COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-12-07
Institutions: European Commission
Subjects: EU financial instrument, cross-border cooperation, developing countries, development aid, international trade, sustainable development, third country

EUROPEAN COMMISSION 

Brussels, 7.12.2011 
SEC(2011) 1476 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on establishing a Partnership Instrument for cooperation with third countries 

{COM(2011) 843 final} 
{SEC(2011) 1475 final} 

 
 
 
 
  
 
1. 

PROBLEM DEFINITION  

The fundamental challenge the proposed Partnership Instrument addresses is a consequence of 
globalisation: the texture of the world economy  is changing,  power is shifting, prosperity is 
diffusing; new players increasingly shape the international agenda. The G-20 is one symbol of 
this change: the perception that a new international order is slowly replacing the former power 
structure is very much grounded in reality, even if the pace of the change may sometimes be 
overstated. 

In particular 

*The  emergence  of  new  powers  such  as  India  and  China,  or  South  Africa  and  Brazil,  has 
changed the international order as these countries are playing an increasingly important role in 
international economy and trade, in multilateral fora (UN, G-20) and in addressing challenges 
of  global  concern.  Whilst  development  and  poverty  alleviation  remain  key  concerns,  these 
countries are progressively leaving behind the status of developing nations.  

*The  EU  has  developed  broad  based  binding  agreements  with  key  partners  and  emerging 
economies  to  address  bilateral  issues  and  matters  of  global  concern.  The  implementation  of 
these agreements requires a toolbox, a dedicated financing instrument so that the EU has the 
means to promoting its interests worldwide, and to deal with global issues wherever the need 
arises. 

*The  current  Instrument  for  Cooperation  with  Industrialised  (ICI)  countries  has  a  limited 
geographical  scope;  it  covers  only  17  countries  and  high  income  territories;  whereas  the 
Development  Cooperation  Instrument  (DCI)  covers  countries  such  as  India,  China,  South 
Africa and Brazil but only for official development assistance expenditure. 

*Relations  and  economic  ties  between  the  EU  and  Russia  have  evolved  considerably 
underlining  the  importance  of  Russia  as  a  strategic  partner  far  beyond  development 
cooperation.  The  need  for  financial  assistance  has  declined.  Russia  aspires  to  a  relation  of 
equals and has become a donor itself. The proposed Partnership Instrument would become the 
main instrument for cooperation with Russia.  

2. 

ANALYSIS OF SUBSIDIARITY  

The EU has numerous international agreements with partner countries all over the world, not 
matched  by  individual  Member  States,  which  gives  to  all  of  them  influence  in  virtually  all 
fields  of  international  relations.  With  27  Member  States  acting  within  common  policies  and 
strategies, the EU has a critical weight to respond to global challenges. The EU is also in a 
unique  position  to  promote  EU  norms  and  standards,  and  turn  them  into  global  standards 
through international cooperation. 

3. 

OBJECTIVES OF EU INITIATIVE 

The EU currently does not possess an instrument that would allow it to co-operate with new 
emerging  and  emerged  powers  on  issues  related  to  advancing  core  EU  interest  and  on 
common challenges of global concern (such as climate change for instance).  

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For  the  moment,  such  cooperation  is  possible  under  the  Instrument  for  Cooperation  with 
Industrialised  Countries  (ICI)  which  is  however  limited  to  17  highly  industrialised  or  high-
income countries (e.g. United States, Japan, Korea, Gulf states).  

Cooperation  with  countries  such  as  China,  India  and  Brazil  falls  under  the  Development 
Cooperation Instrument (DCI) meaning that this cooperation is confined to actions that relate 
directly to poverty alleviation/eradication in the beneficiary countries. 

The  proposed  Partnership  Instrument  is  designed  to  overcome  this  limitation  of  the  EU’s 
ability  to  engage  internationally  in  the  most  effective  way.  It  would  fill  the  gap  described 
above and allow us in particular to pursue agendas beyond development cooperation with new 
powers,  but  also  enable  us  to  defend  the  core  EU  agenda  globally  with  any  other  partner 
country if the need arises. 

It will pursue the following specific objectives: 

(a) 

(b) 

(c) 

implementing  the  international  dimension  of  the  “Europe  2020”  strategy  by 
supporting  EU  bilateral,  regional  and  inter-regional  cooperation  partnership 
strategies,  by  promoting  policy  dialogues  and  by  developing  collective 
approaches and responses to challenges of global concern;  

improving  market  access  and  developing  trade,  investment  and  business 
opportunities  for  European  companies,  in  particular  SMEs,  by  means  of 
economic partnerships and business and regulatory cooperation; 

enhancing widespread understanding and visibility of the Union and its role on 
the  world  scene  by  means  of  public  diplomacy,  education/academic 
cooperation and outreach activities to promote Union’s values and interests. 

4. 

POLICY OPTIONS  

In principle, there are four available policy options: discontinue ICI; status-quo; amend DCI 
to allow for expenditure that is not ODA; a new instrument building on ICI/ICI+.  

After careful evaluation, neither discontinuing ICI nor maintaining the status-quo are deemed 
to  be  politically  viable  solutions.  Limiting  ourselves  exclusively  to  expenditure  linked  to 
poverty  alleviation,  or  maintaining  this  sole  focus  for  co-operation  with  emerging  powers 
would artificially limit the EU’s diplomatic agenda and neglect core EU interests. 

The option of amending the Development Co-operation Instrument to allow for expenditure 
not  related  to  official  development  assistance  would  have  the  advantage  of  geographical 
coherence (one instrument per country), but the  difficulties of managing an instrument with 
two very different objectives are considered a serious handicap.  

