Reprinted from "THE COURIER" no. 31 Special issue.

March 1975

EUROPEAN COMMUNITY - AFRICA-CARIBBEAN- PACIFIC

THE EUROPEANCOMMUNITY

BElGIUMDENMARKFRANCEGERMANY(Federal. Rep.

IRElANDITALYLUXEMBOURGNETHERLANDSUNITED KINGDOM

THE ACP STATES

BAHAMASBARBADOSBOTSWANABURUNDICAMEROONCENTRAL AFRICAN

REP.CHADCONGODAHOMEYEQUATORIAL GUINEAETHIOPIAFIJIGABONGAMBIAGHANA

GUINEAGUINEA- BISSAUGRENADAGUYANAIVORY COASTJAMAICAKENY ALESOTHOLIBERIAMADAGASCARMALAWIMALIMAURITANIAMAURITIUSNIGERNIGERIA

RWANDASENEGALSIERRA LEONESOMALIASUDANSWAZILANDTANZANIATOGOTONGATRINIDAD and TOBAGOUGANDAUPPER VOLTAWESTERN SAMOAZAIREZAM BIA

THE EUROPE OF THE NI~E COUNTRIES ASSOCIATED WITH THE EECf\, Lome Convention (At;:P)

. ~

ICElAND

SPAIN

99. 1375

Lome - The new convention between theEuropean Community and the 46 ACPcountries was signed in this hall in theTogolese People s Building. The flags of the55 partner countries made a solemn settingas journalists came from all over the worldto cover the event. Outside, the town ofLome, the people of Togo and a blazing sungave a frenetic tropical welcome. The highlycolourful spectacle witnessed in its ownway to the capital importance ofthe occasion.Pages 14 to 18

Garret FitzGerald -Ireland had the privilege of presiding overthe Council of Ministers of the Communitywhen the Lome agreement was finallysettled. The chairman of the Council andIrish Foreign Minister described his feelingsabout this convention, considering thatEurope now has a very close relationship

with these (ACP) countries, which shouldstand to the advantage both of Europe andthese partners in the future. " Page 6

Babacar Ba ~ The Senegalese Minister ofFinance and Economic Affairs was nomi-nated chairman of the ACP Council ofMinisters in July, 1973. Mr, Babacar Baconducted the eighteen months of negotia"tions 'with efficiency and address, the moreso fot; Senegal's having been a signatory tothe first and second Yaounde conventions.Considering the range of the Lome agree-ment, he said: " For me, the new cooperationwith Europe has something of a revolu-tionary character . Page 6

The Convention ~ The official documentsof the Lome Convention signed in the Togo-lese capital will regulate economic relationsbet\ljl~o the Community and the ACPcountr'ies for ~he next five years. It has seventitles, the main ones being trade cooperationexport receipts from basic products, industrialcooperation, financial and technical coopera-tion and the institutions; ninety- four articles;seven protocols; a final act; and an agreementon European Coal and Steel Communityproducts. Cream pages

Francois-Xavier Ortoli ~ The Commissionof the European Communities played acentral part from the beginning in theEurope-ACP negotiations that produced theLome Convention, notably with the Deniaumemorandum. Commission President Fran-c;:ois-Xavier Ortoli was naturally present atLome, and expressing his satisfaction duringthe signature ceremonies he gave credit tothe efforts and the talent of the negotiators

from our different countries . He paid thema warm tribute in the name of the Commis-sion

, "

a tribute to match the exception resultsthat have been achieved". Page 18

THE COURIEREUROPEAN COMMUNITY AFRICA - CARIBBEAN - PACIFIC

No. 31 - SPECIAL ISSUE - March 1975.

CONTENTS2. EDITORIAL: Towards new econ-omic relations, by Dr. Erich Wirsing

3. A negotiation and a convention

6. AFTER A SLEEPLESS NIGHT INBRUSSElS:the comments of the leading negotia-tors.Garret FitzGerald,.lrish Foreign Min-ister and chairman in office of theCouncil of Ministers

Babacar Ba, Senegalese Minister ofFinance and Economic Affairs, chair-man in office of the ACP Council ofMinisters

8. P.J. Patterson, Jamaican Ministerof Industry, Trade and Tourism

9. Olu Sanu, Nigerian ambassador,chairman of the ACP ambassadorsand plenipotentiaries

11. J. R. Rabukawaqa, Fijian ambassa-dor: "A sense of achievement

12. Claude Cheysson: "An agreementunique in history

14. The negotiationscamera

through the

16. The negotiations in the news

18. THE SIGNATURE AT LOME

22. THE MAIN PROVISIONS OF THELOME CONVENTION

23. Trade cooperation

24. StabiHsation of export receipts

30. Industrial cooperation

32. Financial and technical cooperation

36. Institutions

IN BRIEF

38. Resume of the Lome Convention

41. Some statistics on the ACP and theCommunity

CREAM PAGES;

The complete text of the Lome Con-vention

Writers of signed articles are alone responsible for their contents. Reproduction authorized, subject to indication of origin.

DITDRIAL

Forty-six States-practically the wholeof independent Africa south of theSahara, six Caribbean countries andthree groups of Pacific islands-haveestablished a cooperation scheme withthe European Community aimed atspeeding up their development. In all,then, 55 States, comprising the 46African, Caribbean and Pacific States(ACP) and the nine member States ofthe European Community, have reachedan agreement which most observersagree marks the beginning of neweconomic relations between industrialand non- industrial countries, based onpartnership and equality.

On both sides, the negotiations whichfinished at the end of January and pavedthe way for the signature of the newconvention at Lome, Togo, on February28, 1975, were carried out with theintention of getting to the bottom of theissues. For its part, the Commission madea thorough analysis of the efficiency ofthe system of cooperation set up underthe two Yaounde conventions in thelight of the problems the developingcountries are currently facing. The newcomplications posed by the Common-wealth countries, to which the Com"munityhad extended its offer of associa-tion after the accession of the UnitedKingdom, Ireland and Denmark, werealso taken into consideration. The Com-mission was able to give the conclusionsof this analysis to the Council of theEuropean Communities as from April1973. Most of them were translated stepby step into the Community proposals tothe ACP States before ending up as theconcrete provisions of the Lome Con-vention.

It is particularly striking on the ACPside that their united front should haveheld together throughout the 18 monthsof negotiations. It is altogether remark-able, and unprecedented, that so manycountries should have shown suchawareness of their negotiating power ifthey stayed together despite the diversityof their problems and interests. Theenaction of the Lome Convention shouldmake it possible further to extend andstrengthen this solidarity between theACI'I States, especially in the frameworkof the joint institutions.

It should also be said that almost thewhole of the African continent is nowdefining new relations with the Com-

ToW'ards neW' economicrelations

munity; Angola and Mozambique willbe able to join the Lome Conventionwhile the Community is hoping for arapid conclusion to the current negotia"

tions with the Maghreb countries.

. *

A new organization of economic andtrade relations between industrial andnon- industrial countries can be seenin the main provisions of the LomeConvention, which are explained in thisissue. In establishing complementaryeconomic ties between two groups ofcountries, the new agreement aims atsolidarity without dependence. RobertSchuman, one of the European foundingfathers, spoke in different circumstancesand at another time of "de facto solidar-ity . Creation and development supposeits existence. The convention offers flexible and open-ended framework forit. The will of the new partners mustdetermine whether the texts are to applied in future in a restrictive manner,in which case the convention will onlybe a good cooperation agreement, or ina wider sense, setting new precedentsfor the development of economic com-plementarity between two groups ofcountries at different levels of develop-ment.

The experience and the results gainedfrom the previous conventions werecertainly useful to the negotiation. TheEuropean Development Fund, for in-stance, will continue to carry outessential activities which need no furtherproof of their usefulness in view of thefundamental needs for financial andtechnical aid. In this context it should

be emphasized that particular importancehas been attached to the beneficiairiesincreased responsibility for planning andcarrying out aid schemes, as well asto aid programming, regional coopera-tion, the development of small andmiddle-sized firms, carrying out "mini-projects" in rural areas and the prefer-

ences granted to the poorest countriesin the allocation of financial and tech-nical development aid. These provisionsare all important and most often arerevisions, improvements and amplifica-tions, under a renewed and enlarged

F., of provisions already familiar tothe beneficiairies of the preceding con-ventions.

Yet the Lome Convention differs fromthe previous conventions in a number ofways, either in its new provisions or bythe' greater importance given to particularfields. The most important differences arethe non-reciprocity of the trade advan-tages granted by the Community to theACP States, the establishment under the

F. of financial aid in the form of thestabilization of export receipts andindustrial cooperation, which is thesubject of a special section of the newconvention.

Stabilising export receipts is an entirelynew principle in the history of relationsbetween industrial and non- industrialcountries. Basically, the ACP States havebeen accorded the right to compensationif there is a sudden fall in their exportearnings, for instance through unstableworld prices or production set- backs.The deterioration of rates of exchangeshould finally be halted in this way.Covering a dozen categories of products,these new provisions are clearly of par"ticular interest for countries dependenton one or two products for their exportreceipts; but equally for all the ACPStates, they constitute a favourableelement for more certain economicprogramming and the maintenance andincrease of import capacity, which areconditions of their development. par-ticularly in the industrial field.

Industrial cooperation is another impor-tant side to the new convention. Itshould make it possible to add to thediversification of the ACP economies andto transfer suitable technology to thesecountries. An Industrial CooperationCommittee, assisted by an Industrial

---'-+

Development Centre, will develop con-tacts between economic agents andorientate this industrial cooperation.The importance of these provisions willnaturally depend on the energy ofeveryone concerned, but considerablepossibilities for cooperation between thetwo groups of countries are now open.

The particular case of sugar shouldnot be left out; it was a major difficultyof the negotiation until the last minute.The solution agreed was a form ofindexing that, for the first time, linksprices paid to distant tropical producersto those paid by the industrial countriesto their own farmers.

This special issue devoted to the newagreements, published as soon as pos-sible after the signature at Lome, con-tains the full text of the convention plusthe protocols and annexes. It alsoincludes analytical commentaries. Butwhat really matters, beyond the actualtexts, is the spirit and the overalleconomic conception of the Lome Con-vention. It is conceived in the interestsboth of the ACP and of the Europeancountries: "as, by giving the former themeans of developing their infrastructure,improving their production and safe-guarding the value of their work, it allowsthe latter to increase their trade with group of partners who are increasinglyaware of their own possibilities and ofthe benefits of an economic unityequally profitable to both sides. " Mr.Francois-Xavier Ortoli, President of theCommission of the European Commun-ities, summed up this hope by saying:The Community must commit itself

wherever possible to cooperation basedon the search for long-term economicinterdependence, which is betterguarantee of progress and unity than anytreaty. What we want, while respectingour partners' options, is to bring into

one joint scheme our know-how andtechnological capacity, our markets andin some instances our capital and ourproducts, especially from agriculture,together with the resources at the dis-posal of our partners and their desire touse this new situation to build up their

W-tT. ' deve~opment... Drawing up thisconvention proves it is possible to

ensure the difficult birth of a new worldorder through cooperation, not con"frontation 11111 Dr. E. WIRSING

Publisher

A negotiationnd a convention

by Charles SCHIFFMANN (*

The political and historical significance of the new EEC-ACP Conventioncan only be appreciated in perspective. Agence France- Presse correspondantCharles Schiffmann sketches the process leading from 1957 to the LomeConvention.

In the small hours of February 1, 1975,the negotiators who had drawn up thetexts for the new convention betweenthe EEC and the ACP found it was atlast possible for them to tie up their filesand go home. They needed a long pieceof string: they had been negotiating for18 months, had just concluded with a24- hour session and during this processthey had drawn up 350 joint documents,held 183 negotiating sessions betweenthe EEC and the ACP and no less than493 coordination meetings of the ACPdelegations. One day, perhaps, a studentwith a monastic habit of mind will seewhat he can do to distil from the mountainof paper the history of this "drawingtogether of the peoples of severalcontinents . It will be a work of historywhich will have to include such mattersas customs duties on cut flowers and

arrow-root. Precisely what the latterproduct of Africa is, only the initiatedknow, and, so far as we are concerned,there is no reason why their secret shouldnot remain intact.

This is a convention which bringstogether around the EEC the whole ofBlack Africa, the Caribbean and threegroups of islands in the Pacific. Itsorigins date back long before the begin-nings of this gigantic negotiation. Thechromosomes of the new agreementwere in fact bred from the Treaty of Romewhich set up the Common Market. .It isone of the features of the EuropeanCommunity that everything it does owesits inspiration to this Treaty, signed inRome on March 25, 1957. Indeed itcontains a provision (Article 235) whichmakes it possible to do anything whichhas not been specifically included onany of the other pages.

In Part IV, the Six original EECmembers (Federal Germany, Belgium,

) French journalist specialising in European andEur. ACP affairs, has covered Yaoude I and II andLome negotations.

France, Italy, Luxembourg and theNetherlands) agreed that countriesmaintaining special relationships with

them " should become associated withthe EEC These "special relationshipsof course, were the links of colonialism,which everybody knew would soondisappear. The important thing at thispoint was to clarify the legal positionby extending to these countries outsideEurope the free trade system which hadbeen brought into operation inside theEuropean Community.

Between 1958 and 1962 the E.progressively unified Its trade relationswith a large part of Africa, giving it atthe same time financial aid to promoteits development. This was the periodof the first European DevelopmentFund, which had resources for the five-year period of 580 million units ofaccount. At this time the Americandollar was still of the same value asthe European unit of account (U.A.).

In 1960-62 most of the African coun-tries became independent and it thereforefell to them to decide whether theywanted to continue as associates ofthe EEC. Eighteen of them opted forassociation, and on July 20, 1963 theysigned the first Association Conventionof Yaounde. This was the beginning ofthe A.A.S. the Associated AfricanStates and Madagascar. They werenot at any time associated with oneanother, but the habit of dealing togetherin their business with the Communitywas to bring a gradual complicity ofapproach to the big world economic

problems. This was to snowball in futureyears and its effect was considerable.

By the Yaounde I Convention (1963-68), trade relations between the A.A.and the EEC were governed by ' a

system of mutual preferences. Thefinancial aid for the five-year period wasto be U.A. 730 million; and for the firsttime joint institutions were set up toadminister the Association.

The Courier no. 31 - SPECIAL ISSUE - March 1975

Great Britain at the doorBefore the negotiations for Yaounde I

had been completed, the European Com-munity embarked on an adventure ofwhich the consequences are still beingappraised. On January 29, 1963 thesix founder countries of the EEC

broke off their negotiations with GreatBritain, which had been seeking entryinto the Common Market on terms whichFrance-General de Gaulle was in powerat this time-would not accept. Theunderdeveloped countries of the Com-monwealth were not responsible forthe Franco- British incident and therewas no reason for refusing them whatthey had been allowed to expect~privileged links with the enlarged Com-munity and a market of 240 millionconsumers.

Some of the European countries whichhad no colonial past saw in this theextinction of their hope of getting ridof the unduly "post-colonial" aspects

of the Yaounde Association. Peoplebegan to talk about "mondialismand to condemn "spheres of influenceand the wider ideas of some of theEEC members led to the drawing-upof a counterpart to the Yaounde Con-

vention. This was the famous 1963Declaration of Intent. In this the EEC

declared itself willing to extend theYaounde Association agreement. or othersimilar instrument, to other countrieshaving an "economic structure andproduction comparable with theA.A.S,

Nigeria repliesThe countries of the Commonwealth

had been frustrated by the terminationof the British negotiations in Brusselsbut this declaration did not send themgalloping there. Nigeria entered intolaborious negotiations, which continuedfor three years. An Association Agree-ment with the EEC was signed inJuly 1966, but it was never brought intoforce. Kenya, Uganda and Tanzaniasigned a similar agreement in 1968, butthey let this fall into oblivi.on beforenegotiating another which was in fact

- in force from 1971 until January 1975,

The Yaounde II ConventionThis period coincided with the second

Yaounde Convention, which was signedin July 1969 by the same AA.which had been signatories in 1963.

A NEGOTIATION AND A CONVENTION

There were few differences between thefirst and the second convention, thoughone matter which came to the surfacewas to be the subject of much subsequentdiscussion. This was the problem ofthe erosion of customs preferences. The18 AAS.M. now found they had tocontend with competitors who werealso enjoying customs preferences andduty reductions. The East African coun-tries were the first; then came the 91underdeveloped countries to which theEEC granted generalised tariff prefer-ences for their manufactured or semi-manufactured goods with effect from

July 1, 1975. In addition, there werethe G. T. duty reductions, beginning

with the Dillon round and followed the Kennedy round in 1964.

Moreover, as the trade statistics camein, there were indications that theelimination of customs duties was nothaving any exceptional influence onthe flow of trade, and brought practicallyno solution to the fluctuations in rawmaterial prices, the instability of whichwas a constant threat to the developmentplans of the exporting countri.es.

The first tentative attempts to dealwith these two points was containedin Yaounde II (1969). This conventionprovided for aid to trade promotion

(i.e. participation in fairs and exhibitions)for AAS. M. products and "emergencyaid", of which Senegal in particularreceived the benefit with the suddencollapse in the receipts from the ground-nut crop, which constitute 90 % of thecountry s wealth.

These different forms of aid were partof the assignment for the 3rd European

Development Fund. Its resources forthe five years were fixed at U.A 900million , and an additional U.A. 5 millionwas added later, when Mauritius becamean Associate.

The British come inThe second Yaounde Convention was

not yet ratified when the Six in thesummit meeting at the Hague onDecember 2, 1969 gave the green lightfor resuming the negotiations for Britishaccession to the EEC. It was then clearthat Yaounde II would be the lastconvention of this type and that the

whole question of the Commonwealthcountries would have to be reconsidered.The British Treaty of Accession wassigned on January 22, 1972 and four

months later the 19 Associated countriesheld a meeting at Nouakchott (April1972) and decided to take part with theCommonwealth in the forthcoming nego-tiations for the enlargement of the Asso-ciation. At this time the attitude of theCommonwealth countries themselveswas more hesitant. They were iII-

acquainted with the nature of thisAssociation, which had often beencriticised in the Third World. Theuncertainties continued for more thana year.

In May, 1973 the trade ministers ofthe African countries held a meeting atAbidjan where, for the first time, theygave voice to their interest in havinga "bloc- to- bloc " negotiation with theEEC. A fortnight later this was confirmedby the O.A.U. Summit meeting at AddisAbaba.

Abandonment of reciprocityOne of the points which had led to

hesitations among the "AssociableEnglish-speaking countries was thatthe EEC had stipulated that the trade

advantages should be " reciprocal" . TheEuropeans considered this indispensableunder the G.AT.T. rules, and thought itwould maintain the contractual characterof the agreement, which would ensureits du:'3bility. Some of the Europeancountries, however, and most of theEnglish..speaking Africans, no longerregarded this reciprocity as being justi-fied, They called attention to the gener-alised preferences, which had theirorigin in U. C.T. D. and in which noreciprocity is stipulated or given. In allthe international bodies it was reiteratedwith growing frequency that under-developed countries were not requiredto give trade advantages to the countriesaiding them. G.AT.T. itself was accusedof being a junta of wealthy countriesin control before decolonisation.For a long time the Community was

to be brought to a standstill by theunwillingness of some of the Europeancountries to accept this new interpreta-tion of international modes and morals.It took more than a year for the ministersof the Nine to put to the ACP countries

draft Association Agreement whichhad been compiled in Brussels by theCommission in April , 1973. This oweda good deal to the Yaounde formulabut its provisions included not onlyaccess to the European market and

finance aid on a scale providing as muchsupport as hitherto to the former Asso-ciates, but also an entirely new systemfor the stabilisation of export receiptsfor basic products.

