Select Committee on European Scrutiny Second Report


15 Cooperation with Industrialised and other High-Income Countries and Territories

(a)

(27261)

5854/06

COM(06) 25

(b)

(28057)


Commission Communication: Thematic Programme on Cooperation with Industrialised and other High-income Countries under the Future Financial Perspectives (2007-2013)

Draft Council Regulation laying down general provisions establishing a Financing Instrument for Cooperation with Industrialised and other High-Income Countries and Territories under the Future Financial Perspectives (2007-2013)

Legal baseArticle 181a EC; consultation; QMV
DepartmentForeign and Commonwealth Office
Basis of considerationEM of 24 November 2006
Previous Committee Report(a) HC 34-xx (2005-06), para 5 (1 March 2006)

(b) None

To be discussed in Council20-12 December 2006 Agriculture and Fisheries Council
Committee's assessmentPolitically important
Committee's decisionCleared

Background

15.1 At present the EC's External Actions spending is funded from a multitude of diverse instruments and budget lines. As part of the 2007-2013 Financial Perspective, the Commission proposed, in 2004, a major simplification:

  • three instruments directly to support European external policies: the Pre-Accession Policy (IPA), the European Neighbourhood and Partnership Instrument (ENPI) and the Development Cooperation and Economic Cooperation Instrument (DCECI), this last to be the main means of cooperation with other non-EU countries not covered by the first two instruments; and
  • three further instruments to respond to crises and regional or international problems: the Humanitarian Aid Instrument (HAI), the Macro-Financial Assistance (MFA) Instrument and the Instrument for Stability. The first two would continue the current arrangements for, respectively, providing short-term humanitarian assistance, including food aid, and guarantees for EC loans to third countries to help with extraordinary balance of payments difficulties. The Instrument for Stability would be used to address trans-border challenges such as the fight against terrorism and trafficking, to promote nuclear safety, to provide electoral assistance and to develop the European Union's peace-keeping capacity.

15.2 The Committee examined the framework and the associated draft Council Regulations relating to the proposed Instruments on 1 December 2004; considered them on several further occasions in 2005; and finally recommended them for debate in the ESC. That debate took place on 10 November 2005.

15.3 Since then we have cleared the final versions of the Nuclear Safety Instrument (which it was decided should be separated out from the Stability Instrument), the IPA, the ENPI and the Stability Instrument.

15.4 We have also cleared the Development Cooperation Instrument, which originally encompassed both economic and commercial cooperation with developed and developing partners together and development assistance to less-developed partners; and the European Instrument on Democracy and Human Rights (which was originally to be "mainstreamed" into other external instruments but which, after consultation with the European Parliament, it was decided to retain as the successor to the European Initiative on Democracy and Human Rights).

15.5 The Instrument for Cooperation with Industrialised and Other High Income Countries and Territories (ICI) started off as a "Thematic Programme for Industrialised Countries" within the combined DCECI.[33] Following consultations with the European Parliament, it was agreed that it should be separated out into a specific instrument with its own financial envelope.

15.6 Thus, from 1 January 2007, there will be nine key instruments designed to implement particular policies and to provide the necessary response to particular needs:

  • Instrument for Pre-Accession Assistance (IPA)
  • European Neighbourhood and Partnership Instrument (ENPI)
  • Development Cooperation Instrument (DCI)
  • Instrument for Stability (SI)
  • European Instrument for Democracy and Human Rights (EIDHR)
  • Nuclear Safety Instrument (NSI)
  • Humanitarian Aid Instrument (HAI)
  • Macro-Financial Assistance (MFA)
  • Instrument for Cooperation with Industrialised and Other High Income Countries and Territories (ICI)

The Council Regulation

15.7 The ICI aims to provide a framework for engagement with newly industrialised or high-income countries and territories with whom the Community has a strategic interest in promoting links. It has the following geographical coverage:

  • Key OECD member countries: the United States, Japan, Canada, the Republic of Korea, Australia and New Zealand;
  • OECD Development Assistance Committee (DAC) list of ODA recipients: Singapore, Hong-Kong, Macao, Chinese Taipei, and Brunei; and
  • Gulf Cooperation Council countries excluded from the DAC list of ODA recipients: Kuwait, Qatar, the United Arab Emirates, Bahrain and Saudi Arabia;

Co-operation with the two remaining GCC countries (Saudi Arabia and Qatar) which are still listed by the OECD DAC as developing countries ("upper middle income countries") will also be carried out under this instrument. The Commission will amend the list of countries at Annex 1 in the Regulation to take account of the OECD/DAC's reviews of its List of Developing Countries.

