1. United Nations

2. Human Rights

3. Environment and Sustainable Development

4. Development Cooperation

5. Trade relations

6. Crime Prevention, Drugs and Terrorism

1. Disarmament, arms control and non-proliferation

2. Security and Defence

III. EUROPE

1. EU Enlargement

2. Central Europe and Southeast Europe

3. European Economic Area (EEA) and Switzerland

4. Western Balkans

5. Eastern Europe and Central Asia

1. The Mediterranean region

2. Middle East/Gulf

3. Middle East Peace Process

VIII. LATIN AMERICA

On 1 May 1999, the Treaty of Amsterdam entered into force. It in particular underlines the fact that the Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to its Member States. One of the Treaty's main aims is to make the external policies of the Union more coherent, effective and visible in promoting peace, prosperity and stability in the world. Provisions to that end include strengthening the role of the European Council, including through defining common strategies; establishing the Secretary-General of the Council as High Representative for the Common Foreign and Security Policy (CFSP); streamlining decision-making by greater recourse to qualified majority voting; making it possible for the Union to conclude international agreements on foreign policy matters; and developing the Union's security and defence objectives. On 3-4 June 1999, the Cologne European Council designated Mr. Javier Solana as Secretary-General of the Council and High Representative for the CFSP.

The European Union's Common Foreign and Security Policy reflects the fundamental principles and objectives of the United Nations, as defined in the Charter. One of its key aims is to preserve and strengthen international security, in accordance with the principles of the Charter. The European Union is convinced that the best strategy to maintain international peace and security is to address first and foremost the root and trigger causes of conflicts. There is a growing awareness of the humanitarian and economic costs of failing to prevent conflicts. The UN Secretary-General's efforts to further improve the UN Early Warning System and to place increased emphasis on preventive diplomacy are supported by the Union. Only by shifting focus from the late stages to early warning signals of nascent conflicts can we make early conflict prevention possible. The Union will continue to be to the fore in preventing and responding to conflicts, crises and humanitarian need and to support the development and consolidation of democracy and the rule of law. The Union promotes the full and unconditional implementation of human rights and fundamental freedoms by all States in accordance with the Charter and other international instruments.

The Union seeks to cooperate closely with all members of the United Nations in the common responsibility of ensuring that the UN system is strengthened to meet the challenges, responsibilities and opportunities it faces at the dawn of the new millennium. The EU reaffirms its commitment to the organisation as well as its support for the Secretary-General and his efforts to promote a modern United Nations.

The EU reiterates again its support for the modernisation of the UN. The Union will concentrate its efforts toward the goal of an effective, coordinated, better managed and accountable UN that is better able to serve the needs of all its members. The Union urges member States to share this objective and to work together constructively in taking this positive agenda forward. In this regard, the EU welcomes and is encouraged by the positive results already achieved across the UN system, including within the Secretariat, the Funds and Programmes and the Specialised Agencies.

The EU remains highly concerned over problems related to the UN's financial situation and over the negative effects these have on efforts to strengthen and modernise the system. Placing the UN on a sound and viable financial basis is an integral part of these efforts. Continuing high levels of unpaid assessments are undermining the financial stability and liquidity of the UN and place a heavy and unfair burden on peacekeeping troop contributing countries. These concerns have been voiced repeatedly by the EU in the General Assembly over the last year. The EU is firmly committed to finding lasting and equitable solutions to the financial crisis facing the UN and calls on all UN Member States to fulfil their obligations in this area in accordance with the UN Charter. Therefore, these obligations cannot be subjected to unilateral conditions.

The Union believes that next year's Millennium Assembly provides an opportunity to deploy the full weight of the UN's moral authority in support of an agenda for action which contributes to the mobilization of the UN system. This agenda for action should be of widespread popular interest, so as to give new impetus to popular support for the UN among people and governments, and should be likely to rally support across the great majority of the UN's membership. The Millennium Assembly should produce results which aim at action-oriented follow-up. Themes should contain a concrete and readily understandable objective and focus on key areas of UN activity. In this spirit, the EU welcomes the broad agreement among member States that the theme for the Millennium Assembly should be the UN in the 21st Century. The Union believes that within this overarching theme, consideration should be given to two principal sub-topics - poverty eradication, globalisation and development, and strengthening the UN. The EU urges all member States to work together in a light preparatory process to continue discussion on the modalities of the Millennium Assembly, reiterates its desire for crisp and tangible outcomes from the Millennium Summit, and considers that a political declaration in the form of a succinct final document, based on the proposals by the UN Secretary-General, should reaffirm the continued relevance, in a globalizing world, of the principles enshrined in the Charter.

The European Union is firmly convinced that the achievement of sustainable development under the auspices of globalization and the fight against extreme poverty must feature high on the global agenda. The UN has a unique role to play in this regard, especially in the co-ordinated implementation of and follow-up to the Conferences and Summits of the 1990s. The UN system as well as the member States are called upon to enhance and strengthen the impact of the UN in this regard by further streamlining and co-ordinating activities, in particular at country level.

The European Union has strongly supported the UN's broader role in contributing to international development. It welcomes the UN's leading role in encouraging all national and international actors to accept their responsibilities for taking forward the outcomes of UN Summits and Conferences. It also welcomes the ongoing reflection on financing for development, and the efforts further to improve the effectiveness and coherence of the UN system, at both headquarters and field level. The EU will continue to promote a system-wide approach with all organisations having coherent policies and working towards common development goals with improved dialogue, co-ordination and co-operation, including joint programming. In this respect the EU welcomes the further development of the UN Development Assistance Framework and the establishment of UN common houses. The EU also notes the opportunity which the Comprehensive Development Framework offers for improved wider donor coordination, based on a framework of priorities set by the partner government. The EU donor governments will be playing an active role in supporting this process and look to the UN agencies to do likewise.

The EU attaches great importance to reform in the area of environment and human settlements, and welcomes the agreement on a General Assembly resolution endorsing the Secretary-General's recommendations resulting from the report of the Executive Director of UNEP and UNCHS, Mr. Klaus Töpfer. The June 1999 Cologne European Council also considered that the entry into force and implementation of the Kyoto Protocol is an important objective and stressed the urgent necessity of further measures, especially in industrialised countries, to achieve this.

The EU supports the initiatives of the Secretary-General concerning Africa and notes with satisfaction the large measure of support they have received in the UN. In this respect, the results of GA deliberations on the Secretary-General's report A/53/463 are welcomed. The Secretary-General's Report as well as its follow-up are important contributions to raising the international's community's awareness of the need for promoting durable peace and sustainable development in Africa. The EU believes key areas where work is needed are assistance to the OAU - in this respect, the EU welcomes the efforts to enhance African peace-keeping capacities in close cooperation with the OAU; limiting arms flows including monitoring and discouraging violations; the promotion of representative and responsive governance; children in armed conflict; and more effective coordination of assistance in conflict and post-conflict situations.

The EU is committed to working for an integrated and coordinated system-wide approach by the UN System, focused on poverty eradication, to the major UN Conferences of the last ten years. UN Member States should seize the opportunity offered by the five year review processes to consolidate and build upon the consensus developed and the agreements reached at these conferences, in the form of concrete, action-oriented recommendations. The Agenda for Development has been an important step to formulate that consensus and to call for action upon it.

The June-July 1999 UNGA Special Session for the review and appraisal of the implementation of the Programme of Action of the International Conference on Population and Development (Cairo + 5) was the culminating point of a thorough review process which has served to pinpoint successes and shortcomings in implementation and to renew commitment to the core principles, strategies and actions of the Programme of Action. The Special Session of the GA on Social Development in 2000 (Copenhagen + 5) should be an important opportunity to build on the overall appraisal and review of the implementation of Copenhagen taking into account developments since the 1995 Summit, to renew the commitment to the Plan of Action and to agree on further and new initiatives for its implementation in conformity with the list drafted by the EU before the first session of the Preparatory Committee in May. Likewise, preparations for the Special Session "Women 2000" (Beijing + 5) should lead to the identification of strategies to accelerate the implementation of the Beijing Platform for Action. Equally important is the preparation of the UNGA Special Session 2001 for the review of the implementation of the recommendations at the 1990 World Summit for Children and the development and agreement on a "Global Agenda" for future work for children and their rights. It is evident from the + 5 processes that changes will have to be introduced in the future format of + 10 reviews in order to streamline procedures and avoid the present day's heavy workload and time-consuming format, for example through making better use of the ECOSOC and its machinery.

In order to achieve its objectives in all areas, the United Nations system depends on support from civil society, in particular non-governmental organizations. More than ever, NGOs should be encourages to continue to play a central role in support of UN activities in the field as well as at headquarters. The 54th General Assembly is a propitious time to consider ways and means to enhance NGO interaction with the UN.

The EU looks forward to the UNCTAD X Conference to be held in Bangkok in February 2000 and will play a full and constructive role in the preparatory process which will officially commence at the Trade and Development Board in October. The EU will make a substantial input to the Conference in cooperation with its development partners. The EU has especially emphasised the need to focus UNCTAD's activities according to the principles approved in Midrand. Particular stress has been attached to the importance UNCTAD's activities have for the LDCs in their capacity building for their integration in the international trade system.

The EU appreciates the various activities undertaken in the implementation of the United Nations Decade of International Law to conclude in 1999. Of these, two elements stand out: the efforts of the Secretariat in the field of the Organization's legal services, and the initiative of the Netherlands and Russia on the celebration of the Centennial of the First International Peace Conference. These activities and efforts have served as a useful basis for carrying the results of the Decade of International Law into the next millennium.

Finally, the EU wishes to underline the importance of humanitarian assistance and to express its support for the UN Office for the Co-ordination of Humanitarian Affairs (OCHA).

The EU strongly supports the ICC and its early establishment. It believes the ICC will help bring about a more just and more peaceful world.

All EU Member States have signed the Rome Statute of the Court adopted in July 1998. The EU welcomes the first ratifications, including that of Italy; the other Member States will ratify as speedily as possible. The EU urges all States to sign and ratify the Rome Statute so that the quorum of 60 States, necessary for the Statute's entry into force, is secured at an early date. The EU has supported initiatives promoting the ratification of the Statute and has offered legal assistance to countries in relation to ratification.

EU Member States continue to participate actively in the work of the Preparatory Commission for the ICC. In view of its heavy workload as well as the June 2000 target date set for the completion of the Rules of Procedure of the Court and the Elements of Crimes, the work of the PrepCom should remain focused and as efficient as possible. In carrying out the tasks within its mandate, the Preparatory Commission has to respect the letter and spirit of the Rome Statute, and the balance achieved therein.

The EU and its Member States, which have already provided significant assistance to the ad hoc tribunals for Rwanda and the former Yugoslavia, reaffirm their readiness to consider making substantial contributions to the work of the Court.

The EU and its Member States remain strong supporters of the International Criminal Tribunals for the Former Yugoslavia and Rwanda. The Union calls upon all States to cooperate with these Tribunals in conformity with their obligations under the relevant resolutions.

The Union reiterates the importance of peaceful settlement of international disputes for the maintenance of stable international relations and reaffirms the commitment of its member States to the effective operation of the international institutions in that field, such as the International Court of Justice, the International Tribunal for the Law of the Sea and the Permanent Court of Arbitration, which this year celebrated its one hundredth anniversary.

As the fiftieth anniversary of the Universal Declaration of Human Rights was celebrated, the development and consolidation of democracy and the rule of law, and respect for human rights and fundamental freedoms continued to form one of the principal aims of the EU's Common Foreign and Security Policy. The Union sought to promote respect for all human rights in all countries of the world. It highlighted this policy in all international fora, in particular the United Nations, and in the framework of its relations with third countries.

The Union regrets that violations of human rights and fundamental freedoms remain the order of the day in many countries. Unfortunately, Europe is no exception, as the gross violations of human rights and the crimes against humanity committed in Kosovo illustrate.

In the Union's view, human rights have become more important in foreign policy and in the world economy in recent years. First, conflict situations today come about less because of international tensions and more because of internal tensions, which are often closely associated with the suppression of human rights, in particular the rights of persons belonging to minorities. Secondly, economic success and stability cannot be ensured in the long term unless human rights are observed and guarantees are provided by a constitutional State in which democracy and the rule of law prevails.

Just as prevention activities are critical for any human rights policy, conflict resolution and reconstruction activities must encompass a full human rights dimension if the healing process is to be credible and sustainable. Institution building, especially that related to law enforcement, and the rule of law are both means and objectives.

On 10 December 1998, the Presidency of the European Union organised a celebration of the 50th anniversary of the Universal Declaration of Human Rights in Vienna. On this occasion, the Union recalled the primary importance it attaches to this Declaration, which constitutes the foundation for national, regional and global policies to advance respect for human rights and fundamental freedoms and ensure human dignity worldwide.

The EU, in the Declaration it made on that occasion, identified areas in which it would consider concrete measures to reinforce its own capacity to achieve its objectives on the protection and promotion of human rights and fundamental freedoms. The Vienna Declaration was endorsed by the Vienna European Council and a report on the implementation of the operational points was presented to the Cologne European Council in June 1999. Some of the operational points are already being implemented.

In particular, (i) to present in accessible form an account of its global human rights strategy, the EU is preparing the first issue of an Annual Human Rights Report. (ii) In the field of education, the EU is working on the continuation of the Human Rights Masters Programme organised by fifteen European universities. (iii) The Union is also making preparations for convening a periodic human rights discussion forum. (iv) In June 1999, the EU agreed common criteria for the selection of its electoral observers. (v) In April 1999, the EU Council adopted two regulations on development cooperation actions and other cooperation actions in third countries, which contribute to the general objective of developing and consolidating democracy and the rule of law and respect for human rights and fundamental freedoms. Under these regulations, a sum of 98 million Euro is allotted to activities in support of human rights and democracy for 1999. (vi) The EU will also assess ways to strengthen its human rights structures.

The entry into force on 1 May 1999 of the Amsterdam Treaty has reinforced the position of Human Rights within the EU. It has enhanced the EU's competence to counteract discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

Finally, in June 1999, the Cologne European Council concluded that there appeared to be a need, at the present stage of the Union's development, to establish a Charter of fundamental rights in order to make their overriding importance and relevance more visible to the Union's citizens.

The EU continues to implement its policy towards the abolition of the death penalty under its guidelines agreed in June 1998. In recent months, the EU intervened in a series of specific cases and explained its policy in relation to the death penalty in contacts with several Governments, including those of China, the US, Cuba, the Bahamas, Jamaica, Trinidad and Tobago, Iran, Pakistan, Uzbekistan, the Palestinian Authority, the Philippines, Vietnam, Sierra Leone, Benin and Uganda. With the objective of the abolition of the death penalty, the EU asks that where the death penalty still exists, its application is progressively limited and that it must be applied according to minimum standards. Where applicable, the EU calls on States to establish moratoria. The Union is encouraged by the fact that the number of abolitionist countries is steadily growing. It welcomes the abolition of the death penalty in Bulgaria, in Lithuania, in Estonia, in Latvia, in Azerbaijan and in Nepal. It also welcomes the moratoria declared by Kirgysztan and Turkmenistan, as well as the de facto moratorium established in Russia and calls upon these countries to take the necessary steps towards definitive abolition. As a reflection of this trend, the resolution presented by the EU at the 55th session of the Commission on Human Rights received strong support. The EU has decided to present a resolution on the question of the death penalty also at this 54th Session of the General Assembly as one of its key objectives for this session.

The rights of the Child, the human rights of women and the fight against racism are of key importance for the EU's human rights policy.

The Union places particular emphasis on the protection and promotion of the rights of the child in accordance with the Convention on the Rights of the Child. It regularly raises this question in the framework of its political dialogue with third countries. It notably lends its firm support to the work of the Committee on the Rights of the Child and of the Special Representative of the UNSG, Mr Olara Otunnu, concerning children and armed conflict, as well as to the work of the Special Rapporteur of the Commission on Human Rights, Ms. Calcetas-Santos. It calls for rapid progress in the work on the elaboration of the optional protocols on involvement of children in armed conflicts and on the sale of children, child prostitution and child pornography, with a view to the successful conclusion of the work of the respective working groups in the year 2000. Furthermore, it is important to stress the problems of children in especially difficult situations, e.g. children in war or a refugee situation; children exploited in hazardous work or sexually abused; and children belonging to marginalised groups. The EU welcomes the adoption in June 1999 of the ILO Convention and Recommendation concerning the prohibition and immediate action for the elimination of the worst forms of child labour. The EU supports the ILO campaign calling for early ratification of the Convention by all States. The EU recognizes that boys and girls have different opportunities and needs. The situation of girls is often the most difficult and their rights continue to be limited in many ways. The protection and promotion of child rights, with particular emphasis on ensuring the full enjoyment of these rights by girls, is one of the most effective ways of achieving social development as a whole. The EU hopes that during the celebration of the tenth anniversary of the Convention on the Rights of the Child we will have the first truly universally ratified convention.

The full enjoyment of human rights and fundamental freedoms by women must be the basis for full equality and the development of a stable society. The Union is concerned by the continuing discrimination and violence against women in many countries. The adoption by the UN Commission on the Status of Women of the Optional protocol to the Convention on the Elimination of all Forms of Discrimination Against Women marks an important step forward which will grant women wide-ranging rights to lodge complaints at an international level. The EU hopes that the number of ratifications necessary for the Protocol to enter into force will be reached by June 2000 when the General Assembly convenes to review the implementation of the outcome of the Fourth World Conference on Women.

Finally, the UN World Conference against Racial Discrimination, Xenophobia and Related Intolerance will be an important event. At the initiative of the EU, the Council of Europe is organizing the European preparatory process to the World Conference. The EU is an active participant in this process, including on the basis of input from its Vienna European Monitoring Centre for Racism and Xenophobia. To have maximum impact both the preparatory process and the World Conference must be action-oriented and forward-looking and focus on achievable goals. They should focus on all forms of racial discrimination as defined in article 1 of the International Convention on the Elimination of All Forms of Racial Discrimination. The EU welcomes the fact that NGOs will have a strong part in the European process. The EU believes that the World Conference and the whole preparatory process will gain a lot from effective NGO-participation at all stages.

The EU welcomes recent efforts by the international community, by the Committee on economic, social and cultural rights, the UN High Commissioner for Human Rights, and specialised agencies to give more attention to economic, social and cultural rights. The EU also gives its support for the better implementation of these rights and will continue to promote an efficient international monitoring of economic, social and cultural rights.

The EU fully supports the efforts of the UN High Commissioner for Human Rights, Mary Robinson to give human rights their due recognition throughout the whole UN system. The EU plays an active part in the work on the mechanisms of the UN in the field of human rights. It reaffirms its support for the special procedures and for the ongoing review of mechanisms. It considers that the operating conditions for the Treaty Bodies, Special Rapporteurs, Special Representatives, Working Groups and field activities need to be enhanced. The EU supported efforts to increase the human rights budget and welcomes recent progress in this regard.

At the 55th session of the Commission on Human Rights (22 March - 30 April 1999), the EU presented a series of resolutions (Iran, Iraq, Burma/Myanmar, Democratic Republic of Congo, Israeli settlements in the occupied territories, Sudan, Rights of the Child, Death Penalty) which were all adopted, and took the lead in the negotiation of Chair Statements on Colombia and East Timor. It also actively participated in negotiations on a number of other texts.

In the framework of the 3rd Committee during the 53rd Session of the UNGA, the Union also took the initiative on a series of resolutions (Iraq, Iran, DRC, Rights of the Child, as well as Nigeria for the Chair) and actively participated in negotiations on a number of other questions.

The Union pursued its human rights-specific dialogue with China, relaunched in 1997. The EU welcomed China's signature of the International Covenant on Civil and Political Rights and of the International Covenant on Social, Economic and Cultural Rights, as well as the visit to China of the UN High Commissioner for Human Rights, Mary Robinson. However, the Union regrets that these developments have not been matched sufficiently by concrete progress in the human rights situation in China. The EU-China dialogue on human rights is accompanied by a cooperation programme in this field as well as a series of legal seminars.

The importance of environmental and social aspects of sustainable development has come increasingly to the fore in international cooperation. According to the Treaty of Amsterdam, which entered into force on 1 May 1999, sustainable development is now a key goal of EU action. Environmental requirements have to be integrated in the formulation of the actions of the Community in order to achieve sustainable development. The purpose of the new environmental provisions incorporated into the Treaty of Amsterdam is to promote sustainable use of natural resources and to protect human health and natural habitats on a long-term basis.

EU Member States have stressed the need for comprehensive work on sustainable development in international fora. Emphasis is placed on the joint responsibility of UN Member States on the basis of the principles agreed in the Rio Declaration on Environment and Development during the UNCED in 1992.

As United Nations operations expand, it has become necessary to streamline and coordinate the work of the various organisations in the economic, social and environmental sectors and to make them more efficient. The EU has been a strong advocate for these efforts. In recent years, the reform project has been aimed at achieving better operational coordination and improving the interplay between various environmental conventions. UNEP should play the key role in this area. The EU sees it as an important step forward that consensus has been reached and will work towards an effective implementation of the reform. The EU supports action aimed at making UNEP more effective, and notably the efforts of Executive Director Töpfer to this end. The voluntary contributions of EU Member States to the Environment fund of UNEP amount to more than 70% of the budget.

