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Documents considered by the Committee on 31 January 2018 Contents

7New EU partnership with Africa, the Caribbean and the Pacific

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Foreign Affairs and the International Development Committees

Document details

Recommendation for a Council Decision authorising the opening of negotiations on a Partnership Agreement between the European Union and countries of the African, Caribbean and Pacific Group of States

Legal base

Articles 218(3) and (4) TFEU; QMV or unanimity depending on final content of the agreement

Department

International Development

Document Number

(39367), 15720/17 + ADD 1, COM(17) 763

Summary and Committee’s conclusions

7.1The EU maintains a special economic and political relationship with countries in Africa, the Caribbean and the Pacific which have historical colonial links to its Member States. Since 1975, these countries have represented themselves jointly vis-à-vis the EU as the “African, Caribbean and Pacific Group of States” or ACP. Forty-one ACP countries are also members of the Commonwealth.

7.2Currently, the bilateral EU-ACP relationship is governed by the Cotonou Partnership Agreement (CPA), which was signed in 2000 and expires in 2020.116 It creates the framework for political dialogue and cooperation on a range of issues, including trade and economic development, climate change, and food security. The EU is also in the process of negotiating more detailed bilateral trade agreements termed Economic Partnership Agreements (EPAs) with groupings of ACP states. Lastly, the Union provides funding for development assistance projects in ACP countries via the European Development Funds (EDF). The UK is a major contributor to the EDF, having agreed to provide nearly 15 per cent (£3.2 billion) of its budget over the 2014–2020 period.

7.3As the 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 2015.117 In October 2016, the European Commission recommended the creation of three “Regional Compacts” with the African, Caribbean and Pacific groups respectively under a single framework agreement.118 In January 2017 the previous Committee published its assessment of these initial recommendations,119 concluding that securing agreement between the EU and the ACP countries on renewing and updating the legal framework for their bilateral relations would be a “major challenge”, with the implications for the UK complicated by its withdrawal from the EU.

7.4The Commission formally submitted a proposal for a Council Decision containing its draft negotiating objectives to the Member States in December 2017, with a view to opening discussions between the Commission and the ACP states in May 2018. The proposal establishes the suggested priorities for each Regional Compact, to reflect the socio-economic, environmental and political challenges in the different regions. Each Compact would also have its own institutional framework to facilitate cooperation between the relevant ACP countries and the EU, within which regional organisations—such as the African Union, the Association of Caribbean States and the Pacific Islands Forum120 would have a prominent role. The Commission also emphasised the importance of involving non-ACP states in North Africa in the work of the new EU-ACP association. We have set out the substance of the Commission proposal in more detail in paragraphs 7.29 to 7.36 below.

7.5In January 2018, the then Minister of State at the Department for International Development (Lord Bates) submitted an Explanatory Memorandum on the Commission proposal for the new EU-ACP Agreement.121

7.6The Government is broadly supportive of the Commission’s approach, in particular the decentralised regional approach and the envisaged involvement of the African Union and non-ACP African countries in the EU-Africa Compact. However, the Minister makes clear the Government will seek further clarification of a number of elements of the Commission’s negotiating mandate as it is modified by the Member States in the coming months. These include in particular the details of the procedures for modification of the new Agreement; the criteria for involvement of additional countries or regional organisations; and the parameters for a dispute resolution procedure and the process by which one party can terminate their participation.

7.7With respect to the implications of Brexit, the Minister—after reiterating that the EU will remain an important partner for UK development policy—states that the UK will “continue to actively contribute to [the] negotiations” on the successor to the CPA. He also reiterates that the EU “will remain an important development partner for the UK in the future and a key player globally”, adding that “it is in our interest to secure a modernised and fit for purpose post-2020 development framework”.

7.8We thank the Minister for his helpful overview of the substance of the Commission proposals for the new EU-ACP Agreement and the three Regional Compacts. We ask him to keep the Committee informed of any changes to the substance of the detailed negotiating mandate before it goes for approval to the Council in May, in particular as regards the regional priorities for each of the three Compacts, and the criteria for accession to the Agreement or for obtaining observer status.

