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EU Development Policy: Constitutional and Legislative Foundation(s)
Published online by Cambridge University Press: 27 October 2017
Abstract
The Union’s constitutional regime for development policy has traditionally progressed alongside two parallel tracks. In addition to a general regime for all developing countries, there exists a special regime for African, Caribbean and Pacific Countries (ACP countries). The Union’s general development policy originated as a flanking policy within the Common Commercial Policy. This trade-centricity was only relativised by the insertion of an express development aid competence in 1992. The Union’s development cooperation competence can today be found in Article 209 of the Treaty on the Functioning of the European Union (TFEU) and allows the Union to adopt legislative acts or conclude international agreements to reduce poverty within developing countries. By contrast, the Union’s special development regime has had a very different constitutional source. It stemmed from the ‘colonial’ association to the Union (qua its Member States) of certain dependent ‘oversees countries and territories’ for which the 1957 Treaty of Rome had provided a limited development competence. Once these countries gained independence in the 1960s, however, the Union had to transfer this special regime to its contractual association competence under Article 217 TFEU. The association regime for ACP countries has itself undergone a number of significant changes with the transition from the Lomé Convention(s) to the Cotonou Agreement.
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References
1 Holland, M and Doidge, M, Developing Policy of the European Union (Basingstoke, Palgrave Macmillan, 2012) 1 CrossRefGoogle Scholar.
2 Title II of Part V of the Treaty on the Functioning of the European Union (TFEU).
3 Ibid, Title III of Part V.
4 Ex art 110, Treaty establishing the European Economic Community.
5 Under a MFN clause, states offer to every state the treatment previously reserved to the most-favoured nation. The clause thus ‘equalises’ trade rules by preventing discrimination between various third states. The MFN clause within the GATT can be found in art I:1 GATT, which states that: ‘With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and charges, and with respect to all rules and formalities in connection with importation and exportation, and with respect to all matters referred to in paragraphs 2 and 4 of Article III, any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.’
6 For an overview of the ideas behind the ‘new international economic order’, see Hart, JA, The New International Economic Order (London, Palgrave, 1983)CrossRefGoogle Scholar; and Hudson, M, Global Fracture: The New International Economic Order (London, Pluto Press, 2005)Google Scholar.
7 In 1971, the GATT first granted a temporary waiver from the MFN principle, allowing for tariff preferences for developing countries (cf Decision of the Contracting Parties of 25 June 1971, relating to the establishment of ‘generalized, non-reciprocal and non discriminatory preferences beneficial to the developing countries’ (BISD 18S/24)). This temporary solution became permanent in 1979 when the GATT integrated an ‘Enabling Clause’ (cf Decision of 28 November 1979 (L/4903)), which states that: ‘Following negotiations within the frame-work of the Multilateral Trade Negotiations, the Contracting Parties decide as follows: 1. Notwithstanding the provisions of Article I of the General Agreement, contracting parties may accord differential and more favourable treatment to developing countries, without according such treatment to other contracting parties. 2. The provisions of paragraph 1 apply to the following: a) Preferential tariff treatment accorded by developed contracting parties to products originating in developing countries in accordance with the Generalized System of Preferences.’
8 Cf ‘Enabling Clause’ (n 7) para 2(d): ‘Special treatment on the least developed among the developing countries in the context of any general or specific measures in favour of developing countries.’
9 Cf Regulations 1308–14/71. For an English translation, see: www.wto.org/gatt_docs/English/SULPDF/90840264.pdf.
10 Case 827/79 Amministrazione delle finanze dello Stato v Entreprise Ciro Acampora [1980] ECR 3731 [5], emphasis added.
11 Case 45/86 Commission v Council (Generalised Tariff Preferences) [1987] ECR 1493. But see already Case 231/81 Hauptzollamt Würzburg v H Weidenmann GmbH & Co [1982] ECR 2259.
12 Commission v Council (n 11) [10].
13 Ibid [17]–[19].
14 Ibid [19]. See already Opinion 1/78 (International Agreement on Natural Rubber) [1979] ECR 2871.
15 Regulation 978/2012 of 25 October 2012 applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No 732/2008 [2012] OJ L303/1. According to art 43 of the Regulation, this new tariff regime will only apply from 1 January 2014. Until 31 December 2013, the preferences established under Regulation 732/2008 of 22 July 2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011 and amending Regulations (EC) No 552/97, (EC) No 1933/2006 and Commission Regulations (EC) No 1100/2006 and (EC) No 964/2007 [2008] OJ L211/1 will continue to apply (cf Regulation 512/2011 of 11 May 2011 amending Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011 [2011] OJ L145/28).
