IN THIS ISSUE:

Africa needs infrastructure improvements.........................................2

New alternative ways to transport heavy goods ...............................4
New projects for the Black Sea region................................................6
Free trade between the EU and Singapore..........................................8

FLASH ALERT:
A new mandate for the European Investment Bank ( the EIB). The European Commission
presented to the Council and the European Parliament a proposal on the external
mandate of the EIB. The aim of this proposal is to activate 2 billion EUR for projects that
fight against climate change. The EIB provides loans to the EU member countries and about
140 non-member countries, as well as private companies.
The EU seeks to enhance the EU-Palestinian trade relations. Recently the EU as well as
Palestine work towards the strengthening of the capabilities of the Palestinian administration in
order to deepen trade liberalization in goods and services. The EU plans to open EU markets
fully to Palestinian exports in the coming months.
Trade liberalization between the EU and the MERCOSUR group. The EU and the South
American trade group MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) continue
negotiations on a trade liberalization pact. The EU is seeking full liberalization of a large part of
trade in goods and concessions for all major industrial sectors in return for access to its markets.

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 Africa needs infrastructure improvements
- The new projects are awaited in the countries on the African continent;
- The priority is given to four crucial areas: energy, transport, water and telecommunications;
- The main financial instrument for the projects is the EU-Africa Infrastructure Fund.

The main purpose of the EU-Africa Partnership is to promote the regional integration on the
African continent. The cross-border infrastructure projects will improve the living conditions
for all people.
The EU-Africa Partnership on infrastructure was launched in 2007 in Addis Ababa
(Ethiopia) where the headquarters of the African Union are located. The Partnership is based
on the EU strategy for Africa and on the objectives defined by the short-term action plan in
the field of infrastructure of the African Union and NEPAD (New Partnership for Africa's
Development). The aim of this Partnership is to reinforce regional integration through the
development of large infrastructure networks on the continent.
Improving infrastructure in Africa is a fundamental precondition for increasing economic
growth, promoting regional trade, and for reducing poverty. The Partnership aims to
substantially increase the EU investments in African infrastructure and support regional
development in four priority areas: transport, energy, water as well as information technology
and telecommunication networks. The African Union Commission is the main interlocutor of
the EU for the implementation and further development of the Infrastructure Partnership.
The African transport system remains underdeveloped. The transport problems dominate across
a range of areas: road and railway networks, ports, maritime and river routes, as well as air
transport. The movement of persons and goods mainly is based on road transport, with its
insufficient connections and services. There are few road networks and they are poorly
maintained. The coverage of the train network is very limited and connections between the
rail networks are weak.
The continent's energy potential, while high, is not used efficiently. It is estimated that no more
than 20 %, and in some countries as little as 5 % of the population in Africa (including South
Africa and Egypt) has direct access to electricity. This figure falls to 2 % in rural areas. The
proportion of people in Africa still depending on inefficient traditional energy sources like
wood or other biomass such as dung and crop is higher than in any other continent. It is
necessary to improve the cross-border connections and distribution in rural areas and allow
network extension.
It is important to improve the management of water resources at local, national and cross-
border basin levels. While some areas in Africa receive more than enough water, others
experience constant drought. The majority of the continent falls somewhere between these
two extremes. The ground-water accounts for only 15 % of the continent's water supply and
there are serious concerns about the quality of that water. The African people lack
technical knowledge and financial resources needed to access their water supplies.

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 Lastly, an access to telecommunications services is costly and patchy. The African digital divide
is the highest in the world. Despite the spectacular growth in mobile phone use, half of African
countries are still dependent on expensive satellite connections to link up with each other and
with the rest of the world. In order to ensure adequate access to information and
communication technologies it is important to support regulatory reform, capacity building and
broadband.

The financing will be provided for a huge number of projects. The Partnership will finance
cross-border regional projects such as the major road corridors across Africa, cross-border
energy interconnections, trans-boundary water programs as well as ICT networks. It should
improve the ways how the European Commission, and African institutions, donors, business
and investors can better work together for regional integration in Africa.