7.9However, the Minister was regrettably unable to articulate in any more detail the Government’s approach as regards the level of the UK’s proposed involvement in the EU-ACP relationship after Brexit. As such, he did not address major outstanding questions on Brexit and the UK-ACP relationship which we have raised with him before, namely:

7.10We have made a more detailed assessment of these effects of Brexit in the “Background” section below, in paragraphs 7.44 to 7.70.

7.11In summary, as regards the immediate implications of Brexit, we are concerned about the potential for disruption of the UK’s economic and political engagement with ACP countries when it drops out of the Cotonou Agreement and related EPAs, as the Minister is unable to provide any detail of the status of discussions with the ACP or the European Commission on maintaining the UK as a party during the post-Brexit transition. Similarly, the Government has not made any public proposals for its involvement in the governance of the European Development Fund during the transition to ensure it can continue to scrutinise the way in which taxpayer money is spent.123

7.12With respect to the future of the UK’s relationship with the ACP, there is even less certainty about the Government’s approach. Given that negotiations with the ACP countries are set to begin no earlier than June 2018, the UK will no longer be a Member State by the time a final agreement is presented to the Council for signature and conclusion if its EU exit date remains 29 March 2019.124

7.13As such, the UK would not be a party to the new EU-ACP Agreement unless the Government makes a request to this effect, and this is explicitly agreed by both the EU and the ACP countries. The Committee is extremely disappointed that the Minister is still unable to indicate whether the UK will seek to become a party to the new EU-ACP Agreement as a non-EU, non-ACP country. It has not even released into the public domain any assessment of whether the efforts that would be involved in negotiating the appropriate institutional framework to allow for continued UK involvement could, or would, outweigh the efforts needed to recreate the UK’s partnership with the ACP bilaterally.

7.14The Committee takes the view that it is in the Government’s interest to make clear now whether it wants to be a party to the successor to the Cotonou Agreement. Clarifying this objective explicitly at this stage would give the UK a clear stake in the drafting of the Commission’s negotiating mandate and the subsequent talks with the ACP countries. Conversely, if the Government has taken the view that continued participation in the EU-ACP framework beyond Cotonou is not feasible or not in the UK’s interest, it can begin to have preliminary talks with the ACP countries directly about the future relationship.

7.15The Government is also yet to clarify whether the desired level of alignment on development policy with the EU after Brexit might involve contributions to the next European Development Fund after 2020, in return for a degree of influence over how the Fund is applied. If the UK is seeking continued participation in the post-2020 EDF, it will have to engage in negotiations with the EU-27 on the new Internal Agreement and the institutional framework to allow for the UK to exercise oversight as a non-EU contributor.

7.16In this regard, the Committee will closely follow the negotiations between the Government and the Commission on the UK’s representation on the current European Development Fund during the post-Brexit transition. The nature of the next Fund, and in particular whether it will remain “off-budget” or become part of the EU’s overall Multiannual Financial Framework, will also have a considerable impact on the level of participation the UK could achieve given the constraints imposed by the Treaties on the management of the EU budget.

7.17In light of the uncertainty around the UK’s approach to the outcome of the EU’s negotiations with the ACP on a new partnership, we retain the proposed Council Decision under scrutiny. We ask that the Minister update us in good time on the outcome of the Council’s reflections on the Commission mandate, so that the Committee can consider it before the meeting of EU Development Ministers in May. We would also like to be kept informed of any future negotiations between the Member States on a 12th European Development Fund, whether as part of the wider discussions on the post-2020 Multiannual Financial Framework or by means of another Internal Agreement.

7.18Given the importance of direct UK engagement with partner countries around the world after Brexit, we draw these developments to the attention of the Foreign Affairs and the International Development Committees.

Full details of the documents

Recommendation for a Council Decision authorising the opening of negotiations on a Partnership Agreement between the European Union and countries of the African, Caribbean and Pacific Group of States: (39367), 15720/17 + ADD 1, COM(17) 763.

