ACP-EU Cooperation after 2020: towards a new partnership?

August 31, 2015 - nr.93
Summary

Summary, conclusions and recommendations

1 Summary

The expiry of the Cotonou Agreement in 2020 offers all parties a natural moment to take a critical look at whether there is a need for a specific successor to the ACP-EU partnership and, if so, what its form and content should be. Although formal negotiations on a successor to Cotonou need not start until 1 October 2018, and this advisory report thus comes at an early stage of the process, there is good reason for both parties to make a thorough strategic analysis of what the partnership under the Cotonou Agreement has achieved, and what goals and interests it could serve in the future.

The ACP countries have been involved in a process of reflection for some time. Based on discussions with experts, the AIV considers it not unreasonable to expect that the ACP group will choose to continue to exist as a collective and as an organisation and will have an interest in continuing its partnership with the EU. The analysis presented in this report offers a number of other arguments in favour of continuing the partnership and for expanding it in new directions.

Although the original Georgetown Agreement saw the ACP primarily in terms of its relationship with the EU, information on the process of reorientation suggests that many within the ACP group no longer see the relationship with the EU as an exclusive – or even necessary – reason for the group’s continued existence. A focus on the further development of South-South cooperation is presented as one argument for capitalizing on the advantages of the tricontinental nature of the ACP group and developing it further as an instrument to promote mutual trade and economic relations. This is an interesting idea that could enable the group to expand from an export-oriented partner of the EU to an organisation focusing primarily on cooperation among its own members. The ACP’s relatively favourable position in maintaining contacts with other actors, such as the BRICS countries, is also seen as a potential starting point for finding ways towards a less onesided, exclusive and dependent relationship with the EU. This would reflect the strongly increased influence of non-European powers in the ACP region.

Should the ACP, as a group, see no reason for a successor to the Cotonou Agreement, there would be little reason for the EU to work towards a new collective partnership with the ACP group. In that case, it would be advisable for the Netherlands to take steps to ensure that ACP countries that wish to do so – and/or are eligible – are included in other relevant and definitive EU instruments for development cooperation and trade (DCI, EPAs and the European Banking Authority). In the AIV’s opinion, the Netherlands should also insist on a good transitional arrangement where appropriate, especially to support the least developed ACP countries and to ensure that the trade support measures linked to the EPAs and currently laid down in the Cotonou Agreement are guaranteed in other ways after 2020.

The EU also needs to consider its own internal situation internally, and that calls for a clearly defined timeline. The EU’s position in ACP countries is less self-evident than it used to be. There are those within the EU who suppose that the relationship with the ACP is no longer of strategic importance to the Union. In some member states, a certain degree of cynicism and possible disappointment about missed opportunities and/or lack of results seem to have evoked widespread indifference about future cooperation with the ACP countries. Some member states believe that it is strategically much more important to work with the EU’s surrounding countries than with the ACP, and thus question the exclusive nature of the special EU-ACP relationship.

All this calls for a clear redefinition of Europe’s own interests in the partnership. One key question in this connection is whether the relationship with the ACP strengthens the EU’s external position in the world. A second relevant question is whether the ACP-EU partnership in its current form best serves the development objectives of the ACP and the EU.

On paper, most of the scenarios for the future of ACP-EU relations are still open: continuing on the same footing, not continuing with a special arrangement for ACP countries, or continuing in some other way. The impression gained from the AIV’s various interviews is that many people implicitly assume in advance that the partnership will continue in some way or another. Its long history and achievements clearly carry great weight, including the political credit that this has earned the EU in ACP countries and vice versa.

The results of the Agreement so far can be summarised as follows:

  • General: In a broad sense, the many years of experience with the theory and practice of ACP-EU cooperation have been a rich source of knowledge that can be used in shaping partnerships with other developing countries. That is certainly the case in the areas of development aid and political dialogue, where Lomé/Cotonou practice has served as an example for cooperation with other developing countries.
     
  • Political dialogue: Structural and ad hoc political dialogue is an important basis of ACP-EU cooperation. Over the years, considerable experience has been accumulated through a process of experimentation. It is often a matter of steering a way through slow, complex usually confidential processes. That makes it difficult to assess the dialogue’s effectiveness and results. It can be concluded with some degree of certainty, however, that the collective dimensions of political dialogue – i.e. at collective ACP and EU level – have not so far lived up to their promise.

    If the parties wish to step up their political cooperation in the future – bilaterally between the regions and to strengthen their positions in multilateral forums – a possible successor to the Cotonou Agreement will have to allow scope for a different structure and form, so that there is a clear place for dialogue at higher level between the ACP and the EU as collectives.

    Within the EU, there appears to be a desire to work more closely with the ACP countries on UN dossiers and in the WTO. Important questions in this connection are whether and how collective political dialogue can be better designed and what is required to achieve that. That needs to be explored further. Given that other partnerships, like the G77, are already active at multilateral level, it is clear that stepping up collective political dialogue only has a chance of success if both the ACP and the EU commit themselves to new objectives in this area and then actively pursue them.
     
  • Development cooperation: it is striking how much support development and poverty reduction efforts continue to enjoy among Europeans. This suggests that the EU should remain a major and reliable partner for the ACP countries, including non-‘donor darlings’ that need assistance but do not always receive it from other donors.

