PAF ProActive File - Regular News Update from Eurostep

No. 336

21 November 2003

1.EU COUNCIL MOVES CLOSER TO ESTABLISHING A PEACE FACILITY FOR AFRICA

On 17 November in Brussels, the EU General Affairs and External Relations Council approved a draft decision, to create a financial support facility for African Peace-keeping forces in Africa that the Commission has proposed to finance with part of the development resources (EDF) allocated to the African Countries of the ACP Group (See PAF 333). The proposal is to allocate a total amount of €250 million to the Peace Facility. This amount would be composed of €126.4 million from allocations earmarked to African countries under the 9^th EDF. However, to raise this money the European Commission’s idea is to shave off 1.5 % off’ each ACP’s country programme allocation of funds in addition to €123.6 million taken from unallocated funds from the 9^th EDF.

The EU Council’s endorsement of this proposal, which meets a request made by the African Union, now leaves the ACP/EU Council of Ministers to take the final decision jointly before end of November 2003.

Reservation expressed by some delegations about the Council’s control in implementing this facility and the duration of its financing by EDF resources were calmed during the Committee of Permanent Representatives of EU Member States thanks to a compromise between the Council and the Commission.

Germany, in particular, supported by France, Sweden, Greece and Luxembourg, feared that EDF funding of the Peace Facility till 2006 would be to the detriment of the Monterrey Goals aiming at increasing the average level of EU state aid for development from 0.33% of GDP to 0.39% in 2006, as an intermediary stage towards 0.7%). It therefore urged for the deduction from financial resources intended for development to last no more then one year, and that this time is used to seek other sources of funding from the EC Budget. The United Kingdom, agreeing on an interim period, refused any formula that referred to other methods of financing other than the EDF. Eurostep has however raised questions with the Commission about the use the EDF in funding this facility.

The aim is for the African Peace Facility to be operational in 2004.

2. DEVELOPMENT HIGH ON THE IRISH EU PRESIDENCY AGENDA

Ireland, which takes over the EU Presidency from January 2004, has apparently put development issues high on its list of EU priorities. In a speech by Irish President, Mary McAleese, to the European Parliament this week, she highlighted the upcoming Presidency’s concern that the overall level of assistance from the rich countries to the poor has “dropped to an unacceptably low level”. Mrs. McAleese argued that a key element of Europe’s future security strategy should be “the reduction of poverty rather then the poverty management”.

3. EU GENERAL AFFAIRS AND EXTERNAL RELATION COUNCIL (DEVELOPMENT SESSION)

Apart from green lighting the establishment of the African Peace Facility, the EU Council session set aside for development issues, held a debate on 17 November on EU-Africa issues. On the EU-Africa Dialogue the Council commended the African Union for having ratified new modalities decided on by the EU-Africa Troika to deepen the dialogue on a regular and more flexible basis.

The issue of cotton was also debated in the Council, as requested by the French delegation, which is calling for a greater opening of the European Markets to exports from the four West African cotton producer countries. This proposal found a positive echo with the Dutch and Swedish (who, nevertheless, argued that cotton was a trade rather than a development issue).

The Council called on the Commissioner to examine the issue in more detail and produce a report on the subject. EU Development Commissioner, Poul Nielson, indicated that a Commission Communication on basic products is currently being prepared. He argued, however, that it was not up to the EU to increase its development aid to compensate massive US subsidies to their cotton exports.

4. EU WILLING TO COMPROMISE ON TRADE TALKS

In a bid to restart world trade negotiations the EU says it is willing to compromise on four key issues. The EU says it is willing to drop its insistence that trade talks cover cross-border investment, competition, trade facilitation, and government procurement, writes the BBC. The EU’s bullishness on these issues - the so-called Singapore issues - coupled with an unwillingness to further reduce agricultural subsidies were blamed by many as being the cause of the collapse of WTO talks in Cancún earlier this year.

During a visit to WTO headquarters in Geneva on 19 November, EU trade commissioner Pascal Lamy called for greater compromise.

"My sense is that there are areas where we should show flexibility", Mr Lamy said.
"I am looking at options like this in order to address the concerns in certain developing countries", trade commissioner added.

During the WTO talks in Cancun last September, developing countries refused to discuss these four controversial issues raised by EU. However, the European Commission is determined to kick-start the world trade negotiations and therefore has been reviewing its standpoint.

On 15 December all 146 WTO members will meet again in Geneva, to discuss how to go on with the trade talks. The current round of talks is scheduled to finish in January 2005.

5. EUROSTEP CRITIQUES EU APPROACH TO ACP MID-TERM REVIEWS

Eurostep has sent a letter to the European Commission critiquing the approach the EU has adopted toward the Mid-Term Reviews of the five-year EU- ACP country programmes. Eurostep point out that the principal objective of the Reviews should be in advancing poverty eradication in the ACP in line with goals of ACP-EU partnership and the Millennium Development Goals.

The letter points out that while EU Council clearly stated in March this year that

“Country Strategy Papers, as a matter of principle and in an appropriate timeframe, be reviewed at the mid-term point of the implementation”, the Commission plans to carry out the Mid-Term Reviews at the beginning of 2004, a time most ACP countries would only be starting implementation. Only 20 of the potential 77 ACP CSPs were adopted before June 2002. As the letter points out “it is hard to see how there can be a meaningful Review of a Country Strategy that has not yet had sufficient time to put into effect.” It is worth noting that the stakes for ACP countries are quite high as the Review could lead to revision of funds allocated or changes in the strategies of their programmes.

6. DEVELOPMENT FOR ALL DEVELOPING COUNTRIES IN THE CONSTITUTION?

Ministers from EU Member States have confirmed the position that the EU's development policy should provide the principal framework for its co-operation with all developing countries. In responses to a Eurostep letter urging Member States to clarify the articles in the draft Constitutional Treaty on development, Ministers from Austria, France, Germany, Spain and the UK have stated that development policy applies to all developing countries. This has important implications on the negotiations in the Intergovernmental Conference, which is set to finalise EU’s Constitutional Treaty, as there was an attempt by legal experts from the Council to open a section on “economic, financial and technical co-operation” to developing countries.

This would have led to EU relations with developing countries without any poverty eradication or policy coherence objective. The positions taken by the Member States in their letters will strengthen Eurostep’s call to the Intergovernmental Conference to safeguard the proposal made by the European Convention to establish the section on “economic, financial and technical co-operation” only for countries “other than developing countries”. (the letters from Austria, France, Germany, Spain and the UK are available on: http://www.eurostep.org/strategy/future/index.html)