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			SUMMARY RECORD OF THE 59TH MEETING OF THE  COUNCIL OF ACP MINISTERS  (Brussels, 27, 28, 29 NOVEMBER AND 2ND DECEMBER 1994) Ref: ACP/25/002/95 AMS/sac Brussels, 9 January 1995 Retyped by : bae

SUMMARY RECORD

THE 59^TH SESSION OF THE ACP COUNCIL OF MINISTERS

HELD ON 27, 28, 29 NOVEMBER AND 2^ND DECEMBER 1994

AT ACP HOUSE - BRUSSELS

OPENING CEREMONY

The opening ceremony of the 59^th session of the ACP Council of Ministers was presided over by H. E. Mr Justin NDIORO, Minister for finance and Economy of Cameroon and President-in-Office of the ACP Council of Ministers.

In his opening statement, the President-in-Office congratulated on behalf of Council and on his own behalf, his predecessor Hon. George BRIZAN, Minister of Agriculture, commerce, Industry, Energy and Production of Grenada and his Bureau for the excellent work they accomplished during their term of office.

The President then welcomed all delegates, and in particular the South African delegation, headed by Hon. Trevor MANUEL, Minister of Trade and Industry, which was attending and ACP Council meeting as an observer for the first time.

The President conveyed Council's sympathy to victims of natural or man-made disasters in a number of ACP countries and assured then of Council's solidarity. In that regard, he referred to floods, volcanic eruptions and political violence that recently claimed human lives and destroyed property.

While Council expressed its indignation over the Rwandese tragedy, it also reiterated the ACP Group's unflinching attachment to the fundamental values of respect for life, freedom and security for all.

The President welcomed the successful outcome of elections in Mozambique, the signing of a Peace Protocol in Lusaka between the Government of Angola and the rebel Unita movement, the return of President Jean-Bertrand ARISTIDE to Haiti and the restoration of democratic legitimacy in that Caribbean State. All of these events heralded the dawn of a peaceful and promising future for the people of those countries.

Reverting to the business before Council, the President drew to its attention the three major agenda item :

- the adoption of the ACP Secretariat's budget for 1995

- the election of a Secretary General, and

- the consideration of a negotiating strategy in preparation for the Mid-Term Review of the Convention with the European Union.

In that regard, he invited Council to be pragmatic and realistic in its approach. Such an approach was perfectly compatible with Council's determination to take into account all ACP interests in the Mis-Term Review.

Council's proceedings

1. Adoption of the agenda [ACP/25/016/94 Rev.3]

Council considered and adopted the agenda as set out in document ACP/25/016/94 Rev.3.

2. Communication from the President

The President communicated the following matters :

Intervention by Ministers : The President announced that the following Ministers had indicated their wish to make an intervention during Council's deliberations :

- H. E. Mr M. BIRARA, Minister of Planning of Rwanda : On the situation in Rwanda

- H. E. Mr Jean-Marie CHERESTAL, Minister of Planning and External Cooperation and National Authorizing Officer of Haiti :

On recent political development in Haiti.

Derogation to GATT rules : The Convention had been for some time the subject of attacks from GATT where panels had been set up to examine its compatibility with GATT rules. The ACP coordinator in Geneva, H. E. Mr PIERCE, Ambassador of Jamaica, had accepted the invitation to brief Council on the developments regarding the issue.

Invitation extended to the ACP Troika : the ACP Ministerial Troika had been invited by the French authorities to meet Mr DEBRE, the French Minister for Cooperation.

Meeting of the Ministerial Bureau : The Bureau met in the morning to prepare Council's deliberations. At that meeting a document prepared by the Secretariat's Legal Counsel on the procedure to be adopted for the election of the Secretary General was circulated for the Bureau's consideration. The Enlarged Ministerial Bureau also met to assess the state of progress of the Mid-Term Review exercise.

In accordance with the rules guiding the choice of a Rapporteur when a Council session is held at headquarters, the responsible region - in this case Central Africa - was required to nominate a Rapporteur. Consequently, CONGO, the region's nominee, was appointed Rapporteur of the 59^th session of Council.

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

East Africa : Seychelles

Southern Africa : Angola

West Africa : Mauritania

Caribbean : St. Lucia

Pacific : Papua New Guinea

4. Approval of the draft summary record of the 58^th meeting of the Council of Ministers held in Mbabane, Swaziland, on 16 and 17 May 1994 [ACP/25/017/94 Rev. ]

Introducing the report, Hon. Themba N. MASUKU, Minister for Economic Planning and Development of Swaziland and Rapporteur to the 58^th session of Council, said that the Rapporteur and his Friends had considered the first draft prepared by the Secretariat, then cleared by the Committee of Ambassadors. He expressed appreciation for the assistance provided by his Friends in finalizing the report. He also thanked the Secretariat for preparing a first draft.

Having made those remarks, the Honourable Minister commended the draft summary record for approval by Council.

Council considered and adopted the draft summary record of its 58^th session held in Mbabane, Swaziland on 16 and 17 May 1994; with the following amendments :

c) Arrangement pertaining to the notification of vacancy of the post of

Secretary General (page 28) : "Council took note of the proposal" .... reads "Council accepted the proposals" (amendment underlined).

A. The Committee of Ambassadors' report and draft budget

5. Considered of activity report of the Committee of Ambassadors on the

implementation of the Lomé IV Convention and internal matters [ACP/26/069/94 Rev.1] :

Introducing the activity report, H. E. Mr I. BASSONG, Ambassador of Cameroon and Chairperson-in-Office of the Committee of Ambassadors, said that since the 58^th meeting of Council, the Committee of Ambassadors had been concerned primarily with the Mid-Term Review, but it did also monitor the implementation of the Convention.

On the political and social front, the Committee continued to monitor the changes unfolding in a number of ACP countries, in particular the crises in Haiti and Rwanda.

The Chairperson then proceeded to identify outstanding issues on which the Committee of Ambassadors required further guidance from or a decision by Council. Below is a summary of Council's deliberation on those issues.

The position of the Lomé Convention in the context of GATT : Council's attention had been drawn to the precarious position of the ACP Group vis-à-vis GATT and the Uruguay round. In a bid to regularise the position of the Lomé IV Convention in the context of GATT, and to stem attacks on the trade protocols, it had been decided to seek a waiver from the GATT Council.

In recognition of the important role to be played by ACP Ambassadors in Geneva and out of a desire to be fully briefed on all dimensions of the issue, the Committee of Ambassadors had invited Ambassadors PIERCE of Jamaica and ACP coordinator in Geneva, to address Council.

The elements of the intervention by H. E. Mr R. PIERCE are found in Annex I attached.

At the close of the exchange of views that followed Ambassadors Pierce's presentation, Council urged all ACP countries Contracting Parties to the GATT to attend the 50^th session of the Contracting Parties and to cast their votes in support of the ACP request for a waiver.

Situation in Rwanda :

Intervening on the situation in his country, the Minister of Planning of Rwanda, H. E. Mr BIRARA, first of all thanked the ACP Group for their show of sympathy to the people of Rwanda following the tragic events that the country experienced.

