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Indo-African Business
Quarterly
Issue: Nov'07-Jan 2008
  COVER STORY
 
   
 

EU-Africa Joint Strategy on Local & Global Issues

The European Union and Africa have agreed to forge a strategic partnership aimed at facing common challenges together, ranging from climate change to development, energy, migration, peace and security, trade and regional integration, and good governance human rights. This Joint EU-Africa Strategy was launched at the 2nd EU-Africa Summit held on 8 and 9 December in Lisbon. The strategy followed negotiations between the EU and the African Union (AU). Based on a deeper and broader political dialogue, Europe and Africa now intend to leave the archaic and narrow minded "donor-beneficiary relationship" behind and create a partnership between equals. The Joint Strategy is expected to enable both partners to work increasingly together on global issues. It will also involve civil society as well as institutions.

Africa and the EU will enhance cooperation in the context of international initiatives to counter the illicit trade and to promote the transparent and equitable management of natural resources, such as the Kimberley certification process, the Forest Law Enforcement Governance and Trade (FLEGT) and the Extractive Industry Transparency Initiative (EITI).

Africa and the EU will also, together, address issues relating to the fight against corruption, bribery, counterfeiting, money-laundering, tax-fraud, as well as other aspects of economic governance. In this context, both sides will take measures to facilitate the investigation and return of illegally acquired assets, including funds, to their countries of origin.

On all these issues, Africa and the EU recognise that civil society, the media and democratic institutions have important roles to play in ensuring transparency and accountability.

The improvement of economic governance and the investment climate are essential elements to build Africa's economic strength and allow Africa to move away from continuous donor support and find its place in global markets. In this regard, the development of domestic markets and regional integration are key in creating larger and more integrated markets that, in conjunction with enhanced regulatory convergence, will help to attract investment, increase productive capacities and therefore foster sustainable economic growth and development.

One of the priorities of the Africa-EU partnership will be to help Africa improve its productive capacities, move up the value-added scale and become less dependent on raw materials and simple processed products, which in the long term is the best way to avoid a deterioration of the terms of trade and participate in, and benefit from, the global economy. Africa and the EU will also, together with other international partners, work to promote fair trade. In order to achieve this, the key goals which will be pursued by Africa-EU cooperation on trade and regional integration will be: (i) private sector development, supported by foreign investments, to strengthen the supply side of African economies; (ii) the development and strengthening of physical infrastructure networks and related services, which are needed for the movement of persons, goods, information; and (iii) trade integration, which is essential to increase both South-South and North- South trade flows.

Private Sector Development

The promotion of an investment and business friendly environment is a core prerequisite for the development of the private sector, within the framework of a stable political environment and governance-related reform. These efforts should be underpinned by appropriate African economic growth strategies aiming at maintaining macroeconomic stability, promoting regulatory reform and harmonisation, protecting intellectual property rights and standards, promoting investment codes, and establishing credible laws and guarantee systems. In this context, it will also be necessary to address key investment disincentives such as fraud, corruption, money laundering and organised crime.

Cooperation between Africa and the EU in this field will aim to promote stable, efficient and harmonised legal frameworks for business, free of red tape, as well as to promote Corporate Social Responsibility. Both sides will cooperate on technology development and transfer, quality infrastructure and skills development in support of the industrialisation process. It will also aim at enhancing appropriate business support services, and facilitate better access to credit, especially for converting activities from the informal to formal sectors, which is also a key contribution to enabling more women to participate in the formal economy and to facilitating investment and business activities by members of diasporas.
The partnership will, furthermore, contribute to the facilitation and strengthening of the dialogue between, and within, governments and with the private sector on both continents via appropriate continental and regional networks. In this regard, the EU Africa Business Forum will play a key role in bringing together entrepreneurs and public and private investors from both Europe and Africa in order to discuss ways of improving the investment and business climate and to raise the profile of doing business in Africa.