The United Nations has worked to promote systems of cooperation that will reduce and control the world-wide environmental changes that may have significant impact on the ecosystems. Measures to slow down climate change, maintain and allow for sustainable use of biodiversity, protect the ozone layer, combat desertification, reduce marine pollution, secure integrated approaches to freshwater management and ensure sustainable forestry can only be successful if the broadly-based international cooperative arrangements set up to achieve these goals are sufficiently effective.

The Kyoto Protocol requires industrial countries to reduce emissions of greenhouse gases pursuant to quantitative targets and enhance sinks that remove these gases from the atmosphere over a commitment period from 2008 to 2012. The reduction commitment undertaken by the EU in the Kyoto Protocol is -8% (as compared to -7% for the United States and -6% for Japan). All EU Member States signed the Kyoto Protocol on 29 April 1999 and the EU has since started its preparations for the Protocol's implementation. In May 1999, the European Commission presented its third communication on a comprehensive European strategy to address this issue ("Preparing for implementation of the Kyoto Protocol").

Overfishing and pollution are seriously threatening many marine environments and the people who depend on them. Most of the pollution originates from land based sources and is caused by industrial and urban wastewater and agricultural chemicals. The system of conventions providing for marine protection is fairly comprehensive. The EU notes that oceans and seas are a special case as regards the need for international coordination and cooperation. A more integrated approach is required to achieve the objectives of sustainable development of ocean and coastal zones, both at national and at international level. To this effect, a special effort should be undertaken to review and adjust, where necessary, the existing institutional arrangements dealing with oceans and their uses and recognizing the overall framework provided by the UNCLOS, Agenda 21 and other relevant instruments. The EU supports the proposal for a new informal consultative process, launched at the seventh session of the UN Commission for Sustainable Development, that would assist in coordinating and strengthening the action concerning marine protection.

If ecological sustainability is to be achieved, sustainable forestry is essential and national action as well as global cooperation and coordination to help bring this about will have to be continued and deepened. The EU has taken the view that an institutionalisation of the ongoing intergovernmental dialogue must be guaranteed. Such a framework should also ensure full implementation of the measures confirmed at the UNGA special session in 1997. The EU has supported endeavours aimed at building consensus on future international arrangements and mechanisms to promote sustainable management of forests.

In order to ensure a high level of protection of the environment the EU is committed to further international efforts in the fields of dangerous chemical substances and biological safety. The EU also attaches great importance to the continuing implementation of the Conventions on Biological Diversity and the Convention to Combat Desertification while improving the effectiveness and efficiency of these instruments.

Sustainable development, including environmental protection, is to be incorporated into all spheres of activity following an integrated approach. This new policy stems from persistent worldwide environmental problems. Agriculture, production and use of energy, transportation, urban sprawl and industrial plants continue to pollute the environment excessively, even though new restrictions have been imposed on emissions and discharges and environmentally friendly production methods have been introduced.

The Union engages in continuing dialogue with NGOs on environmental matters. Ordinary citizens, too, have a say in developing the EU's environmental policy and comprehensive environmental legislation. The EU has introduced national participatory arrangements enabling citizens to influence EU environmental legislation. The aim of making EU environmental policy more transparent enjoys wide support, and new technologies will make it easier to obtain and pass on information about these matters.

4.1 Development cooperation is an important part of the European Union's external relations. The EU (Member States and European Community) provides more than half of the world's total Official Development Assistance (ODA). As in almost all fields of external cooperation and support, development cooperation has as a prerequisite the willingness and readiness of partner countries to take on their responsibility for their own development and to establish supportive political, social and economical frameworks for sustainable development.

The EU is committed to the International Development Targets and the overarching objective of development cooperation programmes is the eradication of extreme poverty. This goal should be achieved through supporting the national efforts of developing countries to promote stable and democratic political institutions, to achieve progressive integration into the world economy, to safeguard full respect for human rights, the rule of law, good governance and fundamental freedoms, to achieve equality, social justice and a development that is economically, socially, culturally and environmentally sustainable, and supporting their efforts designed to prevent conflict and build peace. The EU focuses particular attention and directs special efforts towards the poorest countries, notably through its policy aimed at facilitating the progressive integration of LDCs into the global economy and trade system. The EU will host the Third UN Conference on LDCs in 2001. The European Commission action plan on gender and development provides an important framework for future mainstreaming of this policy orientation. The EU also looks forward to participating constructively in the important forthcoming UNGA Special Session on Small Island Developing States.

The EU further emphasises the importance of a more comprehensive and holistic approach to poverty eradication as well as of the ownership of the developing countries and an optimal partnership between the various actors. Coordination of development cooperation needs to be improved by utilising maximally the new coordination mechanisms such as the mechanisms being put in place within the EU and internationally - within the UN system, UNDAF and the World Bank's CDF proposal.

The negotiations on a new ACP-EU partnership agreement to replace the fourth Lomé Convention, which expires in February 2000, were opened on 30 September 1998.

These negotiations are aimed at revitalising the relations between the Union and ACP States and at establishing a new framework of cooperation implementing a global and integrated approach based on political dialogue, development assistance and economic and trade relations. The main objectives of this new partnership will be poverty eradication and the gradual integration of ACP States in the world economy, as well as the promotion of peace, security, democracy and sustainable development.

A first ministerial negotiation Conference was held in Dakar on 8-9 February 1999. Significant progress was already registered notably on political and institutional questions, concerning development strategies and in the field of development assistance. A further negotiation meeting was held on 29-30 July in Brussels, which saw further progress in areas such as financial cooperation and private sector participation. An important effort remains to be made to bring positions closer on the trade aspects of the negotiation, as well as on the principle of good governance. The next meeting will be held in November. The Union aims to conclude these negotiations by the end of 1999.

The European Union is deeply concerned about the effects of unsustainable levels of debt on many developing countries, particularly the Heavily Indebted Poor Countries (HIPCs) and is participating fully in the multi-actor HIPC Initiative, launched in 1996 by the Bretton Woods Institutions to specifically tackle the problem of multilateral debt.

The current initiative does have its shortcomings, however, for example it has delivered too little debt relief to too few countries, too late. In this context, the EU strongly welcomes the measures proposed by the G8 leaders at Cologne in June, designed to ensure that debt relief is delivered faster, wider and deeper and establish a strengthened link between debt relief and poverty eradication.

The European Union further welcomes the ongoing review of the HIPC Initiative and hopes that the Annual Meeting of the World Bank and IMF will witness agreement on a more generous and flexible response to the debt crisis.

5.1 The EU reaffirms its support for the launch of a new comprehensive round of multilateral trade negotiations within the framework of the WTO at the Third WTO Ministerial Conference in Seattle at the end of 1999. The EU considers that a comprehensive approach, encompassing a broad range of issues, is the most appropriate way of achieving substantial and balanced results for the benefits of all WTO members including developing countries. A new round will encourage global economic growth and increased employment through further trade liberalization, underpinned by multilateral rules bringing transparency, fairness and predictability and promoting sustainable development. The EU considers that a new round, which should begin in the year 2000, should if possible be concluded within 3 years.

The EU remains committed to the overall objective of universal membership of the WTO, and therefore attaches considerable importance to the negotiations on accession currently underway, including those with China and Russia. The EU underlines the importance of reaching a successful conclusion to all these negotiations, on the basis of respect for WTO rules and effective commitments in the area of market access.

The EU Council approved the regulation on the renewal of the Community scheme of generalized tariff preferences (GSP) for developing countries for the years 1999 to 2001.

It is recalled that the European Community opened in 1971 generalised tariff preferences for developing countries in order to sustain the economic and social development of the developing countries and their smooth and gradual integration into the world economy. To make it easier for beneficiaries to use these preferences, all GSP legislation in force has been brought together in this regulation. It covers both industrial and agricultural products and includes general, social and environmental incentives, as well as provisions concerning drugs (special facilities for the Andean and Central American countries) and arrangements for Least Developed Countries (LDCs)

In parallel to the provisions of the Lomé Convention and subject to the expiry or appropriate amendment of the non-discrimination clause contained in this agreement, it has been agreed that the European Commission will present to the Council appropriate proposals under which the LDCs, by the year 2003, will benefit from duty-free access to the Community market for essentially all products, from all LDCs, to be obtained progressively, starting in the year 2000, and from simplified and reviewed rules of origin including cumulation provisions that apply to the LDC's exports. The EU has since proposed to WTO members in Geneva that there be a commitment at the WTO Ministerial in Seattle to provide duty free access to LDCs for essentially all products no later than the end of the Round in 2003.

In this context the Council and the Commission also reiterated the importance of compliance with international labour law and environmental protection standards, which make a full contribution to sustainable development. They reaffirmed their intention to take account of progress made in this matter in their cooperation with the countries concerned.

Crime prevention and criminal justice are a major priority for the European Union. The Amsterdam Treaty assigns to the Union the objective of providing citizens with a high level of safety within an area of freedom, security and justice. To achieve this objective, the Union will prevent and combat crime, organised or otherwise, in particular trafficking in persons and offences against children, drug trafficking, corruption and fraud, through closer cooperation between police forces, customs authorities and judicial authorities in the Member States and through approximation, where necessary, of rules on criminal matters in the Member States. In October 1999, a Special European Council will be held in Tampere, Finland, where Heads of State and Government will discuss how to further develop the area of freedom, security and justice.

The fight against crime and the prevention of lawlessness are fundamental to a society's stability. The EU is in particular deeply concerned by the increase in transnational organised crime including specifically the different forms of smuggling of migrants, trafficking in human beings, drug trafficking, and illegal trade in firearms, as well as money laundering, financial crime, corruption of officials and high tech crime. The EU has pursued its efforts to fight against organised crime in the framework of the action plan adopted in 1997 to combat organised crime. Convinced that international cooperation has become an absolute prerequisite for success in preventing and investigating numerous types of crime, the Union is determined to improve and make more effective the mechanisms for international collaboration for crime prevention. It is in this context that the Union wishes to highlight its continuing support for the work carried out by the UN Crime Prevention and Criminal Justice Programme.

The Union fully supports efforts to negotiate an effective United Nations convention against transnational organised crime, including protocols on trafficking in persons, especially women and children, smuggling of migrants, by land, air and sea, and the illicit manufacturing of and trafficking in firearms. In this context the EU stresses the importance that negotiations on a protocol on the illicit manufacturing of and trafficking in firearms be consistent with the aims laid down in the EU Joint Action of December 1998 with regard to combating the destabilising accumulation and spread of small arms and light weapons.

The Union follows with interest the lead-up to the Tenth UN Congress on Crime Prevention and the Treatment of Offenders, which will take place in April 2000 in Vienna and will address the theme: "Crime and Justice: Meeting the Challenges of the 21st Century".

The fight against drugs is a major priority for the European Unions both in its internal and in its international action. The Union stresses the importance of considering the problem of drugs as a global phenomenon requiring an integrated approach focusing on all its aspects: demand and supply reduction, social and health-related problems, precursors, trafficking, money-laundering, as well as other drug-related crime. It also underlines the importance of recognising the links between poverty and the drugs problem and of integrating drugs policies into mainstream development. The concepts of "shared responsibility" and "partnership" between the developed and the developing countries have become the basis for cooperation in this field. The common threat that drugs pose to these countries requires intensified cooperation at country, regional and global level.

The EU strongly supports the efforts made by the UN to strengthen international cooperation in the framework of UN Conventions, based on the principles agreed at UNGASS and in accordance with existing national instruments. All EU Member States are signatories of the three UN Conventions regarding drugs. In view of the importance of international cooperation in this field, the EU would like to urge States that have not signed or ratified the Conventions thus far to do so with the shortest possible delay. Also in this context, the EU will continue to support the work of UNDCP as the leading international agency in the global efforts to combat the world drug problem. The EU (Member States and Community budget) is the major donor of UNDCP (70,5% of total budget for 1998).

The EU also calls for continued follow-up being given to the 1998 UN General Assembly Special Session on the world drug problem and to the documents adopted on that occasion, notably the political declaration and the documents on money-laundering, eradication of illicit drug crops and alternative development, precursors, amphetamine-type stimulants, judicial cooperation and the declaration on the guiding principles in the field of demand-reduction, as well as the Action Plan for the implementation of this declaration, which was adopted in March 1999 at the 42nd meeting of the UN Commission on Narcotic Drugs. An EU Action Plan on Drugs (2000-2004) is currently being formulated and reflects the spirit of the UN Special Session (shared responsibility and a global balanced and comprehensive approach to the drugs problem).

With a view to preparations for enlargement, the EU provides assistance to Central and Eastern European Countries in the fight against drugs in the framework of the PHARE programme. At the interregional level, the Union carries out a number of cooperation initiatives, notably with Latin America and the Caribbean in close cooperation with the UN and other major donors (US, Canada). At the June 1999 Rio de Janeiro Summit, a Comprehensive Action Plan on Drugs between the Latin American and Caribbean countries and the EU was adopted. A number of projects for Central Asia are under consideration and an action plan for the region is being prepared. In Africa, the EU supports the implementation of the SADC Regional Drugs Control Action Plan and the development of master plans for the West African countries. Moreover, a comprehensive project for Nigeria is being elaborated to assist the new democratic government in its efforts to cope with the drug problem. A joint EU/US assessment mission to Nigeria was carried out in cooperation with UNDCP and CICP.

The European Union reaffirms its unreserved condemnation of terrorism in all its forms, wherever and whenever it occurs, whatever its motives and origin, its opposition to making concessions to terrorist demands, and its determination to prevent those committing terrorist crimes from deriving any benefit whatsoever from their acts. Terrorism constitutes a threat to internal and international security, to peaceful relations between States, to the development and functioning of democratic institutions throughout the world and to the enjoyment of human rights.

The European Union seeks to enhance international cooperation against terrorism and supports efforts to complement the arsenal of texts available to the international community in this field. The EU continues to support, in particular in the 6th Committee of the UN General Assembly, initiatives to suppress terrorism. EU Member States have signed and ratified with few exceptions all eleven international anti-terrorism conventions. The EU calls upon those countries that have not yet done so to sign and ratify these conventions. It is playing an active role in the negotiation of a Convention on the Suppression of Terrorist Financing, for which France has tabled a draft, and hopes that negotiations can be concluded before the end of the year. It also hopes that discussions on the draft Convention on the Suppression of Acts of Nuclear Terrorism can be successfully completed, and that both Conventions can be submitted to the General Assembly for adoption.

The EU also carries out concrete counter-terrorism cooperation activities. It notably pursues its programme of assistance to the Palestinian Authority in the fight against terrorism, launched in 1997. It conducts a dialogue on terrorism with Mediterranean countries in the framework of the Barcelona Process.

The Union reiterates its belief that relentless efforts to suppress terrorist crimes are and should at all times be compatible with respect for human rights and fundamental freedoms.

Internally, the EU is enhancing its capacity to fight terrorism. In addition to the cooperation and exchange of information currently taking place between EU Member States within the EU structures, Europol has taken up its responsibilities in the field of counterterrorism from 1 July 1999. It will increasingly add value to the work of Member States through the exchange and development of intelligence to support their investigations.

For the European Union progress in the areas of disarmament, arms control and non-proliferation is vital for the maintenance of peace and the strengthening of international security. Support to the reinforcement of global non-proliferation and disarmament are at the core of the external action of the European Union, which reiterates its commitment to actively contribute to the successful outcome of the work within the various international conferences and other fora aimed at these objectives. The EU's readiness to participate in international cooperative efforts to promote arms control and disarmament was incorporated into the Common Strategy on Russia adopted by the European Council on 4 June.

For the Union, the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) remains the cornerstone of the global non-proliferation regime and the essential foundation for the pursuit of nuclear disarmament. In this spirit, the EU supports and promotes the implementation of the objectives laid down in the Treaty itself and in the decisions of the 1995 NPT Review and Extension Conference - the Decision on Strengthening the Review Process for the Treaty, the Decision on Principles and Objectives for Nuclear Non-Proliferation and Disarmament, together with the Decision on the extension of the Treaty - as well as the Middle East Resolution. The EU continues to attach special importance to achieving universal adherence to the NPT. It welcomes the accession of Brazil to the NPT in September

1998 and urges the four States which have not yet done so to follow its example. Following the successful first session of the Preparatory Committee, which set in motion the new strengthened review process for the Treaty, and in preparation of the second PrepCom, the EU defined a Common Position in April 1998 on how to contribute to a successful outcome of the 2000 NPT Review Conference. The Common Position served as a basis for the EU's action also during the 1999 third PrepCom. Detailed comments on the EU position on key issues were given in six common EU statements. As to the result of the third PrepCom, the Union regrets that agreement was not reached on substantive recommendations to the Review Conference but nevertheless notes with satisfaction that in finalising all procedural preparations, the PrepCom cleared the ground for the Review Conference. Bearing in mind the importance of the Decision on Principles and Objectives for Nuclear Non-Proliferation and Disarmament, the European Union remains firmly committed to the successful outcome of the 2000 Review Conference and is ready to continue to play an active and constructive role in the strengthened review process.

The European Union reiterates its concern over the nuclear tests conducted by India and Pakistan and considers that these tests have negatively affected the security environment in the region and run contrary to global efforts towards nuclear non-proliferation and disarmament. The European Union supports the position of the international community, as contained inter alia in resolution 1172 of the UN Security Council, and continues to call upon both countries to meet all the goals set out in this resolution. The EU expressed strong concern following the ballistic missile tests conducted by both India and Pakistan. It calls upon them not to develop or deploy either nuclear weapons or their delivery systems.

The EU welcomes the declared intention of India and Pakistan to accede to the Comprehensive Nuclear Test-Ban Treaty and calls upon them to do so without delay. The Union calls on India and Pakistan to work for the start of negotiations on a Fissile Material cut-off Treaty at the Conference on Disarmament. The Union welcomed the resumption of dialogue between India and Pakistan and the Summit meeting in Lahore in February as an important step towards reducing tension as well as towards confidence-building in South Asia. The EU urges India and Pakistan to continue the process of dialogue. The EU is ready to contribute to efforts to promote non-proliferation and confidence-building in the South Asian region. To that end, the EU adopted in October 1998 a Common Position which sets out its objectives and possible contributions to encourage nuclear and ballistic missile non-proliferation and confidence-building and to prevent conflict in the South Asian region.

Following the successful conclusion of the Comprehensive Nuclear Test Ban Treaty (CTBT) in 1996, the European Union has been active in promoting the rapid entry into force and the universality of this Treaty. The EU will be equally active when it comes to contributing to the forthcoming conference provided for in Article XIV of the Treaty. The EU Member States have decided to strengthen their cooperation in support of an early entry into force of the CTBT through a common position adopted on 29 July 1999. In this context, they underline the importance of the first conference to be held in accordance with article XIV of the Treaty, which is expected to take place in Vienna in October 1999, and their commitment to contributing to the successful outcome of the Conference. All the Member States of the EU signed the CTBT on the day of its opening for signature. Since then, 11 of them, including the nuclear weapons States France and the United Kingdom, have ratified it and all the others have initiated national ratification procedures. The Union calls on all States to sign and ratify the CTBT especially those on the list of the 44 States whose ratification is needed for the Treaty to come into force. The Union expresses its full support for the efforts of the Preparatory-Commission of the CTBTO to establish the Treaty's verification regime in a timely and effective manner and in accordance with the Treaty.

In the EU's view, a convention banning the production of fissile material for nuclear weapons or other nuclear explosive devices (the cut-off treaty) constitutes a second major step towards the achievement of both the nuclear non-proliferation and the nuclear disarmament objectives envisaged in the document on Principles and Objectives. The EU urges all members of the Conference on Disarmament in Geneva to re-establish without delay the ad hoc committee to negotiate a cut-off treaty.

The EU Member States all agree that systematic and progressive efforts towards nuclear disarmament as set out in the 1995 Principles and Objectives decision are essential if we are to make progress towards our common goal; the ultimate elimination of nuclear weapons and general and complete disarmament. In past years, significant progress has been made both through unilateral and bilateral efforts towards the reduction of nuclear arsenals. The agreements reached in this area must now be fully implemented and followed up with negotiations on further reductions.

The EU deplores that the START II Treaty which was signed in 1993 has still not entered into force. The Union calls upon Russia and the United States to take all necessary steps to bring the treaty into force without further delay. The EU welcomes the US-Russian statement of 20 June 1999, in which both states agreed to begin discussions on START III. The EU hopes that these discussions will enable the rapid conclusion of negotiations on a START III Treaty on further deep reductions in nuclear arsenals, as envisaged in de declaration of the Helsinki Summit held in March 1997. The EU also supports negotiations on transparency measures for short-range nuclear forces to be included into the START III framework. While the practical implementation of nuclear disarmament primarily falls on those states which possess the largest arsenals and such weapons, it is also an obligation of all States Parties to further the implementation of Art. VI of the NPT.

