I propose to deal first with the ACP-EC - Cotonou - Agreement. I will provide an outline of the agreement while we are waiting for the Minister.
From the outset, the Lomé conventions were a unique model of contractual trade and co-operation between the developed North and the developing South. Lomé combined a system of trade preferences together with development co-operation. Co-operation was generous, with billions of euro being granted to the African, Caribbean and Pacific countries in the form of direct assistance for development projects and supports at times when there occurred price fluctuations on the export of agricultural produce and ore. Trade preferences were also beneficial to the ACP countries as they introduced a measure of stability and the protocols on rice, beef and sugar are vital to some ACP countries' economies. However, while the agreements have been positive, overall they have not been as beneficial as was intended and certain valid criticisms have been levelled against Lomé.
With some notable exceptions, such as Uganda and Mozambique, the development co-operation between the EU and the ACP countries does not appear to have achieved the hoped for results, with the populations of some of these countries, particularly in sub-Saharan Africa, continuing to be stuck in the same abject poverty traps as heretofore. Poverty in these countries, the least developed in the world, does not just mean lack of jobs, it frequently means no food for their populations in addition to life threatening diseases such as malaria, TB and HIV-AIDS. Women and children are frequently the ones who pay the ultimate price.
What has happened is that one event or a combination of events have occurred that undermine programmes which have the potential to lift these countries out of poverty and give them the necessary impetus to find their own way forward. Among the reasons for the lack of success are internal and external conflicts, the fact that some development programmes were not sustainable, inefficiencies in the implementation of those programmes and corruption in a number of the countries receiving aid.
Under Lomé agreements, ACP countries have preferential access to EU markets for certain products. In addition, there are agreed protocols giving special terms for ACP commodity imports to the EU. However, under World Trade Organisation rules, these preferences and protocols have to be removed. The least developed countries are, however, exempt from the rules. This has been reinforced after the EU sponsored "everything but arms" duty free access was agreed by the WTO. While some of the non-least developed ACPs are apprehensive about losing preferences and protocols - one can understand their concern - we in Ireland discovered that preferences can be a golden cage. Although they offer protection of sorts, one cannot depend on them and growth is restricted. While the Lomé preferences and protocols were generous, they failed to generate the type of growth and trade that was expected when they were introduced. Free trade on the other hand forces industry in countries to produce products efficiently at competitive prices, which in turn leads on to better competitiveness and growth. What is needed in these countries is change with some necessary framework and capacity building which would gradually allow the ACPs to integrate their economies into the world market.
Cotonou attempts to learn lessons from Lomé and combines this with much of the new strategic thinking on development co-operation shared by international organisations, the EU and the member states. With the objectives of poverty eradication, sustainable development and gradual integration of the ACP countries into the world economy, the new agreement emphasises the importance of partnership where, unlike in the past, the developing country itself takes the lead role in developing strategies for its own future. The EU helps with budgetary support, regular political dialogue with the country concerned and the introduction of an innovative and trade framework which will involve the private sector. The focus of the new structures will be directed at conflict prevention, good governance, particularly the fight against corruption, the inclusion of other players in the economy besides government, and greatly improved economic and trade performances.
The new agreement uses political dialogue to prevent or at least mitigate conflict, increases respect for the three essential elements of democracy, the rule of law and human rights, and fosters good governance with particular emphasis on combating corruption. Development co-operation will be carried out by working with the country involved to develop strategies and programmes which will provide sustainable development. A new trade regime is proposed to replace the preference system under Lomé. Negotiations to introduce this system of free trade agreements between individual regions of the ACP with the EU are scheduled to commence next September and to enter into force in 2008.
The internal agreement covers the arrangements for funding the first five years of the Cotonou Agreement, under which the member states will agree to fund €13.5 billion. Added to this will be €1.7 billion from the European Investment Bank and a further €9.9 billion from the past unspent Lomé funding. The overwhelming amount of this fund will be provided in non-repayable development co-operation grants. However, €2.2 billion will be spent on the investment fund to provide loans for private enterprise in ACP countries.
The Cotonou Agreement between the EU and the 77 countries from Africa, the Caribbean and Pacific islands offers a positive way forward for development co-operation and trade partnership. Many of these countries are well known to Ireland and have shown their friendship over the years. They were central to the massive support we received in securing a seat on the UN Security Council in 2000. The EU is the biggest provider of aid to developing countries and this agreement reinforces that commitment. This is a message that will again be borne in mind as part of the EU approach to the Monterey convention on financing for development, which is currently taking place.
However, the EU's past implementation record is not good and it is not certain that the promised reforms have healed that problem. We must also ensure that funding is only provided to those countries which carry out the programmes which they agreed with us and that this money is not diverted to corrupt uses or used to allow government funding to be diverted for military purposes. The essential and fundamental elements must strictly be complied with and sanctions under Article 96 of Cotonou must be rigorously applied against countries like Zimbabwe.
It is to be hoped that the new trade regime can be negotiated within the time limits agreed with the WTO. There has been some slippage in the timetable. It is noted that despite our greatly increased development aid budget, Ireland's commitments have not increased in this agreement over the percentage agreed in Lomé. There are, however, ways of becoming more deeply involved with some of the countries in question and the investment facility offers a means by which both Ireland Aid and the Irish private sector could become involved in assisting economic growth in them.
Cotonou is a landmark agreement in relation to partnership co-operation between North and South, and I recommend that the committee agrees to its ratification and the acceptance of the internal agreement which accompanies it.