COUNCIL OF ACP MINISTERS


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	SUMMARY RECORD OF THE 54TH MEETING OF THE COUNCIL OF ACP MINISTERS (KINGSTON, JAMAICA, FROM 18TH TO 20TH MAY 1992) Ref: ACP/25/009/92AMS/evo/yz Brussels, 9 October 1992

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OPENING CEREMONY

The opening ceremony of the 53rd session of the ACP Council of Ministers was presided over by Rt. Hon. Ralph MARAJ, Minister for Foreign Affairs of Trinidad and Tobago and President-in-Office of the ACP Council of Ministers.

Having welcomed delegates to the Caribbean region and to Jamaica, the President offered, on behalf of Council, profound thanks and congratulations to the Government and people of Jamaica for the warm reception they had given the delegates and the wonderful facilities they had put at Council's disposal.

The 54th session of Council, attended by a record number of Ministers, was taking place in the context of changing world situations such as the désintégration of the Communist world and the dismantling of the concept of centrally planned economic systems, the collapsing of the apartheid system and the re-emergence of South Africa on the world stage.

All of that was compounded by the GATT Uruguay Round and its politics of compromise and trade-offs which, though generally welcome, often posed considerable challenges to the survival of many of the fragile ACP economies.

Against that background, the ACP Group needed not only to increase its cohesiveness, unity and strength of purpose, but also it should re-examine its role and position as it related to the industrial world in general, and the EEC in particular.

The President of Council spoke of the difficulties faced by ACP nationals living in many Community Member States, which were worsened by the rise in many Community capitals of ultra-conservatism accompanied by racial discrimination and xenophobia. These, he said, were of great concern to the ACP Group.

He urged Council to effect on the consequences of a diversion of resources and investment from the countries of the South to those of Eastern Europe and other areas.

Concluding his opening speech, the President invite Council to focus attention on a number of new elements on the agenda that could point to the direction that cooperation between the ACP Group and the European Community would be taking in future. They included notably

- the deepening and widening of ACP-EEC dialogue,

- the search for solutions to the Stabex impasse,

- ACP efforts to ensure that the Community adhered to Article 12 of the Ivth Lomé Convention concerning the consultation mechanism between the two sides

- the examination of the questions of ACP refuges, drought, hunger and the spread of diseases.

All these elements called for new ideas, new strategies and a new resolve to find solutions.

COUNCIL'S PROCEEDINGS

1. Adoption of the agenda [ACP/25/001/92 Rev.4

Council adopted the draft agenda, Doc. ACP/25/001/92 Rev.4, after including under item 7 "Hurricanes and Typhoons".

2 Appointment of a Rapporteur and Friends of the Rapporteur.

The President recalled that in accordance with established practice, when a meeting was held away from the Group's headquarters, the host country was invited to be

Rapporteur. Consequently, Jamaica was designated Rapporteur of the 54th session of Council.

Council agreed to the appointment of the following countries as "Friends of the Rapporteur":

Central Africa : BURUNDI

East Africa : DJIBOUTI

Southern Africa : SWAZILAND

West Africa : COTE D'IVOIRE

Pacific : PAPUA NEW GUINEA

3. Approval of the Rapporteur's Report of the 53rd meeting of the ACP Council of Ministers held on 18th and 19th November 1991, in Brussels [ACP/25//002/92]

The delegate from Fiji, the country which was Rapporteur to the 53rd Council session told Council that his Head of delegation, the Minister, was indisposed and could not therefore present in person the draft report. He was presenting the report on behalf of his Minister.

Introducing the draft report, the delegate said it had been seen by the Rapporteur and his Friends and in their view the document represented a true reflection of Council's deliberations at its 53rd session held in November 1991, in Brussels.

He extended deep appreciation to the 'Friends of the Rapporteur' and the Secretariat for their assistance and cooperation preparing the report.

He concluded his presentation by commending that Council adopt the report.

Having expressed regrets that the Minister was indisposed and having wished him a Quick recovery, Council considered and adopted the report.

4. Communication from the Chairman

In his communication the President informed Council that he attended the following meetings:

(a) The 14th Session of the ACP-EEC Joint Assembly held in February 1992 in Santo Domingo, the Dominican Republic:

The President told Council that at the 14th Session of the Joint Assembly he made an intervention, on behalf of Council, in which he highlighted those current issues of particular importance to the ACP.

The Joint Assembly also discussed topical issues which included, inter alia,

- Democracy and Development in ACP countries

- ACP indebtedness

- Structural adjustment, and

- the implementation of the Convention in the Caribbean region.

He added that the presence and intervention of H. E. President Father Jean-Bertrand ARISTIDE constitutionally elected President of Haiti, at the session raised the image of the Joint Assembly.

(b) ACP-EEC Conference on oil and Gas in ACP countries, held from 4-6 May 1992 in Luanda, Angola [ACP/89/009/92]:

The President represented the ACP Group at the first ACP-EEC Conference on hydrocarbons in ACP countries, held in Luanda on the initiative of DG XVII of the European Commission from 4 to 6 May 1992 in the framework of the implementation of the Fourth Lomé Convention. The conference brought together 50 ACP countries, the Commission, oil industries, international institutions and specialized institutions.

The conference discussed the following topics:

- the oil and gas situation in ACP countries

- the financial instruments and development of hydrocarbons

- a reflection on a new ACP-EEC partnership in the area of hydrocarbons.

The ACP side made a request for the introduction of a special mechanism for assisting oil-producing and exporting countries and the establishment of an appropriate framework of an effective follow-up of the conclusions and recommendations of the conference.

The Commission agreed that a joint ACP-EEC group be set up in autumn 1992 to further study the specific issues raised by the conference.

Council took note of the President's communication.

5. Consideration of the report of the Committee of Ambassadors [ACP/26/038/92 Rev.l]

6. Consideration of special Ministerial Report

(a) Development Finance Cooperation

(b) Sugar

(d) Commodities

Having agreed to deal with items 5 and 6 together and having heard the presentation of the activity report by the Chairman-in-Office of the Committee of Ambassadors, H. E. Mr. F. MUTHAURA, Ambassador of Kenya, Council went through the report item by item. Below is a summary of the deliberations on those items:

PART I : ACP-EEC COOPERATION

A. TRADE COOPERATION

[I] Erosion of ACP Preferences in the EC:

The Chairman of the Committee of Ambassadors reported that the ACP-EEC Working Group, established under Annex XXX of the Further Lomé Convention to examine the impact of the Community extension of preferences to the ANDEAN and Central American countries on ACP-EEC trade, had completed its work.

The ACP-EEC Committee of Ambassadors had examined and approved the recommendations put forward by the Working Group.

Following an exchange of views, Council adopted the recommendations as listed below:

[a] ACP-EC agree to monitor closely market developments for all the products involved in the EC offer to the Andean and Central American countries. To this end, the Commission Services and the ACP General Secretariat will submit periodic evaluation reports to the ACP-EC Subcommittees on Trade Cooperation with a view to averting any negative effects that could arise. The first report will be submitted within the first quarter of 1993

[b] the ACP States and the Community agree to undertake a joint study to determine the factors affecting ACP competitiveness in the products identified and to propose ways in which they could improve their competitiveness. They further agree that this study should explore opportunities in other markets, in particular EFTA and Eastern and Central Europe. The study will be commissioned by October 1992;

© the ACP States and the Community further agree to provide their full support to the proper functioning of existing Commodity Agreements and to the establishment of viable consistent agreements on cocoa and coffee;

(d) the two parties have undertaken to implement without further delay the provisions of Annex XX of the Lomé IV Convention with a view to ensuring proper follow-up of the above recommendations particularly with regard to the improvement of ACP's competitiveness.

(e) ACP States will present their case for compensation as and when appropriate.

(f) Finally, among the remedial actions to be taken, the Community should make appropriate compensation to the ACP States for losses incurred, including improved access, improved competitiveness for ACP producers and products.

(ii) Bananas [ACP/67/039/93]

The report on the outcome of the Ministerial Committee on Bananas, presented by Dame Eugenia CHARLES, Prime Minister of Dominica and ACP Ministerial Spokesperson on Bananas, is attached as an annex. Council adopted the report and the proposals contained therein.

