AND AFRICA STILL TO BE ACHIEVED
Cooperation between the European Union and countries of Sub-Saharan Africa, the Caribbean and the Pacific (later on known as the African, Caribbean and Pacific Group (ACP) goes back to the signing in 1957 of the Rome Treaty -- the starting off point for the European Common Market. The Fourth Section of the Treaty envisaged the setting up of an European Development Fund (EDF) destined to provide technical and financial aid to African countries (still “colonies” at that time) and with which some countries had historical ties. This Treaty was followed by the Yaounde I Agreement (Cameroon) signed in 1963 between the European Economic Community (EEC) and 18 African and Madagascan countries.
Yaounde I and II; Lome I, II, II, IV (1963-2000)
The Yaounde Agreement marked the start of cooperation between the European Union and independent African countries and forecast an aid programme to recently independent French-speaking countries, financed by the second EDF (1963-1969). This Agreement was renewed in 1969 by the Yaounde II (1969-1973) Agreement); the third EDF would concentrate on efforts to build infrastructures following colonial rule.
In 1973, when the United Kingdom joined the European Economic Community (EEC), and with the stimulus of the European Commissioner Claude Cheysson, a new Agreement, the Lome (Togo) Convention was signed in 1975 between 46 ACP countries. The Lome I (1975-1989) Convention had its secretariat in Brussels and was financed by the Fourth EDF. Lome I established non-reciprocal preferences for most exports from ACP countries to the EEC, and set up ways and means of compensating ACP countries for the shortfall in export earning due to fluctuation in the prices or supply of commodities. (STABEX). The Convention included separate trading protocols on sugar, beef and veal and bananas. Vis a vis bananas, this specific protocol ensured duty-free entry to the European Union (EU) for specific quotas from specific countries. Regarding sugar, the Community agreed to buy a fixed quantity annually from ACP producers at guaranteed prices, in line with current prices within the European market. Concerning beef and veal: the Protocol permits a 90% refund of tax normally paid on beef imports from several ACP countries, and has especially benefitted Southern African exporters. Lome I also prioritised infrastructures: road building, bridges, hospitals, schools and sustainable agriculture.
All these priorities were confirmed with the signing in 1979 by 58 countries, of Lome II (1980-1985) . A further addition was that of the SYSMIN i.e. a system allowing for a country heavily dependent on a particular mineral and suffering export losses to access SYSMIN loans which were designed to lessen a country’s dependency on mining.
This Convention was renewed in 1984 by the Agreement known as Lome III (1985-1990). This Agreement set aside funding for rural development projects so as to further self-sufficiency and promote food security; also to combat desertification and drought.
Then came Lome IV (1990-2000) in 1990. This provided a framework for cooperation over a ten-year period. Several European Community (EC) and ACP Indicative Programmes (NIPs) and sectoral and general import programmes which raised money for health and education projects by the sale of goods in short supply on the local market ,were financed with Lome IV’s initial five year financial protocol. The EC now provides 10% t0 30% of total adjustment aid to ACP economies, notably toeducation and health programmes. Lome IV became the first development agreement to incorporate a human rights clause as a “fundamental” part of cooperation.
Further changes were made at Lome IV’s revision five years later. An updated clause confirmed human rights as an “an essential element” of cooperation, meaning that any violation could lead to partial or total suspension of development aid by the EU after prior consultation of other ACP countries and the abusing party. Another novelty in the revised Lome IV concerned a protocol for the protection of ACP forests, allowing the 8th EDF budget (1995-2000) to be tapped for the preservation of tropical forests.
Not everything it seems
However, the fact is that in spite of some successes and twenty years of cooperation, the ACP-EU alliance has not resulted in the economic development of these African countries. Statistics indicating that generous trade preferences were not enough for economic take-off , were detailed in a “Green Paper” published by the European Commission in 1997, ahead of the 1998 talks on a new agreement. It appears that whilst exports from other developing countries has grown by 76% between 1988 and 1997, those from African countries have increased by a mere 3.6% In spite of preferential trade agreements, ACP countries’ share of the EU market had declined from 6.7% in 1976 to 3% in 1998 with 60% of total exports concentrated in only 10 products. Only four countries (Cote d’Ivoire, Mauritius, Zimbabwe and Jamaica) registering economic growth. The per capita GDP in sub-Saharan Africa grew by an average of only 0.4% per annum during the period 1960-1992, compared with 2.3% for developing countries as a whole. Also, only 6% of African trade was with other countries of the continent.