    According to available comparative evaluations, the Cotonou Agreement and the EDF have performed well, sometimes playing a pioneering role. Over the years development assistance for ACP and non-ACP countries (through the EDF and DCI, respectively) have converged in practice, in terms of both content (poverty focus) and procedures (programming). A discussion that has been going on for some time is whether the EDF should be integrated into the DCI and thus be financed through the general EU budget rather than through a separate fund. This modified structure would put an end to the group approach to the ACP countries and mean that the principle of reciprocity would be abandoned, which would weaken ownership by the ACP countries. The AIV believes that alternative proposals for the EDF should be solidly founded on public and preferably independent strength-weakness analysis. Although the AIV is aware that the Netherlands has to date been in favour of funding the EDF through the EU budget, the considerations set out above show that this is a complex issue.

    Development cooperation under the Cotonou Agreement is notable for its high degree of reliability and predictability, its reciprocity and mutual responsibility in drafting, implementing and monitoring programmes, its complementarity with other donors’ programmes and the level of ownership by recipient governments. Policy coherence for development is promoted by embedding development efforts broadly in political dialogue and in economic cooperation and trade. The ACP-EU partnership is a modern instrument that fits in well with contemporary thinking on an integrated development approach characterised by policy consistency and coherence. The partnership is also well suited to incorporation in the future international agenda for global public goods, which is expected to lay heavy emphasis on the integration of different policy areas, including climate change and environmental policy, gender equality, human rights and good governance, economic and financial development, migration, and peace and security.
     
  • Economic cooperation and trade: In this area, there is still a serious problem of coherence. Too often, EU trade policy continues to be based solely on the logic of trade instead of a broader, combined trade and development perspective. This was one of the main causes of the problems encountered during the process of concluding ACP-EU Economic Partnership Agreements. It was compounded by the fact that ACP countries – deliberately or not – were only included in the EPA negotiation process at a relatively late stage. The development of the current, largely provisional, system of EPAs was literally and figuratively a tour de force that produced results that have been far from universally welcomed, and the first indications of the new balance of trade between EU and ACP countries are cause for concern.

    Besides seeking coherence between development and trade objectives and measures, it would be advisable in the future to work more on the EPAs on the basis of clear reciprocity and mutual interests. It is also important to establish a clearer cooperation arrangement for issues of common interest, such as global and regional public goods, regional development and national industrial policy. This is the only way in which economic and trade policy can genuinely help create an enabling environment for sustainable development, in line with the new post-2015 agenda.

    No matter what form the ACP-EU partnership takes after 2020, parts of the old trade agenda will continue to require attention, despite the EPAs. Examples are the financial support under the Cotonou Agreement pledged through the EPAs , honouring the promise of compensation for loss of revenue from import and export duties, greater access to the EU market, and non-tariff trade barriers.
     
  • Governance structure, composition and working methods of institutions: The composition of the ACP group is distinctive in its tricontinental structure and wide diversity in the levels of development of the member states. The group is interesting in that it contains a relatively large number of LDCs, small island states and land-locked countries. The Cotonou Agreement contains articles that devote specific attention to ACP countries that fall into these categories. Most of these countries or groups cannot make a strong showing in international forums, but their membership of the larger ACP group gives them a voice. In addition, it is important for these countries to be embedded as strongly as possible in their own regions. This is one of the main obstacles enlarging the ACP to include LDCs that are not yet members.1

    A number of ACP and EU institutions are in need of reform. For ACP institutions, the AIV is looking forward to the report of the ACP Eminent Persons Group and the decisions the ACP will make in response to it. One key question is the financing of ACP organs and the costs of its secretariat. Until now, the EU has covered a substantial part (in effect, about half) of these costs. The AIV believes that it would enhance the ACP group’s independence if the member countries paid all the costs of the secretariat.

    The EU should explore ways of enhancing coherence between EU policy and the policies of individual member states, thereby increasing the effectiveness of all efforts. In addition, the exchange of information and coordination between Commission officials responsible for development aid, trade, and diplomatic and political relations also need to be improved.

    The functioning of the joint ACP-EU organs should be critically evaluated. It may not be necessary for representatives of all EU and ACP countries to attend all the regular meetings of the Council of Ministers. Such changes would also have consequences for the composition and tasks of the Committee of Ambassadors, whose mandate should be thoroughly reviewed and be more closely tailored to the new ambitions of a more robust form of international cooperation between the ACP and EU. Although the functioning of the Joint Parliamentary Assembly has been more positively assessed in some quarters, especially more recently, the question also arises whether a more modern approach is not possible and might work better than the JPA, which is relatively large and therefore costly and cumbersome. The Technical Centre for Agricultural and Rural Cooperation (CTA) in Wageningen is widely assessed more positively.

    In short, the time is ripe for a critical analysis of the functioning of all the institutions with a role in the ACP-EU partnership, and for creative thinking about possibly more dynamic and potentially more effective alternatives. Working with civil society organisations is an important way of raising the partnership’s effectiveness, and all of these institutions could do this much better and more extensively.