The EU reiterates the importance it attaches to nuclear-weapon-free zones, created on the basis of arrangements freely arrived at between the States in the region concerned, as well as to the establishment of zones free of all weapons of mass destruction. The EU welcomes the progress made so far towards establishing a nuclear-weapon-free zone in Central Asia. The EU is looking forward to the entry into force of the African Nuclear Weapon Free Zone Treaty at an early date and to the successful conclusion of discussions between States parties to the South East Asian Nuclear Weapon Free Zone Treaty and Nuclear Weapon States in order to allow for the accession of the latter to the protocol to that treaty. The EU continues to support efforts to establish a zone free from all weapons of mass destruction and their delivery systems in the Middle East and calls upon all States in the region which have not yet done so to accede to the NPT as well as to the Chemical and Biological Weapons Conventions as soon as possible.

On the basis of the International Atomic Energy Agency Model Protocol, aimed at strengthening the effectiveness and improving the efficiency of the Agency's safeguards system, three additional protocols were signed on 22 September 1998 between the IAEA and the EU Member States, i.e. the thirteen non-nuclear-weapons States and the two nuclear-weapons states of the EU, the United Kingdom and France, as well as the European Atomic Energy Community and the IAEA. The EU recalls the Resolution 17 of the 42nd General Conference of the IAEA on strengthening the effectiveness and improving the efficiency of the safeguards system and application of the Model Protocol. The EU continues to support the verification role of the IAEA and attaches great importance to the universal conclusion of the Model Protocol. It calls on all NNWS to conclude comprehensive safeguards agreements with the IAEA as well as additional protocols as soon as possible and to ratify them without delay. It invites all NNWS to sign and to ratify additional protocols as soon as possible. The EU also invites States which do not have comprehensive safeguards agreements to negotiate additional protocols with the Agency as provided for in the foreword of the Model Protocol.

The Union stresses the importance of fissile material withdrawn from military use to peaceful nuclear activities being, as soon as practicable, placed under IAEA safeguards. It welcomes the efforts made to set up a verification mechanism and the further measures envisaged in the framework of the bilateral talks between the United States and the Russian Federation including a verification mechanism under the auspices of the IAEA, as well as the decision by a number of States to adopt a set of guidelines for the management of plutonium in all peaceful nuclear activities. The EU underlines the importance of each State with nuclear materials in its territory improving and/or maintaining its own arrangements for nuclear materials accountancy, safety and physical protection and welcomes the steps taken by the United Kingdom to increase cooperation on and implementation of the programme for Preventing and Combating Illicit Trafficking in Nuclear Materials.

The EU considers that the existing systems of export controls in the nuclear field are a necessary corollary to technical cooperation for peaceful uses and should be further improved. The EU remains convinced that transparency in these export control regimes should be promoted within a framework of dialogue and cooperation among all interested State parties to the NPT. The Union considers that these activities are an essential element to ensure greater general understanding both of the necessity for export controls and also of the needs and views of developing countries seeking advanced technology. The EU supports the transparency activities of the Nuclear Suppliers Group and played a major role in the organization of the two NSG transparency seminars.

The Union supports the efforts of the Security Council aimed at re-establishing long-term control over Iraq's illegal WMD programmes, on the basis of the final report of the panels presented to the UNSC last April.

The Union is following developments in the Korean Peninsula with great attention and is a member of and significant contributor to KEDO. The EU expressed grave concern over the missile test undertaken by the Democratic People's Republic of Korea in August 1998 and now reiterates its call on the DPRK to refrain from any further testing and to exercise utmost restraint in its missile development and export activities. The EU urges the DPRK to join international non-proliferation efforts. Safeguards implementation in the DPRK remains the subject of considerable concern to the EU, which, strongly urges the DPRK to fully comply with its commitments under the NPT and strictly observe IAEA safeguards.

The European Union considers the Chemical Weapons Convention (CWC), which has now been in force for some 26 months, as a landmark in the disarmament process. It reconfirms its strong commitment to its universality and to the full, effective and timely implementation of all its provisions by all its parties. It calls on all States that have not yet done so to become parties to the Convention without delay. It also calls on all States Parties to fulfil their obligations in relation to the declarations to be submitted under the provisions of the Convention. In this respect, the EU would like to stress that any delay in the submission of declarations by a State Party does not only risk to weaken the effectiveness of the verification regime set up by the CWC, but also puts a heavy burden on the industrial companies of those States Parties that have already fulfilled their obligations. The Union will continue to support actively the important work of the OPCW organisational structures. The Union also acknowledges the importance of providing assistance to States Parties to the CWC that face difficulties in meeting their international obligations with respect to destruction of stocks of chemical weapons as well as production facilities. The Union draws attention to the assistance that it has provided to Russia under the Technical Assistance to the Commonwealth of Independent States (TACIS) programme. It will encourage and foster a coordinated approach to assistance rendered for the destruction of former Soviet weapons of mass destruction.

The European Union reiterates the high priority it gives to the reinforcement of the Biological and Toxin Weapons Convention (BTWC), in particular to the conclusion of the negotiations in the BTWC Ad Hoc Group on a legally binding Protocol establishing a verification and compliance regime which will effectively strengthen the Convention, in time for the adoption of the protocol by a special session of States parties before the next review conference. The Union has always played an active role in the ad hoc Group negotiations and has reaffirmed its continuous commitment by adopting on 17 May 1999 a Common Position on progress towards a BTWC legally binding protocol and intensification of work in the Ad Hoc Group to that end, notably through the allocation of the necessary time to the negotiations. In its Common Position, the Union identifies in particular those measures, including compliance and verification measures, which are deemed to be both central and essential to an effective protocol. The associated countries of Central and Eastern Europe, Cyprus, Iceland and Liechtenstein have declared that they share the objectives of the Common Position and will ensure that their national policies will conform to it. The Union will continue to promote its objectives in future sessions of the Ad hoc Group.

The EU wishes to express its support for the export controls in the biological and chemical field. As with export controls in the nuclear field, these provisions are regarded by the EU as necessary and a corollary to technical cooperation for peaceful uses and should be further improved. The EU expresses its support for the efforts of the Australia Group (AG) and the measures taken in its realm in order to prevent the spread of biological and chemical weapons.

On the eve of the Ottawa Conference in 1997, the Council of the European Union had adopted a joint action on anti-personnel landmines (APLs), in which the Union reiterated its commitment to the goal of the total elimination of APLs worldwide, established a common moratorium on production and transfers of APLs and undertook to seek to promote in all appropriate fora, including the Conference on Disarmament, all efforts likely to contribute to the joint action objectives. The Union welcomed, for this reason, the opening for signature in Ottawa of the Convention and the efforts made by its signatories to promote universal accession to the Convention.

Although the early entry into force of the Ottawa Convention on 1 March 1999 was a significant success for both disarmament and humanitarian policy, continued action is needed for the total elimination of APLs. The EU welcomes the successful outcome of the First Meeting of States Parties to the Ottawa Convention held in Maputo, the results of which are laid down in the Maputo Declaration. It supports the Programme of Intercessional Work adopted there in which EU Member States will actively participate. The EU hopes that this programme will provide a systematic and coherent approach to dealing with the practical implementation of the Convention. The European Union emphasises the importance of full and speedy implementation of the Convention. It underlines the importance of reporting in accordance with art. 7 of the Convention. This can also be done by non-States Parties on a voluntary basis. The EU calls upon all States to join efforts to achieve with the Ottawa Convention the total elimination of APLs worldwide. To this end, the EU has carried out a number of demarches underlining that the further production of APLs can no longer be justified and urging APL producing countries to strictly refrain from exporting these weapons.

From 1993 to 1997, the Union contributed approx. 135 million Euro (140 million USD) to humanitarian mine action, including demining and victim assistance. This amount does not include individual contributions by the EU Member States. In 1998, total funding by the European Commission and Member States in landmines related activities amounted to approximately 103 million Euro (108 million USD). This makes the EU the world's major donor in humanitarian mine action.

On 9 November 1998 the EU Council adopted a decision to carry out a specific action in the field of demining in Croatia and requested the Western European Union (WEU) to implement it. In strengthening Croatia's national capacity in this field, this WEU mission will contribute to restoring normality to areas previously affected by conflict and thus facilitating the return of refugees.

Experts from eight different countries (among them seven EU member States) will provide advice, technical expertise and training support to the Croatian Mine Action Centre (CROMAC) and the United Nations Mine Action Assistance Programme (UNMAAP) activities already in place. In addition to bilateral financial contributions by EU member states to fund equipment needed at CROMAC, the total EU operational budget for this mission (of twelve months duration) is 424,000 Euro.

The Union confirms its intention to continue working actively to promote the efforts of the international community towards the complete elimination of APLs. Most recently victims of mine-laying in Kosovo have again highlighted the importance of abolishing this deadly weapon once and for all. The EU supports the UN Mine Action Coordination Centre in Pristina and is providing funding for humanitarian mine action in the region. The Union believes that, in order to allocate and use more efficiently the resources made available in the fight against APLs, improved international coordination of mine action activities, including those by regional organisations, is essential. The EU supports the central co-ordinating role of the United Nations Mine Action Service. It commends the efforts undertaken by NGOs towards the goal of banning all APLs and further implementation of the Treaty obligations.

The European Union believes that the ultimate responsibility for mine action rests with the national authorities of the country afflicted. The full support of the host country is crucial for the success and effectiveness of mine action. The EU notes that all States Parties have undertaken never to use APLs. The EU also expects all Signatory States to fully abide by the objective, purpose and spirit of the Ottawa Convention. While guided, first and foremost, by humanitarian concerns, the EU will focus its financial and technical assistance on States Parties to the Ottawa Convention, and on signatories which fully observe in practice the principles and objectives laid down in the Convention. In this context, the EU stresses that any laying, or relaying of APLs would contravene the purpose and spirit of the Convention.

Against this background, the EU Presidency issued a declaration on behalf of the European Union on Angola on 28 December 1998 regretting the increase in minelaying activity in that country and calling on the government of Angola as a signatory of the Ottawa Convention and particularly on UNITA to cease minelaying activity immediately and to ensure that valid records exist so that these weapons can be removed. The EU notes with concern new use of APLs also in Ethiopia, Eritrea, Nagorno-Karabakh and Kosovo.

The European Union continues to consider that the UN Register of Conventional Arms is a major instrument to promote transparency and confidence-building between States. It is therefore essential that all States submit regular returns, even a nil return, to the Register. All EU member States have consistently submitted returns to the Register. The Union carried out an extensive series of demarches with a view to encouraging the submission of returns to further increase transparency in the field of conventional arms. The Union welcomes the convening in 2000 of another group of governmental experts on the register and supports the goal of early expansion of the Register.

The European Union reiterates the need for exporting States to exercise a high degree of responsibility in authorising transfers of conventional arms. All EU Member States continue to apply rigorously the Code of Conduct on Arms Exports adopted by the Council of the European Union on 8 June 1998. The Code of Conduct establishes a common set of detailed criteria against which Member States will assess proposed exports, and also requires Member States to circulate details of licences refused and to consult the author of a denial before authorising an essentially identical export. The operation of the Code of Conduct has increased mutual understanding of Member State policies on conventional arms exports, and helped to contribute to the harmonisation of policies and procedures. The associated countries of Central and Eastern Europe, the associate country Cyprus and the EFTA countries members of the European Economic Area have aligned themselves with the export licensing criteria in the Code of Conduct. The European Union commends the principles of the Code of Conduct to other arms exporting countries, and encourages them to consider, where appropriate, the scope for similar inter-State transparency arrangements.

In line with the decision taken by the UN General Assembly in 1998 in its resolution 53/77 E to convene an international conference on the illicit arms trade in all its aspects not later than 2001, the European Union has conveyed to the Secretary General its views on the agenda, timing and scope for such a conference. It is essential that the conference deal with all relevant causes and implications of the small arms problem and, to that end, take due account of the valuable contribution of the UN Group of Governmental Experts in its reports. The Conference on illicit arms trade in all its aspects, to be held no later than 2001, shall serve as a focus for EU efforts to tackle the Small Arms problems. Global efforts will necessarily have to be supplemented by regional efforts.

On 17 December 1998 the Council of the European Union adopted a joint action on the EU's contribution to combating the destabilising accumulation and spread of small arms and light weapons. This joint action entails building consensus in the appropriate regional and international fora (e.g. the UN and the OSCE) on principles and measures to prevent further accumulations, principles and measures to reduce existing accumulations, and measures to be promoted, where appropriate, in the context of resolving armed conflicts. The Union will provide financial and technical assistance to projects furthering these objectives, including relevant programmes or projects conducted by the UN, the International Committee of the Red Cross, other international organisations and regional arrangements and NGOs. Such projects might include, inter alia, weapons collection, security sector reform and demobilisation and reintegration programmes as well as specific victim assistance programmes. In providing such assistance, the EU shall take into account in particular the recipient's respect for human rights, its compliance with international humanitarian law and the protection of the rule of law, and its compliance with its international commitments, in particular with regard to existing peace treaties and international arms control agreements.

The associated countries of Central and Eastern Europe and the associated country Cyprus and the EFTA countries members of the European Economic Area (Iceland, Liechtenstein and Norway) as well as South Africa and Canada have declared that they share the objectives of the joint action and that they shall be committed to that joint action in the positions they adopt and in the conduct of their activity.

The Union carried out demarches pursuant to its joint action on small arms and light weapons with 120 governments and three international organisations (OAS, OAU, ICRC) in February/March 1999, resulting in numerous countries of all regions and backgrounds having offered close and active cooperation towards the ultimate goal of securing a global answer to the challenge posed by the destabilising accumulation and spread of small arms and light weapons. To this end, the EU has engaged in a dialogue with the USA, Canada, SADC and ECOWAS to initiate joint efforts on combating the global threat posed by the destabilising accumulation and spread of small arms and light weapons.

The EU Council, in application of this joint action on small arms, adopted on 10 May 1999 a decision on the EU's contribution to promoting the collection and destruction of weapons in Albania. It provides for a contribution of up to 500,000 Euro in support for the UN Department for Disarmament Affairs and the UNDP pilot project "weapons in exchange for development in the Gramsh district of Albania". The EU's contribution will be used for the destruction of collected weapons, as well as the setting up of an adequate mobile arms control team.

Another EU development in this field was the Resolution on "Combating the Excessive and Uncontrolled Accumulation and Spread of Small Arms and Light Weapons as part of the EU Emergency Aid, Reconstruction and Development Programmes", which was adopted by the EU Council on 21 May 1999. It builds upon the EU initiatives taken in the last two years, namely the Code of Conduct on Arms Exports, the EU Programme and the EU joint action on small arms. The Resolution addresses the problem under a "Development" angle, and its recommendations - such as the inclusion of small arms issues in the political dialogue with developing countries, development support for the control and elimination of surplus small arms and for combating small arms trafficking as well as for the challenging and reversing of "cultures of violence" - reflect this.

On 18 June 1999 the EU Presidency issued a declaration on behalf of the EU on the arms trade to and within the Great Lakes Region underlining, inter alia, the will to promote dialogue and cooperation on the problems of arms flow with countries involved directly or through their nationals in manufacturing or marketing of military equipment. The declaration reiterates the EU's determination to strictly implement its Code of Conduct on arms exports of 8 June 1998.

The European Union continues to implement its programme for preventing and combating illicit trafficking in conventional arms, decided in June 1997. The EU programme provided the basis for a "Southern African regional action programme on light arms and illicit arms trafficking" endorsed at the EU-SADC Ministerial meeting of 3-4 November 1998 in Vienna. The EU and SADC are currently considering ways to strengthen their cooperation in this field. To this end a Technical Working Group, tasked with the further development of measures proposed in the regional action programme may soon be established.

The EU welcomes the adoption by consensus at the United Nations Disarmament Commission in April this year of guidelines on conventional arms control/limitation and disarmament with particular emphasis on consolidation of peace. Their adoption represents a major step forward in an area that has a direct impact on the security and stability of countries and sub-regions in a post-conflict situation. They provide a valuable tool which can assist the international community as well as regions, sub-regions and countries directly affected in taking the necessary steps to consolidate peace and begin the process of economic and political reconstruction. They should also be drawn upon in the design of mandates for future United Nations peace-keeping or preventive operations.

The EU notes the close relationship between efforts to prevent the excessive accumulation and uncontrolled spread of small arms and light weapons and the negotiations in Vienna on a Protocol on the illicit manufacturing of and trafficking in firearms within the context of a UN Convention against transnational organized crime. The EU Member States will actively participate in the negotiations.

The European Union reiterates its attachment to the maintenance of peace and the strengthening of international security - in accordance with the principles of the United Nations Charter as well as the principles of OSCE/CSCE documents - and to the promotion of international cooperation.

With regard to security developments in Europe, the Union is pursuing the objective of consolidating peace and stability for the whole of the continent. The adoption by the European Council on 4 June of the Common Strategy on Russia is a concrete example of progress towards this objective. The development of the new European security architecture reflects the new spirit of cooperation in Europe. European security is by definition comprehensive and indivisible, and the new security architecture will give full weight to the legitimate security interests of all the countries of Europe.

The European Union accordingly believes that the various organizations with responsibility for security in Europe should continue to interact and mutually reinforce each other. It encourages close coordination and, where appropriate, cooperation between international organizations concerned, notably between the UN and the other institutions which have responsibility for European security. An example of such coordination and cooperation can be found in the Stability Pact for South Eastern Europe, launched by the EU and signed in Cologne on 10 June 1999.

Through its enlargement, the European Union intends to extend to future EU members the prosperity and stability already enjoyed by the present Member States. On the eve of the 21st century, the enlargement process of the EU contributes to security and prosperity in Europe as a whole.

The Union is also making an important contribution, through active pursuit of a transparent and open dialogue with other countries on the continent - such as Russia and Ukraine - and with neighbouring regions, notably the countries of the Mediterranean basin, on issues regarding the new security architecture.

In accordance with the Amsterdam Treaty, which entered into force on 1 May, the European Council, on 4 June, declared its intention to give the European Union the necessary means and capabilities to assume its responsibilities regarding a common European policy on security and defence. It reiterated its conviction that the Council should be able to take decisions on the full range of conflict prevention and crisis management tasks defined in the Treaty on European Union; and that it should have the capacity for autonomous action, backed up by credible military forces, the means to decide to use them, and a readiness to do so, in order for the EU to respond to international crises with the participation of all EU Member States and without prejudice to actions by NATO.

Such a military capacity would broaden the range of instruments at the disposal of the Union for crisis management. The EU will thereby increase its ability to contribute to international peace and security in accordance with the principles of the UN Charter. The European Council aims to take the necessary decisions before the end of the year 2000. In the event, the WEU as an organisation would have completed its purpose.

In the past year, the European Union continued its cooperation with the WEU. Recent examples of activities undertaken upon request of the EU include demining in Croatia, as well as the re-establishment of a viable police force in Albania. During the Kosovo crisis, the EU also requested the WEU Satellite Centre to provide images of the area.

The EU welcomes the fact that the Czech Republic, Hungary and Poland have become WEU Associate Members.

The Union welcomes the central role played by NATO in building stability and security in Europe, including its increased role in crisis management and partnership with non-NATO nations as means to achieve the fundamental task of enhancing security and stability in the Euro-Atlantic area, as well as the Alliance's intention to promote peaceful and friendly international relations and to support democratic institutions. The Union fully supports the principles referred to in Security Council Resolution 1244 (1999), which constitutes the basis of a political solution to the crisis in Kosovo, the work of the KFOR military implementation force under the political direction of the North Atlantic Council, and the Alliance's commitment with the framework of the Stability Pact to helping the nations of South East Europe develop secure, stable and cooperative relations among themselves and with NATO. The European Union welcomes the accession of Poland, the Czech Republic and Hungary to NATO and is convinced that this and further enlargement of the Alliance together with the Alliance's active programme of partnership with non-NATO nations through the Euro-Atlantic Partnership Council, the Partnership for Peace, the Permanent Joint Council with Russia and the NATO-Ukraine Commission will contribute to the consolidation of peace, security and stability without creating new dividing lines in a single, undivided Europe.

The Union welcomes the results of the NATO Washington Summit as regards NATO support for the process launched by the EU and its confirmation that a more effective role for the European Union in conflict prevention and crisis management will contribute to the vitality of a renewed Alliance. In implementing this process the EU shall ensure the development of effective mutual consultation, cooperation and transparency between the European Union and NATO.

The OSCE, a regional arrangement in the sense of Chapter VIII of the UN Charter, is at once transatlantic, pan-European and Euro-Asian, and as such has a central role in promoting peace, security and stability in its vast region. The Member States of the Union continue to be among the principal actors and contributors, both financially and in personnel terms, to the OSCE. The Union supports efforts to strengthen the OSCE's role in the European security architecture, notably in discussions on the elaboration of a Charter on European Security to be adopted as a politically binding document at the Istanbul Summit in November 1999. The Union believes that this Charter should not only reconfirm the OSCE acquis but also bring an added value to the prior documents by formulating new principles taking into account the changes that have taken place in the OSCE area since the adoption of the Charter of Paris in 1990. It should also focus on implementation of commitments and strengthen the OSCE's capacity to act.

