The Cotonou Agreement: An Assessment.
The Cotonou Agreement is a treaty between the European Union and the African, Caribbean and Pacific (ACP) group of states, signed in 2000 in Cotonou, the largest city in Benin. Seventy-eight ACP countries and the then fifteen member states of the European Union signed this treaty. It was ratified in 2003 and is the latest and most comprehensive agreement in the history of ACP-EU Development Cooperation!.
ACP is an abbreviation referring to the countries of Africa (South of Sahara), the Caribbean and the Pacific. The ACP group was created by Georgetown Agreement of 1975. The main objectives of this group are:
* Promoting and strengthening of solidarity and understanding between ACP peoples and governments;
* Promoting a new, fairer and equitable world order;
* Contributing to the development of closer economic, social and cultural relations among developing countries, as well as development of cooperation among ACP states in the areas of trade, science and technology, industry, transport, education, training and research, information and communication, the environment and human resources.
* Promoting regional, inter-regional and intra-ACP cooperation.
The ACP Group now comprises 79 member-states. All of them, except for communist Cuba are signatories of the new Cotonou Agreement, which binds them to the EU. The Group has 48 countries from sub-Saharan-Africa, 16 from the Caribbean and 15 from the Pacific region. These were at one time colonies or dependent territories of European countries presently member states of the EU. The countries that have signed the Cotonou agreement and are given aid and preferential access to EU markets are:
Angola, Antigua and Barbuda, Bahamas, Bermuda, Barbados, Belize, Benin,
Botswana, Burkina Faso, Burundi, Cameroon, Cape-Verde, the Central African Republic, Chad, Comoros, Cook Islands, Cot d'Ivoire, Djibouti, Dominican Republic, Democratic Republic of Congo, Dominica, Timor Leste, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Ghana, Grenada, Guinea Bissau, Guinea, Guyana, Haiti, Jamaica, Kenya, Kiribati, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Marshall Islands, Mauritius, Micronesia, Mozambique, Namibia, Nauro, Niger, Nigeria, Niue, Papua New Guinea, Palau, Rwanda, Republic of Congo, St. Kitts-Nevis, St. Lucia, St. Vincent, Western Samoa, Sao Tome and Principe, Solomon Islands, Somalia, Suriname, Senegal, Swaziland, Seychelles, Sierra Leone, Tanzania, Togo, Trinidad and Tobago, Tonga, Tuvalu, Uganda, Vanuatu, Zambia, and Zimbabwe.
The original aim of creating the Group was to coordinate cooperation between its members and the European Community. Except for the fact that these are all developing countries, they have little in common. Their size, location, political set-ups, cultures, racial groups and stages of economic development differ greatly. Its main aim was to jointly negotiate and implement cooperation agreements with the European Community formed in 1957.
Its range of activities has expanded over the years. Cooperation among its members has now gone beyond development cooperation with the EU and covers a variety of sectors spanning trade, commerce, politics and culture. In particular, the Group cooperates in international fora such as World Trade Organization.
Seen in the historical perspective the connection among the ACP countries and between them and the EU is a legacy of colonial ties. When the Treaty of Rome was prepared in 1957, it included a provision that conferred associated status upon the Overseas Countries and Territories (OCT) of member-states. This was meant to protect the interests of the colonial powers, and was done on the insistence of France. As the colonies started gaining independence the two Yaounde Agreements were concluded specially to deal with francophone African states, including Madagascar. In 1963 and 1969, 18 African countries and the 6 European Community member states signed the First and Second Yaounde Conventions in Cameroon. The basic thrust of the agreement was financial, technical and trade cooperation aimed at building up the economic and social infrastructure of these countries. It granted preferential trade arrangements such as duty-free access of specified African goods to European markets.
The early structure established by the Yaounde convention still provides the framework for many aspects of ACP-EU cooperation today. Britain's entry into the EEC in 1973 led to the expansion of the European-African cooperation to include the Commonwealth countries in Africa.
Between 1975 and 1989, the European Community signed a series of conventions with African countries and the island states of the Caribbean and Pacific. These were Lome 1,11,111 and 1V.The conventions focused on aid and trade policies. Lome1, which was signed by 46 ACP countries and 9 European countries in 1975, marked the beginning of cooperation between the EC and ACP Group of countries. The Lome Convention was hailed by the Courier, monthly magazine of the ACP as the "finest and the most complete instrument of cooperation ever". Under the convention, the European Community gave non-reciprocal trade preferences to ACP countries and established the Stabex compensatory scheme for loss of export earnings due to price fluctuations. Lome 11 was clinched in 1980 between 9 EC states and 58 ACP states and Lome 111 was signed in 1985 by 65 ACP countries and 10 EC states.
In Lome 11 the Sysmin mechanism similar to Stabex, was introduced for mining products. With droughts leading to famines having become widespread and frequent in Africa in Lome111 emphasis was placed on food self-sufficiency in ACP countries. Lome 1V signed in 1990 introduced a political dimension to cooperation. In 1995, Lome Convention bis was signed by 70 ACP countries and 15 EU countries. This time the emphasis was on decentralized cooperation and enhancement of the role of civil society.
