|
The current negotiations are the most
significant since those that gave birth to Lomé I. The WTO banana dispute has had a
disproportionate impact by fracturing the shell of a relationship that had been weakened
already by underlying change. The economic importance of the ACP to the EU is much less
than it was in 1975; at the same time, Europe’s trade policy relations with other,
economically more important, regions has blossomed. Hence, while Lomé I was unique in
terms of the breadth, depth and institutional richness of its trade regime, Lomé IV is
just one of many and suffers from certain anomalies compared with more recent accords. |
|
One of these anomalies is its status
within the WTO framework. In its judgement on the EU banana regime the WTO Dispute
Settlement Panel brought into question the compatibility of the entire Lomé relationship
with international trade rules. Although the current waiver appears to have
resolved the issue until February 2000, it needs to be replaced when it expires with a
more robust justification. The reason for the use of the term ‘appears’ is that,
as the dispute on bananas illustrated, the precise terms of a waiver can be subject to
close scrutiny with the aim of striking down aspects of the regime that have not been
supported unambiguously. It remains open, therefore, to WTO contracting parties to
challenge parts of the Lomé relationship even before February 2000 if they believe that
they cannot be supported by the precise wording of the waiver. |
|
The WTO ‘problem’ is an
intractable one since none of the ‘pegs’ that support discrimination in favour
of certain developing countries but not others is entirely fool-proof. None provides a
fully robust justification for the EU–ACP trade regime. |
|
Even variations within the Generalised System of
Preferences (GSP) could be subject to challenge. This was illustrated at the very end of
the research project, when Brazil announced that it was lodging a complaint against the
treatment by the EU of exports from the Andean Community of instant coffee. The special
preferences for the Andean states are provided within the GSP — what has been called
in this report the ‘Super’ GSP. |
|
Similarly, Article XXIV, which covers
free trade areas and customs unions, might not provide defence against a challenge by an
aggrieved state. The treatment accorded to the EU–South Africa free trade agreement
(FTA), if it is concluded, may provide case law that would then apply to REPAs. |
|
The WTO also presents a challenge to
ACP preferences in a different sense. By presiding over further liberalisation of the
products of particular interest under Lomé (clothing and temperate agriculture) it is
contributing to the erosion of effective market access. Preference erosion has been a
feature of EU–ACP trade policy for many years but, unless there is a sharp reversal
in the trend of international trade policy formation, it is likely to accelerate markedly
over the next five to ten years. The phase-out of the Multifibre Arrangement will remove a
major stimulus to clothing investment in ACP states and a key competitive advantage to ACP
exports. The liberalisation of temperate agriculture may take longer to come into effect,
but it would be imprudent for the ACP to assume that, for example, the Sugar and Beef
Protocols will still offer them advantageous prices by the end of the next decade. |
| |
The loss of favourable prices for agricultural exports may
come sooner. The EU’s internal changes for the Common Agricultural Policy may tend to
focus on reforms that have a disproportionate adverse effect on the ACP. Moves, for
example, to shift subsidies from consumers to tax-payers would result in price falls that
would be offset for EU farmers (but not ACP suppliers) by direct transfers. |