Conference in theEgmont Palace

The Nine were still not clear about thearrangements for this offer on July 25,1973, when delegations from the 43African, Caribbean and Pacific countries(now 46) came to Brussels. The ACPnominated three spokesmen, one foreach geographical region, to express theirviews of the links to be set up with theCommunities. These were to includeaccess without reciprocity to the Euro-pean market; improved terms of trade andsystems of payment for basic products;industrial cooperation and financial aid.

This conference was a formal one andfor along time after it was over theEuropeans were wondering about thereal intentions of some of the English-speaking countries which had beenrather circumspect in their approaches.

More than one had said that it had onlycome to Brussels to avoid a split in

African unity. There were many Europeandoubt~; about the attitude of Nigeria,

which ,.had been ranked as one of themost hostile to the Yaounde Conventionand which has a population of 60 million,or almost as many as all the AA.countries put together.

The Brussels negotiations started inOctober 1973; and in February, 1974 afurther conference of African tradeministers was held at Addis Ababa whichproved that African unity was no merefa9ade. The negotiators in Brussels wereamong the first to recognise this. TheEuropean delegations had an enormousnumber of discussions at expert andambassadorial level, and were able see for themselves how true it was thatthe ACP knew what they wanted. Someof the contentious points were to remainon the negotiating table until the daywhen the final bargain was struck. Thesewere:

agricultural produce. The ACP wereirrit~ted by the experience of the AA.to whom the EEC had, in 1972, refusedtariff concessions for early fruit andvegetables. From the beginning of thediscussions the ACP demanded totaland unrestricted access to the Europeanmarket for all their agricultural produce.

Though the E. C. agreed to relax itsagricultural protection to a considerableextent by granting reductions in customsduties and .agricultural levies, it never-theless maintained throughout that itsagricultural policy was not negotiable.- non-tariff obstacles. The ACP wantedthe EEC to eliminate regulations suchas health rules, standardisation and non-customs duties affecting tropical producewhich they regarded as impediments to

their sales in EEC countries.The Nine replied on this point that the

obstacles in question arose through

national regulations outside fEC com-petence.

This was a point which caused irritationamong some of the African delegates.In one case, they complained, theirrequests were rejected because of aCommunity policy; and in another theywere rejected because they did not relateto a Community policy.

As the talks went on, it had to admitted that the European Communitycould not claim any power to set upparadise on eaith. It was indeed offeringto stabilise export receipts for basicproducts; but the much bigger problemof raising the prices for these productscalls for agreement between producersand consumers at world level. The EEC

was offering industrial cooperation, cal-culated to promote the processing ofAA. M. resources in their countries oforigin, but in negotiating this at expert

level the EEC delegate had to admitthat the Community countries live undera liberal and capitalist regime in whichit is not possible for governments toforce private firms to set up in anAssociated country.

The limitations which apply to theEEC came to the surface again in thesugar discussions, and remained aproblem till the very end of the negotia-tions. The EEC had undertaken to buy1.4 million tons of sugar from the ACPeach year, and to pay a price equivalentto the price guaranteed to beet producersin Europe. They could not, howeveroffer more to the ACP planters of sugarcane than to the European beet farmers

without running serious political risks.The Nine had to convince their prospec-tive partners that, if they wanted to getthe benefit of the high world marketprice for sugar, .it must be with theconsumers that the commercial negotia-tions should be put in hand.

The Kingston ConferenceThe differences of view were many,

and their scope considerable, so thatsolutions were outside the scope of theBrussels negotiators. There had to further reference to the politicians; andthis time it was the ACP who took theinitiative, inviting the EEC to a con-ference at ministerial level to be heldat the end of July, 1974 at Kingston,

Jamaica.This conference opened in an atmo-

sphere of gloom with the Caribbeandelegates convinced no agreement couldbe reached before the end of the year.Yet it was in fact destined to give a realimpetus to the Brussels negotiations.The Nine finally abandoned any reci-procity requirement on the trade side;

they recorded their definite agreementon the system for export receiptsstabilisation as proposed by the BrusselsCommission; they agreed also thatindustrialisation should be given a placeof priority in the future cooperation.On the last point it was the ACP mem-orandum, handed in at the Kingston

Conference which, for practical purposes,served as a draft for the Lome Conventionprovisions.

It was now July, 1974 and theYaounde Convention was to expire insix months time. There had, as yet,been no talk about the amount of thefinancial aid to be provided. It was onlyin the lobbies that the figures began tocirculate. The chairman ofthenine"nationministerial conference, M. Jean Sau-vagnargues (France) said the EECwas willing to treble the resources ofthe E. F. to make it about U.A. 3 000million, but the chairman of the ACPM. Babacar Ba, Senegal , was demandingtotal aid of U .A. 8 000 million.

After the Kingston discussions, nego-tiations were to be resumed in Brussels;and the tempo was at first slow enoughto cause a certain anxiety, both on theAfrican and on the European side.It became necessary to think in terms oftransitional measures to prevent theAssociated countries finding they hadleft in the air when the Yaounde Con-vention expired on January 31 , 1975.

Day after day experts and ambassadorsput finishing touches to drafts, but atno point was it possible to get down tothe things which mattered.

It thus became necessary to call onthe ministers to hold two further meet-

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The Courier no. 31 - SPECIAL ISSUE - March 1975

ings, on January 13 and January 30,to deal with the difficulties set asidefor last minute decision during theprevious 18 months.

When the final conference opened onJanuary 30, it was still not knownwhether the Convention would definethe lines of an "Association " or a simple

Cooperation . Both expressions hadbeen rejected in turn. It was expectedthere would be tough bargaining inthe best Brussels tradition before theamount of the financial aid could besettled; but it was in fact decided almostwithout discussion, since the ACP hadrecognised that with economic condi-tions as they are, the effort the EEC wasmaking was on a really remarkable scale.

The final conference on January 30was a marathon and the negotiators wereharrassed with a multitude of details,discussing such problems as Jamaicarum, Somali bananas, the amount ofthe financial aid and the ACP customstreatment of goods from the EEC as ~compared with goods from other world ~powers, such as the United States, the ~USSR or China (most favoured nation ~clause).

At midnight on January 31 the Yaoun- ~de Convention quietly became a thing of

the past and the new agreement wasin sight. Another nine hours were neededfor settling the final version of the volum-inous texts which, for the next fiveyears, will constitute the "Conventionof Lome between the I:EC and the ACP"It was at nine o clock in the morning,

after 24 hours of almost uninterrupteddiscussion, that the two chairmen~Dr. Garret FitzGerald (Ireland) for the

EEC and M. Babacar Ba (Senegal) forthe ACP~exchanged letters of assent,agreeing to these texts.

Six hours later, at the end of a sunnySaturday afternoon other negotiators~in some cases the same ones in.a differentcapacity~came back to finish off thedrafting of the Sugar Protocol , providingfor the Community to buy 1.4 milliontons of sugar from the ACP countries.This negotiation, too, continued farinto the night, but it led to a result

- unarimously considered satisfactory. In ~the end, a satisfaction worthy of the ~'hopes placed by the ~uropean Com- munity and the ACP countries in this ~

...,

agreement, which may be a decisive Iapproach towards a different system of ~international relations. II Ch. S.

AFTER A SLEEPLES

GARRET flTZGERAti

satisfying and sat

Brussels ~ The final session ofnegotiations to hammer out the EEC-ACP agreement meant a sleeplessnight for the negotiators and jour-nalists present in the Charlemagnebuilding, headquarters of the EECCouncil of Ministers, on February 1.But it paved the way for the signatureof the Convention at Lome February 28. " The Courier " askedleading European and ACP personal-ities how they felt when the talks werefinally over.

Dr. Garret FitzGerald, Irish ForeignMinister and chairman in office of theCouncil of Ministers, considered thatits contents and wider area of operationgave the new convention " funda-mental importance " for the future of

the " two partners

GARRET FITZGERALD~ BABACAR BA

A revolutionary

agreement

BABACAR BAACP Chairman

After the European and ACP nego-tiators had stayed in session through thewhole of Friday night without inter-mission , it was at 10 o clock on Saturdaymorning, February 1 that the news brokeof the new cooperatian agreementbetween the EEC and the 46 countries .of

Africa, the Caribbean and the Pacific(ACP): the " Lome Canvention betweenthe EEC and the ACP"

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GHT IN BRUSSELS

very close,ctory relationship

Dr. FitzGerald, what were yourimmediate reactions when the ACPnegotiations were concluded, and whatare they now?

Well, my immediate reaction was oneof relief that we had succeeded ingetting agreement. Reflecting on it sometime later, I must say I am even happierwith it noW than then, because then wewere too close to it to see the wood forthe trees. In fact it seems to me now,looking back at it, that it is a very goodagreement indeed. It is one which wereached with the full consent of allour partners, and which in its overallimpact is Vfi)ry favourable to the ACPcountries. I certainly think they got remarkable number of concessions fromthe Community during the negotiations;I think they have reason to be satisfiedwith it. And on our side, I don t think

anybody feels that we gave too much, or

that there is any dissatisfaction-I thinkthe European countries are very satisfiedtoo.

What do you think will be the essen-tial political significance of the Conven-tion in the long run?

I think that it establishes a new rela-tionship between the countries of Europeand a large part of Africa, plus most of theCaribbean and some of the PacificIslands, which is much broader geograph-ically than the relationships existingpreviously, and which is in muchgreater depth, because it goes into areaslike stabilisation of export receipts andindustrial cooperation which were notpreviously covered; it is relationshipvery much based on equal terms betweenthe two partners. In these respects, Ithink it is of fundamental importance andit means that Europe now has a very close,satisfying and satisfactory relationshipwith these countries, which I thinkshould stand to the advantage both of

Europe and these countries in the future.These countries are major suppliers ofraw materials and this close link must beto Europe s advantage: andl am certainthat it is to their advantage because of

the terms we managed to settle in thesenegotiations.

You became chairman of the Councilof Ministers at a difficult time fat rheCommunity. The conclusion of theACP negotiations must have seemed likea ray of sunshine in the Council building...

It did indeed!

Can you explain why the sector ofdevelopment cooperation has been sodynamic recently compared with someother fields of Community activity?

Really, I think that since we got tothe Paris Summit last December andachieved some measure of success, theCommunity has developed a certainnew momentum which is to be found inevery area. We have now had twoCouncil sessions in January and February,quite apart from the two sets of ACPnegotiations, and almost without ex-ception the policies which came beforethese Councils have been adopted. So Ithink there is at present a certain generalmomentum in the Community 11/

I nterview byBARNEY TRENCH

The two chairmen held a joint pressconference. Europe was represented byDr. Garret FitzGerald, Irish Minister forForeign Affairs and chairman in officeof the Nine-nation Council of Ministers;the ACP by Mr. Babacar Ba, SenegaleseMinister for Finance and EconomicAffairs, chairman of the ACP Council ofMinisters. Both of them expressed theirkeen pleasure and deep satisfaction atthe agreement which had been reachedafter 18 months of discussions, 11 ofwhich had been spenton the negotiationsproper. '

Dr. FitzGerald spoke of the importanceand the unique character of the relationsbetween the European and ACP partnersembodied in thfi) new Agreement. Hedes~ribed the finance arrangements as

". -

;11'

, . . "

Imf)r' esslv~ .Mr. Babacar Ba, in the name of the

ACP, declared in substance that the newConvention is " document whichbreaks new ground, for it takes no ac-count of the necessities of the moment.Moreover, having regard to the inter-

national economic difficulties, the finan"cial effort the Nine are making is indeedimpressive . He went on to paytribute to our partners in the European

Economic Community who, despite thecurrent economic background, are makinga considerable effort to deal with the

development requirements which con-cern the life of our peoples

Mr. Babacar Ba continued: "We havejust set up .a new type of relationshipbetween underdeveloped and developed

countries. I regard this as very important.In my view the cooperation we are aboutto establish with Europe has a certainrevolutionary character, in the sense

that between ourselves and the developedcontinent of Europe, all our relationshipswill be falling into a new pattern

The new agreement is a bold one, theSenegalese minister said. "The YaoundeConvention was certainly a completearrangement, quite satisfactory to theAA. ; but the Convention which hasjust been agreed upon marks materialprogress over its predecessor because it

contains two provisions of paramountimportance. These are the export receiptsstabilisation fund and industrial coopera-tion. " I think, that these two provisionsare enough in themselves to mark thenew Convention as revolutionary , he

added.Asked about the title of the Convention

and why the description " Associationhad not remained in it, the Senegaleseminister replied that the trade, industrial,financial and technical provisions of theConvention were much more importantthan any question of names. "The LomeConvention may well imply the Lome

Association Convention. After all, theYaounde Convention was itself a con-vention of Association, but everybody

referred to it simply as the Yaounde

Convention. In any case , he concluded,the Lome Convention is a great

achievement and an absolutely new andunique fact in the relations of the ThirdWorld with industrial countries 11/

LUCIEN PAGNI

The Courier no. 31 - SPECIAL ISSUE - March 1975

P...J.. PATTERSON:IH' A neW'system of re-lationsh ipsin theperspective ofdevelopment

From the start of the Europe-ACPnegotiations in July, 1973 in Brussels,one man caught the attention both ofthe other negotiators and of thepress Percival James PattersonJamaican Minister for Industry, Com-merce and Tourism and spokesmanfor the Caribbean group. The months of talks between the ACP andthe Nine showed Mr. Patterson tobe a tough, intelligent and effectivenegotiator, whose speeches raisedenthusiasm on the one side and" anxiety " on the other. One of themain proponents of the agreement, hegives his first impressions of theconvention below.

Is the new convention finally justpackage deal of specific items?

No, I think it is something wider thanthe mere specific items which it con-tains. What we have been trying toestablish is a new trading relationship,which will characterize the developmentof countries in Africa, the Caribbean andPacific in partnership with the ninecountries in Europe.

Referring to the ACP, you usedthe word "Associated". Is the newconvention Convention of "Associa-tiont for cooperation?

It is going to be called "the ACP- EECConvention of Lome", because wesigned the Treaty in Lome on February 28,1975 according to the recommendations

INTERVIEW PATTERSON

Percival J. PattersonA tough and intelligent negotiator, Aboveduring the ministerial conference in King-

ston , Jamaica. Right in Bmsse/s.

((The problem of sugar does not only

concern Jamaica, or the Caribbean, or

the ACP producers. The sLIgar problem isa political question concerning the wholeof the 46 ACP,).

and decisions made by the ACP Bureau ~of Ministers when they met at Accra, in :iGhana.

..,

J:::

J:::Il.

::J

;..

::J(:I

Sugar seems to have been one of themost difficult problems of the talks.Could you explain briefly what trademechanism has finally been decided forsugar?

Yes - the EEC has agreed to import ~1.4 million tons of sugar from severalcountries, and we are contractuallyobliged to supply them. There will be atwo-tiered price mechanism: one whichincludes a basic guarantee elementwhich will be continuous, and onewhich includes a supplement whichwill bear a relationship to prevailingprices in the world market and will be as aresult of a free negotiation betweenbuyers and sellers.

The negotiations have been charac-terized especially by the solidarity of theACP group. Do you think this solidaritycan be maintained and will find furtherexpression, for instance in the ' creationof new regional links between ACPcountries?

- I'm sure it can be maintained andI'm sure it will provide new dimensions.

I regard the new relationship which hasbeen created between the ACP countries,their affinity, the knowledge of eachother, ' the \Solidarity which they havedeveloped, as being among the mostimportant features that have emergedfrom these negotiations. And we for ourpart are determined to preserve them. II1II

Interview byloP.

DWARD OLUSOLA SANU :

We are particularlypleased that Eu ope

recognizes the importanceof regional cooperationNigeria has played a major role in the Europe-ACP nego-

tiations. Eighteen months ago, that might not have seemedlikely. The contribution of Mr. Edward Olusola Sanu,Nigerian . ambassador and chairman of the ACP Council ofPlenipotentiaries, to ACP unity has been widely appreciated.In his opinion, the new agreement is satisfactory and thenew convention could help bring the ACP together, partic-ularly in the field of regional cooperation.

Mr. $anu, what were your feelingswhen the negotiations were finallyconcluded?

Naturally, I was quite relieved thatafter 18 months of negotiations wewere able finally to conclude an agree-ment which seemed to us to be adistinct improvement of the old Yaoundeagreement. I was so happy that at thisdifficult stage the forty-six ACP countriesremained united till the very end of thenegotiations. Of course, we have had ourprogrammes, different points of view onthe major issues of the negotiations,but we managed throughout to overcomethese difficulties and to present a fairlyunited front to the very end. As youknow, even towards the end, we hadsome fairly difficult issues such as, rum,sugar, and bananas which are of particularinterest to the Caribbean countries,and it was a test of the unity of the ACPthat we stood by the Caribbean countriesso that they would get a fair agreement onthese major products. So on the whole Ithink I feel quite pleased that we havesucceeded in creating a form of relation-ship among ourselves which is to usjust as important as relationships be-tween the ACP and the EEC.

In an earlier interview with " TheCourier , you said financial aid wasnot the most important aspect of the

negotiation for Nigeria. With the agree-ment now concluded, what prinr;iplesections of the new Europe-ACP Con"vention seem to you of capital importanceto the development of your country?

Well, I think probably I can singleout two: the trade aspect is quite impor-

tant in the sense that it offers a lot of freeaccess for most of our products to the

EEC markets, both in the agricultural andindustrial fields; and the industrial co-operation aspect, which gives us thehope of assistance in training, in trans-ferring technology during this very crucialtime in our development. As you know,we are going to have another five-yeardevelopment plan, from April nextyear, and we will settle in it all thefacilities which we can have in Europeduring this period. I don t think I wanUogive the impression that the aid part isso unimportant to us. I think we areparticularly pleased that for the firsttime Europe recognizes the importance ofregional cooperation and the newagreement set aside 10% of the European

----+

The Courier no. 31 - SPECIAL ISSUE - March 1975

Development Fund to assist regional

projects. This is of particular importanceto us, because in our own part of theworld, we belong to some regionalorganizations that cut across the barriers.We have the River Niger Commissionwhich includes Nigeria, Niger, Chad,Dahomey and a few of our neighbours.And we have also the Chad BasinCommission which groups us withCameroon again and a few other Africancountries who are both English andFrench-speaking. So, we hope that wewill be able to use some of the EDF tostrengthen these regional organizations.I don t think it would be correct to saythat we are not at all interested in thisaspect of regional cooperation, no.

So the agricultural, commercial andindustrial aspects of the agreementare of particular importance to Nigeriacompared with financial cooperation,although the latter is still important. Doyou think it is also a good agreementwhere rules of origin and non- tariff bar"

riers are concerned?