Over the decades, the relationship between the ACP and the EU has changed significantly. The historical bonds, which had featured prominently in the agreements, had begun to lose significance and the ACP countries' importance for the EU had also diminished. With the signing of the Maastricht Treaty, the completion of the single market programme and the end of the cold war, the EU became more attentive to issues closer to home. The Central and Eastern European countries which had just gotten rid of oppressive communist regimes and the Mediterranean region were now considered more important for European security. Beside many of these countries were aspiring to become EU members. The absence of expected economic results from the Lome Convention also led to rethinking on the mode of cooperation between the ACP and the EU.
It is noteworthy that the Lome Agreements between the EU and ACP states lasted until the end of the 20th century. For a very long period they remained a focal point of the EU's development policy. As pointed out by the European Commission a new global environment had emerged in the nineties and "the colonial and post colonial period are behind us and the more politically open international environment enables us to lay down the responsibilities of each partner less ambiguously". In mid-1996, the European Commission drafted a Green Paper on relations between ACP states and the EU countries. The Commission recognized the need for reassessing the ACP-EU relationship and it also expressed disappointment on the performance of the ACP states. The Commission admitted that the development efforts based on assistance from the European Community had not produced the expected results in the ACP countries. In particular, the progress in the 32 Least Developed Countries had been dismal.
The poor performance of ACP was attributed to various reasons: They lacked expertise and technology, and investment foreign as well as local was inadequate. While the overall amount of European Development Fund (EDF) had increased over the decades it did not match the increase in the number of the states needing assistance. Nevertheless, despite certain drawbacks in the Lome Agreements, the ACP Group remained strongly committed to a continuation of the cooperation with its European partners. At the first summit of ACP heads of states held in 1997 in Libreville a declaration was issued which affirmed the resolve to have a "new and even more vigorous relationship" with the European Community. The statement also expressed the desire to strengthen the unity and solidarity of ACP Group and to "retain it as a geographical entity". The European Commission's Green Paper triggered a vigorous debate on the EU's development policy for the ACP.
The debate led to the conclusion that a revamp of the EU's relations with the ACP was required. Thus the Cotonou Agreement established a new type of partnership, based on differentiation, and regionalization according to the varied development needs of the partners. The new partnership agreement is for a 20-year period and it came into force in April 2003. Cuba did not sign the agreement. The last country to join ACP was Timor Leste, affiliated with the Pacific. It became a member of the ACP Group in 2003, shortly after its independence.
The new agreement provides for an end to non-reciprocal trade preferences after a transition period in ACP-EU cooperation. The Cotonou Agreement provides for duty free access to each other's markets, which is negotiated under Economic Partnership Agreements (EPAs). The Caribbean is the only region to have signed full EPAs and a total of 35 ACP countries signed either full or interim EPAs in 2007.
The main aims of the Cotonou Agreements are:
* To help in the gradual integration of ACP countries into the world economic order.
* To facilitate economic cooperation and development both within and between the regions of the ACP.
* To promote the free movement of persons, goods, capital, labour and technology among the ACP countries.
* To encourage and facilitate the diversification of the ACP economies and the coordination and harmonization of regional and sub-regional cooperation policies.
The Cotonou Agreement marks out two groups of ACP states. The least developed countries in the ACP group were to be given enhanced Lome type access to EU markets, but this facility was also extended to other countries whose level of development is low. Those ACP countries, that are at a higher level of development would have to negotiate trade agreements with the EU, based on the principle of reciprocal trade preferences. Thus, a unique characteristic of the Lome regime was removed. Under Cotonou, the ACP countries will enter into regional arrangements with the EU termed as Economic Partnership Agreements (EPAs). The basic goal of EPAs are, firstly to enhance European companies' access to the ACP markets, and secondly, through free trade between the EU and ACP to strengthen ACP producers exposed to increased and more open competition with EU goods in ACP markets accruing from the principles of reciprocity of the EPAs.
The aim of the EPAs is to stimulate the development of ACP countries and facilitate their gradual and relatively trouble-free integration into the global economy. It must be understood that the EPAs are not just instruments of trade policy, but also serve as a link between development and trade policy. This is a new facet of EU development policy. EPAs are meant to reduce trade barriers among ACP countries and the EU, and to increase cooperation in all areas related to trade.
Aid management under the Lome agreement is now criticized for its general ineffectiveness in promoting sustainable development in ACP countries. Under Lome, the ACP states were given aid without an assessment of their political and economic performances, but the Cotonou Agreement requires that the EU allocate aid on the basis of two criteria: first, taking into consideration the level of development of a country and second participation in regional integration projects. Thus, the countries which have performed well in the economic and political realms are eligible for more aid as against those whose performance has been relatively mediocre or bad. Earlier, specific amounts were earmarked for adjustment support, project aid, and promotion of human rights. The Cotonou mechanism has made it much easier for the Commission to divert aid to those ACP states that are seen as more efficient in utilizing aid. The Cotonou Agreements also provide for assistance in the form of financial aid and technical support.