Council also adopted a resolution on bananas:

(a) calling on the Community to endorse the Commission's decision to opt for the exclusion of bananas from the list of agricultural products which will fall under the tarification mechanism proposed by the Secretary General of GATT in his report, and

(b) urging the Commission to begin the process of consultations on establishing common rules on bananas, giving due regard in that exercise to the need for maintaining the current balance of market share between ACP and EEC producers on the one hand and third country suppliers on the other.

With respect to the recommendation to accord a consultancy to Mrs Gloria FRANCIS, Council took note and agreed to look at the matter in the context of the consideration of administrative matters relating to the Secretariat staff.

(iii) STABEX

1990 Year of Application:

The Chairman of the Committee of Ambassadors reported that the latter had in accordance with the Council resolution adopted at its 53rd session, sought to persuade the Community to make an exceptional gesture aimed at paying the uncovered balances of 757 MECU and at ensuring that the basis of transfers for least developed and landlocked countries, on the one hand, and island countries, on the other, were not subjected to reductions.

In spite of the ACP claims regarding the shortfalls for transfers, the Community maintained its position, indicating that as far as it was concerned the dossier was closed.

In its exchange of views, Council observed that the major causes of the problem of insufficiency of resources emanated directly from depressed world prices of agricultural commodities covered by the system.

To deal with the structural difficulties confronting the Stabex scheme, Council endorsed the recommendations submitted by the Committee of Ambassadors, namely:

(a) funds earmarked for Stabex under Lomé IV could be deposited in an interest-bearing account to maximize their interest-bearing capacity in order to augument funds available on the Stabex system;

(b) the Community should be requested to use balances existing under several votes/heads of the Glkobal EDF of Lomé II, III and un-allocated/non-programmable resources including interest earned therein;

© the Community should be requested to make an exceptional gesture not limited to the resources available under Lomé IV Convention to pay the uncovered balance of 757 MECUs for the 1990 year of application;

(d) the Community should ensure that with respect to 1990 year of application and for the rest of the life of the Lomé IV Convention, the transfer basis for the least developed and landlocked countries on the one hand, and the island countries on the other, which fall below 2 MECU and 1 MECU, respectively, are not subjected to reductions.

(e) balances remaining at the end of the first financial protocol of Lomé IV, pursuant to settlement of all justified claims under the Stabex system should be utilized for payment of outstanding balances;

(f) during the negotiation for the second financial protocol, Stabex resources should be increased substantially to ensure that at least 6% of the justified Stabex entitlements are covered;

(g) the application of the framework of mutual obligations mentioned in Article 210 of Lomé IV should not jeopardize the Quick disbursing nature which characterize the Stabex system.

Stabex transfers for Sudan for 1990 year of application:

The delegate from Sudan apprised Council of the positive political developments which took place in his country and the Government's sustained efforts to pursue the reforms being undertaken. He indicated that Sudan had satisfied all the requirements of peace and respect for human rights and that in his opinion there was no reason for the Community to continue to suspend the implementation of the Convention in Sudan.

In the exchange of views, Council expressed deep concern with the decision of the Commission of the European Communities, not to sign the transfer agreement with Sudan. Council further recognized that Sudan is a least developed country deserving special attention.

In that regard, Council appealed to the Commission to sign the transfer agreement with Sudan to enable it to draw on its Stabex entitlements for 1990 year of application, without any further delay.

Outstanding balances for 1980, 1981, 1987 and 1989 years of application:

presenting this item, the Chairman of the Committee of Ambassadors recalled that the

subject had been on the ACP-EEC agenda for a long time and despite arguments put forward by the ACP Group, the Community side had continued to consider that the ACP claims were unjustified.

The Committee of Ambassadors had thought that perhaps the time had come when the ACP Group might obtain positive results by concentrating on the implementation of Lomé IV. The ACP Group might also seek to persuade the EC to look at the ACP debt problem more sympathetically, to support the Group's demand for viable commodity agreements, and its increased participation in the processing, marketing, distribution and transportation of their commodities.

In view of the above, the Committee of Ambassadors had agreed to recommend to Council to abandon the issue of outstanding balances.

Council endorsed the Committee's recommandation after a full discussion on its possible implications for future claims of a similar nature.

(iv) Sugar [ACP/63/024/92]

Council approved the report submitted by the ACP Ministerial Spokesman on the consultations on sugar, Hon. MM DULLOO, Minister of Agriculture, Fisheries and Natural Resources of Mauritius. The elements of the report are found in document ACP/63/024/92 attached as an annex.

Council also adopted a resolution calling on the Community to, inter alia,

(a) refrain from adopting any measure either within the reform of the CAP or in the contest of the GATT, which could in any manner have an adverse impact on ACP sugar economies

(b) ensure that the price offer for 1992/93 delivery period should take into account all factors of economic and social relevance indicated in the relevant Memorandum

(d) accede to ACP request for increased access to the Portuguese market as that would offer Zambia the opportunity of obtaining an economically viable quota.

Finally, Council mandated the Committee of Ambassadors to finalize the examination of the request by the Regional Sugarcanes Training Centre for Africa and submit as soon as possible the project to the EC Commission for consideration and financing.

(v) Commodities [ACP/67/043/92]

The report on Commodities was presented by Hon. Abbvey KAFUMBE-MUKASA, Deputy Minister of Finance of Uganda and ACP Chairman of Article 75 Ministerial Committee (See Annex Doc. ACP/67/043/92 for detail).

Following the introductory remarks by the Ministerial Spokesman Council discussed and approved the report.

Regarding the Dominican Republic's eventual participation in the International Cocoa Agreement, Council decided to send a delegation comprising the Chairman of the ACP Article 75 Committee, the Chairman of the Committee of Ambassadors and the

Chairman of the Subcommittee on Agricultural Cooperation and Commodities to meet and sensitize the authorities of that country to the problem.

The Minister from the Dominican Republic told Council that his country would be pleased to host the meetings with the ACP delegation.

(vi) Sysmin, Development of Mining and Energy potential:

Sysmin

Having considered the report by the Community of Ambassadors on Sysmin and having noted with concern the delays in the implementation of Sysmin, Council

- appealed to the ACP States to give prompt consideration to the questionnaire to be addressed to them;

- agreed to urge the Community to expedite the consideration of Lomé IV requests;

- decided to request the Community to indicate the concrete measures it was contemplating for making the additional payments expected under Lomé II and Lomé III;

- resolved to maintain presseur in order to get the debts incurred under Sysmin by the ACP States in the framework of previous Conventions written off an the Sysmin loan facilities under Lomé II and II converted into grants.

Development of mining potential:

On account of the special nature of this sector, the depressed mining investment and the difficulties raised, Council advised the ACP States to adopt the following recommendations:

- measures should be adopted by each State to ensure that all the results, Basic data and all other information obtained by foreign mining companies during their Prospection activities in the country are handed to the government;

- for a rational use of these data, efforts should be made to reinforce the capacities of the national geological and mining services;

- knowledge of mineral resources should be improved through an adequate inventory of existing and potential resources and a better forecast of consumption requirements established and research conducted for a rational use, taking into account the structural changes that have occurred in the world such as the introduction of new technologies and appearance of new high-tech products;

- training should be undertaken in all areas of the enhancement of mineral resources of highly-skilled and middle-management personnel and a dynamic interdependence established between material infrastructure and human infrastructure;

- regional and subregional cooperation should be strengthened through the establishment and development of a system of inter-state exchange of scientific, technical and economic data in the areas of geology, mining activities and mining economies;

- establishment of Basic principles for the mining sector,

- establishment of a policy for the promotion of the ACP mining industry;

- concerted action of the Community and the ACP in defining conditions and ways and means of establishing a balanced partnership in the mining sector.

(vii) Development Finance Cooperation

The Report on Development Finance Cooperation was presented by Hon. A. L. THOAHLANE, Minister of Finance of Lesotho and Chairman of the Ministerial Commitee. The Chairman indicated notably that the Committee reviewed the work done at the level of Authorized Representatives- Ambassadorial level - both internally with the ACP and jointly with the Community.

Below is a summary of the conclusion of Council's discussion on the subjects covered by the report.

[a) Programming [Doc. ACP/81/043/92]

The Chairman pointed out that a number of issues had been raised in the report and they were addressed in the draft resolution attached to it. Those issues included notably

- The delay in concluding the indicative programmes of some ACP States

- The delay in the new procedures adopted for regional programming

- the merits and demerits of programming missions, and

- the lengthy period taken to ratify the Convention.