Those two areas presented to us themost: difficult part of our negotiations. Whil~ in some arnas of the rules oforigin we have sl!cceeded particularlyas regards the col!ective origin whichfor the first time acc",-pted the whole ACPas one market for the purpose of rules oforigin, as we were not particularlysatisfied with the part that we did notget through: our own basic stand thatrules of origin should be limited to25 % value added. As you know, theCommon Market said the equivalentcouldn t go below 50 %, but there was aproviso that for products we may havein the future, or for products that were nottaken account of, we should within thefirst six months of the agreement try towork out an acceptable solution to thisproblem. The non-tariff barriers which weface 'again stem from the basic rules of theCommunity itself, which is going to bea very difficult thing to tackle as non-

- tariff barriers have not been harmonizedbertNeen the Member States of the Nineand some of these barriers have beeninstituted by each of the countriesconcerned. So for those aspects that havebeen harmonized, it is easy for us to tryto find a way to get the Community torecognize our interests, but it is not so

INTERVIEW SANU

E. Diu Sanu

((...

We hope that lee lei!! be able to use someof the EDF to strengthen these regionalorganizations))

easy with those that have not yet been

harmonized. The result is that we havehad to content ourselves with a basicposition whereby when we have barriersparticularly disadvantageous to us, ask for a certain amount of consultationon how this can be arranged so as not toaffect us too adversely. I'm afraid this isthe only thing we were able to do inrespect.

Mr. Sanu, the role played by Nigeriaand by yourself in these negotiations hasbeen particularly appreciated. Nigeria isa big country, and big countries haveimportant roles to play. Beyond theconvention, how does Nigeria see thedevelopment of relations between theEEC and the ACP?

The relationship between the EEC

and the ACP will not really evolve. It willdepend to a great extent on how the EEC

implements the agreement. If they do sowith the same sincerity as theyshown during the negotiations, then Ithink that this relationship would develop.We compare it with the way they havedealt with the Yaounde group and seewhether it has been a substantial im-provement. But I think that, more thananything else, the EEC will probably helpin a way to force our cooperation amongthe ACP countries. We will start theWest African Economic Community, I'msure, within the lifetime of this agree-ment, in which, I hope, they will playapart. We hope that they will playa part intrying to foster trade among ACPcountries; and .all this will mean that inthe lifetime of this agreement the EECwill have a substantial role to play andwe shall judge the whole agreement bythe manner, the spirit in which thiscooperation is carried out by the Com-munity.

What do you think about Mozam-bique and Angola joining the newconvention?

Of course, the whole of this Africanparticipation stems naturally from abasic resolution of the OAU. And the

A.U. .has a definite stand on decoloni-sation. So to us, naturally, it is going tobe a very happy thing if we get thesecountries to accept the resolution of the

AU. which states that Africa shouldnegotiate together with the EEC. So justas we welcomed Guinea Bissau verywarmly during the negotiations, wewould hope that soon afterindepen-dence, Mozambique will be able to joinus and later, Angola. I think this willstrengthen our hand very considerably;it will also assist in the process regional integration in that part ofAfrica and we are looking forward verymuch to it; I think this is about the onlything I can say at this time. Our standis basically that any process of decoloni-zation should be welcomed. Any helpthat these countries can have in theinitial stage of their own growth will bevery much cherished by the forty-sixcountries that have already negotiated

with the EEC. So we are looking forwardto these two countries. I hope they willjoin us very soon. 1II

Interview byLUCIEN PAGNI

Fiji: R.. RABUKAWAQAlfIlfI

sense of achievement

lfIlfI

Fiji, the furthest from Brussels of allthe ACP States, takes the credit forunblocking the negotiations at a criticalpoint on the final day. Fiji Ambassador

R. Rabukawaqa says he felt:... Relief, satisfaction and a sense of

achievement. Relief because I do nothave to continue to commute betweenLondon and Brussels; satisfaction be-cause that is how I feel on behalf of mycountry - Fiji's main concern is sugarand we have already achieved a fairdeal in this commodity; and a sense ofachievement because quite apart fromachieving what we have been strivingto get, we, the 46 ACP countries, havecome to know a little more of oneanother, understand one another betterand respect one another's differencesduring these months of negotiation.

The Pacific group has negotiatedjointly with the ACP from the start, yetyour geographical position does setyou apart to some extent. Do you feel theconvention has a different significancefor you from what it represents for theAfrican and Caribbean countries?

In the past, when any non-self-governing territory like Fiji acquiredfull autonomy over external commercialrelations, Britain automatically ceased tobe responsible for ensuring the obser-

vance of the terms of agreement by theformer colonies. In the circumstances,

the rights and obligations under thetrade agreements between the formercolonies and the other Commonwealthcountries concerned should be regardedas legally terminated.

The entry of Britain to the EEC has amajor impact on the Commonwealthpreferential system. As a member of theEEC, Britain would have to adopt theCommon External Tariff of the Communityand preference in the British markets toimrlE' ris froVi the Commonwealth wouldcease.

The trade of other Commonwealthcountries which, over a period of years

has been patterned on the availability ofduty free preferential entry to the Britishmarket, will be adversely affected by

Britiain s entry to the EEC. This I consideris the most significant fact affecting allCommonwealth countries.

It is true that geographically the ACPcountries are separated, but separated

only in the sense of location. Theeighteen months of negotiations have,as I mentioned earlier, made us under-stand one another better; we are moreunified now; we have some differencesbut we have many common areas andcommon problems associated with newlyindependent developing countries-prob-lems of finance, markets transportcosts, education, health, living standardsto mention but a few. So you see the vastoceans which separate us have notreally affected our understanding of oneanother to the extent that some peoplewould expect; and the solidarity ofthe ACP group in its negotiation withthe EEC over the last weeks proves this.

Is the new convention entirelysatisfactory to you as far as it concernsthe specially Pacific products?

- My answer to this question is yes. Itis satisfactory as regards our sugar.Copra products, an important item to allPacific countries, are now catered forunder STAB EX; the list of products nowincludes coconut, copra, coconut oiland coconut oil cake. Also cocoa, coffeeand tea. These are commodities thatare of interest to the Pacific region.

In the fields of aid, though, we did notget as much as we bargained for; butbeing a new-comer to this convention Icannot truly say whether this is enough ornot; all I can say at the moment is thatwe are satisfied.

As far as trade is concerned, we in Fijiproduce annually approximately 400000long tons of raw sugar. We consume andsell locally to Pacific Islands about

20000 tons, the remainder is soldoutside the Pacific.

This raises the question of sugar.

What happened when Ratu Sir KamiseseMara went to London on the last day ofthe negotiations? Was it thanks to Fijithat the question was " unblocked"

- As regards this question I am veryglad and proud that my Prime Minister,the Rt. Hon. Ratu Sir Kamisese Mara,was able to break the deadlock, one onwhich the whole negotiation seemed tobe hanging. Messages of appreciationaccorded to him from other Ministers ofsugar producing countries were almost

embarrassing and we are very proud thathe was able to intervene successfully,

A long term sugar agreement has

been of primary importance to Fiji.What are the other particularly importantaspects of the convention as far as thePacific is concerned?

- As far as the Pacific is concerned, theother importantaspects of the conventionlie in the various facets of STABEX andin the various aspects of technical and

financial cooperation. Tonga and WesternSamoa are listed as most favourednations under the aid scheme. Further-more, during these negotiations we haveestablished our links not only withEurope but also with the other richcountries of this side of the world.

How do you think your relationswith Europe will develop from now on?Will there be a permanent Pacificrepresentation in Bru.c:sels?

J sincerely hope and believe that ourrelations with Europe from now on willprogress for our mutual benefit. MyPrime Minister has already announcedthat our present Mission in Brusselswould be made permanent. I myself havebeen accredited to the EEC since 1971.

Some people have already asked whywe are not aligned with ECAFE (* ). We.have considered this, and so far, we havecome across two main obstacles: Firstly,the isolation of Fiji from most of theEEC countries due to distance andinadequate shipping, and secondly, thestrict foreign exchange and importcontrol maintained in most ECAFEdeveloping countries. Britain has beenour traditional trade partner. Even thoughwe are 12 000 miles away as the crowflies, the system of trade established fornearly 100 years now made Britain partand parcel of our trading, so whenBritain joined the EEC it is only ofinterest to us to extend and develop thetrade association for our mutual benefit. II1II

) UN Economic Commission for Asia and the Far

East.

The Courier no. 31 - SPECIAL ISSUE - March 1975

An agreement unique in historyby Claude CHEYSSON

Mr Claude Cheysson, member of the Commissionof the European Communities responsible fordevelopment and cooperation and the leadingEuropean figure in the negotiations, explains the

ideas behind the new convention and outlines itsplace in the overall development policy of theCommunity.

The Lome Convention was dulysigned on February 28. It is now themoment, in this special issue of "TheCourier , to consider why it was possibleto conclude it and what is its importancefor the future of the ACP and of Europe.

The negotiations began in July, 1973.They thus took about 18 months sustainedeffort, with many meetings at all levels,the outstanding occasion being themeeting. at Kingston, Jamaica in July1974. The outcome has been that55 coul1;tries of Africa, the Caribbean, thePacific and Europe, representing a totalpopulation of 510 million, have reachedthe agreement embodied in the Lome

Convention.I have been given some amusing

figures. During the many months ofwork, there were 183 sessions of theACP and the Community; the ACPthemselves held 493 meetings amongthemselves; there were 350 joint EEC-ACP documents etc. This enormousmass of work calls for a tribute to allthose responsible for the day- by-dayeffort of the negotiation. A very remar-kable task was accomplished at theplenipotentiaries' level, both on the ACPside and on the Community side.

All this work has produced an agree-ment which, I say it with some pride,is unique in the world and in history.Never before has there been any attemptto do anything of this kind. It is the firsttime in history that an entire continent

has undertaken a collective commitment. after discussing matters with the in-dust;-ialised countries through only asingle spokesman. We should be im-pressed indeed if we were to hear thatLatin America had come to Washingtonand spoken through a single spokesman.But if we were to hear that an agreementhad been reached between the United

A UNIQUE AGREEMENT

States and the whole of Latin America,we should regard it as an historic event.In the same way, what has just happenedbetween the European Community andthe ACP is indeed an historic event, andthere are three comments I should liketo make.

To begin with, the new relations thusdefined through the Lome Conventionare founded on equality between thepartners. The importance of this capital, for there can be no cooperationwhere there is no equality.

Secondly, this is a very importantmoment in the history of developingcountries, for an entire region-severalregions as a matter of fact-havecarried out a collective negotiation onextremely complex matters. Attitudeshave often been difficult to conciliate.For example, when at the last momentthe Community agreed that iron oreshould be included among the productscovered by the stabilisation arrange-ments, the countries to benefit were

those such as Liberia and Mauritania

--+

which produce iron ore. On the otherhand, other countries have had to giveway when some point of great interestto the ACP was in the end turned down.It is in such cases as these that concilia"tion was difficult, because it was notthe same countries which did or did notreceive advantages in the package deals.So negotiating with a whole continent orwith whole regions is especially difficult.In my view, the very scope of the agree-ment makes it historic, for this is the firsttime in the history of the Third Worldthat such a thing has taken place in an

agreement on such a scale.My third point is, that never before has

there been a discussion between indus-trial and non- industrial countries em-bracing problems so we.ll defined and sovaried in character: financial aid, .accessto markets, the possibility of developinglocal production by guaranteed accessto markets, the stabilisation of receipts,

special treatment for a number ofproducts, industrial cooperation andaccess to an organised system of co-operation through meetings with execu-tives, with parliaments, with trade unionswith industrialists and others. The agree-ment covers it all; and it is just because itis an all- inclusive agreement with anentire continent-in which all politicaltendencies are represented-that I callit an agreement unique in history andunique in the world.

* *

I should like to put the new conventionin the general context of Communitydevelopment policy. This policy is be-ginning to come along very well. Oneof the facts to note about recent monthswas the decision to make a very con-siderable increase in the value of our1975 food aid, so that the quantitiessupplied may be slightly bigger. In the1 !n5 budget we have about U.A. 291million of food aid, to which unspentbalances from previous years will beadded.

Secondly, we should note the decisionon emergency action. The Communityhafil. undertaken to provide $ 500 millionfor"tbuntri\Js most affected by the crisis.Many thought this commitment fan-tastic, but it has been possible to confirmit. There will indeed be $ 500 millioncoming from the Community and itsmember countries. We have also initiated

I think this agreement hascome at a significant moment;for the great effort which Eu-rope is making does not comeat a time of great prosperity,but at a time of major difficulty.This proves how important itis to Europe, for without she might well have drawn inon herself. It is at a time whentoo many countries and toomany people, in the industrialcountries and in the ThirdWorld, are talking in terms ofconfrontation, that we havefirmly committed ourselves tothe dynamic of cooperation

the elements of a world policy, what wemight call a kind of fresco. These ele-ments will be defined in relation to thefinance programmes within the next fewweeks, so that they can be brought intoapplication after the emergency actioni.e. from 1976 on. In a few weeks, I hope,we shall have our agreements with theMaghreb countries, to mention only afew.

This is the Community s developmentpolicy. As anybody can see, it is a policyon a very large scale. It seems to me very

striking that a development policyunique in the world can emerge from

this Europe which people say is in sucha bad way, which is having so manydifficulties in making progress in somany fields, and which has even-let'sbe frank~had to go into reverse onsome of its present plans.

It seems to me this is worth thinkingabout. I think that both sides haveinstinctively recognised that the Europeof tomorrow cannot have its indepen-dence, its prosperity and its growth unlessit establishes with the countries of theThird World relations much closer andmuch more integrated than before; andthat it follows that this Europe must havean overall policy towards the Third World.

This policy is additional to what theindividual member countries are doing.But in the field of foreign policy, I think itis in matters of development thatEurope can have a policy distinct fromthat of its members, additional to it andconceived on individual lines. When itcomes to our relations with the greatpowers, it is clear there is no such thingas a Community foreign policy~in the

first instance the texts preclude this-butit is equally clear that the foreign policy ofthe Nine is the juxtaposition , with the be-ginnings of coordination, of the policiesof each of the Nine. In relation tothe ThirdWorld we can indeed have an integratedCommunity policy, which differs fromthat of member countries, more complete,bolder and less linked with the past. Thisseems to me to be a very fundamental

aspect of the construction of Europe. It isan aspect which seems to me to put theCommunity well in advance of the restof the world in this field.

In conclusion, I think this agreementhas come ata significant moment; forthe great effort which Europe is makingdoes not come at a time of great prosperi-ty, but at a time of major difficulty. Thisproves how important it is to Europe, forwithout it she might well have drawnin on herself. It is at a time when toomany countries and too many people, in

the industrial countries and in the ThirdWorld, are talking in terms of confron"

tation, that we have firmly committedourselves to the dynamic of cooperation.At the beginning of 1975, this is not

without its usefulness, and I am veryproud that this is what the ACP and theCommunity are doing. III!!

C. CHEYSSON

The Courier no. 31 - SPECIAL ISSUE - March 1975

MilestonesThis page, top left to bottom rigllt:

Signatures to the first Yaounde Con-vention;

Negotiating the Arusha agreement;Signing an EEC-ACP agreement;

If' lIssels: the EEC-ACP negotiationsfor the Lome Convention;

(above) Cameroon signs the secondYaounde Conrent ion;

(right) Jamaican Prime l\1inisterAlichael A1anley at the ACP-EEC ministe-rial meeting, Kings/on , Jamaica.

THROUGH THE CAMERA

THE NEG TIATIONSTH H THE MERAScenes from the previo.

and the latest negotiations betvveenthe E u ro pean Com munitv

and the African.. Caribbeanand Pacificcou.ntries..

The reality of the negotiations

TIlls page, left:

Messrs. Sanu, Cheysson, Babacar Ba

and Sylla;Garret FitzGerald, chairman of the

Community Council of Ministers;Hans-Broder Krohn, EEC Director

General of Development and Cooperation;

right:

Vasco Cabral of Guinea-Bissau withGarret FitzGerald;

Babacar Ba, chairman of the ACPCouncil of Ministers;

Outside the conference room in theCharlemagne building: a sleepless night.

The Courier no. 31 - SPECIAL ISSUE - March 1975

THE CONVENTION IN THE NEWS

.....

One of the European Communitygreatest achievements

The new convention between Europe and the ACP, drawn up in Brus-sels on February 1 and signed at Lome (Togo) on February 28, 1975

was widely commented on by the press in Europe and the ACP countries,and on radio and television.

What the papers said: In LA CROIX(Paris), Jacques Docquier noted that thenew convention marks the end ofan epoch far the Common Market andthe 19 African countries which hadwoven special links of cooperation withone another under the Yaounde Conven-tion . The new agreement, the La Croixcorrespondent believes, " is an up- to- dateversion of the original cooperation, whichis now extended to the developingcountries of the Commanwealth , and

there is a remarkable innavation~thestabilisation of ACP expart receipts, aswell as a laborious compromise onsugar

LE QUOTIDIEN (Paris), under the titleAn historic agreement writes thatthe guarantees are better for the 46 than

they were for the farmer A.A.S. M.

adding that the financial aid will beeven more consistent and noting with

satisfaction that an international coop"eration agreement designed to. promotethe international division of labour willround off the new convention for the

benefit of the ACP. Le Quotidien alsoemphasises the institutions of the lomeConvention.

LE MONDE (Paris) considers the mainpoints of the agreement consist of tradecooperation, ACP export earnings andfinancial aid. Philippe lemaitre notesthat in addition to the UA 3390 millionof aid, there is provision for additionalfinancial aid far averseas territaries anddepartments

LE FIGARO (Paris) puts the accent

. prirlfipally on the equality, dignity andpride which are the foundation stonesof the new Europe-AC P co operation. Itquotes an interview by its correspondent,Yann de l' Ecotais, with Mr. ClaudeCheysson, who considers that Eurapemust go an with its wark in finding its

I N THE PRESS

place in the sun with the ACP, but alsoof caurse, with the cauntries on the

sauthern shores of the Mediterranean

Algeria, Morocco, Tunisia, Egypt andSyria . All this, Mr. Cheysson adds,shauld lead us a lang way farward,

and bring us into. a real fabric af inter-dependence . On the international level,the export receipts guarantee for the ACPfor important products, such as coffee,cocoa, cotton and iron ore, constitutes

sart of right to. unemploymentbenefit We are tackling these rawmaterial problems Mr. Cheyssonsuggests, " at right angles to the ecanamicliberal appraach; and this accaunts farthe appasitian af the United States, who.

believe in the virtues of autamatic

balances reached by the play af the

market. In my apinian he adds, thisshauld lead us and aur Assaciatesto. jaint attitudes in internatianal badiesin which these prablems, the mastimportant ones of aur decade, come upfar discussion. This is a major fact

Industrial cooperation, the stabilisation ofexport receipts for the ACP, the guaran-teed market given for their sugar outputat a minimum price based on Com-munity prices, are described by Mr.Cheysson as a kind af price indexing

He continued, " the essence of the wholequestion is political. The cooperation wasformerly concerned with a limited numberof countries taken from a much largergroup,' now it includes the whale ofindependent Black Africa. It is thereforenecessarily a regional graup, clearlydistinct from the outside world, and thusacceding to a state of equality Mr.Cheysson concluded by saying:

have contributed to the dynamic afAfrican unity

LE SOIR (Brussels) also makes approv-ing comment on the new relations

between Europe and the Third Warld"

It believes that the Nine can find in theirdevelopment aid an opportunity for self"assertion; and it reproduces a furtherquotation from Mr. Cheysson, that

development is the field in which theEEC can have a fareign policy af its own,which can be mare complete and balderthan that af its individual membersLA CITE (Catholic~Brussels) notes theimportance of the effort which is to bemade in favaur af the poarest amongthe ACP countries.