Background

7.19The 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.

7.20Many 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. The Convention was renewed in 1969, as Yaoundé II. The 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 1969.125 It was also the first occasion where the ACP States negotiated formally as a group of states, rather than individually.126

7.21The 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. The fourth Lomé Convention was replaced by the Cotonou Partnership Agreement (CPA) in 2000, which remains in force until 2020. It covers the 28 EU Member States and 78 ACP countries127 (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.

7.22The CPA also included the phasing out of non-reciprocal trade preferences for ACP countries, which were declared 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 groupings (the Caribbean, the Pacific, and five regions of Africa). 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 has been slow.

7.23Where no EPA is yet in place, most ACP countries also benefit from unilateral preferential access to the EU’s market under its Generalised System of Preferences (GSP). This grants different levels of duty- and quota-free access for exports from developing countries according to a sliding scale, where the least developed countries (LDCs) face no tariffs or quotas except on exports of arms. Lower or middle-income countries can export to the EU market with additional tariff- or quota restrictions, but far fewer than apply to industrialised countries.

The European Development Funds

7.24The EU’s development assistance to ACP signatories to the Cotonou Agreement is financed by the European Development Funds (EDFs), which remain outside of the EU budget. Funds are established for periods of five to seven years, through separate international agreements outside of the framework of the EU Treaties.

7.25The current, 11th, EDF amounts to €30.5 billion (£21.9 billion)128 for the period 2014–2020, of which UK’s contribution is 14.68 per cent, or €4.5 billion (£3.2 billion). The vast majority (95 per cent) 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), including six British Overseas Territories.129

Replacing the Cotonou Agreement

7.26The 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 2015.130 Its purpose was to 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.

7.27The Commission’s own evaluation of the Agreement, published as part of the consultation exercise, 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.131 In June 2016, the ACP countries also called for a renewed, legally-binding partnership with the EU.132

7.28In November 2016, the Commission published its recommendations for a successor arrangement to the Cotonou Agreement. In particular, it indicated it would prefer the conclusion of three “Regional Compacts” 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”.133

The Commission proposals for a new EU-ACP Agreement

7.29In December 2017 the Commission formally proposed to open negotiations and asked the Council to adopt a Decision with detailed negotiating directives under Article 218 TFEU.134 As expected, the draft negotiating mandate135 for the renewed EU-ACP partnership splits the proposed legally binding agreement into four parts: a general framework, which applies to all ACP countries, and three separate regional compacts covering Africa, the Caribbean and the Pacific, with tailored regional objectives.

7.30The key overall objectives are to accelerate the ACP’s progress against the Sustainable Development Goals (SDGs) and to promote more effective EU-ACP cooperation in international organisations. The Commission has also identified six horizontal priority areas for all three regions, including human rights and democracy; sustainable economic development and trade cooperation; environment and climate change; peace, security and justice; mobility and migration; and human development.

7.31The three regional compacts would exist as legally-binding protocols to the overall agreement. The Commission has proposed the following regional priorities:

7.32Regarding the institutional framework, the Commission proposes that the EU’s primary interlocutors would be the Governments of the ACP countries. The overall strategic direction of initiatives undertaken under the new Agreement would continue to be taken by ad hoc summits of the Heads of State and Government of both the EU and the ACP as supported by the EU-ACP Council at Ministerial level, which would agree for example on joint positions within international fora.

7.33Given the focus on regional cooperation, each Regional Compact will also be managed by its own Ministerial Council, which will have the task of conducting political dialogue and taking the decisions necessary for the implementation of the provisions of each Compact. Each Council will have an Operational Committee, to which it could delegate certain powers for the day-to-day management of the new framework. The Commission argues that the relevant regional organisations (the African Union, the Caribbean Forum and the Pacific Islands Forum)136 should have a prominent role in the work of the Compacts, and could seek observer status in their own right or even request accession to the relevant Compact as an independent party.137

7.34The new EU-ACP Agreement would not have a fixed expiry date, unlike Cotonou. Instead, the Commission proposes to allow termination of the treaty at the request of one of the parties through a specific exit procedure, the details of which are to be established as the negotiations progress.