Having related the origin and sequence of events leading to the genocide in Rwanda, the Minister told council that the Government of Rwanda, composed of parties which did not participate in the genocide, took over a country with a devastated economy and infrastructure. The state apparatus had to be rebuilt and the new government lacked the financial and other material and human resources to face up to the three major tasks comprising.

- national reconciliation

- solidarity between the people of the country, and

- good relations with the neighbouring countries (which share the same history and culture with Rwanda).

In that endeavour, the new authorities in Rwanda sought :

- the understanding and solidarity of the international community especially its Lomé partners;

- both moral and material support in order to prevent the recurrence of such sad and tragic events;

- ACP support to urge the EU to allow Rwanda to accede immediately to its Lomé entitlements.

Having heard the report on the developments in the situation in Rwanda, and after holding an exchanged of views on the subject, Council :

- condemned those responsible for the genocide and demanded that they be brought the international tribunal set up for that purpose;

- called on the International community and especially the neighbouring countries to continue to show their understanding, solidarity, material and moral support for the Rwandan people and reinforce the appropriate preventive measures with a view to restoring peace and security in the region;

- urged the European Union to give the new Rwanda government its politics, economic and Financial support so as to enable it reconstruct the country;

- requested the ACP countries and the European Union to provide additional financial resources through the mechanisms of the Lomé Convention and established procedures;

- encouraged the humanitarian organizations operating within the country to step up their efforts in order to alleviate the sufferings of the Rwandan population.

Situation in Haiti

The Minister of Planning and External cooperation and National Authorizing Officer of Haiti, H. E. Mr Jean-Marie CHERESTAL, for his part, expressed his country's gratitude to the ACP Group which gave support to the people of Haiti during the three years of residence against despotic rules which destroyed the country's economy and brought misery and hunger to the people of Haiti. The ACP Group's support in helping adopt resolutions at international forums was an effective contribution to the isolation of the military regime which suppressed the majority of Haitians.

H. E. Mr. CHERESTAL observed that the situation was corrected on 15 December 1994 with the restoration of the democratic process in Haiti. Haiti needed help to reconstruct its battered economy. Therefore the ACP Group should pursue its support and solidarity for the achievement of material well-being which is necessary to nurture democracy.

PART I : ACP-EU COOPERATION

A. TRADE COOPERATION :

Enlargement of the European Union : Pursuant to the provisions of Article 358 of Lomé IV Convention, the ACP Group should engage in negotiations with the EU on the effects of the accession of the new members to the Union, namely Austria, Finland and Sweden and future members. The negotiations would aim mainly at establishing a protocol of accession and adopting measures of adaptation or transition that might be necessary.

Council took note of the progress made in the study on the implications of the enlargement of the EU and it mandated the Committee of Ambassadors to negotiate with the EU on behalf of the ACP Group.

SUGAR :

The report on Sugar presented by the Ministerial Spokesman, Hon. K. C. RUHEE, Minister of Agriculture and Natural Resources of Mauritius, covered the following subjects :

New Sugar Regime : The spokesman informed Council that the EU Commission adopted the proposals on the new Sugar Regime to be implemented from 1^st July 1995. The Ministers decided that an analysis of the proposals would be carried out by a working group consisting of Brussels-based representatives, the London Commercial Group and delegates from capital. The meeting could be held in December or January in Brussels.

Meeting with Commissioner STEICHEN : On Monday 28 November, the Ministerial Spokesman on sugar led an ACP delegation, comprising the representatives of the Enlarged Bureau together with the Chairman of the sugar Subcommittee, to meet commissioner STEICHEN. The meeting enabled the ACP delegation to convey a number of issues affecting ACP sugar.

A ministerial lobbying mission was also undertaken to 9 EU capitals where ACP concerns about their sugar industries were raised with the various European Ministers met. The EU Ministers who were visited on that occasion appreciated the fact that the they would lend their support to the ACP position when called upon to make a decision on the Sugar Regime.

The 1992 European Parliament (EP) report on the sugar regime - the Pasty Report :

the resolution adopted in January 1993 consequent to this report contained certain elements that could be detrimental to ACP interests. To avoid similar proposals prevailing when the EP is called upon to study the Commission's proposals on the new Sugar Regime, the Ministers recommended that meetings be organized with the President of the EP's Committee on Development and Agriculture.

The guaranteed price Sugar - 1993/94 Delivery Period : The Ministers took note of the conclusions of the price negotiations. In spite of the fact that the offer represented a 1.3% reduction in ECU terms, it was accepted in a spirit of compromise, in the hope that the EU partners would respond favourably to the ACP Group's long-standing expectations in other areas.

The guaranteed price for ACP Sugar - 1994/95 delivery period : Noting that the Commission's offer represented a freeze at the 1993/94 price level, the Ministers decided that it would be appropriate to defer a detailed examination of the offer until discussions on other important issues enabled the ACP to view the price offer in a global perspective.

The important of the GATT Agreement on ACP Sugar : Having been appraised of a preliminary analysis done on this issue, the Ministers noted that it was difficult to predict how the ACP price would be affected during the transitional PERIOD. They agreed on the need for an in-depth analysis of the implications of the GATT Agreement on the Sugar Protocol. If it brought price reductions, the claim for compensation should be entertained by the EU.

ACP Sugar transport costs study : In the light of other ACP priorities under the present circumstances, Ministers mandated ACP representatives in Brussels to hold informal discussions with the Commission officials to keep this issue alive.

Accession of Zambia to the Sugar Protocol : Ministers noted that the Commission was finalizing its examination and recommendations for Zambia's accession to the Sugar Protocol as from January 1995 and called for an early completion of this exercise.

Having heard the above report and at the close of an exchange of views, Council adopted a resolution in which it :

I) called on the European Union to :

ensure that, in keeping with the provisions of Sugar Protocol, due consideration is given to the relevant socio-economic factors submitted by the ACP States signatory to the protocol in their annual memorandum when considering the price package to be offered to the ACP;

recognize that the ACP States signatory to the Protocol did make a sacrifice when they accepted, without any accompanying measures, the 1993/94 price offer despite the detrimental effect which the continued restrictive price policy is having on their economies. They had done so in the hope that due consideration be given to their outstanding requests;

ensure that the long-standing and legitimate ACP request to supply the EU refiners' deficit at the full quaranteed price, is fully met in the review of the sugar regime now being proposed by the Commission;

expedite the final agreement on the supply of the EU refiners' raw deficit so as to ensure that appropriate commercial arrangement can be effectively implemented as from July 1^st, 1995;

agree in consultation with the ACP on adequate measures to allevaite the burden on the ACP suppliers of the high cost of transporting sugar to European ports;

hold early consultations with the ACP States signatory to the Protocol on its proposals regarding the EU refiners' deficit in keeping with previous assurances;

finalize its report on Zambia's sugar industry and expedite the procedure for that country's accession to the Sugar Protocol by 1 January 1995.