In the area of preventive diplomacy, conflict-prevention, crisis-management and post conflict rehabilitation, the Union continued to lend its support to the OSCE field missions and acknowledges that their increased activity is a major element in the evolution of the OSCE in the past few years. It actively participated in the setting-up of the Kosovo Verification Mission (KVM) and in the OSCE Task Force for Kosovo. The OSCE has an important role to play, with cooperation from the Council of Europe and others, in the fields of institution-building, democratisation, human rights, media, elections and training of judges, police and local administration in the province, as one component of the UN mission in Kosovo, to which it is at present making a major contribution.

The Union also continues to support OSCE-led activities under the general framework agreement for peace in Bosnia-Herzegovina. It supports the role played by the OSCE in Albania and actively cooperated with the OSCE by jointly chairing the "Friends of Albania" Group. It supports the OSCE Mission in Croatia, which took over police monitoring in Eastern Slavonia from the United Nations, the OSCE AMG in Belarus and the efforts of the OSCE's Minsk Group concerning the Nagorno-Karabakh conflict, as well as the efforts of the OSCE mission in Georgia to reach a settlement in the South-Ossetian conflict. The Union welcomes the initiative taken by OSCE participating States, including several EU countries, to provide assistance in the liquidation of Russian ammunition and equipment depots on the territory of Moldova. It welcomes the fact that an agreement could be reached about a framework for future cooperation between the OSCE and Ukraine. It also supports the work of other OSCE field missions.

The Union also supports the OSCE's enhanced focus on fully integrating the States of Central Asia and the Caucasus in a community of values based on democracy, the rule of law, human rights, and the commitment to preserve peace and stability in the OSCE area.

In the area of arms control the agreement reached on the basic principles for the adaptation of the Treaty on Conventional Forces in Europe (CFE) ensures that a key element in arms control in Europe is maintained. The EU looks forward to the adoption of the adapted Treaty at the Istanbul Summit.

The Union made an important contribution to the work in the "human dimension" of the OSCE, notably to the OSCE Implementation Meeting on Human Dimension Issues (Warsaw, October-November 1998) and to the first Supplementary Human Dimension Meetings on Freedom of Religion (March 1999) and on Gender Issues (June 1999). The Union supports the work of the OSCE's Office of Democratic Institutions and Human Rights (ODIHR). It also supports the activities of the OSCE Representative for the freedom of the media (Mr Duve), as well as of the High Commissioner on national minorities (Mr Van der Stoel).

The EU supports the work of the OSCE Coordinator on economic and environmental issues, and took an active part in the 7th Economic Forum in Prague as well as in different seminars organized throughout the year. It considers that a steady economic development, relying on regional cooperation and respectful of the environment, is a key factor of peace and stability in the OSCE area.

On the occasion of the 50th Anniversary of the Council of Europe, the European Union paid tribute to the achievements of this organisation. It reaffirms its attachment to the fundamental values of the Council of Europe of pluralist democracy, respect for human rights and the rule of law. The CoE's enlargement as a response to the political changes in Europe has further enhanced the relevance of the organisation. The Union welcomes Georgia's accession as 41st Member State. It hopes that the remaining applicant countries will soon bring their institutions and legislation in line with the requirements of the Council of Europe and resolve any conflicts between them so that they would also be able to join the organisation. The EU stresses the importance of full compliance with membership obligations and expects that all Member States of the Council of Europe fulfil their commitments to the organisation.

The Council of Europe has developed a unique expertise and an essential standard-setting role in the field of democracy and human rights. Central to the CoE's system in this field is the European Convention on Human Rights, as ratified by all Member States. The New European Court of Human Rights inaugurated in November 1998 further consolidates the CoE model of protection of human rights, as does the establishment of the post of a CoE Commissioner for Human Rights. The protection of persons belonging to national minorities forms a major part of the Council's acquis, as illustrated by the Framework Convention on National Minorities. The EU also underlines the particular importance it attaches to Protocol n°6 to the European Convention on Human Rights concerning the abolition of the death penalty. It calls upon all Member States of the CoE to abide by their commitment to establish moratoria on executions, to be consolidated by complete abolition of the death penalty.

The EU and the Council of Europe share the same goals with regard to the protection and promotion of the principles of democracy, respect for human rights and fundamental freedoms and the rule of law. They join forces notably by implementing a number of joint programmes for cooperation and assistance to Central and Eastern European Countries.

The EU encourages the work underway to define the CoE's priorities and objectives for the 21st century which include, as well as those mentioned above, cultural and social cohesion) and to reorganise and make more efficient the Council's structures and working methods.

The EU supports regional cooperation initiatives as ways to enhance stability, prosperity and integration in Europe. The Union considers such cooperation fundamental in fostering good-neighbourly relations in line with the OSCE's objectives, encouraging political stability, strengthening democracy and human rights and boosting economic cooperation and trade.

This process launched by the EU in 1995 continued to develop. In November 1998 the Union adopted a Common Position formalising and reinforcing its support for the Royaumont process. In May 1999, it gave Royaumont Coordinator Mr. Roumeliotis the status of EU Special Representative.

A key feature of the Process is the involvement of representatives from civil society, who are provided with the opportunity to make recommendations to governments and organisations participating in the Royaumont Process. Roughly 80 projects dealing with stability, good neighbourliness and civil society were submitted within the framework of the Process. A number of them are being implemented, others are being examined for future implementation. The budgetary authority of the EU has earmarked a sum of 5 million Euro for Royaumont projects.

The Royaumont Process is expected to play a key role in the Stability Pact for South Eastern Europe launched on 10 June in Cologne.

The EU has developed guidelines for a "Northern Dimension" in its policy. This Dimension is conceived as a way of working with the countries of the region (Russia, Norway, Iceland and the associated countries concerned) to increase prosperity, strengthen security and resolutely combat dangers such as environmental pollution, nuclear risks and trans-border organised crime. The EU Presidency intends to convene a Ministerial Conference on the Northern Dimension in November 1999.

The current enlargement process, which was launched in March 1998, on the basis of the Luxembourg European Council of December 1997, represents a historic opportunity for the European Union with the prospect of almost doubling EU membership over the coming years and increasing the population of the Union from around 380 million to nearly 500 million persons. This will not only require adaptations of the institutions of the Union, but also pose considerable challenges for the policies and financing of the Union.

The overall agreement reached in March 1999 in Berlin on the "Agenda 2000" reform package now means that the financial framework of the Union has been secured for the next seven years. Pre-accession aid will be almost doubled from 2000 and will include the introduction of two pre-accession instruments for agricultural and structural measures. Also, substantial funds have been set aside for new Member States within an enlarged Union from 2002 onwards. Furthermore, the decision of the Cologne European Council in June 1999 to convene a new Intergovernmental Conference on institutional reform at the beginning of next year will ensure that the Union's institutions continue to work efficiently after enlargement.

Work on enlargement with the ten Central and Eastern European countries and Cyprus is progressing well. The current process comprises both those candidates with whom negotiations have begun (Cyprus, Hungary, Poland, Estonia, the Czech Republic, Slovenia) and those with whom the Union has not yet started negotiations (Romania, Slovakia, Latvia, Lithuania, Bulgaria). The inclusive nature of the enlargement process has allowed the Union to strengthen its relationship with each of the candidate countries, while allowing each country to progress at its own speed on the road to accession. The same political and economic criteria apply to all the candidates. The Commission has been invited to consider measures to help crystallise the prospect of accession in its next progress report for all applicant countries.

The success of the process depends on the ability of the candidate countries to align themselves with the legislation of the Union prior to accession. This includes effective implementation and enforcement. The enhanced pre-accession strategy established by the Union has already produced results. The Council's examination of the first regular reports of the Commission in December 1998 on progress made by the candidate countries revealed that substantial progress has indeed been made in their preparations for membership. For the countries of Central and Eastern Europe, the enhanced pre-accession strategy centres on Accession Partnerships and increased pre-accession aid. The individual Accession Partnerships, which are designed to channel all forms of assistance within a single framework, have already enabled the candidates concerned to focus on priorities and to align them with available resources. The short and medium-term priorities contained in the Partnerships are to be revised. As regards substantive negotiations, these were initiated with Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia in Autumn 1998. Good progress has been achieved so far. By the middle of 1999, negotiations had been started on around half of the negotiating chapters that make up the legislation of the Union. The pace of progress in the negotiations naturally depends on the degree of preparedness of each candidate country.

Following the decision of Malta in September 1998 to reactivate its application for EU membership, the Commission submitted to the Council in February 1999 a report updating its 1993 opinion on Malta's membership request. On the basis of this report, the Council decided in March 1999 that the screening of EU legislation with Malta should begin as soon as possible. This exercise is now well underway. The June 1999 Cologne European Council confirmed that the Commission would prepare a progress report on Malta.

The European Strategy prepares Turkey for membership. The Council has received the first regular report on Turkey's progress towards accession. The Council will receive second regular reports on each candidate's progress towards accession. In the case of Turkey, reports will be based on Article 28 of the Association Agreement and the conclusions of the Luxembourg European Council.

In the framework of the overall enlargement process, the European Conference brings together for political consultation the Member States of the Union and the European States aspiring to accede to it and sharing the Union's values and internal and external objectives. Following the first meeting at the level of Heads of State and Government in March 1998, a second meeting at the level of Ministers of Foreign Affairs was held in October 1998. The third meeting was held in Brussels on 19 July 1999 at the level of Foreign Ministers.

The Union's contractual relations with the ten countries of Central and Eastern Europe (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia) are based on Europe Agreements, establishing an association between the European Union and these countries. These Agreements provide an institutional framework for contacts at all levels and contain legally-binding commitments by both parties. The entry into force of the Europe Agreement with Slovenia in February 1999 means that such Agreements now exist with all Central European candidate countries.

The European Union remains fully committed to a comprehensive settlement of the Cyprus question on the basis of the relevant UN Security Council resolutions. It reaffirms its strong support for the efforts of the UN Secretary-General and his Special Representative to achieve such a settlement. It warmly welcomes UNSCRs 1250 and 1251 of 29 June, and in particular the Security Council's request to the UN Secretary-General, in accordance with the relevant UN Security Council Resolutions, to invite the leaders of the two communities to comprehensive negotiations without pre-conditions in the Autumn of 1999. It hopes that the two leaders will give their full support to such negotiations under the UN Secretary-General's auspices.

The Union notes with great concern the excessive level of armament in Cyprus and lends it full support to the UN Secretary-General to continue to promote efforts aiming at the eventual demilitarisation of Cyprus as an objective in the context of an overall comprehensive settlement.

Cyprus's accession to the EU should benefit all communities and help to bring about civil peace and reconciliation on the island. In view of the fact that the invitation of the Cyprus government has not been taken up so far, the Presidency and the Commission will continue their efforts to convince the Turkish Cypriot community of the benefits of EU membership and of an early association of Turkish Cypriots with the accession process, in accordance with the conclusions of the 1997 Luxembourg European Council.

A number of decisions have been taken which contribute to closer cooperation between the Union and Cyprus, in particular the decision to extend the 4th Protocol on financial and technical cooperation as well as the signature of an Additional protocol to facilitate the participation of Cyprus in the EU's 5th Framework Programme for research, technological development and demonstration activities.

The Vienna European Council underlined the great importance it attaches to the further development of relations with Turkey, taking forward the European strategy to prepare Turkey for membership. The European Commission has submitted proposals for the implementation of this strategy, including financial cooperation and Turkish participation in Community programmes. These proposals are currently being examined.

Strengthening links with the Union also requires Turkey's active cooperation in pursuing its candidature and making progress towards taking on the requirements for membership and fulfilling the necessary conditions, including the Copenhagen criteria.

On 29 June 1999, the EU Presidency following the death sentence passed on Abdullah Öcalan by the State Security Court of Ankara on that day, reiterated its well-known opposition to capital punishment as a matter of principle, irrespective of the defendant and the offence of which he is convicted. It reiterated its condemnation of all forms of terrorism. The non-application of the death penalty would be in accordance with Turkey's European vocation.

The Union looks forward to close cooperation with the new Turkish Government and expects it to carry forward the pledged reforms, including in the Southeast of the country. The Union welcomes the willingness in this regard expressed by Prime Minister Ecevit in his letters to the German EU Presidency as an important step forward in the development of the Union's relationship with Turkey. In this context, the EU continues to believe that it will be beneficial to both sides to resume fully-fledged political dialogue on all issues of mutual importance.

The EU was deeply touched and saddened by the loss of life and damage caused by the devastating earthquake in Northwest Turkey. It extended its sympathy to the victims and pledged the EU's support and cooperation in order to ease the suffering of the people in Turkey. The EU provided assistance to Turkey following the disaster and is considering further measures. Foreign Minister Cem, upon the invitation of the Presidency, met EU Ministers on 13 September and discussed EU reconstruction aid and EU/Turkey relations.

Taking into account the fact that analytical examination of the EU "acquis" with Malta has started, and in order to ensure the continuation of close cooperation between the Union and Malta, the 4th Protocol on financial and technical cooperation has been extended for another year.

The European Commission is preparing a proposal for a specific pre-accession strategy for Malta.

The multilateral political dialogue which the Union conducts with the Central and Eastern European countries and Cyprus was re-extended to Malta in June. On the basis of a decision taken by the EU Council in March 1999, Malta participated in the European Conference on 19 July in Brussels.

The multilateral political dialogue in the CFSP field with the Central European Countries and Cyprus continued on the basis of the March 1994 Council conclusions and the Guidelines as revised in June 1996. In June 1999 the dialogue was re-extended to Malta. The dialogue has allowed for harmonisation of policies at different levels, intensive cooperation in international fora such as the UN and the OSCE as well as a high level of alignment with the EU's CFSP instruments, including a Joint Action. In addition, the first EU Common Strategy, which concerns Russia, foresees association of the countries concerned with actions within the framework of this Strategy.

The Agreement on the EEA continues to work well as a basis for development of the privileged relations which exist between the EU on the one hand and Iceland, Norway and Liechtenstein on the other. In particular, it allows these States to be integrated into the EU's internal market. It also offers opportunities to discuss mutual foreign policy interests in the context of an enhanced political dialogue.

The European Union signed a package of seven sectoral Agreements with Switzerland in June 1999. This package comprises agreements on the Free Movement of Persons, Agriculture, Air transport, Rail and Road transport, Research, Public Procurement as well as on Mutual Recognition. When entered into force, these agreements will strengthen considerably the bilateral relations between the European Union and Switzerland.

During the past year, the EU's attention and activities were focused in priority on the Kosovo crisis. The Belgrade regime's policy of ethnic cleansing and the resulting flows of refugees and displaced persons led to a humanitarian catastrophe of major proportions, threatening the stability of the fragile neighbouring countries of the FRY, especially Albania and the former Yugoslav Republic of Macedonia.

As an immediate reaction to these developments, the Union pursued its efforts in the field of humanitarian assistance. Due to the Kosovo crisis, the flight and the forced deportation of close to a million Kosovo Albanians, even more people in the region continued to depend on such support, requiring budgetary commitments of 19 million Euro in 1998 and 392 million Euro so far in 1999.

This has been a year of difficult challenges for the UN. It is therefore appropriate to underline the role the organization is playing in the implementation of the solution of the crisis in Kosovo. The Security Council adopted Resolution 1244, which defined the basic points of the political solution to the crisis and decided on the deployment, under United Nations auspices, of international civil and security presences.

The EU pays tribute to the International Criminal Tribunal for the former Yugoslavia (ICTY) and to its increasing success in bringing to trial those accused of atrocities. The Union recalls the duty of all States to cooperate with the ICTY in delivering indicted persons into the Tribunal's custody. It also welcomes and strongly supports ICTY's investigations of atrocities in Kosovo.

Regarding long term stabilisation, the European Union took the initiative to launch the Stability Pact with a view to achieving lasting peace, prosperity and stability for the region as a whole. The Stability Pact was formally adopted at a Ministerial meeting in Cologne on 10 June 1999. Subsequently, Mr. Bodo Hombach was appointed Special Coordinator for the Stability Pact by the Council of the European Union, as endorsed by the OSCE Chairman in Office. A Summit Meeting at the level of Heads of State and Government was held in Sarajevo on 30 July 1999 to endorse the purposes and principles of the Stability Pact. The European Union will actively support the countries in the region to enable them to achieve the objectives of the Stability Pact, one of which is to draw the region closer to the perspective of full integration into its structures.

The EU is formulating a comprehensive policy towards the region on the basis of the Communication by the European Commission on the "Stabilisation and Association Process for the Countries in South Eastern Europe". This new process will be based on the existing EU Regional Approach and reaffirms the European Union's resolve to take up the challenge and responsibility to contribute to the stability of the region. The EU will introduce a new dimension to its relations to the region, namely the offer to the five countries concerned - in return for compliance with the relevant conditions - of a tailor-made category of contractual relations: Stabilisation and Association Agreements (SAAs). These agreements will take into account the specific and evolving situation of each country and will be gradually introduced in the light of the ability of each country to meet reciprocal, contractual obligations, as well as of its effective contribution to regional cooperation. As not all countries will be able, at present, to meet the reciprocal standards necessary for the opening of negotiations for such agreements, the Stabilisation and Association process also envisages improved cooperation in other fields (e.g. trade and economic relations, economic and financial assistance, democratisation assistance, cooperation in new post-Amsterdam fields, political dialogue...), where cooperation and increased assistance will enable the countries to reach the necessary standards for negotiations on SAAs.

In more general terms, the relations between the European Union and the Western Balkans region (Albania, Bosnia and Herzegovina, Croatia, Federal Republic of Yugoslavia, former Yugoslav Republic of Macedonia) continue to be governed by the Regional Approach and the political and economic conditions identified in the EU Council conclusions of 29 April 1997. On 9 November 1998, 31 May 1999 and 21 June 1999, the Council reviewed the performance of the countries concerned with regard to these conditions. A further review will take place toward the end of this year.

Relations between the European Union and the FRY were dominated by the Kosovo crisis. On numerous occasions, the Union called on the FRY government and the Kosovo Albanians for an immediate end to violence, full compliance with the relevant UN Security Council Resolutions and for early negotiations with a view to a political solution to the crisis.

On 5 October 1998, the European Union appointed the Austrian Ambassador to Belgrade, Wolfgang Petritsch, as EU Special Envoy to act on the spot for the EU under the direction of the Presidency.

The European Union has done its utmost to contribute to finding a peaceful solution to the Kosovo conflict, notably during the negotiations in Rambouillet and in Paris, and to negotiate an agreement for the self-government of Kosovo. However, in the face of extreme and criminally irresponsible policies and repeated violations of UNSC Resolutions, the use of the severest measures, including military action, became necessary and warranted.

To further increase pressure on the FRY to move towards peace and to undo the effects of Belgrade's policy of ethnic cleansing in Kosovo, the EU, for its part, imposed a ban on the delivery of petroleum and petroleum products on the FRY. Furthermore, the EU extended the existing EU sanctions regime (visa ban, flight ban, investment ban, freeze of assets) and adopted further measures (travel ban, extension of freeze of funds, prohibition of provision of export finance, extension of the investment ban, sports boycott, comprehensive flight ban).

At their informal meeting in Brussels on 14 April 1999, in which the Secretary-General of the UN took part, the EU Heads of State and Government summed up the demands of the international community: an immediate halt to the use of force, withdrawal of all military and special forces as well as irregular units, deployment of an international military force and the return of all refugees and displaced persons.

The Council fully supported President Ahtisaari's work on behalf of the European Union, in cooperation with the Russian and US efforts, to ensure the implementation of the conditions of the international community to end the conflict in Kosovo. The EU warmly welcomed the adoption of UNSCR 1244, the full withdrawal of all Serb security forces, the end of NATO's air campaign, as well as the deployment of KFOR and UNMIK to Kosovo. The Union is actively engaged in UNMIK - with responsibility for "pillar 4" of UNMIK (Economic Reconstruction, Recovery and Development) - and intends to play a key role in the stabilization of the situation in the territory. The EU will continue its endeavours to achieve a democratic, multi-ethnic Kosovo, with a substantial degree of autonomy in the framework of the FRY.

The EU emphasises the importance of finalising the UNMIK deployment in Kosovo. It also welcomes the fact that KFOR deployment will soon be completed. The EU condemns the continuing acts of violence and harassment in Kosovo. It stresses that the KLA must fully comply with its commitments for demilitarisation.

The EU also welcomes the efforts of UNMIK to promote reconciliation and cooperation between various ethnic and other groups in Kosovo. The EU expresses its deep concern that the Serb and other non-Albanian populations have to a large extent left Kosovo and recalls that UNSCR 1244 foresees the right to return of all refugees and displaced persons. Every effort should be made to facilitate their return. The EU also expresses its deep concern that the question of several thousand persons, overwhelmingly Kosovo Albanians, who have disappeared remains open.