Why? A number of reasons are put forward. Firstly, the Green Paper notes that the advantages ACP exporters have in trading with the EU have been eroded by the extension to other, non ACP suppliers. Also, the study of EU assisted projects since the 1980s have shown efficiency rates of 70% for transport projects, but only 30% in vital areas of agriculture and rural development. While preferential terms of trade applied to both manufactured and processed goods from the ACP, preferences for agricultural products, on which most Southern African economies depend, were less generous. Secondly, ACP producers found it difficult to adapt rapidly to product quality standards and to changes in world demand. Thirdly, waning international donor support for developing nations, falling over ten years from 0.33% of donors’ GNP in 1988 to 0.23% in 1998, was of concern to. And this worry was heightened by an increasingly negative public reaction to cooperation, some European taxpayers viewing corruption as endemic in African nations and calling for better and more efficient use of funds.
To the above must be added internal problems besetting the African continent, problems highlighted by the Green Paper such as the disintegration of the social fabric; the never-ending and ever-increasing internal conflicts; humanitarian catastrophes which have undermined the whole development policy, thus forcing the aid agencies to concentrate on providing emergency aid and crisis management.
The EU then put forward a key reason to justify the end of guaranteed preferential trade access (with European markets). It stated that these preferential tariffs were incompatible with the rules of the World Trade Organisation (WTO). In 1993, the EU introduced the New Banana Regimes that replaced the various national import systems of the EU Member States, with a single uniform system, and essentially guaranteed ACP countries a certain share of the EU banana market. The New Banana Regime imposed a tariff quota on banana imports that was applied according to whether the bananas originated from ACP or non-ACP countries. Immediately after the EU announced its New Banana Regime, many Latin American banana producing countries, five of whom were General Agreement on Tariffs and Trade (GATT) members, requested that a WTO Panel examine the legality of the Regime, which found that the EU’s trade preferences violated GATT’s free trade principles. The countries concerned claimed that the EU’s import regime was inconsistent with the Most Favoured Nation Clause in Article 1, paragraph 1 of GATT.40. Subsequently, the WTO panel condemned the EU Banana Import Regime, whereupon the EU rejected the WTO Panel ruling and wrangling over the issue continued on for a number of years. In the end, widening the issue to the principle of market free exchange between countries and interest blocks of countries (which include African countries), it was decided that African countries must open themselves up to European producers in the same way as European countries have opened themselves up to African products. The commodity stabilization mechanisms, STABEX and SYSMIN systems were then closed.
It was evident that changing circumstances in both ACP countries and European countries must dictate a new approach to commercial relations. Thus, a new agreement, the “Cotonou Agreement”, was to see the light of day
The alternatives of the Cotonou Agreement (From 2000)
On 23 June, 2000, an Agreement between, the EU and ACP countries was signed at Cotonou in Benin. The Cotonou Agreement is scheduled to run for 20 years (March 2000-February 2020), and provides for a revision clause which foresees that the Agreement is adapted every 5 years. 102 countries are signatories to the Agreement – 77 from the ACP and 25 from the EU. This Agreement marked a turning point in cooperation between the EU and the ACP. It has been drawn up with the rules governing world trade in mind and aims to combat poverty in ACP countries. Broad principles for cooperation are laid out with the underlying objective of the fight against poverty: an enhanced political dimension; improved financial cooperation; new forms of economic and commercial cooperation; new economic and trade partnerships between member States. The Agreement means that strings are attached to the giving of European aid.
