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The European Union and its member states are collectively the world's largest donors. Together they provide almost half of all development aid. The European Community (EC) is the second largest multilateral donor, after the International Development Association of the World Bank. The EC development programme (commitments) provided €9.3 billion in 2000.

Aid, particularly in relation to forests, is increasingly linked to trade measures in the European Community. This can be seen in the Cotonou Convention (the successor of the Lomé Convention), the Community’s proposal for a new development policy, and the regulation of the General System of Preferences that includes environmental criteria for tropical forest products. These connections raise concerns as forests are not simply a source of timber but play important ecological, social and spiritual functions.

FERN focuses its work on improving the quality of the EC’s development programme to ensure it contributes to the protection and sustainable use of forests and respect for the rights of forest peoples. The quality of the EC’s aid programme is, even by its own account, poor and needs to be improved.