During the exchange of views on the report Council heard a report by the Head of delegation of Sudan and Zaire on the positive political development in their respective countries. In that regard, both Heads of Delegation requested that the Commission undertake the programming mission in their countries. The Head of delegation of Zaire invited the ACP and EC to send a mission of information to his country comprising an EC Troika and ACP representatives. On his part, the Head of delegation of Sudan said there existed no political situation in his country which would hamper the undertaking of any programming mission.

Council, having given consideration to the report on the programming of the Lomé IV resources and having heard the difficulties encountered by Sudan, and Zaire because of failure by the Commission to undertake the programming mission

- took note of the report

- adopted the resolution annexed to the report

- urged the Committee, in accordance with the resolution and in consultation with the Community, to seek appropriate solutions to the problems raised in the report with a view to improving the procedures and

- give support to Sudan and Zaire to their appeal for undertaking a programming mission and sending an ACP-EEC mission to the two countries respectively.

(b) Structural adjustment [ACP/81/044/92].

A resolution had been prepared on structural adjustment addressing the major concerns of the ACP Group and aimed a facilitating the implementation of EDF structural adjustment programmes.

The major concerns include, among others

- the Community's support programme should not be subordinated to the programmes of other financing institutions,

- the 'code of conduct' on the basis of which the Community carries out its coordination with international financial institutions should focus on reducing the negative effects of some conditionalities.

Council, after considering the report on the implementation of the structuralm adjustment support programme under the Lomé IV Convention

- took note of it

- adopted the resolution annexed thereto

- urged the Committee to pursue actively the mandate given to it in the resolution and continue its close monitoring of the implementation of the programme.

Council observed, with satisfaction, that the Community's decision to wave the obligation to replenish Stabex transfers arising from Conventions previous to Lomé IV was indeed a step in the right direction, whose impact was the diminution of debt creating transfers in the new Convention.

That gesture provided a compelling reason for the Community to take a similar positive action in respect of other instruments, notably special loans and Sysmin.

In conclusion, Council

- expressed deep regret that the negotiations with the Community on the issue of CP States' indebtedness had been protracted and with little result, even in the light of the rapidly deteriorating situations in the ACP States

- endorsed the proposal to organize a seminar on the issue further and mandated the Committee to continue its consulations with the Community

- also agreed to call on the Community to express solidarity with the ACP States in seeking an early solution to the debt problem.

(d) 1990 Implementation Report [ACP/81/036/92]

Council reiterated the importance it attached to the implementation of financial and technical cooperation and it gave its support to the positions taken by the Committee on various matters dealt with in the report.

Council agreed to draw the attention of the Community to those positions, in particular as regards:

- the slow pace of implementation of financial and technical cooperation, and the apparent stagnation in the levels of commitment and disbursement in recent years, and

- the bottlenecks in the implementation of SYSMIN.

Council adopted the resolution on financial and technical Cooperation and urged the Committee to pursue its work under the mandate given therein.

(e) Joint Study on implementation procedures [Doc. ACP/81/003/92]

Council expressed concern that the choice of the representative sample of projects and programmes used for the purpose of the study was made by the Commission without consulting the National and Regiional Authorizing Officers.

Having taken note of the progress made on the study and urged the Committee to take necessary steps to bring it to a speedy and satisfactory conclusion, Council called on the Committee to ensure that the joint partnership approach was fully reflected in all the stages of the study.

(f) Register of ACP Consultants

After expressing concern about the low level of ACP participation in EDF consultancies, Council

- took note of the work done in furthering the establishmentof a register of ACP consultants

- mandated the Committee to proceed with the establishment of the register, and

- approved in accordance with Article 164.1 (d) of the Lomé IV Convention, that the project be financed from regional funds.

(g) EIB Operations [ACP/81/048/92]

Council reiterated the Committee's concern that the poor performance in the use of the European Investment Bank's (EIB) own resources was due to the issue of the request for loan guarantees which the bank felt it could not waive.

However, Council welcomed the action taken by the Committee of Ambassadors to establish a channel of communication with the EIB and hoped that the understanding thus attained in the regular consultations would facilitate the operations of the Bank and bring about increased investments in the ACP States.

Council also took note of the proposal regarding risk capital operations through selected European intermediaries, and requested the Committee of Ambassadors to monitor the working of the proposal.

B. ACP INTERNAL MATTERS

[i] Request from Liberia and Haiti

Council took note of the appeal by these two countries to wave the application of sanctions because of the special circumstances prevailing in those countries.

Council decided that sanctions provided for under the Financial Regulations be waved in respect of the two countries until its next session.

It further decided that Liberia be exempted from the payment of its contribution to the 1992 budget of the General Secretariat.

It has, however, renewed its mandate to the Chairman of the Committee of Ambassadors to continue to apply sanctions against the Member States in arrears with their contributions and to report on the implementation of the decision at the following Council session.

[ii] Structure, functioning and conditions of service of the ACP General Secretariat staff

Having considered the report of the Committee of Ambassadors on its on-going examination of the conditions of service of the Secretariat staff, Council extended its mandate handed down to the Committee

- to conclude its deliberations and apply the conclusions it would have reached on the adjustment of the housing allowance and the institution of a severance pay in addition to the pension scheme by 30 September 1992 and

- to submit its recommendations on the reclassification of the linguistic staff during the next session.

[iii] Freezing of certain posts provided for under the 1992 budget

Council recalled that at its 51st session it had authorized in principle the creation of a certain number of posts in the Secretariat.

Having considered the progress report by the Committee of Ambassadors on the implementation of the above decision, Council decided that

- the posts hereunder be frozen until the next ACP Council Session:

. Chief of Development Cooperation Division

. Chief of Development Finance Division

. Expert/Technical Cooperation

. Expert/Debt and Structural Adjustment

. Computer/Research Expert

. Bilingual Secretary

. Administrative Assistant

. Assistant Accountant

. Unilingual Secretary/French

. Unilingual Secretary/English

- contracts of temporary staff members occupying such posts be extended, if necessary, up to November 1992, by the appointing authorities concerned;

- the Committee of Ambassadors should re-examine the need to create these posts and report to Council at its next Session, and

- With regard to the recommendation from both Ministerial Commitees on Bananas and Sugar requesting Council to accord a consultancy to Mrs Gloria FRANCIS, Expert in charge of Commodity Protocols, Council, after an exchange of views, directed that the appointing authority concerned should ensure that, at the date her retirement there is no break in the functioning of the Secretariat in respect of these Protocols. Council recognised the good services Mrs Francis rendered the ACP Grouip and advised that it be given due consideration by the Secretary General at the incumbent's date of retirement.

Finally, Council took note of the offer by the Minister of Senegal to put at the disposal of the Secretariat a tem of auditors to assess the manpower needs of the Secretariat. The Secretariat would provide hotel accommodation and per diem for the team.

Having thanked the Minister from Senegal for his offer, Council requested the Committee to examine it and take the appropriate action.

Council expressed gratitude and congratulated all those who contributed in preparing the activity report.

7. Emergency situations andother disasters in the ACP countries

[i] Refugees

Council expressed concern about the rising number of refugees and displaced persons, and high mortality rate in some refuge camps. It observced that conflicts in certain countries were the root cause of instability and involuntary mass movements of people in pursuit of security and basic needs.

Having heard interventions by participants from the various ACP regions and from countries which had a high concentration of refugees and displaced persons, Council called on conflicting parties to seek ways and means of tackling the root causes of the refugee situations so as to facilitate the return of the refugees and displaced persons to their countries of origin.

In that regard, Council further appealed to the EC. Its Member States and other international donors to

- provide urgent support in mobilizing emergency food aid water and medical facilities as well as assist in establishing emergfency stockpiles for new influxes of refugees;

- provided urgent financial, technical and logistical support to the countries hosting refugees as well as to their countries of origin so as to effect repatriation and resettlement of voluntary returnees;

- participate in regular regional coordinating meetings under the auspices of UNHCR to streamline existing programming and reporting measures and improve emergency response capacities.

[ii] AIDS

Council was alarmed by the AID epandemic and its attendant social, cultural, economic, demographic, political and other consequences pointing out that if by the year 2000 a cure was not found and the prevention rendered more effective, the impact of the disease would seriously affect the structures of some countries.