There are conditions attached to the giving of European aid. The Cotonou Agreement states that when human rights violations are detected, then the EU can react immediately and can take measures such as the freezing of cooperation. In the past, the EU had to consult with the ACP before taking such steps. Likewise, the fight against corruption is foreseen and appears for the first time in this Agreement text. However, “corruption” does not appear in the list of “essential elements” (respect for human rights, democratic principles and the rule of law) which would result in aid being suspended. Nevertheless, the two parties to the Agreement have agreed that when serious corruption is detected, there could be some kind of consultation which could result in aid being suspended. Finally, the key role of political dialogue (at the very heart of the new Agreement) should be more frequent and more open, allowing the ACP and the EU to address all issues of mutual concern and to ensure consistency and increased impact of development cooperation. Networking and links between ACP and EU actors (Cabinets, Parliaments) are also encouraged.
Financial aid…but with conditions attached
European financial aid is still on-going. Euros 13.5 billion are earmarked for the period 2000-2007. Added to this , Euros 1.7 billion in loans from the European Investment Bank. Then there’s still Euros 10 billion remaining which have not yet been spent from the previous Lome Agreements period. But the Cotonou Agreement marks the end of the age of automatic allocations in making its aid dependent on ACP macroeconomic performance. Grants-in-aid are given out in a more selective way according to the needs and achievements of each country. Every two years there is an joint evaluation of each country, after which a decision will be made as to how financial aid will be allocated. In addition, Euros 1 billion of the total amount is subject to a decision taken by the EU depending on if the ACP can handle it.
Agreement ACP countries Length EDF in Euros every 5 years Commited
Rome Colonies 1957-1963 1 billion 0.9
Yaounde I 18 1963-1969 1 billion 0.9
Yaounde II 21 1969-1975 3.1 billion 1.1
Lome I 46 1975-1980 4.7 billion 2.9
Lome II 58 1980-1985 7 billion 4
Lome III 67 1985-1990 8.8 billion 8.8
Lome 1V 69 then 72 1990-2000 10.8 then 2.9 billion 19
Cotonou 77 2000-2005 15 billion 17.2
Actual total - 48 years 64.3 billion 54.8
A new look commercial agreement
The new look Agreement changed everything and raised questions about the underlying factors regarding the Lome Agreements. For the last 25 years, the EU had been guaranteeing non-reciprocal trade preferences toward European markets. This preferential trade regime is due to be maintained until the end of 2007. It will then disappear because of the restrictions imposed by the WTO. According to the Cotonou Agreement, all ACP countries are encouraged to join sub-regional groups of countries capable of managing a customs union. (Examples of such existing Groupings are: the SADC in Southern Africa; ECOWAS in the West and COMESA in the East). Each group will then negotiate an agreement with the EU which would involve detailed timetables for the removal of import tariffs and quotas and export duties on specific products and to negotiate free trade deals. These new trading arrangements between the EU and ACP regional groupings will replace the former regime from 2008 onwards.
The Economic Partnership Agreements (EPAs) are due to start in 2008 and be completed within 12 years (2020). The EPAs will be compatible with WTO rules and they ought to cover all aspects of trade. There is some kind of reciprocity, so in theory African markets should have an opening to those of Europe and apart from trade, should have access to other areas of cooperation and aid.
But ACP countries still have the possibility of choice. They are not obliged to allow in products from EU countries in 2008. It is foreseen that Least Developed Countries (LDCs) can continue to profit from the Lome Agreements. ADC countries not classified as LDCs, which do not want to have commercial agreements with the EU, can enter into agreements offered to countries of the third world – albeit less generous than the Lome Agreements – or even to establish other kinds of Agreements , with the condition that they are compatible with WTO rules.
It is clear that Africa, come what may, must fall in line with the WTO and with present-day trends vis a vis commercial agreements. Likewise, countries such as China have had to follow suit and with this in mind, Africa has launched itself into the European and United States’ markets.
Integration of the private sector and civil society actors into the development process
This is a major factor of the Cotonou Agreement. From the time of the Lome Agreement onwards, such Agreements had been drawn up between countries and governments. From now onwards, other actors have entered upon the scene: civil society, the private sector and local authorities. Non-State Actors will be able to access financial resources, and 15% of EDF funds are already earmarked for them. Non-State Actors will participate in the setting up of development programmes, particular attention being given to the private sector. The Cotonou Agreement thus acknowledges its role in the development of ACP economies.
Serge Azide Lorougnon S.J.