The following external factors and developments also affect future ACP-EU relations:

  • In the 21st century, we are seeing the emergence of a multipolar international society, in which the economic and political rise of Asia and a number of other powers elsewhere in the world (such as Brazil, South Africa and Russia) are having an impact on the position of the EU and its member states. These new players are clearly raising their profiles in global forums like the UN and as economic partners for the ACP and other developing countries. This means that the EU is no longer necessarily the main – and certainly not the only – partner for the ACP countries, as it once was.
     
  • In respect of the global development agenda, the context is changing. In the course of 2015, evaluations of the outcomes of efforts to achieve the MDGs and the drafting of new goals for the 2015-2030 period will culminate in the adoption of a new set of Sustainable Development Goals. The SDGs will call for a new focus on eradicating poverty and making consumption and production sustainable, and for breathing new life into the global partnership for sustainable development, including financing for development. Climate change, gender and the position of the least developed countries will also be given priority. New areas of attention are inequality between and within countries, combating violence, and improving the position of children and young people.
     
  • Clearly both the EU and the ACP will support the SDG agenda. In a joint declaration, they underlined the importance of the agenda and its content, just as they did when the Rio+20 sustainability agenda was announced. In recent internal discussions on the future, the ACP has explicitly stressed the importance as tasks for the group of addressing global issues and the greening of economic growth jointly with the EU. Mostly, these are issues involving stakes not only for the EU economy, but also for activities in partner countries in the South.
     

2 Conclusions and recommendations

The importance of future ACP-EU relations
During the 40 years of structured international cooperation between the ACP and the EU, formalised in the first Lomé Convention of 1975, a solid relationship has been built up. The parties have reached agreement in this partnership on many important (and often sensitive) issues. Besides access to natural resources – traditionally considered of prime importance – a continuing, showcased and modernised partnership with the ACP offers the EU an excellent opportunity for privileged economic and political relations with nearly 80 developing countries. If this partnership – which may in the past have been too firmly wedded to a focus on development cooperation – could focus more strategically on pursuing shared political goals at the UN, it could strengthen the positions of both the ACP and the EU on the global stage. It is therefore certainly in Europe’s short- and long-term interests to give due weight to the historical and strategic importance of its partnership with the ACP countries.

The best way to preserve these gains would seem to be continuing to cooperate with the ACP countries collectively. Regionalisation is an irreversible phenomenon, however, and regional organisations like the African Union are gaining in importance. The AU not only unites ACP countries in Sub-Saharan Africa, but also includes the countries in the northern part of the continent. The EU will have to make the best possible use of the comparative advantages of the AU and the ACP group, simultaneously and on the basis of an open and pluralistic approach.

At global level, decision-making should become more responsive, inclusive, participatory and representative, and the participation of developing countries in global governance must be strengthened. This is pre-eminently an area in which ACP-EU cooperation could make a contribution, for example, by successfully presenting joint political objectives at the UN in a concrete and constructive manner.

The AIV believes that it is in the spirit of the current Agreement to link any continuation of the ACP-EU partnership explicitly to the SDG agenda, including identifying the common interest in global governance of public goods and the further organisation of a political dialogue on elements of the agenda. There are relatively new opportunities to render natural resources useful for a sustainable economy (including renewable energy from the land and sea, water and industrial policy). In this area, there is potential for more exchange of information on, and possibly even coordination of, positions and activities. With their numerical majority in some international forums, the EU and ACP countries could perhaps have a stronger influence on agenda-setting and decisions at global level.

The structure of the ACP-EU partnership
One of the primary characteristics of ACP-EU cooperation is that, until now, it has been based on formal agreements. The fact that substantive priorities, institutions and procedures have been set down for an extended period in a jointly agreed, legally binding document for has benefitted the partnership’s ownership, predictability, reliability and authority. The ACP group and others would probably interpret going back on this as downgrading the partnership and sending a negative message. Furthermore, one of the main achievements of ACP-EU cooperation in the past was precisely its reciprocity and jointly agreed principles, rather than provisions imposed unilaterally by the EU. Modern development aid cannot be based on a relationship of dependence. For the EU, this demands that it makes a greater effort than in the past to inform and consult the ACP countries on policy developments within the Union that affect them.

This means that there is no place in ACP-EU relations for unilateral decisions. The Convention-based nature of the partnership offers a structure that safeguards cooperation between two active and vocal partners, in a way that could not be guaranteed by a political strategy, a policy-based agreement or a change in the Treaty of Lisbon.

The convention-based construction has the disadvantage that it is relatively inflexible, as neither the content nor the implementation procedures can be adapted to new priorities without formal changes to the agreement. In addition, the ratification procedure is becoming increasingly time-consuming, with some countries dragging their heels before finally ratifying the agreement. This problem could be solved by agreeing that, in the future, the partnership would no longer be convention-based.

Taking all the above considerations into account, the AIV has a clear preference for a legally binding document. It believes that the advantages of this basis for the partnership outweigh the disadvantages. The AIV therefore advises the Dutch government to pursue this aim in the negotiations. It should be noted, however, that there are good reasons to look critically at which components of the current Cotonou Agreement will really be necessary after 2020, what may need to be added and how the partnership can be made more efficient and effective. A more compact and streamlined agreement is desirable, focused more clearly and selectively on a number of priorities and with a stronger emphasis on achieving them.