Throughout the crisis, the European Union had been at the forefront of efforts to ease the plight of refugees and displaced persons. Apart from 392 million Euro in humanitarian assistance, a 100 million Euro financial package had been pledged to neighbouring governments in the form of refugee/displaced persons- related support. The first Donor's Conference for immediate refugee-related needs, co-hosted by the European Commission and the World Bank in Brussels on 28 July 1999, confirmed the EU's position as the single largest contributor to the international assistance effort. The European Union is continuing to carry out a damage assessment survey of Kosovo, and further conferences will be held as needs are clarified and programmes developed.

The EU insisted on respect for human rights and democratic principles in the FRY. In 1998, almost 5.5 million Euro were committed for support to the independent media in the FRY. In December, the Union agreed to impose a visa ban on FRY and Serb personalities responsible for the repression of independent media. The Union condemned, both in the UN Commission on Human Rights and on other occasions, the extremely serious human rights violations perpetrated by the FRY against the ethnic Albanian population in Kosovo.

The EU continuously expressed its support for Montenegro and its democratically elected Government, which is bearing a heavy burden due to the Kosovo crisis and the influx of refugees. In addition to support for Montenegro's strained economy and the Government's continued drive toward political and economic reform, 13 million Euro were also made available to Montenegro to cover internally displaced persons related expenditure. Furthermore, the EU Council endeavoured to exempt Montenegro from the EU sanctions regime against the FRY whenever possible.

The European Union will continue to support democratic change in the FRY. It reaffirms its intention to reach out to the Serbian people and to the democratic forces in the country in their efforts to promote democratisation and civil society. It will continue to differentiate between the Belgrade regime and the population in the FRY so as to make sure that the regime will not benefit from EU action in favour of the population.

The EU participated in the Conference on Reconstruction and Development in Zagreb on 4/5 December 1998, in the light of some encouraging developments in Croatia's attitude to refugee return. At the same time, the EU stated that substantive progress was needed on the return of Croatian citizens of Serb origin and urged the Croatian Government to fully implement all the commitments already undertaken, including in the fields of the media and of election law reform.

Croatia also has responsibilities towards its neighbours, particularly Bosnia and Herzegovina. In this respect, constant support for the implementation of the peace process remains a sensitive point on which Croatia must abide by its undertakings.

The Union remains fully committed to the objectives agreed at the Madrid Peace Implementation Council last December for implementation of the Dayton/Paris Peace Agreement. It will continue to support fully the efforts of the High Representative, not least in the light of the fact that progress achieved in BiH has been largely the result of strong pressure by the international community.

Following the September 1998 elections, the Union recalled the need for the newly elected authorities at all levels to cooperate constructively in the implementation of the Dayton/Paris Agreement. In this context, it reiterated that EU assistance would only be available to those living up to their commitments and obligations under the peace agreements.

As the largest donor to BiH, the Union remains committed to continuing its support for economic and democratic consolidation, reintegration of refugees and reconciliation. The fifth Donor's Conference for Bosnia and Herzegovina confirmed the Union's role as the single largest contributor to the international assistance effort. By 2000, the EU will have spent more than 1 billion Euro for reconstruction and technical assistance and a similar amount for humanitarian aid in Bosnia and Herzegovina.

The Union notes progress in the implementation of the Dayton/Paris Agreements, but the situation in both Entities, in particular in Republika Srpska, remained a cause for concern. The attempted dismissal of the incumbent Prime Minister Dodik, as well as the non-recognition of the Brcko arbitration by Nikola Poplasen, have slowed the work of the joint bodies of BiH. In the Federation, parallel illegal structures still exist and the functioning of the Federation is not fully satisfactory mainly because of the uncooperative attitude of HDZ and SDA. Conditions for minority return in both Entities need improvement.

At a Ministerial level Political Dialogue meeting of the EU Troika with Prime Minister Georgievsky, the EU encouraged the new Government to continue along the road of reforms with due respect for the rights of minorities.

The continued presence of the "Democratic Party of Albanians" in the new Government demonstrated the willingness to develop a multi-ethnic and pluralistic society. The country has come under tremendous strain through the effects of the Kosovo crisis, notably the massive influx of refugees. Budgetary assistance for refugee-related expenses has been provided. A report on the feasibility of the opening of negotiations for a Stabilisation and Association Agreement was published by the European Commission on 16 June 1999. In line with the EU Council conclusions of June and July, the Commission is submitting to the Council draft negotiating directives for such an Agreement.

The inaugural meeting of the "Friends of Albania" Group took place in Brussels on 30 September 1998 under the co-chairmanship of EU and OSCE and constituted an important signal on continued international commitment to the stabilisation of Albania. The European Union actively participated in the International Conference in Tirana on 30 October 1998 and appealed to the Albanian authorities to implement quickly the steps towards economic and political reform spelled out in the operational conclusions of the Conference and the relevant EU documents. This Conference was followed by two plenary meetings of the "Friends of Albania" on 24 February and 22 July 1999, and a political dialogue meeting at Ministerial level took place on 27 April 1999.

There has been progress regarding the respect for democratic principles, national reconciliation and market economy reform. The country has also dealt admirably with the massive refugee influx from Kosovo and has cooperated efficiently with international organisations. However, large parts of the country remain marked by a lack of public order and security. The European Union has continued its assistance, not least on refugee related expenses with a view to achieving further progress in stabilisation, economic reform and democratisation in Albania. In that context, an Emergency Donor meeting organised jointly by the European Commission and the World Bank on 26 May 1999 successfully pledged approx. 190 million Euro to cover external financing needs for 1999. In order to help the Albanian government to improve the security situation, the EU, on 5 March 1999, adopted a joint action to support the WEU in its activities in favour of the Albanian police and, on 10 May 1999, a joint action to support weapons collection and destruction in the Gramsh area in cooperation with UNDP.

The EU continues to pursue its goals of strengthening democracy and civil society, fostering respect for human rights, supporting the transition to functioning market economies and integrating these economies in the world markets.

The EU considers that regional cooperation is essential for the attainment of these goals. The EU will seek to use all instruments at its disposal to further strengthen such cooperation. In this context, the ministerial conference on the EU's Northern Dimension to be held in the month of November will be of particular importance. The October 1999 Black Sea Economic Cooperation Ministerial Conference to be held in Thessaloniki will also be of importance.

The Partnership and Cooperation Agreements (PCAs), signed with each of the twelve Eastern European and Central Asian Countries with the exception of Tajikistan, nine of which have entered into force, form the backbone of the Union's policy. All parties commit themselves to the UN Charter, the Universal Declaration of Human Rights and the principles set out in the CSCE/OSCE documents, and recognize that support for the independence, sovereignty and territorial integrity of the partners will contribute to safeguarding peace and stability in Europe and beyond. The broad scope and substance of the PCAs effectively strengthens the links between the Union and its partners, and their practical implementation through cooperation councils at ministerial level and agreed working programmes allows not only for a closer economic relationship, but also for improved cooperation through a strong political dialogue.

Through the implementation of the TACIS technical assistance and other regional cooperation programmes, the EU continues to provide considerable support for economic and political reforms. As a response to acute problems, the EU, in close cooperation with other donors, has also provided humanitarian aid, food aid and post-conflict rehabilitation and reconstruction assistance.

Following the Russian financial crisis of August 1998, the EU stressed its solidarity with the Russian people and authorities and the need for continued reform. EU assistance was re-oriented to meet the new situation including the structural weaknesses which the crisis revealed. In addition, the Union has provided 470 million Euro of food aid and 7 million Euro of humanitarian aid for the most vulnerable groups.

Following the entry into force of the Amsterdam Treaty in May 1999, the European Council in Cologne decided upon a Common Strategy on Russia, the EU's first Common Strategy. This strategy will strengthen the partnership between the EU and Russia, which is so crucial to maintaining peace and security in Europe and beyond and to meeting common European challenges. To this end, the Union looks forward to working with a Russia that is increasingly open, pluralistic, democratic and stable, respects human rights and individual freedoms and is governed by the rule of law, underpinning a prosperous market economy. As a new tool for the EU's Common Foreign and Security Policy, the Common Strategy will also bring more coherence and coordination to actions of the EU, the European Commission and Member States, in particular through the use of more efficient decision making mechanisms in implementing the foreign policy aspects of the Strategy.

The EU-Russia Summits (Vienna - 27 October 1998 and Moscow - 18 February 1999) and the second EU-Russia Cooperation Council (17 May 1999) provided a common forum to discuss international issues of common interest and bilateral EU-Russia relations, and were proof of the intensification of the coordination, coherence and complementarity of all aspects of the EU's policy towards Russia.

Developing a closer political and economic partnership with Ukraine remains one of the EU's key objectives. The European Union welcomes the increasing cooperation with Ukraine under the Partnership and Cooperation Agreement in force since March 1998, which has brought about a new quality of relations. The EU-Ukraine Summits (October 1998 and July 1999), and the second EU-Ukraine Cooperation Council (26 April 1999) marked a further intensification of the relations between the EU and Ukraine. Full use should be made of the considerable potential afforded by that Agreement so as to bring Ukraine into closer contact with the European Union. The Union urges Ukraine to follow its reform policy through consistently and assures it of constant support in the process, including support for the European vocation of this country. The Union recalls the G7-Ukraine Memorandum of Understanding on the closure of the Chernobyl nuclear power plant. It emphasises the need to do everything possible to effect decommissioning in 2000 as agreed, and calls on the international community to consider measures which will make the consequences of closing down the Chernobyl plant bearable for Ukraine. Work has started on the EU's Common Strategy on Ukraine, which will provide greater coherence and consistency, as well as a higher profile, to EU actions in regard to Ukraine. The EU also welcomes the recent agreement for a continued OSCE presence in Ukraine.

Since its entry into force on 1 July 1998, the Partnership and Cooperation Agreement has been successfully implemented and constitutes the backbone of Moldova's increasingly close relationship with the Union.

As for the situation in Transnistria, the EU has urged all parties to step up their efforts to work out a final settlement for Transnistrian autonomy within the framework of the Republic of Moldova. The Union fully supports the approach defined at the OSCE Ministerial meeting in Oslo, namely to work towards a settlement in a "feasible" step-by-step approach. The Union took note of Russia's unilaterally established timetable for the withdrawal of arms and ammunition from Transnistria. The EU invited Russia to cooperate fully with Moldova in order to rapidly establish a revised and detailed timetable for the complete withdrawal of Russian troops and their equipment in conformity with the Russia-Moldova agreement of 0ctober 1994 and the Oslo decision. Several EU Member States have declared their willingness to provide technical assistance for the repatriation or the destruction of stockpiled arms and ammunition once an agreement between the parties concerned has been reached. The Union will continue to support all initiatives contributing to enhancing the security and the stability in this region, in particular confidence-building measures aiming at greater military transparency or improved contacts and links between the two sides.

The EU has on many occasions underlined its interest in a stable, peaceful, prosperous and democratic Belarus, which respects its international obligations and human rights. To this end, the Union has continued to support the activities of the OSCE Advisory and Monitoring Group in Belarus. The EU has urged the authorities to engage in a constructive dialogue with all political forces in the country in order to settle the political problems in a peaceful way, paving the way for free and democratic parliamentary and presidential elections. The EU has attached particular importance to the development of a civil society and the rule of law. The Union remains deeply concerned about the human rights situation and in particular the many individual human rights cases and has appealed to the authorities to solve these cases rapidly and in conformity with international standards.

The relations between the EU and the Caucasian countries (Armenia, Azerbaijan and Georgia) are steadily deepening. The Partnership and Cooperation Agreements/PCAs signed in 1996 entered into force on 1 July 1999 and will lead to a further intensification of relations. The Summit with the Caucasian Heads of State or Government in Luxembourg on 22 June has illustrated the region's importance to the EU. The EU is determined to use its potential of political ties and economic assistance to promote the solution of regional conflicts via support for confidence-building measures etc.

Georgia's accession to the Council of Europe was a recognition of the significant progress this country has made in terms of democratization and respect for human rights. Georgia's forthcoming WTO accession shows that progress is possible, in spite of the negative effects of the economic crisis. The Union noted with satisfaction that parliamentary elections took place in Armenia without major incidents.

As for the regional conflicts, the Union remains worried by the continuing stalemate and the absence of lasting peaceful solutions. The EU will continue to support international mediation efforts for solutions which respect the territorial integrity of the States concerned. Through cooperation- and assistance programmes and special initiatives like TRACECA, the Union aims at creating conditions conducive to peace and stability. But these efforts can only bear fruit if complementary efforts are made by all parties involved in conflicts. The EU has noted some positive steps in South Ossetia and hopes that more progress can be made, in particular concerning economic rehabilitation of the conflict area and the return of refugees and displaced persons. As far as the conflict in Abkhazia is concerned, the Union has expressed on several occasions its support for the UN-led negotiation process for a peaceful solution. The EU is concerned about the repeated outbreaks of violence in the Gali district. The implementation of the confidence and security building measures agreed in Athens in October 1998 and in Istanbul in June 1999 under the aegis of the UN must be continued. The Union also deplored the continuing skirmishes in Nagorno-Karabakh. Although the cease-fire signed on 12 May 1994 has been generally respected, clashes on the front line have to be deplored. Those which occurred in mid-June 1999 were a setback to international efforts to defuse the tension which the EU deplores. The EU urges all parties to respect the ceasefire and to recommit themselves to the search for a peaceful settlement through the OSCE's Minsk process.

The Union continued its support for the political and economic development of the Central Asian countries. The entry into force of the EU-Kazakhstan, EU-Kyrgyzstan and EU-Uzbekistan Partnership and Cooperation Agreements (PCAs) on 1 July 1999 will give a new qualitative dimension to relations between the EU and these countries. The first Cooperation Councils with Kazakhstan and Kyrgyzstan on 20 July 1999 and with Uzbekistan on 14 September 1999 provided a strong legal and political basis for a close relationship between the EU and these partners.

Enhancing regional cooperation remains a particularly important task, since many problems in the environment and other domains remain unresolved. The EU remains concerned at the slow implementation of the peace agreements in Tajikistan as well as the human rights situation in several other countries in the region. In particular, the EU has made clear its concerns about death sentences imposed on those accused of carrying out bombings in Uzbekistan in February, about serious human rights violations in their trial, and about freedom of religion in that country. The development of civil societies, independent media, respect for human rights and functioning democratic systems, including multiparty competition and free and fair election procedures, are of prime importance. The EU stands ready to assist all countries in this respect and will continue its cooperation with other actors.

The European Union remains fully committed to the development of the transatlantic relationship, which is fundamental to international stability and for ensuring that problems in relations are resolved in a mutually satisfactory way.

The Transatlantic Declaration of 1990, the New Transatlantic Agenda of 1995, the Transatlantic Partnership for Political Cooperation of 1998, and the Transatlantic Economic Partnership Statement and Action Plan of 1998 collectively provide the framework for a vast, cooperative relationship between the European Union and the United States. However, the disagreement over the character and extra-territorial impact of sanctions legislation adopted by the United States, both by Congress and at State and local level, continued to affect relations negatively. While the 18 May 1998 London Summit had registered substantial progress on the dispute over US extra-territorial legislation, through the agreement on a set of joint statements, the Union remains concerned that over one year later implementation by the United States is incomplete and, in particular, that the waivers sought by the Union remain outstanding. The dispute over the Union's banana policy narrowly risked overshadowing relations in the latter part of 1998, while 1999 has been marked by arguments over the EU's ban on hormones and on EU-approved processes for genetically modified organisms (GMOs).

Two summits took place with the United States: Washington on 18 December 1998 and Bonn on 21 June 1999. At the first, a number of statements were published: Cooperation in the Global Economy; Western Balkans; Middle East Peace Process; and the NTA Chapter IV "people-to-people" Transatlantic Dialogues.

Discussions at both summits also covered other political subjects of common interest or concern, including the situation in Russia and in Ukraine, and bilateral trade matters, including the banana dispute. The Summits noted progress in cooperation in a number of areas including Transatlantic Dialogues (People-to-People links).

In the "Bonn Declaration" published on the occasion of the EU-US Summit in Bonn in June 1999 the EU and the US commit themselves to a full and equal partnership in coping with regional and global challenges. In addition, both sides agreed to coordinate better, both internally and bilaterally, in order to strengthen both the principles and mechanisms that would enable potential bilateral EU-US problems to be identified and prevented at an early stage. This was recognised in a separate statement on EU-US Early Warning and Problem Prevention - Principles and Mechanisms published at the same time.

The EU and the US worked together to achieve a diplomatic solution in Kosovo and cooperated intensely on short-term humanitarian relief in South Eastern Europe. The EU and US cooperated to tighten sanctions on the FRY, imposing further measures on Serbia in support of democratisation, Dayton implementation and an end to the crisis in Kosovo. The EU and the US worked closely to develop the Stability Pact for South Eastern Europe, which will enhance security, economic prosperity, democracy and respect for human rights in the region in the aftermath of the Kosovo crisis. In Bosnia and Herzegovina, they continued their cooperation with the OSCE to ensure successful elections and worked to advance Dayton implementation. In Croatia, they have strengthened Dayton and Erdut implementation and the promotion of democratic reform, refugee return and economic liberalisation. They established the "Friends of Albania" group to assist in the political and economic stabilisation of that troubled country.

After jointly training observers, the EU and the US successfully collaborated on monitoring the Slovak elections. They consulted closely, including at the ministerial level, to assess economic and humanitarian needs in Russia as a basis for addressing the economic crisis there. They continued their common approach, together with others in the international community, to urge Russia to develop an action plan on nuclear waste management in the Northwest. In a Joint Statement on Ukraine, issued on the occasion of the June 1999 Bonn Summit, the EU and the US reaffirmed their continued cooperation in a range of priority areas: political and economic reform, nuclear safety, trade and investment, energy sector reform and civil society. They consulted closely on steps in response to Belarusian violations of the Vienna Convention on Diplomatic Relations.

On the Middle East, the EU supported the implementation of the Wye River Memorandum brokered by the US. The EU and the US have worked together to make the 30 November Donors' Conference in Washington a pledging success. We cooperated in the adoption of UN Security Council Resolution 1192, and urged Libya to comply and surrender the two Pan Am 103 bombing suspects. The EU and the US continued their intensified dialogue on Iran.

EU and US experts cooperated closely on demining efforts and are pursuing the joint development of demining technologies.

The EU and US launched cooperation on combating child pornography on the Internet. They continued the Caribbean Drugs Initiative. At the Peru Conference, in Brussels on 10-11 November 1998, the EU and the US together pledged approx. 77 million Euro in new funds towards alternative development, prevention and institution-strengthening projects in Peru.

The EU and the US agreed on the Transatlantic Economic Partnership (TEP) action plan, under which they started a regular dialogue on a broad range of multilateral and bilateral trade issues. They brought the Mutual Recognition Agreement (MRA) into force on 1 December 1998. They have started implementation of the recently signed Positive Comity Agreement which improves EU-US cooperation on anti-competitive practices in cases of mutual concern. On data protection, they have made progress in developing an arrangement that would provide a predictable framework for the application of the EU directive on data protection to the transfer of personal data from the EU to the US with adequate protection for privacy. Significant progress has been made towards resolving differences on standards for third generation mobile communications systems. On 17 September, the EU and US concluded a Statement of Cooperation, the purpose of which is to establish a framework for the exchange of supervisory information regarding banks and banking organisations that have establishments in both the EU and the US.

We initiated contacts between the US Supreme Court and its European counterparts; the first ever judicial branch activity under the NTA. The EU-US Science and Technology Agreement entered into force. We held the first official Joint Consultative Group (JCG) meeting to discuss cooperation and concluded implementing arrangements on cooperation in information technology and standards/metrology.

Relations with Canada developed in line with the Joint Political Declaration, and associated Joint Action Plan, signed in December 1996. Three agreements were signed with Canada in December 1998 and a further agreement in June 1999.

Under the Declaration on EC-Canada relations of 1990 and within the framework of the Joint Political Declaration of December 1996, two summits took place: in Ottawa on 17 December 1998 and in Bonn on 17 June 1999.

At the Ottawa Summit, declarations were issued on Small Arms and Anti-personnel Mines; and a new EU-Canada Trade Initiative (ECTI).

In the margins of the Summit, the following agreements were signed: the EC-Canada Veterinary Agreement; the Agreement amending the EC-Canada Science and Technology Cooperation Agreement; and the Euratom-Canada Nuclear Research Cooperation Agreement.

In the margins of the Bonn Summit, an agreement on cooperation between the respective competition authorities was signed. The Summit took note of the work under ECTI. The EU still has concerns about some extra-territorial Canadian legislation.

The third Euro-Mediterranean Conference of Foreign Ministers between the EU and its 12 Mediterranean partners was held in Stuttgart on 15-16 April. It demonstrated that three and half years after having been launched with the Barcelona Declaration, the partnership has developed and strengthened considerably. Additional impetus has been given and Ministers agreed to further concentrate activities in priority areas, to increase the involvement of actors outside central governments and to make the partnership more action-oriented and visible. Libya participated as guest of the Presidency and it was agreed that Libya would become a full member as soon as the UN Security Council sanctions have been lifted and Libya has accepted the whole Euro-Mediterranean partnership acquis. Ministers discussed in particular the relationship between the partnership and the Middle East Peace Process, which should be regarded as complementary. Ministers reviewed the progress achieved and welcomed the guidelines for elaborating a Charter for Peace and Stability as a basis for future work with a view to completing the elaboration of the Charter by the next Ministerial Conference and to approve it formally as soon as political circumstances allow. The fourth Conference of Foreign Ministers will be held in the second half of 2000, preceded by a "brainstorming" meeting of Foreign Ministers during the first half of 2000.

