You are here: Parliament home page > Parliamentary business > Publications and Records > Committee Publications > All Select Committee Publications > Commons Select Committees > European Scrutiny > European Scrutiny
Documents considered by the Committee on 25 January 2017 Contents

5EU Partnership with African, Caribbean and Pacific Countries

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; further information requested; drawn to the attention of the Foreign Affairs Committee and the International Development Committee

Document details

Joint Communication—A renewed partnership with the countries of Africa, the Caribbean and the Pacific

Legal base

—

Department

Department for International Development

Document Number

(38307), 14770/16 + ADDs 1–2, JOIN(16) 52

Summary and Committee’s conclusions

5.1Since 1963, the EU and its predecessor organisations have maintained special relations with developing countries in Africa, the Caribbean and the Pacific (ACP). The focus of the EU’s partnership with ACP states has traditionally been on those countries that have former constitutional ties to its Member States. Under successive Agreements (Yaoundé, Lomé and currently Cotonou), the EU has provided these countries with preferential market access and financial assistance under the European Development Fund. Following the UK’s entry into the EEC in 1973, the economic links between the developing Commonwealth nations and the UK were incorporated into the broader EU-ACP relations.

5.2The current EU-ACP partnership (CPA) was agreed in Cotonou in 2000 and remains in force until 2020. It applies to the 28 EU Member States and 78 ACP countries (including over forty Commonwealth nations).26 It covers development, political and trade relations between the countries, establishes joint institutions and a framework for dialogue with each of its members. The CPA included the withdrawal of the non-reciprocal trade preferences for ACP countries which had been a key feature of EU-ACP relations since their inception in the 1960s. Instead, Cotonou committed both sides to the negotiation of reciprocal Economic Partnership Agreements (EPAs), two of which have so far been agreed (see “Background” for more details).

5.3In view of the expiry of the Cotonou Agreement in 2020, the EU has been engaged in a process of reflection on the options for the future of the EU-ACP relationship since 2015.27 The Government set out its priorities for the substance of a new EU-ACP agreement in November 2015: continued promotion of human rights and good governance; making the mechanisms of political dialogue and application of sanctions more effective; improving the outcome of the dialogue with ACP countries on migration; and adapting the focus of European Development Fund investment to emphasise longer-term economic transformations, inclusive growth and increased private sector investment.28

5.4The Commission and EU’s High Representative for Foreign Affairs have now published their recommendations for a successor arrangement to Cotonou. It proposes replacing it with three specific regional partnerships for Africa, the Caribbean and the Pacific respectively, under one overarching framework agreement that sets out key principles and objectives. The priorities for the new partnership would include tackling fragility and inequality; responding more effectively to the migration crisis; and widening engagement with both non-ACP countries (especially in North Africa) and non-state actors, such as the African Union. The Joint Communication provides the basis for discussions in the Foreign Affairs Council, which is expected to adopt a negotiating mandate addressed to the Commission by early 2018.

5.5The Cotonou Agreement is a central component of the EU’s development policy framework. The majority of the EU’s development assistance is aimed at the ACP states, with €30.5 billion (£21.9 billion) available from the European Development Fund in the period 2014–2020. Securing agreement among both the EU and ACP states on renewing and updating the legal framework for the EU-ACP relationship will be a major challenge.

5.6We note that the Government is broadly supportive of the Commission’s preferred approach of three regional partnerships under an umbrella ACP framework agreement. The Minister calls it a “pragmatic compromise”, as long as the framework agreement is “sufficiently light touch and efficient in practice”. This is a sensible approach. The divergent levels of economic development now seen within the ACP group necessitate a framework that allows for differentiated assistance based on the specific needs of partner countries.

5.7Our main concern with the Minister’s assessment is the lack of detail about the impact of Brexit on the UK’s trading relationship with Commonwealth nations currently covered by the Cotonou Agreement. The question of the UK’s influence over these negotiations is particularly acute because, as the Government itself concedes, the new EU-ACP partnership agreement “will not come into force until 2021, after the UK’s intended exit date from the EU”.