International Coffee Agreement : Council noted with satisfaction that the International Coffee Agreement entered into force on 1 October 1994. It recalled the initiative taken by 27 States, including many ACP countries, to set up in September 1993 an Association of the World's Coffee - producing countries whose aim was to implement a plan for the retention of 20% of exportable production.

Council expressed concern over the recent plunge in the price of coffee caused by speculation. It had adversely affected the retention plan whose objective was to rise coffee prices and improve the balance between supply and demand. In a bid to strengthen the Association, council requested :

- the ACP which had not done so to join the Association;

- the signatory members to ratify the Agreement in order to confer on it the relevant legal status and to enable it to intervene on the market to stave off a fall in prices through a reactivation of the retention plan.

C. STABEX :

Transfers for Sudan for 1990, 1991, 1992 and 1993 years of applications :

Council recognized that Sudan, a least developed country deserving special attention, was entitled to transfers for the years listed above. It was concerned that the long delay resulting from the Commission's refusal to sign transfer agreements with Sudan was having a disastrous effect on the economic sector concerned.

Council recalled the commitment of Contracting Parties under Annex XLVI to adopt the simplest possible procedures for the application of the Framework of Mutual Obligations with a view to making transfers available to the ACP States as swifty as possible. Consequently, it called on the commission to sign the transfer agreement with Sudan to enable it to draw on its Stabex entitlements for the years of applications in question.

D. INDUSTRIAL COOPERATION

Appointment of the new heads of the CDI : Under this subject, the Minister of Finance of Western Samoa, Hon. Tuilaepa Sailele MALIELEGAO, speaking on behalf of the Pacific region, recalled that at its 58^th session hel in Mbabane, Swaziland, council had accepted, inter alia, the proposal that, for the purpose of the second cycle of Lomé IV, the post of Director of the CDI be filled by a national of the Pacific region.

The Pacific region, he indicated, wished to advise Council that it had identified Mr Surendra SHARMA, current Deputy Director of CDI, as the Pacific region's nominee to the post of Director of the CDI for the second phase of the Lomé IV convention. He aurged Council to issue directives to the Committee of Ambassadors to ensure that necessary measures were taken to ensure a smooth transition at the management of the CDI.

Council took note and instructed the Committee of Ambassadors to take appropriate measures to appoint at the Director of the CDI.

SYSMIN, MINING AND ENERGY DEVELOPMENT

Mining development : Council observed that Sysmin resources, hitherto used for the rehabilitation of the mining sector, should be used for exploration of

minerals and investment in the mining sector. Such an approach could stimilate mining development in ACP countries.

F. Resumption of Cooperation between the European Union and certain

ACP States : Council had an exchange of views on the suspension of cooperation beteen the EU and certain ACP States and it expressed concern about the effects of that suspension on the people of the countries concerned. Council called to mind the spirit of friendship, solidarity and cooperation which characterizes the Lomé arrangements and the need to maintain the spirit of international cooperation in the interest of the various Lomé partners and of mutual understanding. In view of the foregoing, Council :

- called on the european Union and the ACP States concenred to normalize thier relations;

- urged the European Union, to this end, to resume its cooperation with ACP States in the context of the implementation of the fourth Lomé Convention;

- recommended, in the general contexct of this resumption, that measures be taken to ensure that these States enjoy their STABEX transfer rights as quickly as possible and in conformity with the amounts mutually drawn up under the various implementing years.

PART III : INTRA-ACP, REGIONAL, CULTURAL AND SOCIAL, COOPERATION

The movement of waste from the EU Member States to ACP States :

Council discussed the Note Verbale and questionnaires addressed by the Directorate-General for External Relations of the European Commission to ACP Mission concenring the provisions of that Regualtion which relate to shipments of so-called green waste for recovery from EU Member States to ACP countries.

Given the highly sensitive nature of the issue, council took note and referred it to the Committee of Ambassadors for further examination. In the meantime, it stressed that non-stressed that non-responses to the quesionnaires sent out by the Commission should not be regarded as acceptance by or willingness of the ACP Group to import so-called "green" waste from EU Member States into ACP countries.

PART IV : ACP INTERNAL MATTERS

A. Financial matters

Financial position of the ACP Secretariat : council examined the huge arrears of contribution resulting from the failure of a number of member States to pay regularly and on time their contributions to the Secretariat's budget. After reviewing the possible causes for the failure to pay up, Council :

- instructed the Chairman of the Committee of Ambassadors to contineu applying sanctions against defaulting States;

- directed the Committee of Ambassadors to review current cases of exemption with a view to making a recommendation on whether to contune the exemption or request the States concerned to resume payment of contributions;

- decided that requests for exemption from payment of contributions and from application of sanctions should be introduced to the Secretariat by the Member States concerned in writing, stating the grounds for seeking exemption;

- further decided that the Committee of Ambassadors should examine and assess the request and make a recommendation to Council for a decision, pending which the contributions as budgetary remain due.

Review of the categorization of ACP Member States as regard their contribution to the ACP Secretariat's Budget : In a bid to finding a solution to the problem of contributions to the Secretariat's budget, Council revisited its decision to set up a Group of External experts to review the categorzation of Member States for purposes of payment of contribution to the Secretariat's budget.

- the study on the review should be undertaken by an external consultant and that it should be completed in time for presentation to the next Council session;

- provision for the study, estimated at BF 1 000.000 was to be made in the "Contingencies" Head of the 1995 budget and the Reserve Fund.

With regard to contries in a special situation, Council decided that pending the outcome of the study, ERITREA would be temporarily classified in category A and that it should start pauing its contribution as from the 1995 financial year. The other countries in a specail situation, RWANDA and SOMALIA, wer expempted from the payment of their contributions to the 1995 budget and the application of sanctions and all their arreras of contribution inclusive of interest were frozen.

External auditor's Report for 1993 and appointment of an external

- approved the auditor's report on the Secretariat's accounts for 1993

- adopted the auditor's recommendations set out in his management report

- gave discharge to the Authorizing officer for the 1993 financial year.

Finally, Council decided that the firm KPMG Peat Marwick be appointed to undertake the audit of the Secretariat's 1994 acounts, but for 1995 and subsequent years, the Secretariat should invite tenders with a view to preenting other options to Council.

Establishment of an internal tax system for the Secretariat : council was informed that the Headquarters Agreement concluded between the Belgian authorities and the ACP General Secretariat was in the course of being ratified and that the last condition to be fulfilled by the Secretariat was to establish an internal tax system. The document relating to that subject as adopted (doc. ACP/27/020/92 Rev...) Had been forwarded to the Belgian Government.

Having taken note of the above information, Council decided to establish an internal tax system for the Secretariat and authorized the Genral Secretariat to modify the salary structure and scale by indicating salaries gross of tax.