7.35The exact geographical scope of the new Agreement is yet to be decided. All 78 current parties are expected to engage in the negotiations, but formal decisions on ratification by each of them will be taken at a later stage. It remains to be seen whether Cuba will reconsider its position as the only member of the ACP grouping not to have signed the Cotonou Agreement when any future partnership agreement is presented for signature. The European Commission is also actively encouraging South Sudan to become a signatory to the Cotonou Agreement and any successor arrangement.

7.36The proposal for the Commission’s negotiating objectives will be debated by the Member States in the coming months, with a view to EU Development Ministers agreeing to the opening of formal talks with the ACP countries at their meeting in Brussels on 22 May 2018.

The Government’s views

7.37When the European Commission published its initial recommendations for the successor to the Cotonou Agreement in October 2016, the then Minister of State at the Department for International Development (Lord Bates) said that it presented a “key opportunity to influence the EU to significantly reform the ACP relationship in a way which aligns with UK priorities and interests”.138 He noted at the time that the proposed Regional Compacts were “well-aligned” with UK priorities, but that they should be “sufficiently light touch and efficient in practice” to ensure that flexibility remains to work with different country groupings as necessary.

7.38In response to the negotiating mandate tabled by the Commission in December 2017, the Minister has set out in more detail the Government’s objectives for the EU-ACP negotiations.139 In his latest Explanatory Memorandum, he states the Government is supportive of the proposal as a first step in securing a modernised partnership between the EU and ACP countries, welcoming in particular:

7.39However, the Minister also cautions that a number of issues will need to be clarified during the fine-tuning of the Commission mandate before negotiations begin with the ACP. These include:

7.40With respect to the implications of Brexit, the Minister—after reiterating that the EU will remain an important partner for UK development policy—states that the UK will “continue to actively contribute to [the] negotiations” on the successor to the CPA. He also reiterates that the EU “will remain an important development partner for the UK in the future and a key player globally”, adding that “it is in our interest to a secure a modernised and fit for purpose post-2020 development framework”.

7.41However, the Minister is regrettably unable to articulate in any more detail the Government’s approach as regards UK involvement in the EU-ACP relationship after Brexit. He refers to the ambition to secure “a future partnership with the EU that goes beyond existing third country arrangements, and which builds on the breadth and depth of our shared interests and values”, but failed to provide any indication as to the proposed shape such a partnership should take in the context of a possible tripartite relationship between the UK, the EU and the ACP.

7.42As such, the Minister did not address major outstanding questions on Brexit and the UK-ACP relationship which we have raised with him before, namely:

7.43In light of this, we have revisited our predecessors’ assessment of the implications of the new EU-ACP partnership for the UK below.

Our assessment

7.44In January 2017 the previous Committee published its assessment of the European Commission’s initial recommendations for the successor to the Cotonou Agreement.140 It concluded that securing agreement between the EU and the ACP countries on renewing and updating the legal framework for their bilateral relations would be a “major challenge”, with the implications for the UK complicated by its withdrawal from the EU.

7.45However, the Committee remains concerned about the Government’s lack of clarity about the impact of Brexit on the UK’s trading relationship with ACP countries, and Commonwealth nations in particular, which are covered by the Cotonou Agreement.

7.46In December 2016 the Department for International Development stated that the Government would use the “opportunity of leaving the EU to free up trade with the world’s poorest”.141 In September 2017 the Government also published a “future partnership paper” on foreign policy, defence and international development. This offers a UK-EU partnership which would be “unprecedented in its breadth […] and in the degree of engagement”:

“Such close collaboration would be on a case-by-case basis and be subject to UK’s standards on full transparency, accountability, risk and assurance, results and value for money. The UK envisages that these partnerships could facilitate collaboration and alignment on development policy and programming in support of the UN’s Sustainable Development Goals and our common interests.”142

7.47The Minister referred to this in his latest Explanatory Memorandum. However, there has been no detailed information from the Government about the implications of “a future partnership with the EU that goes beyond existing third country arrangements”, and whether it might entail seeking to negotiate partnership agreements trilaterally with the EU and developing countries. Similarly, we have not yet received a meaningful reply from either the Foreign & Commonwealth Office or the Department for International Development with respect to their proposals for the institutional and legal frameworks to facilitate this “unprecedented” cooperation in practice after the UK loses its representation within the EU’s institutions.

