SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS
1. DFID has recently produced a White Paper
which provides an admirable refocusing of its development strategy
on the eradication of poverty. The Department therefore has an
obligation to British taxpayers to ensure that such a considerable
proportion of its aid budget is spent effectively and in ways
consistent with its development strategy (paragraph 6).
2. We consider the renegotiation of the Lomé
Convention to be an opportunity for the EU to re-examine its development
priorities not only for the ACP but for the whole of the developing
world (paragraph 9).
AID
3. We recommend that the Commission publish
the details of how it has calculated the amount of programmable
aid provided to each ACP country. We also recommend that there
be, in the provision of aid, greater differentiation amongst ACP
countries on the basis of levels of poverty (paragraph 12).
4. We trust the post-Lomé IV Convention
will introduce simplicity and flexibility into aid allocation
procedures, which are currently criticised for their inefficiency
and complication. We support further steps to provide aid in tranches
to ensure greater accountability against poverty-relief and other
objectives, but the criteria for assessing performance must be
clarified and agreed by both parties (paragraph 16).
5. It is clear that Stabex and Sysmin cannot
continue in their current form. We strongly recommend, however,
that additional and equivalent budgetary support, targeted to
social sectors and to the diversification of the economy, be provided
in cases where commodity price fluctuation merits intervention
(paragraph 19).
6. We welcome the proposed incorporation of
the DAC international development targets in to the Lomé
Convention. Effective strides towards the achievement of the DAC
targets will require a coherent donor strategy, in consultation
with developing country partners, and the European Union programme
has a special responsibility to promote consistency among EU donors
(paragraph 21).
7. We support the Government's concern to
reform the financial regulations of the Commission to achieve
effective decentralisation coupled with appropriate safeguards.
Simon Maxwell from the Overseas Development Institute suggested
decentralisation take place on a pilot basis in a few countries.
This also appears a useful suggestion and we trust that any changes
to the financial regulations will allow for this possibility (paragraph
25).
8. We recommend that the Government press
the EU as a matter of urgency for a concerted initiative to address
the problems in staffing identified in the Commission and its
delegations. There should be a particular emphasis on the recruitment
of staff with expertise in poverty-related issues and social development,
drawn wherever possible from the local and regional populations
(paragraph 28).
9. The lack of scrutiny by the European Parliament
of the Court of Auditors' reports on the operation of the Convention
constitutes a serious gap in accountability.[277]
(Paragraph 30).
10. We have argued in a previous Report,[278]
and do so here, that the EU needs a modern, integrated development
policy. In principle the budgetisation of the Lomé Convention
is a necessary part of such a development policy. We do not, however,
wish to see the budgetisation of Lomé until the EU has
clearly embraced a poverty-focussed approach. It would not be
acceptable to see, as a possible result of budgetisation, funds
reallocated for political and strategic reasons from the Least
Developed Countries of the ACP to the richer countries on the
EU's borders (paragraph 32).
11. We welcome the commitment to systematic
monitoring of the impact of projects on women (paragraph 35).
12. We also recommend that there be gender
analysis of all Lomé activity, both aid and trade. We recommend
that support be given to institution-building of independent women's
organisations (paragraph 35).
13. We recommend that the EU when agreeing
its negotiating mandate also commit itself to a significant increase
in expenditure and staffing in the Commission on gender issues.
Details should be given of the amount of extra money allocated
and the number of extra staff proposed (paragraph 36).
14. We welcome the emphasis in the Draft Negotiating
Mandate on sectoral aid, rather than project aid. With the right
conditionality this will help provide appropriate policy and administrative
frameworks for development. It will also make it more likely that
the development strategy is agreed with and owned by the government
of the developing country (paragraph 41).