The Euro Mediterranean partnership is increasingly multidimensional: Ministers responsible for several sectors (culture, health, water, science and technology, industry, transports) already meet on a regular basis; the first meeting of Parliaments was held last year and will be pursued; Euro-Mediterranean networks linking civil society are in place and others are being created; decentralised cooperation will be relaunched; Social and Economic committees meet regularly; the regional cooperation has been considerably developed.

Given the global character of the relationship between the EU and the Mediterranean partners, the Union is discussing a common strategy towards the Mediterranean in order to enhance the connections among the several dimensions of the Euro-Mediterranean partnership using all the instruments available to the EU. Thus, according to the mandate of the European Council in Vienna, this common strategy will integrate the Barcelona Process, the EU policy towards the Middle East Peace Process, and other EU actions with a Mediterranean component, taking into account their complementarity with other Mediterranean dialogues.

To advance the Euro-Mediterranean partnership and the objectives put forward by the Barcelona declaration, a financial programme is in place for the period 1996 to 2000 and will be extended for the period 2000 to 2006.

Negotiations with Egypt for a Euro-Mediterranean Association Agreement were concluded at the end of June. This brings now to six the number of association agreements of this new generation to be either entered into force, signed or initialled. The EU is actively negotiating the same kind of agreements with three other Mediterranean partners, Algeria, Lebanon and Syria. The main objective of these agreements is to contribute to the core aim of the Barcelona Process to create an area of peace, stability and shared prosperity in the region, including through the creation of a free trade area by the year 2010.

The EU continues to follow closely developments in Algeria by supporting and encouraging the democratization process the country has embarked upon since 1995. It follows with great interest the reform process undertaken by the Algerian authorities in the political, economic and social fields. By taking an active part in the campaign for the April 1999 presidential elections, Algeria's citizens showed the store they set by pluralist democracy. The EU expressed its disappointment that the credibility of the electoral process was undermined by allegations of malpractice.

The EU welcomes with hope the initiatives of President Bouteflika in favour of peace and civil concord. It expresses the wish that the measures adopted will contribute to putting an end to violence and suffering in Algeria.

The EU firmly believes that promoting human rights, democracy and the rule of law will allow Algeria to overcome its difficulties. The EU urges Algeria to cooperate with UN human rights bodies.

The EU confirms its readiness to support the reform process in particular through the Euro-Mediterranean Cooperation. In order to open a new stage in the EU - Algeria partnership, it also wishes that the current negotiations on an association agreement can be concluded as early as possible.

The EU also attaches importance to continuing the political dialogue with the Algerian authorities aiming at improving common perception of the issues of mutual interest and fostering cooperation with this important Mediterranean country.

The EU fully supports the long-standing UN efforts to implement the Settlement Plan, which aims at the holding of a free, fair and impartial referendum in Western Sahara. It supports the recent proposals of the UN Secretary-General to hold the referendum in July 2000.

The EU is satisfied that agreement could finally be reached on the proposals of the UNSG as regards the further steps of implementation of the Settlement Plan, i.e. resumption of voter identification and the start of the appeals process, which it hopes will be conducted in an appropriate manner and with no further delays. The EU welcomes the adoption of Security Council Resolution 1263 extending the mandate of MINURSO until 14 December 1999.

The EU also welcomed the talks of both parties with the UNHCR hoping that these consultations would soon lead to the conclusion of an agreement that would allow the return of refugees. Furthermore, it fully supports the efforts of the ICRC to face the humanitarian issues which have arisen from this conflict.

The EU has welcomed the transfer by Libya to the Netherlands of the two individuals charged with the Lockerbie bombing of PAN AM 103 as demanded by the UNSCR 1192 which resulted in the suspension of the UN sanctions against this country. In compliance with the UN suspension, the EU, in a Common Position adopted on 16 April, suspended the corresponding EU sanctions. In a further common position adopted on 13 September, it equally lifted the sanctions decided in 1986 in reaction to Libyan support to terrorism -the arms embargo however will remain in place. This decision was taken in the light of the report presented by the UN Secretary General on 30 June, which cited several elements suggesting that recent acts by the Libyan authorities were indicative of the Libyan government's renunciation of terrorism.

The EU welcomes Libya's commitment to pursue the implementation of the relevant UNSCRs. It urges Libya to maintain its spirit of cooperation, so that it can regain its position as a full member of the international community in the near future. Re-establishment of diplomatic relations with the United Kingdom on 7 July was a useful step in this process.

The EU also believes that it is in the interest of stability in the Mediterranean that Libya is included, in due time, in the Euro-Mediterranean dialogue in the Barcelona Process, and hopes that Libya will soon accept the whole Barcelona acquis. In this prospect, it invited Libya to attend the latest Euro-Mediterranean Conference in Stuttgart as an observer.

The Union welcomes the fact that the comprehensive dialogue initiated with Iran in 1998 is progressing well, enabling the two sides to discuss both issues of concern - such as weapons of mass destruction - and issues of mutual interest - such as the fight against drugs. The Union looks forward to the continuation of the dialogue, including in the working groups which have been established to discuss possible EU-Iran cooperation in certain areas such as energy, trade and investment.

The Union welcomes the declared aim of the Government of Iran to pursue a course of institutionalising the democratic structures and respect for civil society as well as promoting respect for human rights and fundamental freedoms. However, the Union has followed with concern the reaction of police and security forces to the course of events related to student demonstrations which started in July in Tehran and which spread to other cities. It welcomed the condemnation by the Iranian government of violence that has been used against demonstrators.

The European Union appealed to all political and social forces in the Islamic Republic of Iran to promote a policy of tolerance and respect for universal human rights in all aspects, including protecting the rights of freedom of expression, association and assembly. It believes that progress will be made only through dialogue and on the basis of universally recognised human rights and fundamental freedoms. In this respect, it also remains concerned about the overall human rights situation in Iran, including the rights of religious minorities and the rights of women and urges the Iranian Government to resume its cooperation with the Special Representative of the UN Commission on Human Rights.

The Union welcomed the assurances given by the Iranian Government in September 1998 that it has no intention to take any action whatsoever to threaten the life of author Salman Rushdie and those associated with his work, nor to encourage or assist anybody to do so and that it disassociates itself from any reward offered in this regard and does not support it. This positive step removed an impediment to better relations between the Union and Iran and enhanced the prospects of closer cooperation.

The European Union remains committed to the full implementation of all UN Security Council resolutions pertaining to Iraq. In particular the Union calls for the implementation of all the provisions of UNSCR 687 and UNSCR 715. Compliance by Iraq with its obligations will allow the Security Council to act in accordance with the relevant provisions of UNSCR 687 on the lifting of sanctions.

The Union supports efforts to restore unity in the Security Council on the basis of the panel reports submitted in April 1999.

The Union remains deeply concerned about the alarming humanitarian situation in Iraq. It is determined to ensure that the arrangements for bringing increased humanitarian goods to the Iraqi people under UNSCR 986 and subsequent resolutions extending these arrangements are fully implemented. The Union calls upon Iraq to continue to cooperate with the UN's humanitarian efforts.

The Union reiterates its commitment to the sovereignty and the territorial integrity of all States in the Middle East region, including Iraq, and calls upon all States to act in full respect for this basic principle of international law.

The Union strongly condemns the systematic, widespread and extremely grave violations of human rights in Iraq and calls upon Iraq to cooperate with the UN Special Rapporteur on Human Rights in Iraq and other UN mechanisms in this field.

The Union calls upon Iraq to cooperate with the ICRC to account for the fate of all missing Kuwaiti nationals and nationals of other States.

The European Union welcomes the progress made by the GCC in the preparation of its customs union, with a view to its entry into force in March 2001, as well as the presentation of a GCC mandate for the EC-GCC free trade negotiations in March this year. These developments will facilitate the early conclusion of a free trade agreement.

At the 8th EU-GCC Joint Council and Ministerial meeting in Luxembourg in October 1998 the two sides took stock of these negotiations and discussed political developments of common interest in their respective regions. In this framework the question for respect for human rights was also discussed.

The EU welcomes the signature on 5 September of the Sharm-el-Sheikh Memorandum as a decisive step towards just, lasting and comprehensive peace in the region and praises Prime Minister Barak and President Arafat for their courage and determination to achieve this goal.

In paying tribute to the contribution of King Abdullah, President Mubarak and Secretary of State Albright in the final phase of the negotiations, the EU notes that the successful outcome was largely a result of direct negotiation between the parties, which bodes well for the next steps of the process. Noting the presence of the Presidency and Special Envoy Moratinos in Sharm-el-Sheikh, the Union reiterates its readiness to be associated with the implementation and, if the parties so wish, to contribute to issues to be dealt with under the resumed Final Status negotiations. A letter has been sent to President Arafat to assure him of the Union's support for the Memorandum and commitment to contribute to its implementation. The EU Council on 13 September invited the Presidency, with Special Envoy Moratinos, and the Commission to explore with parties in and outside the region how, against the background of progress on the Palestinian Track, early progress can be achieved on the Multilateral, the Syrian and the Lebanese Tracks.

The EU welcomes the opening of the final status talks in Erez, noting with satisfaction the invitation extended to the Union including the Special Envoy to attend the ceremony.

The EU condemns in the strongest terms the acts of terrorism which followed the signing of the Sharm-el-Sheikh Memorandum. It strongly supports the stated determination of the parties to deny success to those seeking to frustrate the Peace Process by provocative actions.

Since the elections for a new Knesset on 17 May and the formation of the new Israeli government by Prime Minister Ehud Barak on 6 July, the general political situation in the Middle East has changed towards a feeling of renewed hope and rising expectations for a just and comprehensive peace in the Middle East. The president of the EU Council in her visit to the region on 1-5 August had encouraged the parties to use the new momentum to take concrete steps to advance the peace process through confidence-building measures and implementation of the agreements.

Sharing these hopes and expectations, the Union will continue, not least through the substantial efforts of its Special Envoy, through its diplomatic relations and economic involvement, and above all through its relations of friendship and trust with the various parties, to work together with the parties concerned both in the region and outside, in particular the co-sponsors of the Process (the United States and the Russian Federation), to help the direct parties to achieve agreement on a comprehensive, just and lasting peace.

Looking back on the past year, the Union welcomed the signing, in October 1998, of the Wye River Memorandum, which opened the perspective of ending the deadlock of the MEPP.

At the Berlin European Council on 24 and 25 March 1999, the Heads of States and Governments of the European Union called upon the parties to implement fully and immediately the Wye River Memorandum and to reaffirm their commitments to the basic principles established within the framework of Madrid, Oslo and subsequent agreements, in accordance with UNSC Resolutions 242 and 338. They called in particular for an early resumption of Final Status negotiations in order for these negotiations to be concluded within a target period of one year. They urged both parties to refrain from activities which prejudge the outcome of the negotiations and from any activity contrary to international law, including all settlement activity, and to fight incitement and violence.

The Heads of State and Governments reaffirmed the continuing and unqualified Palestinian right to self-determination including the option of a State and looked forward to the early fulfilment of this right. They appealed to the parties to strive in good faith for a negotiated solution on the basis of the existing agreements, without prejudice to this right, which is not subject to any veto. They expressed the conviction that the creation of a democratic, viable and peaceful sovereign Palestinian State on the basis of existing agreements and through negotiations would be the best guarantee of Israel's security and Israel's acceptance as an equal partner in the region. They stated the readiness of the Union to consider the recognition of a Palestinian State in due course in accordance with these principles.

They finally underlined the need for an early resumption of negotiations on the Syrian and Lebanese tracks of the Middle East Peace Process, leading to the implementation of UNSCRs 242, 338 and 425.

New positive indications point to a shared willingness of Israel, Syria and Lebanon to work hard for an early resumption of negotiations which have been interrupted for too long. The European Union welcomes those encouraging signals and hopes that they will materialize soon. Indeed tangible progress on the Syrian and Lebanese tracks is also an essential component of the achievement of a durable peace in the region. In the meantime, the Union encourages all parties concerned strictly to implement the April 26 1996 Understanding in South Lebanon.

The Union remained the largest donor to the Palestinians. At the 30 November 1998 Ministerial Conference to Support Middle East Peace and Development meeting in Washington the Union announced for the period 1999-2003 a pledge of around 400 million Euro in Community budget grants, subject to budgetary procedures. In addition Member States as bilateral donors made individual pledges. The Union furthermore ensured the concrete follow-up to the conference in the framework of the Consultative Group and the Ad Hoc Liaison Committee, which met in Frankfurt in February.

The Union continued to press for implementation of outstanding economic commitments under the Interim Agreement, in particular Gaza Industrial Estate, as well as the start of work on Gaza harbour and provision of safe passage between the West Bank and the Gaza strip, these projects being crucial for the long-term viability of the Palestinian economy. It welcomed the opening of the airport following the Wye agreement and Member States and the Special Envoy stepped up efforts to help make the airport fully operational.

The Union has been participating in activities linked to the multilateral track of the peace process and stands ready to do its part for full reactivation of this track as soon as the situation permits.

The President of the EU Council, accompanied by the Commission and the EU Special Envoy for the Middle East Peace Process, visited capitals in the region in November 1998; his successor visited the region again in February.

The EU recalls that a stable and democratic political environment is indispensable for sustainable development. The EU Council on 26 April 1999 adopted conclusions welcoming the UN Secretary General's 1998 report on "the causes of conflict and the promotion of durable peace and sustainable development in Africa". The EU is committed to participating actively in the continued follow-up process in close co-operation with other actors concerned. It therefore welcomes the progress made in several African countries in the field of economic reform, democracy and good governance.

In May 1999, the EU reviewed its May 1998 Common Position on Human Rights, Democratic Principles, the Rule of Law and Good Governance in Africa. On this occasion, it recalled that respect for human rights and fundamental freedoms, democratic principles, the rule of law and good governance were key criteria and objectives in a number of co-operation agreements between the EU and African countries, in particular in the revised Lomé Convention (Lomé IV).

It noted that while the period under review had been marked by positive changes in Nigeria - in addition to which encouraging developments in other places have materialized since then (Lomé agreement on Sierra Leone, Lusaka agreement on the DRC), many countries in Africa showed little progress towards increased respect for human rights, or adherence to democratic principles, the rule of law or good governance, and that one third of the countries of Sub-saharan Africa were presently involved in armed conflicts (civil wars, supporting parties of civil wars in other countries, armed intervention outside own country or self-defence). In this context the EU remains concerned at the use of child soldiers in armed conflicts. It reiterates its concern at certain traditional and customary practices affecting the health of women and girls.

The EU welcomed the favourable response from the OAU to the Union's proposal for the holding in April 2000 of a summit of the Heads of State and Government of the European Union and of Africa. The Union looks forward to starting the preparation of the summit, which should adopt a balanced approach between political and economic issues, reflecting the global nature of EU-Africa partnership in order to ensure concrete results.

The Union is deeply concerned by the extension of armed conflicts, the huge influx of arms and military equipment to conflict areas in Africa and the increasing role in these conflicts of non-State entities. These are often the main actors of the conflicts, financing their activities through the trafficking of diamonds, gold and other precious materials as well as thorough other lucrative illicit activities. Out of six armed conflicts that erupted in 1998, only one, Kosovo, was not in Africa. More than a third of African States are at present or have recently been involved in civil wars, supporting one of the parties of other civil wars or involved in cross border conflicts.

The EU has sought to an active, comprehensive and integrated approach towards the issue of violent conflicts in Africa based on the 1997 Common Position and Council Conclusions on "Conflict prevention and resolution in Africa". A number of concrete measures have been taken to strengthen African political will, ownership and capacity to focus on the prevention of violent conflicts by addressing their root-causes at an early stage and providing analysis, early warning and early action.

On 17 December 1998 the EU adopted a Joint Action on small arms and light weapons to complement the EU programme for preventing and combating illicit trafficking in conventional arms of June 1997. In May 1999, the EU furthermore adopted a resolution on "Combating the Excessive and Uncontrolled Accumulation and Spread of Small Arms and Light Weapons as Part of the EU Emergency Aid, Reconstruction and Development Programmes".

On 18 June 1999, the EU expressed its concern at the continuing flows of arms and military equipment of all kinds, in some cases together with military and technical personnel, which is fuelling conflicts in the Great Lakes and Central Africa region, as well as in other parts of the continent.

The EU is committed to supporting the capacities of regional and sub-regional organizations in Africa in the fields of conflict resolution and peace-keeping, and, bearing in mind UN Security Council Resolution 1209 on arms flows in Africa, considers that in the search for a long term solution to conflicts, high priority should be given to measures which curb arms supplies, their illicit circulation and the illicit trafficking which finances them.

The European Council in Berlin on 24–25 March 1999 approved the Trade, Development and Co-operation Agreement with South Africa.

After the decision taken on 24 April 1997 regarding South Africa's qualified membership of the Lomé Convention as the 71st ACP State, this agreement is an important further step in the consolidation and strengthening of the solid partnership which exists between the European Union and South Africa in the political, economic and trade fields. It is a symbol of the strong links of friendship and solidarity between the peoples of Europe and Southern Africa, bearing in mind that the interests of all States in that Region must be taken into consideration in the implementation of the agreement. It is also the first agreement to be negotiated and concluded under the new rules of the World Trade Organisation (WTO). This means in particular that in practically all areas trade between the EC and South Africa will be substantially liberalised.

Co-operation between the European Union and the Southern African Development Community (SADC) has continued to progress along the lines identified by the Final Declaration adopted by the First EU–SADC Ministerial Conference in September 1994 in Berlin.

The Third Ministerial EU–SADC Conference took place on 3–4 November 1998 in Vienna. This Conference reviewed co-operation between the two regions since the Ministerial meetings in Berlin 1994 and Windhoek in 1996.

The Conference reaffirmed the importance it attaches to respect for human rights and the principles of democracy and recalled the commitment of both sides to build, consolidate and strengthen democratic institutions founded on accountability, transparency, good governance and the rule of law, as these fundamental principles form an essential element of, and are the basis for co-operation between EU and SADC. The two sides reaffirmed their commitment to development and indicated their intention to closely coordinate the planning and implementation of mutually beneficial regional development programmes and projects. Since then the EU–SADC Joint Steering Committee met twice to exchange views on issues of mutual interest as well as on the implementation of priorities established by the Ministerial Conference in 1998. The EU welcomes the entry into force of the SADC Regional Protocol on Drugs which will enable the Union to support action against drugs in the region.

The EU remains concerned about the prevailing conflicts in the Great Lakes Region, particularly in the Democratic Republic of Congo. The EU supports the principles of territorial integrity and national sovereignty, and recognises the legitimate security concerns of all parties concerned. Through the EU Special Envoy for the Great Lakes Region, the EU has pursued its efforts to promote peace and respect for human rights and democracy.

The EU welcomes the signature of a cease-fire agreement in Lusaka which it considers as an important step towards a settlement of the DRC war and a comprehensive solution to the Great Lakes' crisis. The EU calls on all the parties to facilitate its entry into force. The EU will, along with the UN and the international community, act in favour of a timely, complete and equitable implementation of this agreement.

The EU remains concerned about the violations of human rights and international humanitarian law in the Great Lakes Region.

The EU urges all the warring parties to support and facilitate the implementation of the Lusaka cease-fire agreement, allowing for a complete cessation of hostilities, the orderly and supervised withdrawal of the forces engaged in the DRC, to be followed by the setting up of a peace-keeping force led by the UN jointly with the OAU in conformity with the Lusaka agreements and with UNSC Resolutions 1234 and 1258, as well as an international conference on peace, security and stability in the Great Lakes Region, which could provide a basis for long-term solutions to the current crises. The EU also urges all parties to the conflict to respect human rights and fundamental freedoms.

The EU has declared its readiness to give support to the peace, reconciliation and democratisation process in the DRC. It intends to support the planned national dialogue between all parties concerned provided it is facilitated by an independent authority and addresses a return of peace, the establishment of the rule of law and democracy in the country.

On 30 September 1998, the EU Council welcomed the progress achieved in the Arusha peace process and reiterated its support. The Union has given political and financial support to President Nyerere's peace mediation efforts in the framework of this process and has appointed, upon request by President Nyerere, the chairman of Commission IV on reconstruction and development in the framework of the Arusha process.

The EU is concerned about recent developments in the country. In August and September 1999 it condemned the killings of civilians by rebels and on the occasion of clashes between the army and rebels.

The EU has updated its policy on Rwanda in its new Common Position in July 1999. It is committed to encouraging the efforts of Rwanda in its foreign and security policy in favour of regional stability and to supporting the recovery from genocide and the promotion of national reconciliation, reconstruction and development, protection and promotion of human rights and a transition to democracy. The EU welcomed the elections at local level as a first step towards democratisation and national reconciliation. The Union urges the Rwandese government to accelerate progress towards these objectives and to call national elections within the time frame it recently announced. The Union calls for cooperation with the International Criminal Tribunal for Rwanda (ICTR) and underlines the importance of an effective operation of the tribunal.