The British press, with its cohort ofBrussels correspondents, devoted columnupon column of front page copy to theevent. This was not only because of theimportance of Europe-ACP cooperation,but also for reasons of British internalpolicy. The neW agreement between theNine and the ACP could have a positiveeffect in keeping Great Britain inside theCommunity, which is to be decided bythe British people itself through areferendum a few months after the

renagetiation . The DAILY MIRRORwrites, the British housewife can feeljust as pleased as Fred Peart, theAgriculture Minister, about the sugaragreement which will make it possibleto " guarantee enough sugar in the shopsthis year without further price rises The newspaper wonders whether Mr.Peart would have' been able to get theBritish market supplied without GreatBritain s membership of the Communityand replies in the negative. Certainly,the Market's co-aperatian helped. Andcertainly, the price would go. up if Sameaf the sugar did not carry a Marketsubsidy

This is much the same as the opinionof the DAIL Y TELEGRAPH, whichregards the Convention as an EECvictory for Britain . In other words, the

COMM\~S\OR

(R. to I.) Claude Cheysson, Maurice Foley (Deputy Director-General) and Philippe Soubestre (Deputy Head of Mr. Cheysson s Cabinet)..reading all about if.

British government obtained, throughthese negotiations, what it had beenseeking to obtain from the Nine. TheSUNDA Y TIMES was of the same opinion,under the headline Brussels agrees toMr. Wilson s point " Point 4satisfactory deal for the developingCommonwealth countries , is one of therequirements specified by the BritishPrime Minister for continued member-ship of the Common Market.

THE GUARDIAN refers to the sweetreasons , which led the Europeannegotiators to find a satisfactory solutionfor the sugar producers.The German newspapers were also

enthusiastic in welcoming the LomeConvention. SODDEUTSCHE ZEITUNGwrites under the headline The EuropeanCommunity and 46 developing countriesunite for economic cooperation

recapitulates the various headings in theagreement, with special mention of theEDF and the financial section, and itscorrespondent Hans-Joseph Strick notesthe new character of the prospective

relationships between the EEC and theACP which" are no longer based on theold colonial links On the other hand,DIE WEL T after giving a detailed accountof the negotiations, is particularlyconcerned about the attitude of theUS~I1. to the' agreement, basing on

remarks in roe Russian press an opinionthat the convention between theEuropean Community and the ThirdWorld leaves Moscow in an uncomfort-able position in regard to the latter.

In DIE ZEIT Von Dieter Buhl writes:

The agreement between the Nine and

the 46 ACP countries is one of thegreatest achievements of the Commissionin Brussels.

...

It is a pattern for helpingthe ACP .countries to help themselves,a reasonable approach to the problem

of reducing the gap between the northand the south, an unequal agreement

weighted this time to the advantage ofthe weaker FRANKFURTER ALL-GEMEINE ZEITUNG welcomes theimportant customs franchise offered bythe Community to the 46 developingcountries

The Italian newspapers are the onlyones which probe further into the differentphases of cooperation between Europeand the Third World. Recalling the dictumof Louis XIV that on this empire the

sun never set , Ferdinando Riccardiwonders in IL GIORNO " what oneshould say today about the new conven-tion between the Nine and the ACP

Noting with satisfaction that the English-speaking countries had moved fromattitudes of distrust towards confidencein Europe, he takes the view that thenew style of relationship between Europeand the Third World is based uponequality and respect for reciprocalinterests CORRIERE DELLA SERAmentions the leading political axis inthe world , which now exists betweenthe European Community and the 46ACP countries. It confines: " the importantplace assigned in the convention toindustrial cooperation will make fortechnological transfers and the rapideconomic development of the 46"

The Dutch economic paper NR.HANDELSBLAD, emphasises the

united front of the ACP during thenegotiations, and acclaims the newagreement, no longer based on the linksbetween former colonial powers andformer colonies. " For this reason, F.

Visser concludes, the Commonwealthcountries are not likely to change theirattitude if Great Britain should withdrawfrom the Common Market

The Lome Convention was also amatter for wide comment in the pressof the ACP countries and also on theradio, which is the main channel of newsand information. We are unable to reportthese comments on the new conventionbecause the newspapers from ACPcountries had not reached us at the timeof going to press. We hope to be able toinclude such a survey in the next numberof The Courier . An example of thepress reaction in the ACP countriescomes to us in the form of a commentaryfrom the DAIL Y TIMES of Malawi, whichconsiders the convention as a newpattern for friendship between the 55partners of the Lome Convention. On thecooperation side, the Malawi paperconsiders the industrial section willhelp the ACP countries to promote theirown industries for processing their ownraw materials . It also takes the viewthat the ACP countries, in accepting anEDF amounting to UA 3390 millionwere making concession to theEuropean Community IIIiI

LUCIEN PAGNI

The Courier no. 31 - SPECIAL ISSUE - March 1975

The signature at LomeThe EEC-ACP Convention was signed at Lome, the

capital of Togo, on February 28, 1975. More than 500political figures and journalists from Europe, Africa, theCaribbean and the Pacific were present at the officialceremonies, which naturally found an enthusiastic echo inthe Togolese press and on the radio. Under the heading

The end of the Tower of Babel " , the editorialist of themonthly " Togo- Dialogue " wrote: " Lome has seen thebirth of a new economic order... For the first time, a groupof industrial countries has granted to a third of the membersof U. O. complete exception from customs duty On theirbasic export products, and has offered a guarantee for thereceipts from these products

If this produced speeches in New York at the U. N., it didso all the more in the Togo capital. Speakers included themayor of Lome; Mr. Schridath Ramphal, Guyana s Minister

of Foreign Affairs and Industry; Fiji Prime Minister RatuSir Kamisese Mara; Dr. Garret FitzGerald, Irish ForeignMinister and chairman in office of the Council of Ministersof the European Community; Mr. Babacar Ba, SenegaleseMinister of Finance and Foreign Affairs, chairman in officeof the ACP Council of Ministers; Mr. Franc;:ois- Xavier OrtoJi,President of the Commission of the European Com"

munities; .and General Gnassingbe Eyadema. President ofthe Republic of Togo. In a speech characterised by itswarmth of feeling, the Togolese president said: " Buildingup progressively and in stages, nine-nation Europe showsus today what solidarity, political will, union and under-standing can achieve. Europe is giving the ACP countriesthe chance of thinking more clearly about their realdevelopment problems, in order to organise themselvesbetter within the new dimensions of the united ACP group "

Mr. Babacar Ba earlier emphasised the considerableprogress made in the Lome Convention by comparisonwith the Yaounde agreement. He insisted, nonetheless, onthe importance of the Yaounde Convention in shorteningthe road to Lome, and said the Yaounde signatories had byno means " taken a wrong turning " despite the claims of

so many useless theories "Mr. Franc;:ois-Xavier Ortoli gave credit, in the name of the

Commission, to all the Community and ACP negotiators,saying essentially that: "The event in which we participatetoday constitutes a major turning point in the history ofinternational economic relations during the second half ofthe 20th century ~ in fact, in history itself" . The completetext of Mr Ortoli's speech is given below.

During the signature of the convention: Mr Gnassingbe Eyadema, President of the Republic of Togo , leans over to have a wordwith the Prime Minister 0.( Mauritius, Sir Seell'OOsagur Ramgoolam , and Dr. Garret FitzGerald of Ireland, chairman in office of

the Council of the European Communities.

THE SIGNATURE AT LOME

----.-

President ORTOLI:

",

A turning point in history

::r

Frani;ois-Xavier OrtoliA decisive stage ill the history of the hI/mail community

" So the moment has come to sign theLome Convention and to put an officialend to the long and difficult negotiationswhich opened more than 20 months agobetween the governments of the African,CafW6ean ~nd Pacific countries on oneside, and the European Community onthe other.

The first thing I would like to do, asI think is clearly called for, is to pay

tribute to the efforts and the talent of thenegotiators from our different countries.

The Commission means to give them duecredit for the exceptional results that

have been obtained.Beyond the requisite optimism and

the usual expressions of satisfactionemployed in these circumstances, wereally are all .aware that the event inwhich we are taking part today constitutesa major turning point in the history ofinternational economic relations in thesecond half of the 20th century~in fact,in history itself.

The mere fact that an internationalagreement could be drawn up betweennearly 50 developing countries and thenine European countries grouped togetherin the Community represents somethingquite unique.

It seems all the rnoreremarkable in viewof the fact that the new convention hasnot been negotiated by isolated countriesbut by organized groups of States.

A whole region of developing countries-several regions-have been able

--+

The Courier no. 31 - SPECIAL ISSUE - March 1975

successfully to carry out lengthy anddifficult dealings through a singlespokesman. Despite the diversity in thesituations of the different States, thisunity was unfailingly maintained to theend, and we must recognise this realityof today, and of tomorrow, as a factor offundamental importance.

So it has be~n proved~and it is one ofthe first big lessons to be learned fromthe Lome Convention-that regionalgroups allow a more effective, better-balanced and fairer international collab-oration than can be achieved by Statesacting alone, which may be equal in lawbut often have difficulty in achievingequality in practice.

has meant cohesion and unity. By forginglinks of association with the peoples ofAfrica, the Caribbean and the Pacific,the Community as a whole is provingcapable of undertaking an overall policyof effective contribution to the develop-ment of the non- industrial countries. Forit goes without saying that the EuropeanCommunity sees the Lome Conventionnot only as an instrument of cooperationwith the ACP States, but as a funda-mental element of cooperation with all thedeveloping countries.

At a time when Europe is hard hit bythe world crisis and the basis of herprosperity and economic expansion isthreatened, such an attitude-and

comprehensive an agreement, intendedto offer an overall approach to the solu-tion of so many and such complexproblems. Let us consider what it putsat our disposal: provisions for financialid, access ,to markets, stabilisation

export receipts; for sugar, mutual com-mitments on guaranteed deliveries andguaranteed minimum prices, fixed to theprices offered to producers in the Com-munity; the organization of systematic

cooperation aimed at the industrializationof the developing countries; the estab-lishment of an institutional framework toensure regular contacts and meetings,

not only at public and government levelbut also between unions and industrial.ists. The Lome Convention, bringingtogether this armoury of means andprovisions, is, in the present field ofinternational cooperation, the mostcomprehensive and accomplished formof " attack force " on poverty andu nderdeve.lopment.

This is not to say that the convention isthe last word in the great debate onrelations between developed and devel-oping countries. But we can at least besatisfied with having created a verywide range of cooperation instruments.Some of them are tried and tested: theconvention we are going to sign is basedin part on the experience acquired fromthe previous agreements between the

Community and a certain number ofAfrican States. But some are entirelynew, taking into account the needs

raised by the international economicdevelopments of recent years as well asof the choices clearly expressed by thedeveloping countries.

Although financial aid remains neces-sary, and even fundamental, for a certainnumber of particularly poor countries,it cannot remain the only method ofdevelopment cooperation. That is whywe wanted to open the European marketto products from the ACP States and givethem access to our know-how andtechnology in a framework of intensiveindustrial cooperation.

It is also the reason why we havedesigned a mechanism for the stabilisa-tion of export receipts, establishing the

principle of compensation for States whofall victim of the problems and disorderscharacteristic of the commodity markets.It is an original mechanism of immensesignificance, in that it reflects ourconcern to find an immediate and

A moment s relaxation between the ceremonies at Lome. Left, Mr. R. Van ElslandeBelgian Minister of Foreign Affairs and Cooperation.

It is also worth emphasising that theprogress made in these conditions hasnot, all the same, given rise to closedinternational blocs. In no way have thenegotiations we are concluding today ledthe ACP countries to isolate themselves

- from other developing countries. And. furtl\er, these negotiations have broughtout, in a particularly effective way, newideas, which we can hope will progres-sively spread their advantages to all rela-tions between industrial and developingcountries.

In Europe s case also, this negotiation

SPEECH- F. X. ORTOLI

especially the financial effort it involves-demonstrates convincingly how muchthe Lome Convention resides in consciouspolitical will and a deep and lasting com-mitment by the Community.

The importance and the originality ofthe Lome Convention derive not onlyfrom the particular conditions in which ithas been negotiated but also, perhapsespecially, from its contents.

Relations between industrial anddeveloping countries have never-I sayit without emphasis, it is a plain fact-have never before been defined by so

concrete answer to a major and very realproblem.At all events, such innovations give

factual rather than merely verbalemphasis to Europe s sincere wish to

contribute to the establishment of a new

type of relationship, based on equalityand respect for the independence andindividuality of the partners. In doing so,these innovations demonstrate beyondany possible argument-and that iscertainly what matters most~that Europe

The departure from Lome airportWrapped up in a heavy-looking cardboard box, the signed convention is brought home by asmiling Leon Cools, head of the conferences service for the Council. Right, Mr. Franfois-Xavier Ortoli; behind left (with briefcase) Dr. Erich Wirsing, Director ofEDF Programmes

and Projects and publisher of" The Courier

wants to establish long-term links withthe developing countries, based oneconomic interdependence, which isbetter able than any treaty to ensureprogress and complementary develop-ment.This choice, this fundamental, con-

scious and deliberate option for soli-darity, will, I am sure, have a considerableimpact on the world. The chief problem ofour time is the redefinition of relationsbetween rich and poor countries, betweenthe producers and the consumers of rawmaterials, between industrial societiesand those that produce primary goods.

The achievement of the Lome Conven-tion proves it is possible-possiblebecause on both sides we have had thewill, the imagination and I will say thecourage-to ensure the difficult birthof.a new world order through cooperationinstead of confrontation. From this pointof view, today s agreement has the valueof serving as an example; at a time whenthe strategy of confrontation seems to bethe order of the day in too many inter-national circles, the Lome Conventiontakes another way, bringing togetherthe long-term preoccupations andobjectives common to all the peoplesof our planet into the same vision of theirfuture: that of a community not onlyof self- interest, but of civilisation.

Yet the Lome Convention countrieshave not only opted for a strategy basedon cooperation instead of confrontation,they have launched into another funda-mental debate on the future of relationsbetween developing and industrial coun-tries: the debate between the doctrinairetheoreticians and those who believein progress they can see with their owneyes. And I think they have got hold ofthis question in the right way by choosingconcrete, tangible achievements as partof an overall idea-hence, financial aidwhich will in some cases, no doubt, stillbe considered too limited, but which isin fact very considerable. Hence, also,an export receipts stabilisation mecha-nism, imperfect no doubt, but a real stepforward nonetheless.

So let the spirit of friendship and theideal of justice that have reunited us here

c..! today at Lome continue increasing IV toinspire the relations between industrial

~ and developing countries, and give the~ new convention the value of a decisive~ stage in the history of .the human;;: community " . III

The Courier no. 31 - SPECIAL ISSUE - March 1975

THE MAIN PROVISIONSOF THE CONVENTION

At midnight on January 31, 1975 the YaoundeConvention and the Arusha Agreement expired.A few hours later the European Community hadarrived at a new agreement with 46 countries Africa, the Caribbean and the Pacific, now.common-Iy known as the ACP. The signature ceremony tookplace on February 28, 1975 at lome, the capital ofTogo, and the convention is accordingly referredto as the lome Convention.

Since July, 1973, therefore, it has taken 18 monthsof negotiation, including the ministerial conferenceat Kingston, Jamaica in July, 1974, which is regardedas the decisive phase in securing this unprecedentedresult. Parties to the new convention are no lessthan 55 countries, including the 46 ACP and thenine members of the European Community. Theyare nearly half the countries of U. Q. and they covera population of nearly 510 million. They includealmost the whole of Africa south of the Sahara;much of the Caribbean archipelago; and threegroups of Pacific islands belonging to the Com-monwealth. All of them have entered into an agree-ment on original lines with the European Com-munity, primarily designed to speed up theirdevelopment.

This agreement is mainly based on:Free access without reciprocity to the European

market for goods exported from the ACP;~ A stabilisation fund to compensate the ACP inthe event of reductions in the receipts they derivefrom the export of their principal basic products;

Financial aid for the ACP, including U.A. 3000million from the European Development Fund(E. ) and U.A. 390 million from the EuropeanInvestment Bank (E. I.B.

Industrial and technological cooperation, aimedto promote a better international division of labouron lines advantageous to the ACP;

Joint institutions to supervise observance of theagre,ment .and promote discussion between thegroups of countries.

The agreement also provides that the EuropeanCommunity shall undertake to buy 1.4 million tonsof sugar from the ACP countries every year and toguarantee for it a minimum price, by reference to

MAIN PROVISIONS OF THE CONVENTION

Community prices and the various economic factorsconcerned, which shal.1 be at least equal to the priceguaranteed to European producers. This is the firsttime that industrial countries have agreed to submitthe price of a food item bought from the tropics toprice indices based on their own price changes.

The new convention is for five years, beginningafter ratification and dating from March 1, 1975.The entry into force of this .convention requires thecompletion of ratification procedures by the highcontracting parties. Transitional arrangements areprovided, dating from the expiration of the YaoundeConvention and the Arusha agreement, andinclud-ing the system defined in the Treaty of Accession inregard to the countries referred to in Protocol 22,for the relations between the countries in questionto be governed by the status quo ante during aninitial phase dating from February 1, 1975. In asecond phase, beginning July 1, 1975, there is expect-ed to be a transitional arrangement with the ACPcountries as a whole, based on the EEC-ACP Con-vention and bringing its provisions into effect inadvanc' e. This refers in particular to the tradingarrangements.

The various main chapters of thelome Conventionare as follows:Title I : Trade cooperationTitle II : Export earnings from commoditiesTitle III : Industrial cooperationTitle IV : Financial and technical cooperationTitle V : Provisions relating to establishment, ser-

vices, payments and capital movementsTitle VI : InstitutionsTitle VII: General and final provisions

In this special issue of " The Courier ", readers willfind articles on the history of the negotiations (p.3),the opinions of leading African and Europeanpersonalities on the agreement (p. 6), a press review(p. 16), a report on the signature ceremony at lome(p. 18), commentaries on the main provisions of theconvention (p. 22), a resume of the convention(p. 38), some statistics on the ACPand the Com-munity (p. 41), and finally the complete text of theconvention (cream pages). (See page 23)

Trade cooperation

Title I of the Lome Conven-tion, which deals with trade coop-eration between the EEC and theACP countries, contains only 15articles, most of which are quiteshort. This section, nevertheless,raised the toughest problemsduring the discussions and someof them were not resolved till thevery final stage of the negotiation.