15. We do not consider that enough political
effort and will is as yet being focused on aid coordination. Each
ACP country should negotiate, plan and own its country strategy
for the eradication of poverty - ownership by the recipient is
crucial to the success of any programme of development aid. The
EU and member states should then coordinate their proposals for
assistance within that strategy. We recognise that some ACP governments
have difficulty employing sufficient expert staff to plan such
a strategy. We therefore recommend that the EU and other donors
provide financial assistance to enable ACP governments to employ
and equip local development experts in the elaboration of a country
anti-poverty strategy.
16. We do not see in principle any objection
to the EU and member states being involved in similar work but
we recommend that the EU nevertheless concentrate on its strengths
and those areas where it has an advantage. These include structural
adjustment funds and sectoral aid. We trust also that sectoral
aid will be poverty-focused, with an emphasis on the health and
education sectors. We recommend that the Commission report annually
on coordination, country by country, between the EU and member
states in ACP countries (paragraph 45).
17. "the evidence shows that poverty
is reduced more quickly if certain conditions are met. Those conditions
include democratisation, good governance, participation, an economic
framework which encourages labour intensive growth, and the provision
of social services. If those conditions are not met, then aid
is not going to be well used" (paragraph 47).
18. We recommend that greater thought be given
in Lomé aid to the preparation and targeting of programmes,
effective monitoring during the implementation of programmes,
and evaluation of the impact of the programmes in the eradication
of poverty and the fulfilment of their objectives. This should
not add significantly to the time spent on bureaucratic procedures
(paragraph 50).
19. We recommend that the Government press
for effective communication with NGOs on the availability of evaluation
reports (paragraph 51).
TRADE
20. Lomé trade preferences have failed
to stem a decline in the ACP's trading position with the EU; such
trade preferences, however generous, will in any event be ineffective
if no action is taken to deal with the supply-side constraints
which hinder the ACP economies from producing competitive goods
(paragraph 66).
21. It was necessary for the EU to negotiate
a waiver for the current Convention from the WTO rules. This is
because it provides trade preferences, in other words tariff reductions,
to the ACP which are not available to all developing countries.
This waiver will expire with the Convention in the year 2000 (paragraph
77).
22. Much of the evidence we received concentrated
on the feasibility of the FTA option, as should be expected given
the continuing emphasis placed on it by the Commission. A number
of criticisms were made of the proposal:
(a) that the economies of the ACP were not
sufficiently developed to withstand the arrival of duty-free imports
from the EU
(b) that the EU would not be willing to open
up its market to ACP products, in particular those `sensitive'
products currently protected by the Common Agricultural Policy
(CAP)
(c) that the timetable for the agreement of
regional economic partnership agreements (five years from 2000
to 2005) was impossible to achieve and that the ACP countries
lacked the capacity to enter into such negotiations
(d) that there was at present inadequate regional
integration amongst ACP countries and thus no basis for the proposed
regional economic partnership agreements (particular mention was
made of the problem of the presence in a sub-region of countries
at different stages of development)
(e) that there was a danger of trade diversion
resulting from the establishment of such FTAs which would hinder
the process of global trade liberalisation.
(f) that those non-Least Developed ACP countries
which failed to join an economic partnership agreement would be
faced with the alternative of the inferior preferences of the
GSP (paragraph 82).
23. It is also important to remember the "massive
efforts of liberalisation" necessary for many ACP countries
to enter such a FTA. Ghana for example would have to remove 60
per cent of their tariffs for the implementation of such a FTA.[279]
Mr Bloomer later gave the example of Swaziland where 80 per cent
of the revenue spent on health and education came from import
taxes.[280]
For such countries not only was there a threat to fledgeling industry
from a FTA with the European Union but also the prospect of significant
loss of revenue for the Government, which might have undesirable
social consequences (paragraph 84).
24. We do not accept that the negotiations
towards FTAs between the EU and ACP proposed by the Commission
are at present either realistic or desirable, since they are not
in the interests of the ACP countries (paragraph 88).
