Economic Paper

2310-1385 (online)
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This series examines current economic issues from a Commonwealth perspective. The titles in the series are technical papers of topical interest to specialists concerned with trade, micro and macroeconomics, development economics and related subjects.

PostLomé WTOCompatible Trading Arrangements

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Christopher Stevens, Jane Kennan
01 Jan 2001
9781848597563 (PDF)

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This report aims to stimulate a debate on the future of EU trade policy. It was written against a background of continuing uncertainty over a WTO waiver for the EUACP Cotonou Convention that would continue liberal access to the European market for ACP exports until 2007. Whilst it may have influenced the resolution of this issue, the immediate shortterm objective of the report was to help the ACP prepare for the start of negotiations on a postCotonou agreement (scheduled to begin in 2002 for completion by 2007); and in particular to set the agenda by seizing the intellectual high ground in the way that the European Commission was able to do during the final years of Lomé IV through the publication of its Green Paper.

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  • Executive Summary

    This report aims to stimulate a debate on the future of EU trade policy. It has been written against a background of continuing uncertainty over a WTO waiver for the EU-ACP Cotonou Agreement that would continue liberal access to the European market for ACP exports until 2007. Whilst it may influence the resolution of this issue.

  • Introduction

    This report is designed to stimulate a debate following the signature in Cotonou of a Framework Agreement for ACP-EU co-operation. The focus of the debate is to improve the development coherence of North-South trade policy in general, and that involving the EU in particular. It is desirable in its own right, but it is also a necessary part of preparations for a secure post-Cotonou trade regime.

  • WTO Approval

    The need for the ACP and EU to extend their negotiating from Brussels to Geneva is a recent phenomenon: the Lomé Convention existed for two decades before its legitimacy before multilateral trade policy was challenged. Why? This section explains the changing attitude of WTO members to preferences, the ‘pegs’ on which such accords can be hung to secure their legitimacy, the extent to which the proposed post-Lomé options measure up, and the possible sources of challenge.

  • The EU's Trade Policy Hierarchy

    The EU has managed over the years to fashion with some skill a quasi-foreign policy based on a limited range of Union-level instruments. Trade preferences have bulked large in the relationship with the South. The system that has grown up is particularly complex.

  • Which Developing Countries have an Interest?

    The WTO members that have a direct, objective commercial interest in opposing an extension of ACP preferences – both now in relation to the Cotonou waiver and subsequently over a post-Cotonou agreement – are those that export the same (or closely competitive) items to the EU. A cessation of Lomé-style preferences would provide these competitors with a relative improvement in their access terms compared with the ACP. If they are currently disadvantaged the change would give them parity of treatment.

  • Integrating the GSP into a Coherent Trade Policy for Development

    Section 4 has identified the countries that have a potential objective interest in opposing a continuation of ACP preferences; this section and the next examine possible improvements in EU trade policy that, if linked to the Cotonou and post-Cotonou package, could sway their opinion. Evidently, any changes that removed the ACP's preference margin would undermine the purpose of the exercise.

  • Improving Product Coverage

    In addition to the reforms to the GSP architecture identified in Section 5, the report considers possible changes to the product/country details of the GSP that would be advantageous to the ACP's Standard GSP competitors and might be technically feasible for the EU to introduce; their political feasibility remains to be seen. At the same time, their introduction would not substantially erode ACP preference margins. One is to defer the next round of graduation out of the GSP.

  • Conclusions

    The ToR for this report require it to identify developing countries affected by ACP preferences, develop stylised scenarios for the EU import regime, relate ACP choices to likely WTO requirements and the objective interests of Standard GSP exporters, and make recommendations on the long-term evolution of the EU's trade regime. The developing countries affected by ACP preferences were identified in Section 4. Stylised scenarios for the EU import regime were outlined in Section 3 and given some detail in Sections 5 and 6.

  • Products on which the ACP Receive Effective Preferences and References
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