It was no simple task to settle the traderelationships between a Community ofnine industrial countries and 46 develop-ing countries and bring the whole of theminto a single legal framework. Both onthe Community side and on the ACP sidethere was a great diversity of situations,traditions and attitudes among the variouspartners, and this seemed from the startto preclude uniform organisation. In theend, however, the negotiators succeededafter all in getting the better of theirdifficulties, and in giving their future traderelations a fair and positive basis, withall the flexibility needed for making surethe convention is applied withoutambiguity.

Rather than analyse everyone of theprovisions, it is proposed to concentratehere on the solutions found for theprincipal problems. These are:

the principle of non-reciprocity intrade commitments;

access for ACPgoods to Communitymarkets;

access for Community products to theACP markets;

other problems of commercial policy;trade promotion.

. The principletof npn-reciprocity

Both sides agreed on the principle ofnon-reciprocity in commercial under"takings, which is one of the main featuresof the new convention. It results in adeliberate imbalance between the obliga-

tions undertaken by the Community andthose undertaken by the ACP. Such animbalance is clearly justified by the verydifferent development levels of thepartners.

Nevertheless, though the arrangementmade was fair and justified, it could notavoid raising various problems connectedwith other international obligations of thecontracting parties.

The Community and its partners arewell aware of this, but they decided to actconcertedly, so as to avoid prejudice to

the security and permanence of theirarrangements.

2. Accessfor ACP products tothe Community market

The convention specifies that goodsoriginating from ACP countries shallhave access to the Community marketfree of customs duty and taxes of equiv-alent effect, and without being subject toquotas or other quantitative restrictions.

By this arrangement the Communityis assuring the ACP countries that theywill be treated in the same way as theEEC member countries treat one another.

There is, however, one area of excep-tion to the rule of free and unlimitedaccess. This is concerned with Europeanimports of certain agricultural producecoming directly or indirectly under thejoint agriculture policy. The Communityhas undertaken to import such products

from the ACP countries on more favour-able terms than are applicable to imports

from other countries.Any assessment of the Community

offer needs the support of a few figures.In 1973 the imports into the Com-

munity of goods originating from theACP countries were valued at about$ 7 600 million. Of these, only about$1 000 million, or 13.4 % of the total,consisted of goods coming under thejoint agriculture policy (including sugar).In its implementation arrangements,

indeed, the Community has gone a greatdeal further. Its offer amounts to allowingfree access to the Community market for71.9 % of the imports of the agriculturalproducts under consideration. For sugarwhich accounts for 22.3 % of the importsin question, special arrangements wereagreed (see below). For the remaining

8 % the Community will in fact applymore favourable terms than are grantedto outside countries. Setting thes~percentages against the total value ofimports originating from the ACP coun"tries, we see that 99.2 % of these importsare covered by the free access rule, andthe small residue is admitted on pref-erential terms.

The figures show the outstandinglyfavourable character of the Communityoffer, which certainly goes far beyondany it has yet made to an outside country,despite various internal pressures regard-ing specific agricultural items.

Another factor affecting ACP accessto Community markets was the questionof the rules of origin. These rules areintended to enable the customs admin-istration in the Community to identifyexactly which products it can regartlas having originated in the ACP countrie$and eligible as such for free access.

These rules led to laborious negotia-tions, but the solution finally reachedsatisfied both sides. The Communitywas anxious to keep as much uniformityas possible in the rules of origin it appliesto goods from outside sources; and theACP countries were anxious that variousspecial situations should be allowed for.The Community made two major con"cessions. In the first place it agreed toconsider the ACP countries as a singlecustoms area, which has the optimumeffect in regard to successive processingsor partial manufactures in different ACPcountries. Secondly, it is prepared to

consider requests for temporary deroga-tions required for purposes of industrialdevelopment in the countries concerned.

In return the ACP countries haveaccepted lists of exceptions put forwardby the Community.

The Courier no. 31 - SPECIAL ISSUE - March 1975

3. Accessfor Community goods toACP markets

The convention provides that the ACPcountries, having regard to their currentdevelopment needs, will not be requiredduring the period of the convention to

give undertakings in regard to imported

goods of Community origin correspond-ing to those given by the Community inrespect of ACP goods. This formally giveseffect to the principle of non"reciprocitymentioned above.

The ACP countries, on the other hand,have undertaken that in their trade withthe Community they will not discriminateagainst any member country to theadvantage of other member countries,and they will grant the Communitytreatment no less favourable than thatgranted to the most- favoured-nation.This means that the ACP countries willhave the greatest possible freedom andthe least possible restriction in choosingthe instruments of their own tradingpolicies with the Community and withother countries , provided only that thesepolicies are not discriminatory. Finally,the Community has agreed that the ACPcountries shall not be required to applythe most-favoured-nation clause byreference to their trade with one anotheror with other developing countries.

4. Other commercial policyproblems

In addition to the rules governing theaccess of goods to different markets, thenegotiators were anxious to provide forpossible changes in the commercialpolicies of individual partners. For thispurpose they set up a mutual informationand consultation procedure, which willenable those concerned to discuss any

matter which may affect their tradecooperation. The contracting parties arethus equipped with an institutionalframework, in which they can state theircase or express their concern and set inmotion discussions as far-reaching asmay be necessary, whether on tariff ornon- t\Jriff measures, or more generallyon safeguarding any internationalinterest they may have in common.

The same concerted approach is to befound in the provisions regarding anyapplication of safeguard measures. In

STABILISATIO N OF EXPORT RECEIPTS

these cases the Community is to seeksolutions which, by their nature andduration , will cause the least possibledisturbance to the normal channels trade.

5. Trade promotion

The commercial cooperation title islogically rounded off by provisionsregarding trade promotion campaignsunder Community sponsorship. Thenegotiators here reproduce the provisionsin the Yaounde Convention, but givethem greater precision. They put specialemphasis on improving the cooperationbetween those concerned in the Com-munity andin the ACP countries, and forthis purpose they look to the formation

of liaison bodies suitable for promotingthis cooperation. An effort has certainlygot to be made to see that contacts arecurrent and closer and that there is betterw_-

-,-understanding between the importersand the exporters. Experiments in thisfield during the last few years, thoughstill limited in scope, have neverthelessbeen of sufficient interest to demonstratethe need for extending them.

* *

This brief review of the provisions in

the convention covering cooperation inthe trade field makes it clear that each ofthe ACP countries will have advantagesoutside the field of its traditional trade.Each will now be trading in a new marketof 250 million people; and within thismarket it will be able to offer its goodson appreciably better terms than thosewhich apply to its competitors. It is nowfor these countries to make the most ofthe opportunity, and in the practicaltask of promoting their export, the Com-munity resolved to help them. II1II

"",

"'!m!?i . " J l Jill"

Stabilisationof export recei pts

The benefits of a price riseseldom seem to offset the dis-advantages of a fall in prices onthe same scale.

Effect of unstableexport receipts

There are various forms of disturbancecaused by fluctuations in export receipts.

1. Investment planning is thrown out ofgear. For many developing countries,rigid economic structures do not permittaking full advantage of an unexpectedincrease in export receipts; and when theyshrink suddenly, current investment pro-jects may have to be abandoned suspended without it being immediatelypossible to substitute alternative projects

based on a smaller import content.For developing countries depending

on basic products for which markets arevery unstable, the tendency is thereforefor a sudden rise in export receipts to

lead to increased imports of consumergoods, while a fall usually results in thecountry getting into debt.

2. The internal balance of public financesis apt to be upset. When prices arerising, governments will often increasethe public consumption expenditure; andwhen the price trend goes into reversethey find this expenditure difficult tocut back. The loss of fiscal receipts thushas to be offset either by higher ratesof taxation on the incomes of the pro-ducers or by recourse to internal borrow-ing with the implied danger of inflation.In either case, the decline in the realincome of the producers may lead totheir abandoning export production whichmay cause or accentuate a fall in exportreceipts.

3. There is a deterioration in the balanceof payments. If prices fall , the effect maybe made worse by anticipatory movementssuch as a flight of capital, payments inadvance for imports, exceptional delaysin bringing home export proceeds, etc.

----+

An export receipts stabilisation policyshould not only affect the general econ-omic structure of the exporting countrybut also mitigate the difficulties ofproducers and the government so as toavoid structural imbalances being madeworse by unexpected fluctuations.

It is essential that measures designedfor stabilisation should avoid the ill-effects inherent in all systems whichhave the effect of insulating producersand exporters from market forces.

Both the economic aspect and anumber of political pressures dictate thatthe system chosen should:

avoid interfering with the free play

of the markets;

avoid creating obstacles to inter-national trade;

be compatible with world agreements,if any, and not obstruct the making ofnew ones.

This analysis led to the Commissionproposal on April 4, 1973 of a systemof export receipts stabilisation as thebest way of implementing the third partof Protocal 22 to the Act of Accession (1).

This proposal was the subject of longand laboured negotiations. It had cometo be called the " Oeniau Plan " after themember of the EEC Commission thenresponsible for development and co-operation.

It would be interesting to trace theups and downs of ideas and opinionsover the 22 months between the originalproposal and the final text agreed in thenegotiations. At the outset its receptionwas anything but enthusiastic, whetheramong the industrial countries (includingat times even the Community itself) oramong non-associated developing coun-tries; and in its final form, it may notfulfil all the hopes put upon it by theACP. This, however, would be a longanalysis, which space does not permit.The reader is accordingly asked to be

l1) The third part of Protocol 22 declares that:t~C~mrnun,ity will make it its business to safeguard

the Interests at all the countries (A. M. and Com"

monwealth countries in Africa, the Indian and PacificOceans and the Caribbean) the economy of whichdepends to a large extent on the export of basic prod-ucts, especially sugar. The case of sugar shall be dealtwith in this light and bearing in mind the importance ofsugar exports to a number of these countries, moreespecially Commonwealth countries

content with the following comments onSTAB EX" the code name given to the

system, as defined under the Convention.

The stabiUsation system inthe Convention

The aim of Stabex is defined as "provide a remedy for the adverse effectsof unstable export receipts and thushelp the ACP countries to secureeconomic stability, profitability and steadygrowth" . The aspects dealt with herewill be successively the products covered,the machinery, the financial provisionsand the other aspects of the system.

The products covered

1. In compiling a list of products, twoclasses of criteria were taken intoconsideration:

those agreed at Kingston, namely,

the importance of the product toemployment in the exporting country,

deterioration in the terms of tradebetween the Community and the ACPcountry concerned, and the differentlevels of development in the individualACP countries;

the fact that receipts derived fromany product are by tradition unstableowing to fluctuations in prices and/orquantities, and the dependence uponthese products of the economies of theACP countries (2).

The latter criterion is expressed byfixing a "dependence threshold" . Innormal conditions the export receiptstrom the product in question must in thepreceding year have been at least 7.5 %

of the total value of exports of goods.For sisal the proportion is reduced to5 %; and for the less developed insular orland- locked ACP, it is reduced to 2.5 %.

The principle underlying the dependencethreshold calls for two remarks:

the fact that these thresholds arerecalculated each year is one of thefactors giving the system its dynamiccharacter, keeping it close to economicreality. The annual calculation of the

(2) See appendix for statistical outlines on thisquestion (pages 41 to 44).

thresholds is a "photograph" of theposition of the product concerned in thegeneral economic development of eachcountry;

the fixing of a lower threshold for theless developed land-locked or insularACP countries denotes the desire of thenegotiators to give these countriesspecial treatment.

Some of the criteria mentioned aboveare applicable as long as the system is inoperation. If, a year or more after theconvention has come into force, itappears that one or more products not

yet included are liable to grow consider-ably in importance for one or more of theACP countries and to be subject to bigfluctuations, the Council of Ministers 1sempowered to decide that these productsshould be included forthwith amongthose covered by the scheme.

2. The application of the criteria aboveled to the compilation of a list coveringseveral groups of products:

a number of basic tropical products,more or less corresponding to the 7products originally proposed by theCommission. These are: groundnuts,cocoa, coffee, cotton , coconut products,bananas;

~ a number of products in various wayssimilar to those in the first group:leather and hides, timber, tea, raw sisal,palm products;

~certain initially- processed productsobtained from basic products: groundnutoil and cattle cake, cocoa-butter andpaste, coffee extracts and essences andvarious similar products.

iron ore. The Community agreed tothe inclusion of this product only for the

sake of securing a general agreement andremains firmly opposed to mineral prod-ucts being included under the system.

There are two ways of looking at thelist. Taking the products by family, thenumber is 12. Counting the number ofmembers in the different families~whichis what really has to be done, since the

insurance " is for each individual item~the number is 29.

The Courier no. 31 - SPECIAL ISSUE - March 1975

3. The system applies to productsoriginating from ACP countries andexported by them to the Community-i.e.which are consumed inside the Com"munity or processed or further manu-factured there.

In a number of special cases the systemcovers all the exports wha~ever theirdestination. At the time of signature, thisderogation covered the exports fromBurundi, Ethiopia, Guinea-Bissau,Rwanda and Swaziland. There is provi-sion for this list of countries to berevised if necessary.

The machinery

1. At the centre of the machinery the use of export statistics from theACP countries and import statistics intothe Community. For various reasonsthese statistics may not exactly tally,maybe because of the time lag betweendeparture from the exporting countryand clearance through the Communitycustoms , or because cargoes are divertedfrom their original destination. There willtherefore have to be cross-checking toarrive at definite figures. The values tobe considered are fob. Normally fobvalues are those used tor export statistics;but import statistics are shown cif. andthere will therefore have to be a furthercross-check or a suitable fob/cif coeffi-cient applied.

To facilitate the cross-checks andgenerally get the system working fastand well, there will be statistical andcustoms cooperation between the Com-mission and the ACP countries. Bothparties will take any practical measureneeded to facilitate the exchange ofinformation and the submission ofrequests for transfers.

2. The statistics will serve in the firstplace for calculating a reference levellor ,ach ACP country and for eachproduct. This reference level is themoving average for the tour yearspreceding the year of each application, ofeach ACP country s receipts from ex-ports to the Community of the productconcerned. Thus, the reference level tor

STABILISATION OF EXPORT RECEIPTS

1975 will be calculated from the resultsof the trade in 1971- 74; and for 1976 thebasis will be the results of 1972-75 andso on.

3. Secondly, the statistics make itpossible to determine the actual results inthe year of application. The first conditionfor an application under the systemis that the actual receipts in the given yearshould be below the reference level.This is a necessary but not a sufficientcondition. The other is, that the differenceshall go beyond another thresholdknown as the "trigger" or "fluctuationthreshold" . The normal gap is 7.5 %; butfor the less developed land- locked orinsular countries it is 2.5 %.

4. Once it is established that thefluctuation threshold has been passedand the scheme triggered into operationthe difference between the level ofreterence and the actual receipts becomesthe basis for the transfer.

Each ACP country is required to applyto the Commission for the transfer. TheCommission is to examine the applicationand draft a transfer decision in consul-tation with the applicant State.

If, however, the examination showsthat the fall in receipts from exports tothe Community is the consequence ofmeasures of commercial policy which arerestrictive or discriminatory against theCommunity, the application cannot beconsidered.

Apart from price and productionfluctuations and the possible influence ofa restrictive commercial policy, there aremany other reasons which may lead toa fall in export receipts. Even if totalexports are unchanged in quantity, theproportion going to different destinationsmay vary; exports of raw products mayfall because local processing or localconsumption has increased; the receiptsmay also fall as the result of a naturalcalamity or the fall may be an outcome ofa decline in demand.

This is far from being an exhaustivelist, and in some conditions there mightbe a risk of the system coming intoapplication when economic conditionsdid not justify it. This risk is to be dealt

with by the Commission ascertainingwhether the total growth in exports fromthe ACP applicant shows any importantchanges. If so, there are to be consul-tations between the Commission andthe country concerned to determinewhether and how far the amount of thetransfer should be affected.

5. When the application has beenexamined on these lines, any necessaryconsultations have taken place and thetransfer decision drafted in consultationwith the applicant government, the nextstage is for the Commission to make thedecision itself and it is then given formand substance in a "transfer conventionbetween the Commission and the appli-cant State.

6. As will appear from the foregoing, it isimportant that there should be arrange-ments for payments on account. This islargely because these transfers can onlyhave a stabilising effect if they are mademore or less at the same time as the fallin receipts is being felt. If there were toolong an interval the eventual paymentsmight not stabilise receipts, but ratherthe reverse.

This need is foreseen in the conventionand there is specific reference to "ad-vances at intervals of about 6 monthsThis is not difficult to implement sincethe annual export picture does not vary

greatly and the month-by-month swingscan be allowed for by a seasonal coeffi-cient.

A factor which does change, howeveris the quantity of the exports each month.The amount of the advances will there"fore be determined by the use of seasonalcoefficients and the variations in thequantities exported.

These are all comparatively easy tasks,calling for well-established statisticaltechniques; but the amount of workinvolved is quite considerable. The effort,however, will not be in vain, nor is itdictated by an over-perfectionist spirit.It is part of the logic of the system.

Financial arrangements

1. The stabilisation system has at itsdisposal a fund of not more than U.A. 375

----+

million for the five-year period of theconvention. It is divided into five annualinstalments of UA 75 million (1).The .surplus remaining at the end of eachyear is automatically carried forward tothe next. If the transfers to be madein any year should exceed the amount ofthe annual instalment, the Council ofMinisters may authorise (except ofcourse in the final year) an advancedrawing on up to 20 % of the next yearinstalment.

The above is a summary of the pro-visions in the convention. In practicethey mean:

that everything has been done to seethat the system can play its part through-out the life of the convention, so thatthere is no justification for the fearssometimes expressed that it will haverun out of funds in a very short time;

that as from the second year, assumingthe first instalment has not been whollydistributed, the resources available willbe as follows:

'" the surpluses carried forward frompreceding years;

'" the annual instalment of U.A. 75million;

'" up to U.A. 15 million which can bedrawn if needed from the followingyear's instalment;

'" resources put at the disposal of the

fund under the principle by which theACP countries will, under certain con-ditions, contribute to the reconstitution

of the fund.

In the worst event~if no money hasbeen brought forward, if no contributionhas been made to reconstitute thefund and if it has already been necessaryto draw 20 % from the following year'sinstalment-the amount available mightbe no more than U.A. SO million for thefirst year, U.A. 75 million for the second,

,t" i" .

(1) If this is regarded as an insurance premium andset again~ the "risk" to be covered, (Le. the annual totalshown in the second part of the appendix) it will beseen to be approximately 4 %.

third and fourth years and U.A. 60 millionfor the final year. Though present econ-omic conditions are far from brilliantthere is little real fear that things will beas bad as this.

Nevertheless the negotiators insistedon preparing tor the worst, and had astipulation put in the convention thatthe Council of Ministers may reduce theamount of the transfers to be made underthe systems on the basis of a report madeto them by the Commission.

If, at the end of the five years, therestill exists a surplus, it will be for theCouncil of Ministers to decide what shallbe done with it.

