How and why have the EU's external policies changed toward developing countries ?

Content

List of abbreviations

1. Evolution of EU-development policy

2. From Yaoundé I to Lomé III

3. Lomé IV

4. Fundamental changes

5. The Cotonou-agreement

6. Conclusion

Bibliography

List of abbreviations

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Relations with developing countries are a long-established part of the European Union’s external affairs and the “(…) EU’s contributions to international development are not only unsurpassed but have become the standard against which the rest of the world measures itself and is judged.” (Babarinde, 1998: 128).^[1] For most of the past 40 years the ACP-countries have been at the heart of EU-development affairs. Yet, several factors, mainly caused by the end of the Cold War, contributed to the transformation of the Union’s development policy in general.

The following paper analyses how and why the EU’s external policies have changed towards developing countries, thereby focusing on the ACP-EU relationship. Section one discusses the evolution of the Union’s development policy. The Yaoundé- and Lomé-agreements are examined in the subsequent sections. Section four then analyses the developments that led to the most fundamental transformation of the Union’s development policy- the Cotonou Agreement, which will be subject to the last section. The paper concludes by evaluating the transformation of EU-development policy in general.

1. Evolution of EU-development policy

EU-development policy falls under the Community(EC)-pillar, managed by the European Commission, but constitutes an area of shared competence.^[2] The evolution of an explicit Community-development policy was due to three factors:^[3] First, with the introduction of the CAP in 1967 the EC became involved in food aid, which culminated in the EC’s global food aid policy in 1986. Second, a side-effect of the strong economic EC-presence was that the Community increasingly engaged in development-promotion.^[4] Third, Community involvement in development affairs originated from the need to accommodate the remaining colonial interests of the member states. On the insistence of France the Treaty of Rome provided for solidarity with former member states’ colonies.^[5] From these provisions the principles of association evolved, which form the basis of Community development-cooperation.^[6] Thus, the association agreements with the ACP-countries^[7] were originally at the centre of EC-development cooperation.^[8]

2. From Yaoundé I to Lomé III

The first formal treaty of association between the EC and the AASM-countries, the Yaoundé

Convention, entered into force in 1964.^[9] It provided for closer cooperation and preferential trading arrangements that involved a privileged AASM-access to EC-markets.^[10] Furthermore it acknowledged a legally independent status of the associates. At the end of the 1960s the AASM-countries had become increasingly influential.^[11] This was reflected in the second Yaoundé-agreement of 1969, which set crucial precedents. While the former agreement had been imposed on the associated countries, Yaoundé II was subject to ratification by all participating states. Moreover, it established joint institutions such as the Association Council and the parliamentary assembly, which were important fora for the articulation of AASM-

demands.^[12]

Also, the Generalized System of Preferences (GSP), launched within the GATT in 1971, has to be mentioned here. It accorded to the developing countries preferential access to EC-markets for industrial products and some processed foods.^[13]

The Yaoundé-agreements symbolized the first vital step towards a comprehensive EC-development policy.

Yet, three main factors contributed to the creation of a new development-cooperation framework- the Lomé Convention. First, the ‘francophone’ selectivity of the Yaoundé-agreements was criticised by other member states. Second, the increasingly empowered associates called for a ‘New International Economic Order’.^[14] And third, the UK accession in 1973 necessitated the broadening of EC-development cooperation as to include former Commonwealth-colonies.^[15] Thus, the Lomé I Convention of 1975 linked the EC with 46 associated African, Caribbean and Pacific countries, thereby establishing the ACP-group.^[16] Lomé I was revolutionary in the following respects: it provided for non-reciprocal preferences for most exports from ACP-countries to the EC^[17] ; it stressed the notion of equal partners, mutual interests and the respect for the ACP-country’s sovereignty^[18] ; it introduced a new EDF-instrument (STABEX) to ameliorate the impact of price fluctuations on export earnings^[19] ; and it added separate trading protocols for sensitive products.^[20] The position of the ACP-countries

was further enhanced through the strengthening of the association-institutions and the establishment of an ACP Committee of Ambassadors to facilitate dialogue and cooperation.

The subsequent Lomé II (1980) and Lomé III-agreements (1985) introduced only few innovations (i.e. Lomé II established the Sysmin).^[21]

Several developments in the 1980s required a more profound revision of the Lomé-framework. First, the general oil price-rises caused a debt crisis in many developing countries, including the majority of the ACP-states.^[22] The existing Lomé-provisions were insufficiently flexible to deal with these problems. Second, the neo-liberal ideological climate of the 1980s (i.e. market liberalization, foreign direct investment, removal of subsidies) directly influenced EC-development policies. Third, the accession of Spain and Portugal in 1986 generated pressures to include Latin American and Mediterranean non-members in the EC-development framework, which indirectly weakened the priority-position of ACP-countries.^[23] And fourth, the ACP-countries could not take advantage of the new opportunities provided by the EC’s Single Market programme due to their deteriorating economic situation.^[24] Additionally, the Single Market programme introduced impediments to ACP-exports, “(…) which required levels of investment largely unavailable to ACP countries.” (Bretherton/Vogler, 1999: 119).^[25]

These developments had a significant effect on EC-development cooperation, which in turn was reflected in the revised Lomé IV Convention.

3. Lomé IV

The fourth Lomé Convention of 1990 was of ten years duration^[26] and introduced significant innovations. It provided for decentralized cooperation, diversification of the ACP-country’s economies, promotion of the private sector and increased regional cooperation.^[27] Most importantly, however, an explicit political conditionality was introduced- Article 5 linked aid-provisions to the promotion of human rights. The “(…) achievement of high human rights standards was no more the necessary byproduct of the development process but an autonomous goal and a constituent element of development itself.” (Hilpold, 2002:60).^[28]

[...]

