European Parliament Fact Sheets

6.4.11.     The Countries of South Asia and the Indian Subcontinent

LEGAL BASIS

Under Article 133 of the EC Treaty, responsibility for commercial policy vis-à-vis third countries lies with the Community. Existing cooperation agreements are based on Article 308 ECT. The new third-generation cooperation agreements are based both on Article 133 and on Articles 181 and 300.

OBJECTIVES

The EU's objectives with regard to South Asia include strengthening its relations with the area, and consolidating the regional cooperation process represented by the South Asian Association for Regional Cooperation (SAARC)

ACHIEVEMENTS

A. SAARC relations
Europe is the South Asian countries' most important trading partner and a major export market. Development cooperation between the EU and the countries of South Asia covers financial and technical aid as well as economic cooperation. Priorities include regional stability, the fight against terrorism and poverty reduction. SAARC was founded in 1985 and groups seven countries of the Indian subcontinent (India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan and The Maldives). For several reasons, SAARC has not been as successful as other similar regional groupings. Despite structural constraints, the entry into force in 1995 of SAPTA (SAARC Preferential Trading Arrangement) was a positive achievement.
In its dialogue with SAARC (Ministerial Troika, annual meetings in 1994-September 1999), the EU has consistently affirmed an interest in strengthening links with SAARC as a regional organisation. This sentiment is equally consistently reciprocated by SAARC. The EU can help consolidate the ongoing integration process through its economic influence in the region, its own historical experience of dealing with diversity, and its interest in crisis prevention. The EU remains convinced that SAARC could play a useful role in regional cooperation and dialogue, although so far SAARC development has been less than breathtaking in the economic and political arena.
Hence, the EC took the initiative in 1996 to sign a Memorandum of Understanding with the SAARC Secretariat, offering them technical assistance. The MoU was explicitly signed at the technical level to overcome political inertia. Yet, the internal problems of SAARC largely prevented any effective implementation of the MoU. The main result of this otherwise limited cooperation is the inclusion of SAARC in the General System of Preferences (GSP)

B. Bilateral relations

1. India
India is the second most populous country in the world, the dominant political and military power in the region and one of the most dynamic economies among developing countries, with, in particular, a fast-growing information technology sector. Its democracy is healthier and more vibrant than ever and the country is an increasingly important player in global issues. Both the EU and India promote an effective multilateral approach.

EU-India relations go back to the early 1960s: India was amongst the first countries to set up diplomatic relations with the EEC.
- The first cooperation agreement concluded in 1973 between the EC and India was superseded in 1981 by a more extensive agreement covering not only trade but also economic cooperation, and then in 1994 by a 'third-generation' agreement which provides for greater cooperation, particularly in the sphere of trade. Based on adherence to the most-favoured-nation clause, it is compatible with the World Trade Organisation rules. It also includes dispute resolution and anti-dumping measures. Cooperation covers the industrial and services sector, communications, energy and private investment. The EU-India Joint Commission oversees the entire field of cooperation.
- Since 2000, the EU and India have held a Summit at government level each year. A science and technology agreement was signed in November 2001.
- The agreement at the EU-India summit in November 2004 to launch a Strategic Partnership and to implement it through an Action Plan set the scene for another quantum leap in relations. The Action Plan as well as a new Joint Political Statement were agreed at the 6th Summit in Delhi on 7 September 2005. The AP spells out concrete areas where the EU and India should become active and influential collaborators in global political, economic and social developments.
Over 2002-2006 the EU will make available some € 225 million for development and economic cooperation with India.

2. Pakistan
After being delayed on account of the country's nuclear programme and human rights abuses, a third-generation cooperation agreement was signed in November 2001, and ratified by the European Parliament in April 2004. It is a non-preferential agreement with no financial protocol. First, it establishes respect for human rights and democratic principles as an essential basis for cooperation. Secondly, the scope of cooperation between Pakistan and the Community will be significantly enlarged. Not only does the Agreement provide the framework for commercial, economic and development cooperation, but it opens up possibilities for dialogue and cooperation in important new areas including the environment, regional cooperation, science and technology, drugs and money laundering. Lastly, the Agreement formalises the dialogue - providing regular meetings of a Joint Commission where issues in relations with this important partner can be addressed. Over 2002 - 2006 the EU will make available some € 165 million for development and economic cooperation with Pakistan.