That being an eventually, Council considered that projects designed to combat the disease should take account of the social and cultural realities of the societies concerned. In that regard, Council urged more cooperation at the Intra-ACP and regional levels in order to provide more effective and efficient intervention and information exchange.

Having welcomed the Commission's proposal to earmark 50 MECUS under Lomé III for the AIDS Control Programme, the Ministers advised that the latter aimed at preventing and controlling the spread of the disease in developing countries should be extended under Lomé IV.

Council agreed to request the Community to provide technical support and additional financial resources from the Regional Funds and from resources available within the

Community's budget lines to support the Programme and to improve and develop the infrastructure of existing health systems in ACP countries.

[iii] Emergence of Malaria menace:AA

Council considered that the resurgence and magnitude of the malaria menace in ACP countries called for a coordinated ACP-EEC approach to the problem and the initiation, by the EC, of a programme of assistance to the ACP countries aimed at dealing effectively with the menace.

In that regard, Council called for the convening of an urgent ACP-EEC professional seminar to take stock of on-going mamaria control programmes in ACP countries and to propose a practical strategy for channelling Community assistance.

[iv] Drought and food shortages

Council mentioned the magnitude of the effects of drought and deseritification both on the environment as well as on human and animal resources of the ACP regions threatened. It held the view that the rehabilitation of the environment was a challenge which required assistance from the international community.

In that regard, Council called upon the EEC to increase its human, technological and financial resources with a view to assisting the ACP States affected.

Council heard reports by delegates from regions affected by either drought or war which resulted in either crop failure or a situation of insecurity making it unsafe for populations to engage in any meaningful agricultural activity, the net result of which is food shortage.

Council appealed to the EC and international donors to do their utmost to step up urgently, their assistance to countries suffering from food shortage and to provide them with food delivery logistical support.

[v] Cholera menace

a re Council recognized that the recent spread of the cholera epidemic to South America was likely to affect the neighbouring Caribbean ACP countries. That likelihood would give the epidemic gional dimension which woujld require a regional approach.

In view of that development, Council agreed to appeal to the Community and its Member States to assist the ACP countries concerned, inter alia, with:

- the launching of anti-cholera educational campaigns in schools and hospitals

- the lauching of media campaigns aimed at raising public awareness of the dangers of diseas

- the promotion of safe water education projects

- the provisions of faccines

- the setting-up of cholera alert programmes

- the promotion of health care and health programmes through education, training research and information

- the rehabilitation of dilapidated water and sewage systems;

8. Perspectives for the ACP-EEC relations in the rapidly changing world situation

[i] Aid conditionalities

Under this item Council discussed the Community's refusal to sign the transfer agreement with Sudan and the suspension of aid to Zaire. Council considered that Article 5 of the Convention, on the respect of human rights should not be unilaterally interpreted and applied against an ACP country.

Council also recognised that the linkage between aid and the respect for human rights, good governance and democracy was an accepted practice in international cooperation and that fact could not be ignored.

Council further referred to the implications of the disappearance of the Berlin wall, the collapse of the communist bloc, and the process of European unification which had been given a fresh impetus by the signing of the Maastricht treaty.

After a full exchange of views, Council

- requested the Committee of Ambassadors to devise a joint consultations mechanism for the verification of human rights violation in countries that are signatory to the Lomé arrangements. Such a mechanism would serve as an early-warning system for the prevention of the violation of human rights and consequential unilateral application of sanctions.

- decided that the mechanism, after adoption by the ACP Group, could be put to the EC side for acceptance as a joint mechanism.

[ii] Widening of ACP-EEC dialogue and greater participation of Ministers in the deliberations of Council [ACP/42/001/92]

Council observed that dialogue between the ACP and EEC should not only be devoted essentially to human rights issues but should include also other topical issues affecting the implementation of the Lomé Convention.

Council urged that there should be more meetings of Ministerial committees before Council plenary where technical issues could be discussed by Ministers. Such issues would be presented at the Plenary session by Ministerial spokesmen. The President could have discussions on the more general topics.

Council also recommended that the ACP President should write to the ACP Heads of State and Governments reminding them of the importance of Council sessions and the need for Ministers to attend them.

9. Intra-ACP and Regional Cooperation efforts and support [ACP/87/014/92]

Council took note of the report by the Committee of Ambassadors of the proposal that a Ministerial Committee be set up on Intra-ACP Cooperation. Council further called upon ACP States on expedite the implementation of the Intra-ACP action programme and declarations.

10. U.N Conference on Environment [ACP/86/009/92]

Given the advanced stage reached in the preparation of the Conference on Environment by the U.N., Council agreed to withdraw the item from its agenda. It considered that the subject was being ably handled by the respective national missions to the United Nations.

11. Preparation for the 17th session of the ACP-EEC Council of Ministers

(a) consideration of the draft agenda [ACP-EEC 2129/92]

Council took note of the draft agenda after agreeing to propose the deletion of the item on the UN Conference on Environment and the inclusion of an item on hurricanes and cyclones.

(b) Designation of ACP Spokesmen for the "c" items

The countries listed below were designated as Ministerial spokesmen on the items as indicated:

JAMAICA : "The Widening of ACP-EEC dialogue and greater participation of Ministers in the deliberations of Council"

KENYA : "Emergency situations and other disasters in ACP countries"

SENEGAL : "Aid conditionalities".

Council considered and took note of the programme for the session.

12. Consideration of the Committee of Ambassadors' proposals for the Review of the Georgetown Agreement

Reporting on the Committee's work the Chairman recalled that at its 53rd Session Council, had held discussions on the Committee of Ambassadors' interim report on the Georgetown Agreement, and had decided to extend the mandate of the Committee to enable it to complete its work before the 54th ACP Ministerial Session.

In implementing the mandate, the Committee felt that the review should be considered in its entirety and therefore its recommendations to Council should be in the form of q "package".

Unfortunately, the Committee encountered serious difficulties in its efforts to find a solution to the review of Articles 7 and 10 relating to the routation of the Council Presidency and the decision-making procedure of the Council respectively. It was unable to make any fresh proposals.

Consequently, the Committee requested Council to undertake a wide ranging review of those highly political issues with a view to defining precise guidelines to enable it to complete its revision exercise.

Following an extensive exchange of views on the subject, Council agreed to further extend the mandate of the Committee of Ambassadors to enable it finalize its work on the review of the Georgetown Agreement. The Committee of Ambassadors was requested to report to Council at its 55th session.

13. Consideration of the question regarding the post of Deputy Secretary General [Part V. Doc. ACP/26/038/92 Rev.1]

Council referred to its decision at the 53rd session relating to the conditions of service of the Deputy Secretary General and recalled that the Committee of Ambassadors had expressed concerns thereafter with respect to the level of salary.

Mindful of those concerns Council had mandated the Committee of Ambassadors to re-examine the matter and make proposals to the 54th session. This mandate was implemented.

Having considered the Committee's recommendations regarding the conditions of service of the post of Deputy Secretary General, Council decided that

[i] the Deputy Secretary General's salary be fixed at BF 160 611 (inclusive of the recent salary indexation) per month.

[ii] the housing allowance be fixed at 140.000 per month

[iii] the transport allowance by fixed at Bf 7.000 per month

[iv] the other allowances and entitlements as provided for in the staff Regulations are also applicable.

[v] the post be financed from the financing agreement signed between the ACP and EEC.

[vi] in the event of the of the acceptance by the Commission to finance the post, the Committee of Ambassadors should go ahead with the advertisement of the post and the recruitment process.

[vii] Should the response be negative, the whole matter should be re-submitted to Council for re-consideration.

14. Consideration of the financial situation of the ACP Secretariat

(a) State of contributions [ACP/45/010/92]

(b) Implementation of sanctions [ACP45/011/92]

Having recalled the various decisions adopted relating to arrears of contribution and reminders sent by the Chairmen of the Committee of Ambassadors and the Secretary General to ensure the timely recovery of sums owed by defaulting States, Council expressed concern that the overdue interest paid on the Secretariat's bank accounts was still too high. The Secretariat was therefore unable to implement Council's earlier decisions on notably staff recruitment, conditiions of service and the acquisition of an official residence for the Secretary General.

