The Cotonou Agreement
| Author | Françoise Moreau |
| Profession | Head of Unit Forward looking studies and policy coherence European Commission Directorate-General Development |
| Pages | 11-21 |
Head of Unit Forward looking studies and policy coherence European Commission Directorate-General Development and Relations with African, Caribbean and Pacific States
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The agreement, signed in Cotonou on 23 June 2000 for a period of twenty years and revised in 2005, builds on the acquis of thirty years of experience. The successive Lom Conventions had provided a unique model of North/South relations, combining a negotiated system of trade preferences and considerable amounts of aid. Yet the results had been mixed. Evaluations of Community aid to the ACP countries often demonstrated that insufficient account had been taken of the institutional and policy context in the partner country, and this had too often undermined the viability and effectiveness of cooperation. The impact of non-reciprocal trade preferences had also proven disappointing. The rise in private direct investment flows to the developing countries over the previous two decades had not benefited the majority of ACP countries. Although the farsightedness and the contractual nature of the Lom Conventions were acquis worth preserving, there was also an obvious need to adapt to international and regional developments. The rise in poverty in a number of countries, demographic development and environmental pressures meant that objectives and cooperation practices needed to be substantially reviewed.
The Cotonou Agreement tried to provide responses to these challenges. It was elaborated following a broad public consultation launched in 1996 on the basis on the Commission Green Paper on the future of relations between the European Union and the ACP countries. Wide-ranging public debate made it possible to assess the expectations and changes needed to bring a new dynamic to these relations and create a modern, authentic and efficient partnership.
The partnership reflects an evolution of the political dimension. Dialogue plays a key role in the success of development cooperation activities, and the political dimension of poverty-reduction strategies and sustainable is henceforth acknowledged to be an integral part of development processes. The first revision of the Agreement has been an opportunity to further strengthening the provisions on the political dialogue.
The ACP-EC partnership also aims at promoting increased participation of civil society, the private sector and the economic and social actors.
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This approach is inherent to the consolidation of democracy, and can improve the effectiveness and viability of cooperation policies. In the revised version of the Agreement this participatory dimension has also been further defined.
The ACP-EC partnership makes a clear link between the political dimension, trade and development. It is based on five pillars:
* reinforcement of the political dimension of relations between ACP countries and the European Union;
* involvement of civil society, the private sector and other non-State players;
* poverty reduction, confirmed as a key objective within the context of the objectives and targets agreed at international level (in particular the Millennium Development Goals);
* an innovative economic and trade cooperation framework;
* rationalisation of financial instruments and a system of flexible programming.
The agreement was concluded for twenty years, with a clause allowing for revision every five years and a financial protocol for each five-year period. As regards the trade agreements, a specific timetable was agreed between the parties, anticipating the various stages leading to the effective setting-up of the new arrangements. Certain aspects of the Agreement, particularly the sectoral policy guidelines defined in a "Compendium" or the procedures for implementing financial assistance contained in the annexes, can be adapted on a regular basis if necessary. The ACP-EC council of Ministers, which in principle meets once a year is responsible for adaptations. This approach embodies the dynamic nature of the partnership and provides for greater flexibility in the cooperation system.
The Cotonou Agreement contains a revision clause (article 95) which foresees that the Agreement can be adapted every five years (with the exception of the economic and trade provisions, for which there is a special review procedure). In accordance with Article 95, at the end of February 2004, EC and ACP partners notified the provisions of the Agreement they wished to amend. The negotiations were launched at the ACP-EC Council of Ministers in Gaborone in May 2004 and were concluded at a ministerial meeting in Brussels on 23 February 2005. The revised Agreement was signed in Luxembourg on 25 June 2005.
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The revision process did not call into question the fundamental acquis of the Cotonou Agreement. The objectives were rather to enhance the effectiveness and quality of the ACP-EC partnership, to ensure its consistency with the new international agenda for development, to further deepen the political dimension of the partnership and to broaden the cooperation framework in order to include new important security issues. The revised provisions can be broadly grouped under four headings: the political dimension and security issues, development strategies, Investment Facility and implementation and management procedures.
Regular political dialogue should promote the consistency and relevance of ACP-EC cooperation strategies and make it possible to address all issues of mutual interest. Important matters such as peace-building and conflict-prevention policies, and migration, were deliberately introduced into the Agreement in 2000. Respect for human rights, democratic principles, the rule of law, and good governance are subjects for regular dialogue where regional and sub-regional organisations and representatives of civil society can be associated. The Joint Parliamentary Assembly is called upon to play a particularly important role in such areas. Consultation procedures are envisaged in the event of violation of human rights, democratic principles and the rule of law, or in serious cases of corruption.
