ID21 - Insights Issue 24

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		Issue #24
		Lomé: from model to misfit. But is a better deal on the cards?

		Ties that blind? Trade, aid, the EU and Lomé

		Two into WTO won't go: Green Paper options and the new trade order

		Poverty, people and the case for Lomé V

		Understanding EU aid better

		The EurAfrican Dimension: History's ghosts haunt Lomé's Last Supper

		Banana split: can ACP beat the clock?

December 1997 Insights Issue #24

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Lomé V: time to tackle poverty first

European Union relations with developing countries are at a crossroads. For poorer countries, particularly in Africa, it is acute inability to trade and low investment (supply-side constraints) that bar progress. Future approaches to development cooperation should hinge on removing these curbs by investing in basic infrastructure and human capital.

Oxfam began a programme of analysis and advocacy on the fate of Lomé IV in November 1995, including work commissioned from researchers in Africa, Bangladesh and the Caribbean. The Caribbean Reference Group, initiated by Oxfam Caribbean but now run independently, brings together academics and analysts from NGOs and banana growers' organisations. We are presently supporting efforts by African NGOs to form a similar continental group. Our advocacy has been coordinated with fellow members of the NGO network, Eurostep. Investigations and analyses have so far included:

an overview of EU aid quality in developing capacity to trade, including relevant aspects of social development

short investigations into the past impact of Lomé IV preferences and the forseeable impact of EU Green Paper proposals in Zimbabwe and the Caribbean

potential impact of the options presented in the Green Paper on revenues to ACP through EU trade.

The latter study follows two strands of enquiry, one (with the Institute of Development Studies) into impacts likely to arise from graduating to a Generalised System of Preferences for all developing countries, the other into the Free Trade Agreement option. We favour cushioning impacts on the poorest countries, by (for instance) retaining trade preferences along Lomé IV lines, a measure requiring a waiver under Article XXV at the WTO. Other options are not coherent with the development objectives of the Maastricht Treaty. The GSP option would mean a drastic rise in protectionism for EU relations with developing countries, while WTO is unlikely to approve any FTA. In any case, the claim that the latter would deliver 'gradual integration of developing countries into the global economy' remains unproven. Other safety-net measures might include:

technical assistance to promote prudent management of liberalisation within a regulatory framework designed to steer trade and investment towards economic, social and environmental goals while retaining some protection for agriculture
technical and financial assistance in developing capacity to trade, focusing on countries which demonstrate commitment to eradicating poverty and preventing conflict, with special emphasis on small to medium-sized enterprises, rural development and livelihoods for women
financial assistance for basic social and welfare services in countries committed to poverty eradication.

Over the period of the next Lomé Convention negotiations must determine how gradual reciprocity can be introduced for more prosperous ACP countries in exchange for more market access.

In this same period, the EU and ACP should team up at the WTO table to alter the current inadequate Special and Differential Treatment provision to allow greater assistance in the form of trade and investment to flow to poor countries and those most vulnerable to shocks. This improvement should include a redefinition of 'least developed countries' based not only on per capita income but also on a human development index, export diversification capacity and a vulnerability index.

Jointly with its European Network, Eurostep, Oxfam has produced six papers in the Partnership 2000 series on Lomé, for the current round of negotiation. All are available from the address above, or see www.oxfam.org for online versions.

Phil Bloomer,
Policy Department,
Oxfam,
274 Banbury Road, Oxford OX2 2DZ
UK

T: +44 (0) 1865 312251
F: +44 (0)1865 312417

E: pbloomer@oxfam.org.uk
URL: http://www.oxfam.org.uk

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