In view of this, Council decided that the Chairman of the Committee of Ambassadors should continue to apply the sanctions against States in arrears with their contributions and report to Council on the implementation of the decision. Fpr decision concerning Haiti and Liberia, see "ACP Internal Matters" above.)

With regard to the huge arrears accumulated by the Government of Equatorial Guinea, Council requested the Chairman of the Committee of Ambassadors and the Secretary General to get in touch with the authorities of that country with a view to setting the issue of arrears.

Finally, Council recalled the decision taken in the past requesting that a study be carried out on a new categorization of countries for contribution to the Secretariat's budget and urged that the study be carried out as soon as funds were available.

15. South and Southern Africa

- Stock taking of latest development

Council heard a statement from the spokesman of the Southern African region, the Minister from Zimbabwe, who gave an account of the political developments in that region and in particular the reform process unfolding in South Africa. The Statement mentioned notably

- the positive outcome of the referendum of white voters endorsing the continuation of the reform process undertaken by President DE KLERK of South Africa

- achievements by CODESA I and II in working out modalities for the transfer of power to an interim Government

- the signing of Protocol III concerning the electoral law and citizens' rights between the Government of Mozambique and RENAMO

- efforts toward ensuring peace and national reconcilation Angola, and

- negotiatiions between the Government of Namibia and South Africa on the question of the enclave Walvis Bay.

Council also heard a statement from the Director of the OAU office in Brussels who mentioned notably that for the OAU the idea of an irreversible move towards ending apartheid consisted, among others, the establishment of an interim government and the introduction of universal adult suffrage (one person one vote) and a common voters' list.

After an exchange of views, Council reaffirmed its support for all efforts to establish a new democratic non-racial political system in South Africa based on the rpinciple of one person one vote.

Council condemend the violence and all other threats to the peaceful constitutional changes in the region and called for the release of all political prisoners in South Africa.

It alos encouraged the people and Government of Angola to pursue the peace process and called on RENAMO to demonstrate commitment to the peace process in Mozambique.

16. Designation of the members of the Ministeria Bureau [ACP/549/79 Rev.20]

The countries listed below were elected by their respective regions to serve on the new Bureau of Council whose mandate would come into effect at the end of the 53rd session:

WESTERN SALOA : Pacific (President)

ZAIRE : Central Africa

SEYCHELLES : East Africa

ANGOLA : Southern Africa

GHANA : West Africa

JAMAICA : Caribbean

17. Date and venue of next meeting of

(a) the Council of ACP ministers

The 55th session of the ACP Council of Ministers will take place from 23rd to 26th November 1992 in Brussels.

(b) the Council of ACP-EEC Ministersd

The date and venue of the next meeting of the ACP-EEC Council of Ministers shall be agreed upon at a later date after consultation between the two sides.

18. Outcome of the 54th ACP Council session

- Adoption of draft decision and resolutions

Decisions

Council adopted the following decisions:

Decision No. 1/LIV/92 : Arrears in contribution and the financial situation

Decision No. 2/LIV/92 : Structure, functioning and conditions of service of the ACP General Secretariat staff

Decision No. 3/LIV/92 : Conditions of service of the Deputy Secretary General

Decision No. 4/LIV/92 : Freezing of certain posts provided for under the 1992 budget.

Resolutions

Resolution No. 1/LIV/92 : Implementation of Stabex under the Fourth Lomé Convention

Resolution No. 2/LIV/92 : Stabex transfers for Sudan for 1990 year of application

Resolution No. 3/LIV/92 : Bananas

Resolution No. 4/LIV/92 : Sugar

Resolution No. 5/LIV/92 : The AIDS control programme under Lomé IV

Resolution No. 6/LIV/92 : Drought and food shortages

Resolution No. 7/LIV/92 : Hurricanes and Cyclones

Resolution No. 8/LIV/92 : Drought and desertification

Resolution No. 9/LIV/92 : The movement of toxic waste

Resolution No.10/LIV/92 : Regional sugar cane training centre for Africa

Resolution. No 11/LIV/92: Malaria

Resolution No. 13/LIV/92: Refugees and displaced persons

Resolution No. 15/LIV/92: Southern Africa.

Resolutions referred to the Committee of Ambassadors for finalization

- Cholera

- ACP Students and migrant workers in Member States of the EC.

19. Any other business

Closing the ACP Council session, the President thanked all delegates for their useful contribution to the deliberations and the support given to him and his Bureau. He also thanked the Bureau members for their cooperation during their mandate.

On behalf of Council; he thanked the Committee of Ambassadors and the Secretariat for having prepared the ministerial session and for servicing the meetings.

Finally, he thanked the Government and people of Jamaica for having provided the ACP Council with facilities for holding its 54th session. He wished the ACP a successful joint Council session with the EEC side.

ANNEX

ACP/63/024/92 Kingston, 19 May 1992

GF/yz

Report

Of the Ministerial Spokesman to the 54th Session of the Council

of ACP Ministers on the Consultations on Sugar held on

Monday, 18 May, 1992 in Kingston, Jamaica

Mr. President,

Collages,

It is my pleasure to report to our Council on the deliberations on the Ministerial Consultations on Sugar which took place on the 18th May. The deliberations were will attended and once more indicated the importance which the States concerned attach to the proper functioning of the protocol. Ministers recalled the important role played by the Prime Minister of Jamaica, RT. Hon. J. PATTERSON in the establishment of the Protocol and expressed their satisfaction at being in Kingston, Jamaica where so many important meetings have taken place in the history of the ACP. Group.

Mr. President, the period which has elapsed since we last met has witnessed major developments which will have a bearing on the ACP Sugar supplying States.

The GATT Uruguay Round and ACP Sugar prices

The single most important development was the publication during the second half of December 1991 of the Report of the Secretary General of GATT, Mr Arthur Dunkel, under the title "Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations".

In respect of agriculture, the report makes proposals for the reduction by 20% in domestic support; the conversion of all border measures into tariffs.

and the reduction thereof on a simple average basis of 36% over the implementation period of 6 years; the reduction of export subsidies by 36% and the reduction export volumes by 24% over the implementation period.

It is apparent to us that were the proposals to be agreed by the EEC and other Contracting Parties, the ACP Sugar supplying States would most inevitably suffer from a reduction in their export earnings. On the long term the reduction of tariffs on the simple average basis of 36% would open the door to sugar from their countries and lead to a contraction in their market share.

On the basis of these considerations we communicated our anxieties to the Commission and to the Community and the GATT Secretariat by way of letters sent by the Ministerial Spokesman to the President of the Commission of the European Communities and to the Director General of GATT.

Our strategy parallelled that of the EC Sugar industry with whom ACP sugar representatives have been keeping close contact.

During meetings of the relevant ACP-EC institutions the Commission has given the assurance that neither the GATT proposals nor any consequential reform of the Community's common agricultural policy would endanger the guaranteed indefinite duration of the Protocol and that the Community intended, in the event that the commercial interests of ACP sugar were affected negatively, to examine ways and measures to be taken to safeguard ACP interests.

Mr. President, while expressing appreciation for this reassurance we must point out again at our joint meeting that the indefinite duration of the Protocol was fundamentally linked to access and to price - the two other guarantees in Article 1 of that instrument.

Mr. President, Council will recall that assurances were given by the EEC at the special ACP-EEC Ministerial Consultations on Sugar held on 7th May 1991 to the effect that "Any adjustment to the common organization of the Community Sugar market following the Uruguay Round or as part of the reform of the ACP would not affect any other guarantees given in the Sugar Protocol, which had been concluded for an indefinite duration".

We have called for constant dialogue between the technical experts of both sides (outside the official DG I Group established for the purpose of monitoring and analysing development in Geneva) on this and other specific areas of the GATT Report and in the ongoing negotiations.

Mr President, these concerns also featured prominently in the Resolution on sugar adopted unanimously in the Joint ACP-EU Assembly which met in Santo Domingo, Dominican Republic from 17 to 21 February this year. But the problem remains acute and we will have to maintain a strong pressure on the Community and its Member States so that they refrain from adopting any measure either within the reform of the ACP or in the context of GATT which could in any manner have an adverse impact on our sugar economies

The Portuguese market

Mr. President, Council is fully aware of the situation in respect of improved access for ACP sugar to the Portuguese market. In November 1991, just after ACP Council rose from its 53rd Session in Brussels I had the honour and privilege to lead an all embrassing delegation comprising Ministers, Ambassadors, officials and representatives of Sugar Industries to Lisbon where discussions were held with refiners and Ministers and other officials of the Portuguese Government.