3. Bangladesh
Relations with Bangladesh date back to 1973, shortly after the country's independence.

The commercial cooperation agreement signed in 1976 has now been replaced by a new cooperation agreement, signed in 2000, and in force since March 2001.This newer agreement aims to support sustainable economic and social development of Bangladesh and particularly of the poorest sections of its population, with special emphasis on women, taking into account its Least Developed Country status. It focuses on trade and commercial cooperation, development cooperation, environmental policies, the establishment of a more favourable climate for private investment, science and technology, the fight against drug trafficking and money laundering, as well as activities in the field of information, culture and communication. Accordingly, the overarching objective of the EC and Bangladesh as agreed in the Country Strategy Paper 2002 - 2006 is poverty eradication through a strategy of sustained, rapid, pro-poor economic growth. Since 1976, total humanitarian aid and NGO co-financing has amounted to € 1 500 million.

4. Sri Lanka
Sri Lanka first signed a cooperation agreement with the EU in 1975. A third generation agreement came into force in 1995, focusing on partnership, cooperation, and respect for human rights and democracy.

Due to the civil war, a large part of EU assistance has been through ECHO (€ 8.3 million in 2002). Over 2003 - 2005, € 61.32 million for rural development, economic cooperation and post-conflict assistance is programmed. In its resolution of 20 November 2003, the EU encouraged the main political parties in Sri Lanka to stick to the cease-fire agreement and urged Sri Lanka's President to do everything possible to achieve a fair and stable political situation and to further the peace process. Following the Tsunami that hit Sri Lanka on 26 December 2004 and caused massive flooding, death and devastation, major assistance was provided to the country. Initial emergency relief assistance was sent through ECHO, quickly followed by large rehabilitation/reconstruction programmes with a € 95 million budget allocation. Flanking measures in trade, fisheries and early warning systems were also approved.

5. Nepal
- On 20 November 1995 the European Union and Nepal signed their first cooperation agreement covering the following areas: respect for human rights and democratic principles, cooperation in trade, development, science and technology, energy, agriculture, the environment, and action to combat drugs and AIDS.
- From 1977 on the EU has committed € 160 million in development assistance, focusing on rural development, health, education, local development, refugees and water management. € 615 000 was made available in 2002 as a response to the growing instability in the country due to the Maoist guerrillas.
- For the period 2002 - 2006, EC cooperation strategy, with a budget of € 70 million, will be based on the tenth five-year plan which embraces poverty alleviation as the overriding objective. Agricultural production and infrastructures, socio-economic development, institutional strengthening and good governance, and alternative renewable rural energy are the most important objectives pursued by this strategy. Moreover due to the present situation, special attention will be given to conflict prevention initiatives

6. Bhutan
EU assistance to Bhutan started in 1982 and totalled about € 46 million over the period 1982 - 2002. It focused on rural development and poverty reduction. The overall estimated EU allocation over 2002 - 2006 is € 15 million.

7. The Maldives
Since 1981, the Maldives has received € 5 million in EU development assistance (projects in tourism and fish inspection). The Maldives has achieved buoyant growth over the past two decades. The development of the tourism and fisheries sectors, favourable external conditions, inflows of external aid and good economic management contributed to steady economic growth. The Maldives' social indicators have also shown significant improvements. But the Maldives still faces several key development challenges. Accordingly a further amount of € 2 million for regional development with a clear focus on environmental issues and capacity building in trade and economic development is programmed for 2004.
The country, also badly affected by the 2004 Tsunami, has been allocated € 16 million to build on the achievements of the humanitarian aid phase.

8. Afghanistan
European Union relations with Afghanistan are firmly within the wider international community's relations with, and reconstruction efforts for, Afghanistan. While the EU (Eurocorps) and its Member States have contributed militarily to Afghanistan (through ISAF), reconstruction and development aid is the pillar of political relations. The Commission is on track to deliver its 2002 Tokyo pledge of € 1 billion of reconstruction assistance over the period 2002 - 2006. Overall, the EU is the second-largest aid donor to Afghanistan, after the United States.

The EC's efforts also included co-hosting a March 2003 Afghanistan High Level Strategic Forum, to which the Afghanistan Government invited key donors and multilateral organisations. It covered the progress and future vision for state-building in Afghanistan, as well as the long-term funding requirements for reconstruction.