If the choice is made for a formal convention, account should be taken of the likelihood that several contentious issues will be raised in the negotiations that could have a strongly negative influence on the climate of the talks and ACP-EU relations. Examples could be references to the International Criminal Court (a very sensitive subject within the AU), to lesbian, gay, bisexual, transgender and intersex rights, and to migration, especially readmission requirements. A well-thought-out, participatory and well implemented negotiation and communication strategy is crucial to address such issues without letting them become deal-breakers.

Even if the ACP and the EU should jointly agree to continue to cooperate in another way, and to set down the details in a form other than a convention or other legally binding document, the AIV believes it is important that there continues to be, at least, a binding, overarching instrument in which important shared principles – such as a comprehensive approach to development and the central importance of coherence and human rights – are set down.

It is therefore important for future ACP-EU relations that any follow-up agreement preserve a number of overarching principles, such as coherence between economic cooperation, trade, development aid and political dialogue, and fundamental values in the areas of human rights, the rule of law and good governance, and the development dimension of the EPAs. A new agreement should also preferably offer comparable legal guarantees to the Cotonou Agreement. It must also indicate as concretely as possible how these overarching principles can be put into practice. Human rights practice is already covered in sufficient detail in the Cotonou Agreement, but this is not yet the case for coherence.

Overseas countries and territories
It has frequently been proposed that the distinction between overseas countries and territories (OCTs) and ultra-peripheral regions (UPRs) be abandoned. That would allow OCTs to be brought under European regional policy, and their development could be supported by the EU’s regional structural funds. The 2013 OCT Decision contains a number of potential starting points for gradually reducing of the differences.

The AIV recommends supporting this proposal to jettison the distinction between OCTs and UPRs and, in anticipation of this change, supporting those Caribbean countries in the Kingdom that may seek to join arrangements applying to UPRs, or make the transition to UPR status.

The specific role of the Netherlands
The AIV points out that by adopting a constructively critical approach, the Netherlands can make a difference in the discussions on the future of ACP-EU relations after 2020. The Netherlands’ reputation in the area of international cooperation and the progressive role it plays in advancing coherence between aid, trade, economic and political cooperation (illustrated by merging trade and aid policies under one minister) all contribute to this potential. The brokering role played by the Netherlands in the difficult negotiations on the Economic Partnership Agreements, which was highly valued by both sides, also provides a solid basis for playing a constructive role in the transition to a post-Cotonou partnership framework.

The Netherlands’ position could even be of strategic importance, given that it will hold the Presidency of the Council of the EU in the first half of 2016. This is the period in which the outcomes of the consultations on post-2020 ACP-EU cooperation – and possibly their implications – will become clear. The Netherlands’ role as holder of the Presidency, the efforts of Minister for Foreign Trade and Development Cooperation Lilianne Ploumen in the area of ACP-EU trade, and the mandate of Commissioner Mimica could generate synergy for the process. The AIV sees the Dutch Presidency as a significant opportunity to put specific priorities of Dutch policy for EU development cooperation, such as coherence, on the agenda for the negotiations.

One of the main characteristics of the Cotonou Agreement is the strong substantive link it has made between economic cooperation, trade, development aid and political dialogue. Coherence is also addressed in the post-Lisbon Treaty on the Functioning of the European Union (article 208), in relation to policy areas that affect developing countries, such as agriculture and fisheries, energy policy and climate change. The objective of coherence is to avoid giving with one hand and taking with the other. The comprehensive approach to development advocated in the Cotonou Agreement offers a good framework within which to further pursue policy coherence.

Within the EU, the Netherlands is seen as a pioneer in the area of policy coherence. The quest for coherence is indeed one of the main elements of Dutch development policy, especially now that the portfolios for foreign trade and development cooperation have been brought under a single minister. Now that ACP-EU relations have been somewhat disrupted by the EPA negotiations, it is all the more important that EU trade standpoints are in the future more permeated by the more integrated development rationale expressed by the Cotonou Agreement and the international agenda on sustainable development.

In conclusion, it can be stated that, since the signing of the Cotonou Agreement in 2000, the world has changed radically. It is therefore not self-evident that the ACP-EU partnership should be prolonged. Any decision to this effect must be considered in the light of new challenges and a shifting geopolitical context. Our starting point remains a vision of the EU as a community of values, in which achievements in the fields of human rights, the rule of law and democracy are of paramount importance. Actively promoting peace and security in the world is a cornerstone of its foreign policy. Nevertheless, as a result of new multipolar global relations, the EU’s geopolitical influence is declining.

In its partnership with the ACP group, Europe has long believed that the ACP was the sole beneficiary. This is decreasingly the case. It is thus crucial to reconsider the importance of political partnership in the broad sense and take the significance of the EU’s ties with the ACP group seriously. The cooperation has a rich past and enormous knowledge has been accumulated.

The AIV therefore recommends unwavering efforts to conclude a follow-up agreement between the EU and the ACP group, with a greater emphasis on political cooperation. Cooperation with the ACP countries is a potentially important means of pursuing geopolitical objectives in the areas of sustainable development and peace and security. The Netherlands should take the lead in further shaping the EU’s partnership with the ACP countries.