Shortly afterwards formal consultations were initiated by the Commission on 6 December 1991 when a Joint Subcommittee, (the twenty-first since the Protocol was established) was convened specifically for this purpose. However, the Commission said it was unable to undertake the examinations of Portugal's supply situation and of the CAP's request in that regard in the first half of 1992 in view of the ongoing Uruguay Round talks in GATT and the reform of the CAP. But we hold view that the determination of this issue should not necessarily await the GATT of the CAP reform outcome. This should be conveyed to the Joint Council meeting.

It is essential that the Community gives full attention to the issue of supply of raw sugar to the EEC and to Portugal in particular. Indeed, the transitional arrangements for the supply of sugar to Portugal expires at the end of 1992. The ACP supplying States need time to finalise technical arrangements for the supply of such sugar next year. The Commission said that our anxieties were fully understood and that hopes were held for the possibility of bringing forward such discussions before much longer although this might not be easy to achieve.

Mr. President, a letter has been addressed to the Commissioner for Agriculture Mr. Ray MacSharry where we remind him that the request to supply raw sugar to Portugal was made as early as 1985 and was raised yearly having also been the subject matter of lengthy discussions during the Lomé IV negotiations leading to the incorporation of Annex XXVIII of Lomé IV. At no time was either the GATT Uruguay Round or any CAP reform consequential upon the outcome of MTN linked to this request. The Community therefore must be urged to finalize all arrangements in respect of access to the Portuguese market in consultation with the ACP as provided for in Annex XXVIII before the end of 1992.

We received a warm welcome at the time of our visit to Portugal; however, since then attempts to arrange meetings with Portugal's Secretary of State for Agriculture has been so far unsuccessful and Ministers agreed that they avail themselves of the opportunity presented by the 17th Session of ACP-EC Council on the 21st and 22nd instant to arrange such contacts.

Developments in respect of Zambia's request for accession to the Protocol

Mr. President, Ministers took note of the fact that the Commission had accept to undertake a new review of Zambia's export capacity and agreed that the Commission be urged to expedite its internal procedures in order to reach an early decision in respect of Zambia's new request for accession to the protocol in accordance with the ACP's recorded view.

The Study on transport costs in ACP sugar industries

Mr. President, Ministers took note that the cost of the study will met from the Commission's own funds. They also took note that the British Firm TECNECON, which has been choosen after an examination of tenders was proposing to hold an inception meeting with the Commission and ACP experts in the second week of June.

Implementation of Council Regulation 1719/91 in respect of market premium for ACP sugar

Mr President, Ministers noted that the first and second tranche of the 30 Million ECUs marketing premium has been disbursed and that the ACP Signatories to the Protocol had been able, thanks to the London Experts Group and the firm E D & F MAN to ensure that the interests of countries selling special sugars be safeguarded. Ministers agreed that the Commission be urged to effect the payment of the last tranche of the marketing premium as early as possible during the second half of 1992.

ACP guaranteed prices for the 1992-93 delivery period.

Mr President, as is well know the negotiations for the ACP guaranteed price must, in accordance with Article 5 (4) of the Protocol, be concluded early enough for a decision to be taken by 1 May preceding the delivery period to which it will apply. Fro many years now this has not been possible because of the Community's difficulties in agreeing on its own internal prices in time.

Again this year Mr. President, the occasion of the twenty-second meeting of the Joint Subcommittee on 3 April last was used to convene the joint negotiating group on 1992-93 prices simply to initiate the usual ceremonial "stopping of the clock". No formal statements were made by either side but the Commission indicated that it had proposed a roll-over of the 1991-92 Community intervention prices to the EC Agricultural Council. This proposal was being examined although the Commission said it did not anticipate a decision before mid-June because of a number of considerations, among them being the need to await comments from the European Parliament.

We, on the ACP side, must remind the Commission and the Member States that the circumstances which made the payment of the 30 MECU marketing premium necessary were still prevailing and even worsening. Our memorandum on the factors of economic and social relevance to the fixing of our guaranteed price points out that were the freeze recommended for Community prices to be imposed on ACP sugar also, the consequences for our industries would be very serious indeed.

Mr President, it might be useful to point out to the Commission and to Council that the 30 MECU, while going some way towards meeting our concerns, was significantly below the losses in export earnings actually suffered during the three-year period to which it applied and considerably less than the total loss incurred during the seven years of freeze and reduction in prices, and that in such circumstances if a remunerative price cannot be obtained under the Protocol, then other measures must be devised to ensure acceptable levels of income for ACP producers.

It is recalled also Mr President, that our technical experts group have been requested to re-examine the question of "special measures" and to submit proposals for the reactivating of the joint Contact Group in this regard in order to continue the work already initiated. This is being pursued. However, the timing for raising this matter will have to be carefully determined in order not to compromise any possible claim for corrective measures.

Court of Auditors Special Report

Ministers took note that the Commission, whilst answering adverse remarks made by the Court of Auditors report on the Protocol had underscored the basic features of this trade agreement and had placed the Protocol in its correct perspective. Ministers were also informed of the efforts jointly undertaken by ACP sugar supplying States and the Community's raw cane refiners to counter the damaging remarks made by the Rapporteur of the Committee for Budgetary control of the European Parliament when analysing the Court of Auditors Report. Ministers noted that as a result of these efforts, the Rapporteur's report was now more favourable to the ACP.

ISO

Ministers agreed that all efforts should be undertaken by the ACP Sugar Supplying States to persuade the US to reintegrate the International Sugar Agreement (ISO).

Expert for Commodity Protocols

Finally Mr President Ministers agreed that the critical circumstances warranted the retention of the services of Mrs. Gloria Francis, after the expiry of her present contract in October 1992. I am mandated to fully support the proposal of the Honourable Spokesperson on Bananas in the same direction and to commend to Council such a measure in the better interest of ACP.

This completes my report Mr President, I thank you.

ANNEX

ACP/67/039/92 Kingston, 20 May 1992

GF/yz

Messrs. Co-Presidents,

There are only seven months to go before the full implementation of the European Single Market, an event which has been anticipated with much optimism and , in some quarters, with much apprehension. The Community has at regular intervals announced the steps it is taking towards becoming more fully integrated economically and has all but completed its proposals that would make the Single Market a reality. For us in the ACP, and in particular in the Caribbean, there is one notable exception - I refer, of course, to bananas.

The ACP and the European Community agreed in the Joint Declaration relating to the Banana Protocol to Lomé IV on certain objectives for the trade in Bananas in the Single Market and on a procedure to ensure those objectives. For some years now the European Commission has been promising proposals for a Single Market for Bananas - proposals which could have a profound effect on those ACP economics, like our own, which depend heavily on exports of bananas to the Community. Over the period, there has been no lack of ideas as to how the Community could achieve a Single Market for bananas while at the same time respecting its international commitments under the Banana Protocol of the Lomé Conventrion. We in the ACP Group have put forward our own views for the Commission's consideration.

As we await a formal proposal from the Commission let me take this opportunity to remind the Commission and our friends in the EC Member States once again, of they yardstick we in the ACP will be using to measure the effectiveness of those proposals. For this I would refer to Article 1 of the Protocol which states:

In respect of its banana exports to the Community, no ACP State shall be placed, as regards access to its traditional markets and its advantages on those markets, in a less favourable situation than in the past or at present".

Therefore we will first of all be looking at whether the proposals the Commission put forward will give us the access we presently enjoy. Secondly, the most important advantage to all of us, ACP States exporting bananas to the Community, is that of income. Our banana industries provide us with vital employment, foreign exchange earnings and domestic economic activity - in short, income . Any new regime must maintain our income at least at current levels. This in our view must be delivered through the market place. We believe the right way forward is trade and not aid. Uncertain cash hand-outs are a poor and ineffective substitute for genuine trade where our farmers can see the results of their labours in their weekly banana returns.

Now I know how hard the Commission has laboured to achieve acceptable proposals. Indeed, I thank and honour them for the stand they took against the GATT Director - General's proposal for tarrificatiion of bananas. The only merit Mr. Dunkel's proposal had in terms of bananas was that it could be interpreted as being compatible with the GATT. Fro the rest, it could not have achieved the objectives which the Community has set itself and would have caused hardship to ACP and EEC banana producers and provide no long term benefits to consumers. The Commission took a principled position in that regard. I would urge the Commission to maintain its very firm stand against tariffication its negotiations in the GATT.

