The
ACP states and the EU agreed to respect their sovereignty, mutual interests and
independence and to treat each other equal. All contract parties should have
the right to determine its own political, social, cultural and economic policy
options and the relations between ACP states and EU should base on security.
The EU will support the ACP states to achieve a self-reliant and self-sustained
development based on their economic potential, their human capacities and their
natural resources. In this context good governance shall be a particular aim of
cooperation operations. Besides this, the development policy shall respect the
human rights and recognize the importance of democracy and law.
The
contracting parties want to promote the development of the market economy and
the private sector and agreed to integrate the ACP states into the world
economy in a harmonious manner. Least developed countries, e.g. landlocked and
island countries should be treated special, taking into account the specific
difficulties of the poorest section of the population.
Consultations
should take place as soon as possible at request of any contracting party. An
enlarged political dialogue shall be conducted by the Council of Ministers and
ensure an effective dialogue by the contracting parties.
Decentralized
cooperation should be intensified as they contain a potential for positive
contributions. The main issues of trade development are to develop, diversify
and increase the trade of the ACP states and to improve their competitiveness
in domestic, regional and international markets. Trade, financial and technical
cooperation, should reach these goals. The EU shall contribute towards the ACP
states’ own development efforts by providing adequate financial and technical
help and pay particular attention to the least developed countries.
The
ACP states agreed to facilitate investment and to improve their access to
capital markets. Besides this, the African countries want to stabilize their
export earnings, i.e. most of all they have to stabilize their agricultural
commodity markets.
Sustainable
economic and social developments, which will improve the living conditions of
the population and to safeguard those of future generations, are the main
objects between ACP and EU. The idea of the protection of natural resources
shall include any project and program. Therefore it is necessary to take not
only the direct but also the indirect costs and consequences into account.
Intergovernmental and non-governmental organization will support this process.
In this spirit the EU shall prohibit all exports of waste to the ACP states and
the ACP states themselves shall no longer import waste from industrial
countries. The use of pesticides is allowed.
The EU will support the ACP states to increase their
degree of self-sufficiency in food in particular by strengthening ACP’s capacities
and stimulation regional trade flows. The EU will further help the rural
population to improve their standard of living and to cover their essential
needs in the area of food, education and health. Therefore the farming methods
animal production shall be modernized. Besides this, the management and the
marketing of the products must be more effective and an improved control of
diseases is necessary.
The cooperation with the EU should cover the
exchange of information and experience as well as the supply of factors in
production, training of people and the opening of credits. Food aid shall be
integrated with the development policies of the ACP states so that the aid
products will meet the need of the recipients and will not disrupt the domestic
market. Special attention shall be paid to the least developed countries, which
need substantial help in productive sectors, transport, marketing, packaging
and the setting-up of storage infrastructure.
Cooperation in the fishing industry is very
important for the ACP states and shall promoted by optimum utilization of the
fishery resources. The coastal states shall have the right to exercise
jurisdiction over the living marine resources of their exclusive economic zones
and the landlocked states shall participate in the exploitation of sea
fisheries. Fishery shall follow in conformity with current international law.
In order to develop the fishery within the ACP
states it is necessary to improve their knowledge of the fisheries environment
and its resources, to increase the means of protecting fishery and watch their
exploitation, to increase the involvement of ACP states in deep-sea fishery
within their zones and to increase the contribution of fisheries. The EU will
support the ACP countries in this area concerning production, development of
infrastructure, provision of special credits, management, protection,
processing, marketing and distribution. Intra-ACP fishing cooperation shall be
strengthened in particular.
Nevertheless, the ACP states agreed to negotiate
with the EU for fishing activities of vessels of the EU and to neglect any
discrimination against the EU or any ACP member states. Besides this, the ACP
states are prepared to grant the EU satisfactory conditions, i.e. EU vessels
are allowed to fish in ACP zones when they pay financial compensation e.g.
licensing fees, employ ACP nationals, taking observers on board and provide ACP
countries with transfer of technology, research and training grants.