16 Article 1(2) of Regulation 978/2012 (n 15). Any preferential treatment may be with-drawn in certain circumstances. The Regulation thereby distinguishes between the temporary withdrawal due to certain unacceptable circumstances in the beneficiary country, such as systematic violations of international law (arts 19–21), and the following situation: ‘Where a product originating in a beneficiary country of any of the preferential arrangements referred to in Article 1(2), is imported in volumes and/or at prices which cause, or threaten to cause, serious difficulties to Union producers of like or directly competing products, normal Common Customs Tariff duties on that product may be reintroduced’ (art 22(1)).
17 Ibid art 7(1). These non-sensitive products are listed in Annex V. The list of eligible countries is established in Annex II of the Regulation.
18 Ibid art 7(2). There are a number of special rules for certain categories of sensitive products in art 7(2)–(6). Moreover, there is also an absolute limit to these tariff preferences: they will be suspended ‘in respect of products of a GSP section originating in a GSP beneficiary country, when the average value of Union imports of such products over three consecutive years from that GSP beneficiary country exceeds [17.5 per cent]’: ibid art 8(1) and Annex VI(1).
19 Ibid art 9. The Conventions are listed in Annex VIII.
20 Cf art 11 of Regulation 978/2012 (n 15), which states: ‘1. The products included in the special incentive arrangement for sustainable development and good governance are listed in Annex IX. 2. The Commission shall be empowered to adopt delegated acts, in accordance with Article 36, to amend Annex IX to take into account amendments to the Combined Nomenclature affecting the products listed in that Annex.’
21 Ibid art 12(1). For a number of exceptions to this rule, see para 12(2).
22 On the notion of ‘positive conditionality’ and the conformity of the GSP+ with GATT, see Bartels, L, ‘The WTO Enabling Clause and Positive Conditionality in the European Community’s GSP Program’ (2003) 6 Journal of International Economic Law 507 CrossRefGoogle Scholar; Bartels, L, ‘The WTO Legality of the EU’s GSP+ Arrangement’ (2007) 10 Journal of International Economic Law 869 CrossRefGoogle Scholar.
23 These countries are listed in Annex III. The list of GSP+ countries is momentarily empty, but the Regulation invites applications from developing countries to the Commission (cf Article 10 of Regulation 978/2012 (n 15)).
24 These countries are listed in Annex IV of Regulation 978/2012.
25 This rule originated in the ‘Everything but Arms’ Regulation. Cf Regulation 416/2001 of 28 February 2001 amending Regulation (EC) No 2820/98 applying a multiannual scheme of generalised tariff preferences for the period 1 July 1999 to 31 December 2001 so as to extend duty-free access without any quantitative restrictions to products originating in the least developed countries [2001] OJ L60/43.
26 Faber, G and Orbie, I, ‘Everything But Arms: Much More than Appears at First Sight’ (2009) 47 Journal of Common Market Studies 767, 768CrossRefGoogle Scholar.
27 The EC Treaty contained two legal bases within its original title on ‘Development Cooperation’: art 179 EC allowed for the adoption of unilateral measures in the form of multiannual programmes, while art 181 EC entitled the Union to conclude international agreements.
28 Article 209(1) and (2) TFEU.
29 Case C-268/94 Portugal v Council [1996] ECR I-6177. For an extensive analysis of this case, see Peers, S, ‘Fragmentation or Evasion in the Community’s Development Policy? The Impact of Portugal v Council ’ in Dashwood, A and Hillion, C (eds), The General Law of EC External Relations (London, Sweet & Maxwell, 2000) 100 Google Scholar.
30 Portugal v Council (n 29) [39].
31 Ibid [55], [60] and [76].
32 Ibid [24]–[29].
33 Case C-91/05 Commission v Council (ECOWAS) [2008] ECR I-3651. For an extensive discussion of this case, see Hillion, C and Wessel, R, ‘Competence Distribution in EU External Relations After ECOWAS: Clarification or Continued Fuzziness?’ (2009) 46 CML Rev 551 Google Scholar.
