13.6 Development and Aid

Part 4 of the Treaty of Rome (1957) provided for the association with the European Community of the former colonial territories of Belgium, France, Italy and the Netherlands. Subsequently former British, Spanish and Portuguese territories became eligible. Initially this provision applied mainly to former French territories in Africa but the scope has progressively widened and there are now nearly 80 former colonial territories involved. This number includes South Africa and Cuba, which have qualified membership. The former territories were originally known collectively as the Associated African States and Madagascar (AASM), but they have been known since the mid 1970s as the African, Caribbean and Pacific (ACP) states.

The first two Conventions between the EEC and the former territories were signed at Yaoundé (Cameroon) in 1963 and 1969 and they set a pattern for four subsequent ones, signed at Lomé (Togo) in 1975, 1979, 1984 and 1989. These Conventions were primarily trade-and-aid agreements.

The EU-ACP Conventions have aimed to break new ground in four ways. They have:

• Given stability to cooperation links by creating a legal framework, based on a contract negotiated for a fixed period of years between two groupings, each comprising a large number of independent states.
• Established a single contract between regional blocs, excluding economic and ideological discrimination and taking account of the special problems of countries which are severely underdeveloped and those of enclaves and islands.
• Created common institutions allowing a permanent dialogue and largely responsible for the implementation of the development programmes: a joint assembly of MEPs and ACP representatives, an ACP-EU Council of Ministers and a Committee of Ambassadors.
• Instituted a global approach covering all aspects of cooperation: financial aid, trade concessions, stabilisation of export earnings, agricultural and industrial assistance.

Altogether some 99.5% of types of goods exported to the EU by the ACP countries are admitted free of custom duties. The main exceptions are:

• Farm produce in direct competition with EU-produced items, protected by CAP.
• ACP textile exports, which were sharply restricted by the operation of the Multi-Fibre Arrangement (1974-94) and its successor, the WTO's Agreement on Textiles and Clothing (1995-2004).

The following table shows the breakdown of Lomé development expenditure and gives an idea of the range of aid funding. Not all the aid is development aid. Some is for emergency humanitarian reasons.

Lomé IV: development expenditure, 2001

Source: Dick Leonard, Guide to the European Union (8^th edition), Economist, 2002, quoting the European Commission.

In June 2000, a 20-year EU-ACP Agreement was signed in Cotonou (Benin). This Agreement replaced the Lomé Convention, and focused on poverty alleviation, aid and stronger political, economic and trade cooperation.

In April 2002 the Commission adopted a negotiating strategy for Economic Partnership Agreements (EPAs) between the EU and most ACP countries in order to create a free trade area between the EU and the ACP. The resulting agreement is planned to come into force in 2008, with a 12-year transition period to 2020.

For the negotiations the ACP countries are grouped into 6 regional groups:

• West Africa (Economic Community of West African States + Mauritania)
• Central Africa (Economic and Monetary Community of Central Africa + São Tomé & Príncipe (STP)).
• East South Africa.
• Southern African Development Community (SADC) (excluding South Africa).
• Caribbean (excluding Cuba).
• Pacific.

The European Development Fund (EDF) is the means whereby financial aid is granted to the ACP countries under the successive Conventions and Agreements.  Since the conclusion of the first partnership convention in 1964, the EDF cycles have generally followed the partnership convention/agreement cycles. Thus:

• First EDF: 1959-64.
• Second EDF: 1964-70 (Yaoundé I Convention).
• Third EDF: 1970-75 (Yaoundé II Convention).
• Fourth EDF: 1975-80 (Lomé I Convention).
• Fifth EDF: 1980-85 (Lomé II Convention).
• Sixth EDF: 1985-90 (Lomé III Convention).
• Seventh EDF: 1990-95 (Lomé IV Convention).
• Eighth EDF: 1995-2000 (Lomé IV Convention & the revised Lomé IV).
• Ninth EDF: 2000-07 (Cotonou Agreement).
• Tenth EDF: 2007-13 (Revised Cotonou Agreement).

Other aid programmes

Other development aid programmes and agreements include:

• Pre-accession instruments for the CEE countries:
• Phare Programme of Aid for Economic Restructuring for Poland and Hungary was set up in 1989. (PHARE stands for "Pologne, Hongrie, Assistance à la Réstructuration".)
• SAPARD (Special Accession Programme for Agriculture and Rural Development) was established in 1999 to help the CEE countries with the problems of structural adjustment in their agricultural sectors and rural areas.
• ISPA (Instrument for Structural Policies for Pre-Accession) was for infrastructure projects.
• TACIS (Technical Assistance for the Commonwealth of Independent States, CIS) was launched in 1991 for assistance to the former states of the USSR (and Mongolia).
• MEDA: similar development aid is provided to Mediterranean countries in the Maghreb (Algeria, Morocco and Tunisia) and Mashreq (Egypt, Jordan, Lebanon and Syria) and to Israel.
• In January 2007, TACIS and MEDA were replaced by EPNI.

The Humanitarian Aid Directorate-General, otherwise known as the European Community Humanitarian Office (ECHO), handles the EU's Humanitarian aid programme.

RL, February 2007