore), it being understood  that these arrangements would  apply to 
all LLDCs (ACP or otherwise). 

-  Regionalised  economic cooperation agreements would  consolidate the ACP countries' 
access to the European market and introduce an element of reciprocity for EU exports. 
Such agreements would be a key step on the way to overall liberalisation.  They would 
specify the access arrangements applicable to the two parties and the rate and schedule 
for adjusting tariffs. They would also contain provisions on further  cooperation in other 
trade-related  areas.  They  would  specify  the  period  after  which  the  situation  would 
need to be reviewed to assess the progress made towards liberalisation  and establish a 
timetable for subsequent stages. 

-  Besides  provisions  on  economic  cooperation,  regionalised  economic  partnership 
agreements  could  provide  for  the  gradual  establishment  of  a  free-trade  area  in 
accordance with WTO rules (excluding no sector, covering the bulk of trade, a normal 
implementation period often years) and the common agricultural policy. 

The enhanced economic partnership would therefore be achieved by economic partnership 
agreements,  preceded  where  necessary  by  economic  cooperation  agreements,  covering 
trade arrangements, introducing the principle of reciprocity and close cooperation in other 
trade-related areas. 

Such  an  approach  would  significantly  reinforce  economic  ties  between  the  parties  by 
creating highly integrated economic areas. 

5.5 

Compatibility  with 
agricultural policy 

the  WTO  compatibility  and 

the  common 

In the long run, the harmonisation of the preferences  offered  by the EU to all LLDCs and 
a  proliferation  of  economic  cooperation  agreements  compatible  with  the  WTO,  and  in 
particular  GATT Article XXIV on free-trade  areas, would ultimately mean that  the EU's 
future  trade  arrangements  were  perfectly  in  line  with  WTO  provisions  and  require  no 
exceptions. 

In  the  short  and  medium  term,  however,  whatever  line  is  actually  taken,  it  is  hard  to 
imagine  trade  arrangements  between  the  EU  and  the  ACP  countries  that  would  not 
require an exception from the WTO. 

An exception would have to be obtained to maintain the current arrangements throughout 
the  three-year  negotiating  period.  Furthermore,  given  that  the  movement  towards 
reciprocity  involves,  for  some  areas  at  least,  economic  cooperation  agreements,  an 
exception  of the type provided  for  in Article 9 of the WTO Agreement  (like the  current 
The  Community  should  carefully  prepare  its 
one)  or  XXIV. 10  would  be  needed. 
presentation  of  these  measures  to  the  WTO. 
It  could,  for  instance,  emphasise  the 
considerable  development  benefits  of  such  agreements,  which  would  help  the  ACP 
countries  adjust,  each  according  to  its  own  development  level,  to  the  new  international 
environment. 

25-

The  advisability  of  switching  to  economic  partnership  agreements  involving  free-trade 
areas will  in any case  require careful  examination  in terms of the criteria laid  down  in the 
report  to  the  European  Council  on  the  development  of  the  commercial  policy  and  the 
Community's  preferential  agreements,28  notably  in terms  of  compatibility  with  the  WTO 
and the common  agricultural  policy.  If this examination  revealed  inconsistencies,  the  EU 
would  have to resort to agreements that were narrower in scope,  which would  necessitate 
an  exception,  the  duration  of  which  would  have  to  be  determined,  but  which  would  be 
subject  to  annual  review.  In the weeks  ahead  the  Commission  will  be  examining,  in the 
light  of the  criteria laid  down  in the report to  the  European  Council,  the  extent  to  which 
the objective of free trade could be written into the overall  agreement  to  be offered  to  all 
ACP countries. 

At the same time the Community should look for other ways of helping the ACP countries 
integrate  into  the  multilateral  trading  system.  This  could  be  done  by  encouraging 
countries that have not yet done so to join the WTO and by encouraging ACP members  of 
the  WTO to  gradually  bind  their  tariffs  at  the  levels  actually  applied  in the  light  of  their 
level of development and the economic and social constraints facing them. 

It will  not be possible  to  maintain the preferences  accorded  to  LLDCs under the  product 
protocols  (on bananas,  sugar and beef)  unless they  are covered  by an exception  based  on 
Article 9  of  the  WTO.  This  would  entail  an identical  exception  for  countries  benefiting 
from the GSP. For countries entering into economic cooperation  agreements with the EU, 
some or all of the benefits  afforded  by the protocols could be maintained by incorporating 
them in a suitable form in the new agreements. 