^[1] The Union’s significance as an international actor regarding development policy is for example underlined by agreements with the World Bank or the United Nations Development Programme to produce common development strategies. (Bretherton and Vogler, 1999: 109). In the late 1990s the EC and its Member States accounted for 60 percent of the world aid. Also see European Union (2000) and Grilli (1993).

^[2] The TEU of 1993 established this provision. The member states’ focus is still mainly on their bilateral development programmes. Also see de Chávarri Ureta (2001: 52-63) and Hewitt/Whiteman (2004: 133-148).

^[3] See Bretherton and Vogler, 1999: 110.

^[4] The Union engaged in development promotion through economic diversification and trade incentives that encouraged industrialization in developing countries. (Ibid).

^[5] (Ibid: 112). Articles 131-6 provided for “association of non-European countries and territories with which Member States have special relations”. (Ibid) Thus the Treaty of Rome introduced the idea of development through cooperation but this cannot be regarded as provision for exclusive Community-competence in the area of development policy and has to be seen in the colonial context. (Hilpold, 2002:54-55). On France’s role in EU-development affairs see Claeys, 2004: 113-132).

^[6] Bretherton and Vogler, 1999: 112.

^[7] At the beginning, the ACP-countries (AASM-countries) mainly included former French colonies. See Smith, 2003.

^[8] Yet, the EU increasingly concluded agreements with other countries such as MENA (association agreements with Greece and Turkey in early 1960s), Latin America (ALA; reciprocal trading arrangements) and Asian countries (i.e. broader cooperation agreements with Vietnam and Nepal in 1996). Yet, these agreements are not as institutionalised as the ACP-agreements. Bretherton/Vogler (1999: 130-132). Generally, main elements of the EU’s development policy include trade cooperation (to stimulate economic growth and development), financial and economic assistance (The EDF was specifically established for this purpose and derives from national funds rather than from the Community budget. Economic assistance is supposed to remedy short-term imbalances and infrastructure problems in the developing countries.), technical cooperation (the sharing of know-how to increase production-efficiency), debt relief and institutions for dialogue. (Babarinde ,1998: 135)

^[9] Yaoundé I linked the then six EC-member states and 18 associated African States, including Madagascar (mainly former French colonies) and was of five years duration. It generally maintained the core aspects of the previous agreements.

^[10] In the 1960s approximately 80% of the associated countries’ trade involved EC-member states and 98% of the aid to the AASM-countries was EC-related. (Bretherton and Vogler, 1999: 113).

^[11] This was supported by anti-imperialist sentiments during the late 1960s and early 1970s.

^[12] Ibid: 114. The parliamentary assembly was composed of AASM-representatives and members of the European Parliament.

^[13] Babarinde, 1998: 137. The GSP was to foster the economic development and industrialization of developing countries.

^[14] Hilpold, 2002: 56.

^[15] The UK was particularly keen to put its special trading preferences for bananas and sugar under the EC-umbrella.

^[16] The Georgetown Agreement of 1975 gave the ACP-group a separate legal status as international organization. (Bretherton/Vogler, 1999: 115). Lomé I was again subject to renegotiation every five years.

^[17] Hilpold, 2002: 57. The Community-concessions to ACP-countries were made unilateral. Also, the EDF-funds were considerably increased.

^[18] This included the right of each ACP-state to determine its own internal policies. Yet, Hurt (2003: 162) notes that the notion of equal partners was contested; the equality was asymmetrical.

^[19] Bretherton/Vogler, 1999: 115. The Stabex was to compensate ACP-countries for the shortfall in export due to fluctuations in prices/supply of commodities and thus addressed the prevailing commodity-crisis.

^[20] European Union (w.y.). These included sugar, beef and veal as well as bananas. The banana protocol, for example, ensured duty-free entry to the EC-market for specific quotas of bananas.

^[21] The Sysmin system established loans to support the mining industry of those ACP-countries that were dependent on it. Lomé III shifted the main attention from the promotion of industrial development to self-reliant development based on self-sufficiency and food security. (European Union, w.y.)

^[22] Bretherton/Vogler, 1999: 118. These countries experienced balance of payments difficulties that resulted in deepening national debt.

^[23] A broader focus of EC-development policy was strongly supported by the Spanish Development Commissioner Manuel Marin, who came into office in 1988. (Lister, 1997: 146).

^[24] Bretherton/Vogler, 1999: 119. The Single Market programme principally provided stimulus to ACP-countries that seeked to increase or diversify their exports. Yet, falling commodity prices and rising debt as well as the failure of the New International Economic Order made it hard for these countries to take advantage of the programme.

^[25] Also, trade liberalization measures to agricultural products were extended in the GATT Uruguay Round, which further threatened to erode ACP-preferences. (Ibid).

^[26] See Huber, 2000. Lomé IV linked the then 12 EC-member states with 68 ACP-countries and provided for a mid-term review at the end of 5 years. Prior to new Convention the EC had seeked advice from the World Bank and the IMF on how to best support structural adjustments as a means to economic growth. See Brown, 2004, 17-41.

^[27] Lomé IV also stressed the strengthening of the position of women and the protection of the environment. On Gender issues in development policy see Elgstrom, 2000: 457-476.

^[28] Yet, this positive human rights-conditionality did not involve a non-compliance clause. Moreover, the Lomé III Convention had already made an indirect reference to human rights in its Article 4 and Annex I of the Convention attributed a high priority to human rights. (Hilpold, 2002: 59).