The main financial instrument for this partnership is the EU - Africa Infrastructure Trust Fund.
This Fund was launched in 2006 to provide the EU financial support for trans-border
infrastructure projects that link African countries and regions and close gaps in regional
infrastructure networks. This Funds combines resources from the EC and the EU Member
States as well as from the European Investment Bank, the African Development Bank and the
EU development financiers.
Funding support for eligible projects can take four different forms: interest rate subsidies,
technical assistance/feasibility studies, one-off grants for social or environmental components of
projects, and grants covering early-stage premiums on risk mitigation insurance. In oder to get
a financing for the projects it is necessary to fit some requirements. One of them - eligible
infrastructure projects must respect the guiding principles of African ownership and long
term project sustainability.

Upshot
The transport, energy, water and telecommunication sectors still remain underdeveloped in the
most African countries. The poor transport and energy connections, the expensive
telecommunication networks, the bad quality of the water have a negative impact on the
health and business. These problems are the main obstacles for increasing the economic
growth and for improving the living conditions in Africa. The EU investments and financial
support for the trans-border infrastructure projects should improve the situation in a separate
African country.

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 New alternative ways to transport heavy goods
- The EC calls for the projects that create the alternative ways for transporting heavy goods
- The Marco Polo II program provides financing
- May participate and not the EU countries

The current aim of the European Commission (EC) is to increase a number of the non-road
freight transport services. The companies are invited to take part in that process.

After dealing with the freight transport problem on the roads, the EC decided to encourage the
business to carry the heavy goods by rail or water rather than by road. Growth in the transport
of goods exceeds overall economic growth. Since the early 1990s the road transport has been
the primary mode of transport in the EU. Reliance on road transport is a cause of heavy
congestion as well as being a major source of pollution and CO2 emissions in Europe.

In the EU policy on transport were specified two main objectives:

1. to fight congestion on the European roads;

2. to improve the environmental performance of the freight transport system.

The ways of achieving these two objectives are described in the Marco Polo program. As
explained over there, it is necessary to:

1. utilize alternatives to road such as short sea shipping, rail ways and inland waters;
2. support innovations that help overcome technical barriers to inter-modal transport (the
performance of transport operations using more than one transport mode);
3. use motorways of the sea in combination with other modes of transport and preferably
promoting the use of the most environmentally friendly transport modes, such as inland
waterways and rail;
4. reduce the need for transporting goods by road via improved logistics;
5. address training and other ''soft'' factors within the transport business.

This means fewer trucks on the roads and thus less congestion, less pollution, and more
reliable and efficient transport of goods.

Marco Polo program is the EU's funding program for projects which shift freight transport from
the road to sea, rail and inland waterways. It includes two parts – the first Marco Polo program
and the second Marco Polo program - and in the past it was managed by Directorate General for
Energy and Transport. Since 2008, Marco Polo program is managed by the EC's Executive
Agency for Competitiveness and Innovation.

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 The current second Marco Polo program runs from 2007 - 2013 and is a continuation of the first
Marco Polo program, which ran from 2003-2006. The main difference between these two
programs is that the Marco Polo II program introduces the possibility for all ''close third
countries'' that have ''a common border with the EU or with a coastline on a closed or semi-
closed sea neighboring the EU'' to receive funding for the projects. In the Marco Polo II
program are participating also Norway, Iceland, Liechtenstein as well as Croatia.

Only the projects concerning freight transport services may be supported by the Marco Polo II
program. Other research or study projects are not eligible for support. The companies across
the EU and beyond are invited to submit proposals as from today. For example, the railway
companies can contribute to reducing the road traffic congestion and to the development of a
more eco-friendly freight transport system.

If you feel lack of ideas for the projects you may begin to know the places where the traffic is
more congested. You may be interested in finding, for example, the roads, that are being
repaired or new ones being built. Also you may analyze the networks and the traffic flows.

