Summary
The EC communication on the Post Cotonou ACP-EU negotiations has bene described as ‘a confusing mixture of liberalisation and positive policy recommendations’. There are some areas which could be built on for the benefit of ACP agricultural producers and exporters, but there are also areas which could narrow the options which ACP governments have for supporting integrated agro-food sector development. The growing EU member states focus on ensuring EU interests are more effectively promoted through the future ACP-EU partnership, alongside a growing focus on migration and security areas as well as the promoting the economic interests of EU companies in ACP markets is unlikely to lead to any substantive changes which enhance the contribution of the EU-ACP partnership to the integrated development of ACP agro-food sectors. However this remains a terrain of political struggle with a key question being: how effectively prepared are ACP structures and institutions for engaging in the political struggle which lies ahead in the post-Cotonou ACP-EU partnership negotiations.
- The General Approach
On 12 December 2017 the EC posted its recommendation for a Council decision on the pending renegotiation of the ACP-EU partnership agreement. The EC wants to see the new agreement depart ‘even more from donor-recipient dynamics’. The EC advances three overarching strategic interests which the EC hopes to pursue through the agreement include:
- forging a political partnership focused on building peaceful, stable, well-governed, prosperous and resilient states and societies;
- accelerating progress towards the attainment of the Sustainable Development Goals;
- building effective alliances in international settings with a view to driving global action forward (1).
The proposed agreement will not be limited in time but could be terminated by one of the parties. The communication‘s strong focus on migration issues is noteworthy. There is also a strong focus on ‘accelerated action to fight environmental degradation and climate change’ (1).
However EC objectives cannot be divorced from growing EU member states’ demands that any future EU-ACP agreement should better reflect EU priorities and concerns and more effectively promote EU economic and political interests in an increasingly competitive global arena (see companion article ‘Implications of the EC orientation for Post Cotonou negotiations for ACP agro-food sectors’, 28 January 2017). Specific EU interests identified include ‘migration; peace and security, investment’ and promoting ‘the EU as a stronger global actor’ (1).
Against this background the EC recommendation proposed the conclusion of umbrella agreement which would provide ‘the common foundation, applicable to all members of the Partnership’ and which ‘will list general objectives, principles and priorities, and enable increased cooperation at international level’ (2). This would be supplemented by a much stronger regional focus, through the conclusion of 3 specific individual compacts with Africa, the Caribbean and the Pacific countries, nominally tailored to each region’s needs.
Significantly within the shift of focus to regional compacts the door would be left open for ‘the involvement or adhesion of other countries’, so as to promote a ‘strengthening (of) the ‘Africa as one’ approach’, while ‘respecting the existing bilateral association agreements with North African countries’ (1). The EC envisages the regional compacts being ‘protocols to the agreement, providing for a comprehensive legal framework of the relations’, but with simplified procedures which allow ‘a flexible adjustment to changing circumstances’.
- Trade and Investment
In terms of trade and investment issues the EC maintains ‘the EPAs have been the main deliverable’ of the Cotonou Partnership Agreement. The EC notes how during stakeholder consultations emphasis was placed on ‘the need to strengthen those provisions that enable a more effective promotion of vital EU interests (particularly on migration and investment)’ (1). The EC recommendations for a Council Decision speak of the new agreement promoting a significant increase in ‘the level of sustainable and responsible investment flows to their mutual advantage’ (1) and places a strong emphasis on significantly enhancing investment opportunities and facilitating private sector development (1).
Parallel to this there is a strong focus on establishing dialogues which ‘facilitate the process of economic reform’, with this implicitly focussing on reform in ACP countries and not reforms aimed at fostering more equitable trade and economic outcomes within the ACP-EU partnership arrangements. There is also a strong focus on promoting an ‘enabling regulatory environment’ (2). This raises once again a range of issues which ACP governments have been reluctant to engage on in the EPA negotiations.
- Agriculture and Food Security Issues
Agriculture and food security issues are addressed in discussions of the Africa Compact as part of some 28 areas which should be addressed in the new EU-Africa partnership. Specifically in regard to agriculture the EC highlights the need to:
- ‘boost and diversify agricultural production, including through improved access to finance and markets and elimination of incentives that generate unsustainable production systems;
- strengthen the position of agricultural producers and exporters in global value chains, including through the removal of technical barriers to trade, the building of capacity in the area of sanitary and phytosanitary standards, and the promotion of fair trade schemes;
- ensure the registration and protection of geographical indications (GIs) for African and European agricultural and food products and undertake actions to support local communities to take full advantage of GIs to move up regional and global value chains’ (2).
On food security the EC Communication sets the following priorities, namely to:
- ‘ensure that all are able to access sufficient, affordable, safe and nutritious food, with a view to eradicating famines and other types of food crises;
- enhance coordination between development and humanitarian action so as to better anticipate, prevent and prepare for food crises, ensure timely action for making food available locally, and address the root causes of excessive price volatility;
- mitigate the exposure of the most vulnerable populations through strengthened social safety nets;
- ensure that the commitments on fighting all forms of under-nutrition are implemented and that special attention is paid to populations suffering from under-nutrition where institutional capacity is weak and frequent disasters or conflict have a devastating effect on the most vulnerable groups’;
- prevent the rise of non-communicable diseases by supporting healthy diets and healthy lifestyles’.