34 ECOWAS (n 33) [65]–[68], emphasis added.
35 On the demarcation between the CFSP and other external policies of the Union in light of art 40 TEU, see Schütze, R, European Constitutional Law (Cambridge, Cambridge University Press, 2012) 197–99CrossRefGoogle Scholar.
36 On this point, see also Case C-403/05 Parliament v Commission (Philippine Borders) [2007] ECR I-9045. In this case, the European Parliament had sought annulment of a Commission decision approving a project relating to the security of the borders of the Republic of the Philippines. It argued that the project pursued the aim of international security and the fight against terrorism and as such would not form part of development cooperation (at [41]). The Court partly accepted this argument by insisting that ‘there is nothing in the contested decision to indicate how the objective pursued by the project could contribute effectively to making the environment more conducive to investment and economic development’ (at [67]).
37 Article 208(1) TFEU, emphasis added.
38 cfBroberg, M, ‘What is the Direction of the EU’s Development Cooperation after Lisbon?’ (2011) 16 European Foreign Affairs Review 539 Google Scholar, 546: ‘the Lisbon Treaty has not led to a limitation of the objectives that will guide the EU’s development cooperation policy’; Martenczuk, B, Die Kooperation der Europäischen Union mit Entwicklungsländern und Drittstaaten und der Vertrag von Lissabon’ (2008) 2 Europarecht-Beiheft 36 Google Scholar, 41: ‘keine Veränderung der Reichweite der Entwicklungspolitik der Union’.
39 Cf art 21(2) TEU: ‘(d) foster the sustainable economic, social and environmental development of developing countries, with the primary aim of eradicating poverty; (e) encourage the integration of all countries into the world economy, including through the progressive abolition of restrictions on international trade’; and finally: ‘(b) consolidate and support democracy, the rule of law, human rights and the principles of international law’.
40 In this sense, see also Koutrakos, P, The EU Common Security and Defence Policy (Oxford, Oxford University Press, 2013) 211 CrossRefGoogle Scholar. Of course, it all depends on how broadly the Court will interpret ‘poverty reduction’. For a broad definition of the concept, see Joint Statement by the Council and the representatives of the governments of the Member States meeting within the Council, the European Parliament and the Commission on European Union Development Policy: ‘The European Consensus’ (2006/C 46/01) para 11, which defines poverty as relating ‘to human capabilities such as consumption and food security, health, education, rights, the ability to be heard, human security especially for the poor, dignity and decent work’.
41 The non-exclusive nature of the development cooperation competence was confirmed in Case C-316/91 Parliament v Council (Lomé Convention) [1994] ECR I-625, especially [34]: ‘the competence of the [Union] in the field of development aid is not exclusive’.
42 On the notion of Union pre-emption, see Schütze (n 35) 363–68.
43 Cf art 209(2) TFEU.
44 Article 208(1) TFEU. See also art 210(1) TFEU: ‘In order to promote the complementarity and efficiency of their action, the Union and the Member States shall coordinate their policies on development cooperation and shall consult each other on their aid programmes, including in international organisations and during international conferences. They may undertake joint action. Member States shall contribute if necessary to the implementation of Union aid programmes.’
45 On the various legislative instruments, see Bartelt, S, ‘The Institutional Interplay Regarding the New Architecture for the EC’s External Assistance’ (2008) 14 European Law Journal 655 CrossRefGoogle Scholar. For illustrations of Union agreements in the field of developing cooperation, see only Cooperation Agreement between the European Community and the Islamic Republic of Pakistan on Partnership and Development Fields [2004] OJ L378/23; and Convention between the European Community and the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) concerning aid to refugees in the countries of the Near East (2002 to 2005) [2002] OJ L281/12.
46 Article 209(1) TFEU.
47 Regulation 1905/2006 of 18 December 2006 establishing a financing instrument for development cooperation [2006] OJ L378/41.
48 Ibid art 1 in combination with Annex I.
49 Ibid art 2(1).
50 Ibid art 4.
51 Ibid art 5.
52 Ibid arts 6–10, which deal—respectively—with the development aid priorities of Latin America, Asia, Central Asia, the Middle East and South Africa.
53 Ibid art 11.
54 Ibid art 12.
55 Ibid art 13.
56 Ibid art 14.
57 Ibid art 15.
58 Ibid art 16.
59 The Regulation will need to be amended soon. For a recent proposal, see European Commission, ‘Proposal for a Regulation (EU) of the European Parliament and of the Council of 17 March 2010 amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation’ COM(2010) 102 final.