Housing allowance of the Deputy Secretary General : After recalling Decision N°.3/LIV/92 of the 54^th Council session establishing the conditions of service of the Deputy Secretary General including a monthly housing allowance of BF 140 000 and given the position of the Commission of the European Union to reimburse not more than BF 65 000 of the said allowance, council decided to maintain the BF 90 000 provision in the budget to be financed from the contributions of the ACP States.

i) Extension of contracts of staff of the ACP General Secretariat

Permanent Staff : Council took note of the Committee of Ambassadors' decision to extend the contracts of permanent staff for a period of 6 months from 1 March to 31 August 1995 pending the completion of the consideration by the Committee of the assessment of the position carried out by the Organization and Methods Bureau of Senegal.

Temporary Staff : given that the consideration of the study on the staff requirements of the General Secretariat by the Committee of Ambassadors had not been completed, Council decided to authorize the Secretary General to extend the contracts of the temporary staff for a period of 6 months from 1^st March to 31^st August 1995 in accordance with the statutory provisions in force.

Statement by Hon. Trevor MANUEL, Minister of Trade and Industry of South Africa : Council heard an intervention from Hon. Trveor MANUEL, Minister of Trade and Industry of South Africa, on that country's effeorts tofind its own niche in the global arena and more particularly how it could

Be aligned with the Lomé convention after the country had abandoned the practices of apartheid. He requested the Council of Ministers to establish a task force during the current Council meeting to begin the discussions on how South Africa could be aligned with the Lomé Convention. The text of his intervention is attached as Annex II.

At the conclusion of the exchange of views that ensued, Council decided to :

- establish, within the Council of Ministers, a Working Group comosed of one representative from each of the ACP regions;

- entrust the Working Group with the consideration of the nature and content of the future relations between the Lomé Convention and the Republic of South Africa, and to define the modalities of the latter's contribution to the growth and development of all ACP States;

- entrust the Ambassadors of the countries represented within the Working Group with the preparation of recommendations on these matters for submission to the Working Group before the next session of the Council of Ministers.

Finally, council asked the Ministers from South Africa to provide the ACP Group with a dossier on his country to enable the Working Group to carry out the mandate handed down.

Candidature of M. RENATO RUGGIERO to the post of Director General of the World Trade Organization (WTO) : Council was informed that the Enlarged Bureau of the Committee of Ambassadors received anEU delegation which requested the ACP Group's backing of Mr Renato RUGGIERO of Italy, the EU's candidate to the post of Director General of the World Trade Organization (WTO). The EU delegation pointed out

that Mr. ruggiero was sentive to ACP¨concerns in the new approach to global trade liberalization.

In its discussion on the matter, Council observed not only that ACP-EU Copperation was essential to ACP development but the EU is the main trade partner of the ACP States. In view of this, the ACP Group had a stake in the EU's candidate. Consequently, Council urged ACP States, Contracting Parties to the GATT to give their individual support to Mr

Renato RUGGIERO.

6. Consideration and adoption of the ACP Secretariat's budget for 1995

[ACP:45/019/94] and accompanying documents [ACP/45/021/94, ACP/022/94, ACP/45/023/94 and ACP/45/017/94 and ACP/41/020/94]

The ACP Secretariat draft budget for 1993 was introduced by the Chairperson of the Committee of Ambassadors, H. E. Mrs I. BASSONG , Ambassador of Cameroon. She pointed out that the Secretariat's budget proposals had been considered by the Establishment and Finance Subcommittee, by the Committee of Ambassadors which took into account the observations of the Financial Controller. The Chairperson's presentation was supplemented by remarks and observations by the Secretary General.

The introductory remarks were followed by an-in-depth discussion by Council. Below is a summary of Council's deliberations on the ACP Secretariat budget for 1995:

Financial Controller's Report : Council considera and adopted the recommendations set in the annual report by the Financial Controller as itemised below :

- the staff complement, including temporaries should be frozen at the 1994 levels;

- the provision for overtime worked should be further reduced;

- the proposal for an annual appropriation for uniforms to eligible GS staff should be reviewed;

- the vote for staff development programme should be abolished and any concrete proposals from the Secretariat be financed from the arrangements being negotiated with the EU Commission;

- the allocation for staff replacement should be reduced;

- provision should be made for confirmed cases of repatriation/recruitment, otherwise the head should be charged to contingencies or Reserve Fund;

- cheaper travel tickets should be obtained even for individual missions

- and ACP contribution to the Joint Assembly fund should be provided only when Annex LXVIII fund runs short.

Preparation of the draft :Council directed that in future the draft budget should be accompanied with an evaluation paper on the management of the Secretariat and a work programme that should justify the budget proposals.

The ACP General Secretariat's 1995 Budget : Having considered the draft budget recommended by the Committe of Ambassadors, with the statutory accompanying documents, Council decided as follows :

- the amount of the ACP General Secretariat's 1995 budget was fixed at BF 248 156 000 to be financed as follows :

- Contributions from ACP States 118 428 000

- EDF Contributions 102 077 000

- Tax revenue 21 023 000

- Reserve Fund 6 540 000

- Income from the ACP Hall 88 000

Total BF 248 156 000

Issues arising from the adoption of the draft budget

a) Home Leave Entitlements : Introducing this issue, the Chairperson said that at the close of its in-depth discussion, the Committee of Ambassdors was informed about an appeal by the Staff Association to re-examine the Subcommittee's recommendation on home leave entitlements as the application of a decision based on that recommendation could create some difficulties and would reduce the acquired rights accrued to staff under Article 55 of the Staff Rules.

The Committee of Ambassadors confirmed the provisions of Article 55, namely, travelling

- in economy class passage

- by the most direct route

- without restriction

However, it requested the Secretariat to negotiate with travel agencies special fare tickets valid for at least 3 months. The Committee further requested the Secretariat to set up a unit within the Secretariat responsible for centralizing the orders for all tickets (home leave, missions, seminars, etc...)

Considering that the provisions in the 1995 budget for home leave would create a situation whch is contrary to the spirit and letter OF Article 55 and taking note of the appeal by the Staff Association, council, at the close of its discussion mandated the Committee of Ambassadors :

- to examine the issue in the light of its observation and to apply its decisions

- to charge any budget overruns to the Reserve Fund and the Financing Agreement with the Commission of the European Union.

b) Tuition fees : Council was informed that members of staff of the Secretariat had expressed concern regarding the constant and substatial increase being demanded by the internation (English Speaking) Schools in Brussels. Indeed, it was alleged that some staff members are meeting about 2/3 of the total fees, a situation which is at variance with the conditions of staff contracts.

Council, recalling its decision N° 1/LIII/91 of its 53^rd session fixing the ceiling for tuition fees, indicated that the objective of that decision was not to create difficulties for staff members affected.

In view of the concerns expressed by staff members, Council instructed the Committee of Ambassadors :

- to examine this issue in the light of council's observation and to apply its decsions; and

- to charge any budget overruns to the Reserve Fund and the financing Agreement with the Commission.

B. MID-TERM REVIEW

7. Consideration of reports on :

- the meeting of the Enlarged Ministerial Bureau held inb Brussels on 17 and 18 October 1994 [ACP/25/018/94]

the summary record of the meeting of the Enlarged Ministerial Bureau, document captioned above, distributed for information was noted by Council.