In agriculture and food security spheres as elsewhere as one prominent NGO based observer of EU trade policy has pointed out the EC’s recommended approach to the post-Cotonou negotiations is ‘a confusing mixture of liberalisation and positive policy recommendations’.
- Agriculture and EU Development Cooperation
Another issue of relevance in the agro-food sector is the singular lack of any specific recommendations for future instruments for the financing of EU-ACP development cooperation activities. The EC limits its comments in this regard to an emphasis on the Sustainable Development Goals as the framework for future EU-ACP cooperation with a listing and brief exploration of the multiplicity of areas to be addressed. This is complemented by a reiteration of the EU’s commitment ‘to provide 0.7% of its Gross National Income (GNI) as ODA’ and the commitment to providing ‘0.2% of its GNI to LDCs within the timeframe of the 2030 Agenda’. Closely linked to this, there is a commitment to deploying ‘financial assistance where it is most needed and can have most impact, particularly the LDCs, SIDS and countries in situations of fragility and conflict’.
This being noted it is acknowledged that attention will also need to be paid ‘to the challenges related to inequality and social exclusion, as well as to the challenges faced by middle-income countries’. This is stressed in the context of proposals for adopting a comprehensive and integrated approach to mobilise financing’, and developing ‘new forms of engagement with more advanced ACP countries, including the possibility of co-financing’ (2).
However on future financial cooperation instruments and how these will build on the existing ACP-EU acquis the EC documents have little say. Remarks are limited to the statement that the future Agreement will ‘state that different and complementarity modalities (e.g. project support, budget support, blending, trust funds) and modes of support delivery (including aid for trade, twinning, technical assistance and capacity building) will be used depending on each country’s capacities, needs and performance and in the framework of dialogue among the ACP and EU’. This would appear to give the EU considerable flexibility in how much and in what ways future development assistance is deployed (2).
- Policy Coherence for Development
Finally on an issue of critical importance in the agro-food sector, namely the EU’s legally binding commitment to promoting policy coherence for development the EU is proposing the future agreement should ‘include the commitment of each Party to individually and collectively maximise the benefits and minimise the negative impact that their policies may have on the other Party’ (2). This however needs to be seen in a context of the repeated reiteration by the EC that it agricultural policies are perfectly compatible with its development policy commitments. This is a position which neatly sides-steps any consideration of a range of substantive issues which arise from the trade and market consequences of EU policy measures in the agro-food sector. These range from the highly managed poultry trade regime to the market consequences of the EU abandoning its maximum ceiling on skimmed milk powder taken into public storage in response to a market crisis in the EU (see companion article ‘Fears over impact EU SMP stocks on global dairy prices being realized’, 2 November 2017).
| Comment and Analysis
– Agricultural Cooperation The proposal made in the context of the agricultural section of the proposed Africa Compact to taking measures to ‘strengthen the position of agricultural producers and exporters in global value chains, including through the removal of technical barriers to trade’, could potentially prove of value. This would be the case if it were to: a) open up scope for more effective dialogue on the design and implementation of EU SPS and food safety controls, which are better suited to the situations of ACP producers, while at the same time ensuring the integrity of SPS and food safety control measures; b) address the issue of unfair trading practice along ACP-EU supply chains in line with the principles and regulatory measures being set in place within the EU. Currently analysis from UNTAD suggests there is systematic bias against small holder producers and small scale exporters in how the EU designs and implements its SPS and food safety control requirements. This does not relate to the underlying EU SPS and food safety requirements but rather the modalities set in place for ensuring compliance. There are multiple examples of where un-necessary burdensome requirements have been set in place which simply fail to take on board the production structures within which smallholder farmers operate. Similarly there is growing evidence of unfair trading practices along ACP-EU supply chains which carry profound commercial consequences and which would not be tolerated under the various codes of conduct being set in place at member states level in the EU (see companion article ‘Role of UK Groceries Code Adjudicator could be extended’, 17 July 2017). There is an urgent need for the EU to systematically address these issues not only in relations with Africa but in relations with all ACP regions. However given the ‘confusing mixture of liberalization and positive policy commitments’ it is unclear to what extent positive policy commitments are likely to be realised. An important test case of the EC’s commitment to strengthening the position of ACP agricultural producers and exporters in global value chains will be the extent to which addressing unfair trading practices along ACP-EU supply chains are incorporated into current EC regulatory proposals for reducing abusive trading practices along agro-food sector supply chains (see companion article ‘Proposed EC Regulatory Initiative on UTPs Needs to be Extended to ACP-EU Supply Chains’, 8 September 2017). Currently EC proposals focus exclusively on internal EU agro-food sector supply chains and singularly neglect the unfair trading practices perpetrated on ACP producers by EU importers. In addition while it is unclear what the reference to ‘the elimination of incentives that generate unsustainable production systems’ is intended to refer to, given the broader direction of EU policies it is unlikely to refer to the elimination of EU agricultural policies and support measures which promote expanded EU exports to ACP