A draft ACP negotiating mandate for forthcoming ACP-EU negotiations for a successor to the Lomé Convention has received limited circulation. The draft has been accepted by the ACP Bureau and will almost certainly be formally adopted by the ACP at the end of the month, just in time for the negotiations. You may recall that the EU finalised its negotiating mandate in the summer. The draft mandate covers four chapters: a) political dialogue, b) trade and related issues, c) co-operation financing issues and d) development of the private sector and investments. On a number of key points the ACP adopts a position which is at variance with the EU's. The ACP for instance is in favour of the maintenance of previous Convention instruments such as STABEX (fund for stabilising revenues from exports from certain products under certain conditions) and SYSMIN (similar fund for mineral exports). It is also in favour of maintaining the various protocols on certain agricultural products which offer them special protection. On trade, in contrast to the EU which is seeking a five year transition period for the maintenance of the system of non-reciprocal preference in trade with the ACP, the ACP is seeking a ten year transition period. Notably the ACP appears to view civil society as a tool or an instrument for development while the EU's view of civil society leans more towards recognising civil society as a genuine partner in development co-operation. Prior to the completion of the ACP mandate much had been said over the ACP's difficulty in reaching a common position on what it wants from an agreement with the EU. The diversity of the ACP States in interests and levels of awareness and development has been widely discussed. This is likely to manifest itself over the potentially divisive issue of setting up regional groupings to serve as free trade zones with the EU. At an ACP Council Bureau meeting earlier this week, Mrs Billie A. Miller, Deputy Prime Minister of Barbados and President in office of the ACP Council, described free trade areas as not being a priority, stating, “We should instead be studying how to strengthen ACP economies”.
According to reports from the European press, due to the apparent lack of a united front within the ACP, EU Officials are not optimistic on whether the first few months of the negotiations will constitute real dialogue. According to a London official “The first few months will probably be a kind of phoney negotiation.” On the actual Agreement, the Eurostep secretariat has noted that by the time it may come into force in 2000, it may offer a lot more flexible funds, given the decision to roll over the 6th and 7th European Development Funds (EDFs) from previous conventions to the 8th EDF of thus Lomé IV bis Convention. Thus it is unlikely that the 8th EDF may be totally spent by the time of the new Agreement.
2. CONCERN GROWING OVER EFFECT OF EURO ON AFRICAN CFA FRANC COUNTRIES Concern over the effect of the planned common currency of the EU - the euro - on the group of African countries that use the common CFA franc currency is growing. According to most observers the CFA franc which has been pegged to the French franc for decades is set to become the CFA euro, to all extent and purposes, after France along with EU countries adopt the euro. In effect the monetary future of the 14 CFA countries will be determined by France, Germany, Italy and Spain. Opinions are still divided over the net result for African countries in having such currency associations with European countries. While most agree that the CFA franc's association with the French franc over the last 20 years granted its users in Africa a degree of stability and low inflation compared to non CFA African countries, some have pointed to the rigidity and overvaluation of the currency resulting from such a practice. According to a representative of the Overseas Development Institute of the UK, this rigidity contributed in the past to fiscal imbalances and impeded structural changes. From 1986-1993 the CFA franc zone's terms of trade fell by 5.6% a year while the CFA's real exchange rate fell by 1.5% a year. In 1994 the CFA economies halved the value of their currency to the French franc as global commodity prices continued to decline. A recent IMF working paper, despite claiming that the euro could bring positive gains for the region in Africa, admits that exporters in the region could suffer, especially faced with Asian and other African competition. In addition an overvalued currency could damage prospects for inter-regional African trade. At present CFA zone membership is being reconsidered, with question marks over admitting anglophone West African countries like Ghana, which have long been out of the CFA zone, if they enter a West African free trade zone with the EU. Some observers have pointed out that a powerful euro could oust the dollar in day to day transactions especially if the influential UK pound joins after 2000. The World Bank and the IMF may even begin to work in euros in certain regions - a move which would affect all African countries. Given the volatility of many African currencies, many countries outside the CFA zone may consider pegging their currencies to the euro, especially if they are to enter into free trade zones with the EU. This makes it all the more important that net results of the establishment of the euro for African countries are carefully examined.
3. EU CONSULTATIONS WITH TOGO
Following the EU Troika (the Presidency of EU- Austria, previous Presidency - UK and next Presidency - Germany) consultations with the Prime Minister from Togo on events surrounding the Togo Presidential elections in June, the Togolese Government has been given till September to show positive signals with respect to democracy and the rule of law before further consultations in September. These consultations were called for according to the procedure of the Lomé IV bis Convention which states that one party to the Convention considering another party to have failed to fulfil obligations concerning democratic principles and the rule of law, may invite the party concerned for consultations. Consultations are supposed to last no longer than one month. If no solution is found, once the deadline expires, the party that invoked the shortcoming may take appropriate measures including, as a last resort, partial or full suspension of the Convention.
4. NOTICE FOR EUROSTEP MEMBERS
Timetable For Production And Use Of Eurostep Position Paper On ACP-EU Negotiations
Distribution of final draft to the Lomé Working Group for comments - 28 August
Deadline for return of comments to the Secretariat - 10 September
Discussion of paper during Steering Committee telephone conference - 11 September
Circulation of paper to all members - 15 September
Press release - 18 September
Launch of the paper - 23 September
Presentation to European Parliament Development Committee - 29 September
Formal Launch of ACP-EU negotiations - 30 September
Forthcoming Eurostep Events
11 September Steering Committee telephone Conference 21-22 September, Paris Reality of Aid Management Committee 24-25 September, Florence Gender Working Group Annual Meeting 7 October, Bonn Lomé Working Group 8 October, Bonn Sextet Meeting 15 October, Brussels Launch of the Reality of Aid 27-28 October, Brussels Advocacy Workshop 29 October, Brussels Steering Committee Meeting 9-13 November, Managua Nicaragua Partner Consultation Meeting 16-17 December, Brussels General Assembly