- the state of the negotiations [ACP/26/080/94 and ACP:00/043/94 Rev.1 and ACP/00/046/94]

the Central Negotiating Group (CNG) Having heard the progress report by the chairperson of the Committee of Ambassadors, H. E. Mrs I. BASSONG, Ambassador of Cameroon, on the Mid-Term review with respect to matters dealt with by the CNG, council discussed the following outstanding problems :

Institutional matters : the ACP-EU Joint Assembly

Frequency of meetings : In view of the increasing important of the role of the European Parliament and of the fact that that body is generally receptive to ACP concerns, council maintained its stance that there should be two annual meetings.

ACP Representation at meetings of the Assembly : council observed that the democratization process unfolding in ACP States should be encouraged. It noted however, taht the ACP States still require time and support to pursue that process. In view of that, Council reiterated its position that the current practice of ACP State with Parliaments being represented by Parliamentarians at Joint Assembly meetings and those without elected Parliaments represented by officers designated by the States concerned be maintained. The ACP Group should press for the maintenance of the status quo.

Human Rights, Democracy and the Rule of Law : Council expressed the ACP Group's belief in maintenaning human rights, democracy and the Rule of Law. However, it observed that the EU's assumption founded incorrectly on the notion that only ACP States are likely to infringe Human Rights in an apparent failure to appreciate the positive efforts already made by a number of ACP countries in respecting or omplementing these concerpts and does not take into account infringements in EU States. For instance, the rights of ACP nationals are often not respected in EU States by agents such as immigration police.

Emphasis should instead be laid on the position developments with ACP countries whose records in respect of human rights and records have improved considerably. Indeed, more positive measures need to be put in place to promote human rights and democracy in ACP States, and to address non-political factors threatening new democracies.

Consultative groups, involving the State and private sectors should help to I dentify and eliminate the non-political factors working against the respectg for human rights and democracy.

The suspension clause : Having heard the text of the suspension clause proposed by the EU Commission (read by the Chairperson) which included a consultations mechanism and a suspension process, Council discussed ways and means of ensuring that any agreement entered into in this area would not be used to the detriment of ACP States. It therefore set out the following approach to ensure that the suspenstion clause is not unilaterally applied against one party :

- a clear procedure for suspension should be outlined;

- the ACP group should demand that unequivocal criteria for suspending the Convention be defined and spelled out in the Concention;

- an unambiguous procedure of censure against EU Member States who infringe guidances of respect for human rights, good governance etc, need to be drawn up;

- with rrespect to consultations, details of the procedure and pre-agreement on the topics of consultation should be established so as to render them transparent and objective and finally;

- a permanent ACP structure should be put in place to deal with issues relating to Article 5 of the Lomé Convention. The ACP Troika plus the stae accused of human rights violations could for example constitute the corre membership of such a structure.

The "Free Market process" condition : Council referred briefly to the German proposal to have a condition of "free market process" introduced into the Convention. It decided that the concept should be rejected because it is not consitent with the EU's position regarding one of its trade partners, namely that trade with that partner would not be affected even by an infringement of human rights.

The status of Commission delegations in ACP States : t was felt that this is a bilateral matter. However, if it is accepted as an issue of the Lomé convention, its consideration should be traced off against guarantees of a headquarters agreement and the free movement throughout the Union of ACP personalities and offers operating within the Lomé Convention.

Council was not opposed to the proposed change of designation of the EU Delegate but it called for the reinforcement of his powers in the administration of the programmes.

Political dialogue : council was not opted to political dialogue but is stressed that all political dialogue - be it global ACP, regional or subregional - should be conducted within the context of the Lomé Convention and ACP-EU cooperation. Any attempt to depart from that framework could contribute to the weakening of ACP solidarity and cohesion.

Negotiating Group 2 : Trade Cooperation and related matters

The state of progress in the work of Negotiating Group 2 was presented by Hon; RUKIKAIRE, Minister of State for Finance and Economic Planning of Uganda and ACP Ministerial Spokesman on Trade Cooperation and related issues. Following his introductory remarks, Council held an exchange of views on the outstanding issues, arriving at the following :

Market access : Council endorses the position proposed by the Negotiating Group, namely that :

the ACP should request an across-the-board reduction of all measures, customs duties, quantitive restrictions and measures having equivalent effect, applied on ACP products;

as a fallback position (in the event that the EU would not accede to the first position), the ACP negotiators should request improvements on specific products for which the ACP could demonstrate an export potential. The Secretariat was requested to contact ACP Missions with a view to preparing ring a list of such products.

Cumulation : The ACP position could benefit from establishing a list of developing countries in the same areas as the ACP countries in which originate the products for which originating status is being requested.

Automatic derogation for Canned Tuna : Council called for an increase in the tonnage for automatic derogation from 2500 tonnes to 8000 tonnes (a compromise figure of 5000 tonnes could be acceptable).

Bananas : Council reaffirmed its supports for the request that a link be established between the current organization of the market and the protocol on Bananas in Lomé IV. Council also agreed that additional resources for the second half of the Convention were necessary and should also apply to non-traditional AC P suppliers.

It was felt, however, that this request should be pursued with caution given the prevailing hostility against the current regime in certain Member States of the EU.

Protocol for Tropical Timber : council maintained its initial request for a Protocol for Tropical timber which would ensure a rational ans sustainable exploitation of ACP tropical forest resources. In that regard, it recalled that in some ACP countries the land tenure system makes its difficult to ensure such exploitation of forest resources. The Protocol could be a useful increment for the ACP States concerned.

Negotiating Group 3 : Development Finance Cooperation and related matters :

Following the presentation of the state of negotiations in the area of Development finance Cooperation and related issues by the ACP Ministerial Spokesman on Group 3, Hon. Dr. SENAONA, Minister of Finance, Economic Planning and Manpower Development of Lesotho, council focused on the areas where neither an agreement nor a compromise had been reached. Those areas included the following :

- Tranching : Two positions emerged from Council's exchange of views on this subject.

Those against tranching argued that it would bring about additional delays noting that the procedure itself does not tally with national planning strategy. Furthermore, the EU side had not spelt out the criteria for eligibility for the second allocation.

The speakers who proposed a compromise pointed out that tranching as a principle did not pose any problem and they aurgued that there is already some form of tranching being carried out by the Commission. In view of this and given the determination of the EU, the ACP could propose, among other, one of the following compromises :

- accept the principle of tranching and negotiate a higher initial percentage, or

- trade-off tranching for another problematic area;

Decentralized Cooperation : Council expressed its opposition to giving the agents of decentralized cooperation direct access to the financial resources without the express agreement of the ACP State, as provided for in the Convention. Such a procedure would erode the democratic accountability and credibility of ACP States.

Implementation Procedures : Council maintained its opposition to the EU's proposal which it regarded as tantamount to transferring ACP national sovereignty to brussels. Instead, Council called for devaluation of more powers to the Commission delegates in the ACP countries so as to accelerate the implementation of projects and programmes. Council urged that the conclusions of the discussion on this subject by the 3^rd meeting of the ACP National Authorizing Officers should be used for improving the procedures.