_______________________

1 Non-ACP least developed countries (Afghanistan, Bangladesh, Bhutan, Cambodia, Laos, Myanmar, Nepal and Yemen), all of which are in Asia or the Middle East, have few regional or other features in common with members of the ACP group. The position of South Sudan is different, making it the only non-ACP LDC that could logically join the group at this time. Political problems could, however, prevent this for some time to come.
Advice request

Professor Jaap de Hoop Scheffer
Chairman of the Advisory Council
on International Affairs
Postbus 20061
2500 EB The Hague

Date    3 March 2014
Re       Request for advice on review of the Cotonou Agreement

Dear Professor De Hoop Scheffer,

The EU’s association with the African, Caribbean and Pacific (ACP) countries dates back to the establishment of the EU and the modification of its member states’ relationships with their former colonies. This association was shaped by the Yaoundé Convention (1963), the Lomé Convention (1975) and the Cotonou Agreement (2000). This makes the ‘association’ of this group of countries with the EU, laid down as early as the Treaty of Rome, a special one.

The partnership agreement between the EU and the ACP countries (the Cotonou Agreement) will expire in 2020. The future of the relationship between the ACP countries and the EU needs to be discussed now in order to have an impact on the upcoming negotiations. The agreement is a unique combination of development cooperation with trade, political cooperation, security and migration – all in a single framework. The European Development Fund (EDF), which the EU uses to finance its development cooperation with the ACP countries, is a product of the Cotonou Agreement, and has largely shaped the EU’s foreign relations with the ACP countries. It is an intergovernmental fund that is not part of the EU budget.

The Treaty of Lisbon no longer refers to the ACP countries as a group. Some have seen this as a signal that the link between the EU and the ACP countries is now deemed less important. At the same time, the provisions that gave the ACP countries preferential access to the EU could no longer be maintained, as they did not meet WTO requirements. As a result, the European Commission began negotiating with the separate regions on development-friendly free trade agreements that do meet to WTO requirements: the Economic Partnership Agreements (EPAs). This raises the question of whether development links with ACP countries should be merged with other EU financing instruments like the Development Cooperation Instrument (DCI).

In this connection, the government has the following questions:

  1. Should there be a follow-up to the Cotonou Agreement? If so, what form should it take (should it be legally binding or not?), and what topics should it cover?
  2. Is there still any reason for a relationship with the ACP countries as a group and, if so, on what basis? Would it be better to reach agreements with the separate regions (Africa, the Caribbean and the Pacific), or instead to aim for an integrated approach within the EU budget? If separate agreements are preferable, what form should they take? Which elements of the Cotonou Agreement should be retained?

A number of subsidiary questions may then arise:

  1. How should cooperation between the EU and the ACP countries be assessed in terms of development cooperation and trade, political cooperation, security and migration? What has the Cotonou Agreement achieved, and how well does it compare with other cooperation models?
  2. Are the EU’s strategic cooperation goals being promoted in its relations with the ACP countries, for instance in terms of sustainable social, economic and ecological development, renewable energy sources, raw materials, migration, human rights, peacebuilding and the rule of law? How effective is this partnership in comparison with other, partly overlapping regional partnerships (such as the African Union, the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS), etc.)?
  3. What influence does the EU have in the ACP countries, and what part are new powers like the BRICS (Brazil, Russia, India, China and South Africa) playing in setting the agenda? What is the ACP countries’ role, or potential role, in global governance?
  4. To what extent does the partnership’s governance structure affect the quality of cooperation?
  5. What role should the Netherlands play in negotiations on a possible follow-up to the Cotonou Agreement? This country played a brokering role in the EPA negotiations. Did the EU and the ACP countries value this role?
  6. What factors, including the timetable between now and 2020, could facilitate or hamper the decision-making process?
  7. To what extent, and in what way, does the signature or non-signature of EPAs affect the future of the Cotonou Agreement?
  8. What do the ACP countries think about the review of the agreement, and what opportunities do they see for an improved reciprocal relationship?
  9. How would a change in relations with the ACP countries affect the Overseas Countries and Territories (OCTs)?1

With a view to the drafting of a possible EU mandate for negotiations, your report should be completed by January 2015.

We look forward to reading your report.

Yours sincerely,

Frans Timmermans
Minister of Foreign Affairs

Lilianne Ploumen
Minister for Foreign Trade and Development Cooperation

_____________________

 
1 Council Decision 2013/755/EU of 25 November 2013 (the ‘Overseas Association Decision’) aims for a reciprocal partnership to support the OCTs’ sustainable development (point 5 of the preamble) and establishes a direct link to the EDF (points 32 and 34 of the preamble and articles 75 (a), 77, 78, 85-87, 91 and 93 (4).
Government reactions

To the President of the House of Representatives
of the States General
Binnenhof 4
The Hague

Date: 24 September 2015

Re: Government’s response to the AIV advisory report on reviewing the Cotonou Agreement

Dear Madam President,

We hereby present you with the government’s response to advisory report no. 93 of the Advisory Council on International Affairs, ‘ACP-EU Cooperation after 2020: Towards a New Partnership?’. We have also sent a copy of this response to the President of the Senate.

Bert Koenders
Minister of Foreign Affairs
Lilianne Ploumen
Minister for Foreign Trade and
Development Cooperation

                                         
Government’s response to the AIV advisory report ‘ACP-EU Cooperation after 2020: Towards a New Partnership?’