5.8Many Commonwealth countries in the ACP group are economically reliant on exports to the UK. At present, the conditions for market access that facilitate such exports are based entirely on EU law, but these will cease to apply to the UK as soon as it leaves the EU. For ACP states reliant on exporting to Britain, trade deals with the EU are therefore likely to become irrelevant. It is unclear if the Government will offer similar market access rights as they enjoy at present on a bilateral basis. Moreover, development assistance funded by the European Development Fund in these countries is likely to decrease as the EU readjusts its priorities in the light of Brexit.

5.9The Minister has not offered any details of the Government’s plans for a new bilateral agreement with Commonwealth ACP countries after Brexit. We ask him to clarify the following points:

5.10We now clear the document from scrutiny, but we ask the Minister to keep the Committee informed of the direction of travel within the Council as the drafting of the negotiating mandate progresses. We expect to be informed when the mandate is agreed, with as much details as possible. We also draw the Communication to the attention of the Foreign Affairs Committee and the International Development Committee.

Full details of the documents

Joint Communication—A renewed partnership with the countries of Africa, the Caribbean and the Pacific: (38307), 14770/16 + ADDs 1–2, JOIN(16) 52.

Background

5.11The EU Treaties have provided for special treatment for Member States’ dependent overseas countries and territories (OCTs), including preferential market access for their exports, since the founding of the European Economic Community in 1957. The purpose of that special association was to promote the OCT’s economic and social development. To finance development assistance projects in these territories, the Member States established the first European Development Fund in 1958, based on a separate inter-governmental agreement and funded outside of the Community budget.29

5.12Many OCTs regained their independence in the late 1950s and early 1960s, leading the EEC to establish formal bilateral relations with—initially—18 African countries under the Yaoundé Convention of 1963. 30 The Convention was renewed in 1969, as Yaoundé II.

5.13The entry of the UK into the Community in 1973 more than doubled the number of developing countries with (former) constitutional links to a Member State. As a result, the 1975 EEC-ACP Agreement (dubbed the Lomé Convention) was signed by 46 ACP countries, compared to only nineteen in 1969. It was also the first occasion where the ACP States negotiated formally as a group of states, rather than individually. The Lomé Convention was renewed in 1980, 1985 and 1990, with more ACP States signing up each time. A cornerstone of each iteration was the granting of non-reciprocal trade preferences to exports into the EEC from the ACP.

5.14The fourth Lomé Convention was replaced by Cotonou Partnership Agreement (CPA) in 2000, which remains in force until 2020. It covers the 28 EU Member States and 78 ACP countries (including over forty Commonwealth nations). The CPA is a legally binding agreement. It covers development, political and trade relations between the countries, establishes joint institutions and a framework for dialogue with each of its members.

5.15The CPA also included the phasing out of non-reciprocal trade preferences for ACP countries, which were seen as incompatible with the General Agreement on Tariffs and Trade. From 2008, they were withdrawn and both sides started a process of negotiating reciprocal Economic Partnership Agreements (EPAs). For the purpose of negotiating the EPAs, the ACP has been divided into seven regional groupings.31 At present, EPAs have been signed with two such groupings (the Southern African Development Community and the Caribbean) while negotiations with the other five groups continue. The EU has also signed interim EPAs with individual countries where progress with the regional grouping as a whole was slow.32

5.16The Cotonou Agreement is financed by the European Development Fund (EDF), which remains outside of the EU budget. It amounts to €30.5 billion (£21.9 billion) for the period 2014–2020, of which UK’s contribution is 14.68%, or €4.5 billion (£3.2 billion). 95 per cent or €29.1 billion (£25.1 billion) of the available funding is earmarked for development assistance projects in ACP countries. The remaining five per cent is allocated to the Member States’ dependent territories (OCTs).33

Replacing the Cotonou Agreement

5.17The Cotonou Agreement expires in 2020. The EU has been engaged in a process of reflection on the options for the future of the EU-ACP relationship since 2015, initiated by the publication of a consultation paper by the EU’s High Representative for Foreign Affairs and the European Commission in 2015. Its purpose was take stock of the CPA’s performance, explore the extent to which it remained valid for the future and ultimately be used to set out policy proposals for the future relationship.34