A five-year European Development Fund (EDF) of 13.5 billion euro in grants was earmarked in the agreement for the period 2002-2007.
Another important feature of the Cotonou Agreement is stronger political dialogue to underpin the ACP-EU relationship. Through this dialogue, the two sides would be able to exchange information, discuss objectives as well as any matter of common concern. The Agreement emphasizes upon respect for human rights, democracy and the rule of law. Violating these universal norms can lead to partial or total suspension of development aid. It was further agreed that serious matters such as peace and security, the arms trade, drug trafficking, organized crimes and corruption, could halt the process of consultation and may result in suspension of aid.
The Agreement strengthens the role of non-state actors, which includes the private sector, as an essential ingredient for promoting economic development, as enshrined in the principle of participation. Cotonou contains provisions which ensure the participation of non-state actors in the policy-making process in ACP countries. Non-state actors have also been given access to financial resources and are involved in the implementation of programmes. The ACP Civil Society Forum was set-up after the signing of the Cotonou Agreement. Thus the civil society and the private sector have become an important channel for effective economic cooperation.
The new Agreement did not include the Stabex and Sysmin schemes. These compensatory mechanisms were considered inappropriate and also expensive. There is provision in Cotonou allowing aid to be used to counter the adverse financial impact in the event of a fall in export earnings, but such aid would be part of allocations of aid funds for two years. Determining the pattern of future trade relations between ACP-EU was found to be the most difficult task. When the World Trade Organization was formed in 1995, there was ambiguity on whether a mere renewal or reproduction of Lome regulations would be given a waiver by the new organization. The WTO factor was apparent in the dispute between the US and the EU over the Lome regulations on banana trade. Owing to this dispute the EU had to alter its rules. On its part, the EU was bound to frame a trade regime that would be according to WTO rules instead of preferential market access.
However at the WTO ministerial conference in November 2001, the ACP countries supported by the EU obtained waiver from the WTO for the trade chapter of the Cotonou Agreement. A major problem with regard to the ACP states is difference in the level of development of various countries. The ACP Group includes 39 LDCs and 32 middle-income countries.
As pointed out earlier, the Cotonou Agreement is for two decades and provides for revision every five years. The first two revisions of the Cotonou Agreement, in 2005 and 2010, led to the adoption of more serious political goals, such as combating terrorism, non-proliferation of weapons of mass destruction and support for the International Criminal Court. These are among the most important contemporary international goals.
Cotonou reflects the growing importance of regional integration in the ACP Group and in ACP-EU cooperation. The ACP-EU role in promoting peace and security and in tackling cross-border challenges is emphasized in the Agreement. With regards to Africa, the continental dimension is also recognized and the African Union is treated as an important actor in the EU-ACP relationship.
It is known that development can take place only in a secure environment. Cotonou emphasizes the strong interdependence between security and development and calls for tackling security threats jointly. One of its important objectives is conflict prevention and peace building. To meet the Millennium Development Goals, attention has to be given to tackling issues such as food security, HIV-AIDS and sustainability of fisheries. These areas have been identified as extremely important for sound development, growth and poverty reduction. In this regard the need for developing sustained joint approaches for cooperation has been emphasized. It is noteworthy that for the first time, the EU and ACP have recognized the global challenge of climate change as a major dimension of their partnership. Under Cotonou, the trade preferences expired in 2007. Thus the agreement underlines the importance of strategies for trade adaptation and the Doha Development objective of aid for trade.
However, a lack of consistency is noticeable between certain EU policies for ACP countries. For example, the Common Agricultural Policy's strict product standards and restrictive Rules of Origin, make it difficult for ACP farmers to gain access to EU markets. The EU has on many occasions expressed its intention to reform its Common Agricultural Policy but not much progress has been made in this regard, owing to opposition from EU members and EU farmers. Also, there are apprehensions in ACP countries that EPAs will negatively impact upon the local producers, by giving EU exporters free access to their markets without a transition period. From this it can be gleaned that the ACP countries are yet to become fully reconciled to their new relationship with the European countries or with the European Union as an entity.
Nevertheless, the Cotonou Agreement promises to promote a long lasting and real economic partnership through new trade agreements, among other things. The ACP group itself has been making a lot of efforts to attract foreign investment and has ambitions to establish a congenial legal, economic and political environment for achieving that objective.
Cotonou is a landmark agreement, for it has brought about an important change in the decades old relationship between ACP and the EU. It is also a milestone in the evolution of international development policies and relations between the developing and the developed world. The fact is that with 106 countries party to this agreement it is the world's largest cooperative grouping for development and involves nearly one billion people from half the sovereign states in the world.