5. 

ASSESSMENT OF IMPACTS  

ECONOMIC: 

The  implementation  of  a  new  Partnership  Instrument  would  provide  the  EU  with  another 
window of opportunity to promote its enterprises (SMEs in particular) and products. It would 

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create the financial possibility to support EU business in third countries, providing incentives 
for  EU  competitiveness  and  innovation  in  a  way  that  should  remain  complementary  to  the 
actions  financed  under  the  Competitiveness  and  SME  programme  and  under  Horizon  2020 
(research and innovation), support EU international trade and investment which, in turn, could 
lead  to  the  facilitation  of  foreign  investment  into  the  EU.  Numerous  areas  of  cooperation 
could  be  pursued  including  climate  change,  environment,  approximation  of  technical 
regulations  and  standardisation,  corporate  social  responsibility,  intellectual  property  rights, 
protection of personal data, best practises in economic, trade and financial matters. Thus, the 
EU’s economic security could be strengthened and new jobs created which, ultimately, would 
contribute  to  economic  growth.  The  new  Instrument  could  foster  well  developed  forms  of 
economic cooperation between the EU and partner countries. In this context, it would allow 
the  EU  to  ensure  that  environmental,  sustainable  energy,  social,  employment  and  other 
welfare values are adequately considered in policy programme design and implementation. 

SOCIAL: 

By  harmonising  the  EU  and  EU  Member  States’  financing  instruments  and  by  supporting 
joint activities with other bilateral and multilateral donors, the new Instrument could have an 
important impact  on  the social fabric of emerging countries. It could provide support to the 
reform  of  welfare  systems,  national  employment  policies,  national  training  and  skills’ 
development policies, education and research programmes and the strengthening of national 
safety “nets”. Its contribution to extra “green” jobs creation, income- per-capita increases and 
effective social cohesion and poverty alleviation strategies at national level will be relevant. 
In  this  respect  it  would  contribute  to  successful  implementation  of  the  international  social 
agenda promoted by the UN International Labour Organisation and G8/G20.  

ENVIRONMENT: 

EU partnerships through the new Instrument will aim at encouraging and supporting growth 
and long-term environmental sustainability. In this respect, the new Instrument is expected to 
play  a  key  role  in  providing  support  for  both  EU  and  partner  countries’  environmental  and 
climate  change-related  actions  and  policy  dialogues.  The  Instrument  could  support  a  low-
carbon business model by providing incentives to the European private sector. Building on the 
successful results of the COP-16 United Nations Conference on Climate Change in Cancún, it 
could  be  used  to  help  EU  business  to  develop  effective  and  least-cost  policies  to  achieve 
environmentally  friendly  goals  in  the  partner  countries.  It  will  also  help  partner  countries’ 
economies  to  reap  the  full  environmental,  ecological  and  energy-efficient  benefits  of 
innovation.  The  Instrument  could  allow  cooperation  to  better  understand  the  economic  and 
social costs of biodiversity loss and ecosystem degradation in countries of global significance.  

6. 

COMPARISON OF OPTIONS  

Proceeding  by  elimination,  it  was  judged  that  extending  the  scope  of  the  Development 
Cooperation  Instrument  to  cover  non-developmental  actions  creates  the  risk  of  tension 
between  different  objectives,  and  could  lead  to  significant  delays  in  decision-making  and 
implementation.  It  was  preferred  to  recommend  the  creation  of  a  single,  new  and  global 
instrument  focused  on  defending  core  EU  interests  and  addressing  challenges  of  global 
concern whose scope of activities would be clearly defined. Therefore, the recommendation is 
to propose a new instrument building on ICI/ICI+. 

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7. 

MONITORING AND EVALUATION  

Budget: EUR 1.0 billion over the period 2014-2020 (equal to 1/70, or 1.4% approximately, of 
overall envelope foreseen for expenditure under the external relations heading). 

The Partnership Instrument shall be an enabling Regulation establishing the essential elements 
and  the  basis  for  the  EU  intervention.  The  exact  actions  are  defined  through  annual  action 
programmes  detailing  the  activities  to  be  carried  out  by  the  EU,  including  the  operational 
objectives  and  the  expected  results.  Operational  indicators  are  fixed  at  that  moment,  taking 
into account the particularities of the action in question.  

Progress towards the three specific objectives (see above under 3) will be monitored through 
the following core impact indicators:  

(1) 

(2) 

Influence  of  EU  policies  on  policy  formulation  in  key  strategic  partner countries 
covered by this instrument. 

EU share in world trade as well as in trade with countries targeted by actions under 
this instrument.  

(3) 

Perception of EU in key strategic partner countries covered by this instrument. 

Typical indicators to measure the impact of the Partnership Instrument’s activities will be the 
number  of  participant  enterprises,  the  extent,  relevance  and  sophistication  of  support 
activities,  the  degree  of  cooperation  within  the  European  business  network  and  division  of 
labour,  entrepreneurial  user  satisfaction  and  achievement  of  economic  targets,  i.e.  the 
measurable impact on job creation, turnover, foreign direct investment of EU enterprises and 
overall EU exports to target markets. Indicators to measure the impact of these activities, both 
qualitative and quantitative, will be related to the trends in knowledge exchange, the number 
of  reciprocal  academic  exchanges,  the  number  of  participants  in  programmes,  scholarships 
and joint research and academic projects. The results will also be measured by the frequency 
and quality of media coverage, the local demand for EU sponsored activities, the participation 
rate at EU events. 

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