5.18 The Commission’s own evaluation of the Cotonou Agreement concluded that the main shortcoming of the CPA had been its failure to provide a framework for the coordination of a response to the migration crisis, and that progress on human rights, democracy, good governance and the rule of law had been inconsistent. However, the Commission reported significant progress in poverty reduction, improving food security and social protection, macroeconomic stabilisation, improved public financial management, and EU-supported increases in public expenditure in social sectors (leading to an increase in enrolment rates in primary and secondary schools and improved rates of access to basic healthcare). 35

5.19The Government set out its position on the future of the EU-ACP relationship in an Explanatory Memorandum of 10 November 2015. The then-Parliamentary Under-Secretary of State at the Department for International Development (Baroness Verma) said that, with the recent adoption of the Sustainable Development Goals, CPA negotiations presented:

“a key opportunity to modernise EU development policy and its relationship with the ACP countries, ensuring that its instruments and partnerships are geared towards delivering on this ambitious framework.”

5.20The Minister supplied further information on the Government’s priorities by letter of 5 February 2016, in particular on the structure of the EU’s future relationship with the ACP countries:

“There are a range of options which could be considered including, but not limited to, continuing with the ACP as a group, a regional approach with African States, the Caribbean and Pacific States, aligning with different groupings such as Least Developed Countries (LDCs) and Small Island Developing States (SIDS), or integration with the Development Cooperation Instrument (DCI).36 We think it is important at this stage to keep all options open and have called on the Commission to assess [the] relevant options (…).”

5.21The Minister also expressed caution about continuing to negotiate an overarching framework agreement with all 79 ACP States:

“We wonder whether the ACP grouping has sufficient coherence to speak and negotiate as one voice in important international fora, noting that joint positions have been extremely limited (with the exception of the World Trade Organisation) and we would like them to be a more effective ally for the EU in international fora.”

5.22The Government’s priorities for the substance of a new EU-ACP agreement included: continued promotion of human rights and good governance; making the mechanisms of political dialogue and application of sanctions more effective; improving the outcome of the dialogue with ACP countries on migration; and adapting the focus of European Development Fund investment to emphasise longer-term economic transformations, inclusive growth and increased private sector investment.

Recommendations for a new EU-ACP Agreement

5.23In November 2016, the Commission and the EU High Representative for Foreign Affairs published their recommendations for a successor arrangement to the Cotonou Agreement. The impact assessment accompanying the Communication sets out five specific issues which any new EU-ACP agreement should seek to address:

5.24The Commission also considered what form the new EU-ACP partnership should take. Its preferred option is the conclusion of three regional partnerships (with the African, Caribbean and Pacific groups respectively) under a single framework agreement. It says this would “preserve all of the valuable elements of the current CPA”, including a legal commitment to political dialogue, while allowing for a more tailored partnership for the different regions. It should, it says, also put in place the “right conditions (…) to meet new objectives, such as more effectively pursuing EU political and economic interests”.

5.25The differentiated approach would allow the EU to tailor its partnership agreements to the specific challenges facing each of the three ACP regions. For the African countries, the Commission argues the main focus should be conflict resolution and prevention, as well as tackling irregular migration. For the Caribbean and the Pacific, which are more politically stable, the Commission’s priorities are the consolidation of democratic institutions and improving economic governance, in pursuit of sustainable development.

Our assessment

5.26The discussions on the replacement of the Cotonou Agreement are a crucial component of the EU’s wider development policy. The majority of the EU’s development assistance is aimed at the ACP states. The CPA’s financing instrument, the European Development Funds, is investing €30.5 billion (£21.9 billion) in the period 2014–2020, with a UK share of 14.68%, or €4.5 billion (£3.2 billion). Renewing and updating the legal framework for this central relationship is important to ensure continued economic and political cooperation between the EU and the ACP states. Securing agreement on the substance and form of a new partnership will be a major challenge.

5.27We note that the Government is broadly supportive of the Commission’s preferred approach of three regional partnerships under an umbrella ACP framework agreement. The Minister calls it a “pragmatic compromise”, as long as the framework agreement is “sufficiently light touch and efficient in practice”. We support the proposed introduction of greater flexibility into the EU-ACP framework. The divergent levels of economic development now seen within the ACP group require the EU to put in place a framework that allows for differentiated assistance based on the specific needs of partner countries.