market at prices which undermine local agro-food sector development and in no way reflect actual EU production costs. It is much more likely to refer to the dismantling by ACP governments of the non-tariff trade policy measures referred to in the EPA provisions dealing with the removal of quantitative restrictions on imports from the EU and the obligation to accord EU companies the same treatment as national producers. This could leave a number of agro-food sectors across a range of ACP countries vulnerable to intensified competition from EU exporters, these range from poultry meat production in the Caribbean and Southern Africa through onion production in West Africa to milk production in East Africa. – The EC’s Policy Environment Focus The focus on facilitating the process of economic reform and promoting an enabling regulatory environment raises the issue of what policies the EU is likely to promote in the agro-food sector as part of this ‘enabling regulatory environment’. The indications are this will be driven by EU agro-food sector export interests. This could see demands for the complete abolition of the use of non-tariff trade policy tools which are routinely used by African governments to deal with the external trade consequences of trade distorting EU policy measures. In sectors such as the poultry meat sector this could lead the EC to advocate the abandonment by ACP governments of managed trade policies to which the EU itself remains firmly wed in the interests of the promotion of the development of its own poultry sector. It is acknowledged within the EU poultry sector that in the absence of the EU’s current managed trade regime, more competitive third country suppliers would come to dominate the EU market, with EU producers being relegated to the production of niche poultry products (see companion article, ‘Report highlights vulnerability of EU poultry sector to liberalisation of trade in poultry meat’, 5 September 2017). The fact that the EU’s own experience is singularly ignored in developing policy recommendations for ACP governments on what an ‘enabling regulatory environment’ should entail is something which should give ACP governments and EU policy makers pause for thought. – Investment and Promotion of Private Sector Engagement There is a need to look closely at how EU objectives in regard to promoting investment in ACP countries can be reconciled with ACP structural development objectives in the agro-food sector. Across a number of agro-food sectors EU investment flows into ACP countries have led to the denationalization of agro-food sectors and the integration of ACP agro-food sectors into the global strategies of individual EU transnational corporation. These strategies of individual EU companies are not always consistent with local agro-food sector structural development objectives. – Financial Cooperation Dimension and the Agricultural Sector The issue of the lack of specificity in EU commitments on the modalities for the deployment of financial assistance to development cooperation activities is a matter of some concern Traditionally agriculture and rural development were a major focus of nationally allocated and programmed development cooperation activities. Indeed, the EC has traditionally been the second largest donor of development assistance financing to the agricultural sector in sub-Saharan Africa (second only to France). For example, between 1975 and 1990 from 28.8% and 41.4% of EDF resources was deployed in support of agriculture and rural development activities. This subsequently fell and a mere 8.1% of NIP resources under the 9th. While subsequently efforts have been made to reassert the importance of the agricultural sector, it is unclear how the new EC policy focus on European policy concerns will translate into funding priorities in regard to the agriculture sector. In this context it should be recalled that traditionally a central component of the ACP-EU partnership has been the existence of a grant financed multi-annual financial allocations the utilization of which is determined by ACP governments acting individually and collectively. While since the late 1980s this central element has been eroded by the emergence of more thematic instruments over which the EC has greater control, the multiannual programming approach has nevertheless remained a core element of the ACP-EU development cooperation partnership. The EC’s neglect of any discussion of the financial instruments for the conduct of development cooperation activities alongside proposals for great flexibility to allow adjustment to changing circumstances implies an even stronger shift away from this traditional core element of the ACP-EU relationship, towards even greater use of thematic instruments control of which is retained by the European Commission. Against this background the danger exists that the EC’s emphasis on ‘strengthening the role of civil society and the private sector’ may just be an additional dimension of moving away from deploying development assistance through ACP government authorities. Overall, the absence of any clear details on future financial instruments for the conduct of development cooperation activities and how these will build on the existing ACP-EU acquis in the EC communication suggests that the very concept of multi-annual programmable assistance which has been at the heart of ACP-EU cooperation since 1975 is to be finally abandoned. This could lead to a reduction of development assistance support to agriculture and rural development programmes implemented through ACP governments, or more ominously may make the provision of such support contingent upon regulatory reforms to establish what the EC considers an ‘enabling regulatory environment’. |
Sources:
(1) Recommendation for a Council Decision, ‘Authorising the opening of negotiations on a Partnership Agreement between the European Union and countries of the African, Caribbean and Pacific Group of States’, COM(2017) 763 final, 12 December 2017
https://ec.europa.eu/europeaid/sites/devco/files/pc-com-2017-763-final-act-20171212_en.pdf
(2) Annex: Recommendation for a Council Decision, ‘Authorising the opening of negotiations on a Partnership Agreement between the European Union and countries of the African, Caribbean and Pacific Group of States’, COM(2017) 763 final, 12 December 2017
https://ec.europa.eu/europeaid/sites/devco/files/pc-com-acp-2017-763-annex-20171212_en.pdf