CHAPTER 4 - The Lomé IV Convention mid-term review - The main innovations

Unlike earlier conventions designed to cover a five-year period, the fourth ACP-EU Lomé Convention signed on 15 October 1989 was concluded for a period of 10 years taking effect on March 1 1990. Only the financial protocol attached to the convention was limited to an initial five-year phase with mandatory renewal provided for at the end of that time.

Principal Lessons from the Review

Since the signing of the Lomé IV Convention, major political and economic changes have taken place globally namely:

· The economic crisis of the 1980s, that eroded the competitiveness of ACP products to date

· The changed ideological and geo-strategic balance resulting from especially upheavals in Central, Eastern Europe and the former USSR

· The liberalisation of trade became a household policy

· The signing in 1992 of the Treaty on European Union providing for a new section on development cooperation

· From January 1, 1995, the number of Member States in the Community went up to 15.

The mid term review of the provisions was under four headings: Institutional and political; commercial; thematic and sectoral and financial.

Under the institutional and political, issues covered were:

· Democracy and Human Rights.

· Incorporating of a reference, in article 5 of the Convention, on the application of democratic principles, the consolidation of the rule of law and the proper management of public affairs.

· Observance of human rights and respect for democracy and the rule of law that came to be regarded as essential elements of the Convention.

· Ways of expanding political dialogue between the EU and ACP through a given framework.

Under commercial provisions, issues covered were:

· Expansion of the preferential system to cover virtually all products originating from ACP countries.

· Relaxation of quantitative restrictions applied to certain tariff concessions.

· Extension of tariff concessions beyond current timetables.

· Special attention was given to Forestry Resources leading to:

Þ A new Protocol on sustainable management of forestry resources

Þ Stress on active participation by the local communities and planning at national, regional and local levels

Þ Formal agreement for development of forest-certification systems

Under Thematic and Sectoral issues covered were:

Cultural Co-operation

Given past problems in implementing cultural co-operation, the EU felt the need to clarify the ambiguities resulting from Article 141 and from Annex XXII of the Convention. Consequently an exclusive role was granted to the ACP-EU Cultural Co-operation Foundation in implementing Title XI, as well as giving it the right to permanent assistance from the Community.

Industrial Co-operation

Articles 87 to 96 were renegotiated, the role of the Industrial Co-operation Committee redefined and a reorientation of the objectives of the Centre for the Development of Industry (CDI) undertaken.

Decentralised Co-operation

· Introducing decentralised co-operation was endorsed

· However, differences arose over the conditions necessary for direct access of those involved in Decentralised Co-operation (local communities, cooperatives, trade unions etc.) to community financing and to inspection by the national authorities of recipient countries.

Maritime Transport

· Intentions were expressed of facilitating and encouraging access by ACP maritime operators to resources.

· Provision was also made for the Community to contribute in the form of venture capital or loans when financing projects and programmes in sectors dependent on maritime transport.

Under Financial issues covered were:

Programmable Aid:

· Programmable aid was retained as the central feature of the ACP-EC co-operation, representing the largest single component of the Community's financial contribution to its ACP partners.

· An amendment to take account of the objectives and priorities of EC co-operation policy in its dialogue with each ACP country was made.

Dialogue in the areas of:

· Financial protocol of EU's total programmable resources available to each ACP country

· Draft indicative programme drawn up by the recipient country

· The indicative programme's review when a high level of commitment in the implementation of the programme is achieved and within three years after the entry into force of the second financial protocol.

Structural Adjustment:

Agreement on use of structural-adjustment resources to encourage regional integration efforts and to support reforms leading to inter-regional economic liberalisation.

European Investment Bank (EIB) agreed to:

· The improvement of programming procedures.

· Venture capital with provision for 50% of the overall amounts available to be allocated to the least developed countries.

· Greater flexibility when setting the financial conditions of reimbursable aid.

Debt

The European Community drafted a declaration:

· Reaffirming support to alleviating the debt of the ACP countries

· Confirming determination to lobby appropriate authorities/ international bodies, to take into account the particular problems of the ACP countries

· Where all special loans not yet taken up under the terms of previous conventions would be converted into subsidies.

It should be noted that for the agreement signed in Mauritius to enter into force, it had to be ratified by all EU Member States and by at least two thirds of the ACP countries.