15.8 Cooperation activities with these countries reflect the policy goals and co-operation objectives laid down in the various bilateral instruments (such as framework agreements, cooperation agreements, political declarations, co-operation agendas and action plans) which govern relations between the European Union and the partner countries. The core activities listed under Article 4 include:

  • Promotion of economic partnerships and business cooperation: between companies in the EU and in certain partner countries, through inter alia helping EU companies to build-up their capacity to handle more effectively the specific features of the market and business environment in these partner countries;
  • Dialogues: in particular with, and between, civil society in areas such as business, consumers, environment, labour market, and media;
  • People-to-people links/education cooperation; and
  • Public diplomacy and outreach: notably through the consolidation and expansion of centres of excellence of the existing network of EU Centres, and the establishment of new EU Centres in partner countries where they do not exist.

15.9 The objectives will be met through a framework of multi-annual cooperation programmes covering cooperation with all or a selection of the partner countries. Priorities for assistance will be developed on the basis of annual action programmes, which will set out the objectives pursued, the fields of intervention, the expected results, how they will be managed and how much funding is needed.

15.10 The Commission will submit annual reports to the Council and European Parliament; and, by 31 December 2010, a review evaluating the implementation of the Regulation in the first three years.

15.11 The indicative financial framework for this instrument for 2007-2013 is €172million.

The Government's view

15.12 In his Explanatory Memorandum, the Minister for Europe (Mr Geoffrey Hoon) notes that the EU has a "raft of agreements" with the countries covered by the ICI, whose effect will be "to provide a more coherent framework for developing political, economic and commercial relations with them, and to raise the EU's profile across the board — in the private and NGO sectors as well as with governments". He supports separating out the ICI from the originally proposed Development Cooperation and Economic Cooperation Instrument, as a means of increasing the effectiveness of funding and improving transparency.

15.13 He welcomes the objectives set out in Article 1 of the draft Regulation, particularly the references to the promotion of cooperation projects in areas such as research, science and technology, and climate change. He is pleased that the reference to Taiwan ("Chinese Taipei") in Annex 1 makes clear that, "although there are no diplomatic or political relations with Chinese Taipei, intensive contacts do take place and should be continued in the areas of economy, trade, science and technology, standards and norms and on a number of other subjects."

15.14 He also welcomes the inclusion of clauses aiming to ensure regular evaluation of these community programmes including associating non-state actors, among others, in the evaluation phase.

15.15 He notes that the reference in Article 14 to an annual report (rather than biannual as proposed by the Commission) was inserted at the UK's insistence to bring the text in line with the other external spending instruments.

15.16 With regard to the financial envelope, he says that he supports the continuation of a limited amount of funding of this nature to promote the EU's interests with industrialised countries and territories, and will keep a close eye on annual budget appropriations and will seek to maximise resources where needs and impact are greatest.

15.17 Looking ahead, the Minister says that:

  • the text of the ICI was agreed at Council Working Group level on 22 November and under Article 181a has been passed to the European Parliament for its formal opinion;
  • the EP will give this in the week beginning 11 December;
  • the Committee of Permanent Representative will then agree the text on 13 December; and
  • the Presidency will seek approval at the 20/21 December Agriculture and Fisheries Council.

Conclusion

15.18 As noted above, the instruments dealing with Humanitarian Aid Instrument (HAI) and Macro-Financial Assistance (MFA) are well-established, and continue as before, while the remainder are new. This present proposal is the conclusion of a long and winding road, resulting in the creation of a framework which, if not as numerically small as originally conceived, is nonetheless much smaller and more coherent. As the Minister says about the ICI, the much simplified framework of which it is part should facilitate greater transparency and, it is accordingly to be hoped, effectiveness.

15.19 The evaluation process is particularly important. Though the ICI itself is modest, at €172million over 6 years, total expenditure is significant — €49.5 billion under the heading "the European Union as a global partner" in the 2007-13 Financial Perspective.

15.20 The ICI now having materialised, we clear the Commission Communication which we had in the meantime kept under scrutiny.

15.21 Although the Council Regulation has yet to be finalised, we are content to allow the Minister to join in a consensus around the unofficial text, which we also now clear. We would expect him to revert to us, however, if the Opinion of the European Parliament leads to any significant changes.




33   See HC 34-xx (2005-06), para 5 (1 March 2006). Back


 
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Prepared 11 December 2006