As  an  agreement  between  consumers  and  producers  concerning  specific  quantities,  the 
sugar  protocol  could  be  maintained  by  the  EU  and  the  ACP  as  a  separate  agreement 
unrelated  to  the  overall  cooperation  agreement.  It  might  be  necessary  to  obtain  an 
exception  under Article 9  of the WTO to  ensure WTO  compatibility.  It  might  be  worth 
accompanying  this application with one for a broader exception  covering  all  the  different 
needs. 

6. 

TOWARDS NEW PRACTICES IN FINANCIAL AND TECHNICAL  COOPERATION 

6.1 

Effectiveness 

Financial  cooperation  currently  rests  on  a  fundamental  principle  of  the  Convention:  its 
contractual  nature.  The  Convention  binds  the  signatories  on  a  long-term  basis  and 
guarantees them, within this freely negotiated  contractual framework based  on  reciprocal 
commitments and permanent dialogue, a secure and predictable relationship. 

This principle has been the Convention's great strength and has contributed a great deal to 
the  "culture  of  Lomé".  Putting  it  into  operational  practice  has,  however,  shown  its 
limitations. 

The  quasi-automatic  manner  in  which  ressources  have  been  allocated  and  donors' 
tendency  to  take  over  responsability  for  their  management  when  they  deem  local 

28  Amsterdam, June 1997. 

- 2 6-

management  to be weak  has not  encouraged  the genuine political  commitment  expected 
of  ACP  governments.  There  has  been  departures  from  best  practice  as  cooperation 
instruments  have  tended  to  dominate  policies  rather  than  serve  them.  The  variety  and 
growing  complexity  of  these  instruments  makes  them  difficult  to  manage,  particularly 
where they are used simultaneously in the same country. 

Shared  responsibility  in  managing  aid  between  the  Commission  and  the  beneficiary 
countries  -  introduced  because  of  its  usefulness  in  policy  dialogue  -  is  a  source  of 
confusion  and delay. 

There has to be a change in cooperation practice. This is rendered  all the more necessary 
by  European  public  opinion's  demand  that  cooperation  be  effective  and  the  need  for 
differentiation  highlighted in the Green Paper. 

This change must reconcile three considerations: 

- 

- 

- 

the  maintenance,  in  their  fundamental  aspects,  of  Lome's  main  achievements:  the 
contractuality  and  predictability  that  have  shaped  the  "culture  of  Lomé"  are  more 
valuable than ever; 

the  necessary  movement 
effectiveness  and greater  differentiation; 

towards  a  more  responsible  partnership, 

increased 

the  demand  that  resources  be  used  with  accountability,  i.e.  for  sound  resource 
management. 

Reconciling these considerations presupposes a review of: 

- 

the logic behind cooperation instruments; 

- 

the procedures for resource allocation; 

- 

the forms of aid; 

-  management procedures. 

6.2 

Simplified  instruments 

The  efficiency  and  impact  of  Community  cooperation  are  limited  by  the  difficulty  of 
ensuring  consistency  between  different  instruments  applied  in  related  areas,  where  they 
inter-act, but which are pursuing distinct objectives according to different  criteria. Though 
some  Community  initiatives,  including  8th  EDF  strategy  papers,  undoubtedly  curb  this 
undesirable tendency,  the impression  remains  one  of complexity,  inflexibility  and  lack  of 
transparency. 

Existing instruments will have to be simplified and rationalised. 

Such a course of action could be conducted on two levels: 

- 2 7-

1. 

Reducing the number of instruments 

The  need  for  more  flexible  cooperation  practice  able  to  meet  increasingly  differentiated 
and  evolving  needs  suggests  that  the  existing  instruments  should  be  gathered  into  three 
separate packages: 

-  A  package  of  programmable  resources  would  be  earmarked 

long-term 
development.  Depending  on  the  needs  and  the  type  of  operation  considered  most 
appropriate,  this  package,  which  would  combine  the  current  allocations 
for 
programmable aid,  adjustment  support,  Stabex and Sysmin,  would  provide  support  for 
sectoral  policies,  institutional  reforms,  macroeconomic  reforms,  decentralised  agents 
and  individual  projects.  For  the  countries  currently  concerned  by  Stabex  and  Sysmin, 
lost  export  earnings  could  be  offset  by  providing  additional  resources 
for 
macroeconomic or sectoral reforms. 

for 

In  other  words,  a  distinction  must  be  made  between  eligibility  for  a  compensating 
mechanism and access to the resources concerned. 