The political dimension
The revised Agreement makes provision for a more systematic and formal dialogue under article 8 in relation to the three essential elements (human rights, democratic principles and the rule of law). Furthermore, this dialogue must now be held before the consultation procedure under Article 96 can be launched -except in cases of special urgency. Representatives of the ACP Group and of the Joint Parliamentary Assembly may henceforth take part in the political dialogue provided for under Article 8. These provisions are complemented by a new Annexe VII setting out detailed modalities for the structured dialogue.
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In keeping with the preventive nature of the dialogue provided for under Article 8, a formal, structured dialogue must now be held with each country. Annexe VII lays down detailed modalities for this dialogue:
* it provides for joint drawing-up of benchmarks and targets for human rights, democratic principles and the rule of law;
* these benchmarks and targets must be based on the international standards laid down by the instruments referred to in the preamble (Universal Declaration of Human Rights, agreements on civil and political, economic, social and cultural rights, the Convention on the Rights of the Child, the Convention on the Elimination of All Forms of Discrimination against Women, the Convention on the Elimination of all Forms of Racial Discrimination, etc.);
* these benchmarks and objectives must take account of the particular circumstances in each country (economic, political and social context).
This structured dialogue should lead to greater transparency and should strengthen the efficiency of political dialogue as a preventive tool. It should result in commitments with regard to intermediate objectives and implementation timelines. An in-depth dialogue of this kind requires regular contacts and must continue over a sufficiently long period to enable progress to be measured against the commitments undertaken. If, at the end of the formal dialogue, one party believes that the other has failed to respect an essential obligation, it can invoke the consultation procedure and, if necessary, the appropriate measures provided for under Article 96. The time-frames for consultations under Articles 96 and 97 have also been extended.
Security issues
ACP-EC partners agreed on the introduction of three security-related provisions into the Agreement. This includes a reference to cooperation in countering proliferation of weapons of mass destruction (WMD) (Article 11b). The provision calls for full compliance with and national implementation of existing international obligations, as an essential element of the Cotonou Agreement. The provision also contains: (1) a statement that additional financial and technical assistance will be granted for cooperation on non-proliferation of WMD and that this will not be funded from resources intended for ACP-EC development cooperation; (2) a statement specifying that the timetable for such measures will be tailored to the specific circumstances in each country and (3) a provision whereby compliance with non-proliferation measures must bePage 15 assessed in particular on the basis of reports produced by the relevant multilateral institutions.
Partners also agreed to inclusion of a provision on the International Criminal Court and the Statute of Rome in the preamble as well as in the text of the Agreement (Article 11 6).
Furthermore, the revised Agreement includes a clause which confirms partners' international cooperation in the fight against terrorism (Article 11a) and a provision relating to the prevention of mercenary activities (Article 113a).
The general provisions aim to promote the involvement of civil society and economic and social players within the context of the partnership. They stress the need for information; support for capacity building; the principle of consultation of non-state players on reforms and economic, social and institutional policies to be supported by the Community; involvement of non-State actors in the implementation of programmes and projects; and the encouragement of networking and strengthening of links between ACP and EC actors.
The revision related to:
* Non-state actors: insertion of provisions to facilitate non-state actor access to indicative programme resources, under a strategy to be approved by the Commission and the ACP State concerned. These actors can benefit directly from financing via grant contracts drawn up between the Commission and the body in question. This will apply provided that the types of non-state actors and the type of activities to be supported are identified in the country strategy paper (Annexe IV, Articles 4 and 58);
* Local authorities : insertion of a provision aiming at involving them in the consultation processes and in the implementation of programmes (Article 4);
The partnership is centred on the objective of reducing and, in the long term, eradicating poverty, in line with the objectives of sustainable development and progressive integration of the ACP countries into thePage 16 global economy. The Agreement defines a general strategic framework reflecting international commitments and simultaneously taking into account the political, economic, social, cultural and environmental components of development. In contrast to previous Conventions, the Cotonou Agreement defines a global strategy for development which requires the Community, Members States and ACP partners to work together to establish a consolidated and operational cooperation framework. This includes qualitative and quantitative indicators to allow systematic evaluation of results.
