Memorandum submitted by the Department
for International Development
THE RENEGOTIATIONS OF THE LOMÉ
(Fourth Report, 1997-98)
The Government agreed with many of the Committee's
recommendations for the content of the draft EU Mandate. The detail
on the implementation of Cotonou is laid out in both the Cotonou
Agreement itself, finalised on 3 February 2000, and in the Internal
Agreement (between the EU Member States) on Financing and Administration
of Community Aid, which was finalised in September 2000. DFID
worked closely with the Foreign and Commonwealth Office, the Department
of Trade and Industry and other Government Departments during
The central objective of the Cotonou Agreement is
reducing and eventually eradicating poverty. The Agreement is
'underpinned' by the International Development Targets.
Under the terms of the Cotonou Agreement country
allocations will be based on needs and performance. The Commission
has recently published draft methodology for resource allocation,
which will need to be agreed by the Member States in the EDF Committee.
The allocation will comprise a basic programme, together with
an additional component to cover unforseen needs. Country allocations
will be published and, following mid-term and end-of-term reviews,
can be revised based on a re-assessment of needs and performance.
The review process will focus on results achieved measured against
programme targets and indicators.
The new Agreement includes provision for additional
financial support where countries' development efforts are jeopardised
by short-term fluctuations in export earnings.
There is strong emphasis in the Agreement on better
co-ordination of support. The Internal Financing Agreement requires
EC strategies to be coherent with country-led development strategies
including Poverty Reduction Strategy Papers and the Comprehensive
Development Framework. Co-operation will include programmes to
ensure the equal participation of men and women in all spheres
The new Agreement emphasises support for sectoral
policies, including through budgetary support. The draft Development
Policy Statement which covers all EC programmes further promotes
the move from project to sector support.
There is strong emphasis in the Agreement on pursuit
of peace-building policies, conflict prevention and resolution.
There is also an improved role for civil society in the implementation
of the Agreement. While there is no specific forum where the voices
of non-state actors can be heard, they should be consulted on
EC country strategies, receive support to strengthen their capacity,
and be involved in implementing projects and programmes.
There is no scope in the agreement for an annual
report on the implementation of Cotonou. However, the Government
continues to press for an annual report on all EC development
assistance as follow up to the Council Conclusions on the evaluation
of EC aid.
The Cotonou trade regime is aimed at fostering the
smooth and gradual integration of the ACP into the world economy,
so as to promote their sustainable development and contribute
to poverty eradication.
The Cotonou Agreement recognises the importance of
supply-side constraints to ACP participation. Both financial and
technical assistance will be specifically focussed on supporting
strategies for promoting investment and private sector development,
including through risk capital and loans via the new Investment
Under the new Agreement, until 2008 there will be
a preparatory period during which the existing preferential trade
arrangements will be maintained. The EU and ACP have applied to
the WTO for a waiver for this period. After 2008 there will be
new WTO-compatible arrangements, mostly comprising regional economic
partnership agreements (REPAs), essentially free trade areas.
Negotiations on these will start in 2002. Initially the new REPAs
will be heavily assymetric. Thus, fully reciprocal free trade
with the EU is unlikely for a long period, perhaps fifteen years
after the REPAs come into effect in 2008.
The Government shared the Select Committee's concern,
and that of the Governments of many ACP countries, that some ACP
countries would be unable to enter REPAs. This would not be a
problem for Least Developed Countries (LDCs), as the EU confirmed
in the Cotonou Agreement its commitment to provide duty-free market
access for essentially all LDC products by 2005 at the latest.
On 20 September the Commission published a proposal to extend
duty and quotafree access to the EU for all products (except
arms and munitions) for all LDCs, from 1 January 2001. Three sensitive
products rice, sugar and bananas will be subject
to phased liberalisation over 3 years. The Government has welcomed
For non-LDCs that are unable to enter REPAs there
is a safety net under Cotonou whereby the EU has committed to
explore all possibilities to provide a new, WTO-compatible trading
framework with benefits equivalent to those under Lomé.
The EC agreed under Cotonou to help the ACP States
to participate, negotiate and implement agreements in the WTO
and in other international organisations. The EC is currently
assisting the ACP establish a presence in Geneva with this objective.