As
large number of ACP states are highly dependent on their exports of primary
products the downward trend in world prices lead to the deteriorating of their
economic situation. Besides this, the ACP states fight against structural
difficulties in many commodity sectors. The objectives of EU help in this field
are horizontal and vertical diversification of the ACP economies through
processing, marketing, distribution and transport and the improvement of the
competitiveness of the ACP states’ commodities on the world market through
reorganization and rationalization of production, marketing and distribution
activities. The cooperation operations of commodities shall include the
improvement of infrastructure, the promotion of investment and the exchange of
information as well as training programs and courses for operators in this
sector and support for national or regional schools or training institutes.
The
contracting parties will take all market signals as well as economic and social
impacts into account. Moreover, a greater consistency at regional and
international level between the strategies of various ACP states should be
ensured.
A
Commodities Committee, set up by the EU and the ACP states, shall find
solutions for all these issues, in particular for structural problems relating
to commodities.
In
order to facilitate industrial development, sectoral strategies for
agricultural and rural development, manufacturing, mining, energy,
infrastructure and services shall be integrated in such a way as to foster
interlinkages between the economic sectors. Therefore, specific provisions on
industrial cooperation, promotion for ACP products and for private investments
are necessary.
The
objectives of the industrial cooperation in the fields of manufacturing and
processing, mineral and energy resources development, transport and
communication are improvement of capacities, support for the establishment of
new industries, promotion of participation in enterprises by ACP nationals and
promotion of business associations.
The
EU will assist the ACP states in the improvement of their institutional
framework and their industry-related infrastructure. Besides this, the EU will
provide industrial assistance and training for ACP citizens.
Manufacturing
and processing of primary goods, industries based on local needs and resource,
engineering, metallurgical and chemical industries are the main areas of
support. The establishment and development of small and medium enterprises
(SME’s) in ACP states and their cooperation with SME’s in Europe are essential.
The establishment and strengthening of industry-related scientific and
technical infrastructure as well as the support of technology, patents and
other industrial property through the EU play also an important role. Besides
this, the ACP states want to promote technology cooperation with other
developing countries. The Committee of Industrial Cooperation will be
responsible for all these issues and identify, appraise, evaluate, promote and
assist in the implementation of industrial projects in the ACP states.
The
main objectives of mining development are to exploit all types of mineral
resources in a way, which ensures the maximum profitability and meets also
environmental concerns. The EU shall carry out technical and financial
assistance as well as know-how and training programs to maintain and modernize
economically viable production units, which are more operational and
competitive. Particular attention shall be accorded to small and medium-scale
projects, the promotion of local mining enterprises and the encouragement of
European and ACP investment.
Due
to dependence on imported petroleum products and the increasing shortage of
fuel the energy situation in most of ACP states is serious. The EU should help
the ACP states to find ways for saving and making efficient use of energy and
for new and renewable sources of energy. The main objectives for energy
development are to exploit the energy resources in an appropriate manner from
the technical, economic and environmental viewpoint and to encourage the
increased use of alternative energy sources (like solar energy). Therefore it
is important to strengthen the management and control of ACP states’ energy resources
in order to achieve strategic energy planing and implicate them in any
development project. The enhancement of the investment potential, promotion,
research and adoption of technology, maintenance of the basic infrastructure
and encouragement of the cooperation between ACP countries and EU are also
important fields.
The
financial support of the EU shall be given in form of risk capital,
mobilization of public and private capital and other financial and technical
resources.
The
restructure of ACP economies should be complemented by efforts to strengthen
and enlarge their productive base in order to revive economic growth. The
private sector plays an important part in this strategy. Therefore, it is
important to stable the environment, to promote entrepreneurship and investment
and to encourage SME’s to play a greater role in ACP economies. The EU will
provide technical assistance, support chambers of commerce, assist for the
creation new businesses, grant technology transfer and develop specific
programs to train and develop the capacity of individual entrepreneurs.
Besides
this, the EU will support the ACP states to increase their capacities to
provide services in order to improve the working of their economies. Most of
all services in the areas foreign trade, business sector regional integration,
tourism, transport, communications and information technology should be
extended.