2. The States which have receivedtransfers (which, it should be noted, areinterest-free) are to contribute to thereconstitution of the fund if the Com-

mission notes for any year and for anyproduct that the unit value of exports (2)exceeds the unit value of reference, andthe quantity actually exported to theCommunity is at least equal to the quan-tity of reference. In this case the bene-ficiary country is required to pay backto the fund an amount equal to the

quantity of reference multiplied by the

difference between the unit value ofreference and the actual unit value, butnot exceeding the amount of the transfersit has received.

To take an example, let us suppose thevalue of reference is 10000, obtained bymultiplying a unit value of reference of

100 by a quantity of reference of 100. Itwill be supposed that the country inquestion received during the previousyear a transfer of 1 000.

Case 1: The actual unit value is 120 andthe actual quantity is 80, so that the

actual receipts are 9 600. Though theunit values have risen, the country notonly does not need to pay anything backto the fund but is in a position to askfor a transfer.

(2) The level of reference is the product of thequantity of reference and the unit value of reference. Thesame applies to the actual receipts. Decisions ontransfers depend on the level of reference and the actualreceipts; but for the implementation of the provisions

for reconstituting the fund each factor has to be takenseparately.

Case 2: The unit value is 105, the actualquantity 100. In this case the actualreceipts amount to 10 500 and thecountry pays back 500.

Case 3: The unit value is 120, theactual quantities 100. In this case theactual receipts .amount to 12000; butsince the country concerned only receiveda transfer of 1 000, this is the limit ofwhat it is required to repay.

Case 4: The unit value is 100, the actualquantity 110. The effective receipts aretherefore 11 000; but the country inquestion is not required to repay anythingbecause the actual unit value does notexceed the reference unit value.

3. If after the five year period mentionedin paragraph 2, the fund has not beenwholly reconstituted, the Council ofMinisters may decide on the immediatereconstitution~in whole or in part andimmediately or over a period-of theoutstanding amounts to be recovered, orto abandon the credit altogether. Inreaching this decision, it is required toconsider the position and prospects of

the balance of payments of the ACPcountries concerned, their foreign ex"change reserves and their external debt.

4. Countries which are regarded asbeing the least developed, as defined inthe chapter on financial and technicalcooperation, are exempted from havingto make any contribution to the recon-stitution of the fund.

Other aspects of the system

1. It will be noted that countriesreceiving transfers will be free to decidefor themselves how the funds shall beapplied. They will, nevertheless, berequired to inform the Commission eachyear of the uses which have been madeof the funds transferred.

2. The period of application of thissystem will be the same as that laid downfor financial and technical cooperation.

The Courier no. 31 - SPECIAL ISSUE - March 1975

3. It will be noted that the stabilisationsystem has two lists of less developedcountries. These are "the less developedcountries which are land- locked orinsular , which have the advantage of

special thresholds of dependence and

fluctuation; and the. "less developedcountries " for purposes of the arrange-ments for financial and technical co-operation. The latter are the only oneswhich are not required to contribute tothe reconstitution of the fund.

4. It will be recalled that under Article118 of the Treaty of Accession, themeasures taken under Protocol 22 areextended also to the overseas countriesand territories. This means that thesecountries and territories may also havethe benefit of the stabilisation machineryin virtue of a decision to be made bythe Community Council of Ministers.This will be in close conformity with

chapter I of part 2, but will take into

consideration any special features result-ing from the status of the countries andterritories concerned.

* *

In setting up a system of exportreceipts stabilisation, the conventionbrings a major innovation into inter-national economic relations. Apart fromthe 1M F system of compensatory finance-which is very substantially differentfrom the newly-negotiated EEC-ACPsystem, both in its methods and in itsresults-this is the first time that industrialcountries and developing countries whichexport basic products have agreed insetting up a system designed to shelterthe developing countries from the fluc-tuations to which they are normallyexposed through market influences andthe hasards of production, and thusto guarantee them a definite level ofexport receipts.

The political significance of this in-novation cannot be overestimated. It is

.the f~rst practical response, incompletethough it be, to a number of anxietieswhich have for decades past obstructedthe development of smooth and well-balanced relations between those whoproduce raw materials and those who usethem.

STABILISATION OF EXPORT RECEIPTS

Summary statement of principal exports which may be covered by STAB EX1. Proportion of ST ABEX products in total exportsBotswana leather and hides (9 %)Burundi coffee (86 %), cotton (3 %), leather and hides (6 Cameroon cocoa (23%), coffee (26%), timber (12%)Central African Republic coffee (23 %), timber (21 %), cotton (18 %)Chad cotton (69 %)

Congo Peoples' Republic timber (42 %)Dahomey palm products (34 %)Ethiopia coffee (38 %), leather and hides (13 %)Fiji coconut oil (5 Gabon timber (32 %).Gambia ground nuts, including oil and cattle-cake (94 %)Ghana cocoa (61 %), timber (19%)Ivory Coast cocoa (15%), coffee (23%), timber (29%)Jamaica bananas (4%)Kenya coffee (22 %), tea (11 %)Liberia iron ore (71 %)Madagascar coffee (30 %), sisal (3 %)Malawi tea (17 %), groundnuts (7 %)Mali cotton (39 %), ground nuts (7 %)Mauritania iron ore (73 %)Niger groundnuts (15 %), groundnut oil (9 Rwanda coffee (61 %), raw hides (4%)Senegal groundnuts and groundnut oil (35 Sierre Leone iron ore (10 %), palm kernel oil (5 %)Somalia bananas (26%), copra (45%)Sudan cotton (56 %), groundnuts (9 %)Swaziland cotton (3 %)Tanzania coffee (19 %), cotton (13 %), sisal (9 Togo cocoa beans (26%), coffee (13%)Tonga copra (50 %)Uganda coffee (66 %), cotton (15 %), tea (5 %)

Upper Volta groundnuts and groundnut oil (8 %), cotton (22 %)Western Samoa cocoa (28 %)Sources: International Financial Statistics, Nov., 1974 and national statistics.

2. Imports to the EEC(EUR 9) from ACP countries (1973)1.000

1 02 1 6983085

28841839 18912 391

350 271

126 855763

671627 0272068532 02920 512

44011173 92056 72127 926

275 890

Groundnuts (husked)Groundnut oilCocoa beans

Cocoa butterCocoa pasteGreen coffeeRaw cottonCopraCoconut oilPalm oilPalm kernel oilPalm nuts and kernelsOx and cow hidesTropical timber (round)Tropical timber (sawn)Fresh bananasSisalIron ore

Total 1 984678

Special arrangementsfor sugar

Protocol 17 annexed to the Act on theterms of accession to the Communitiesand the adaptations to treaties specifiedthat the United Kingdom should, subjectto certain conditions, be authorised to

import up to February 28, 1975, quantitiesof sugar from exporting countries andterritories included in the CommonwealthSugar Agreement corresponding to thequotas therein specified and at theagreed prices. Protocol 22 under itsheading III stated that the Communitywould make it its business to safeguardthe interests of the countries concerned,the economies of which depend to alarge extent on the export of basicproducts, especially sugar.

The arrangements laid down in thisframework regarding the export of sugarwere to take into account its importanceto the economy of several Commonwealthand other countries.

The special arrangements implementingthese intentions now figure underchapter 2, heading II of the Lome

Convention. They are the result of longnegotiations between the ACP countriesand the EEC, and the arrangements for

th.

!p,

application of this article are laid down-'8 prototol annexed to the convention

and accompanied by declarations relatingto them.

The agreement provides for the ACPexporting countries to supply, and theCommunity to purchase and import,

The Lome Convention document.

certain specified quantities of sugar withthe guarantee of a minimum price. Theseundertakings are given for an indefiniteperiod, but there is a legal possibility ofwithdrawal after five years and subject tonotice of two years.

The price to be guaranteed, expressedin EEC units of account cif Europeanport for unbagged sugar of standardquality, is to be negotiated each yearinside the range of prices operative inthe Community. This guarantee concernssugar which it was not possible tomarket on satisfactory terms at pricesfreely negotiated between seller andbuyer.

The guaranteed price for the next18 months is fixed at U.A. 255.30 permetric ton, corresponding on February 1,1975 to a British price of ( 151.15 perlong ton; but in practice an agreementhas been reached between the ACPcountries and Great Britain on a priceof ( 260 per long ton. For the next six

months the total quantity agreed 310000 long tons white sugar equiv-alent; and for each 12-month periodfrom July 1 to June 30 following, thetotal of the Same quantities will bearound 1 200000 metric tons for sugarshipped in 1975, and could not in any

case exceed 1 400 000 metric tons.

As an instrument of raw materialspolicy, it is satisfactory to note that thisagreement breaks new ground and sets aremarkable precedent from several stand-points:

institutionally it sets up a special linkbetween a group of various developing

countries and the European EconomicCommunity, in token of which the textwhich settles the joint organisation of themarket for the product in question willinclude a special section V relating to theimports concerned. Moreover, theduration of the commitments and under-takings is indefinite and is not linkedwith the duration of the convention,though they are an integral part of it.

as an instrument of price policy itvirtually links a price with a general priceindex, since the guarantee given is fixedinside a range of Community cropprices, which are subject to Commissionproposals at an annual price review madein the light of conditions prevailing atthe time. Moreover, the Commission isto consult the exporting countries of the

ACP before putting forward to theCouncil its proposals for the Communityprices.

as an instrument of commercialpolicy it provides a quantity guaranteeof particular value for the regulardevelopment of the exporting ACPcountries and a guarantee of delivery tothe Community without impairing freetrade in its own markets.

as an instrument of internationalrelations, it is an instance of a balancedreciprocal undertaking, embodying theaspirations of partners who are aware ofthe importance of the issues at stake

and see in this agreement the fulfilment,in a specific sector, of their hope ofsecuring an economic order with a higherdegree of justice and stability. II1II

Th~ Courier no. 31 ~ SPECIAL ISSUE ~ March 1975

Industrial cooperation

The importance attached to theidea of industrial cooperation isone of the most striking featuresof the Lome Convention. It hasnow become an entirely separateaspect of cooperation, and it isdealt with as a separate heading(Title III) in the convention.

Many things are changing in inter-national economic relationships, and oneeffect is that developing countries arepreparing to playa bigger part in industrialproduction and the trade in manufacturedgoods. The place which industrialcooperation now occupies in EEC-ACPcooperation is a reflexion of this. It is

fundamental aspect of the " newpattern of relations between developedand developing countries " which the

contracting parties to the Lome Conven-tion have, as they state in the preamble,resolved to promote.

All the ACP countries look forward tosome form and some extent of industrial-isation; for some of them it is essentiallyfor this, and as a matter of priority, thatthey look for Community support. Theseare primarily the countries which, owingto the rise in the relative values of someof their .raw materials, will in future havefinancial resources of their own on a farfrom negligible scale, so that financialcooperation in the old pattern is muchless important to them than before.

Quite early in the negotiation it cameto the surface that the Communitypartners attached great importance toindustrial cooperation being made anessential element of this " economic

TRADE COOPERATION

cooperation, changing existing structuresand promoting a real partnership " whichthey hoped to see founded by theconvention. Though they found the Com~munity sattitude was responsive to theirrequest, it was not until the ministerialconference at Kingston (July, 1974) thatthe first definite steps were taken. TheACP ministers tabled a " memorandumon industrial cooperation " and secured

Community agreement that this aspectof cooperation should have .a separatechapter in the future agreement. The

general approach of their memorandumwas accepted and it was on this basisthat the negotiations continued.

The ACP memorandum thus playec'. akey role in the negotiation of tileindustrial section of the convention.

The industrial cooperation section isnot really on the same basis as the otherparts of the convention, and this raisesvarious problems. The other sectionsadopt an " instrumental" approach~development and cooperation, usingcommercial and financial instruments,coupled with technical assistance, train-ing schemes and similar instruments.Industrial cooperation looks to thedevelopment of a whole sector in theeconomy of ACP countries. It wasaccordingly necessary, even though itmeant repeating provisions which figureelsewhere in the convention, thatindustrial cooperation .should call upona whole range of instruments of coopera-tion, defined in various parts of theconvention, adapted to these specialpurposes and mostly figuring under theheading " financial and technicalcooperation

" .

Naturally the industrial cooperation

provisions are not limited to a re-hash ofinstruments and arrangements laid downelsewhere and served up afresh for theneeds of a specific sector (though sucha re-hash would in itself add somedynamism). They go in fact beyond this,developing a number of new themes suchas information and industrial promotion,which is quite a new subject, and thetransfer and adaption of technology.Moreover, Title III provides for the

formation of an industrial cooperationcommittee and an industrial developmentcentre, and thus gives industrial coopera-tion an institutional background.

* *

Title III of the convention beginswith an introductory article defining theaims of the contracting parties in thisaspect of cooperation. It proceeds tosketch out the various fields and forms ofthis cooperation and the provisions whichfollow cover all the forms which normallycome to mind. These include the develop"ment of infrastructures connected withindustrialisation (transport, energy,research, training schemes etc.); contri-butions to the setting-up of manufactur-ing industries and especially the proces"sing of local raw materials; industrialtraining schemes in Europe and the ACPcountries; definite measures for providingaccess to technology and their adapta-tion to local needs; a special effort onbehalf of small and medium-size firms;industrial information, promotion andstudy schemes; accompanying tradepromotion measures.

Everyone of these themes deserves aseparate commentary, but the readerwould probably do better to turn to thetext of the convention, which is quite

explicit and more so in relation to thenew themes. The provisions, of course,tell us nothing about the great efforts ofnegotiation, explanation and compromisewhich were required before these resultscould be reached. There was forexample, a wide gap between the ACPrequest for free access to European

technology and the drafting of

operative article in the convention, whichcombined compatibility with theindustrial property system in EEC coun-tries with the provision of real help forthe ACP partners to make the choice oftechnology and the connected problems

easier to tackle, facilitate contacts withthose who possess technological know-how and the acquisition on favourableterms of patent rights and other forms ofindustrial property.

* *

The convention does not specify anysum of money for financing the indus-trialisation campaigns. On the otherhand, a number of the techniques andmethods of finance provided for under

financial and technical cooperationand its corresponding protocol, includingsome of the newly introduced techniques,are well adapted for intervention in thissector.

For example, the financing of pro-

ductive investment projects in theindustrial sector will be made, as amatter of priority, by loans from theEuropean Investment Bank (usually witha rebate of the standard rate of interest)or by risk capital including the new formsof quasi-capital financed from theEuropean Development Fund. Another

example is concerned with the specificarrangements provided for small and

medium-size firms. In future the Com"munity will be willing to finance projectsfor the benefit of firms in this class,usually through finance intermediariesin ACP countries for which it will beopening a line of credit.

In so far as the implementation of theiR./;.tu?trial cooperation heading calls forCemmuni\y finance, it follows the rulesand procedures laid down for financialand technical cooperation. In practicethis means that the amount which hasto be definitely spent on industrialdevelopment will mainly depend on the

priority given to this aspect by the differ"ent ACP countries themselves.

* *

In practice the industrial cooperationchapter is most remarkable for the pro"motion, or " animation ", arrangementswhich are its special feature. The conven-tion has run ahead of the provisionsenabling the Council of Ministers to setup groups and committees on specialsubjects. It has itself set up an IndustrialCooperation Cornmittee, the task which will be to follow the implementa-tion of chapter III, note the problemsarising, suggest solutions and report tothe Committee of Ambassadors. The

Industrial Cooperation Committee willbe in a position to impart a decisive drive

to the underlying policy.

Another of its tasks will be to guideand supervise the Industrial Develop-ment Centre, a new and strictly opera"tional instrument which will be managedjointly by the ACP countries and theCommunity. Its job will be concernedmainly with industrial information,contact-making and other functions con-nected with industrial promotion. It isprincipally through the centre that it ishoped to arouse the interest of businesscircles in Community countries inindustrial cooperation with the ACP, andto persuade them to take positive action.

This centre is a unique experiment. Thepartners to the negotiation have of coursetaken a certain risk in launching out intothis adventure. If it should succeed it willbe valuable as an example, even if onlyas a new pattern for joint management.

The convention has set up a frameworkfor industrial cooperation which opensthe way to new and interesting develop-ments. Much will depend on the way thepartners succeed in attracting businessfirms and securing their cooperation,for in the last resort it is they who carryout the industrial projects, transfer thetechnological and management know-how and look after the marketing of theproducts. Hence arises the importance ofcreating an atmosphere conducive toparticipation by European professionalsin industrial cooperation with thepartner countri.es.

There were various difficulties duringthe negotiations in the drafting of ageneral clause which would ensuresuitable reception and working conditionsfor Community businessmen. Some ofthe ACP countries apparently saw in thissigns of interference with their sovereignright to determine their own developmentpolicies. In actual fact the Communityhad made it clear from the start that itintended to leave a completely free handto the wishes of the ACP; and that it waswell aware that in industrial matters, morethan in other fields, it was a question ofhelping the ACP countries to fulfil theirown choices, and not of persuading themto accept European patterns as such.

Once this had been said, the Com"

munity drew the attention of its partnerswho might desire the help of Europeanbusinessmen to the desirability of creatinga good atmosphere for this participation,provided of course that it must always bein strict conformity to the developmentpriorities of the host country.

The negotiators finally agreed on anarticle which, though it somewhatwatered down the original concept,provides that the ACP countries shall

take the necessary measures to promoteeffective cooperation with businessmenfrom the EEC countries who respect thedevelopment plans and priorities of thehost countries. In practice it is obviousthat initial advantages provided forforeign firms by the host countries, evenif substantial, are not the most importantfactor. The attitude of the Europeans is

much more likely to be determined byconsiderations of stability and security.

Under the same article, the Communityis to take steps to persuade firms toparticipate in the industrial developmentof the ACP countries.

* *

Probably no other agreement goes sofar as the Lome Convention in dealingwith industrial cooperation with suchcompleteness, in such detail and in sooperational a manner. A word of caution,however, is not out of place. None of theprovisions in question operates auto-

matically. The way in which the frame-work is filled in must therefore dependprincipally on the political goodwill,imagination and perseverance of thosenow responsible for industrial coopera-tion. It is a formidable challenge, but itis not unattainable. II1II

The Courier no. 31 ~ SPECIAL ISSUE ~ March 1975

Financial and technical cooperationAt the end of long and sometimes difficult negotia-

tions, an agreement, variously described as historic,unique and revolutionary, has at last emerged

These epithets apply not only to thenature of the agreement and the mannerof its fashioning, but also to its content.It is a new convention marked byfundamental additions and occasionallyradical changes in the idea of aid as it hasbeen applied up to now. This is certainlythe case for one of the most essentialelements in the Community s develop-

ment policy~financial and technicalcooperation.

As the years have passed, financial andtechnical cooperation has of course beenadapted to the needs of the Associated

countries. There had therefore to be acertain continuity in the conception anddevelopment of financial and technicalcooperation and an attempt to consoli-date the positive results already achieved.

This, however did not rule outimprovements, adaptations and reforms.These were necessary because of theenlargement of the Association and thenew relationships between industrialcountries and developing countries. Thenegotiators have in fact given the Com"munity the instruments for a policy; theyhave arranged for the aided countriesto take an active hand both in theadministration and in the managementof the aid; and they have given Com-munity aid a new angle. In doing thisthey have provided a face- lift for financialand technical cooperation, enabling it todeal forthrightly with the new develop-ment requirements of the ACP countries.

