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Zambezi River Basin Series: No.12, Poverty

    The African, Caribbean and Pacific (ACP) states have struck a new deal with the European Union (EU) with the extension of the current treaty which was due to expire this February .At a meeting held in Brussels, Belgium, from 2-3 February 2000, the EU and ACP states concluded a new agreement, an extension of the Lome Convention which regulates development cooperation and trade relations between the two regions.

    One of the major agreements entered into is the determination of an eight-year transition period during which new negotiations on trade and economic arrangements with the EU are to be negotiated and concluded. This tral:tSition will run from 1 March 2000 to 31 December 2007 during which period market access into EU will continue under current arrangements. A further 12 years was agreed upon as the implementation period.

    In addition, 13.5 billion euros were made available under the extended Environment Development Fund (EDF) to assist development efforts of ACP countries for the period 2000 through to 2005. This assistance would be used to support and promote efforts of ACP countries, which include poverty reduction, private sector development and reform of ACP economies and gradual integration of ACP countries into the global economy.

    Some 12,8 million euros would be initially allocated. Of the yet uncommitted funds, one billion would go to securing the multi-lateral debt relief initiative for the world's poorest developing countries as agreed on by the seven leading industrialized nations at the World Economic Summit in Cologne, Germany, in 1999.

    The EU is making 680 million euros available to the World Bank's trust fund to be used to offset the debt of the poorest developing countries. Some 320 million euros have also been made available for EU's bilateral debt relief activities.

    The purpose of the meeting was to negotiate a framework leading to a successor agreement to Lome IV, whose expiry date was set at February 2000.

    The ACP states and the EU have enjoyed development co-operation under Lome whose aim is to support the" ACP ~tatesl efforts to achieve comprehensive, self-reliant and self-sustained development".

    The first Convention (Lome I) was signed on 28 February 1975. Lome II and III were signed in 1979 and 1985 respectively. The current Convention, Lome IV, covers the period from 1990 to 2000 and has been the most extensive development cooperation agreement between the North and tne South both in terms of scope {aid and trade) and the number of countries involved.

    The convention states that ACP cooperation is to be based on partnership, equality, solidarity and mutual interest. The convention also recognises the principal of sovereignty and the right of each ACP state to define its own development strategies and policies, affirming development centred on people, respect and promotion of human, political, social and economic rights.

    In 1994, the Lome IV underwent a mid-term review, which resulted in approval of the 8^th EDF to cover the five year period between 1995-2000. The recent extension has paved the way for the 13,5-billion-euro development fund which runs for another five years to 2005.

    According to South Africa's Deputy Trade and Industry Minister,Lindiwe Hendricks, the new Lome agreement is expected to be signed in May 2000. The agreement will then be ratified by the EU's 15 member states and ACP's 71 states by September 2002, before it comes into force.

    Among other issues discussed at the Brussels meeting, which was attended by ministers and government officials from the participating states, were the level of aid to ACP nations, good governance, corruption, market access for countries not classified as least developed and the duration of the new convention. The outcome of the talks was generally favourable for the ACP countries and a number of important agreements were reached, according to analysts. On the delicate issue of migration, the ACP and EU agreed to put in place measures to control migration on a bilateral basis while at the same time upholding the commitment to respect human rights and fulfillment of obligations arising from international law.

    In order for this arrangement to be compatible with World Trade Organisation (WTO) rules and regulations, the EU is expected to ask for a waiver to continue with the current trade preferences. Internal arrangements are being made to ensure continuity of trade flows from ACP to EU.

    The implications of these agreements for the ACP states are that they will continue to benefit from the current trade preferences during the eight-year preparatory period without disruptions. Duty free items and those on concessionary duty will continue to benefit during the transition period.

    For Botswana, Mauritius, Namibia, Swaziland and Zimbabwe, the current quotas on beef and sugar will stay in place. Malawi will benefit from the 18 million euros that was allocated for road projects and rural development and 7.8 million euros allocated to help set up Malawi National Blood Transfusion Service. Zambia will, among other concessions, get 6.5 million euros to boost exports and provide short-term assistance to producer associations, their members and groups of enterprises.

    The more favourable preferential terms granted the ACP countries for accessing the Common European Market was more important than the financial development assistance covered by the agreement. The new agreement sees, particularly, the strengthening of political relations between the ACP and EU states.