The success of the ACP Group can be gauged by the Cotonou Agreement. The Group showed determination and solidarity, thus convincing the EU to design a new agreement for the Group. Though the agreement has not met all the ACP demands, it highlights some fundamental concerns of ACP countries.
Globalization, considered in some quarters as a threat to the economies of developing countries, impacted upon the thinking of those who drew up the Agreement. It introduced many key reforms and a major feature of the document is the commitment of the EU to integrate the ACP countries into the world economy. The Cotonou Agreement is a lengthy document which tackles a wide range of contemporary issues that have implications for EU-ACP relations. The biggest focus is on trade, for the ultimate aim of the Cotonou provisions is creating an arrangement that is in line with WTO rules. At the time of the formation of the WTO the Lome regime was in place and by waiver it was not bound by its predecessor, the General Agreement on Tariffs and Trade (GATT). With the end of Lome bis in 2002 the waiver also expired. Under the Cotonou Agreement, the preferential non-reciprocal arrangements were to be replaced by individual Economic Partnership Agreements (EPAs) with the European Union.
The only exception granted is to least developed countries. The EU began negotiating EPAs with the ACP countries in 2002. Since regional agreements could not be reached by the deadline of December 2007, interim agreements were negotiated with the consenting ACP countries so that continuity of trade was ensured between these countries and the EU.
Administration of ACP Cooperation
There are six institutions for administering EU-ACP cooperation: The ACP-EU Council of Ministers, the Committee of Ambassadors, the Joint Parliamentary Assembly, the Secretariat, the Centre for Development of Enterprise (CDE) and the Technical Centre for Agricultural and Rural Cooperation (CTA). The Council of Ministers comprises members of the Council of Ministers of the EU, one member from each ACP country, and a Commissioner. Political debates are held in the Council of Ministers and decisions are taken on the implementation of agreements. The Committee of Ambassadors helps out the Council of Ministers. The Joint Parliamentary Assembly comprises Members of the European Parliament and Members of the respective Parliaments of the ACP countries. The Assembly does not legislate but is a consultative body which promotes EU-ACP cooperation through dialogue and suggestions. Besides the six main institutions, there are committees, boards etc. that have an equal number of representatives from each side.
The decision of basing the Secretariat in Brussels, was meant to facilitate the implementation of the Cotonou Agreement. The CDE promotes strategies for private-sector development in ACP countries. It identifies companies and businesses and supports joint initiatives launched by the EU and ACP states. The CTA's job is to strengthen policy-making and institutional and management capacities with regard to agricultural and rural development in ACP countries.
Article 17 of the Cotonou Agreement highlights the role of the Joint Parliamentary Assembly in promoting the democratic process in ACP countries, through discussion. Set-up in October 2000, it has played a pivotal political role in EU-ACP cooperation. The new Joint Parliamentary Assembly held a debate on the situation in some of the ACP countries and at the end of the session adopted 22 resolutions; these included resolutions on: the role and status of women in development; the reform of the EU banana regulations; migration flows from ACP to the EU member-states; the special session of the United Nations General Assembly held on June 5-9, 2000 on Women in the 21st Century; AIDS and human trafficking.
The second session of the ACP-EU Joint Parliamentary Assembly was held in Libreville from March 19 to 22, 2001.Its third session was held in Brussels from October 29 to November 1, 2001. The subjects discussed were: the fight against poverty and the ratification and implementation of the Cotonou Agreement. Among important resolutions adopted were: the general situation in Africa, Central Africa, Sudan, the Pacific region and WTO negotiations. Resolutions were also passed on the difficult situations in Botswana, Lesotho, Namibia and Swaziland. At the fourth session of the Joint Parliamentary Assembly held in Cape Town (South Africa) in March 2002, resolutions were adopted on the situation in Madagascar and the Caribbean region, ACP-EU trade negotiations, rules of origin, sanitary and phytosanitary measures, the New Partnership for African Development (NEPAD), the stagnation of banana, rice and other agricultural produce from the ACP and prospects for sustainable development.
The fifth session of the Assembly was held in Brazzaville (Republic of Congo) in March-April 2003. The Assembly welcomed the entry into force of the Cotonou Agreement. It also adopted a declaration on the US-led attack on Iraq, the most urgent international issue at that time. Conditions in Zimbabwe also came under discussion. The sixth session of the Assembly was held in Rome in October 2003. The rights of children and child soldiers were discussed for the first time in the forum. Children are the most affected by poverty, drought, famines and wars in Africa. Discussion in the Assembly on these topics was therefore of vital importance. The ACP and EU parliamentarians also talked about the management and conservation of natural resources in ACP countries as part of the ninth European Development Fund (EDF) programme and the outcome of the WTO conference in Cancun. The above shows the wide range of topics covered by the Parliamentary Assembly.