In terms of security and tackling the drugs issue, the EU supplies financial aid to support Germany and Italy in their lead role on law, order and justice, as well as actively supporting the UK in its lead role in the fight against poppy production. The EC is supplying € 65 million to help the Afghan police impose law and order, another key component in Afghanistan's fight against drugs, while it also finances a project to strengthen controls on the Afghanistan-Iran border so the authorities are better able to interdict and stop drug smugglers.

EC Representation in Kabul has been operational since February 2002. The ECHO Afghanistan office opened in January 2002. An EU Special Representative has been sent to Kabul in order to implement EU policy to Afghanistan, by way of close contact with Afghan leaders and those of surrounding countries, to promote a stable government for Afghanistan.

ROLE OF THE EUROPEAN PARLIAMENT

1. SAARC relations
The European Parliament has recommended the strengthening of economic, political and cultural ties between the EU and Asia in general, particularly through increased trade and investment, and better coordination in the fields of cooperation and development with the most developed countries in the region. It has emphasised the efforts made to improve democratic freedoms, human and minority rights, social rights, and health and environmental protection regulations. An EP delegation maintains relations with the parliaments of the countries of the region.

2. Bilateral relations
The European Parliament has passed numerous resolutions on the political developments, including human rights, in the SAAR countries.

a. India
The EP believes that there is a considerable potential for an all-round bilateral relationship between the European Union and India, given India's values of democracy, cultural pluralism and a robust entrepreneurial spirit which are underpinned by free elections, an independent judiciary, a free national and regional press, active NGOs as well as an open and transparent civil society, and thus called for the organisation of a comprehensive dialogue that covers all aspects of bilateral relations, including issues relating to the non-proliferation of nuclear weapons. It has urged India to continue the dialogue with Pakistan and welcomed India's efforts to strengthen regional cooperation between the Member States of SAARC, in particular its efforts to promote the South Asian Free Trade Area, including the free trade agreement with Sri Lanka. In the sixth term a resolution on the EU-India strategic partnership was adopted on 29 September 2005.

b. Pakistan
The EP reminded Pakistan of the importance that the EU attaches to respect for human rights as an integral part of its external relations and of any cooperation agreement. It reiterated its call on the Commission to institute cooperation programmes offering active support to NGOs in the human rights field (resolution of 5 April 2001). Its concerns over the fairness of the general elections of October 2002 led the Council to postpone ratification of the 2001 cooperation agreement until April 2004.A new resolution on human rights and democracy was adopted on the same day.

c. Bangladesh
The EP has expressed concern at the human rights situation (arbitrary arrests, detention, and torture) in Bangladesh. It encouraged the Government of Bangladesh to protect human rights and apply democratic principles in all areas, including their action to deal with rising crime rates. It called on the Commission to engage with the Government of Bangladesh under the EU-Bangladesh Cooperation Agreement to ensure that violations stop, human rights are protected and the European Parliament is kept informed (resolution of 21 November 2002). In the sixth term a resolution on the political developments and security situation was adopted on 14 April 2005.

d. Sri Lanka
The EP has repeatedly (18.05.2000; 14.03.2002; 20.11.2003) stated its views on the political situation in Sri Lanka, particularly drawing attention to the need for human rights to be respected and for support for the peace process in the resolution of the ethnic conflict between the Singhalese majority and the Tamil minority.

e. Nepal
The EP expressed its deep concern at the breakdown of the cease-fire and the recent upsurge in violence in Nepal leading to huge loss of life and injury. It urged the government of Nepal and the Maoist rebels to declare an immediate cease-fire (resolution of 23 October 2003). On 24 February 2005 the EP condemned the seizure of power by King Gyanendra and urged him to re-establish parliamentary democracy.

f. Afghanistan
The European Parliament's main contribution has been budgetary, maintaining an emphasis on reconstruction, de-mining and election support. The EP sent a delegation to Afghanistan in September 2005 to observe the national legislative elections.

Afghanistan has emerged in several EP debates. MEPs, for example, have raised worries about the kidnapping of aid workers or the increase in the supply of opium in Europe, particularly from Afghanistan. The EP has passed several resolutions. Since the fall of the Taliban it has covered issues like the freezing of Taliban-linked assets, repealing embargoes on the state, etc. A recent EP resolution specifically on the situation in Afghanistan, based on the own-initiative report by André Brie (EUL/NGL, D) and the Foreign Affairs Committee, was adopted on 12 February 2004. President Karzai visited the EU institutions in May 2005. Karzai addressed the European Parliament in Strasbourg on 10 May 2005.

Xavier NUTTIN
11/2005