60 Cf arts 18(1) and 19 of Regulation 1905/2006 (n 47).
61 Ibid art 18(1).
62 Ibid art 6(d).
63 For the Union’s regional strategy vis-a-vis Latin America, see: http://eeas.europa.eu/la/rsp/07_13_en.pdf.
64 For the ‘Regional Indicative Programme 2011–2013 for Latin America’, see: http://eeas. europa.eu/la/csp/11_13_mtr_en.pdf.
65 For the 2011 Action Plan, see: http://ec.europa.eu/europeaid/documents/aap/2011/aap_2011_amlat_en.pdf.
66 For an analysis of this ‘French’ negotiating objective in the Treaty of Rome, see Grilli, E, The European Community and the Developing Countries (Cambridge, Cambridge University Press, 1994) ch 1 Google Scholar.
67 The 1957 EEC Treaty established a special regime for these ‘Overseas Countries and Territories’ (OCTs) that can today be found in the—strange—Part IV of the TFEU. Articles 198–204 TFEU here set out the rules that apply to the OCTs with art 200 TFEU constitution ally establishing a customs union and art 203 TFEU providing the Union with a special legal basis to establish more detailed rules. The list of OCTs that are constitutionally associated with the Union can be found in Annex II of the EU Treaties.
68 Article 198 TFEU, emphasis added.
69 Ibid art 199(1) and (3).
70 Ibid art 217, emphasis added.
71 Prior to the Lomé Convention, the Union had already concluded the Yaounde Convention(s) on the basis of art 217 TFEU. These Conventions will not be discussed here, but for a brief overview of these Lomé predecessors, see Holland and Doidge (n 1) 49 et seq.
72 There were four Lomé Conventions. For an overview of each, see Simmonds, KR, ‘The Lomé Convention and the New International Economic Order’ (1976) 13 CML Rev 315 Google Scholar; Simmonds, KR, ‘The Second Lomé Convention: The Innovative Features’ (1980) 17 CML Rev 415 Google Scholar; Simmonds, KR, ‘The Third Lomé Convention’ (1985) 22 CML Rev 389 Google Scholar; Simmonds, KR, ‘The Fourth Lomé Convention’ (1991) 28 CML Rev 521 Google Scholar.
73 Simmonds, KR, ‘The Lomé Convention and the New International Economic Order’ (1976) 13 CML Rev 315, 324Google Scholar.
74 Cf Grilli (n 66) 27: ‘STABEX was the most important innovation of Lomé I. It met one of the long-standing demands of developing countries to have a measure of insurance against commodity revenue instability.’
75 On this point, see Babarinde, O and Faber, G, ‘From Lomé to Cotonou: Business as Usual?’ (2004) 9 European Foreign Affairs Review 27 Google Scholar.
76 On this point, see Arts, K, ‘ACP-EU Relations in a New Era: The Cotonou Agreement’ (2003) 40 CML Rev 95 Google Scholar; Holland and Doidge (n 1) 16: ‘almost every state in Asia had substantially out-performed those of the ACP, despite not receiving any such concessionary privileges’.
77 For the text of the consolidated version of the Cotonou Agreement, see: http://ec.europa. eu/europeaid/where/acp/overview/documents/cotonou-consolidated-fin-ap-2012_en.pdf. For an analysis of the Agreement, see Bartelt, S, ‘ACP-EU Development Cooperation at a Crossroads? One Year after the Second Revision of the Cotonou Agreement’ (2012) 17 European Foreign Affairs Review 1 Google Scholar.
78 Cotonou Agreement, art 1.
79 For an overview of the (economic) rationale behind EPAs, see Curran, L, Nilsson, L and Brew, D, ‘The Economic Partnership Agreements: Rationale, Misperceptions and Non-trade Aspects’ (2008) 26 Development Policy Review 529 CrossRefGoogle Scholar. The reciprocity underlying the EPAs would make them in principle conform to the GATT, which allows non-generalised pref erential arrangements with non-LDCs only when covered by art XXIV GATT, that is, the creation of a (reciprocal) preferential trade agreement. On the distinctive objective of WTO compatibility, see art 34(4) Cotonou Agreement: ‘Economic and trade cooperation shall be implemented in full conformity with the provisions of the WTO, including special and differential treatment, taking account of the Parties’ mutual interests and their respective levels of development. It shall also address the effects of preference erosion in full conformity with multilateral commitments.’