The European Union followed with growing concern the resumption of civil war in Angola, the responsibility for which lies primarily with UNITA under the leadership of Dr. Jonas Savimbi. In December 1998 and once more in July 1999 the EU has expressed deep concern about the serious deterioration of the overall political, military and security situation in Angola and repeatedly urged UNITA to fulfil unconditionally and without further delay its obligations under the Lusaka protocol and respect relevant UN Security Council resolutions.

The European Union once more stresses its commitment to maintaining strong international pressure on UNITA and its leadership through the full implementation, by all UN Member States, of UN sanctions against UNITA. It welcomes the decisions contained in UN Security Council Resolution 1237 (1999) aimed at improving the implementation of the sanctions regime against UNITA and supports the recommendations thereafter suggested in a report to the UN Security Council dated 4 June by the Chairman of the UN Council Committee established pursuant to Resolution 864 (1993).

The Union remains convinced that lasting peace in Angola can only be achieved through political means. It therefore strongly urged UNITA and its leadership to cease its military activities and to demonstrate, unequivocally, its will to resume dialogue in good faith with the Government of Angola on the basis of the UN Security Council Resolutions, with a perspective of demilitarization of UNITA and extension of State administration throughout the country. Provided that UNITA takes such action, the Union calls on the Government to respond favourably to the cease-fire and to enter into a dialogue. It also calls on the Government to accept a significant UN presence in Angola compatible with the enormous tasks facing the country. The EU considers that a UN presence, including a human rights component, can contribute positively to a peaceful settlement of the Angolan conflict.

The Union expressed particular concern about the fact that as a consequence of the latest outbreak of hostilities the number of refugees and displaced persons has risen dramatically. The Union has repeatedly appealed to the Government of Angola and UNITA to respect human rights and to cooperate with the humanitarian organisations in the delivery of emergency relief assistance, to guarantee the safety and freedom of movement of their personnel, as well as access to affected populations. The Union will continue to make all efforts to provide humanitarian aid to the victims of the conflict and to support demining.

The European Union calls again on the Government, as a signatory of the Ottawa Convention, but in particular on UNITA, to cease mine laying activities immediately.

The Union welcomes the recent efforts made by the Government to implement reforms aimed at stabilising the economic and financial situation of the country and encourages it to continue to fight against corruption and poverty.

The EU condemns the attacks against the UN, notably those perpetrated against UN aircraft in December 1998 and January 1999.

In May 1999, the European Union condemned the military coup in the Comoros and called on the army to allow the legal Government to resume its official duties. It also announced that it would reexamine its development cooperation with the country, in accordance with the provisions in article 366a of the fourth revised Lomé convention, and it urged the leaders on Anjouan immediately to sign the Agreement of Antananarivo of 23 April 1999 and to cooperate in a constructive fashion with the constitutional Government on its implementation. Consultations on the Comoros under article 366a took place on 26 July 1999. The EU is currently preparing its decision on the conclusions of these consultations.

The European Union, including through a February 1999 Ministerial Troika visit to Asmara and Addis Ababa, repeatedly urged both parties to immediately cease hostilities on all fronts, to refrain from any further use of violence and to cooperate with the OAU's efforts to mediate a peaceful negotiated solution to the conflict. In this context, it has stressed the importance for both sides to de-escalate the conflict by adopting policies geared to the restoration of confidence between the governments and peoples of Ethiopia and Eritrea including measures to improve the humanitarian situation.

In June 1999, the EU expressed deep concern at the renewed outbreak of fighting at the border between Ethiopia and Eritrea. The Union welcomes the decision by the Assembly of the Heads of State and Government of the OAU in Algiers on 12-14 July to approve the modalities for the implementation of the OAU framework agreement on the settlement of the conflict between Ethiopia and Eritrea. It reiterates its support to the framework agreement. It urges Ethiopia and Eritrea to subscribe immediately to the modalities, end all hostilities, proceed to the signature of a cease-fire agreement, and fully implement the OAU framework agreement. The Union reiterates its commitment to assist in the implementation process.

On 18 May 1999, the European Union condemned the new outbreak of violence in Guinea-Bissau leading to the deposition of President Vieira in violation of the Abuja agreement as well as the attacks on diplomatic missions.

The EU recalled that in relations with partner countries under the Lomé Convention high importance was being attached to the respect of human rights, the rule of law and the observation of democratic principles. In this light, the Union has been carefully monitoring the latest developments in Guinea-Bissau. On 19 July 1999, the EU decided to activate article 366 a of the revised Lomé Convention and to this end launched, on 26 July, consultations with the authorities of Guinea-Bissau, which had the opportunity to present the answers they intended to give to respond to the EU's expectations.

The EU appealed to the Military Junta, the government of national unity and the other authorities of Guinea-Bissau to renew their efforts to promote national reconciliation, reconstruction and development and takes note of the commitments undertaken publicly by them to respect these principles fully. The Union underlines the importance for Guinea-Bissau to take the necessary measures leading to free and fair presidential and legislative elections due to take place on 28 November 1999. The Union will make available a contribution of 1.6 million Euro for the elections.

The European Union commends the efforts undertaken by ECOWAS and the Community of Portuguese-speaking Countries (CPLP) to facilitate the reconciliation and peace process in Guinea-Bissau.

On 14 April 1999 the EU condemned the coup d'Etat in Niger during which the Head of State, President Baré, was assassinated. On 29 April 1999, the EU decided to invite the Niger government and the ACP States to hold consultations with a view to assessing the situation in detail and to remedy it, pursuant to the provisions of Article 366a of the Lomé Convention. These consultations took place on 18 May 1999 and as a result the Niger government committed itself to a plan for transition to democracy. The EU continues to follow carefully the situation in Niger and the progress towards the re-establishment of democracy and the rule of law in the country which are a prerequisite for the full normalisation of the relations between the EU and Niger.

As of 1 June, the EU Council lifted all remaining sanctions against Nigeria. On 21 May 1999 it welcomed and strongly supported Nigeria's return to civilian rule and democracy. The Council invited the European Commission to present a National Indicative Programme covering all regions of Nigeria, particularly taking into account good governance, the fight against poverty and support for the civil society. On 31 May 1999, the European Commission and Nigerian authorities issued a joint communiqué outlining future plans for cooperation. The Union encourages Nigeria to take early concrete steps towards economic and institutional reform and to create the open and transparent system essential for economic growth and prosperity. The Union also urged the new government to make all efforts to substantially improve its debt payment record.

A joint EU/US Mission assessed the overall drugs situation in Nigeria in August 1999, in close cooperation with UNDCP, with a view to initiating assistance in this field.

The European Union welcomed the signature of the Peace Agreement by the Government of Sierra Leone and the RUF representatives in Togo on 7 July. It commended the role of all those involved in bringing about this agreement, in particular the work of the Special representative of the UN Secretary-General, the President of Togo as current chairman of ECOWAS, who hosted the talks, and the Presidents of Nigeria and Liberia.

The Union called upon all parties to adhere strictly to the terms of the peace agreement in order to achieve a lasting peaceful resolution of a conflict that has imposed immense suffering on the people of Sierra Leone. In this respect, the Union emphasized that the accountability of individual perpetrators of grave human rights violations was important in ensuring a fair and equitable justice system and, ultimately, reconciliation and stability in Sierra Leone. The Union, accordingly, welcomed the establishment of a Truth and Reconciliation Commission as provided for in the agreement and stressed the importance of its successful functioning.

The Union expressed its readiness to give its support to the implementation of the Peace Agreement and to further stability and lasting peace in Sierra Leone, and to support the UN and ECOWAS which both have an important role in the implementation of the agreement.

On 18 June 1999 the EU expressed its concern at the illicit delivery of weapons, military equipment and military assistance to factions and other groups in Somalia in violation of the arms embargo imposed by UN Security Council resolution 733 of 23 January 1992, as well as the dangers of destabilisation of neighbouring countries and the spreading of terrorism produced by this inflow of arms. The EU called on Ethiopia and Eritrea to stop military intervention in Somalia, re-establish their cooperation within the IGAD and the Standing Committee and help the Somalis to settle their problems deriving from their long civil war which cannot be solved through military escalation and further fighting.

The European Union expressed its concern at the humanitarian situation in South Sudan caused by the long civil war and continuous fighting. It welcomed the decision of the Government of Sudan of 5 August to declare a 70-day humanitarian cease-fire. The Union calls upon the Government of Sudan and the Sudan Peoples Liberation Movement fully to implement their respective commitments to humanitarian cease-fire and to enter into a mutual agreement on a permanent comprehensive humanitarian cease-fire.

The Union also strongly calls on both sides fully to carry out, in good faith, their

commitment to the IGAD peace process, for which it reiterates its full support.

In March 1999, the EU expressed its regret that the envisaged dialogue between all Togolese parties had not taken place before the parliamentary elections were held. The outcome of these elections, having been held without the participation of the opposition, could not be considered to reflect the will of the Togolese people. At the request of the Togolese parties, the EU is providing facilitators to support the emerging dialogue between all political forces in Togo. The Union welcomes the signature by all parties of the Lomé framework agreement.

In December 1998, the European Union expressed its willingness to assist Uganda in its endeavour to consolidate its achievements by further political and economic steps, not least to control corruption, to settle armed conflicts in a peaceful way and to allow broad-based political participation to take place.

The EU conveyed its concern to the government of Uganda concerning the resumption of executions in April 1999, which broke a moratorium dating from 1996.

The EU has followed closely the evolution of the internal situation in Zimbabwe since the preoccupying violations of human rights of early 1999. It welcomes the renewed commitment of the government of Zimbabwe to implement the recommendations of the IMF, with which a constructive dialogue was reestablished. It also welcomes the prospects for an end to the armed conflict in the DRC, which can only contribute to the indispensable restoration of international confidence in this important country.

The ASEM process reflects the several dimensions of the relationship being built among its participants (political dialogue, economic cooperation, and cooperation in other areas), which already created several layers of meetings among governmental officials, business communities and civil society in general. Heads of State and Government, Ministers of Foreign Affairs, Ministers of Economy and Ministers of Finance already meet at regular intervals. The first summit took place in Bangkok (1996), the second in London (1998) and the third will be held next year in Seoul. The process of cooperation is developing the dialogue in new fields, with a view to contributing to sustainable growth and deepening the political and social relationship. The future of the ASEM process is being discussed following a report by the Asia-Europe Vision Group on possible directions for ASEM in the medium to long term.

The second ASEM Foreign Ministers' Meeting was held in Berlin on 29 March 1999. The Meeting recalled the guiding principles of the ASEM process as established at the Bangkok and London Summits and set out in the Asia-Europe Cooperation Framework adopted in London. It reaffirmed the continued confidence of Europe in Asia’s ability to achieve economic recovery and stability.

The Meeting discussed developments in Asia (Korean Peninsula, nuclear tests in South Asia) and in Europe (introduction of the Euro and progress in the EU's enlargement process.)

The Meeting, reiterating the importance of enhancing the ASEM dialogue on a wide range of global issues, welcomed the progress already achieved in promoting effective UN institutional reform and noted recent developments in the spheres of arms control, disarmament and non-proliferation, as well as the environment. The formal opening of the AEETC (Asia-Europe Environmental Technology Centre), which took place on that day, was welcomed.

The Meeting recalled the great importance which the ASEM Summit in London had attached to remedying the financial and economic situation in Asia and to working together to address this global concern. Certain signs of recovery were apparent, with the prospect of a resumption of steady growth in the medium term based on continued reform. Nevertheless, the social impact of the crisis was severe. The Meeting noted with satisfaction the rapid progress in implementing various crisis-related initiatives decided at the London Summit, such as the ASEM Trust Fund in the World Bank and the EU network of financial experts. It reiterated support for the trade and investment pledge and the need to resist any protectionist pressures.

It reaffirmed a commitment to the full and faithful implementation of the WTO Agreements and Ministerial Decisions. Ministers also agreed to collaborate to ensure that preparations for mandated negotiations and reviews under the Built-in Agenda are undertaken expeditiously so that negotiations can commence within the stipulated time frames. They stressed the importance of making further progress on broad-based negotiations, which should be sufficiently wide-ranging so as to achieve a balance of interests for all WTO members.

The Meeting emphasised that Asia-Europe cooperation in the cultural and other fields should continue to be multi-faceted and encompass all fields of human endeavour. It reaffirmed their strong determination to extend ASEM cooperation in the field of child welfare and the fight against sexual exploitation of children.

The Meeting reaffirmed a determination to keep the ASEM process open and evolutionary and asked Senior Officials to prepare recommendations on timing and modalities concerning expansion of membership to be submitted in time for ASEM 3.

The 13th EC-ASEAN Joint Cooperation Committee (JCC) met in Bangkok on 26/27 May 1999. Both sides agreed to work together to meet the challenges raised by the recent economic crisis faced by ASEAN. The meeting achieved considerable progress on substance in agreeing on a Work Programme as called for by the EU-ASEAN Ministerial Meeting in Singapore in February 1997. This Programme will deepen the relationship and contribute to a balanced growth in the ASEAN region. The JCC established new subcommittees on the environment and on narcotics. The meeting took note of an EU proposal for a protocol on cooperation in customs matters.

ASEAN and EU took the necessary ratification steps to ensure the entry into force of the protocol on the Accession of Vietnam to the EC-ASEAN Agreement on 1 May 1999.

The EU has continued its active participation in the ARF (ASEAN Regional Forum), including at the Inter-sessional Support Group on Confidence-Building Measures (held in Honolulu in November 1998 and Bangkok in March 1999) and at the Ministerial meeting in Singapore in July 1999. The EU has encouraged the strengthening of the role of the chair of the ARF as a means of increasing the ARF's capacity to pursue CBMs and preventive diplomacy in Asia and the Pacific. The EU's participation in the ARF has been reinforced through the inclusion of the WEU in the EU delegation.

A Ministerial meeting between the EU troika and Foreign Ministers of the SAARC (South-Asian Association for Regional Cooperation) took place in New York on 23 September 1998. A range of international issues were discussed and a number of practical suggestions for enhanced cooperation between the EU and SAARC were made at the meeting. EU-SAARC ministerial consultations will be continued in the margins of the UNGA.

The Union warmly welcomed the long-awaited agreement of November 1998 which led to the creation of a new coalition government following the elections in July of that year, elections to which the Union had offered significant assistance. The Union looked forward to working with the new Government on issues such as the strengthening of the rule of law, social and economic development, human rights and environmental concerns. It paid tribute to the leadership of King Sihanouk whose role had been crucial in achieving the agreement.

The EU remains concerned about the serious problem of impunity and calls upon the Cambodian authorities to take action against those who have been involved in serious human rights violations. In this respect, the Union has made clear that senior Khmer Rouge leaders most responsible for crimes against humanity should be brought to justice in a process meeting international standards.

The Union also welcomed the Cambodian Government's programme of reforms containing notably commitments to reform the administration, to improve the management of public finances, to reduce military expenditure, fight corruption, and put forestry on a sustainable footing. The EC-Cambodia Cooperation Agreement is expected to enter into force in summer 1999. The Union welcomes Cambodia's accession to ASEAN on 30 april 1999.

Faced with continued violations of human rights and the lack of progress towards democracy and national reconciliation, the Union repeatedly expressed its concern at the situation in the country and twice extended its Common Position imposing a series of administrative sanctions and visa restrictions on the State Peace and Development Council (SPDC). In October 1998 the Union strengthened these measures, extending the scope of the visa restrictions. The Union supported the visit to Rangoon by the UN Assistant Secretary-General and continues to support his efforts to discharge a good offices role.

In April 1999, the Union, in extending its Common Position for a further six months, sought the opening of a critical and meaningful political dialogue with Burma with a view to improving the situation there. At the same time, it warned that it might consider further restrictive measures in the light of the worsening of the human rights situation. A Troika fact-finding mission was duly dispatched to Burma in July 1999. It met representatives of both the SPDC and the opposition.

The EU is also concerned with the continuing position of Burma as one of the World's leading producers of illicit opium poppy.

The Union followed with close attention the trial of Mr Anwar Ibrahim, former Deputy Prime Minister of Malaysia, and expressed its concern, at the end of his first trial, that the circumstances of its handling had raised doubts about its fairness. It is concerned that similar circumstances seem to apply to Mr Anwar Ibrahim's second trial. It also called for appropriate legal measures to be taken against those responsible for the brutal mistreatment of Mr. Anwar Ibrahim while in police custody.

The Union has supported the process of political, economic, social and legal reform pursued by the Government of President Habibie, while also expressing its concern at inter-communal violence in the country and its handling by the Indonesian security forces. The Union has stressed its attachment to Indonesia's delicate ethnic and religious balance. The Union played a major role in supporting the Indonesian parliamentary elections of 7 June 1999, providing 7 million Euro in electoral assistance under the aegis of the UNDP, a contribution which offered support not only to Indonesian NGOs helping to prepare the elections, but also to a 135-strong team of EU electoral observers. In addition many of the Member States also provided substantial contributions to the election process. The Union welcomed the manner in which the elections were held and looks forward to enhanced relations between the EU and a democratic Indonesia.

The European Union warmly welcomed the result of the popular consultation of the East Timorese people on 30 August 1999. It considers imperative Indonesia's commitment to the full implementation of the 5 May 1999 Agreement between Portugal and Indonesia. The EU is committed to seeing the people of East Timor enjoy the independence which they have freely chosen. It pays tribute to the United Nations for the organisation of the popular consultation and to the courage and extraordinary work of the personnel of the United Nations Mission in East Timor (UNAMET) in the most challenging of circumstances.

The EU condemned in the strongest terms the atrocious acts of terror in East Timor which have followed the announcement of the result of the popular consultation and which have been perpetrated with the complicity of the Indonesian armed forces and police.

The EU welcomed President Habibie's announcement on 12 September that Indonesia would accept an international force to help create peace in East Timor, protect the population of the territory and implement the outcome of the popular consultation. The EU welcomes the adoption of Security Council Resolution 1264 and the deployment of the multinational force to restore order, security and the rule of law. The attitude of the EU towards Indonesia will depend on the implementation, without delay and without conditions, of the undertakings given by the President of Indonesia.

On 13 September, the EU agreed, for a period of four months, on an embargo on the export of arms, munitions and military equipment, a ban on the supply of equipment which might be used for internal repression or terrorism, and a suspension of bilateral military cooperation. The EU will decide, in the light of the situation after that period, on a possible further suspension, of a period to be determined.

The EU stresses that an urgent priority is to remedy the grave humanitarian situation. It expressed its deepest indignation at the attacks which have been mounted on humanitarian personnel, church members and human rights defenders. It urges the Indonesian Government to allow the safe return of international humanitarian organisations and agencies to East Timor without delay. They must have secure access to displaced people to allow them safe return to their homes. The EU also supports the call of the UN High Commissioner for Human Rights for the convening of a Special Session of the Commission on Human Rights (CHR). It calls for an investigative mission by the CHR to gather the facts and ascertain responsibilities for the campaign of terror which followed the holding of the referendum.

After the resounding vote in the popular consultation, East Timor's independence must proceed without delay, as provided for in the Agreement of 5 May. The Member States of the European Union look forward to recognising East Timor once the process towards independence is complete.

The EU emphasises its desire to see a strong, democratic and united Indonesia.

Looking back on the past year, the Union continued to pursue the objectives set out in its Common Position of 25 June 1996 and repeatedly raised its concern at violence in the territory, much of it carried out by militia groups.

The Union actively supported the negotiations between Portugal and Indonesia under the auspices of the UN Secretary-General and warmly welcomed the agreement reached in New York in May 1999 between the parties which opened the way for the just settlement of a long-standing international conflict through the freely expressed will of the East Timorese people, in line with the resolutions of the United Nations. It expressed its appreciation for the successful efforts of the Secretary-General to achieve this historic result. It shared the deep concern expressed by the Secretary-General in his report to the Security Council on the tense and volatile situation that continued to prevail in East Timor. The Union called on the government of Indonesia to take the necessary steps, including bringing those responsible for violence promptly to justice, in order to ensure that the consultation be carried out in an atmosphere free of violence and intimidation. It also actively supported the actions undertaken by the Secretary-General pursuant to the New York Agreement by providing five million Euro to the UN Trust Fund, as well as bilateral contributions from a number of EU Member States, and the dispatch by Member States of a considerable number of civilian police officers to form part of the UN Mission to East Timor (UNAMET). In this respect, on 19 July 1999, the EU adopted a common position concerning support for the popular consultation of the East Timorese people, as a clear and visible demonstration of the EU's commitment to a successful conclusion of the consultation process. An EU observation team consisting of national components was set up as provided for in the common position.

The EU continued its efforts to enhance its cooperation with India, notably through political dialogue (EU Troika - India meeting held in November 1998 in New Delhi) and in promoting EU trade through the EU - India Partenariate fair in March 1999. Both sides continue to explore new fields to enhance their cooperation. The next EU -Troika Ministerial meeting with India will be held in December 1999 in Helsinki.