As
the tourism is one of the main receipts of many ACP states the contracting
parties agreed to implement measures and operations at all levels to develop
and support tourism. The aim is to enable ACP states to benefit from national
and international tourism in the best way possible. Particular attention shall
be given to the need to integrate tourism into the social, cultural and
economic life of the people and to pay attention the ecological and
environmental aspects. The EU will assist the ACP states with professional
management development in specific skills, the establishment and strengthening
of tourism promotion centers, technical assistance and the development of
institutions and product development, like identification of the tourism
product, provision of technical assistance and investment in the tourist
industry.
Moreover,
the EU will support the market development of the ACP states’ tourism, like
provision of marketing and promotional measures and improve the tourism
information as well as the assessment of the socio-economic impacts of tourism.
Cooperation
in the area of transport shall be aimed at the development of road transport,
railways, port installations, shipping and air transport. In the fields of
communication cooperation are the development of postal service and
telecommunications, including informatics.
The
aim is a greater complementary of transport and communications systems, the
harmonization of national systems and the reduction of barriers to
frontier-crossing transport and communications. All cooperation projects funded
by the EU should ensure an appropriate transfer of technology and know how that
enables ACP nationals to plan, manage and operate new transport and
communications systems.
The
EU will also support the efficient shipment of cargoes at economically and
commercially meaningful rates and grant financial and technical assistance for
shipping, especially for shipping services, developing of interregional
shipping and promotion of joint ventures. Furthermore, the EU agreed to support
the ACP states in the field of information technology, e.g. development of
efficient networks, production of computer components and software and
participation in international activities in the field of data processing.
The
development of trade at all stages up to final distribution is an important
issue of the EU aid. The object is to ensure that the ACP states derive the
maximum benefit from the provisions of this agreement and participate under the
most favorable conditions in the EU, domestic, sub-regional and international
markets by diversifying the range and increasing the value and the volume of
ACP states’ trade in goods and services.
Therefore
the EU will support the macro-economic policies, the reform of administrative
procedures, the establishment of trade strategies, the application of modern
marketing techniques, the participation in trade fairs, the strengthening of
the infrastructure related to trade, the development of human resources and
professional skills in the field of trade and services and the private sector
development. The quality of ACP products shall be improved and adapted to
market requirements so that ACP states have better chances to penetrate third
country markets effectively.
It
is the aim of scientific and technical cooperation to support the efforts of
the ACP states to acquire their own scientific and technical skills, to master
the technology they
require
for their development and to target research in order to find solutions to
economic and social problems. Therefore ACP states’ needs concerning relevant
new technology should be identified, research programs must be established and
exchange and transfers of information and technology between all important
institutions in EU and ACP states is necessary. Also the promotion of local
technology, the reconsideration of imported technology and the improvement of
scientific and technical information and documentation are important areas.
The
EU supports the efforts of ACP states through regional cooperation and
integration and promotes integrated social, cultural and economic development
and greater regional self-sufficiency. Regional economic integration shall be
transcend the concepts of geographical location and cooperate also with overseas
territories or departments.
In
1989 the ACP countries were faced to serious economic and financial
difficulties and many of them had embarked on the reforms imposed by IMF and
World Bank.
This
economic crisis and continued and hindered any development efforts. The EU
helps the ACP countries with financial and technical support. The aim was not
only to speed up the economic progress but to promote also the social
development as an integral part of economic growth. The draconian reforms
required by IMF and World Bank, like privatizing bankrupt public sectors, lead
to concern about social unrest. Since the start of Lome IV the ACP countries
are involved in adjustment programs which ensure that its priorities are taken
into account so that any adjustments are tailored more closely to the specific
capacities and constraints of each country.
The
practical means and the implementation of a policy of human rights has been
included into the agreement and democratic principles and the consolidation of
the rule of law have been recognized as “essential elements”. The EU supported
these democratization efforts and granted the ACP states ECU 80 million for
institutional and administrative reform measures. Moreover, the ACP states
agreed to suspend member states, which violate these essential principles.