I understand the Commission's labours have borne furit and that a Consultative Document exists. We shall be looking very carefully at this document when it is made available to us to see if it delivers access and income in accordance with the Banana Protocol. The Consultative Docuemnt, we understand, will be based on the concept of a auota on the imports of bananas from the dollar zone. We also understand that the quota will be in two parts - the first part, to be bound in the GATT and with a 20% tariff subject with an annual increase and the second part to be an autonomous quota to be set at the Community's discretion. If this is the route the Commissiion is going to follow, it would be well for us to state clearly even if this early stage that the package as a whole must be satisfactory as far as the two advantages, access and income, are concerned. That, to us, would be the litmus test of the new measures. For us, therefore, the key elements must be:

- The size of the total quota, bound and autonomous. This must not be set at too high a level to destablilise the prices of our bananas on the Community maqrket or to affect our export volumes. In this regard, we would view with great concern any initial quota which takes into account the very high levels of dollar imports in 1991 and 1992 which are a distortion of the true market situation.

- The allocation of licences under the quota. This must be done in such a way so that those operators who hitherto, have shown little or no interest in ACP and EEC bananas are not allowed too much leeway to disrupt and destablise the markets to the disadvantage of ourselves and those who have stood by us in the past and now.

- Price/income and Volume. A close watch must be kept on volumes coming into the Community from the ACP and prices these obtain in the market. We will be looking for measures which ensure that our bananas continue to earn an adequate price in the market. Also, we believe the monitoring of these basic indicators must be an on-going exercise with regular reviews, preferably monthly, by an expert committee which would signal changes in management and corrective actions as required. An annual review will not suffice; too much damage could have been done in the interim and our banana industries and economies could be destroyed by then. The system must be designed so as to avert or prevent damage in the first place rather than to allow them to happen and to correct them later. In other words, we shall be looking forward to a package with damage-prevention rather than damage-correctiion measures.

There are doubtless many other details to which we will turn our attention once the Consultative Document is available. I would merely like to repeat in conclusion that whatever package of measures is put forward, it must aim at satisfying the Community's legal commitment to the ACP and to its own Community producers who operate under conditions very similar to our own.

It must be further emphasized that in spite of the propaganda to the country, we are not seeking to replace or adversely affect dollar fruit in the Community market. We are simply seeking to maintain our market share. We are entitled to this. We are convenced that whatever arrangements are put in place, dollar fruit will continue to dominate the Community market and benefit from any increased demand.

When dollarr fruit supplier's to and importers in the Community market understand this, perhaps they will cease in their efforts to drive us out of the market.

ACP/67/043/92 Kingston, 19 May 1992

Tr. AHM/fk/yz

ANNEX

The ACP¨Ministerial Committee on Commodities met on Tuesday 19 May 1992 to examine the Committee of Ambassadors' report to Council relating to cooperation in the area Commodities. In this context, it held discussions on the negotiation of the International Coffee and Cocoa Agreements and the follow-up to the UNCTAD VIII's recommendations.

I. INTERNATIONAL COFFEE AGREEMENT

The Ministerial Committee welcomes the idea that at the 58th International Coffee Council session held from 6 to 10 April 1992 in London, 11 months after the relevant ACP-EEC declaration, a negotiating group has finally been established to prepare the draft of the new market-based Agreement founded on a universal quota system supported by effective control measures. This delay was due to the fact that Brazil the world's leading producer did not agree to the system.

Now that Brazil had changed its position, the whole international Community accepts the idea of a universal quota system for the new Agreement. The ACP Group should therefore request the EEC and its member States for their total support to ensure that the ACP's market share is safeguarded just as the US does for the Central American countries.

To this end, four points need to be emphasized at the meeting of the ACP-EEC Ministerial Committee on Commodities of 21 May 1992, i.e. quota sharing selectivity, control in the framework of a universal quota system and the price level.

1. Quota sharing

Considering the ACP's poor performance in relation to the other countries, during the period of free market, the Committee of Ambassadors recommends that Council propose a reference period comparable to that of the 1983 Agreement. Furthermore, the market share should be the average of the exports of that year less two bad harvests to take account of the special situation of Ethiopia without jeopardizing the interests of the other ACP countries.

As a matter of fact, Ethiopia has put in a special request to the International Coffee Council not to take account of its last two years' exports which were very low for exceptional reasons.

2. Selectivity

Selectivity is important in quota sharing since account should be taken of demand before sharing out global quotas per coffee type.

Since the ACP States are represented in all the different coffee types, the Ministerial Committee recommends that Council request the Community to accept that the quotas for joint producers are shared according to their various coffee types, i.e., Columbia milds, the other milds, the unwashed Arabicas and Robustas.

Further, in assessing this demand, the same reference period for calculating quotas should be adopted but account should not be taken of the years of free market since those years were characterized by bitter competition between producer countries, leading to an unprecedented price decline (which will not reflect the actual demand by consumers).

3. Control within a system of universal quotas

Since control is of extreme importance in a system of universal quotas, it will be desirable for all producer and consumer countries to accede to such an agreement. Now, whilst it is anticipated that all producer countries would accede to the new Agreement, it is not so for the consumer countries since Canada and Australia

have already refused to be members of the 198/3 Agreement as extended in 1989 and most East European countries have never been members. Consequently, effective control would be impossible in those countries. In view of this, Council should request the Community to do all it possibly can to ensure that these two as well as the Eastern European countries accede to the new Agreement.

Furthermore, in order to avoid the problems inherent in the double market, it is important to provide in the enacting terms of the new Agreement a clause forbidding consumer countries to import from non-consumer member countries.

4. Price levels

It is the prospect of improving the current price levels that encourages all importer countries to agree to a rapid conclusion of a New Coffee Agreement with economic clauses. This goes particularly for the United State which intends to accede to this agreement with a view to eliminating the problem of drugs in Columbia.

Consequently, the Ministerial Committee recommends that Council request the Community to maintain the minimum price range of the 1983 Agreement (120-140 cents a pound) for this New Agreement, and this should be defended in respect of Robusta (least quoted Coffee type).

The Max Havelaar initiative which guarantees a minimum price of 20 cents a pound for Coffee growers should be used as an argument in defence besides, the Committee of Ambassadors should ensure that the ACP benefit from this initiative by selling their coffee to Max Havelaar.

Two other factors are important for effective defence of price levels, i.e. method of calculating quotas and production policy.

As a matter of fact, the system of using the moving average for calculating quotas can encourage countries to produce with a view to obtaining better quotas but producer countries should be dissuaded from embarking on high levels of production through the institution of a d device for penalizing those countries which would like to increase their production in excess of demand.

In addition, since a common production policy is in the medium-term the only guarantee for the effective defence of price levels, it is important to make provisions under the New Agreement for achieving it.

II INTERNATIONAL COCOA AGREEMENT

Council will recall that a working party was set up during the Special Session of the International Cocoa Council held in London on 19 and 20 June 1991 to prepare the grounds for a new Cocoa Agreement with economic clauses. Its formal proceedings, started on 6 September 1991 with proposals from the ACP Group, the Cocoa Producers Alliance, etc.

Since then, four Working Group and two International Cocoa Council sessions have been held.

In view of the progress made at its Session held from 19 to 21 February 1992, the International Cocoa Council confirmed the dates for the Geneva negotiation meetings, the first of which was held from 21 April to 1 May 1992

It can be deduced from the four meetings held by the preparatory Working Group on a fifth International Cocoa Agreement and the two sessions of the International Cocoa Council that there are three issues which need to be dealt with in detail with the special partners of the ACP Group, i.e. the Community and its Member States in view of the producers' meeting scheduled for 15 to 18 June in Abidjan and of the 2nd UN Conference on Cocoa to be held from 6 to 24 July 1992. These are the stabilization mechanism, participation in the Agreement and the financing of the said Agreement.

1. Price-stabilization mechanism

The mechanism for regulating prices as proposed by the producer countries is different from that of the consumers; as a matter of fact, while the former hope for a quota and buffer-stock system, the latter prefer a withdrawal mechanism attached to the buffer stock

It would be recalled that since the buffer-stock has attained its maximum capacity of 250,000 tonnes, it will not be operational for the new Agreement. Consequently, there is the need to set up another system capable of achieving the objective which both the producer and consumers have set themselves, namely, to save the Cocoa economy by raising the current price level.

