Lomé Convention

Lomé Convention

Overview
The Lomé Convention is a trade and aid agreement between the European Community (EC) and 71 African, Caribbean, and Pacific (ACP) countries
ACP countries
The African, Caribbean and Pacific Group of States is a group of countries , created by the Georgetown Agreement in 1975. The group's main objectives are sustainable development and poverty reduction within its member states, as well as their greater integration into the world's economy...

, first signed in February 1975 in Lomé
Lomé
Lomé, with an estimated population of 737,751, is the capital and largest city of Togo. Located on the Gulf of Guinea, Lomé is the country's administrative and industrial center and its chief port. The city exports coffee, cocoa, copra, and palm kernels...

, Togo
Togo
Togo, officially the Togolese Republic , is a country in West Africa bordered by Ghana to the west, Benin to the east and Burkina Faso to the north. It extends south to the Gulf of Guinea, on which the capital Lomé is located. Togo covers an area of approximately with a population of approximately...

.

The first Lomé Convention (Lomé I), which came into force in April 1976, was designed to provide a new framework of cooperation between the then European Community (EC) and developing ACP countries
ACP countries
The African, Caribbean and Pacific Group of States is a group of countries , created by the Georgetown Agreement in 1975. The group's main objectives are sustainable development and poverty reduction within its member states, as well as their greater integration into the world's economy...

, in particular former British, Dutch, Belgian and French colonies.
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Encyclopedia
The Lomé Convention is a trade and aid agreement between the European Community (EC) and 71 African, Caribbean, and Pacific (ACP) countries
ACP countries
The African, Caribbean and Pacific Group of States is a group of countries , created by the Georgetown Agreement in 1975. The group's main objectives are sustainable development and poverty reduction within its member states, as well as their greater integration into the world's economy...

, first signed in February 1975 in Lomé
Lomé
Lomé, with an estimated population of 737,751, is the capital and largest city of Togo. Located on the Gulf of Guinea, Lomé is the country's administrative and industrial center and its chief port. The city exports coffee, cocoa, copra, and palm kernels...

, Togo
Togo
Togo, officially the Togolese Republic , is a country in West Africa bordered by Ghana to the west, Benin to the east and Burkina Faso to the north. It extends south to the Gulf of Guinea, on which the capital Lomé is located. Togo covers an area of approximately with a population of approximately...

.

History


The first Lomé Convention (Lomé I), which came into force in April 1976, was designed to provide a new framework of cooperation between the then European Community (EC) and developing ACP countries
ACP countries
The African, Caribbean and Pacific Group of States is a group of countries , created by the Georgetown Agreement in 1975. The group's main objectives are sustainable development and poverty reduction within its member states, as well as their greater integration into the world's economy...

, in particular former British, Dutch, Belgian and French colonies. It had two main aspects. It provided for most ACP agricultural and mineral exports to enter the EC free of duty. Preferential access based on a quota system was agreed for products, such as sugar and beef, in competition with EC agriculture. Secondly, the EC committed ECU 3 billion for aid and investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 in the ACP countries.

The convention was renegotiated and renewed three times. Lomé II (January 1981 to February 1985) increased aid and investment expenditure to ECU 5.5 billion. Lomé III came into force in March 1985 (trade provisions) and May 1986 (aid), and expired in 1990; it increased commitments to ECU 8.5 billion. Lomé IV was signed in December 1989. Its trade provisions cover the ten years, 1990 to 1999. Aid and investment commitments for the first five years amounted to ECU 12 billion. In all, some 70 ACP countries are party to Lomé IV, compared with 46 signatories of Lomé I.

Lomé development aid was dispersed primarily through the European Development Fund
European Development Fund
The European Development Fund is the main instrument for European Union aid for development cooperation in Africa, the Caribbean, and Pacific countries and the Overseas Countries and Territories...

; investment assistance was mainly channelled through the European Investment Bank. Two other important mechanisms were the Stabex
Stabex
The Stabex is the acronym for a European Commission compensatory finance scheme to stabilise export earnings of the ACP countries...

 and Sysmin schemes, which provided compensatory finance to ACP states for adverse fluctuations in the world prices of, respectively, key agricultural and mineral exports.

The emergence of the single European market at the end of 1992 affected ACP preferential access to EU markets. The Caribbean's many smallholder banana farmers argued for the continuation of their preferential access to traditional markets, notably the United Kingdom. They feared that otherwise the EU would be flooded with cheap bananas from the Central American plantations, with devastating effects on several Caribbean economies. Negotiations led in 1993 to the EU agreeing to maintain the Caribbean producers' preferential access until the end of Lomé IV, pending possible negotiation on an extension.

In 1995, the United States government petitioned to the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

 to investigate whether the Lomé IV convention had violated WTO rules. Then later in 1996, the WTO Dispute Settlement Body ruled in favor of the plaintiffs, effectively ending the cross-subsidies that had benefited ACP countries for many years. But the US remained unsatisfied and insisted that all preferential trade agreements between the EU and ACP should cease. The WTO Dispute Settlement Body established another panel to discuss the issue and concluded that agreements between the EU and ACP were indeed not compatible with WTO regulations. Finally, the EU negotiated with the US through WTO to reach an agreement.http://www.coha.org/2005/05/16/banana-wars-continue-%E2%80%93-chiquita-once-again-tries-to-work-its-omnipotent-will-now-under-new-management-likely-big-losers-will-be-caricom%E2%80%99s-windward-islands/

See also

  • ACP countries
    ACP countries
    The African, Caribbean and Pacific Group of States is a group of countries , created by the Georgetown Agreement in 1975. The group's main objectives are sustainable development and poverty reduction within its member states, as well as their greater integration into the world's economy...

  • ACP-EU Development Cooperation
    ACP-EU Development Cooperation
    Development cooperation between the European Union and the countries of the African, Caribbean and Pacific Group of States celebrated its 50th anniversary in 2007. Although bilateral relations have always been and still remain one of the main features of modern development cooperation, it was the...

  • Cotonou Agreement
    Cotonou Agreement
    The Cotonou Agreement is a treaty between the European Union and the African, Caribbean and Pacific Group of States . It was signed in June 2000 in Cotonou, the largest city in Benin, by 78 ACP countries and the then fifteen Member States of the European Union...

  • Stabex
    Stabex
    The Stabex is the acronym for a European Commission compensatory finance scheme to stabilise export earnings of the ACP countries...

  • The Courier (ACP-EU)
    The Courier (ACP-EU)
    The Courier is an ACP-EU development magazine published by the Development Directorate General of the European Commission, focusing on ACP-EU Development Cooperation. Financed by the European Development Fund , it is published every two months...


Further reading

  • Jonathan Fryer, "The New Lomé Convention: Marriage on the Rocks but No Separation,” International Development Review 1 (1980): 53–54.
  • Isebill V. Gruhn, “The Lomé Convention: Inching Toward Interdependence,” International Organization 30 (Spring 1976): 240–262.
  • John Ravenhill, “What Is to Be Done for the Third World Commodity Exporters? An Evaluation of the STABEX Scheme,” International Organization 38 (Summer 1984): 537–574.
  • Carol C. Twitchett, “Lomé II Signed,” Atlantic Community Quarterly 18 (Spring 1980): 85–89.

External links