It
has been seen that the commercial advantages enjoyed by ACP states – compared
with other developing countries – were not enough to offset the competitive gap
between them and their competitors in Asia and Latin America; above all these
preference are now threatened by liberalisation of international trade. That is
why the revised Lome IV agreement gives greater priority to developing ACP
trade and tries to improve its competitiveness. The aim is not only to increase
ACP-EU trade but also to develop the markets of ACP states concerning domestic,
regional and international trade.
As
the tariff concessions granted by the EU had only little impact on the
development of ACP-EU trade the preferential treatment was extended to cover
nearly all products originating in the ACP states. The new provision grants a
general reduction of 16% in the customs duties and levies applied to products
which previously enjoyed no preference. Only olives and olive products, wine
and lemons are excluded from this PTA. Besides this, reference quotas have been
eliminated for all products except oranges and mandarins and tariff quotas now
apply throughout the year.
Moreover,
the ACP countries requested more liberal rules of origin. In the interest of
stimulating the growth of regional markets, 15% of the content of an ACP
product may be sourced from a neighbouring country.
At
least 50% of the risk capital allocated by the European Investment Bank will be
used for ACP States, which support and implement measures to promote investment
in the private sector, particularly in small and medium enterprises (SME’s).
The
tariff reduction for beef and veal has been increased from 90% to 92% and
includes Namibia in the list of beneficiary countries, allocating it a quantity
of 13,000 tons. The revised agreement includes also a joint declaration concerning
the protocol on bananas, whereby the volume of programmable assistance to ACP
banana exporters can be adjusted to take account to their specific problems.
Moreover, the tropical forest of ACP states should be protected. Therefore
internationally harmonized agreements for trade in tropical wood will be
developed.
The
aim of Stabex, a system, which guarantees a substantial export revenue, is to
limit the impact of a shortfall in resources on the least-developed, landlocked
and island states and to allow transfers to be used to support structural
adjustments. The 1994 market increase in world prices and a 20% increase on EU
support brought some respite to the Stabex system which had been running at a
constant deficit for many years.
Lome
IV wanted to participate a broad range of local partners, e.g. firms, trade
unions, NGO's etc. to support the economic development and to accompany the
democratization process. As the ACP states were concerned that this direct
access could undermine the prerogatives of the national authorities they found
a compromise with the EU which guarantees the role of the ACP authorities and
uses the decentralized cooperation with organisations in the ACP states the
best way possible.
The
ACP states have no freedom to choose their own principles, strategies and
models of economic and social development but have to follow the objectives of
the EU which are sustainable economic and social development, progressive
integration into the world market, consolidation of democracy and the rule of
law. The new programming of the EU is providing productive and flexible help,
which should ensure that money is not wasted: The indicative EU program
concludes each ACP state and grant them 70% of the allocation. After three
years the implementation of the program will be checked and if the result is
not satisfactory the second instalment of 30% could be redirected to other,
more effective performing, ACP countries.
The
EU increased its support for structural adjustment by 20%. The revised Lome IV
agreement offers a wider range of structural adjustment methods, allowing
direct budget support for countries with a convertible and freely transferable
currency. The aim is to create an environment, which is attractive to local
business and to foreign investors. This would be also interesting for EU
countries in terms of new markets and improved export and investment
opportunities.
The
EU may take safeguard measures if serious disturbances in a sector of its
economy arise. All other protective purposes have to be undertaken. Prior
consultations between ACP states and the EU have to take place before the
application of any safeguard clause.
The
debt situation of whole Africa is worsening. From 1985 to 1995 the total
identified debt stocks rose from US $ 100 billion to US $ 170 billion. Although
the EU is only a marginal creditor of ACP countries it decided to include a
section in Lome IV which states that special loans will increasingly be
replaced by grant aid. Besides this, debts of about ECU 135 millions have been
transformed into grants.
The
revised Lome IV agreement improves the effectiveness of aid and showed the need
to begin new discussions about the relationship between ACP and EU after 2000.
Due to liberalization of international trade it must be the future aim of
development aid to strengthen the international competitiveness of the aid
recipients. Besides this, regional trading groups could offset the adverse
effects of economic globalisation.