7.48There have been some developments which shed further light on the Government’s approach to development policy post-Brexit. In June 2017, it announced that it will maintain the effects of duty- and quota-free exports to the UK under the EU’s Generalised System of Preferences for developing countries—including, where relevant, for ACP countries—under an independent UK trade policy after Brexit.143 However, we have not yet received further information on the practical consequences of the Government’s pledge to “free up trade with the world’s poorest”, and in particular the non-tariff barriers derived from EU law that will be targeted to make it easier for developing countries to export to the UK.144

7.49Separately, in December, the Government and the European Commission reached a provisional financial settlement on the UK’s withdrawal from the EU. As part of this, the UK has promised to make its contributions into the European Development Funds—the financial instrument to support implementation of the Cotonou Agreement—in line with its agreed contribution schedule until the end of 2020, and to assume liability for a share of any EDF expenditure commitments outstanding at the end of the 2014–2020 budgetary cycle.145

7.50However, important questions remain about implications of Brexit and the UK’s relationship with the ACP. These are essentially twofold:

The immediate consequences of Brexit for the UK-ACP partnership

7.51For many ACP countries, the UK is a major export market. Dozens of them have historical ties to the UK and were included in the EU-ACP Agreement from the 1970s onwards primarily for that reason.146

7.52The UK’s withdrawal from the EU means they face considerable uncertainty, and potential economic disruption. Not all ACP countries are covered by the Generalised System of Preferences the UK intends to carry over, under which preferential market access can be granted unilaterally to developing countries. A number of them—including Ghana, South Africa and all Caribbean ACP states147—access the EU’s internal market (and therefore the UK) via Economic Partnership Agreements negotiated under the Cotonou umbrella, to which the UK will cease to be a party on its date of EU exit, unless they can be de facto carried over with the consent of both the EU and the ACP countries involved. The UK’s withdrawal from the EU-ACP Ministerial Council will also require the UK to enhance its existing bilateral avenues for political dialogue and cooperation with ACP countries.

7.53The Government has committed to maintaining the effects of existing EU trade agreements, to which the UK is party as a Member State.148 However, how that is to be achieved in practice for all such agreements, including Cotonou and the EPAs, remains unclear. We asked the Minister in November 2017 what progress had been made in securing the continued operation of the Cotonou Agreement between the UK and the ACP signatories after Brexit but before its expiry in December 2020, but we have not received any clarity from him.149 In his latest letter to us on this subject, dated 7 December 2017, the Minister stated only that the Government is “open to discussing with our European partners how we can best work together on development after we leave the EU”.150

7.54There have been reports that the Government is preparing to, effectively, ask the EU if it the UK can stay a de facto party to all its international agreements to ensure a degree of continuity at the moment of EU exit (although to do so would also depend on the willingness of the other parties to the agreement). As the Centre for European Reform has suggested, this could require the EU and the UK to agree a form of words in the Withdrawal Agreement to the effect that the UK would be part of the EU for the purposes of its international agreements.151 The legal and political repercussions of such a solution, both domestically and in the UK’s relations with other countries, would need to be carefully considered by Parliament.

7.55In addition, the EU has explicitly stated that the UK would, in any event, no longer be represented in bodies created by the EU’s international agreements during the transition, including—for example—the EU-ACP Council of Ministers.152

7.56We also note that Dr Patrick Gomes, the ACP’s Secretary-General, is on record as saying that “in those trade talks [with the UK] we want to be able to make a case, to point out that EPA is already in place and we can have EPA plus” and that the two-year until the UK’s withdrawal “should give us enough space to negotiate what we see as a carry-over.”153 This heavily implies the ACP is not looking for a simple “roll-over” of the existing agreements, but something that is substantively different and provides better market access.

