THE LOME CONVENTION!

HAS IT CHANGED ANYTHING WITHIN THE ACP COUNTRIES ?

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The Lome Convention Background

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The Lome Convention is an international aid and trade agreement between the ACP (African Caribean and Pacific Countries) group and the European Union aimed at supporting the "ACP states' efforts to achieve comprehensive ,self reliant and self-sustained development. Four such Conventions have been signed to date . The first Convention (Lome I) was signed on February 28, 1975.

Lome II and III were signed in 1979 and 1985 respectively.

The current Convention , the LOME IV covers the period from 1990 to 2000 and is the most extensive development co-operation agreement between North and Southern countries both in term of scope (aid and trade) and the number of signatories. The convention states that ACP cooperation is to be based on partnership, , equality solidarity and mutual interest. The convention also recognises the principal of soveignty and the right of each ACP states to define its own development strategies and policies, affirming development centred on people , respect and promotion of human ,political ,social and economic rights. Lome IV covers a broad range of sectors eligible for support under the development finance cooperation chapters of the convention. These include the environment, agriculture, food security and rural development, fisheries, commodities, industry, mining and energy,enterprise (private sector) development, services, trade ,cultural and social cooperation and regional cooperation. Lome also has extensive provisions for trade cooperation which provides preferential treatment to ACP exports to the EU. In 1994, Lome IV underwent a mid-term review which resulted in approval of the 8th environment development fund to cover the five year period between 1995-2000. Sources: Liaison Commitee of Development NGOs to the European Union; Background document for Europe and Africa: Defining a new partnership, Conference held in Brussels from 28-29 April, 1995.

The Lome Conention:a Future after the Millenium?

Introduction

The European Union's special trading relationships with the developing world under the long running Lome Convention comes to an end in the year 2000. Seventy independent countries the African, Caribbean and Pacific states (ACP) are involved and talks will need to get under way to renew the agreements. In order to stimulate debate about the post-millenium future, the European Commission has just publish a green paper on the issues involved. It considers that the shape of the EU's relashionships with the ACP countries on the treshold of the 21st century needs to be examined in depth. The EU has been linked with the ACP countries, mainly former colonies of the European powers, by special economic agreements since 1975 These are collectively called the Lome Conventions after the Capital of Togo where they were all signed LomeI was signed in 1975 , Lome II in 1980 , Lome III in 1985 , and Lome IV in 1990.This last unlike the others was signed for ten years (1991-2000)

what were the REASONS of the lome conventions

The Lome Conventions have sought to assist ACP states' development and promote close relations with them through

*Pivileged commercial access especially free access for exports to the 15 nation EU markets with guaranteed quotas for some major ACP products

*Commodity export compensation, a unique form of aid through which the EU compensates ACP countries for falls in prices with the STABEX fund guaranteeing agricultural earnings and the SYSMIN fund underwriting earnings from mineral exports.

*Financial aid, provided in various forms by the EU as an entity as well as by the EU states individually and supplemented as required by emergency assistance.

As the EU is the world's largest trading bloc, and the ACP countries include a considerable proportion of the developing world, it is acknowledged that Lome Convention plays a major role in relations between the industrialised and developping countries. However, the EU has developed trade relations and cooperation with many other developing countries outside the Lome framework, including agreements with southern and eastern Mediterranean countries. Some of these have noe being developed into partnership agreements.

In addition the EU offers some trade concessions to developing nations in its Generalised System of preferences (GSP). Meanwhile the entire world trading system is being gradually reformed in the direction of free trade through such devices as the 1994 Marrakech Treaty following the Urugay Round of trade talks and the creations of the World Trade Organisation. (WTO)

THE GREEN PAPER:

Negotiations on a new Lome agreement will need to begin at least 18 months ahead of the expiry date of Lome 4. The Commission's Green paper examines the achievements of the conventions and disscusses the possible future arrangements as well as the changes that might need to be in the present set-up to cope with the changes in the global situation in recent years.

TRADE:

The Green paper notes the three principles upon wich the commercial preferences accorded ACP states are based: stability, contractuality ,non-reprocity. These provide ACP states with a reasonably secure basis for planning. Contractuality means, for example, that agreed quotas for annual exports of products like Cane sugar to the EU cannot be altered by the EU importer. Trade preferences are non- reciprocal, i.e. ACP countries may levy any duties they wish on EU goods. ACP exporters thus have considerable advantages in trading with the EU. However, the Green paper notes that these advantages have been eroded by the extension of preferences to other, non ACP suppliers through the GSP for example. The trend towards wider extension of benefits will inevitebly continue through the workings of the WTO. In addition, the Green paper notes, the ACP countries have failed to encrease or even maitain their EU market share, although at 40% it is very important for them. In general,they have been unable to expand and diversify exports. Some have done so. The Green paper mentions Botswana ,Mauritius and Jamaica among others-- but economic, social and other pre-coditions for export-led groth are lacking in most ACP states. This especially the case in many sub-Sahara African states, despite their commercial position.

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AID

Considerable space is devoted in the Green paper to the examination of development cooperation, or aid, as a vital part of the EU-ACP relationship. It accepts that aid has been used to good effect, for example in Africa south of Sahara where the EU as such provides 10% of development assistance and together with its Member States brings the total to 60%. It notes that this assitance has been reformed over the years to respond to new situations and needs. Food aid has been used, for example, to help recipient countries improve their food security Special structural Adjustment Programmes have been developed and all aid for that purpose is offered as a grant. The EU has linked aid with political reform, with the emphasis on greater democracy, better respect for human rights and similar aspirations. However ,the green paper also highlights a number of problems and defects in the Lome aid programmmes. It stresses the idea of partnership between donor and recipient states, but says that in practice ther has been too little partnership and too much aid dependence. Thinking of development has changed to lay less stress on state relations than before , but the Green paper notes that Lome cooperation is still mainly among States. EU aid , though , has had considerable success with social schemes and infra-structure projects, but without any automatic improvement in development indicators. Studies of EU assited projects since the 1980s have shown efficiency rates of 70% for transport projects but only 30% in vital areas of agriculture and rural development. The unique Stabex & Sysmin aid is now seen, in the wprds of the Green paper, as "ill situated to the present context".

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