80 Article 85(1) Cotonou Agreement: ‘The least developed ACP States shall be accorded a special treatment in order to enable them to overcome the serious economic and social difficul ties hindering their development so as to step up their respective rates of development.’ The list of least-developed countries is given in Annex VI.
81 Ibid art 35(2) Cotonou Agreement: ‘Economic and trade cooperation shall build on regional integration initiatives of ACP States. Cooperation in support of regional cooperation and integration as defined in Title I and economic and trade cooperation shall be mutually reinforcing.’ For the provisions of the Cotonou Agreement dealing specifically with regional cooperation and integration, see arts 28–30.
82 The principle of differentiation and regionalisation is a core principle of the Cotonou Agreement (ibid art 2).
83 These African regions are: West Africa, Central Africa, Eastern and Southern Africa, the East African Community and the Southern African Development Community.
84 For a brief look at the EPA with CARIFORUM, see M Cremona, ‘The European Union and Regional Trade Agreements’ (2010) European Yearbook of International Economic Law 245, 263 et seq.
85 With the remaining six ACP regions, the Union has concluded interim EPAs. See only Interim Agreement with the Southern African Development Community, available at: http://trade.ec.europa.eu/doclib/docs/2009/july/tradoc_143981.pdf. All these interim EPAs were supposed to come into force on 1 January 2008 (after the end of a World Trade Organization waiver) and the Cotonou record has thus not been great. Cf Holland and Doidge (n 1) 93: ‘The record for implementing EPAs has been a disappointment for the Cotonou architects. What was presumed would be an appealing new trade and development paradigm has come to be viewed with increasing scepticism—except in the Caribbean—by the ACP States.’
86 The EDF was created in the 1957 Implementing Convention on the Association of the Overseas Countries and Territories with the Community (Rome, 25 March 1957), whose art 1 stated: ‘The Member States shall, under the conditions laid down below, participate in measures which will promote the social and economic development of the countries and territories listed in Annex IV to this Treaty, by supplementing the efforts made by the authorities responsible for those countries and territories. For this purpose, a Development Fund for the Overseas Countries and Territories is hereby established, into which the Member States shall, over a period of five years, pay the annual contributions set out in Annex A to this Convention. The Fund shall be administered by the Commission.’
87 Cf Cotonou Agreement, Annexes I (a/b).
88 Bartelt (n 77) 21.
89 Cf Regulation 617/2007 of 14 May 2007 on the implementation of the 10th European Development Fund under the ACP-EC Partnership Agreement [2007] OJ L152/1; as well as Regulation 215/2008 of 18 February 2008 on the Financial Regulation applicable to the 10th European Development Fund [2008] OJ L78/1.
90 Cotonou Agreement, Annex IV, art 19 A(1).
91 Above, nn 47 et seq.
92 Cotonou Agreement, Annex IV, art 34 states: ‘The Commission shall undertake the financial execution of operations carried out with resources from the multi-annual financial framework of cooperation under this Agreement, with the exception of the Investment Facility and interest-rate subsidies.’
93 Cf Regulation 617/2007 (n 89) art 2(3)(a): ‘the partner country or region concerned shall to the extent possible be the leading force in the programming of [Union] assistance’. This idea of co-ownership with regard to ACP aid contrasts with the more unilateral nature of the DCI.
94 Cotonou Agreement, Annex IV, art 2.
95 Ibid.
96 Ibid Annex IV, art 4(1).
97 Ibid Annex IV, art 4(3).
98 Regulation 617/2007 (n 89) art 7.
99 Cf European Commission, ‘Preparation of the multiannual financial framework regarding the financing of EU cooperation for African, Caribbean and Pacific States and Overseas Countries and Territories for the 2014–2020 period (11th European Development Fund) (Communication)’ COM(2011) 837 final, 2: ‘The integration of EU development cooperation with ACP States into the EU budget is foreseen for 2020, at the end of the 2014–2020 multi-annual financial framework, coinciding with the year of expiry of the Cotonou Agreement.’
100 The deleted ex art 179(3) EC provided that the Union’s general development competence ‘shall not affect cooperation with the African, Caribbean and Pacific countries in the framework of the ACP-EC Convention’.
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