UK participation in the European Development Funds

7.57When the previous Committee considered the renewal of the EU-ACP Agreement in January 2017, it also expressed concerns about the uncertainty of the UK’s status under the European Development Funds, especially in relation to expenditure commitments after March 2019 but within the EU’s 2014–2020 budgetary cycle.154 As noted above, the EDFs provide substantial amounts of funding to both ACP countries with links to the UK—such as South Africa, Nigeria and Ghana—and to the less economically-developed British Overseas Territories (BOTs): Anguilla, the Falkland Islands, Montserrat, Pitcairn, St. Helena and the Turks & Caicos Islands.

7.58The provisional Brexit financial settlement, as part of which the UK will make its contributions to the EDFs as scheduled in 2019 and 2020 despite its exit from the EU, has removed the most immediate source of uncertainty.155 In absence of this agreement, we considered it likely that EDF funding for the British Overseas Territories and ACP countries with historical ties to the UK would have been reduced in 2019 and 2020, in the expectation that the UK would compensate with bilateral assistance.

7.59However, while the provisional financial settlement means that projects that are set to receive UK-funded expenditure commitments from the European Development Funds in 2019 and 2020 will not be disrupted, the governance arrangements to ensure UK oversight of the Fund’s activities is not yet clear. Funding decisions are taken by the European Commission, but effectively require the approval of a qualified majority of Member States on the EDF Committee.156 After the UK exits the EU, despite making continued contributions to the EDF, it will no longer be represented on that Committee unless specific arrangements to that effect are made.

7.60We therefore welcome the fact that the provisional financial settlement commits the Government and the European Commission to exploring “governance arrangements […] that take into account the continued participation of the UK in the 11th EDF”. The Committee asked the Minister for further information on the Government’s proposals in this area in December 2017, but has not yet received a reply.157 At this stage it is unclear whether the Government might retain its voting rights over EDF funding decisions between March 2019 and December 2020, or whether it will only acquire observer status on the EDF Committee.

7.61In addition to the implications for Government oversight of how UK taxpayer’s money is spent, the scope of the UK’s representation within the Fund’s governance arrangements could also affect the how effectively the interests of the ACP countries with links to the UK, including Commonwealth nations, are pursued within the EDF Committee. The same applies to EU assistance to the six British Overseas Territories which qualify for finance from the European Development Fund.

The future UK-ACP partnership

7.62In addition to the implications of Brexit during the remaining lifetime of the Cotonou Agreement and the 11th European Development Fund, there is also considerably uncertainty about the future of UK-ACP relations after December 2020.

7.63Given that negotiations with the ACP countries are set to begin no earlier than June 2018, the UK will no longer be a Member State by the time a final agreement is presented to the Council for signature and conclusion if its EU exit date remains 29 March 2019.158 As such, it would be a party to the new EU-ACP Agreement unless the Government makes a request to this effect, and this is explicitly agreed by both the EU and the ACP countries.

7.64In his Explanatory Memorandum, the Minister does not make clear whether it is the Government’s intention to seek to become a signatory to the successor to Cotonou. This is extremely disappointing, given that the Committee has pushed for a substantive Government position on this point since January last year. Whether or not it will seek membership of this new agreement is a crucial decision for the UK’s post-Brexit relationship with nearly 80 developing countries, including forty-one Commonwealth nations.

7.65The Committee takes the view that it is in the Government’s interest to make clear now whether it wants to be a party to the successor to the Cotonou Agreement. Clarifying this objective explicitly at this stage would give the UK a clear stake in the drafting of the Commission’s negotiating mandate and the subsequent talks with the ACP countries. Conversely, if the Government has taken the view that continued participation in the EU-ACP framework beyond Cotonou is not feasible or not in the UK’s interest, it can begin to have preliminary talks with the ACP countries directly about the future relationship.