25. Should, however, negotiations take place
on the establishment of economic partnership agreements leading
to FTAs, we consider it vital that proper consideration be given
to the vulnerability of the less developed economy and that, as
appropriate, liberalisation of tariffs take place asymmetrically.
The current Draft Negotiating Mandate hardly mentions this possibility.
We recommend that the final version of the Mandate contain specific
assurances on this point and we trust the ACP will press hard
for such asymmetric liberalisation in any subsequent negotiations.
(Paragraph 89).
26. The Commission's proposals for FTAs are
unacceptable without a clear commitment from the EU to reform
the CAP, reduce its export subsidies and open up its markets to
sensitive agricultural products. If, contrary to our recommendations,
negotiations are opened on FTAs, an agreed timetable must be established
to coordinate any economic partnership agreements with CAP liberalisation.
More generally, we recommend that the Commission conduct impact
assessments of CAP reform proposals for the developing countries
and the ACP in particular. On the basis of such assessments further
assistance should be given to developing countries particularly
vulnerable to any adverse effects of CAP reform (paragraph 94).
27. Negotiations on the establishment of reciprocal
liberalising agreements leading to FTAs will have behind them
the threat of an increase in tariffs for ACP countries. To put
the matter crudely, ACP countries will have the choice of either
opening up their markets to EU products or suffering an increase
in taxes on their exports to the EU. A number of witnesses pointed
out that this amounted to blackmail and was certainly not an appropriate
way to encourage regional integration and trade liberalisation
(paragraph 99).
28. We accept that in the long term there
may be a benefit to ACP countries in a liberalisation of their
markets and greater openness to foreign imports. The arguments
presented to the Committee have, however, convinced us that the
pace of liberalisation should not be forced and that to do so
could do serious damage to the ACP economies. It is immoral for
the EU to misuse its economic strength to dictate clearly unfavourable
terms to the ACP. Regional integration and subsequent liberalising
agreements with the EU should take place on a genuinely voluntary
and consensual basis, not out of fear at the prospect of migration
to an unenhanced GSP. The timetable proposed in the Draft Negotiating
Mandate for the negotiation of economic partnership agreements
is wholly unrealistic (paragraph 104).
29. The Draft Negotiating Mandate is unacceptable
in its current form. Much more emphasis should be placed on the
option of a significantly improved GSP for the ACP non-Least Developed
Countries. We support fully the efforts of the United Kingdom
Government to increase the importance of this option in the negotiating
mandate and recommend that the Government argue strongly in the
EU for the improvement of GSP to Lomé levels (paragraph
105).
30. We recommend that the EU bind the enhanced
GSP in the WTO. This will maintain the predictability and stability
of tariff arrangements that the ACP enjoys under the Lomé
Convention (paragraph 106).
31. We recommend that the Government continue
its efforts to achieve reform of the GSP category of developing
countries with greater differentiation possible according to level
of development (paragraph 107).
32. We conclude that a five-year waiver may
well prove inadequate time for ACP countries to prepare for migration
to the GSP. We see no difficulty in the waiver being for a ten
year period. We recommend that the decision on the length of waiver
requested be made in the light of the terms of the revised GSP,
with five years as the minimum period (if the GSP is revised to
Lomé levels) and ten years as the maximum (if there is
no significant improvement in the terms of the revised GSP). (Paragraph
111).
33. We welcome the extension of Lomé-style
preferences to those Least Developed Countries which are not members
of the ACP (paragraph 112).
34. We welcome the Ruggiero proposal to remove
all tariff and non-tariff barriers in OECD countries for the products
of Least Developed Countries. We recommend that the United Kingdom
and the European Union strongly support it (paragraph 114).
35. We recommend that the revised GSP include
more generous and simpler rules of origin to allow greater cumulation
and thus promote the development of processing and manufacture
in ACP countries, in particular small-island economies, and greater
regional integration (paragraph 116).
36. We recommend that current revision of
the GSP reduce non-tariff barriers to Lomé levels (paragraph
117).