As far as the ACP is concerned, only a quota system with special deposits coupled with a real concerted production policy can ensure that this objectives is actually achieved.

The Ministerial Committee therefore recommends that Council urge the Community and its Member States to accept this system at the second negotiation meeting of the Vth International Cocoa Agreement to be held from 6 to 24 July 1992 in Geneva.

In any case, the withdrawal mechanism as advocated by the Community could be reconciled with the ACP objective on only one condition, namely, no ceiling should be fixed for the entire duration of the Agreement. This would afford the producers ample time to adopt concerted production policies.

2. Participation in the Agreement

Considering Malaysia's and Indonesia's positive statements with respect to their participation in the new agreement and considering that the Dominican Republic is an ACP country, the producer countries and the ACP Group are almost certain that these three countries will accede to the said Agreement.

Nonetheless, as regards the Dominican Republic, it is advisable to send an ACP delegation composed to the Chairman of the ACP Article 75 Committee, the Chairman of the Committee of Ambassadors and the Chairman of the Subcommittee on Agricultural Cooperation and Commodities to meet and sensitize the authorities of that country to this problem.

As regards the United States' participation, the ACP and the Community should act on the basis of the spirit of Cartagena. As a matter of fact, the final text of UNCTAD VIII as adopted by consensus accords special attention to therenegotiation of the Coffee and Cocoa Agreements geared towards price stabilization as set out in paragraph 192 of the said text.

In this regard, the Ministerial Committee recommends that Council propose to the Community to take concerted measures to ensure that the U. S. government accedes to the new agreement as soon as it is concluded.

3. Financing the Agreement

The ACP Group and all the producer countries would like to see the new Agreement financed in an equitable manner between the producer and consumer countries. However, it is regrettable that at the recent meetings of the Working Group, certain Community Member States expressed the idea that this could be done by the payment of arrears in contributions to the buffer stock of the 1986 Agreement.

Should the position of the these Member States be ratified by the Community as whole, it would constitute a unique case because it would imply that in addition to the favourable terms offered them for participating in the new Agreement, the new countries would pay absolutely nothing for this Agreement which is intended to save the whole cocoa economy.

Consequently, the Ministerial Committee recommends that Council urge the Community, in the framework of financing and in the light of the considerable financial difficulties facing the producer countries, in particular the ACP countries, to back the ACP proposal.

III. VIIITH UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT HELD AT CARTAGENA (COLUMBIA) ROM 8 TO 25 FEBRUARY 1992

In my capacity as Chairman of the ACP Ministerial Committee on Article 75, I represented the ACP Group at the United Nations Conference on trade and development where I defended the ACP States' position on Commodities.

This enabled the ACP Group to play a pre-ponderant role in Committee II (which, in addition to Commodities, was also responsible for negotiating development resources, international trade, transfer of technology and services) notably by getting the concept of gradual liberalization adopted in the framework of the Uruguay Round, by placing special emphasis on the renegotiation of international Agreements on Coffee, Cocoa, sugar and tropical wood, and by getting the conference to acknowledge with satisfaction the support given to the diversification of the African economies through the establishment of a special mechanism in pursuance of Resolution 46/151 of the UN General Assembly.

Nonetheless, there were areas of frustration partly as a result of the Secretariat's failure in getting across not only the idea of existing preferences and the actual problems of insularity of certain Caribbean and Pacific countries given the albeit "gradual" liberalization of international trade within the framework of the Uruguay Round, but also that of associating the Caribbean and the Pacific with the mechanism for diversifying the African countries' economies whose creation is now more than a probability

Besides, the idea of considering Sysmin as a compensatory financing mechanism could not be dispelled.

It can be seen from the conclusions of Cartagena that the solutions to commodity problems were summed up as competitiveness, free play of market forces and therefore a national policy before any support for international cooperation. With the Cartagena spirit, which is that of non-confrontation, constructive dialogue and consensus, the final text was adopted. In addition, the Columbian Government's proposal for convening in early 1994 an international conference on commodities touching on all relevant activities was also accepted.

Ministerial Committee's recommendations to Council

a) International Conference on Commodities

The idea of the conference as adopted is tempting but it has one major disadvantage, namely, the danger of compromising the entry into force of the two price-stabilizing Agreement (coffee and cocoa) which have reached an advanced stage of negotiation with the desired and positive conclusions for the ACP. As a matter of fact, given some market economy developed countries' aversion to price-stabilizing agreements and the new trend towards free play of market forces and competitiveness as a means of resolving commodity problems, it is important to confine the items on the agenda for this conference to the following three essential ones:

i) the establishment of new compensatory financing mechanisms and the improvement of existing ones;

ii) long-term solutions such as the increased participation of developing countries in the PMDT of their commodities;

iii) the special problem of ACP Countries in the area of bananas, in case a satisfactory solution is not found.

It would also be very desirable to hold this conference in an ACP country given the ACP's high dependence on Commodities.

Still within the framework of Conferences, Japan proposed to hold and sponsor in 1993 an international conference for the development of Africa but there was no reaction to this judicious proposals.

Consequently, the ministerial Committee requests, the Committee of Ambassadors to re-launch this idea by:

i) Addressing an official letter to the Japanese authorities thanking them for the initiative and requesting precise information on the aims and objectives of the Conference;

ii) involving the ACP Ambassadors in Tokyo in the process with a view to obtaining more information on the issue;

Iii) by submitting a report to the next Council for a definitive decision..

b) International Cooperation between commodity producers and consumers.

Given the fact that international cooperation is only a support for national policies in the area of commodities and in view of the new trend towards the free play of market forces, there is every reason to believe that there will be no more negotiations of new commodity agreements with economic clauses apart from those being re-negotiated (Coffee, Cocoa) or currently in force (rubber).

It is imperative, therefore, to have a common production policy for producer countries within the framework of producer organizations and/or International Commodity Agreements to raise in the medium term the extremely and unprecedented low level of prices. As regards coffee and rubber, this could be done through meetings of groups of producers, whilst for cocoa this consultation could be done within the framework of the Cocoa producers' Alliance.. For the other products, organizations of producer countries must be created.

As regards international cooperation, besides the positive outcome of renegotiations of Coffee and Cocoa Agreements to be concluded not later than December 1992, the ACP should aim at stepping up the competitiveness of their products on world markets, creating and/or improving upon compensatory mechanisms and participating more and more in the PMDT of their products.

i) Enhancing the competitiveness of ACP products on world Markets

In that regard, the Secretariat should ask to be accorded an observer status at the Fund and recommend a special conference on the Common Fund to appraise precisely the possibilities offered by the Fund, like the one that was organized for all the Contracting Parties at which the ACP Group's representation was very low.

Ii) Creating and/or improving the compensatory financing mechanisms

At the VIIITH UNCTAD, the ACP Group's position was the creation of a universal mechanism for compensatory financing to palliate the chronic inadequacies of the existing ones (CFF of the IMF Stabex and Compex of the EEC, and the Swiss mechanism). UNCTAD VIII's recommendation is on the same lines but does not lead to any definitive decision on the matter. The ACP Group should therefore pursue this idea until it materializes probably up to the International Conference on Commodities in early 1994.

In that regard, the ACP Group should participate and defend the ACP position at all the relevant meetings of UNCTAD.

iii) ACP's increased participation in the PMDT of their products

The ACP's increased participation in the PMDT of their products mainly depends on the national policy on incentives, enhancement of human resources and development of transport and telecommunication, the banking sector, energy and the strategy of the big international companies. Regarding the national and/or regional policy which requires considerable financial resources, there is the need to establish by early 1993 at the latest the special mechanism for diversifying the economy of African countries, in pursuance of UN General Assembly Resolution 46/151 while trying to associate the Caribbean and the Pacific.

Furthermore, attempts should be made to remove the restrictive trade practices of multinational companies by getting them to adopt a code of good conduct at the International Conference on Commodities.

Council may wish to adopt these recommendations.

IV). Studies on PMDT of ACP products

The Ministerial Committee hereby requests that the Committee of Ambassadors strive hard to ensure these studies are carried out with greater despatch.