Summary: July 20, 2004: STATEMENT ON BEHALF OF THE EUROPEAN UNION BY MR. DIRK JAN NIEUWENHUIS, FIRST SECRETARY. ECONOMIC and SOCIAL COUNCIL - General segment - agenda item 13 (a): Sustainable development. Report of the Committee for Development Policy on its sixth session (New York)
I have the honor to take the floor on behalf of the European Union. The Candidate Countries Bulgaria, Romania, Turkey and Croatia[1], the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Serbia and Montenegro, and the EFTA countries Iceland and Norway, members of the European Economic Area, align themselves with this declaration.
The EU has studied with great interest both the report of the sixth session of the Committee for Development Policy and the report by the Secretary General on how to formulate a smooth transition strategy. The EU congratulates the Maldives and Cape Verde on their remarkable development progress of the passed years. We welcome this opportunity to take this development to its logical conclusion. That is, the graduation of the Maldives and Cape Verde from the LDC list. We expect a decision to be
taken during this substantive session of ECOSOC in line with resolution L. 10 adopted by ECOSOC on 3 June 2004.
It is of crucial importance that the LDC category remains credible and focused on the least advanced developing countries. In this connection, the EU reaffirms the importance of the CDP's mandate, a body composed of independent experts, to conduct a triennial review to determine the countries to be added to or graduated from the list of LDCs, and reports its findings to the ECOSOC. We furthermore reaffirm our support of GA resolution 46/206, particularly to the procedure outlined therein.
EU finds smooth transition important and believes that what are needed are general guidelines to be applied to each graduating country including the Maldives and Cape Verde Within this framework discussions on specific measures needed in a given country should be carried out between development partners.
At the same time, we underline that graduation is a positive achievement that needs to go hand in hand with a decision on a smooth transition process, allowing countries to prepare themselves and to avoid disruption to their development. The EU, as the most important supporter of the LDC category, is ready to work on measures to help graduated countries.
More specifically, the EU envisages the following graduation/transition mechanism. First, the CDP determines, in two consecutive triennial reviews, that a LDC is fit to graduate from the list. Second, the GA immediately thereafter takes note of the CDP's findings and fixes a graduation date that lies 3 years into the future. At this fixed date, the graduation will take effect automatically. After graduation, the CDP will on behalf of ECOSOC monitor progress made by the graduated country until
the next triennial review.
Graduating countries should take advantage of the intermediate period between the decision of the GA and the actual graduation date to develop specific transition support strategies and prepare measures in consultation with development partners for the next phase. Since graduation most likely entails different challenges for different countries, these strategies and measures should be developed on a case-by-case basis in a bottom-up country-driven process and be reflected in their poverty
reduction strategies and other national development strategies. For this purpose, the EU would welcome at this stage a process involving a country-specific roundtable led by the national government, assisted by the Resident Coordinator, with the participation of donors and international organizations, including WTO, the BWIs, and the UN system, and other concerned parties. It is the responsibility of the country-specific roundtable to study and analyze the specific needs and advise on
post-graduation measures and the related timeframe. Preferably, graduating countries should start considering this after the first positive triennial review.
The EU is committed to finding constructive solutions that will help graduated countries to maintain and enhance the remarkable progress they have made. In this context, trade issues and ODA deserve special attention.
Regarding trade, the EU is open to a gradual phasing out of EBA preferences over an appropriate period of time. Furthermore, the European Commission has just adopted a Communication setting out a new simplified GSP system for the next ten years that also takes the needs of graduated countries into account. It should also be mentioned that the negative impact of graduation will in many instances be very small, since the beneficiary country may be eligible to other EU trade preferences under the
Cotonou agreement. This is for example the case for Cape Verde.
Graduation from LDC status will also affect the rights and obligations of concerned countries in some areas of the WTO. Those WTO provisions granting special treatment toLDCs could similarly be phased out gradually. However, special and differential treatment in the WTO is a multilateral instrument, and transition periods will therefore require support from the WTO membership as such.
Finally, donors provide enhanced and coordinated trade-related technical assistance to LDCs under a number of WTO provisions, the Brussels Programme of Action as well as in the framework of the Integrated Framework. A country graduating from LDC-status would normally no longer be eligible for these provisions, although, of course, donors that want to continue to provide enhanced TRTA to a certain country should consider to do so. The rule of thumb should be the continuation of current
programmes and coordination activities among donors. We would also consider possible TRA projects addressing the specific adjustment requirements of countries graduating from LDC status.
As regards ODA more generally, EU Member States and the European Commission in most cases link assistance levels to a range of criteria mostly related to needs and performance. LDC-status is only one of these criteria. Therefore, a sudden decrease in ODA levels as a result of graduation is not to be expected. On the contrary: under the Barcelona commitments, EU member states have committed to increasing their ODA. EU member states and the European Commission will work with graduating LDCs to
help ensure that the effects of graduation are reflected in their poverty reduction strategies and other national development strategies to ensure a smooth transition.
We call on all donors and trading partners as well as LDCs themselves and relevant international organizations, including the UN and the WTO, to join forces on a pragmatic and constructive approach similar to the one we have just outlined.
Thank you.
[1] Croatia continues to be part of the Stabilisation and Association Process
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