7.66The Government’s current ambiguity risks undermining what leverage the UK does have in the talks as it will not be clear to the other Member States why it should have a meaningful say in an agreement that will not apply to it. If the UK did want to become a party to the new Agreement, it would have to ensure that the new institutional architecture reflected the tripartite nature of the agreement.159 Similarly, ACP countries may not see the need to dedicate scarce negotiating resources to a parallel set of discussions with the UK, unless it is clear that a new bilateral arrangement with the UK is necessary because it has explicitly ruled out being a party to the new EU-ACP Agreement.

Continued UK involvement in the European Development Funds

7.67The Government has already suggested there could be continued “collaboration and alignment on development policy and programming” with the EU after Brexit. It could be that the Government envisages that such alignment could be achieved through contributions to the European Development Fund after 2020 in return for a degree of influence over how the Fund.

7.68However, the problem of institutional representation arises here as well if the UK were to seek continued participation in the European Development Funds. The Government would have to engage in negotiations with the EU-27 on the new institutional framework for the next EDF to allow for the UK to exercise oversight as a non-EU contributor. If that is the Government’s preferred objective, it should hopefully be able to build on the negotiations on UK representation within the current EDF as part of the transitional arrangement until the end of 2020 (see paragraphs 7.59 to 7.61 above).

7.69The issue of institutional representation would become more complicated if the next EDF is “budgetised”, as the Commission has previously proposed. This would end the system of separate contributions by Member States into the European Development Funds, and instead fund development assistance for ACP countries via the general EU budget (in the same way as assistance for non-ACP countries). If the EDF was folded into the EU’s normal budgetary structures, there would be less scope for the remaining Member States to accommodate the UK as a non-EU country within the Fund. Rather than having the flexibility of a separate agreement, the provisions of the Treaties on representation and voting rights would apply.

7.70The Committee will therefore pay close attention to the European Commission’s upcoming proposals for the next Multiannual Financial Framework, and any push for changes to the way in which the European Development Funds are financed. If the Government were to state explicitly that it will not seek to become a contributor to the post-2020 EDF, we will be able to readjust our conclusions on this point. There would also be need a for continued scrutiny of some sort of the EU’s development policy, given that the UK would effectively remain aligned with it. We will therefore follow the negotiations on the Government’s representation in the EDF during the post-Brexit transitional period with great interest.

Previous Committee Reports

Twenty-eighth Report HC 71–xxvi (2016–17), chapter 5 (25 January 2017).

116 The Agreement is available in full on EurLEX.

117 European Commission consultation, “Towards a new partnership between the EU and the ACP countries after 2020“ (October 2015).

118 Communication JOIN(2016) 52 on “A renewed partnership with the countries of Africa, Caribbean and Pacific” (22 November 2016).

119 See the previous Committee’s Report of 25 January 2017.

120 In Africa, the Commission also foresees the involvement of the continent’s Regional Economic Communities, such as ECOWAS and SADC, in the preparation of meetings of the EU-Africa Council.

121 Explanatory Memorandum submitted by the Department for International Development (11 January 2018).

122 The UK’s EU exit date will take place two years after the triggering of Article 50 TEU, i.e. on 29 March 2019, unless a) the negotiations are extended by the unanimous agreement of the remaining Member States and the UK, or b) the Withdrawal Agreement under Article 50 provides for a different exit date.

123 In December 2017, the Government announced that it had agreed to honour its funding commitments to the European Development Funds for the remainder of the current budgetary cycle, for all EDF expenditure commitments made until December 2020.

124 The date of EU exit could be changed by an extension of the Article 50 negotiating period, or by fixing a different date in the Withdrawal Agreement.

125 The only member of the Commonwealth to sign an EEC-ACP Agreement before the UK’s entry into the Community was Mauritius, in 1969. It had joined the Commonwealth the year prior.

126 In 1975, the ACP countries formally organised themselves as a bloc under the Georgetown Agreement.

127 There are 79 ACP countries, but Cuba has not signed the Cotonou Agreement. South Sudan has expressed an interest in joining the ACP.