Trade & Integration

In line with the Abuja Treaty, establishing the African Economic Community, trade and integration are recognised as essential components of the wider process of regional integration and development, which shall be duly promoted by the present partnership.
Regional Economic Communities will play an essential role as building blocks of the continental integration process. In order to do so, Africa and the EU will work together to make trade rules and regimes more coherent and harmonised. This will require the gradual harmonisation of trade, customs and industrial policies, laws, regulations and procedures. Africa and the EU will cooperate to put in place programmes and mechanisms to develop norms, standards and quality control at regional and pan-African levels with reference to international standards.

Africa and the EU will enhance cooperation in the context of international initiatives to counter the illicit trade and to promote the transparent and equitable management of natural resources, such as the Kimberley certification process, the Forest Law Enforcement Governance and Trade (FLEGT) and the Extractive Industry Transparency Initiative (EITI). Africa and the EU will also, together, address issues relating to the fight against corruption, bribery, counterfeiting, money-laundering, tax-fraud, as well as other aspects of economic governance. In this context, both sides will take measures to facilitate the investigation and return of illegally acquired assets, including funds, to their countries of origin.

On all these issues, Africa and the EU recognise that civil society, the media and democratic institutions have important roles to play in ensuring transparency and accountability.

One key area will be regulations and technical standards, including sanitary and phytosanitary (SPS) measures. It is widely recognised that meeting international SPS standards is a key component for advancing the competitiveness and market access of
African agriculture and food processing industry. Improving African standards will therefore enable greater access to international markets, the promotion of South-South trade and the diminution of non-tariff barriers to trade. Both sides will continue to promote market access for African goods and services to international markets, in particular the EU market. Another key area will be enhancing pharmaceutical production capacities in accordance with international rules on good manufacturing practices (GMPs) and efficient regulatory procedures, including the control of counterfeit medicines and of other products, while promoting access to affordable essential generic medicines, vaccines and commodities for major prevailing diseases and epidemics. In this regard, the capacity of African countries to make full use of flexibilities in TRIPs, in line with the Pharmaceutical Manufacturing Plan for Africa, will be developed. A third key area will be preferential market access for environmentally friendly technologies and products.

Africa-EU cooperation will be underpinned by stronger bilateral development-oriented trading relationships between Africa and the EU: (i) through the implementation of Economic Partnership Agreements (EPAs) with African EPA regions (West Africa, Central Africa, Eastern and Southern Africa and the Southern African grouping), which involve the RECs and other African organisations, and the implementation of the EU-Mediterranean Free Trade Agreement with the countries of North Africa, (ii) by supporting African business in its efforts to meet EU norms and standards and to develop its productive capacity , and (iii) by cooperating in developing export strategies and business-to-business relations. The EPA-agreements, as instruments for development, are to be implemented at the sub-regional level, however, the AU-EU dialogue is relevant to the overall process of regional integration and interface with developing Regional Economic Communities. Both sides stress the need for the EPA process to be supportive of Africa's regional and continental integration agenda on the basis of the Abuja Treaty.

The above efforts, in particular the EPA implementation process, as well as more general efforts to better integrate into the rules-based world trading system and to more effectively use trade in the promotion of growth and the eradication of poverty, will be supported by the Community (EDF and other instruments) and EU Member States in accordance with the EU Aid for Trade Strategy, as well as by contributions from other development actors. In coherence with the efforts to further integrate at sub-regional level, efforts to better integrate at continental level will also be supported.

At the global level, Africa and the EU will seek to promote global economic governance, and sustain Africa's efforts to integrate into the world economy. To achieve this, the coordination of African and EU positions in international fora will be promoted. Africa and the EU will seek to join efforts to conclude the Doha Development Agenda as soon as possible. This could involve, in particular, seeking common ground to address key issues for development, such as reductions in trade distorting subsidies, greater access to the markets of all WTO members, reductions in tariff peaks, better anti-dumping rules, as well as the implementation of reforms in view of facilitating trade and ensuring the security of the supply chain. In this context, Africa and the EU will cooperate to build technical and institutional capacity for negotiations in trade and related areas, such as quality and food safety, industrial goods, TBT/SPS and commodities issues in order to promote African trade and safeguard the health and rights of consumers.