This approach takes into account the complexity and multi-dimensional nature of poverty. It concentrates on three priority areas of cooperation: economic development; social and human development; and regional integration and cooperation. In all these areas it envisages the systematic consideration of three cross-cutting themes: gender equality, sustainable management of the environment and natural resources; and institutional development and capacity-building. This approach means that priorities are established on a country-by-country basis. Country and regional cooperation strategies are the subjects of regular reports and are reviewed on a regular basis.
ACP and EC partners proposed a series of amendments relating to sectoral strategies and agreement was reached on all the proposals. This included, in particular, specific references to the following elements:
* Millennium Development Goals: inclusion of a reference to the MDGs in the preamble of the Agreement which reaffirms partners' commitment to those goals (see annexe);
* Social sector: inclusion of a reference to the promotion of the fight against poverty-related diseases and protection of sexual and reproductive health and rights of women (article 25);
* Regional Cooperation (articles 28, 29, 30, 58, annexe IV): simplification of procedures to request intra-ACP financing and facilitation of cooperation between ACP States and other developing countries on the basis of reciprocity;
* Information and communication technologies: introduction of a provision on the development and use of local content for ICTs (article 43);
* Youth: promotion of the participation of young people in public life and encouragement of exchanges and interaction between ACP and EU youth organisations (article 26);
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* Traditional knowledge: promotion of traditional knowledge as part of sectoral economic development (article 23);
* Island ACP States: strengthening of existing provisions on island ACP States, emphasising their increased vulnerability brought about new economic, social and ecological challenges and promoting a harmonised approach in this respect (article 89).
Within the context of the Lom convention, trade cooperation was based essentially on preferential tariffs. Under the Cotonou Agreement, economic and trade cooperation consists of a more complete set of arrangements. The EC and the ACP counties agreed on an approach which aims to establish new trade agreements leading to the liberalisation of trade between the parties and which includes cooperation in trade related areas, such as competition policy, the protection of intellectual poverty rights, standardisation and certification, sanitary and phytosanitary measures, respect for labour standards, and consumer policy. The Agreement also includes provisions for ACP-EC cooperation in international fora.
The objective of economic and trade cooperation is to promote the progressive integration of the ACP countries into the global economy, by enhancing production and the capacity to attract investment, and ensuring conformity with WTO provisions, whilst taking account of respective development constraints. The strategy adopted establishes a clear link between development aid, particularly support for modernisation of the economy, for adjustment needs and for social policies on the one hand, and the setting-up of a regulatory and trade-policy framework to favour the development of trade and private investment on the other. The ACP-EC Agreement aims to support the mutually reinforcing effects of economic and trade cooperation and development aid.
As regards modalities and procedures, the ACP-EC agreement foresees the introduction of new trade agreements after a preparatory eight-year period during which the Lom trade regime is maintained. Formal negotiation of EPAs at the level of all ACP countries started in September 2002. Since October 2003 regional negotiations with the six regions (West Africa, Central Africa, Eastern and Southern Africa, the Southern African Development Community, Caribbean, & Pacific) have been progressively launched. Joint roadmaps or plans and schedules were developed with each region to outline the expected course of the negotiations. The new trade agreements should enter into force in January 2008 at the latest. The liberalisation of trade will bePage 18 achieved asymmetrically to give more time to ACP countries during transitional periods still to be determined, but which must take into account the development and adjustment needs of the ACP countries whilst respecting WTO rules.
The Community has undertaken to liberalise practically all imports of products originating from the LDCs. In February 2001, the Council adopted the 'Everything But Arms' Regulation granting duty-free access to imports of all products from LDCs without any quantitative restrictions, except for arms and munitions. Only imports of fresh bananas, rice and sugar are not fully liberalised immediately. Duties on those products will be gradually reduced until duty free access is granted for bananas in January 2006, for sugar in July 2009 and for rice in September 2009. In the meantime, there will be duty free tariff quotas for rice and sugar.
In 2000, the instruments of the European development fund (EDF) were regrouped and rationalised. All available EDF resources are now channelled via two instruments: one envelope which groups together all non-reimbursable aid, and one envelope providing risk capital and loans with a view to supporting the development of the private and commercially run public sector through an investment facility managed by the European Investment Bank (EIB). The envelope of non-reimbursable aid comprises a programmable part and a part for unforeseen needs which allows for the mobilisation of supplementary resources within the framework of the Community Support Strategy and of the Indicative Programme. A system of flexible programming with regular reviews allows the support strategy to be periodically adapted as the situation in the country or region evolves. The consolidation of the various EDFs in 2000 made it possible to avoid parallel programming systems.
