Signs of a breakthrough in talks on successor to Lomé

Date: 11/11/1999

By Gareth Harding

HOPES for an end to the long-running deadlock in talks between the EU and its African, Caribbean and Pacific (ACP) partners on a new trade and aid accord have been boosted by signs of a breakthrough on the most difficult issue dividing the two sides.

Discussions on a successor to the Lomé Convention have been crawling along at a snail's pace for the past year, prompting fears that the negotiators would fail to clinch a deal before the treaty expires in February.

But a new paper drawn up by the European Commission after a meeting between the blocs' chief negotiators late last month has done much to allay ACP countries' concerns about the downside of rapid market-opening while sticking to the Union's free-trade goal.

The confidential document, which will be discussed by EU foreign ministers next week, would commit both sides to remove trade barriers progressively and to ensure that the new arrangements were in line with World Trade Organisation rules.

The Commission still argues that regional free-trade agreements are the best way of integrating ACP states into the world economy, but now acknowledges that not all countries will be ready to enter into such partnerships. Its paper suggests that such states should be allowed to benefit from a “new trading framework” which would ensure the same level of market access as Lomé and conform with WTO rules.

In the past, ACP countries have fiercely resisted moves to create artificial regional groupings. Development Commissioner Poul Nielson's aides say the aim of his proposals is to “keep the carrot of market access without turning it into a stick for those who do not want it”.

Nielson has also given ground on the timetable for putting the new trading arrangements in place. The Commission originally wanted to sign free-trade deals with regional groups of ACP states in 2005, but it now says it will accept a 2008 deadline.

In addition, developing countries would be allowed “adequate” transition periods and the right to exclude sensitive products from the new regime.

The two blocs would, however, have to fight for a waiver from WTO rules to allow the Union's generous subsidies to continue in the meantime.

ACP states have broadly welcomed the new proposals and say they are confident that the WTO would agree to the necessary waiver. “The EU and ACP states are almost 90 countries and it would be surprising if the waiver were not granted,” said Sir Shridath Ramphal, chief trade negotiator for the Caribbean group of countries.

However, the paper is likely to get a mixed reception from Union foreign ministers at their meeting next Monday (15 November). Several member states are said to be unhappy that the compromise “gives the impression that there is a choice between free trade and another sort of system” and are concerned that any lengthening of the transition period might make it more difficult to get a WTO waiver.

But most believe the carefully-crafted compromise is the only way to break the impasse in the negotiations. “There will be changes to the text but this is definitely the way out,” said one diplomat.

The last leg of the talks is likely to be further complicated by haggling over the amount of European aid ACP countries will receive between 2000-2006. The Commission has proposed to freeze the level of funding at €14.33 billion, but some member states are likely to call for a lower figure. One Commission official warned that a “bad funding offer would create a very bad psychological climate” as the talks enter their final stage.

Ministers from both sides will attempt to thrash out a deal early next month so that EU leaders can approve the new accord at the Helsinki summit.