Finally, Africa and the EU will strengthen their cooperation in the field of statistics with the aim of helping policy makers and other users of statistics and ongoing efforts in the coordination and harmonisation of statistics in Africa within the framework of the African Charter for Statistics.

The regional economic communities (RECs) and other organisations involved in the EPA negotiations are: ECOWAS, UEMOA, ECCAS, CEMAC, COMESA, SADC, SACU, EAS, EAC and IOC.

Accelerating Progress towards the MDGs

For the Millennium Development Goals (MDGs) to be achieved, African countries need to sustain economic growth and equitable social development, and both Africa and the EU have to boost their investments, better focus their policies and deliver on the promises made. Mid-way between 2000 and 2015, supporting Africa's efforts to achieve the MDGs remains the key challenge for the EU's external and development cooperation policy vis-à-vis the continent. In this regard, efforts should focus on making a key contribution to the achievement of the 8 MDGs on (1) poverty and hunger, (2) universal primary education, (3) gender equality and empowerment of women, (4) child mortality, (5) maternal health, (6) HIV/AIDS, malaria and other diseases, (7) environmental sustainability, and (8) the development of a partnership for development.

Development Cooperation
In order to achieve the objectives set out in the present Joint Strategy, partners should urgently work on more predictable and less volatile aid, focusing on results. The EU therefore reaffirms its determination to reach the targets agreed in the context of the Monterrey consensus in May 2005 to increasing ODA volume to individually achieve 0.51% ODA/GNI for those Member States which joined the EU before 2002; to strive to achieve 0.17% for those Member States which joined the EU after 2002 within their respective budget allocation processes, and collectively achieve 0.56% ODA/GNI by 2010 as an intermediate step towards achieving the UN target of 0.7% by 2015. By 2010, attaining the 0.56% ODA/GNI should correspond to at least an additional €20 billion in ODA per year, and no less than 50% of this increase will benefit the African continent.

The EU will respect and implement these commitments and will take appropriate measures to guarantee a timely delivery of aid commitments towards Africa.

Partners will also make further efforts to keep debt at sustainable levels and, where debt becomes unsustainable, consider debt cancellation in the framework of existing initiatives and fora.
Africa and the EU will also strengthen their cooperation in the implementation of the Paris Declaration on aid effectiveness. They will further promote alignment and harmonisation of development aid instruments, increase the use of general and sectoral budget support where circumstances permit, and cooperate closely to implement the EU's commitments to promote complementarity and division of labour.

The predictability of development aid should be promoted and the EU will work toward a limitation of conditionalities and further move towards result-oriented aid, with a clear link with MDG indicators and performance. In this context, Africa and the EU will also improve and expand their cooperation in the field of statistics so that policies and decisions are made on the basis of clear evidence.

Moreover, the two sides fully recognise that development cooperation alone is not enough to achieve these objectives and that non-aid policies on both sides need to be better geared towards attaining the MDGs, including by enhancing Policy Coherence for Development (PCD). To this end, the EU and the AU will discuss how the coherence between policies and initiatives with development objectives could be enhanced, on the basis of stronger commitments on both sides.

In order to ensure coherence and complementarity with the work of other international actors, including emerging partners, Africa and the EU recognise the need to broaden their cooperation with third partners through enhanced tripartite dialogue. Similarly, both parties recognise the importance of triangular cooperation for the development of the two continents.

Human & Social Development

Employment issues, notably social protection, the shortage of employment opportunities and the promotion of decent work in Africa, will be jointly addressed, with priority being given to creating productive jobs in the formal economy, improving poor living and working conditions in line with the UN decent work agenda and integrating the informal economy into the formal. Investments in private sector development will be promoted, looking in particular to youth and women.

The service sector will be further developed as this is where women and youth are mostly involved. Africa and the EU will make technology work for employment, and will ensure that infrastructure works to create jobs for Africans, both skilled and unskilled. In addition, attention will be paid to the creation of jobs through micro-finance schemes. As generally disadvantaged groups often benefit substantially from such microfinance schemes they should be actively pursued.

 
 
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