Under Article 15 of the Cotonou Agreement, the Council of Ministers is the decision making body within the framework of ACP-EU partnership. For its 27th session the Council met at Punta Cana (Dominican Republic) in June 2002. While it discussed several topics, the most urgent issue was the question of ratification of the Cotonou Agreement. Ratification of the Agreement was essential for the release of the ninth EDF. A major concern for ACP countries at the beginning of the 21st century was the probable impact of the enlargement of the EU. They were worried that the inclusion of new member states from East and South Europe would expose them to tough competition. The ACP countries were also apprehensive that they would get much less development assistance, for the relatively poorer new members would be given priority by the EU in this realm.
The EU however reassured the ACP countries that enlargement from 15 to 25 member states would create a huge market of around 450 million consumers for products from the ACP. On conditions in Zimbabwe ruled by Robert Mugabe, 'Father of the Nation' turned dictator, the EU expressed much dissatisfaction for lack of any move towards democratization and control of corruption. As regards Sudan, the EU declared that it was necessary to start a dialogue with the rulers to bring about an improvement in the country's situation. When the Council of Ministers met in Brussels in May 2003, it discussed the Economic Partnership Agreements, trade cooperation and the matter of debt relief to the heavily indebted countries in ACP.
Here it would be important to point out that the transformation of the international scenario at the close of the 80s, which saw the end of the ideological era and the rise of new trends in international economic relations had necessitated that ACP heads of state should hold a summit. To discuss these momentous issues, the leaders met at Libreville, Gabon, in 1997. At this meeting they chalked out the broad guidelines for strengthening the group. Here clearer roles were assigned to the ACP institutions and the General Secretariat was reformed, making it into an executive body.
The Group also decided that for enhancing their international role they would coordinate their stands in forums such as the United Nations and its bodies. The second summit was held in 1999 in Santo Domingo, Dominican Republic where more well-defined guidelines were drawn up for cooperation among the ACP states. At the third summit held in Nadi, Fiji, in July 2002, the leaders decided upon the guidelines to help in the negotiations for future ACP-EU Economic Partnership Agreements. The fourth summit was held in June 2004, in Maputo, Zimbabwe, while the fifth one was held in Sudan, Khartoum in December 2006. Thus the ACP Group has been conscious of the importance of joint strategies and collective bargaining in the international sphere.
Assistance in the form of financial aid and technical support has been provided for in the Cotonou Agreement. The protocol presently in effect has earmarked funds totaling almost 24 billion euros for the period 2008-2011. These funds have been allocated through the 10th European Development Fund (EDF). The EDF is the EU's main financing instrument for rendering development assistance, and the financing comes directly from fixed contributions of the member-states and not from the EU budget. These funds are for the most part used for long term programmes. France is the biggest contributor to EDF, while Germany is the second biggest one contributing twenty percent of the total. Some programmes under Cotonou are also financed with loans from the European Investment Bank (EIB).
The assistance aspects of the Cotonou Agreement, the European Commission claims are more flexible and efficient than the comparable Lome provisions. Under the Cotonou Agreement aid is allocated after assessing the success of the implementation of the "Country Support Strategies" earlier agreed upon by the ACP states and the Commission. The country support strategies outline the way in which aid might be used; how this would push forward economic and political reforms in the country being given aid and how this would help in the achievement of the international targets. The resources allocated can be used in several ways: macro economic support, sector programmes, traditional projects and programmes, debt relief, to meet the shortfall in export earnings and humanitarian aid. The Commission compiled a "Compendium on Cooperation Strategies" called for in the Cotonou Agreement.
It presents a variety of objectives, policies and operational guidelines for development which can be pursued through the financing framework of the Agreement. Under the Cotonou Agreement a new Investment Facility was launched on June 2, 2003. The EIB dispensed nearly 4 billion euros in refundable aid for projects in the ACP countries between 2003-2008. This new Investment Facility was administered by the EIB with a sum of 2,200 million euros from the ninth EDF fund.
Africa, parts of which have faced continuing economic distress, conflict and political instability has formed the New Partnership for African Development (NEPAD) in October 2001, successor of the Organization of African Unity (OAU). The NEPAD has accorded high priority to the private sector. It has been emphasized that African economies must diversify in accordance with their respective natural resources. The private sector is mainly focused on micro, small and medium enterprises, for these generate employment in most of the African countries. The EU is supporting the NEPAD initiative, in line with its obligations under the Cotonou Partnership Agreement.
In many ACP countries, civil society, including various NGOs are getting organized to enable them to develop contacts with their governments to help the latter in shaping policies and identifying the scope for joint action by public and private sectors. In the Caribbean region, political leaders adopted the CARIFORUM charter of civil society in 1997. This was a document outlining the role of all the societal actors in the affairs of their region. Though vast economic, political and commercial disparities exist between ACP countries, the forum has now begun to play a vital role in promoting regional integration. The EU too supports regional integration for promoting peace and prosperity in ACP in particular, and around the world in general. Thus an association of Caribbean states called CARIFORUM has been formed with all the Caribbean states as members. This is mainly an organization for political cooperation but is active in a variety of areas.
It has met with considerable success in the fight against organized crime and illegal drug trafficking. It also monitors the process of democratization and respect for human rights.
