UK aims for Lomé blueprint

Date: 25/06/1998

By Mark Turner

THE UK is hoping to crown its Union presidency with a blueprint for a new Lomé Convention, the trade and aid instrument which ties Europe to 71 African, Caribbean and Pacific (ACP) countries.

"It is very important for us to reach agreement at the end of June General Affairs Council so that negotiations can begin in September," said a British spokeswoman, adding: "We believe there is a good chance that will happen."

EU officials say that even if the final decision is not taken by foreign ministers at their meeting next Monday (29 June), the preparation of a free-trade based negotiating mandate for a new Lomé has been a genuine British success.

In February, the European Commission unveiled its master plan to kick-start the new relationship between Europe and its former colonies when the current Lomé Convention runs out in 2000.

Its central aim was to replace the largely unsuccessful trade privileges of the past 30 years with reciprocal inter-regional free trade agreements (FTAs) to be agreed by 2005 and phased in by 2015.

Under the Commission's plan, this trade liberalisation would be accompanied by European commitments to ACP social and private sector development, and allow reluctant countries the alternative of entry into the EU's Generalised System of Preferences (GSP). The poorest countries of all (known as LLDCs) would get completely tariff-free access.

But the proposal soon came under fire from the ACP and development organisations as overly ambitious and, perversely, protectionist. Critics claimed that most target countries were in no position to enter into regional free trade deals, and that the GSP alternative would actually reduce their access to European markets.

Under growing pressure, the Commission softened its stance, opening the way for the creation of an alternative 'enhanced' GSP with access privileges similar to the current Lomé Convention.

But while this is supported by the UK and development groups, a number of EU countries argue that such a flexible deal would offer little incentive to the ACP countries to opt for free trade, without which they could become even further marginalised in the global economy.

More protectionist Union member states also fear that an enhanced GSP could threaten their own primary producers.

The GSP alternative is set to become one of the main bones of contention next week, as foreign ministers weigh the Union's free trade commitments in the World Trade Organisation against its responsibility as the ACP countries' major partner.

Similar considerations will also influence the debate on the future of special commodity protocols, which currently give preferential access to ACP bananas, sugar and beef.

Most countries believe that these should disappear, probably by around 2005, but some, such as France and Portugal, are calling for a more gradual phase-out, with a review in 2004.

In a further twist, some differences remain over the EU's treatment of LLDCs. The Nordic bloc, driven by a developmental rather than post-colonial agenda, and the UK argue that all poor countries in the world should get tariff-free access. Other say that only those in Lomé should benefit.

Germany has caused further difficulties by resisting calls for the inclusion of Development Assistance Committee (DAC) poverty-reduction targets, including a 50% cut in poverty, a two-thirds drop in the death rate and substantial improvements in health care by 2015.

These debates have created an almost classic north-south divide, with the liberal northern countries opposing France, Italy, Greece, Portugal, Belgium and, perhaps less expectedly, Germany.

Although non-governmental organisations (NGOs) acknowledge that they have been consulted more thoroughly on the new Lomé arrangements than ever before, they are anxious that their concerns should not be cast aside in the last-minute political wrangling.

They are especially adamant that the DAC targets should remain central to any new convention, and that the ACP countries should not find themselves cut off too quickly from traditional markets.

"The final EU mandate must fulfil the Council's commitment of 30 March to maintain trade preferences at their current level or above, prioritise pro-poor trade development and provide an investment framework focused on poverty eradication rather than on enhanced investors' rights," said James Mackie, of the NGO liaison committee in Brussels.

EU Foreign Ministers agree negotiating stance for Lomé Convention revision, Luxembourg, 29.6.98.