A new EU-Pakistan cooperation agreement was initialled in April 1998. However, its signature was postponed after the nuclear tests in May 1998. The EU has expressed concern at the situation of human rights and, in particular, apparent pressure against the press and non-governmental organisations. The cooperation agreement will be signed as soon as the general framework for a comprehensive cooperation has further improved.

An EU-Pakistan meeting at Senior Official level was held in Vienna in November 1998.

In October 1998, the Union adopted a Common Position on the EU´s contribution to the promotion of non-proliferation and confidence-building in the South Asian region. The views of the Union on the need to reduce tensions between India and Pakistan were expressed in November at the EU-India Ministerial troika meeting in New Delhi and the EU-Pakistan meeting at senior official level in Vienna.

The importance of early signature of the CTBT and compliance with UNSCR 1172 by both countries was repeatedly stressed by the Union.

Developments in relations between India and Pakistan are closely followed by the Union. The Lahore declaration of February 1999 was warmly welcomed. The grave concern of the Union regarding the military confrontation in Kashmir following armed infiltration across the Line of Control was clearly expressed, through declarations by the Union and demarches by the EU Troika in both New Delhi and Islamabad.

At the last EU-Japan Summit held in Bonn on 20 June, the EU and Japan discussed matters of international interest, such as the crisis in Kosovo, the stability of the Korean Peninsula and political and economic reforms in Russia. They recognised their growing interdependence and welcomed their engagement in each other's regions. These developments have been recently illustrated by Japan's engagement in Europe, for example its generous assistance to refugees in Kosovo and surrounding countries, and its participation in the Stability Pact for South East Europe. For its part, the EU has done much to support efforts to promote peace and stability on the Korean Peninsula, notably through participation in KEDO, food aid and other humanitarian assistance to North Korea, and the launching of a political dialogue with that country. They also agreed that Japan and the EU should develop some new concrete joint initiatives to advance mutual foreign policy issues.

The Union is committed to the overall development of bilateral EU-China relations. The EU supports China's course of economic reform and market opening. It remains a strong supporter of China's accession to the WTO on terms that will be of mutual benefit and which will reinforce the world trading system.

The EU also wants to promote a more open society, the rule of law and respect for internationally recognized standards of human rights. The Union has welcomed some positive developments with regard to China´s involvement with UN human rights mechanisms, but has remained critical of continuing large scale violations of human rights in China. In particular, the action taken against political dissidents in China as well as the issue of the death penalty have placed a great strain on the EU-China dialogue on human rights. The EU has continued to pursue this dialogue with China of which the most recent round took place in Berlin in February 1999. A third legal seminar took place in Bonn in May 1999. The EU wishes to make the dialogue more concrete and oriented towards progress on the ground.

The Union is keen to intensify the EU-China political dialogue in recognition of China's enhanced position on the international scene. This dialogue was upgraded in April 1998 with the first ever EU-China Summit, held in London, at Heads of Government level. The second EU-China Summit will take place in the autumn in Beijing.

the EU aims to broaden the scope of its political dialogue with China so as to address issues of global interest such as the fight against drug trafficking, money-laundering, organised crime, and illegal immigration, all areas where EU competence has been enhanced under the Amsterdam Treaty.

The Union looks forward to the conclusion of the transition process in Macau on 20 December 1999 in the same positive atmosphere that has marked this process throughout. It is confident that the full implementation of the Sino-Portuguese Joint Declaration of 1987 will ensure a harmonious hand-over of the administration and believes that the high degree of autonomy of the future special administrative region and the continuity of Macau's specific social, economic, legal and cultural identity will provide a basis for its stability and prosperity.

The Union is confident that existing relations and ongoing cooperation between the EU and Macau will be enhanced, thus fostering the further development of the area.

The Union has continued to play an active role in the search for lasting peace and security on the Korean Peninsula. It will continue to work in support of international efforts to achieve these goals. It has welcomed the engagement policy pursued by the Republic of Korea. The Union has also repeatedly reaffirmed its support for the Four Party Talks and encouraged bilateral talks between the two Koreas.The Union sees these two processes as mutually reinforcing and aimed at contributing to peace and stability on the Peninsula, and would welcome any measure which would complement them.

Although they were exacerbated by natural disasters, the Democratic People's Republic of Korea (DPRK)'s difficulties are primarily structural in nature. Policy adjustment is therefore required. The Union has continued to offer significant food aid, humanitarian assistance and support for agricultural rehabilitation to the DPRK as well as active support for KEDO (Korean Peninsula Energy Development Organization), through its financial contribution and membership of the KEDO executive board.

Given the DPRK's largely self-imposed isolation, the Union is in favour of offering DPRK the opportunity to respond positively to engagement. The Union therefore undertook a first and ad hoc political dialogue meeting at experts level with the DPRK in December 1998. The Union has stated its willingness to hold a second such meeting, depending on developments on the Korean Peninsula.The Union has clearly signalled to the DPRK that bilateral relations can be expected to improve progressively as the Union's concerns are met.

The EU has called upon the DPRK to fully comply with its commitments under the nuclear Non-Proliferation Treaty (NPT) and to sign and ratify the nuclear Comprehensive Test Ban Treaty (CTBT) without delay, especially as it is one of the 44 States whose ratification is needed for the CTBT to enter into force. The EU has also called upon the DPRK to join other relevant non-proliferation regimes, including the CWC, and to discontinue missile activities, such as flight-testing, which undermine regional stability. The EU is equally concerned about reported DPRK exports of missiles and missile technology to unstable and volatile regions of the world, and has urged DPRK to discontinue these exports.

The Union is also deeply concerned about serious human rights violations in DPRK, in particular with regard to political prisoners, the absence of the rule of law, and the non-cooperation of the authorities with international human rights mechanisms.

In March 1999, the Union expressed its serious concern about the deteriorating political situation and growing instability in Bangladesh. The Union has a strong interest in cooperation with Bangladesh for the purpose of the country´s democratic, social and economic development, including the ultimate goal of the elimination of poverty. This has been demonstrated by the successful conclusion on 17 February 1999 of the negotiations on a new Cooperation Agreement between the EU and Bangladesh. Respect for human rights and democratic principles are essential elements of that agreement. The agreement will be signed soon.

The Union has followed with concern the ethnic conflict in Sri Lanka. The EU believes that a lasting solution to the conflict can be achieved only through negotiation, and has urged the Sri Lankan Government to pursue peaceful avenues for a political settlement of the conflict. Both sides are called on to work for a political settlement. In the wake of local elections in January the Union's views on the importance of adhering to democratic principles, thereby safeguarding the safety of all voters, were conveyed to the Sri Lankan government.

The Union regretted that the Ashgabat talks between the Taliban and Northern Alliance were broken off and fighting resumed in the spring. The Union also noted that although the "six plus two" process had failed to make a breakthrough, it continued to be a useful vehicle for peace talks, most recently in Tashkent. The Union regretted, however, that this meeting was followed by a fresh outbreak of fierce fighting. The Union remains of the view that the conflict can only be resolved through peaceful means.

In January 1999 the Union adopted a Common Position on Afghanistan, which was a slightly amended version of the Common Position first adopted in 1998. The contents of the Common Position have been conveyed to the Afghan parties to the conflict and to the governments of neighbouring countries. The main objectives of the Union´s policy are to bring about a sustainable peace, put an end to foreign interference encourage, dialogue between Afghan parties and support the United Nations peace efforts conducted by its Special Envoy. Furthermore the Union is especially seeking to promote respect for international humanitarian law and human rights, including the rights of women and children. The Union particularly deplores the continuing systematic discrimination of women and girls, especially in areas controlled by the Taliban.

The increase in the cultivation of opium poppy in Afghanistan, destined for the production of illicit heroin and other opiates, is a source of concern to the EU.

The European Union and Australia have developed a comprehensive relationship, encompassing economic, political and cultural links. The EU-Australia joint declaration signed in June 1997 is the tangible expression of this reinforced and enhanced partnership. A political dialogue meeting at ministerial level has been held in February 1999. It has shown the importance of working together in a wide range of topics on which the European Union and Australia share a common approach, in particular, paying special attention to peace and stability in the Asia-Pacific region, the preparation of the new comprehensive WTO-round, development aid and environmental matters.

The active political dialogue between the EU and New Zealand has acquired a new quality through the signature of the Joint Declaration on relations between the two partners on 4 May 1999 in Strasbourg. In this declaration New Zealand and the EU committed themselves to strengthening their relationship, including by working together to support democracy, the rule of law and respect for human rights, as well as the expansion and further opening of the multilateral trading system. The joint declaration envisages regular contact at Ministerial level to maintain and enhance cooperation between New Zealand and the EU.

The first Summit between the Heads of State and Government of Latin America, the Caribbean and the EU was held in Rio de Janeiro on 28-29 June 1999.

This historic Summit, the first ever to be organised, was convened as a result of political will to strengthen the already excellent interregional relations based upon shared values inherited from a common history. The objective of the Summit was to strengthen the links of political, economic and cultural understanding between the two regions in order to develop a strategic partnership.

To advance this process, the Heads of State and Government decided to implement the commitments contained in the "Declaration of Rio" through the accompanying "Priorities for Action". This will be achieved through the well-established fora of political dialogue and co-operation and through additional interregional efforts. A bi-regional Senior Officials Group was created in order to monitor and stimulate the implementation of decisions taken at the Summit and to contribute to the strengthening of the strategic partnership.

The strategic partnership gathers two important actors on the current international stage. Latin America and the Caribbean is set to be one of the most flourishing regions in the 21st Century as a result of important progress made in the political and economic spheres in the last years. For this reason, the region is determined to persevere in the advancement of democratic processes, social equality, modernisation efforts, trade liberalisation and broad-based structural reforms. The European Union, on the other hand, has advanced towards a historical integration with multiple implications at the global level on political, economic, social, financial and trade matters, which has brought about constant improvement of the living standards of its societies.

EU and LAC intend to foster the existing and, where appropriate, new mechanisms for dialogue and cooperation between them. They are decided to open new roads of interregional trade and investment.

They regard as essential the strengthening of democratic systems by guaranteeing the rule of law and by ensuring a more transparent public sector and the active participation of civil society in each country. They see poverty as a potential element of destabilisation for democracy and agree accordingly to act with energy for a reduction of social imbalances.

They highlighted the role of the civil society, including business fora, in the implementation of joint initiatives to realize the new strategic partnership. The gender aspect will be taken into account as a basis for all cooperation programmes.

They stressed the need to reverse environmental degradation and foster sustainable development through the conservation and sustainable use of resources.

They share the view that a stable and dynamic global economic and financial system is needed and want to support the establishment of mechanisms aimed at preventing crises in the future (early warning) and, should they occur, to ensure their effective and swift solution. They want to undertake a joint reflection on the orientation of the reform of the international financial system.

EU and LAC will co-operate in the preparation of the new round of comprehensive WTO negotiations as well as in future negotiations with the aim of reaching results of mutual benefit. They want to improve, on a mutually advantageous basis, market access conditions with a view to facilitate the active insertion of the different trading partners into the world trade flows, in compliance with the rules of the WTO and taking into consideration the level of development of the different countries and, in particular, the least developed countries.

Also, continued priority will be given to the promotion of centres of excellence resting on trans-regional networks comprising institutions of an academic, scientific and technological nature. EU and LAC agreed to promote universal access to education and professional training as determining factors for diminishing social inequalities and to give special care to promoting the rights of minorities and indigenous people.

EU and LAC intend to tackle the global drug problem under the principle of shared responsibility, endorse the Panama Comprehensive Action Plan on Drugs and express their will to fulfil the agreement reached at the XXth Special Session of the UNGA on Drugs.

The Heads of State and Government agreed to hold a second Summit in the first half of 2002 in Spain.

Assembled in Rio de Janeiro on 28 June 1999 on the occasion of the Summit Meeting of Latin America and the Caribbean with the European Union, the Heads of State and Government of Mercosur and Chile and of the European Union reaffirmed their determination to continue to strengthen their relations, which are based on deep historical, political, economic and cultural links, as well as on common values.

To this end, they decided to attach renewed priority to their relations in the political, economic, trade, cultural and co-operation fields, aiming at building a deeper and fuller partnership between the two regions, which should be based on democracy, sustainable development and economic growth with social justice. They attached special significance to fostering the political and cultural dialogue between the two regions.

With a view to establishing an Interregional Association, they agreed that the expansion of trade between Mercosur and Chile and the European Union, constitutes a central element in the construction of a more dynamic relationship, in the promotion of their integration processes and in the strengthening of the multilateral trading system.

With this purpose, they agreed to launch negotiations between Mercosur and Chile and the EU aiming at bilateral, gradual and reciprocal trade liberalisation, without excluding any sector and in accordance with WTO rules.

On the occasion of the EU-Latin America and Caribbean Summit in Rio de Janeiro in June 1999, the Presidents of Ecuador, Bolivia, Colombia, Peru and Venezuela, Heads of State of the member countries of the Andean Community of Nations, held a working session with the Federal Chancellor of Germany, acting as President of the European Council, the President of Finland as incoming President of the European Council, the President of the European Commission and the Secretary-General of the EU Council.

At this meeting, the Heads of State and Government exchanged views, with special emphasis on the progress of the respective integration plans, and highlighted the achievements from the 1993 Framework Co-operation Agreement and the political dialogue established in the 1996 Rome Declaration.

They welcomed the progress made in the political dialogue between the two regions based on the common purpose to strengthen peace, democracy and respect for human rights. Emphasis was also given to the need for close co-operation in order to tackle the global drugs problem through a comprehensive approach based on the principle of shared responsibility, to the positive effects of the GSP-scheme conceded to the Andean country by the European Union and to the development of co-operation. They also agreed on the importance of fostering sustainable and diversified development.

In this context, the Heads of State and Government discussed the best way to strengthen the political, commercial and cooperation ties between the EU and the Andean Community of Nations and the Andean initiative to begin talks on the negotiation of an association agreement that takes into consideration the level of development of the countries in both regions and the interest of the Andean Community of Nations, and preserves the present arrangements for its preferential access to the European market in the campaign against drugs.

The annual EU-Rio Group ministerial meeting in 1999 was substituted by the meeting of Foreign Ministers of the EU-Latin America and Caribbean on 27 June 1999. This Conference directly preceding the Rio Summit provided Ministers with an opportunity to exchange views on the political, economic and cultural relations between the two regions and on the main international issues on the eve of the 21st century. The next EU-Rio Group ministerial meeting will be held in February 2000 in Portugal.

The Fifteenth Ministerial Conference on Political Dialogue and Economic Co-operation between the European Union and the Member States of the Central American Integration System was held in Bonn on 20 May 1999. Colombia, Mexico and Venezuela were present as co-operating countries, Belize and the Dominican Republic as observer countries.

Ministers welcomed the meeting as an important opportunity to discuss the contributions of the European Union and of Central America to coping with the aftermath of Hurricane Mitch which in October and November 1998 devastated large parts of Central America, in particular Honduras and Nicaragua. The European Union praised the people and the governments of Central America for their determination and courage in coping with the suffering and the damage caused by the hurricane.

The Central American States acknowledged the rapid and generous response of the European Union and its Member States to the disaster, amounting to more than one billion Euro. They expressed gratitude for the moratorium on debt service and the debt reduction decisions in the Paris Club, bilateral debt cancellations and contributions to the multilateral debt service facility, as well as new European and other international initiatives for debt reduction. They welcomed the EU Action Plan on reconstruction efforts in Central America, amounting to 250 million Euro, which was presented at the conference. The terms and details of this programme should be negotiated as soon as possible with a view to its swift implementation.

Ministers welcomed the entry into force on 1 March 1999 of the EC-Central America Framework Agreement. The second meeting of the Trade Forum will be convened in the second half of 1999 and will continue the examination of the best way to enhance the integration of Central America into the world economy. The next Ministerial meeting will take place in Portugal during the first half of 2000.

The issues of human rights as well as the rule of law and good governance are permanent features in the EU-Mexico political dialogue as agreed in the EC-Mexico Agreement on economic partnership, political coordination and cooperation. The EU continues to follow attentively the human rights and security situation in Mexico, particularly in Chiapas. At the same time, the Mexican government's willingness to improve the situation with a view to better protection of human rights in the future should be acknowledged.

Since the first EU-Mexico Joint Council (14 July 1998) launched the negotiations for the establishment of a Free Trade Area, both parties held a number of negotiation rounds allowing substantial progress to be made towards this objective. Negotiations might be finalized in the course of autumn 1999.

In March 1999, the European Union noted with satisfaction the work of the Commission for Historical clarification, which had complied with its mandate to investigate objectively and impartially and elucidate the human rights violations and violence relating to the armed confrontation in Guatemala and to recommend measures to promote peace and national reconciliation. It considered that the publication and intended widespread dissemination of the Commission's final report represented an important step in the ongoing process towards the full implementation of the peace accords. It urged the Guatemalan authorities to take all steps to implement the Commission's recommendations to the fullest possible extent and reiterated its support for all efforts to consolidate the peace process.

Following the negative results of the 16 May referendum on constitutional changes required by the Peace Agreement, the Union encourages the Guatemalan authorities to find appropriate ways and means to implement all terms of the Peace Agreement. The Union hopes that the efforts it made in this Central-American country in the programs of institutional reforms and in the modernization of the State will consolidate towards full democratic stabilization and national reconciliation.

In evaluating its Common Position on Cuba, the European Union noted that in the first half of 1999 the parameters of Cuban domestic and foreign policy had not improved and the human rights situation had deteriorated. It reiterated that the EU's objective towards Cuba remained the encouragement of a process of peaceful transition to pluralist democracy, respect for human rights and fundamental freedoms, as well as sustainable economic recovery and improvement in the living standards of the Cuban people. Thus the EU in Havana has continued to encourage the process of change in Cuba through cooperation in the form of a constructive dialogue with the Cuban government and other actors in Cuban society.

In March 1999, the EU regretted the outcome of the trial against the four members of the "Internal Dissidence Working Group". It underlined that the Group had exercised freedom of expression, a universally recognised human right. It repeated its calls for the prompt release of the four. It also expressed concern at certain provisions of the recent modifications of Cuba's penal legislation which further curtail the exercise of citizens' rights.

On 25 June, the European Union expressed its concern at the broadening of the scope of the death penalty by the law of 15 and 16 February 1999 reforming the Cuban Penal Code, the upsurge in executions, with at least seven Cuban nationals reportedly executed since 1 January 1999, and the difficulty in obtaining accurate information about some of those executions. The European Union called on the authorities in Cuba to introduce a moratorium on executions and, meanwhile, to respect the internationally defined minimum standards and safeguards.

Nevertheless, Cuba continues to intensify its efforts to consolidate and to expand its policy of external relations, mostly towards the Caribbean countries and those of Central and South America. The EU welcomes the gradually active presence of Cuba in regional and multilateral fora. In this context, we must recall that the IXth Ibero-American Summit of Heads of State and Government will be held in Havana, next November, under the subject Ibero-America and the international financial situation in a globalized economy. Cuba was also represented, at the highest level, in the June 1999 Rio Summit between the European Union and Latin-America and the Caribbean.

The European Union is concerned about the current political and constitutional crisis in Haiti. It considers that only the organisation of elections in a free, fair and transparent atmosphere can lead to a sustainable solution to this crisis. In this regard, the Union looks forward to the early official announcement of the date of the elections. It reaffirms its readiness to provide assistance in the preparation of elections that would offer voters the widest range of political opinion and candidates and encourage full participation.

The European Union welcomed with great satisfaction the start of peace talks between the Government of Colombia and the Fuerzas Armadas Revolucionarias de Colombia (FARC) on 7 January 1999. It expressed the hope that these talks, at which the Heads of Mission of EU Member States were present at the invitation of the Colombian Government, would provide a decisive impulse towards a sustainable peace in Colombia and underlined that in this process the early release of all hostages including foreigners was necessary.

The EU Heads of Mission in Bogota have subsequently condemned the continuing acts of violence by the guerrillas and para-military groups.

The European Union reaffirmed its political support for the efforts of the Colombian government in this process. It also reiterates its appeal to all parties to the conflict to observe the rules of international humanitarian law.

In March 1999, the European Union learned with deep regret and consternation of the assassination of the Vice President of Paraguay, Dr. Argana, and strongly condemned the use of violence which cost the life of a prominent political figure. The Union called upon all Paraguayan institutions as well as on the Paraguayan people to act responsibly and to solve the situation in a peaceful and democratic manner.

The Union now expresses its satisfaction that after the appointment of Mr. Gonzalez Macchi as President of Paraguay normality has returned to the political life of this country.

The European Union took note with great satisfaction of the Agreement reached on 26 October 1998 in Brasilia between the Republic of Peru and Ecuador, which have thereby settled their long-standing differences. The Union commended both President Mahuad of Ecuador and President Fujimori of Peru on their personal efforts in bringing the negotiations to a successful conclusion and paid its respect to the Congresses and the peoples of the two countries for their contributions to the final statement. The Union is convinced that this Agreement will contribute to peace and security in the region and to the well-being of its peoples.

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