BACKGROUNDEurope has long had a special relationship with its former colonies in Africa, the Caribbean and the Pacific, the 77 nations which make up the ACP countries. Indeed, mention of this connection was made in the founding Treaty of Rome (1957) that established the EEC. This special relationship was solidified by the Lome Conventions, the first of which was agreed in 1975, thus creating the ACP group. The 1st Lome Convention ensured trade cooperation between the EU and ACP, preferential and duty free access to the EU market for ACP products and provisions for minimum quotas and prices for many products such as sugar, beef, bananas, etc. to the EU. The convention was designed to support industry and agriculture in ACP countries and guarantee regular and predictable export receipts for their raw materials and commodities. Aid and investment of ECU 3 billion was also agreed upon in the first Lome Convention. This system was then continuously updated until the agreement of Lome IV in 1989 which would cover a period of 10 years. Lome Conventions have enshrined the principles of equal partnership, predictable aid flows, non-reciprocal trade benefits, mechanisms to stabilize receipts from commodity exports, trade protocols for specific products, regular dialogue and joint administration. In all, the Lome Conventions brought unilateral trade preferences for ACP products to the EU market for almost 3 decades.
Beginning in the late 1980s and 1990s, this system came under increasing strain both from European consumer and manufacturing groups and especially from other signatories of WTO agreements that felt as if this treatment was unfair under WTO rules. European groups have felt that this system has the potential to distort prices for raw material inputs for their products and can lead to higher prices overall in the market. With the increased globalization of the 1990s, there has been a shift to more globalized trade including new trading partners and thus preferential access for the ACP has been seen as increasingly discriminatory. European foreign policy has also shifted focus somewhat to adapt to new emerging economies on the world stage and European development policy has also adapted to begin to focus more on human rights issues, governance, sustainable development and the environment. In 1996, under pressure from the United States, the WTO ruled that many of the trade agreements of the Lome Convention's were incompatible with WTO rules, especially Article XXIV of the GATT stipulating that trade agreements must be reciprocal and non-discriminatory. A solution had to be found.
Due to increased pressure to find
an agreement that supports development and trade with ACP countries as well as
supports production in these countries, the fourth Lome Convention was replaced
by the Cotonou Agreement in 2000 which extends these trade preferences to the
end of 2007.