There  are  grounds  for  maintaining  the  principle  of  compensation,  albeit  with  a 
simplified  calculation  system,  because  so  many countries  remain  so  heavily  dependent 
on  fluctuating  commodity  revenues  (prices  and  quantities).  However,  considerations 
of optimum effectiveness  argue in favour of using resources as support for reforms. 

-  An  investment  fund  would  be  used  to  promote  the  development  of  the  private  sector 
and  trade  through  direct  investment,  improvements  to  the  capacities  of  technical  and 
financial  support  services,  and the development  of capital  markets.  Such a fund  would 
combine the resources currently allocated for risk capital and interest-rate subsidies. 

It  would  have  to  be  managed  on  a  commercial  basis  and  generate  a  return  on  the 
funding  provided.  The  EIB  would  play  a  key  role  in  managing  this  fund,  within  the 
framework  of the guidelines approved by the Commission. 

The  interaction  of  the  EIB,  the  CDI  and  the  Commission  in  this  area  has  to  be 
improved. 

-  A package for dealing with unforeseen emergencies. 

Such a development  would  improve the flexibility,  consistency  and transparency of the 
Union's cooperation policy. 

2. 

Restoring programming's central role in cooperation 

In  some  countries  only  a  small  part  of  the  resources  available  is  covered  by  indicative 
programmes.  Yet  programming  is  the  best  instrument  available  for  policy  dialogue. 
Programming  should cover all the resources available to  a given country in support  of the 
macroeconomic  and sectoral  policies for which Community  aid is requested,  with the aim 
of concentrating those resources on a limited number of  fields. 

The  dialogue  conducted  in the  course  of programming  should  involve,  in  an  appropriate 
manner,  all  non-governmental  players:  social  partners,  private  sector,  NGOs,  local 
authorities etc. 

28 

It is unlikely that such an approach could be used in the same way in every country. 

Programming must guarantee suitable coordination with all donors. 

6.3 

Allocating resources on the basis of needs and merits 

The automatic allocation of programmable resources has already been reduced by splitting 
programmes  into  two  instalments,  which  has  introduced  a  qualitative  criterion  into 
resource allocation. 

The movement  in this direction must be strengthened  and the criterion  of need, which is 
based  primarily  in  development  indicators,  supplemented  by  criteria  of  merit  based  on 
performance  and sound management.  This presupposes that distortions inherited from the 
past can be eliminated. 

To reconcile predictability with greater  selectivity,  a system of rolling programming must 
be introduced,  with  regular  - e.g.  annual  - reviews.  These reviews will  address  both  the 
total  amount  of the  allocation  and  the  nature  of  aid.  Such  an  approach  is  concomitant 
with a genuine partnership based on permanent dialogue. 

Proceeding  in  this  manner  would  make  it  easier  to  adapt  programmes  to  changes  in  a 
country's overall situation. 

Such a line of action presupposes: 

- 

transparency in the use of performance criteria; 

-  a change in the Member States' role in the programme review process; 

-  abandoning the idea that resources are definitively  allocated to various countries: under 
such  an  approach  the  minimum  sums  presented  to  each  country  at  the  start  of  the 
convention (predictability) are strictly indicative. 

Such  an approach  would  make honouring  commitments  and  effective  implementation  of 
cooperation the criteria for any increase in funding. 

6.4 

A change in the forms of aid 

Support  for  economic  reforms  remains  necessary  in  a  fast  changing  world  demanding 
constant adaptation. 

At the same time Community support should be refocused  on sectoral reforms in order to 
enhance the impact and effectiveness  of cooperation. This entails: 

-  stepping  up  efforts  to  improve  the  institutional  framework  and  local  policy-making 

capacities; 

-  where conditions of transparency  and budgetary effectiveness  permit,  and on the basis 
of undertakings  made in the dialogue  on policy,  gradually  replacing  aid  for  individual 
projects  with  direct  sectoral budget  aid, which promotes  responsibility  and  a  sense of 
ownership. 

- 2 9-

Conditionality,  which  means  that  support  for  reforms  is not  automatic,  must  be  used  to 
encourage the beneficiary  countries to make reforms their own, to ensure that governments 
are  judged  on  their  overall  performance  rather  than  compliance  with  a  multitude  of 
specific  conditions,  and  to  place  such  efforts  in  the  context  of  long-term  development. 
Such  is  the  thrust  of  the  proposals  made  at  the  current  discussions  on  the  reform  of 
conditionality under the Special Programme for Africa (SPA). 