5.28We also welcome the Commission’s recommendation for closer engagement with the countries of North Africa (which are not part of the ACP group of states). As transit countries for large migratory flows, they need to be involved in any comprehensive solution to the migration crisis.

The UK’s exit from the EU

5.29The dynamics of the discussions on a renewal of the CPA have been altered fundamentally by the UK’s decision to leave the European Union. The Minister (Lord Bates) acknowledges that the successor agreement to the CPA will “define much of the EU’s development policy and practice for a number of years to come”. Despite Brexit, he says:

“The EU will remain an important development partner for the UK in the future and a key player globally; it is in our interest to a secure a modernised and fit for purpose post-2020 development framework.”

5.30We agree with the Minister that, irrespective of Brexit, the EU’s development policy framework will be of importance to the UK given the latter’s commitment to multilateral channels of development aid.

5.31However, this does not address the more immediate problem of the impending expiry of the Cotonou Agreement, and the parallel UK withdrawal from the EU’s Common Commercial Policy. Many ACP countries are currently included in the Agreement based on their historical ties to the United Kingdom. In all, over forty ACP states are members of the Commonwealth. The two regions which have finalised their Economic Partnership Agreements with the EU (the Caribbean and the Southern African Development Community) are composed almost exclusively of Commonwealth countries.

5.32The question of the UK’s influence over the renewal of the Cotonou Agreement is particularly acute because, as the Government itself concedes, the new EU-ACP partnership agreement “will not come into force until 2021, after the UK’s intended exit date from the EU”.

5.33Most pressingly, the UK’s exit from the EU raises big questions over Commonwealth states’ continued access to the UK as an export market. The legal framework that underpins access for ACP states to the UK market is the EU’s Common Commercial Policy. However, that framework will not apply to the UK once it leaves the EU. This is a particular point of concern for the numerous ACP states—such as Belize, Mauritius and most Caribbean states—which are economically reliant on exports to Britain. The UK’s withdrawal from the Common Commercial Policy means that their trade deals with the EU are likely to become obsolete. They now face considerable uncertainty, and potential economic disruption. They will need clarification from the Government as soon as possible about its plans for a post-Brexit trading relationship.

5.34Moreover, many Commonwealth countries are beneficiaries of the European Development Fund (EDF). Although the exact status of the UK as a contributor to these Funds after Brexit is unclear due to the EDFs’ peculiar legal set-up, Commonwealth countries are unlikely to be a priority for the remaining EU Member States after the UK leaves the EU.37 Allocations from the EDF to Commonwealth states could be reduced, or possibly even stopped altogether. The Minister provides no indication of whether the Government is considering providing compensatory financial support bilaterally after Brexit.

The Government’s views

5.35The Minister of State at the Department for International Development (Lord Bates) submitted an Explanatory Memorandum on 8 December 2016. He writes:

“The CPA is the EU’s most significant development partnership and its successor will define much of the EU’s development policy and practice for a number of years to come. Its revision presents a key opportunity to influence the EU to significantly reform the ACP relationship in a way which aligns with UK priorities and interests”.

5.36He goes on to describe the Commission’s recommendations, in particular the region specific approach, as well-aligned with UK priorities. However, the Minister cautions that there is as yet little detail on how the differentiated focus between the least-developed countries and middle-income countries within the ACP group will translate into concrete funding approaches under the European Development Fund. He also emphasises that the umbrella agreement which will underpin the three regional approaches should be “sufficiently light touch and efficient in practice” to ensure that sufficient flexibility remains to work with different country groupings as necessary.

5.37The Minister welcomes the Commission’s emphasis on engagement with North African countries as non-ACP states, and also expresses his support for the focus on environmental vulnerability in the EU’s relations with island states in the Caribbean and the Pacific. On migration, he says:

“It will be important to find the right balance between the focus on migration and other priorities. The Communication contains a strong emphasis on this issue, placing it among the overarching priorities for the future partnership with the ACP. While important—particularly for Africa—the framework should present a balanced approach, in particular focussing on tackling the root causes but stopping short of viewing much of the EU’s development work through a migration lens.”