The EU has encouraged the formation of civil society organizations in the Pacific region which could enter into dialogue with their governments with regard to national development plans, budget making and the running of development assistance programmes. Since the Cotonou Agreement has made special provision for the participation of non-state actors in the process, civil society organizations in the Pacific have become important participants in the ACP-EU dialogue. Previously, only policy makers from governments represented participant countries. Representatives from civil society organizations participate in seminars held in the Pacific on the Cotonou Agreement and the Economic Partnership Agreements. Many workshops were held between March 2001-July 2002 by the Pacific Concerns Resource Centre (PCRS) of the Pacific countries, partners in the ACP Group.
The participants of the seminars decided that national platforms would be established that would gather together governments and the European Commission on matters such as country support strategies, the National Indicative Programmes, the Economic Partnership Agreements and human rights issues.
On trade negotiations to be held with the EU in future, the ACP group reaffirmed its commitment to stick to WTO rules on international trade. Around 55 ACP countries are members of the WTO. It is of immense importance for the ACP countries that the flexibilities for development given by the WTO, such as the Enabling Clause, is not removed so that they, like other developing countries continue to have flexibility in policy options. The ACP and the EU realize the importance of having universal, transparent and enforceable rules in a globalizing world. Pascal Lamy European Commissioner for Trade, said in an interview to the Courier, "I am confident we will work together on shaping bilateral and multilateral trade rules as an important element of global governance for the benefit of all".
The 20 year span of the Agreement is meant to allow for a realistic transition. Cotonou set a timetable. After a two year preparatory period (2000-2002), in which regional integration was strengthened, EPA negotiations were conducted between the two sides. This transition period lasted till 2007 and the trade preferences already in place continued for all ACP countries. EPAs were to come into force in January 2008. For the rest of the 12 years of the Cotonou Agreement, the ACP countries would take steps to liberalize their trade. As pointed out earlier, since regional agreements could not be reached by the deadline of December 2007 as per Article 37 of the Cotonou Agreement, interim agreements were agreed with those ACP countries that were prepared to do so, in order to ensure the continuity of trade between these countries and the Union.
An amendment was made in the Cotonou Agreement in 2005. Article 95, the revision clause, foresees that the Agreement is revised every five years. The negotiations for the amendment were held at the ACP-EU Council of Ministers in Gaborone in May 2004 and ended in February 2005. It was envisaged that amendments would be limited to technical or minor changes only and focus upon improving the implementation of the Agreement.
The Cotonou Agreement was again revised in Ouagadougou, Burkina Faso on June 22-23, 2010. The EU Development Commissioner and representatives of ACP countries were present on the occasion. The revision emphasizes upon the need to tackle climate change in a more effective manner through the mechanisms created by regional integration. Among the other goals are joint efforts to maintain food security and strengthen weak and vulnerable states.
The ACP/EPA countries are grouped into seven regions, five in Africa, one in the Caribbean and one in the Pacific. Some of the details of the regional organizations, or regions which have entered into interim EPAs with the EU are as follows:
South African Development Community (SADC): comprising Angola, Botswana, Lesotho, Namibia, Mozambique, Swaziland and South Africa. Their main exports to the EU are diamonds, oil, fish, beef, sugar, tobacco. The main imports of these countries from the EU are machinery, vehicles, and chemicals. Interim EPAs with all these countries with the exception of Namibia were signed in June 2009. Trade between these countries and the EU was worth [euro] 58.2bn (2008).
Eastern and Southern African Group (COMESA): consists of Comoros, Djibouti, Eritrea, Ethiopia, Madagascar, Malawi, Mauritius, Seychelles, Sudan, Zambia and Zimbabwe. This region's main exports to the EU are copper, raw cane sugar, textile, tobacco, processed tuna and coffee. From the EU these countries mainly import machinery. Ad hoc EPA's were signed with six ESA countries in August 2009. With Zambia and Comoros, EPAs are still to be signed. According to 2008 figures the trade turnover with the EU is [euro] 58.2 bn.
The East African Community (EAC): consists of Burundi, Kenya, Rwanda, Uganda and Tanzania. They formed the East African Community (EAC) and signed a customs union in 2005. The area's main exports to the EU are plants, flowers, vegetables, coffee, fish and tobacco. It mainly imports machinery and vehicles from the EU. Kenya is the only country in the group, which is not included in the list of least developed countries. The EAC signed an interim EPA with the EU in 2007. The volume of trade of the region with the EU is worth [euro] 4.8 bn (2008).
West Africa: comprises Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea Bissau, Liberia, Mali, Niger, Senegal, Sierra Leone, Togo and Mauritania. The region's main exports to the EU are oil, cocoa, pineapples, bananas and wood. The major imports from the EU are machinery and vehicles. The region covers 40%of all EU-ACP trade. During 2008, the trade volume was worth [euro] 43.6 bn. The countries have formed two regional groups - ECOWAS and VEMOA.