This  reform  of  conditionality  is  crucial  to  the  appropriation  by  countries  of  their 
development policies and to the implementation of a genuine partnership based on trust. 

Conditionality should not be a means of getting one's own way when argument has  failed. 
To  be  fully  effective,  it  must  be  the  product  of  a  shared  vision  of  the  policy  to  be 
implemented. 

6.5  More efficient  resource  management 

Despite  improvements  made  in  successive  conventions,  all  evaluation  studies  show  that 
the cumbersome joint management system has hampered the effectiveness  of aid. 

What  are the options  for  meeting the demand  for  effectiveness  and probity  in the use of 
resources and making the beneficiaries more responsible? 

This  issue  should  be  addressed  through  a  differentiated  approach,  establishing  a  link 
between "sound management" and increasing responsabilities. 

Answers may be found by exploring the following ideas: 

-  greater use of budget aid (see above); 

-  devolving  power  from  Commission  headquarters  by  delegating  certain  tasks  and 

responsibilities to the delegations; 

-  opening up cooperation to non-governmental players; 

-  simplifying  the Convention and its procedures. 

7.  GEOGRAPHICAL  FRAMEWORK:  A  SINGLE  ACP  GROUP  WITH  MARKED  REGIONAL 

DIFFERENTIATION 

7.1 

An overall agreement with differentiated  procedures 

MaV^g the political, social and economic partnership between the EU and the ACP part of 
UxC  oaion's political  action and presence abroad is crucial.  The configuration  of the new 
agreement,  if  it  is  not  to  lead  to  the  geographical  fragmentation  of  the  UE-ACP 
relationship, should take account of two simultaneous requirements : 

•  The  need  for  an  overall  agreement.  This  derives  from  two  principles  respectively 
mentionned  during  the  debate  on  the  Green  Paper.  The  first  is  political,  namely  the 

-30 

value of an EU-ACP grouping  in a multipolar world where North-South  relations take 
on new meaning. The Union cannot afford  to pass up a strategic opportunity to develop 
a  constructive  relationship  with  a group  of countries  constituting  a potential  force  on 
the world  scene, whose  diversity  may  serve  its  interests  in  international  negotiations. 
The second is the undeniable attachment of the ACP partners to a unified ACP group as 
the expression of their desire for solidarity. This renewed solidarity is not just the  affair 
of governments - something to be expected in the run-up to negotiations - but is relayed 
by many segments of civil society. The ACP partners see in the EU-ACP partnership a 
model  that  could  be  improved,  but  which  nevertheless  remains  unique.  They  are 
counting on the combined weight of the ACP and the EU on the international  stage and 
in international negotiations. 

•  The  need  for  a differentiated  approach  reflecting  the regional  dimension  of  economic 
and  trade  cooperation  and  the  growing  role  of  regional  integration  as  a  factor  for 
development. The introduction of differentiated  procedures into the overall cooperation 
framework  is dictated by circumstances, constraints and interests specific to regional or 
subregional  groupings within the ACP and, more generally, by a desire to simplify  aid 
and make it more effective  by providing it at the most appropriate level and tailoring it 
to regional geography. 

These two factors  must lead the Union to think in terms of a new overall agreement with 
differentiated  procedures geared to regional factors and integration prospects. 

7.2  Three  levels  of  differentiation  reflecting  regional  factors  and  integration 

prospects 

The  new  overall  agreement  must  provide  the  framework  for  the  various  differentiated 
subregional  agreements.  It  will  focus  on  the  essential  components  of  EU-ACP 
cooperation: the general objectives, principles and institutional  aspects. However, the need 
for  genuine change  demands  that  the modalities  of differentiation  at  regional  level  (sub-
Saharan  Africa,  the  Caribbean  and  the  Pacific)  should  also  be  considered.  Yet 
superimposing  different  types  of  differentiation  could  fly  in  the  face  of  the  desired 
therefore  be 
simplification.  The  underlying  rationale  for  differentiation 
déterminent, not contingent factors. 

should 

The rationale can be devided into : 

-  political and policy dialogue; 

- 

the  negotiation  of  regional  economic  cooperation  and  economic  partnership 
agreements; 

- 

the dialogue on regional integration. 