37. We welcome the proposal in the Draft Negotiating
Mandate of an investment facility to promote the private sector
in ACP countries. We recommend that particular attention be given
to the development of small and medium-sized enterprises and cooperatives.
Further development of the supply-side capacity should be considered
a priority in the country strategies and aid allocations for each
ACP country (paragraph 121).
38. We recommend that post-Lomé IV
aid to the ACP include technical assistance and funding for effective
representation in the WTO and other international organisations
(paragraph 124).
39. We recommend that the Commission urgently
prepare studies of the likely impact of CAP reform in beef and
sugar on developing countries. On the basis of these studies we
recommend that concerted action be taken to provide assistance
to enable ACP countries to deal with the necessary adjustments
(paragraph 133).
40. We support the efforts being made by
the Government, the EU and the ACP to agree a new Banana Protocol
to begin in the year 2000. Any request for a waiver to the WTO
should be carefully drawn up so as to ensure that it remains possible
and profitable for banana producers and suppliers to grow and
import ACP bananas into the EU market. We also recommend that
the Government urge the WTO to consider the inclusion of a `vulnerability'/`small
state' category in its rules which might qualify for special and
discriminatory treatment (paragraph 138).
POLITICAL COOPERATION
41. We agree that sustainable development
can only take place within a framework of the rule of law, good
governance, democracy and respect for human rights (paragraph
142).
42. We welcome the provision of an enhanced
GSP to those countries implementing certain core labour and environmental
standards. This positive use of trade preferences is a good example
of the conditionality to which the Lomé Convention should
aspire (paragraph 145).
43. (a) Conflict prevention and post-conflict
reconstruction must be taken into account wherever relevant in
all aspects of development thinking, including trade policy. They
must therefore be included in the priorities and provisions of
the Lomé Convention and we welcome their treatment in the
Draft Negotiating Mandate.
(b) More practical detail is necessary of
how the Lomé Convention can contribute to conflict prevention
and post-conflict reconstruction. We recommend further attention
be paid to the development of an early warning system, efficient
models for discussion and possibly mediation within the framework
of the ACP-EU Council and Joint Assembly, an effective post-conflict
aid and reconstruction strategy, the training of Commission personnel,
both in Brussels and in the delegations, in conflict issues and
how they relate to development (paragraph
(c) The development of a Lomé strategy
for conflict prevention must be within a framework agreed with
other significant international bodies, such as the UN and the
OAU (paragraph 149).
44. We see a value in a forum at ACP-EU level
where the voices of civil society and the private sector can be
clearly heard. It would seem preferable for any forum to be annexed
to the meetings of the Joint Assembly (paragraph 151).
45. We recommend that there be an Annual Report
on the operation of the Lomé Convention (paragraph 154).
46. We recommend that the Annual Report be
presented for debate to the ACP-EU Council and to the Joint Assembly,
and to the parliaments of the member states (paragraph 154).
47. We recommend that a complaints procedure
be established for any persons or bodies who consider that the
principles and terms of the Lomé Convention have been breached
(paragraph 155).
48. We recommend that, whilst President of
the EU, the United Kingdom Government initiate an analysis of
the developmental consequences of a single European currency for
sub-Saharan Africa (paragraph 156).
49. We believe that DFID is better placed
to be the lead department in Whitehall on the renegotiation of
the Lomé Convention and recommend accordingly (paragraph
157).
50. The Committee has organised a meeting
for the chairs of member state parliamentary committees with development
responsibilities. It will take place in June 1998 and we trust
that it will be the first in a regular pattern of meetings to
enhance cooperation amongst EU development committees (paragraph
158).
51. We recommend that Council Resolutions
are accompanied by a Commission strategy for their dissemination,
application and implementation, and the monitoring of their impact
(paragraph 159).
277 Q.240 Back
278
Second Report from the International Development Committee, Session
1997-98, `The Development White Paper', para 16 Back
279
Q.184 Back
280
Q.195 Back
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