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Anger over looming change to EU regional funds
2:32 pm GMT+12, 05/09/2017, Samoa

By Nic Maclellan (Islands Business magazine) in Apia, Samoa

Island leaders have criticised looming changes to European development funding in the region, as Pacific members of the African, Caribbean and Pacific (PACP) group meet in Apia, Samoa.

Leaders “urged the EU not to make any cuts or further rebalancing” of money allocated through the 11th round of funding under the European Development Fund (EDF11).

The PACP meeting was held in the lead up to this week’s 48th Pacific Islands Forum in Samoa.

At the opening PACP ceremony, Forum Secretary General Dame Meg Taylor said:  “It is extremely disappointing that the region has not been able to draw down on the EDF11 funds to address the priority areas identified by leaders. Further, the region has witnessed in recent months the redistribution of funds within the Regional Indicative Program.”

The Forum Secretary General added: “It has also been brought to my attention that the European Union is considering a reduction of allocated funds for the Pacific Regional Indicative Program, particularly in the focal area of regional economic integration.”

The meeting comes as a crucial time, as the EU and ACP prepare for the renegotiation of the Cotonou Agreement. First signed in 2000, Cotonou is a framework for co-operation between European nations and their former colonies, in areas of political dialogue, development support and economic and trade cooperation.

Most EU development assistance to the Pacific is channelled through the European Development Fund (EDF), which globally allocates €30.5 billion for 2014–2020.  As an ACP–EU Joint Parliamentary Assembly convened in Suva in June 2015, the EU and Forum Secretariat signed the EDF11 Pacific Regional Indicative Program 2014-2020 (RIP). Worth €166 million, this regional program was to be allocated between the fifteen Pacific members of the ACP group.

Funding roadblocks

In 2017, we’re halfway through EDF11, yet funds are still not yet flowing. In their communique, PACP members “expressed concern that a mid-term review [of EDF11] has been initiated without any disbursements being made.”

They expressed particular concern for funds directed to Regional Economic Integration, which are targeted at tourism and private sector development. Leaders urging the EU “that this allocation of €37 million should not be reduced any further and guarantees from the EU be sought to this effect.”

The polite diplomatic language of the PACP communique doesn’t mask the fact that Pacific leaders are deeply frustrated, with EU development assistance procedures notoriously inflexible and cumbersome. EU officials in turn express concern about capacity constraints in the Pacific.

After the PACP meeting, Dame Meg said: “We’re disappointed of course, because our countries have been insisting on the drawdown of these funds and the negotiations have been protracted. Of course, this is European money, not our money. We know that there are issues in Europe because of the refugee issues, migration issues into Europe, and they are looking to be much more efficient in the way they manage their resources in order to be able to cope with that.

“Cutting back for the Pacific has been a concern because there’s been, at the moment, a cut back and a redistribution,” she said. “We understand there’s going to be further cuts and we’ve asked our leaders to send a very strong message to the European Union – please don’t cut anymore!”

Striking a post-2020 deal

The Cotonou Agreement, signed in 2000, ends in 2020. Debates are now beginning about the shape and content of a successor agreement.

Dame Meg noted: “As the expiry of the Cotonou Agreement in 2020 approaches, we will need to be proactive to ensure the development support under this arrangement is channelled effectively to our region, in line with our development priorities. We must ensure our priorities are reflected in any future partnership agreement with the European Union.”

But the RIP debate is not the first time that Cotonou structures have foundered. Despite regular EU expressions of trade support, European fisheries policy adversely affected the finalisation of a comprehensive regional Economic Partnership Agreement (EPA), first proposed under Cotonou in 2000. The regional EPA treaty was due to be finalised in 2007, but is yet to be completed, with negotiations suspended for another three years.

With key European markets threatened, Fiji and Papua New Guinea signed interim EPAs in 2009, to ensure ongoing market access for crucial commodities like sugar and fish. But smaller island nations have not followed their path to finalise a regional deal.

At the 2014 Forum in Palau, EU High Representative Catherine Ashton made a firm commitment that Europe would soon finalise the EPA negotiations. Despite this pledge, in May 2015 the European Commission trade commissioner called for deferment of further EPA negotiations for three years, sparking outrage from many Pacific countries. At the time, Dame Meg Taylor said: “For the European Commission to propose a deferment of the negotiations without a formal political dialogue, particularly given its previous assurance to Pacific leaders in 2014, is unacceptable.”

Trade policy is complicated by EU fisheries policy, which attempts to subvert the sustainability principles advocated by the Forum Fisheries Agency (FFA) and the Parties to the Nauru Agreement (PNA). In a 2013 study, the European Centre for Development Policy and Management (ECDPM) acknowledged that “the perception exists that the EU has tried to use a trade agreement on goods and services (EPA) to put pressure on Pacific countries and the Western Central Pacific Fisheries Commission to obtain advantageous measures that can further European commercial interests.”

