by Munetsi Madakufamba
As e globalisation of trade intensifies, both generalised and preferential treatment that Africa is currently enjoying from the European Union (EU), under the Lome Convention, are slowly getting eroded and there are doubts over the renewal of the agreement come Year 2000.
David Jessop, a European economic analyst, says: “All the signs are that the new aid and trade package which is the outcome of the mid-term review of Lome IV, is likely not to be replaced in its present form it expires in the Year 2000”.
The Lome Convention, a cooperation agreement between the EU and African, Caribbean and Pacific (ACP states, was concluded in February 1975 when 9 member states of the then European Economic Community, now EU, and 46 ACP countries gathered in the Togolese capital, Lome, to sign the first version of the agreement — Lome 1.
The cooperation arrangement was hammered out to promote and expedite the socio-economic development of CP nations and to diversify their relations in the spirit of solidarity and mutual interests. The convention has since changed as a five yearly arrangement from Lome I, II, ill to a 10 year agreement Lome IV.
The future cooperation between EU member states and the ACP nations, which have since increased to 15 and 70 respectively, came into the limelight in Mauritius last November when representatives of the two parties signed what could be the last agreement governing the operations of the convention.
Over past 20 years, the Lome Convention has built on and consolidated what has been achieved in previous agreements based on the changing trends in the political and economic scene.
However, the Uruguay Round negotiations that culminated in the endorsement of a global free trade under the General Agreement on Tariffs and Trade (GATT), has rendered some provisions of the Lome Convention obsolete.
A special report by Overseas Development Institute, a London-based think-tank, says the Lome convention inconsistent with GATT/World Trade Organisation (WTO) regulations in its provisions for most-favoured-nation (MFN) status and generalised system of preferences that accord ACP states exclusive duty-free access to the EU market.
Soushem iVrica News Features 23 September 1996
According to GATI/WTO regulations, the convention is an “illegitimate derogation from MFN rules in that it is: non-reciprocal and therefore cannot be seen as a derogation within the framework of a free trade area; and discriminatory among developing countries and therefore cannot be allowed under the provision for special and differential treatment for developing countries, since in that case it should be extended to all developing countries.
“Although a waiver for the derogation of the MFN principle has been granted to the EU up to 2000 –with bi-annual revisions between now and then — several pressures, both external and internal, weigh upon it to rethink its policy towards its most preferred trading partners,” reads part of the document.
In addition to having been superseded by the WTO regime, the Lome Convention is also threatened by fading interest as the EU becomes more and more preoccupied with commitments in East and Central Europe as well as diverting its interests to other developing countries in Asia and South America.
The Mauritian Prime Minister, Aneerood Jugnauth, said the bruising round of negotiations during the midterm review of Lome IV was an eye-opener and that there is need to rethink the relations with the EU.
“We are witnessing a growing movement towards the marginalisation of the South as the focus of the EU’s geopolitical interest seems to be increasingly directed towards other regions of the world,” he said.
The EU too, concedes that Lome as a development instrument is “running out of steam” and that thoughts should be turning to a new model, perhaps one that reflects current changes in world trade.
Joao de Deus Pinheiro, EU commissioner for relations with the ACP, says with the global economy undergoing changes every now and then, “we must look at the convention with new glasses”.
Of the 12 Southern African Development Community (SADC) member states, 11 are signatories to the Lome Convention. South Africa, the only SADC country that is yet to become a member, might benefit from a clause included in Lome IV during its mid-term review in Mauritius.
The clause seeks to permit South Africa’s accession as a special case because the country does not qualify as a developing country — a condition under which other ACP states joined.
However, South Africa’s accession depends on other SADC member states agreeing as they fear a free trade agreement between that country and the EU might erode their preferential advantage in the same market.
Each country, depending on its socio-economic or physical set-up, can export mainly primary products that are deemed not to be causing a threat to European suppliers, under a special tariff scheme or a predetermined quota.
Mauritius exports mainly sugar while Botswana, Namibia and Zimbabwe mainly trade in beef and mineral products. But, products such as textiles and manufactured goods which might pose a competitive threat are still subject to high tariffs.
The looming loss of the more than 20-year old partnership between the EU and the ACP is most likely to impact badly on the SADC region since the EU formed its largest trading bloc in the world. (SARDC)