Industrial Cooperation : Council expressed its firm opposition to the EU's proposed amendments to the current provisions relating to the institutions that govern the CDI and the appointment of both the Director and the Deputy Director of the Centre. It called for maintenance of the current practice.

Cultural and Social Cooperation : the EU proposal, which indirectly attempt to eliminate the recognition given to the ACP-EU cultural Foundation by the Convention and thereby terminate direct financial support to it was not acceptable to Council. The reference to the Foundation should be maintained in the text of the Convention.

Maritime Transport : Council called for the funding of ACP national shipping lines in order to enable them to acquire the instruments for improved capacity in Maritime Transport. This would encourage ACP participation in this area of trade where the dominance of the rich countries is damaging to the limited ACP potential. However,, it was felt that this point should be pressed with caution, since the EU partners did not show an interest in promoting increased ACP participation in Maritime Transport.

Private Sector Development : Council stressed the need for the EU to give support to strengthening the ACP private sector in order to support ACP capacity to achieve self-reliance.

Finally, council endorsed the strategies and recommendations set out in the report of Negotiating Group 3 and urged the group to press the positions set out therein.

8. Organization of negotiations :

a) Programme [ACP/43/016/94 Rev.2 BUR]

b) Structures [ACP/25/022/94]

9. Consideration of the resolutions adopted by the Joint A assembly in Libreville and forwarded to Council [AP/1320, AP/1321 and AP/1322] : the resolutions seen in the context of the consideration of the report of the Committee of Ambassadors to Council, item 5 above, were noted by Council.

10. Appointment of members of the Ministerial Bureau [ACP/549/79 Rev. 25]

the countries listed below were appointed to serve on the new Ministerial Bureau which assumed office at the end of the 59^th session of Council :

Southern Africa : SWAZILAND (President)

Central Africa : CONGO (Member)

East Africa : ERITREA (Member)

West Africa : NIGERIA (Member)

Caribbean : BELIZE (Member)

Pacific : PAPUA NEW GUINEA (Member)

11. Election of the Secretary General

At its session held in Mbabane, Swaziland, council accepted the proposal that for the purposes of the Lomé IV second cycle, the post of Secretary General be filled by an African, that of the Deputy Secretary General by a Caribbean national and the post of Director of the CDI by a national from the Pacific region.

consequently, council received the following candidates :

- Dr Ghebray BERHANE, the incumbent, from Ethiopia

- H. E. Mr Marcel Ibinga MAGWANGU, ambassador of Gabon in brussels

- Dr Machivenyika Tobias MAPURANGA from Zimbabwe, Assistant Secretary General, OAU.

The President having announced that consultations had failed and therefore the appointment of the Secretary General could not be done on the basis of a consessus, Council proceeded on to hold elections with the following results :

1^st Round
 

Dr Ghebray BERHANE	10
H. E. Mr Marcel Ibinga MAGWANGU	24
Dr Machivenyika Tobias MAPURANGA	28

At the close of the first round of voting, Dr Ghebray BERHANE withdrew the race.

2^ND Round
 

H. E. Mr Marcel Ibinga MAGWANGU	24
Dr Machivenyika Tobias MAPURANGA	38

The second round having failed to produce a candidate with the 4/5 majority required by the regulations, Council agreed to pursue the elction process at its February 1995 session, but no other candidates would be accepted.

12. Outcome of the 59^th Council Session

- adoption of the draft decisions and resolutions :

a) Decisions :

Council adopted the following decisions :

Decision N° 1/LIX/94 : The ACP General Secretariat's 1995 budget

Decision N° 2/LIX/94 : External auditor's report for 1993

Decision N° 3/LIX/94 : Housing allowance of the Deputy Secretary General

Decision N° 4/LIX/94 : Extension of contracts of the temporary staff of the ACP General Secretariat

Decision N° 5/LIX/94 : Classification of Eritrea in the scale of contributions to the ACP Secretariat's budget

Decision N° 6/LIX/94 : Situation of countries in difficulty

Decision N° 7/LIX/94 : Internal tax system

Decision N° 8/LIX/94 : Appointment of external auditor

Decision N° 9/LIX/94 : Review of the categorization of ACP Member States as regards their contribution to the ACP Secretariat's budget

Decision N° 10/LIX/94 : Situation of Rwanda and Somalia

Decision N° 11/LIX/94 : Condition of home leave travel for members of staff of the ACP General Secretariat

Decision N° 12/LIX/94 : tuition fees of members of staff of the ACP General Secretariat

Decision N° 13/LIX/94 : Establishment of a Working Group to examine future relations between South Africa and the Lomé Convention.

b) Resolutions :

Council adopted the following resolutions :

Resolution N° 1 : Coffee

Resolution N° 2 : Sugar

Resolution N° 3 : Stabex transfers for Sudan for 1990, 1991, 1992 and 1993 years of application

Resolution N° 4 : Situation in Rwanda

Resolution N° 5 : Resumption of cooperation between European Union and certain ACP States.

13. Date and venue of the next meeting of :

a) The ACP Council of Ministers

The next session of the ACP council of Ministers will take place in February 1995 in brussels, Belgaum, at a date to be communicated later.

b) the ACP-EU council of Ministers

the next meeting of the ACP-EU Council of Ministers will take place in February 1995 in Brussels, Belgium, at a date to be communicated later by the Co-Secretariat.

14. Any other business

Under this item, council heard a statement by :

Hon. Michael NALI, MP, on Bougainville and volcanic eruption in Rabaul, Papua New Guinea.

H. E. Mr Joao Batista KUSSUMUA, deputy Minister of Planning and Economic Coordination of Angola on the recent political developments in Angola following the signing on 20 November 1994 by the government of Angola and the rebel movement UNITA of the Lusaka Peace Protocol.

Hon. Dr Abdulmejid HUSSEIN, Minister for External Economic Cooperation of Ethiopia, on the destruction caused by floods and typhoon in some countries in East Africa, especially in Djibouti.

GABON : 50.000 BF

ETHIOPIA : 100.000 BF

council expressed profound gratitude to the two countries for their kind gesture and encouraged other countries to follow the excellent example.

Concluding remarks

On behalf of Council, Hon. RUIKIKAIRE, Minister of State for Finance and Economic Planning of Uganda thanked the President for the professional manner in which he conducted the deliberations of Council. The President's fairness and his expert handling of the issues were factors which contributed largely to the success of the meeting of Council.

The Minister thanked also the Chairperson of the Committee of Ambassadors for guiding Council through very complex issues, and through her, the entire Committee of Ambassadors for preparing Council's session.

Finally, the President expressed gratitude to all participants for their cooperation and useful contributions to the deliberation of Council. He wished delegates a safe return to their respective destinations.
 