The  cornerstone  of  the  differentiation  system  is  the  negotiation  of  economic  and  trade 
cooperation  agreements  with  a  number  of  centres  of  regional  (Caribbean,  Pacific)  or 
subregional  (Africa)  integration. The other two subjects  will  be dealt with  at the regional 
level only to the extent that the overall agreement does not cover them adequately. 

- 3 1-

7.2.1  Cornerstones of a differentiated political dialogue 

At the political level, besides the key aspects of dialogue defined  in the overall agreement, 
a  specific  political  dialogue  targeted  on  regional  issues  and  based  on  the  most  realistic 
initiatives  for cooperation  and  for economic, social, cultural  and  political  integration  will 
be proposed. 

This differentiated  dialogue based  on the mutual  interests  of the Union  and  the  regional 
grouping concerned should focus on a limited number of priority areas in which the Union 
could assist regional integration efforts.  Preventing or resolving conflicts  at regional level, 
good  governance,  the  management  of  negative  interdependence  (drugs,  other  forms  of 
trafficking,  population movements, natural disasters and threats), environmental issues and 
the reinforcement  of regional institutional capacities and democracy  are all possible  focal 
areas of this differentiated  dialogue. 

Existing or potential  regional  groupings in Africa  (West Africa,  Central Africa,  Southern 
Africa  and  the  Indian  Ocean), the  Caribbean  and the Pacific  should  be  looked  at to  see 
how far they are satisfactory  interlocutors in regional political dialogue. Priority for such a 
dialogue should go to the regional integration schemes that seem most durable. 

7.2.2  Economic cooperation agreements between the EU and regional subgroups 

Enhancing  the  economic  partnership  by  means  of  economic  cooperation  and  economic 
partnership  agreements  with  regional  subgroups will  be central  to the new  differentiated 
approach. 

Based  on  the  essential  elements,  principles  and  objectives  of  the  overall  agreement, 
regional economic and trade cooperation agreements will seek to: 

-  revitalise  EU-ACP  cooperation  at  a  more  appropriate  level  by  establishing  coherent 
focal  points  for  a dynamic  new  trading  system,  creating  common  economic  interests 
and  thereby  increasing  the  involvement  of  economic  operators  in  the  Union  and  the 
ACP area concerned; 

-  maintain a privileged relationship with ACP partners by enabling subgroups to catch up 
with the parties to other economic agreements concluded by the Union in other parts of 
the world. 

The proposed  structure (regional agreements framed by an overall  agreement) will permit 
a suitably flexible  approach, which takes account of the trend towards regional  integration 
processes and the evolving nature of their geographical  configuration. 

7.2.3  A specific regional integration dialogue 

Under  the economic  cooperation  and economic partnership  agreements, the political  will 
for  regional  integration  will  be  a  key  feature  of  differentiation,  in  line  with  regional 
integration support's status as a priority for EU-ACP cooperation (see 4.2.3). 

- 3 2-

A  specific  dialogue  should  be  conducted  during  the  negotiation  and  implementation  of 
economic cooperation and economic partnership agreements and take particular account of 
the  commitment  of  subgroups,  regional  organisations  and  national  governments  to 
economic integration. It will give rise to differentiated  treatment based  on an assessment 
of the financial support needed to cushion the transitional effects  of integration on budget 
resources and the balance of payments. 

Countries  likely  to join  regional  integration  movements  in  the  foreseeable  future  could 
receive  special  treatment  -  financial  and  technical  assistance  -  to  prepare  them  for 
accession.29 

Solidarity  and  cohesion  mechanisms  would  be  set  up  as  a  complement  to  structural 
adjustment  instruments  to  help  a  regional  subgroup's  least-developed  countries  or 
provinces through the transition phase. 

7.3  An  agreement  permitting  new  applications  for  membership  or the  extension  of 

some provisions to other countries 

The  convention  linking  the  EU  and  the  ACP  countries  has  always  been  an  open 
agreement,  to  which  many  countries  have  acceded  over  the  years:  the  number  of  ACP 
states has risen from 46 in 1975 to 71 today. This accessibility should be maintained. 

The  number  of  LLDCs  in  the  ACP  group  and  the  priority  given  to  the  objective  of 
alleviating  poverty  may  result  in  some  of  the  future  agreement's  provisions  being 
extended - outside the contractual framework  of EU-ACP relations - to other countries of a 
comparable 
is  illustrated  by  the  planned 
level  of  development.  This  approach 
arrangements governing the LLDCs' access to the Community market. 