On 4-5 June 2015, the ACP group celebrated its 40th anniversary. Development ties between the European Union and the countries in Africa, the Caribbean and the Pacific Ocean that make up the group (now 79 in total) predate 1975, however. A development fund was set up as early as 1957, when the European Economic Community was founded. This fund was the precursor of the present-day European Development Fund (EDF). Since 2000, the partnership between the EU and the ACP countries has been governed by the Cotonou Agreement, with the aim of contributing to poverty reduction and the gradual integration of the ACP countries into the world economy. The agreement expires in 2020, offering an excellent opportunity to thoroughly review the partnership between the EU and the ACP group. On 3 March 2014, in anticipation of the negotiations on this review and in light of the Dutch Presidency of the EU in the first half of 2016, the government requested an advisory report from the AIV on the future of EU-ACP cooperation. The main question was whether the current partnership agreement between the EU and the ACP group should be continued after 2020 and, if so, in what form and addressing what issues.

AIV advisory report no. 93, ‘ACP-EU Cooperation after 2020: Towards a New Partnership?’, was presented to the House of Representatives on 27 May 2015. This letter contains the government’s response to the report. It also describes the latest developments in the negotiations on the future of the partnership and the preparations for activities during the Dutch Presidency of the EU.

General comments
In the government’s opinion, the advisory report offers valuable analyses of how the geopolitical and economic context has changed and of and internal developments within the EU and the ACP group since the signing of the Cotonou Agreement. The AIV also rightly devotes attention to the importance of the post-2015 agenda, which is currently being shaped and in which coherence and universality play a central role, as a reference point for the future direction of the EU-ACP partnership. In addition, the report gives an overview of specific experiences with cooperation between the partners under the Cotonou Agreement, without claiming to be exhaustive.

The government agrees with the AIV that it is time to fundamentally review relations between the ACP and the EU. To continue on the same footing, with only slight adjustments to the substance of the partnership, would be a missed opportunity. At the same time, the report states that the European Commission ‘seems to be cautiously working towards a successor to the Cotonou Agreement’. In the government’s opinion, this does not necessarily imply a new, legally binding international agreement with the ACP countries as a group. The European Commission has emphasised in various forums that it will be exploring all options, including alternatives to a formal agreement and to the ACP as a group. The only option it rules out is the ‘zero option’: the ACP countries are important partners for the EU and the Commission believes that the continuation of the partnership must absolutely be safeguarded. The government shares this view. Productive cooperation between the EU and African, Caribbean and Pacific countries clearly serves the interests of all partners. This opportunity must be taken to thoroughly explore all possible options to create a modern, equal and effective partnership with the ACP countries that goes beyond a donor-recipient relationship and is based on a coherent and integrated EU foreign policy.

The review must be based on a thorough analysis of the results of ‘Cotonou’. The AIV’s report is a good starting point, but further analysis is required. The government expects the Commission to base its choices on solid research and internal reflection. It would be inadvisable to choose the path of least resistance, based on perceived assumptions and vested interests.

Economic Partnerships Agreements
The AIV report also analyses experiences with the EU’s Economic Partnership Agreements (EPAs). Although the analysis contains valuable elements, in the government’s view it does insufficient justice to the EU’s efforts to meet the conditions imposed by the World Trade Organization (WTO) because it considered the trade arrangements with the ACP group discriminatory. The AIV largely ignores the negative consequences of these arrangements for non-ACP developing countries. Although it rightly notes that the decision to conclude trade agreements with individual regions has put pressure on the negotiations, the AIV is incorrect in suggesting that it would have been possible to conclude an EPA with the ACP as a whole. The decision to conclude agreements by region was also based on existing regional economic bodies and free trade zones. The negotiation process was indeed laborious, for which both parties bear responsibility – including the EU, as the AIV states. But the report completely ignores the problem that the ACP countries, for domestic political reasons (and in the negotiations), had little to gain by actively promoting the EPAs at home. The government therefore does not share the AIV’s view that ‘both the interim and the regular EPAs express a commercial spirit more than the broader development vision of the Cotonou Agreement’. The EPAs are trade agreements in which the development dimension plays a central part: the transition provisions and asymmetries in opening up to the market are more generous than in any of the EU’s other trade agreements. In addition, the ACP countries receive support from development funds in implementing the agreements.

Response to conclusions and recommendations

The ACP as a group
The AIV suggests that the EU-ACP partnership could have focused more strategically on pursuing shared political goals in the global arena. They should, for example, have joined forces at the United Nations where, together, they have a numerical majority. Such political cooperation has been insufficiently pursued; the partnership has primarily remained wedded to development ties and to negotiations on EPAs – the latter with little enthusiasm on the part of the ACP countries, according to the AIV. The AIV would like to see political cooperation with the ACP countries substantially stepped up and therefore calls for the ACP to be continued as a group. This view is shared by leading figures within the ACP institutions. The government believes that it is primarily up to the ACP countries themselves, and not the ACP institutions, to make this choice. The AIV argues for the added value of the ACP group mainly on the basis of the numerical majority of ACP countries and EU member states in various international forums. This begs the question why the ACP and EU have scarcely been able to make effective use of this situation in the past 40 years. Outside Brussels, the ACP has not evolved into a significant political power bloc. Multilateral international negotiations are conducted through different alliances, like the G77. It seems unlikely that the ACP will start to operate more forcefully as a group in international organisations in the future.