A N N E X I
Statement made by H. E. Mr. Richard PIERCE

Ambassador of Jamaica to GATT, Geneva

to the ACP Council of Ministers on Item 5(a) Derogation of Lomé IV

from GATT's Regulations

My task has been made easier by the statement made earlier on this matter by Madam the Chairman of the Committee of Ambassadors. As Ministers are aware, the question of the compatibility of the provisions of Lomé IV, particularly those provisions dealing with trade preferences, have been the subject of lengthy discussions at a number of sessions of GATT Council; have formed the basis of two dispute panels requested by Latin American Banana Exports complaining against the preferences granted bananas exported to Europe by the ACP countries; and have featured prominently in discussions of the Working Party which was appointed by GATT to examine the provisions of Lom IV. Because of the strongly held views of those who felt the trade provisions of Lom IV were not compatible with GATT, and those who argued that they were, the Working Party took almost one year to complete and present its report. In the end the report drew no definite conclusions. It merely reported the views of ACP States and those of the others.

The first Banana Panel ruled that the quantitative restrictions maintained by France, Italy, Portugal, Spain and the U.K. on imports of bananas were inconsistent with a number of GATT articles, and further concluded that the legitimacy of tariff preference accorded by the EEC to imports of bananas originating in ACP countries could only come about from action of GATT Contracting Parties under Article XXV - i.e., by granting a waiver to the E.C. to continue granting such preferences.

The Second Banana Panel was again brought about by Latin American Banana Exporting countries, this time against the 17^th December 1992 Decision by the E.C. council of Ministers on a common organization of the market in bananas. The Panel found that elements of the new regime were inconsistent with the provisions of GATT. Its concluding remarks were of particular interest and I quote in part -
"The Panel, throughout its proceedings was well aware of the economic and social effects of the EEC measures on the ACP banana exporting countries, as well as on the Latin America banana exporting countries. However, it had to take into account that its terms of reference were to examine the EEC measures at issue exclusively in terms of their legal consistency with the General Agreement".

It goes on to say "The panel wishes to point out however that the Contracting Parties have on their disposal other procedures under the General Agreement including Articles XXIV : 10 and XXV : 5 that are designed to allow Contracting Parties to take into account, in the view of the Panel, economic and social considerations" It concludes "The Panel wishes to emphasize that nothing in its report would prevent the parties to the Lomé Convention from achieving their treaty objectives including the objective of promoting the production and commercialization of bananas from ACP countries through the use of policy instruments consistent with the General Agreement".

Neither Panel has been adopted by the GATT Council since the EC and the ACP countries have not found it possible to do so. This is permissible under current GATT regulations. However, next year when the WTO comes into being, a Panel Report will only remain unadopted if the majority of WTO members disputes its findings. No more can one have a blocking minority; a situation incidentally which is now at the heart of current U.S. concerns about the WTO.

The Chief representative of Guatemala, one of the Latin American countries which was responsible for the creation of the two Banana Panels, has repeatedly said that as soon as the WTO comes into being, Guatemala will request the establishment of Panel to investigate the E.C. banana regime and that unlike the other two reports, the EC would find itself faced with the necessity of implementing the Panel decision.

This then is the immediate background to the decision of the EC to request a waiver of GATT for the provisions of Lomé IV under Article XXV: 5 - a decision with which the ACP has associated itself. The matter came up for discussion at the GATT Council meeting on the 10^th of this month. A few days earlier a meeting was called by the Chairman of the Council, Ambassador Zahran of Egypt to discuss the draft decision calling for the waiver, in order to see if consensus could be reached in adopting the request. The US delegation said it had problems of a textual nature and that it also had problem with the timing of the application for a waiver. The reference to the question of the timing was interesting, since at the October Council meeting when the Report of the Working Party on Lomé IV to which I referred to earlier was presented to Council, the US delegate - as well as the Canadian delegate - repeated statements which they had often times made in Council that the EC should seek a waiver for Lomé IV. One therefore became curious as to what new had taken place in the space of one month to cause the US to go back on its own recommendations. The answer in one word in Bananas. Ministers are aware of the complaint brought about Chiquita and the Hawaii Banana Producers requesting the US to take action against the EU because its banana regime was in restraint of US trade.

Since the meeting chaired by Ambassador Zahran arrived at no consensus on the draft waiver request, another meeting was held between the US representative, the Japanese representatives and EC and Jamaica representing the ACP States. At that small informal meeting the US representative admitted that at the earlier meeting he was stalling for time, and that the US would agree to the request for a waiver if ti specifically excluded bananas from the trade preferences. Both the EC, and Jamaica on behalf of the ACP States, said they could not agree to this. At the Council meeting which incidentally was well attended by ACP Ambassadors from Brussels, London and elsewhere who had come prepared to join the consensus to grant the request for a waiver, ACP States found that despite over whelming support by those who participated in the debate, the request could not be adopted because of the request by the US for further consultations. Here I must pause to mention Mr President Diouf of Senegal, who wrote to GATT Contracting Parties who are not ACP members but who are members of the I.O.C., to urge them to support the request for a waiver, as well as the Commonwealth Secretary General who wrote commonwealth members who are GATT Contracting Parties but are not members of the ACP. Both efforts were successful as we were advised by several GATT members who dis not speak than their Governments had been contacted and they had instructions to support the waiver.

In the debate the Council, the only Latin Americans to speak were Argentina, chile and Uruguay. None opposed the waiver. The rest were silent although Venezuela called to say that they had received instructions to support the waiver but that unfortunately it came after the debate had ended.

The question is what do we do next ? In the Council debate a number of speakers said the issue should be included on the agenda of the annual meeting of Contracting Parties which takes place from 8^th to 9^th December. If the US still raises objection what then ? Unlike the GATT Council meeting at which decisions are taken by consensus, matters on the agenda of the meeting of the Contracting Parties can be voted on if need be. I have spoken with the Ambassador of the EU in Geneva to ask if discussions have taken place in Geneva with the US. He said none had taken place in Geneva but some inconclusive discussions have taken place here in Brussels.

The latest word from Geneva is that Guatemala which has remained silent on all these discussions has asked Ambassador Zahran to call a meeting to discuss the request for a waiver. That meeting takes place at 3 p.m. on Monday 29 November. A number of ACP States are expected to attend. It is not anticipated that there will be a break through.

If after tomorrow there is no possibility of the US abandoning its opposition? The ACP Group in Geneva would recommend that ACP Ministers inform the EU that it is the wish of the ACP to put the matter to a vote at the December meeting of Contracting Parties. If that is the only means left to ensure that a waiver is obtained.

Under the Rules of Procedure of the meeting of Contracting Parties, for a motion to be adopted it must be adopted by a figure of 2/3 of those present at voting, provided it is more thank 50% of the total GATT membership. GATT membership presently stands at 125 and the request therefore needs a minimum of 63 if it is to be adopted.

In closing Mr President, it cannot be stressed to strongly the fact that the presence of ACP Member States is essential if we are to succeed. We should also continue to lobby our friends to continue to support us on this important issue.

This Mr President concludes my brief on this matter.

I thank you Mr President.

Draft Speech to the ACP Council of Ministers Meeting presented by the South Africa's

Minister of Trade and Industry

Mr President,

Honourable Ministers,

Ladies and Gentlemen,

I believe that I have today been accorded the first opportunity fora South Africa Minister to address an ACP Council of Ministers' meeting. Therefore I find it almost obligatory to recognize the strong support which has emanated from this particular source ever the years in support of the establishment of democracy in South Africa. For this I thank you.