128 €1 = £0.88723

129 The six British Overseas Territories which qualify for EDF funding are Anguilla, the Falkland Islands, Montserrat, Pitcairn, St. Helena and the Turks & Caicos Islands. The other three (Bermuda, the British Virgin Islands and the Cayman Islands) do not qualify on account of their advanced economic status. See the previous Committee’s Report of 15 March 2017 for more information on the OTCs and the EU, especially in the context of Brexit.

130 Commission consultation, “Towards a new partnership between the EU and the ACP countries after 2020“ (October 2015).

131 For more information on the Commission evaluation, see the previous Committee’s Report of 25 January 2017.

132 Waigani Communiqué on the future perspectives of the ACP Group of States (1 June 2016).

133 The three regional Compacts would build on, and replace, the EU’s existing strategies for relations between the EU and various ACP regions—most notably the 2007 Joint Africa-EU Strategy (JAES), the 2012 Joint Caribbean EU Partnership Strategy, and the 2006 Strategy for a Strengthened Partnership with the Pacific Islands.

134 See Commission document COM(2017) 763.

135 The details of the draft negotiating mandate are contained Commission document COM(2017) 763 Annex.

136 In Africa, the Commission also foresees the involvement of the continent’s Regional Economic Communities, such as ECOWAS and SADC, in the preparation of meetings of the EU-Africa Council.

137 The Commission proposal refers to both “observer” and “enhanced observer” status, but does not clarify the practical difference between the two.

138 Explanatory Memorandum submitted by the Department for International Development (8 December 2016).

139 Explanatory Memorandum submitted by the Department for International Development (Jan 2017).

140 See the previous Committee’s Report of 25 January 2017.

141 DfID, “Bilateral Aid Review“ (December 2016), p. 6.

142 DExEU, “Foreign policy, defence and development: a future partnership paper“ (12 September 2017).

143 DIT and DfID, “Government pledges to help improve access to UK markets for world’s poorest countries post-Brexit“ (24 June 2017).

144 See for example our predecessors’ Report of 25 January 2017 on the Government’s pledge on Brexit and trade with developing countries.

145 See the Committee’s Report of [x] December 2017 on the Article 50 financial settlement for more detail on the UK’s post-Brexit contributions to the EU budget and the European Development Funds.

146 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.

147 European Commission, “Overview of Economic Partnership Agreements“ (accessed 22 January 2018).

148 Department for International Trade, “Trade White Paper: Preparing for our future UK trade policy“ (January 2018), p. 8.

149 For example, on 7 December 2017 the Minister wrote: “You asked for more information on the government’s plans for our future partnership that goes beyond existing third country arrangements, and which builds on the breadth and depth of our shared interests and values. We are open to discussing with our European partners how we can best work together on development after we leave the EU.”

150 Letter from Lord Bates to Sir William Cash (7 December 2017).

151 Centre for European Reform, “Of transition and trade deals“ (16 January 2018).

152 European Commission draft negotiating directives on the transitional arrangement (20 December 2017), para. 14.

153 International Press Syndicate, “EU and 79 ACP Countries Plan a ‘Modernised Partnership’“.

154 See the previous Committee’s Report of 25 January 2017.

155 DExEU and European Commission Joint Report of 8 December 2017. See the Committee’s Report of 6 December 2017 for more information on the provisional Brexit financial settlement.

156 See Article 8 of the 11th Internal Agreement and Article 14 of Council Regulation 2015/322. If the EDF Committee delivers a negative opinion on a Commission proposal, it has to escalate the matter to the Council (i.e. ministerial level).

157 Ministerial correspondence between the Chairman of the Committee and the Department is available here.

158 The date of EU exit could be changed by an extension of the Article 50 negotiating period, or by fixing a different date in the Withdrawal Agreement.

159 For example, the Cotonou Agreement limits participation in its Council of Ministers to “the members of the Council of the European Union and members of the Commission of the European Communities and […] a member of the government of each ACP State”. Similarly, access to the dispute settlement mechanism under the CPA is limited to “Member States or the Community” or “one or more ACP States”.



2 February 2018