H\!STRUMENTSFOR A POLICY

The aim of technical and financialcooperation is to correct structuralimbalances in various economic

FINANCIAL AND TECHNICAL COOPERATION

between the EEC and the 46 countries of Africa,the Caribbean and the Pacific.

branches in the ACP countries, byproviding additional action beyond whatis provided by the countries themselves.

To this end the new convention appliesadditional resources and methods offinancing adapted to the needs of the

beneficiary countries.

The financial meansProtocol 22 of the Act of Accession

had been confirmed by the negotiatorymandate given to the Commission by

the EEC Council in October, 1973. Thetwo principles for determining the amountof Community aid in the new conventionwere to be:

maintenance for the AASM advantages already acquired;

equivalent treatment for otherequivalent cases.

In the Community/ACP negotiationshowever, it was mutually agreed from theoutset that decisions on the amount ofthe aid should be made in the concludingstage of the negotiations.

In practice it was only in the earlymorning of February 1, after a long nightof negotiation , that a decision wasin factreached on the amount of Communityaid.

The total in the pay envelope for theACP countries was fixed at 3 390 unitsof account (1); to this must be added an

(1) The unit of account is defined in a declarationby the Community to the effect that the amount Community aid shall be the equivalent, in a Europeanunit of account to be defined, of 3390 million SpecialDrawng Rights valued as of June, 28, 1974. The

declaration, however, invites the Council to decidebefore the Convention comes into force whether thisunit of accoUnt shall be defined by reference to SpecialDrawing Rights or to a "shopping basket" of currenciesof countries which are members of the Community.In January, 1975 the unit of account was the equivailomtof $ U. S. 1.24.

amount of UA 160 million for the overseascountries, territories and departments.

The total in the pay packet is made upas follows:

ACP OCT Total

Non- repayable grants 2100 120 2650Loans on special terms 430Risk capital 100Stabex 375 400

Total from E. 3000 150 3150I.B. loans on normalterms (2) 390 u400

Total 3390 160 3550

These figures , of course, fall a long wayshort of the UA 8000 million proposedby the ACP countries at the Kingstonministerial conference. There are, how-ever, two factors which have a bearingon the scale of the Community effort:

First. this is a particularly difficultphase in the Community s own develop-ment and it comes at the time of the worsteconomic crisis since the second worldwar. Nevertheless, the Community hasincreased the amount of the aid to itsconvention partners by more than 250 %compared with the second YaoundeConvention.

Secondly, the Community hasaccepted an ACP proposal by which theconvention, which is scheduled for afive-year period, shall run from the dateof signature and not from the date of

(2) It is. however, specified in a Community declara-tion that in the course of implementing the convention,additional E. I.B. interventions from its own resourcesmay be considered. within the terms of Article 18 of theBank' s constitutive articles and depending on its avai-lable resources, the amount of loans already providedthe interest attaching to the projects to be financed

and the guarantees which can be given in connexion

with such loans.

--+

entry into force. Allowing for the delaysincidental to ratification, which can beestimated at about a year, the funds

contributed by the Community for theACP countries will have to be broughtinto operation in four years instead of five.

As in the past, the UA 3 150 million tobe found by the E. F. will be financedby contributions from the membercountries.

This is a matter on which the Com-munity had two possible ways ofproceeding:

either it could bring the E.D.F. intothe Community budget, so that it wasfinanced from the Community s ownresources. This was the solutionadvocated by the Commission; or

it could set up the E. F. outside thebudget, so that it is fed by nationalcontributions .from the member countriesin proportions specified in advance forthe purpose.

After long discussion the latter wasthe solution finally chosen. The decisionwas based on political and economicgrounds and a specific contributionsschedule was laid down as follows:

BelgiumGermanyFranceItalyLuxembourg

6.25 %25.95%25.95%12.00%

20%

Netherlands 7.95%Great Britain 18.70%Denmark 2.40%Ireland 0.60%

Methodsand terms of finance

The Community has a very wide choiceof ways by which it can finance the aid.They run from the straightforward subsidyor non-repayable grant to normal loans

at market rates. They include the loan onspecial terms, subscription of risk capitaland loans with interest rate subsidies.These ,!have proved in the past sufficientto deal adequately with a great varietyof situations. The negotiators of the newconvention, though they did not seek

:jC.nange the principles, thought itnec~ssary ib adapt the terms on whichaid is given to the postulates of the ACPcountries by allowing for a two-foldrequirement:

the need for giving practical recogni-tion to the economic backwardness of

most ACP countries by using the state ofa country s social and economic develop-ment as one of the .criteria in adjustingand modulating the terms of Communityaid.

the need for more frequent recourse

to specific forms of intervention, theconditions attaching to which under thesecond Yaounde Convention had limitedthe extent to which they were used.

The stipulations in the new conventionabout the methods and terms of financingwere laid down with these two considera-tions in mind.

Because of the low level of develop-ment in most of the ACP countries, theproportion of non-repayable grants(80 %) is still the dominant feature bycomparison with loans on special termsand risk capital (20 %); but the proportionis nevertheless, somewhat smaller thanhitherto.

The terms for the special loans fall, forthe most part, .into a standard and veryfavourable pattern, comprising totalperiods of 40 years with repayment notbeginning till after 10 years and a rateof interest of only 1 %. This is much moreadvantageous than under the previousconvention , in which these terms werespecified only as maximum concessionswhich in practice were by no meansgeneral.

When the ultimate beneficiary is nota State but an individual or a firm, thefinancing (whether grant or loan) may

be in two stages, and there is a distinctionbetween the terms made to a Stateborrower and those made to the ultimatebeneficiary.

In addition, the Community may helptowards the execution of industrialmining or tourist projects of general

interest to an ACP country s economy, by

subscribing part of the risk capital andthus buttressing the funds of local firms.The convention seeks to promote thewider use of this type of intervention andspecifies new and more flexible methodsof operation , which will be better adaptedto the requirements of industrialisation. Itmay be provided in a subscription ofcapital in the ordinary pattern, or invarious types of quasi-capital. The lattermay be:

- second-priority loans, the repaymentand .interest obligation in regard towhich rank for payment after the settle~ment of other bank obligations on marketterms;

conditional loans, the interest andredemption of which are subject tospecific conditions laid down in the loancontract, indicating that the project hassurmounted the special risks to which itwas exposed and reached a specifiedlevel of profitability (3).

The normal loans granted by the Bankare usually accompanied by an interestrate subsidy, lowering the effective ratepaid by the borrower by 3%. No interestsubsidy will be given, however, if theloans are for investment in the oil

industry, wherever it is located, or in themining industry, unless it be located inone of the least developed countriesspecified in the convention.

As in the past, the cost of these interestsubsidies is charged against the provisionfor non-repayable grants. Out of the totalprovided under this head, a credit ofUA 100 million is specifically earmarkedfor aid in this form.

These improvements in the methods

and terms of financing are associatedwith a new system of sharing theresponsibilities and competences be"tween the Commission and the Bank inmanaging the different financial instru-ments to be used for financial andtechnical cooperation. The former divi-sion by sector had not given full satisfac-tion, and the need was felt for a clearline of division based on the nature ofthe financial operation concerned.

The new system was agreed with theACP countries and, with their coopera-tion, it will now be for:

th eCommission to investigateapplica-tions for subsidies and loans on specialterms and to manage them;

the Bank to handle corresponding

responsibility regarding normal loans,interest rate subsidies and risk capital.

(3) For example. these conditions may consist of a

statement that the undertaking has reached a certainfinance ratio. a certain volume of sales or distributed

dividends up to a specific level. etc.

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The Courier no. 31 - SPECIAL ISSUE - March 1975

ACP STATES TOPARTICIPATE IN AID

ADMINISTRATIONAND MANAGEMEI\!T

An outstanding innovati.on in the newConvention is the increase in theresponsibility to be borne by the ACPcountries in the administration and

management of the aid. Not only will theybe playing their part in defining thegeneral orientation of the aid; but it is

also contemplated that they shall take

an active part at each successive stage inthe life of a project-the aid programme;preparation and investigation of projects;preparation offinancing decisions; execu-tion of the projects and final evaluationof the results.

Aid programming,project studyand preparation andthe preparationof financing decisions

Community aid is provided as part ofthe development plans and programmesfor each ACP country, and from thebeginning of the period covered by theconvention , it is to be programmed witheach of the countries in such .a way thatthe latter have the clearest possible ideaof the aid they can expect during the

convention period. This programme isdrawn up jointly by agreement betweenthe Community and each ACP govern"ment; and it will consist of items basedon proposals by each of the countriesand subject to the national government'sown list of priorities.

In these aid programmes the ACPStates will be fully responsible fordrawing up their requests for finance.

In addition, the assessment of each

project will be carried out by the Com-munity in cooperation with the ACPcountry concerned, and will be based ongeneral criteria agreed upon andincorporated in the convention.

It Aas also been agreed that the financeproposals, which recapitulate the conclu-sions of the project investigation and aresubmitted to the Community organs ofdecision, shall be drawn up in closecooperation between the competent

FINANCIAL AND TECHNICAL COOPERATION

Community departments and those of theACP countries concerned. In the sameway the final version of these financeproposals will be passed by the competentCommunity institutional departments tothe ACP governments at the same timeas to the member governments of theCommunity.

All projects which have been officiallysubmitted by the ACP governments areto be brought to the knowledge of theCommunity organ responsible for makingfinance decisions, whether or not they

were approved by the competent depart-ments of Community institutions.

These changes are not matters of pureform, but they did not at any point callfor difficult negotiation. On the otherhand the participation of the ACPcountries in the financing decision , andtheir right to be present at meetings ofthe Community organ passing a verdicton their projects (4) was one of thetoughest problems in the negotiation onthe finance and technical cooperationside.

It was only in the last phase of thenegotiation that a compromise solutionwas found. This covers the requirementsof the ACP countries without runninginto institutional difficulties. It consistsof two parts:

After the programming work, eachnational aid programme will be subjectto an exchange of views between repre-sentatives of the ACP country and of theCommunity. This will enable the ACPcountry to give the Community repre-sentatives an account of its developmentpolicy and priorities, and indicate whatcontribution it expects from Communityaid in carrying out this policy. Such aprocedure will facilitate the subsequentexamination of each project as part the national programme.

For projects which do not receive theassent of the ED F Committee or theArticle 19 Committee, the competentdepartments of Community institutions

(4) The financing proposals have to be submitted

for the opinion of the E. F. Committee, if the projectsare to be financed by grants or special loans; and to theso-called "Article 19 Committee" if they are to befinanced by loans with an interest rate subsidy, or byrisk capital.

will consult representatives of the ACPcountries concerned on what shall bedone with the application, and whetherit could with advantage be amended andsubmitted again to the Committee. Beforea final verdict is reached, representativesof the ACP countries concerned willhave the right to ask to be heard by Com-munity representatives in order to putforward justificatory arguments.

When the Committee verdict isdefinitely against the project, the com-petent departments of the Communityinstitutions will again consult therepresentatives of the ACP countriesconcerned to decide whether the projectshould be submitted as it is to the Com-munity organs of decision, or whether

it should be withdrawn or amended.

Project execution

The provisions of the new Conventionhave made important changes tostrengthen the principle that beneficiarycountries sho.uld share in the respon-sibility for the execution of projects.

In the first place the ACP countrieshave complete responsibility for negotiat-ing and placing contracts for work Endsupplies and for technical assistance (5;\

A number of measures are also includedto promote the use, in the execution ofaid projects, of national firms andtechnicians from the beneficiarycountries.

Special arrangements under this headinclude:

the raising from UA 500000 toUA 2 million of the limit below whichworks tenders may be handled by theaccelerated procedure. This procedure isof special interest for national firms in theACP countries, because calls for tendersare advertised mainly in the countries

(5) As in the past. the invitation to tender forcontracts is open on the same terms to all individuals orcompanies in EEC countries or ACP countries. In thedesire, however to avoid work becoming undulycostly because of distances and transport difficulties ordelivery delays. specific outside countries may. in

exceptional circumstances, be permitted to tender.Such participation may also be authorised when theCommunity is providing finance for regional cooperationwith outside countries or projects financed jointly withother lenders.

themselves; and since only short intervalsare available for submission, the localfirms are well placed to secure thecontracts.

- a price preference of 10% is allowedto national firms in the ACP countriesfor works estimated to cost less than

A. 2 million. This is a further conces~sion, for no such provision was inpractice under the second YaoundeConvention.

a price preference of 15 %, withoutlimitation of the size of the contract, is

allowed to national firms in the ACPcountry tendering for supply contracts.Under the second Yaounde Convention,a similar preference was granted on acase~by-case basis and might be any-where between zero and 15 %. Under thenew convention it is automatic and alwaysamounts to 15

provision is made for increased resortto the execution of projects under publiccontrol. In the past, resort to the adminis-tration could be authorised in cases ofacknowledged urgency or if such actionwas justifi~d by the nature, the com"paratively ..small importance, or otherspecial features any contract for worksor supplies. The same criteria remain, butresort to the administration may now beauthorised for contracts of less than

A. 2 million when the public servicesin the ACP country concerned have attheir disposal an important supply ofadequate equipment or an importantreserve of qualified manpower.

national authorities are given newresponsibility for choosing engineeringand survey offices and negotiatingcontracts with them, and in promotingthe handling of technical cooperation bynational surveyor engineering bureaux.

Two other important reforms shouldalso be mentioned:

in line with a proposal made by theACP countries, the Community hasagreed that, for payments made in theACf? ~atio~al currencies, the function of

paymaster delegate for the E. F. (cur-

rently handled by European banks andfinance bodies) shall be transferred to thecentral banks or other public or quasi-public finance institutions in the ACPcountries.

It is not possible to include here adetailed account of this transfer. Theimportance of the reform is, however

worth emphasising. It is an importantfield of further participation for thebenefi.ciary countries in the managementof the aid provided.

the Community has gone ahead ofthe ACP countries in amending theassignments of the Commission delega"tions in each ACP country.

From the beginning of the negotiationsthe ACP countries had asked that thefunctions of the Commission delegatesshould be drastically changed.

The Community, though still findingit necessary to maintain delegates on thespot to follow the financial and technicalexecution of projects, had indicated toits partners that delegations of this kinddid not exclude improvements in the

share of the ACP countries in the execu-tion of financial and technical coopera-tion.

A satisfactory compromise was foundbetween these two standpoints. This hasbeen reflected in a far-reaching form inthe delegates' assignments. It falls intothree parts:

the powers of national authorities areincreased and the administrative assign-ments of the delegates correspondinglylightened on the technical and financialside. (A considerable number of visasare now no longer needed, nor are variouspreliminary assents or authorisationswhich featured in the previous practice.

execution procedures have beenspeeded up and made more flexible,by transferring to the delegates a numberof tasks previously handled by the Com-mission.

- a new task is given to the delegatesif the ACP countries so request. Thisrelates to general information, prepara-tion, study and utilisation of the projects.

final evaluation of results

The participation of the beneficiarycountries in carrying out financial andtechnical cooperation also extends to theevaluation of the effects and results ofcompleted projects. It is agreed that theevaluation-which may also relate to

projects still in course of execution-shallbe regularly carried out on a joint basis bythe competent departments of the Com-munity and those of the ACP countriesconcerned.

In the light of the evaluation work, thecompetent Community organs, and theACP countries concerned, will each putin hand such measures as may berequired. The competent joint body will

be kept informed by the Commission andeach of the ACP countries.

NEW ORIENTATIONSfOR COMMUNITY AID

The negotiators of the new conventionthought it desirable to maintain the

sectoral priorities which have stood thetest of experience.

This implies that the emphasis will stillbe on economic and social infrastructureprojects, rural development and trainingschemes.

It implies that the direct action in favourof industrialisation, marketing and salespromotion will be carried on andintensified.

It also implies that, as in the past,emergency aid will be granted to ACPcountries facing serious difficulties as theresult of natural catastrophes orcomparable events. For this purpose aspecial provision will be set aside fromthe grant section of the E. F. It is initiallyfixed at U.A. 50 million, but is to reconstituted at that figure each year,provided the total appropriations during

the duration of the convention do not

exceed U.A. 150 million.

In answer to anxieties expressed bythe ACP States, it has been agreed that ifthe whole of the special fund should beexhausted before the Convention expiresthe Community and the ACP will decideupon suitable measures for dealing withnatural catastrophes and comparablesituations (6).

(6) Thisi$ completed by a Community declaration

to the effect that it will, as in the past, deal with emer-gency situations as they arise; and the ACP countrieswill be entitled in the same way as others to have thebenefit of any Community intervention under this headapart from the aspects covered by the convention itselfand therefore additional to it.

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The Courier no, 31 - SPECIAL ISSUE ~ March 1975

This maintenance of the sectoralpriorities is associated with a number ofinnovations under various heads, whichhave resulted in new orientations forCommunity aid. This applies particularlyto regional cooperation, aid to the leastdeveloped countries, specific schemesto help small and medium-size firms andsmall-scale projects for basic develop-

ment.

Increased supportfor regional andinter-regional cooperation

Under the second Yaounde Conventionthe accent had already been put on thepotential uses of Community aid forregional cooperation schemes. With therenewal of the convention and theenlargement of its scope, the problem ofregional cooperation arises on a differentscale. On the initiative of the ACP

untries themselves, the objectives ofthis cooperation and its field of applica-tion have been defined and arrangementsmade for its financing.

Among the objectives to which Com-munity aid should contribute, the negotia-tors of the convention mention:

the speeding-up of economiccooperation and development inside andbetween regions of ACP countries;

faster diversification of the economiesof ACP countries;

reduction of the economic depen-dence of ACP countries on imports;

setting up sufficiently extensive mar-kets inside the ACP countries andneighbouring developing countries;

maximum use of resources andservices in the ACP countries.

For the sake of securing these objec-tives, Community aid has been given avery wide field of application. It will coverthe location of industries, including theformation of regional and inter-regionalfirms; transport and communications;

. joint exploitation of natural resources;

. rese~rch and technology applied to theintensification of this type of coopera-tion; technical assistance for the forma-tion or development of regional organisa-tions; cooperation in the development ofthe tourist trade.

FINANCIAL AND TECHNICAL COOPERATION

In the past, one of the main obstaclesto regional cooperation lay in the financ-ing of regional projects. The aided coun-tries were hesitant about supportingregional projects involving funds allottedto them for their own national schemes.

In order to avoid obstacles of this kind,the Community and the ACP countrieshave agreed that part of the Communityfunds should be earmarked exclusivelyfor financing regional projects. TheConvention accordingly provides thatabout 10% of the total Communityfinance, or about U.A. 340 million, shallbe set aside for such schemes.

Increased cooperation withthe least developed countries

The specific needs of the leastdeveloped countries are now recognisedin all international bodies. The Com-munity itself has in the past endeavouredto deal with the special problems of thesecountries as part of its development

policy. The international economic posi-tion of the past two years has made itnecessary to strengthen ~his tendencyin the operation of financial and technicalcooperation policy and to give particularattention to the requirements of the .Iessdeveloped ACP countries.