Since the establishment of the Government of National Unity, we have acceded to a host of multilateral bodies. The first in a long row of these our accession to the organization of African Unity very soon after the elections, followed almost immediately by South Africa's membership of the Non-Aligned Movement. At the end of August, South Africa point the Southern African Development Community, just in time for the Berlin conference of 5/6 September, 1994. In short, we have acknowledged the South Africa is an integral part of the African continent.

As an African country, South Africa now needs to find its own niche in the global arena. We are undeniably more at home in an environment
of developing nations than in the club of developed nations. A close scrutiny of inter alia our economy, health figures, social problems, educational standards, prove that we have no claim to accord full development status for ourselves. In reality I am aware of quite a number of ACP countries which fare much better on a range of social economic indicators.

Because of past government policies, you would certainly agree that in every sphere of our society - economic, social, legal, political, moral, cultural, environmental - South Africans are confronted by serous challenges.

Against these great odds our people have now achieved a remarkable political transition. All parties in the National Assembly have committed themselves to a comprehensive programme to rebuild and stabilise our society.

No political democracy can survive and flourish if the majority of its people remain in poverty, without land, without their basic needs being met and without tangible prospects for a better life. Rooting out poverty and deprivation is the first priority of the democratic Government.

The Government of National Unity has adopted the Reconstruction and Development Program as a framework for launching such assault on poverty. Clearly, not every expectation will be met immediately but the RDP provides the framework for the exercise of choices and a yardstick for measuring success.

A central proposition of the RDP is that we cannot build the South African economy in isolation from its Southern African neighbours. If south Africa attempted to dominate its neighbour, it would restrict their growth, reduce their potential markets, worsen their unemployment and cause increased migration to South Africa. If it seeks mutual cooperation, it assist in developing a large stable market offering stable employment and common labour standards in all areas of the region.

It is for these reasons that we joined SADC on the 29^th August this year. We have understood that our democracy and stability is linked to that of the stability of our neighbours. In addition our reconstruction and development programme will not succeed unless it is linked to the reconstruction of the region and indeed to that of the all the countries on the African continent.

South Africa's economic relations with southern Africa have been characterized by large imbalances in south Africa's favour. Reversing this trend will require increasing intra-regional trade and investment. We have began to actively participate in the SADC trade and investment discussions on how we can contribute to enhancing the process that has already begun in the region. However these measures are likely to succeed without addressing the many discrepancies and the disharmony in the trade regimes within the region.

Whilst the dimensions of South Africa's social problems (literacy, life expectancy) are similar to and in some cases worse than many of its neighbours and other developing countries, it has been characterized as a developed country by the GATT. The UNDP has ranked SA 70^th in its Human Development index - below many developing countries. Our export profile reflects the same pattern and characteristics of most countries in the ACP - our 15 principle exports are in the category of primary and processed primary products. The top three exports are primary commodities - gold, precious metals and coal. All would agree that these figures belle the notion that South Africa is a fully developed country.

South Africa's characterisation as a developed country has also resulted in our exclusion from the preferential market regimes enjoyed by our neighbours, thus prejudicing both our national and regional development. This has placed barriers in the course of regional cooperation and integration. The most important negative consequences of this disharmony are in evidence in the Southern Africa Customs Union in which we participate with Botswana, Lesotho, Namibia and Swaziland as partners. However by characterizing SA as a developed country and meeting it out of a preferential regime, such as the Lome convention, both SA and its neighbours (BLNS countries) are prejudiced; for the purposes of facilitating intra-region trade investment and integration, it is critical that SA harmonizes its trade regime in SA's and the regions's trading relationship with the EU. For both SA and the region, the EU is our most important trading partner accounting for more than 50 % of our total trade.

For regional integration to succeed in South Africa, we will be requires to build on the existing comparative advantages of the different member states to pool our rich natural resources, share our skills and productive capacities, to process the commodities that we produce, to benefited them, and to develop high quality products for the export market. By linking our industries and co-operating with each other we stand a chance of competing more effectively with our more powerful global competitors. However, to achieve this objective we will request the EU to bring our trade regime in line with that of the Lomé convention to which all our neighbours belong.

Trade integration will not succeed on its own in developing our region. We have thus begun to participate actively in all the SADC sectors to enhance SADC efforts to build our regional infrastructure (transport, energy etc.) And services. South Africa's alignment with the Lomé convention will facilitate the optimalization of the available funds of the Regional Indicative Programme (RIP) to develop and implement regional development projects more effectively and efficiently. In addition, South African companies should be afforded freer access to EU funded projects in Southern Africa, to ensure that many projects could be implemented on a more efficient and cost effective basis. Building a successful region will enable us to effectively contribute to the development of Africa and the ACP. Indeed, our aspirations to become a successful region within ACP we have the support of the EU - certainly at the level of its states policy. The Berlin Conference has confirmed this desire of the EU to see our region seceded. However, we now call upon them to translate this desire into action.

One of the central question which arises from the relationship which we seek is : what will be the impact of our alignment with the Lomé Convention on the economies of the ACP ? It is indeed a question that we in south Africa have considered carefully over the past few months. It I, of course, a matter to be considered by the ACP itself. However, all our analysis inform us that, whilst our export profile is similar to that of ACP countries? most of our products are different. The build of our exports to the EU are minerals and do not affect the ACP at all as almost all of these already enter the EU duty free. Agricultural products constitutes a small percentage of our exports - about 5% of our total - and these are mainly temperate products. Industrial and manufactured products which we export into European are not produced to any significant degree by most ACP countries. In the areas where there will be any threat to your products we would welcome a discussion on developing synergy amongst ourselves.

On development aid - or the National Indicative Programmes in particular - we have been fortunate to have obtained, with the support of many of you, a separate budget line from the EU. This programme used to be called the Special Programme for Victims of Apartheid and is known as the European Programme of Reconstruction and Development. We have urged the EU to main this separate budget line thus ensuring that we would not need to draw from existing development aid allocated to the ACP.

We are aware that the ACP is currently every occupied with the Lom mid-term review and thus do not want to burden you with yet another complex issue to discuss. However, we lead your indulgence to consider South Africa's relationship with the Lom convention as a matter of urgency. South Africa needs to kickstart her economy now- to stabilize the country, to be able to respond to the high expectations of our people, to restructure the economy and to contribute to the reconstruction and development of Southern Africa - in which we are inextricably involved. We therefore urge that a task force be established at this Council meeting to begin the discussions on how South Africa can be aligned with the Lom Convention. This task force could be mandated to undertake the necessary research that is required to find ways in which SA can be an asset and stimulus to the growth and development of all the ACP.

To my ACP colleagues, I ask that you embrace us - in the same manner as we wish to embrace you today. We ask you to advice and guide us to achieve our objectives and aspirations. Your experience and knowledge will be valuable in strengthening our case which we seek to present to the EU.

I thank you.