The use of budget support -general or for specific sectors -is being encouraged where conditions allow. This aid modality best respects the primary responsibility of the partner country in the development process (ownership) and facilitates harmonisation and alignment.
The allocation of resources is based on an assessment of needs and policy performance. Five-yearly financial envelopes are defined on an indicative basis. A review of the support strategy, at mid-term and at the end of the period for application of the financial protocol, may alsoPage 19 involve adaptation of the level of resources allocated to each country or region on the basis of needs and performance. The revised Cotonou Agreement gives further opportunities to revise allocations in order to respond to special needs or exceptional performance. This approach makes it possible to provide more effective support to efforts at reform in certain countries, and to prevent resources being frozen in others. Such flexibility has been further increased in the revised Cotonou Agreement in 2005.
The involvement of Non-State Actors through dialogue and consultation on development cooperation strategies and through their active participation in the implementation of cooperation programmes is a clearly established principle in the Cotonou Agreement.
Regional programmes are also subject to a flexible programming system and are re-examined at mid-term and at the end of the 5-year period. Particular account is taken of progress made and prospects for future regional cooperation and integration.
A number of amendments were introduced with the threefold objective of simplification, clarification and harmonisation, while preserving the fundamental acquis of the Cotonou Agreement. At the ministerial conference concluding the negotiations on the revision of the Cotonou Agreement, it was decided that the Joint Council will finalise discussions and take a decision on the updating and renewed harmonisation of the procurement procedures and of the implementing arrangements for the instrument for financing short-term fluctuations in export earnings (FLEX). The revised provisions include:
* Greater flexibility in the allocation of resources; in particular, this implies to maintain a larger reserve when resources are allocated and the possibility of increasing the amounts in national and regional envelopes other than through the reviews planned for that purpose, in the light of special needs, exceptional performance, or to cover international initiatives of benefit to the ACP countries (Annexe IV, Articles 3, 9, 12);
* Financial management in crisis or conflict situations; possibility to allow the Commission to directly manage resources for policies to promote peace and to manage and settle conflicts, including post-conflict support, until normal conditions have been restored (Annexe IV, Article 4);
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* Support for initiatives on untying of aid; in particular in the framework of ACP cooperation and regional integration efforts (Annexe IV, Articles 6, 14, 20);
* Reformulation of the responsibilities of managing and executing agents; strengthening the strategic role of the national authorising officer; rewording of the texts relating to the internal organisation of the Commission, which is prone to change regularly in the context of the devolution process (Annexe IV, Articles 34, 35, 36);
* A number of changes aimed at simplifying procedures;
* Financing devolution; the purpose of the new provision is to enable euros 90 million of intra-ACP cooperation resources to fund devolution in 2006-07 (Annexe I 9).
In order to make implementation of the investment Facility more flexible and more effective, a number of changes were made concerning the conditions attached to loans and interest-rate subsidies, exchangerate-risk-sharing and repayments to the Bank. In addition, as is the case for resources managed by the Commission, the investment facility is now subject to a joint performance review half-way through (mid-term) and at the end of the financial protocol.
A significant volume of financial resources had been earmarked for the first multi-annual period to support development strategies in the ACP countries: euros 13.5 billion for the 9th EDF, plus euros 9.9 billion in remaining balances from previous EDFs at the end of 1999, ie a total of euros 23.5 billion for the period 2000-2007, plus an additional amount up to euros 1.7 billion from the EIB's own resources.
At the final ministerial conference, the parties reached a preliminary conclusion on the post 9th EDF multi-annual financial framework for cooperation (Annexe Ia). The Community committed to maintaining its aid effort to the ACP countries at least at the level of the 9th EDF, not including balances and adding the effects of inflation, growth within the European Union and enlargement to 10 new Member States in 2004, onPage 21 the basis of Community estimates. This minimum aid effort is guaranteed without prejudice to the eligibility of ACP states' for additional resources under other financial instruments which already exist or may yet be created.
At the European Council of 16 December 2005, the EDF 9 successor was agreed. Cooperation with the ACP countries will be allocated euros 22,682 million in current prices for the period 2008-2013.