Central Africa: consists of Cameroon, Central African Republic, Congo, Democratic Republic of Congo, Gabon, Sao Tome and Principe. While its main imports from the EU are machinery, vehicles, iron, steel and pharmaceuticals, the region's major exports to the EU are oil, wood, diamonds, bananas and cocoa.
In 2008 the region's trade with the EU was worth [euro] 13.9bn. Gabon and Congo have not signed any EPAs yet. They are covered by the Generalized Scheme of Preferences. Since Chad, Central African Republic, Democratic Republic of Congo, Sao Tome and Equilateral Guinea are all least developed countries they benefit from duty free access under the "Everything but Arms" scheme.
The Central African countries have formed a regional grouping called Economic Community of Central African States (CEMAC).
The Pacific Islands Forum (PIF) comprises 14 island states. These are: Cook Islands, Timor Leste, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.
The main exports of the Pacific islands to the EU are palm oil and sugar and their main imports from the EU are machinery, transport, and equipment. Papua New Guinea signed an interim EPA with the EU in July 2009 and with Fiji it was signed in December 2009. The region's trade with the EU is worth [euro] 1.012bn (2008).
The Caribbean Forum of Caribbean States (CARIFORUM) consists of 15 countries. These are the Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Lucia, St. Vincent and the Grenadines, Antigua and Barbuda, St. Kitts-Nevis, Suriname, Trinidad, and Tobago, and the Dominican Republic. The region's main exports to the EU are fuel, chemicals and agricultural products (mangoes, bananas, rum, sugar) and it mainly imports machinery from the EU. All the Caribbean countries signed EPAs in 2008 except for Haiti which signed it in December 2009.
The EPA's have their origin in the trade chapter of the Cotonou Agreement, the aim of which is political dialogue, development support and economic and trade cooperation. The ACP countries have to ensure that their exports are according to the changes made from time to time in EU's standard (on food products, animal health etc). The EPAs provide for technical support and training and measures for promoting knowledge transfer and strengthening of public services. Examples of cooperation in this field are the EU pesticides programme for horticulture, an EU fish health project, training in food safety and a quality control programme called the Pesticides Initiative Programme launched in 2001 to help ACP farmers to adjust to new standardized regulations.
It is noteworthy that intra-ACP trade is dismally low. Ghana for example sends less than 3% of its exports to Benin (compared to 49% to the EU). Many ACP countries do not have the infrastructure to trade with each other. For instance, lack of competition in transport leads to high prices. A container from Mombasa to Kampala costs more than the one being sent from Mombasa to Shanghai. Faulty administrative structures are also a hindrance to these countries' better trade performance. On average, the import procedure in Rwanda takes 124 days against the OECD average of 12 days. The EPAs can assist in overcoming such hurdles by stimulating competition and technical assistance for trade related structures. A positive development is that in recent decades, the services and investment sectors in ACP countries have grown rapidly. In the Least Developed Countries there are more people working in service industries such as tourism, health, IT and farming.
Although it has been many decades since ACP exports gained preferential access to the EU market, the volume of exports has actually gone down.
The economies of most of the sub-Saharan countries are agriculture and mineral wealth-based. The major crops of Ghana and Senegal are cocoa beans and peanuts, while Congo and Zambia, like South Africa are rich in copper and gold. Industrialization has just begun in most of sub-Saharan Africa with the exception of South Africa. Oil reservoirs are an economic asset in a few countries stretched along the Atlantic coast from Nigeria in the North to Angola in the South. Some African countries have seen economic growth in recent decades. The island state of Mauritius cashed in on tourism, IT, seafood and other commodities, raising its GDP to the tune of $6.5 billion in 2006. As a result, the per capita income of the small country is over $5000, one of the highest in the continent. On the other hand, Zimbabwe's performance was dismal. Its output fell by 4.4% and the country's inflation rate, 1,700% is the highest in the world. This state of affairs is owing to bad governance, corruption and civil strife.
President Robert Mugabe, gained power in 1980 after the country got rid of white minority rule and has been ruling since than in an authoritarian manner. He and his clique are responsible for the terrible conditions in the country.
The Nigerian commentator, Mobolaji Sanusi aptly referred to political developments in Africa as "demo-crazy'. He expressed concern about African political leaders' insincere attitude towards the electoral process. Also of concern is their tendency to hang on to power and treat their respective countries as their personal fiefdoms. Many donors have also expressed similar views about the behaviour of political elites in Nigeria, Kenya, Zimbabwe, Togo and Uganda. Aid alone cannot lift a country out of poverty, the government and the people have to make genuine efforts to stand on their own feet. Both trade and aid play an important role in development. Botswana became one of the fastest growing economies between 1995-1998 by increasing its exports, but again it was also annually receiving $125 per person in assistance. Between 1960-2003, some US $568 billion were given as aid to Africa, yet there was hardly much development to show.
