Jun 30, 1998
DEVELOPMENT: LOME CONVENTION'S DAYS ARE NUMBERED
Brussels, Jun 29 (IPS/Niccolo Sarno) -- European Union officials have tabled plans for substantial changes to the Lome Convention, the EU's giant trade and aid pact with the 71 countries of the African, Caribbean and Pacific (ACP) group of nations.
The trade and aid pact expires in February 2000 and must be revised to meet the World Trade Organisation (WTO) trade rules -- or be closed down. With some of the world's poorest nations among the ACP membership, the detail of talks for a successor pact mean economic life or death for some.
EU ministers were expected Monday to formally endorse a negotiating mandate that emphasises a new trade and aid regime based around a network of free trade areas to replace the present ACP wide deal. Formal negotiations between the ACP and EU start Sep. 30.
For NGOs campaigning for poverty reduction, the emphasis on free trade is deeply worrying. "There is a deep contradiction between the ambitious objective of poverty eradication and the European drive towards free trade rules," says Freddy Destrait, Secretary-General of the NGO SOS Hunger.
SOS Hunger, fellow EU NGO the Food Security Group (CSA) and several rural farmers' groups from ACP states, meeting in Brussels last week, voiced particular fear that their views would be marginalised during the high-profile negotiations.
They say "civil society is ignored when negotiations take place" and that in most ACP countries, farmers organisations are not informed about the advantages of the Convention or its potential for development in the poorest regions.
"We understand that the EU says that liberalisation is needed to enter world trade, (but) these agreements have to be brought out of this ramework of secrecy," said Andre Marie Afouba of the Cameroon farmers' network APM Afrique.
European ministers, who should adopt the mandate to renegotiate the EU/ACP agreement, are expected to agree on the 'Free Trade Areas (FTAs)' option for those ACP countries which have already achieved a certain level of development.
The FTA option aims to establish regional agreements between the EU and sub-regions of the ACP.
Access to the EU market would remain the same as now enjoyed under Lome, but the ACP states would be expected to match this by opening up their own markets to EU exports, after a transitional period of 10 years which would start in 2004.
"Despite the transition period, the switch from preferential (trade) agreements to reciprocal trade will be very difficult," warned Destrait. "Even 20 years will not be enough for Africa to catch up."
The Least Developed Countries (LLDCs) among the ACP membership will be saved from the rigours of reciprocal trade with one of the world's most powerful trading blocs. Philip Lowe, director general for development at the European
Commission, said the plan was instead to open the EU market, on a non-reciprocal basis, for all products coming from the ACP LLDCs which have not signed Regional Free Trade Agreements by 2004.
The poorest of the ACP states, such as Chad, Ethiopia or Guinea Bissau are not ready for free trade, Lowe acknowledged. There are 40 LLDCs in the ACP group. The proposed solution for these countries is the granting of 'enhanced' preferences, or completely tariff-free access to the European market, under the EU's existing Generalised System of Preferences (GSP).
But the EU was also expected Monday to give up the system of trade protocols that are the best known part of the Lome accord.
Protocols for sugar, beef and veal, bananas, and rum give free access to EU markets for a fixed quantity of exports from selected traditional ACP suppliers.
EU sources have said ministers have already come out in favour of an eventual phasing out of the beef, sugar and bananas protocols by 2004-2005. It was US led objections to the banana protocol and an WTO ruling against it, that spelled the end for Lome in its present form. Lome's banana trade protocols are deemed essential to a number of Caribbean states' economies.
There may be room for special exceptions. There was an expectation before Monday's meeting that parts of the Sugar Protocol may be altered rather than phased out, to protect sugar trade dependent countries such as Mauritius and Swaziland.
Lowe says that the protocols have to be reviewed in light of WTO rules that rule their discriminatory against countries outside the ACP membership. "Sooner or later the phasing out of protocols will have to be examined," he warned. But he added that the phasing out of protocols will not be a problem for those countries which joined an EU FTA.
But farmers' groups fear that WTO rules will always leave ACP states at a disadvantage, whatever way the EU tries to repackage the conventions existing trade benefits into FTA networks. "WTO rules, and in particular the rules regarding agriculture, do not allow ACP (states) to implement their own national and sub- regional policies for developing their agriculture," said Afouba.
The Commission aims to finalise the first Regional FTAs by 2015, starting with those groups of countries which have already begun a process of regional integration. Caribbean countries may form a FTA based on the existing CARICOM and CARIFORUM agreements and Southern African countries may build upon their SACU-SADEC customs union agreements.
But more time would be needed, in Lowe's view, to form FTAs in West Africa, building upon the UEMOA monetary union, in East Africa, between neighbouring Kenya, Tanzania and Uganda, and in the Pacific.
In the case of states like Ethiopia, Eritrea and Somalia, the process of building a group before creating a FTA would be very difficult, Lowe says.
Some critics of the exist accord note however that over the years Lome beneficiary states have failed to develop as expected. The proportion of ACP exports to the EU has fallen from 6.7% in 1976 to 3.7% in 1992.
Even the farmers' groups acknowledge Lome's programmes to support agriculture "have had a limited impact both on the development of trade and on the development of agriculture and the rural world in ACP countries".
The emphasis on export at the expense of development of national markets and internal ACP trade, had been detrimental to local agriculture, which employs at least 70 percent of the population in most ACP states.