The AIV correctly notes that regionalisation is an irreversible phenomenon. Regional organisations like the African Union (AU) are growing in importance. The EPAs, too, have been agreed between the EU and regional bodies. The government therefore does not believe that the ACP necessarily has to be preserved as a group, especially if the ACP countries themselves express the desire to organise themselves politically on a more regional basis or if it would be at the expense of cooperation between the EU and the various regions. The government feels that idea of focusing the partnership more on a regional basis is logical and should in any case be given serious consideration. If ‘Union-to-Union’ proves potentially more effective because it is better tailored to the needs of the various regions, the option should certainly be considered.

The functioning of ACP-EU institutions also needs to be critically evaluated, as the AIV notes. The AIV in particular identifies their formal character and the lack of political engagement, especially on the part of the EU. The ACP is critical of the absence of EU ministers from political meetings, but greater relevance and effectiveness on the part of the institutions would encourage greater engagement. In that light, reforms are urgently needed. The recent decision to close the Centre for the Development of Enterprise (CDE) because of poor functioning and a lack of results is a good example of this, which the AIV also mentions. This decision was taken after many years of urging, not least by the Netherlands. More steps should be taken to ensure that the partnership’s institutions are run on the basis of a modern approach with multi-stakeholder participation. The AIV’s recommendation that making the group’s secretariat in Brussels financially self-sufficient would encourage the group’s independence is important. The government considers it even more important, however, that the institutions be more explicitly linked with the strategy and aims of the partnership, so that they are able to genuinely function as vehicles for cooperation.

The form of the ACP-EU partnership
Until now, the ACP-EU partnership has always been founded on a legally binding agreement. The government shares the AIV’s view that this has benefited the venture’s predictability, reliability and ownership. The risk that the ACP partners might see a different form of cooperation as ‘downgrading’ is certainly a factor to be taken into account during the negotiations. The government does not, however, agree with the statement that a treaty-based arrangement is necessary for reciprocity and jointly agreed principles. The post-2015 development agenda, which will place much more emphasis on universality, is a good example. In advising the government to advocate a legally binding arrangement, the AIV seems to ignore or give too little weight to a number of important considerations:

  1. A follow-up agreement with only the ACP countries could perpetuate the divide in European development policy. In these times, there is no longer any justification for maintaining fundamentally different relations with one group of developing countries merely on the basis of a colonial past. EU support should be based on development prospects and not on an ‘ACP’ label.
  2. With the EPAs’ anticipated entry into force and the European Commission’s intention to bring the EDF under the EU’s budget,[1] there seems little rationale left for a formal agreement. A legally binding agreement is not the only way to ensure an intensive political dialogue.
  3. Without a direct link with development cooperation and trade, it also seems unlikely that a follow-up agreement would be ratified by enough countries to ever enter into force. This would be politically highly undesirable after difficult negotiations and the use of scarce resources. The negotiations will not be easy, because some ACP countries have different views from the EU on a number of issues, such as LGBT rights and the International Criminal Court. The migration agenda, in which both sides have a clear mutual interest, also proved to be a serious stumbling block at the talks on the second review of the Cotonou Agreement in 2010.

In the light of the above, the government believes that it is important to conduct an open discussion on how the mutual interests of the ACP and the EU can best be served. The expiry of the agreement offers a unique opportunity to initiate that discussion. In that process, the good things about ‘Cotonou’ should certainly be preserved. The engagement of the ACP countries and of other actors is of course crucial to its success.

A modern, coherent and integrated European foreign policy
The AIV rightly notes that the Cotonou Agreement has served as an example, especially in terms of the coherence of political, economic and development cooperation and the reciprocity of the partnership. This also applies to the European Development Fund. In the course of time, the development support provided by the EDF and Development Cooperation Instrument (DCI), which is included in the EU budget, have become more closely aligned, both in terms of content (focus on poverty) and programming.

The AIV raises questions about the government’s support for including the EDF in the EU budget. The AIV suggests that by putting an end to the group approach, this would lead to abandoning the principle of reciprocity. The government shares the view that positive features of the current set-up, like reciprocity and mutual responsibility, must be preserved if the EDF is included in the EU budget. At the same time, it is important that all support that the EU gives to third countries must be governed by the same legal framework and be subject to the same democratic control by the European Parliament. This is also completely in line with the desire to achieve a coherent and integrated EU foreign policy, as advocated by the Juncker Commission and supported by the Netherlands. The government will therefore continue to press for including the EDF in the EU budget in the interests of a more coherent EU development policy. In doing so, it will of course make every effort to ensure that the positive features of the EDF are preserved.