5.38Turning to Brexit, the Explanatory Memorandum includes the standard disclaimer that “until the exit negotiations are concluded, the UK remains a full member of the European Union and all the rights of obligations of EU membership remain in force. During this period, the Government will continue to negotiate, implement and apply EU legislation”. The Minister adds:

“The EU will remain an important development partner for the UK in the future and a key player globally; it is in our interest to a secure a modernised and fit for purpose post-2020 development framework.”

Previous Committee Reports

None on this document, but for the Commission consultation on a new EU-ACP Partnership Agreement see (37188) 12797/15, JOIN(15) 33: Twenty-Third Report HC 342-xxii (2015–16), chapter 14 (10 February 2016) and Ninth Report HC 342-ix (2015–16), chapter 4 (18 November 2015).

See also the Commission evaluation of the Cotonou Agreement: (37978), 11345/16 SWD(16) 250: Tenth Report HC 71-viii (2016–16), chapter 15 (7 September 2016).

Annex 1

5.39The following countries are members of the Commonwealth of Nations and signatory to the Cotonou Agreement:

Antigua and Barbuda

Lesotho

South Africa

Bahamas

Malawi

St. Kitts and Nevis

Barbados

Mali

St. Lucia

Belize

Mauritius

St. Vincent and the Grenadines

Botswana

Mozambique

Sudan

Cook Islands

Namibia

Swaziland

Dominica

Nauru

Tanzania

Fiji

Nigeria

Tonga

Ghana

Niue

Trinidad and Tobago

Grenada

Papua New Guinea

Tuvalu

Guyana

Samoa

Uganda

Jamaica

Seychelles

Vanuatu

Kenya

Sierra Leone

Zambia

Kiribati

Solomon Islands

26 See annex I for a complete list of Commonwealth nations which are signatory to the Cotonou Agreement.

27 See (37978), 11345/16 SWD(2016) 250: Tenth Report HC 71–viii (2016–16), chapter 15 (7 September 2016).

28 See (37188) 12797/15, JOIN(2015) 33: Ninth Report HC 342-ix (2015–16), chapter 4 (18 November 2015) and Twenty-Third Report HC 342-xxii (2015–16), chapter 14 (10 February 2016).

29 This practice continues to this day, as it allows for a special funding arrangement outside of the EU budget which reduces the contributions of Member States with fewer or no former dependent territories. The current (11th) EDF runs until 2020.

30 The Yaoundé Convention was published in the Official Journal on 11 June 1964. The original signatories were Burundi, Cameroon, the Central African Republic, Chad, the Republic of the Congo, the Democratic Republic of the Congo, Benin, Burkina Faso, Gabon, Ivory Coast, Madagascar, Mali, Mauritania, Niger, Rwanda, Senegal, Somalia, and Togo. Mauritius joined in 1969.

31 The seven groupings are Central Africa; Eastern and Southern Africa; the Eastern African Community; the Southern African Development Community; West Africa; the Caribbean; and the Pacific. More information is available from the European Commission.

32 Cameroon, Fiji, Ghana, Ivory Coast, Mauritius, Madagascar, Papua New Guinea, the Seychelles and Zimbabwe have interim EPAs with the EU.

33 See article 2 of the Internal Agreement establishing the 11th European Development Fund (August 2013).

34 See (37188) 12797/15, JOIN(2015) 33: Ninth Report HC 342–ix (2015–16), chapter 4 (18 November 2015) and Twenty-Third Report HC 342–xxii (2015–16), chapter 14 (10 February 2016).

35 See (37978), 11345/16 SWD(2016) 250: Tenth Report HC 71–viii (2016–16), chapter 15 (7 September 2016).

36 The Development Cooperation Instrument is the EU’s second-largest financing instrument for development assistance, after the European Development Funds, with a budget of €19.6 billion (£16.9 billion) for 2014–2020. The majority of DCI funding in the 2014–2020 period is targeted at non-ACP countries. More information is available here.

37 The European Development Funds are established by separate inter-governmental agreements, not by legislation under the EU Treaties.



27 January 2017