This week, Forum host Prime Minister Tuilaepa Sailele Malielegaoi of Samoa confirmed: “Issues which caused the suspension relate mainly to fish. There seems to be an impasse on both sides. The message therefore is that for the two parties to move forward, they need to give up a little on both sides. There needs to be a compromise and I think the leaders will need to address that issue because up till need the ministers have been dealing with it. Only the leaders can give that OK for a compromise. “

Transformation in Europe

Despite the debates over EPA and EDF11, the EU is a crucial development and political partner of Forum island states. Over many years, EU delegates to Forum meetings have urged an EU-Pacific alliance around climate policy, especially at a time the Anglosphere is locked into fossil fuel initiatives (tar sands in Canada, coal in Australia and Donald Trump in the United States).

The EU Commissioner for International Cooperation and Development Neven Mimica will lead a large European delegation to Apia this week. Samoa will host an EU-Pacific Gender Conference on the margins of Forum, which will sign a financing agreement worth €18 million to tackle violence against women and girls in the Pacific.

At a time of dynamic global geo-politics, Forum leaders are aware that changes within the EU will transform long-standing partnerships. The June 2016 Brexit referendum on UK’s EU membership has created new uncertainty about London’s contribution to the EDF. Former British colonies in the Pacific have long relied on the United Kingdom to support them, through measures such as British subsidies for sugar or Commonwealth Foundation support for civil society initiatives.

Pacific leaders have valued the Commonwealth Heads of Government Meeting (CHOGM) as an opportunity for face-to-face interaction with African Least Developed Countries and Caribbean Small Island Developing States —crucial partners during global climate negotiations.

Brexit has opened new uncertainty and Forum countries have begun to reposition themselves, building ties with other European powers (at the Forum meeting in Pohnpei last year, leaders granted Germany the status of Post-Forum Dialogue Partner for the first time). As Fiji takes up the Presidency of the UNFCCC Conference of the Parties (COP23) this November, Germany will serve as co-host in Bonn for the global climate talks.

In the lead up to post-Cotonou negotiations, Pacific states also need to co-ordinate with African and Caribbean partners through the ACP.  At the PACP meeting in Apia, Prime Minister Tuilaepa Sailele Malielegaoi acknowledged the work of the ACP Secretariat and ACP Ambassadors in Europe “for their ongoing efforts at ensuring that important issues of significance for our region are advanced”.

The Samoan Prime Minister thanked the ACP Secretariat for “supporting the needs and priorities of small and vulnerable states, that are of crucial importance for our region. Substantial efforts remain and are needed on all fronts with our regional organisations to ensure our efforts are prioritised and coordinated and that the political will and solidarity of the ACP remains strong.”

Ambassadors take the lead

The EU Parliament will discuss their negotiating directive for a post-Cotonou agreement in November 2017, while last May the ACP Council began the process of assembling a negotiating format and team. Tuilaepa told the PACP leaders that: “Negotiations for a post-Cotonou arrangement need to commence no later than August next year.”

This week’s PACP meeting appointed Papua New Guinea and Samoa as ministerial representatives on the ACP Central Negotiating Group, with Fiji and Solomon Islands as alternates. But with only six Forum Island states represented in Brussels, the European-based Pacific ambassadors will bear the brunt of the negotiations.

PNG’s Ambassador in Brussels Joshua Kalinoe will co-ordinate these ambassadors and is attending the Forum in Apia this week. He told Islands Business: “At the ACP meeting in 2015, the leaders agreed that the ACP go into these negotiations as one group and all the negotiations should be done in Brussels. So the regional representatives in Brussels will carry the burden of their regions.”

 “An issue we have to address as a region is capacity constraints,” he said. “If we don’t spend the money in time, the EU may be forced to carry out a rebalancing exercise that may be to our disadvantage.”

The Cotonou Agreement should have been the Suva Agreement, but the May 2000 coup led by George Speight scuttled the scheduled signing in Fiji. The EU-ACP agreement was then signed in Cotonou, Benin in June that year.

Because of this, Samoa’s Prime Minister believes that the Pacific would be the best place to host the signing of a successor to Cotonou:

“The Pacific is a very popular venue”, Tuilaepa said. “When we put across the request to host at about 3am in the morning in 1999, as the last item in the last negotiation for Cotonou, the Europeans did not sit down. They all got up and clapped and clapped and clapped. The next thing, we saw the champagne coming and we all got drunk for the Pacific. And we got drunk again when we didn’t have the meeting!”

Islands Business asked the EU Ambassador for the Pacific for an interview, but he declined to comment.



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