This was due to misuse of funds by corrupt and autocratic rulers. Only 10% of African exports are intra-regional. In contrast 68% of the West European goods were exported to other West European countries. Protectionism in Africa is among the highest in the world, which is one reason why trade among African countries is very low.
The African Union was established in 1999, replacing the Organization for African Unity. It has provided a joint body for addressing Africa's most pressing problems. In its meeting in June 2005, its leaders called for abolishing the subsidies in the developed world that are a hindrance to trade, but did not make much progress on the matter of trade liberalization between African countries. They concentrated on trade with the developed world. The Ugandan trade ambassador, Nathan Irumba, urged African leaders to refuse to accept the radical lowering of tariffs which he said would be very dangerous for their own industries and jobs. Similarly South African President, Thabo Mbeki, emphasized that the subsides which the US and the EU gave to their farmers must end. As a member of the Group of 21 developing nations (G21), South Africa walked out of the 2003 ministerial meeting of the Doha round of WTO negotiations in Cancun.
The World Bank estimates are that gains from global trade liberalization for sub-Saharan Africa would be smaller than that to many other developing countries, particularly those of Latin America and the Caribbean. A support package of [euro] 190 million was announced by the European Commission for banana exporters from ACP member states. This offer was based on the historic Geneva Agreement on trade in bananas. The EU had clinched this deal with Latin American countries and the US in December 2009, which settled a banana dispute around 15 years old. This arrangement was meant to support Caribbean banana exporters to adapt to the new trading environment. It would take into consideration each country's specific situation. These measures basically address three objectives: i) boosting the banana sector's competitiveness, ii) promoting economic diversification and iii) addressing the social, economic and environmental impact.
The European Commission professes that its focus is on investing in people. This is the main theme and instrument of the Commission's support programmes for 2007-2013 in the area of human and social development in the region.
Eradication of poverty has been generally stressed upon in the EU's Development Policy and this is also the main aim of the new Cotonou Agreement. The EU's development policy converges with the 8 Millennium Development Goals (MDGs) adopted by 191 UN members in 2000 with a deadline of 2015. The 8 Millennium Development Goals include measures to halt the spread of HIV/AIDS and to provide universal primary education. A progress report presented in 2005 revealed that all the countries had made financial contributions to achieve these objectives, but more needed to be done. The dismal conditions in sub-Saharan Africa have made the achievement of MDGs for that region particularly challenging.
However, some African countries have made better progress towards reaching MDG's. Since the late 1990's more than a dozen African countries have achieved average growth rates of above 5%. Some low income countries have succeeded in lifting their population above the poverty line, while there are many states which are still striving to meet the target of halving poverty by 2015. Between 2000-2005 about 150 million had the good fortune of having been lifted above the poverty line. But it appears that in certain areas targets will not be met by 2015 and these include lowering child and maternal mortality levels and providing clean drinking water to the people. The Millennium Development Goals had emphasized on increase of aid to the most needy countries. A communication was also adopted on taxation, which aims at increasing the developing countries' domestic revenues by strengthening domestic fiscal systems and fighting tax evasion.
It has been pointed out that Uganda for instance, needs to improve its tax administration system. It must particularly confront the issue of tax evasion by the rich and reduce tax rates as incentives for the people to become regular tax payers. African nations it is said must become fiscally responsible, not fiscally dependent.
The Cotonou Agreement injected a new spirit in development cooperation between ACP-EU countries. After the latest expansions in 2004 and 2007 the EU now has 27 member states. The EU's Lisbon Reform Treaty signed in 2007 is another milestone in the evolution of the Union from its modest beginning in 1957 when the European Economic Community was formed. The EEC focused on trade relations and economic coordination among its member states, while the EU of today covers nearly all aspects of Europe's economy. The Lisbon Treaty is ambitious and the changes it has made in the existing treaties has implications for ACP-EU trade relations. One of the goals mentioned in the Lisbon development chapter is poverty reduction and its eventual eradication, and connected with it, encouraging the integration of all countries into the world economy as well as removal of restrictions on international trade.
An important question which has a bearing on the future of EU-ACP relations is the level of commitment of the EU to the objectives of the Cotonou Agreement. The biggest threat to development in the world as acknowledged by Cotonou is widespread poverty, and the most effective way to overcome it is by restructuring the international trade and financial regime in such a way that it addresses the root causes of the marginalization of the developing countries in the international economy. At a workshop on the Lisbon Treaty in Brussels in May 2010, the Ambassador of Gabon opined "There should be parallel partnerships as a means of helping countries and regions to better their position in the global economy. The EU should be mindful that ... regional development initiatives are not advanced at the great cost of degrading the largest North-South Partnership in the world."
He expressed great concern about the future of the ACP Group, which he said, was to a significant extent dependent on the group's relations with the EU and the success of the Cotonou Agreement. It would be interesting to see how the new external actions of the EU envisaged in the Lisbon Treaty will tackle issues related to the ACP countries.
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|Publication:||Pakistan Journal of European Studies|
|Date:||Dec 31, 2011|
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