Overseas countries and territories
The government also asked the AIV to advise on the consequences for the overseas countries and territories (OCTs) of EU member states of a possible change in the relationship with ACP countries. The AIV recommends supporting the proposal to eliminate the distinction between OCTs and ultra-peripheral regions (UPRs) and, in anticipation of this, to support the Caribbean territories of the Kingdom if they wish to join the schemes open to UPRs or switch to this status. The government notes that there has been no official proposal within the EU to eliminate the distinction between OCTs and UPRs, nor is one to be expected. OCTs can however choose to bring their legislation more in line with the EU acquis. The government warmly welcomes the recommendation to support Dutch OCTs that wish to change their status. A possible change of status for the Caribbean parts of the Netherlands (Bonaire, St Eustatius and Saba) will be considered as part of the constitutional evaluation to be completed later this year. The three autonomous countries of the Kingdom have to date not expressed any desire to give up their status as OCTs in favour of UPR status. This would mean committing themselves to introducing the EU acquis and eventually the euro.

The specific role of the Netherlands
The government shares the AIV’s analysis of the role that the Netherlands can play in the review of the EU-ACP partnership. According to the AIV, by adopting a constructively critical approach and an integrated view of foreign policy – including aid and trade – the Netherlands can make a difference in the post-2020 discussion. This also offers the Netherlands opportunities to further shape the coherence agenda during its EU Presidency in the first half of 2016.

The government endorses the AIV’s conclusion that cooperation with ACP countries is an important means of achieving goals on sustainable and inclusive development and on peace and security. However, it considers the consequence that the AIV attaches to this for the Netherlands – ‘unflagging efforts to conclude a follow-up agreement between the EU and the ACP group’ – insufficiently convincing. On the contrary, in the coming period the Netherlands will advocate in the EU keeping an open mind on this issue, conducting a thorough internal evaluation of the ‘Cotonou acquis’, and involving ACP countries at an early stage. The aim should be to restructure the partnership so that it fits within a modern, coherent and integrated EU foreign policy. That assumes an equal and effective partnership with the ACP countries that can genuinely contribute to peace and security, sustainable development and inclusive growth, and that is a good match with the new global situation and with the post-2015 agenda.

Negotiation timetable
The negotiations with the ACP countries on the future of Cotonou are scheduled to start formally by 1 October 2018.[2] To prepare the EU’s standpoint, the Commission organised a series of roundtable meetings on a variety of themes in March and April 2015.[3] These provided input from various quarters, including member states, EU institutions, civil society organisations, the business community and think-tanks. The Netherlands organised the meeting for stakeholders and institutions. The main aim of the meetings was to formulate the right questions as input for the Green Paper expected to be published in October 2015. Public consultations will be launched on the basis of the Green Paper, the results of which will be presented during the Dutch Presidency and will be used to produce a Communication. Federica Mogherini, the EU’s High Representative for Foreign Affairs and Security Policy, is planning the first formal discussion on post-Cotonou at the meeting of the Foreign Affairs Council in October 2015.

A large number of member states, including the Netherlands, have requested the Commission and the European External Action Service (EEAS) to produce their own analysis and evaluation of what benefits Cotonou has brought. In this way, they are trying to encourage the Commission to engage in a process of internal reflection and, at the same time, to obtain answers to important questions relating to lessons learned. The request suggested a number of questions about, for example, the effectiveness of the political dialogues, the results of EU-ACP cooperation in multilateral forums, and the value of the joint institutions. This process will run parallel to the public consultation and serve as input for the drafting of the Communication. At the same time, the European Centre for Development Policy Management (ECDPM) will, with support from the Dutch government, conduct a ‘political economy analysis’ of the EU-ACP partnership. The results are expected later this autumn and will be presented during Luxembourg’s Presidency of the Council.

On 28 and 29 May of this year, there was a first exchange of ideas with ACP partners on the future of the partnership at the annual EU-ACP Joint Ministerial Council. This focused mainly on information on the process of reflection. The ACP partners, too, have initiated a similar process, in which they are for example assessing the value of the group as a collective. The new Secretary-General of the ACP has ambitious plans for the group as a ‘leading transcontinental organisation’ and believes it can continue to be an attractive partner for the EU in the future. At the ministerial meeting, European Commissioner for International Cooperation and Development Neven Mimica acknowledged the value of the partnership, but emphatically called for flexibility in the negotiating process.

This will also be the aim of the Dutch EU Presidency. As the AIV notes, the Netherlands can contribute to the discussion from a constructively critical perspective and an integrated view of foreign policy, including aid and trade. In cooperation with the ECDPM, the Netherlands will explore concrete alternatives to a formal agreement – something that has so far been lacking in the debate. In consultation with High Representative Mogherini, the Netherlands will place a discussion on this issue on the agenda of the informal Foreign Affairs Council meeting on development cooperation that it is planning to organise in early 2016. During its Presidency, the Netherlands will make every effort to contribute to an open and transparent debate on the best form and content for a modern, equal and effective partnership with the ACP countries.

During the Dutch EU Presidency, in May 2016, the six-monthly EU-ACP Joint Parliamentary Assembly (JPA) will also take place. The Netherlands will emphasise its engagement with interparliamentary cooperation between the EU and the ACP by contributing substantively to the JPA, devoting particular attention to the future of ACP-EU relations.

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[1] See European Council Conclusions of 7-8 February 2013: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/135344.pdf.
[2] Cotonou Agreement, article 95(4).
[3] The themes of the seven roundtable meetings were the type of partnership, the added value of the ACP in the future general development cooperation framework, implementation mechanisms, stakeholders and institutions, regional integration and trade, global challenges, and demographic developments.
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