Upshot

Recently the levels of air pollution and CO2 emissions, especially from the road traffic, in the
EU and other countries are high. Too much big reliance on a road transport also causes a
heavy congestion. These ssues are a challenge to the EU and will still remain in the near
future. One of the solutions that the EU found to these problems is finding the alternative
ways to a freight transport on the roads. For that purpose was created a financial instrument -
Marco Polo program.

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 Free trade between the EU and Singapore

- New Free Trade Agreemant (the FTA) will be launched between the EU and Singapore;
- The business from both sides will receive a special treatment;
- Singapore is the entryway to the South-East Asia for the EU business.

The EU is in an process to make a free-trade agreement with Singapore. The trade liberalization
will open the new opportunities for business. A wider variety of products will raise in each
other's markets.

The EU aims to advance its trade relations with the Asia-Pacific region. The negotiations for a
Free Trade Agreement (FTA) between the EU and the South-East Asian bloc have made a little
progress since their launch in 2007. The Association of South East Asia Nations (ASEAN) has 10
members and after the US and China, they are, if taken together, the EU's third-largest trade
partner.

As the commissioner De Gucht mentioned, ASEAN has the potential to play an increasingly
important role on the global scene: ''Asia represents enormous growth potential for our
exporters. Many of the emerging Asian markets have high entry barriers, and the free trade
negotiations is the best way to tackle these''. As it is noted in the Global Europe strategy,
adopted in 2006, the EU aims to conclude in the fast-growing Asian region comprehensive
bilateral FTAs. They must cover the liberalization of tariffs on goods, services and
investments to the EU business.
After the unsuccessful attempts, the EU had abandoned its strategy of negotiating a trade pact
with ASEAN as a whole. Instead, the EU decided that it would be better to make the free-trade
pacts with an individual ASEAN state. Singapore was chosen as the first ASEAN's state for
opening bilateral trade negotiations with the EU.
This country is the EU's foremost trading partner among the South-East Asian countries: about
1/3 of EU-ASEAN trade is with Singapore. Beside trade, the bilateral investment between the
EU and Singapore is also robust. Over the years they have invested to each others' economies a
total of €100 billion. For the EU, Singapore represents a growing market for exports and
investments and is not a direct competitor in the field of industry and agriculture. Singapore is
the richest member of the ASEAN.
It is already a long time since Singapore is the gateway to South-Asia for many European firms.
There is a hope that Singapore's attitude will convince other ASEAN countries to do
likewise. A big number of the EU companies in many sectors have chosen Singapore as a hub
from which to serve the Pacific Rim region. Singapore itself is interested in getting a
preferential access to the EU, the world's largest market and is willing to increase further its
business ties with Europe.

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 Negotiations on the FTA between Singapore and the EU officially were launched on March 3,
2010. The next round of the negotiations is scheduled to take place in Brussels from May 31 to
June 4, 2010. The launch of bilateral talks with Singapore is the first step in a radical rethink of
the Union's trade strategy towards South-East Asia. For Europe it will mark an important
stepping stone in the EU's engagement with the ASEAN region.

During the first round of negotiations the two sides had constructive discussions on a wide
range of issues such as trade in goods and services, trade remedies, investments, intellectual
property, technical barriers and trade, customs procedures, competition etc. The objective of
the negotiations is to create the new opportunities for business from both sides. Once
concluded, companies wishing to sell goods or offer services, will enjoy preferential treatment
in each others markets, and consumers will gain access to a wider variety of products at better
prices.

Upshot

The ASEAN bloc countries still today keep a huge number of barriers for the EU trade and
investments. The EC decided to deal with each country separately and as the first country
from the ASEAN bloc was chosen Singapore. The negotiations between the EU and
Singapore have already started. The FTA between the EU and Singapore should encourage the
other ASEAN bloc members to liberalize their trade too.

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