The principle of the régionalisation of economic agreements and the account  taken  of the 
complementarities  between  ACP  and  non-ACP  countries  in  a  given  geographical  area 
constitute further grounds for the possibility of extension. 

In  this  context,  the  European  and  ACP  partners  will  have  to  reach  agreement  on  the 
principles  and  mechanisms  for  future  accessions  to  all  or  part  of  the  convention.  The 
future  agreements  are part of a dynamic  approach  to development  and partnership. They 
must provide a framework of mutual obligations offering  the flexibility needed to find new 
answers to new problems. 

29  For instance,  coherent  economic  rehabilitation  and/or  conflict  prevention  programmes  for  the  gradual 

integration of such countries as Congo, Rwanda and Burundi into their subregion's system. 

- 3 3-

THE CONSULTATION PROCESS 

ANNEX 

The  publication  of  the  Commission's  Green  Paper  "on  relations  between  the  European 
Union and the ACP countries on the eve of the 21st century: Challenges and options for a 
new partnership" (COM(96)570 of 20 November  1996) was followed  by a debate  in the 
institutions, the Member States, the ACP countries and all interested circles. 

1.  Institutional  consultations 

•  The European  Parliament  appointed  Mr Martens  rapporteur  on  the  Green  Paper.  On 
16 September  1997 the Committee on Development and Cooperation adopted  a report 
(PE 223.237) and the plenary session on 2 October. 

•  The  Economic  and  Social  Committee  adopted  an  opinion  on  the  Green  Paper  on 

10 July  1997 (CES (775/97). 

2.  Consultation of the Member States and the ACP countries 

Informal  consultations have taken place in the EU Council, the EU-ACP Joint Council 
and  at  an  informal  EU-ACP  ministerial  conference  organised  by  one  of  the  Member 
States. 

3.  Consultation of interested circles (only Commission initiatives are listed) 

Consultation  forums  organised  in  the  Member  States  on  (he  initiative  of  the 
Commission 

-  SPAIN,  Madrid,  13 February  1997:  Association  for  Research  and  Specialisation  in 

Latin American Affairs/European  Centre for International  Cooperation 

-  SWEDEN, Stockholm, 21 March  1997: Nordiske  Afrikainstitutet 

-  GREECE, Athens, 8 April  1997: Greek Centre for European  Studies 

-  FRANCE, Paris,  14-15 April  1997: SOLAGRAL 

-  GERMANY,  Bonn,  16 April  1997:  Society  for  International  Development  and  the 

Office  of the European Commission in Bonn 

-  PORTUGAL,  Lisbon,  21  and  22 April  1997:  Lisbon  University's  Institute  of  Social 

Sciences 

-  AUSTRIA,  Vienna,  28 April 1997:  Institute  of Economics and  Politics  and  Austrian 

Federation of Industry 

-  IRELAND, Dublin,  13 May 1997: Center for Development  Studies 

-  ITALY, Rome,  15 May  1997: Society for International Development 

-  FINLAND, Helsinki, 22 May  1997: University of Helsinki 

>1 

BELGIUM,  Brussels,  29-30 May  1997:  European  Forum  for  a  North-South 
generation contract 

DENMARK, Copenhagen,  18 June 1997: MS and IBIS 

UNITED KINGDOM, London,  19 June 1997: Overseas Development Institute 

LUXEMBOURG, Luxembourg, 9 July 1997: Ministry of Foreign  Affairs 

NETHERLANDS, The Hague,  12 September  1997: Institute of Social Studies 

Seminars organised by the European Commission in the three ACP regions 

DOMINICAN REPUBLIC, San Domingo, 25-27 March  1997: Dominex 

FIJI, Suva, 22-23 May 1997: The Crown Agents 

GHANA, Accra, 8-10 June 1997: Ramel Business Service. 

Final conference 

BRUSSELS, 29-30 September  1997: Brussels Club 

26-27 September  1997:  Preparatory  meeting  with  the  rapporteurs  of  the  Member 
States' consultation forums and the ACP regional consultations. 

2Ï 

ISSN 0254-1475 

COM(97) 537 final 

DOCUMENTS 

EN 

11  02 

Catalogue number  : CB-C0-97-576-EN-C 

ISBN  92-78-26329-X 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

JC?