For this purpose the negotiators of theconvention drew up a list, subject toamendment, of 24 countries (7) whichshould have the benefit of special treat-ment, and indicated measures to beapplied to reduce the specific obstaclesin the way of these countries getting thefull benefit of the opportunities arisingthrough financial and technical coopera-tion.

In the first instance these countries areto be given finance on particularlyfavourable terms, taking into account

the economic position of each country.

More generally these countries willhave the benefit of special treatment ina number of other fields. The necessarytechnical assistance will be at theirdisposal to help identify, prepare and

(7) The countries concerned are as follows: Bots.

wana, Burundi , Dahomey, Ethiopia, Gambia, Guinea,Guinea- Bissau, Uppi"r Volta, Li"sotho, Malawi, Mali,Mauritania, Nigi"r, Uganda, Ci"ntral African Ri"public,Rwanda, Wi"sti"rn Samoa, Somalia, Sudan, Swaziland,Tanzania, Chad, Togo and Tonga.

carry out their development projects,personnel training and administrativetraining schemes. They will have supportin undertaking research angled on solvingsome of the specific development prob-lems. They will have help in developingtheir small and medium-size firms; theywill enjoy priority treatment in promotionschemes for regional cooperation; andthey will be relieved on a temporary anddegressive basis of the functioning and

major repair costs of investmentspreviously financed by the Community.

Specific aid for smalland medium-size firms

It was envisaged in the second YaoundeConvention that specialised developmentinstitutions might be used as inter-mediaries for financial assistancepurposes, such as providing financialsupport for small and medium-size firmsin the ACP countries. No special pro-cedures, however, were laid down for thepurpose; and for lack of them this form ofintervention was never used.

The new convention seeks to remedythis by a number of provisions enablingthe Community to make use of publicbodies concerned with developmentfinance as intermediaries in providingfunds to be used for the benefit of smalland medium-size firms in the ACPcountries.

It is laid down that the Community,after going into the question of thecapacity of the intermediary organisation

and its need for aid, may approve anaction programme put forward by thecountry concerned and open a line ofcredit for the finance organisation for

an amount not to exceed U.A. 2 millionand for a period of not more than 3 years.At the end of this period, the line ofcredit will be renewable.

The terms and conditions for the utilisa-tion of this aid will be embodied in eachcase in a convention between the Com-munity and the finance intermediarylaying down the general rules guiding itin the deployment of the funds. This willcover the size of operations which arenot to exceed U.A. 200000 for anyproject; eligible industries and businesssectors; criteria for selection of eligibleapplicants; criteria of projects and method

-+-

of investigation; the conditions andarrangements regarding loans granted.

The intermediate finance organisationwill finance under its own responsibilitythe loans which it is prepared to makedrawing on the line of credit as may berequired. The Community action will belimited to checking that the loans inquestion are in conformity with the

convention with the finance inter-mediary.

Finally, the convention lays down thatthe organisation will be responsible to

the Community for repayment of suchpart of the line of credit as has beeneffectively drawn. It will make an annualreport to the Community on the executionof approved action programmes and thefinance arrangements relating to them.

Small-scale basicdevelopment schemes

Up to the present, community develop-ment policy has been mainly concentratedon medium and big operations. Experiencehas in fact shown that quite smallprojects may prove very important fordevelopment purposes. It is one of theobjectives to deal in definite terms withthe special requirements of simple com-munities and to enable them to play theirpart in the development process. Withthis in view, the new convention enablesthe E. F., in addition to its normal inter-ventions, to provide finance for small,basic development schemes, especiallyin rural areas.

For this purpose a credit of U.A. 20million has been earmarked from thegrant fund and is scheduled to cover thiswork for the first two years.

The finance for these micro-schemes

will normally come from three sources.These will include the E. ; the nationalgovernment (contribution of funds or useof pubtic equipment); and the local com"munity which is the beneficiary, in thefotlp. of a contribution in cash or in kindwithin its 3apacity.

This is a new form of aid, which has tobe flexible in administration and appliedeffectively to schemes scattered in manyareas. The finance decision on theseschemes will be based on annual pro-

grammes submitted to the Commissionby each ACP country, showing the mainlines of the action contemplated. Theindividual finance decisions for eachmicro-project will come within the widerplan for increased participation by thebeneficiary countries in the administra-

tion and management of the aid. Thedecisions will be made by the nationalauthorities in the ACP country in con-formity with the annual programmes andsubject to the agreement of the Com-

"'"

mission. This agreement will be con-sidered to have been cleared if no objec-tion is raised within a month afternotification of these decisions.

On the one hand these projects willincorporate a maximum element of locallabour, goods and services; and on theother, they will be small in the amountsinvolved and therefore not of a nature

to attract international competition. All

exceptions to the normal rules of com pet tion will accordingly be permissible.

" !

The InstitutionsThe institutional framework

appropriate and solid; here too thereare new features. These institutions areon a joint basis, and they are formed inconformity with convention requirementsand the importance the contractingparties attach to their cooperation.

The Council of Ministers is thesupreme organ of the convention. Itconsists, on the one side, of the membersof the Council of the European Com-munities and members of the EEC Com-mission; and on the other, of one memberof the government from each of the ACPcountries. The chair is occupied alter-nately by the Community and the ACPcountries. The first task of the Council isto administer the convention and it hasthe necessary powers of decision and

consultation for this purpose. It is alsoenabled to discuss questions with a

direct impact on matters dealt with in theconvention. Subject to general agree-

ment, it may discuss other economicand technical questions of mutual interestbut beyond the scope of the convention.

The Council of Ministers expects towork on a definite and realistic basis,and hopes to secure cooperation incircles directly concerned. For thispurpose it may make contacts and enterinto consultation in economic and socialcircles in EEC and ACP countries.

The Committee of Ambassadorsassists the Council of Ministers in theaccomplishment of its tasks, and carriesout mainly the assignments given it bythe Council. It has a supervisory task in

relation to the work of other organs andworking groups, whether permanent orad hoc.

The ~:ecretariat of the Council ofMinisters, of the Committee of Ambas-sadors and of the other joint organs, isrecruited on a joint basis. Its .operatingconditions are determined by an internalregulation of the Conci! of Ministers.

The Consultative Assembly consistson the one hand of members of theEuropean Parliament, and on the otherof representatives appointed by the ACPStates, both parties appointing the samenumber of representatives. For purposesof an activities report by the Council ofMinisters, the Assembly may adoptresolutions on matters germane to theConvention, or specified therein.

Differences which cannot be settledby other machinery can be dealt withby a good offices procedure, or byan ad hoc arbitration. The latterprocedure is similar to that establishedunder the Arusha agreement and it doesnot call for the formation of a permanentCourt of Arbitration, such as that providedin the Yaounde Convention and whichwas never called upon to give a ruling.

The Courier no. 31 - SPECIAL ISSUE - March 1975

BRIE

Resume of the Lome Convention

GENERAL FORM OFTHE COI\IVENTION

The ACP- EEC Convention which wassigned at Lome, 19 months after theofficial opening of negotiations inBrussels on 25 and 26 July 1973,embodies a new kind of relationshipbetween the Community and its nineMember States and 46 African, Carib-bean and Pacific States. An agreementof this magnitude is unprecedented inthe history of relations between indus-trialized and developing countries.

The outstanding events in the negotia-tions were the ministerial conferencesof 17 and 18 October, 1973 in Brussels,at which the framework and mutualobjectives were defined, and 25 and26 July, 1974 in Kingston, at which thediscussion went to the core of theproblems, and finally, the meetings from13 to 15 January and those on 30 and31 January and 1 February, 1975, whichconstituted the final round of an under-taking characterized both by the com-plexity of the problems to be solved andby the large number of States involved,each with naturally differing economictraditions and situations.

Despite all this, the negotiationshighlighted the determination of the ACPcountries to achieve solidarity, whichwas demonstrated by their commonpositions. The negotiations were thusbased throughout on complete equalitybetween partners.

Attention should also be drawn toanother aspect of the negotiations

perhaps less spectacular but no lessvital to the final outcome. This was thework carried on with patience and deter-mination over several months betweenthe ACP plenipotentiaries and the Com-mission which led to agreement at thatlevel on considerable sections of theconvention.. As 'well as being a successor to theYaounde and Arusha Conventions, thenew convention opens up and extendsthe kind of special relationship estab-

lished by these conventions to countlessother African countries and to theCaribbean and Pacific countries, in

RESUME OF THE CONVENTION

accordance with the provisions adoPtedwhen the Community was being enlarged.This geographical enlargement wasmatched by a willingness to break newground which resulted principally inthe improvement of the trade arrange-ments, the setting-up of a system forstabilizing export earnings, the intro-duction of industrial co-operation andthe provision, made in various chaptersof the convention, for the least-favouredcountries.

MAIN FEATURES OFE CONVENTION

Trade arrangementsThe main feature of the trade arrange-

ments is that the Community has openedup its market to ACP products.

This means that the EEC-ACP area canbe considered as a preferential tradingarea in which one partner, the EEC,because of its different level of develop-ment, has foregone the right of free accessto the market of its trading partners.

The ACP states, however, have com-mitted themselves to granting the EECmost-favoured-nation treatment and haveundertaken not to discriminate betweenMember States of the EEC.

The principle of free access to theCommunity market has also been imple-mented for most exports of agriculturalproducts from the ACP States (94.2 %).The principle provides that agriculturalproducts and processed agricultural prod-ucts will be exempt from customs duties.Since this is the only form of protectionin this case, access to the Communitymarket is thus completely free. However,in view of the structures of the EEC'common agricultural policy, certain re-strictions have had to be imposed onthe application of the principle of free

access for certain products. The Com-munity has nevertheless given an under-taking that in these cases it will. as ageneral rule, grant the ACP treatmentmore favourable than the treatmentgenerally applicable to third countries.In order to implement this principle it

will adopt measures, by internal pro-cedures, to give preference to ACP prod-ucts over those from third countries.

Provision has therefore been made forspecial measures to allow the ACP toexport a certain amount of beef and vealto the Community. The " third countrylevy on maize, rice, millet and sorghumand processed rice and cereal productswill be reduced, while some fruit andvegetables may be imported duty- free orat a very reduced duty without the needto observe a marketing timetable.

Finally, the Community declared itswillingness to examine, under the consul-tation procedure provided for in theConvention, the ACP requests for specialarrangements for other agricultural prod-ucts.

To ensure that they are effectivelyimplemented, the provisions on tradeco-operation also include rules forreciprocal information and consultation.The Protocol on rules of origin and theProtocol on methods of administrativeco-operation relating to those rules arealso important parts of this Title. Therules of origin have, moreover, beenspecially adapted to facilitate co-opera-tion, both among the ACP States them-selves (for the purposes of the definitionoriginating products " , the ACP States

are considered as a single territory) andbetween ACP States and other develop-ing countries.

The section on trade is supplementedby Protocols on sugar, rum and bananas.

The first of these, which played adecisive role in the negotiations becauseof the important interests at stake on bothsides and the existing situation on theworld and Community markets, containsa Community undertaking for an indefi-nite period to buy up to 1 375000 metrictons of sugar from the ACP at guaranteedprices (1). In view of the supply com-mitments entered into by the ACP States,the provisions of the Chapter on sugarand of the Protocol relating to this willapply, in practice, to an amount ofaround 1 275 000 metric tons.

(1) There is provision for a similar undertaking to buy25000 metric tons from India.

ThIs sugar will first be offered on theCommunity market at prices freely nego-tiable between sellers and purchasers.The Community will intervene to pur-chase at the guaranteed price only wherethis cannot be reached on the market.The guaranteed price will be fixed eachyear between the Contracting Parties onthe basis of the prices applicable to the

Community s sugar production. Specialmeasures have been adopted for theinitial stage of implementing theseprovisions.

The Protocol on rum lays down theconditions of access to the Communitymarket for rum from the Caribbeancountries among the ACP, while at thesame time protecting the rum productionof certain of the French OverseasDepartments. The Protocol thus providesfor duty-free entry to the Communitymarket for certain quantities of rum fromthe Caribbean countries to be fixed eachyear on the basis of the highest annual

level of exports over the previous threeyears. This basic figure will be increasedby an annual growth rate of 40 % on theUnited Kingdom market and 13 % on theother markets of the Community.

The Protocol on bananas aims toensure that none of the ACP countriesis placed in a less favourable positionthan Qefore with regard to access to the

Community market and to the advantagesoffere~ by this market.

In apdition, a joint effort will be madeto encourage investment at all stages,

from production to consumption, witha view to enabling the ACP~andparticular Somalia~to increase theirbanana exports to their traditionalmarkets and to gain a foothold in newCommunity markets.

Finally, in a declaration on fishingactivities annexed to the Convention, theCommunity declares its willingness toencourage the development of fishingand related industries in the ACP withinthe framework of the industrial, financialand technical co-operation projects,while the ACP state their readiness tonegotiate agreements on fishing in theirwaters with the Member States of theCommunity, avoiding all discriminationbetween and towards the Member Statesof the Community.

Stabilizationof~~port earnings

This Chapter of the new convention inparticular has rightly been hailed inpublic comment as a bold and exemplaryinnovation.This system will be applicable to

12 basic products (or groups of prod-

ucts)~i.e. products made from ground-nuts, cocoa, coffee, cotton, coconut,palm, palm nuts and kernels, raw hidesand skins and leather, wood products,fresh bananas, tea, raw sisal, and ironare. Nevertheless, the Communitystressed that the latter product wasbeing included by way of exception, asin principle it was opposed to the inclu-sion of ores. It is also provided that,after 12 months, other products uponwhich the economies of one or more ACPStates depend to a considerable extentmay be included if they are affected bysharp fluctuations.

The main characteristics of the systemare the following: where an ACP Stateearnings from the export of one of these

products represent at least 7.5 % (5 % forsisal) of its total earnings, that State isentitled to request a financial transfer if itsearnings from the export of one of these

products to the Community are at least5 % below the reference level cal-

culated on the basis of the average of

the 4 preceding years.For the 34 least developed, land- locked

or island ACP States, the dependenceand trigger thresholds are reduced to

5 %. Because of the economic situationof some of these countries~Burundi,Ethiopia, Guinea Bissau, Rwanda andSwaziland~the system will apply toexports of the products in questionirrespective of destination.

The Community will allocate 375 MUAof financial aid to the stabilization system;this amount will be divided into annualinstalments allowing, however, for acertain degree of flexibility (20 % advanceutilization) between the various instal"ments.

The Convention lays down the principlethat the ACP States which have receivedtransfers should contribute~where cer-tain conditions have been met in the fiveyears following the allocation of thetransfers~towards the reconstitution ofthe resources of the system. The 24 least-favoured nations (Botswana, BurundiDahomey, Ethiopia, the Gambia, GuineaBissau, Upper Volta, lesotho, MalawiMali, Mauritania, Niger, Uganda, theCentral African Republic, Rwanda,Western Samoa, Somalia, Sudan, Swazi-land, Tanzania, Chad, Togo and Tonga)are exempted from this obligation.

Industrial co-operationThe practical objections of this new

form of co-operation are intended topromote the industrial development ofthe ACP States, which is acknowledgedas a pressing need.

These objectives include: bringing

about a better distribution of industryboth within these countries and betweenthem, establishing new industrial rela-tions between the partners and theircommercial operators, improving thetransfer of technology and the adaptationof such technology to the specific condi-tions .and needs of the ACP States,promoting the marketing of the ACP'industrial products, encouraging theparticipation in the industrial develop"ment of the ACP States of, on the onehand, nationals of the ACP States, inparticular small and medium-sized firmsand on the other hand, of Communityfirms, where the ACP States so desired.

In this respect, provision has beenmade for the ACP States to take thenecessary steps to promote effectiveco-operation with the Community andits Member States or with their com-mercial operators and nationals whorespect the development plans andpriorities of the host ACP States.

In order to attain these objectives, the

Community will help to set up program-mes and projects as regards infrastruc-tures, industrial undertakings, training,technology and research, small andmedium-sized firms, industrial informa-tion and promotion and trade co-opera-tion.

Generally speaking, financial and tech-nical co-operation will provide the meansfor implementing industrial co-operation.The more specifically new instrumentsfor its implementation will be theCommittee on Industrial Co-operationsupervised by the Committee of Ambas-sadors and generally responsible forseeing to the implementation of co-operation~and the Centre for IndustrialDevelopment~which will have the taskof gathering and disseminating informa-tion, carrying out project studies, organiz-ing and facilitating contacts betweencommercial operators, etc.

Financialand technical co-operation

The basic purpose of economic, finan-cial and technical co-operation is tocorrect structural imbalances in thevarious economic sectors of the ACPand thus to contribute to their economicand social development.

To this end, the Community willallocate a total amount of 3 390 MUA,of which 3 000 MUA will constitute. thenew European Development Fund , whilethe remaining 390 M UA will be furnishedby the European Investment Bank.

The greater part of this aid~2 100M UA~wili take the form of subsidies.430 MUA will be provided in the form of

The Courier no. 31 - SPECIAL ISSUE - March 1975

special loans, granted as a general rulefor a period of 40 years at an interestrate of 1 % per annum. 95 MUA may beused in the form of risk capital, mainlyfor the purpose of strengthening thefunds of undertakings in the ACPStates.

The 390 M UA provided in the formof EIB loans and granted on termsgoverned by the Bank's statutes may,apart from a number of exceptions relatingmainly to the petroleum and miningsectors, be accompanied by interestrebates the effect of which will be tokeep the real interest payable on eachloan within a bracket of between 5 and 8 %. In a unilateral declaration, theCommunity stated that during theimplementation of the convention,further EI B aid might be considered onbehalf of the ACP States under certainconditions.

In accordance with the general aims

of the convention, special attention willbe paid to the needs of the least-developed ACP States, with a view tolessening the specific obstacles whichhamper their development and whichprevent them enjoying the full benefit ofthe opportunities afforded by financialand technical co-operation.

Similarly, a proportion of about 10%of the financial resources will be set asidefor financing projects likely to promoteregional and inter-regional co-operation.

A special allocation of 150 M UA hasbeen provided for under the heading ofexceptional aid to ACP States havingto cope with serious difficulties broughtabout by natural disasters or the like.

In addition, provision has been madefor specific projects for the benefit of

small and medium undertakings in theACP States, to be achieved via nationalor regional development banks. Withinthis same framework, an appropriationof 20 MUA has been set aside forfinancing very small-scale schemes soas to respond effectively to the real needsof local communities. It should be notedthat these various forms of aid may beused for the financing of the whole rangeof investments, technical co-operation

and of the specific projects provided forin the Convention, with the exception

however of all current administrativeexpenditure and of upkeep and runningcosts.The management and administration

of .lid will be a matter for close co-opera-tion between the Community and theACP States. The convention and thefinancial protocol specify the relevantadministrative arrangements and pro-cedures for this co-operation.

In this connection, special attention

RESUME OF THE CONVENTION

has been paid to the planning of aid toensure that it fits in with the developmentplans and programmes of each of theACP States. These States will, moreoverparticipate actively in each of the variousstages of the projects up to and includingthe final evaluation of their results.

A certain number of other provisionsof both the convention and the financialprotocol are designed to guarantee thegood management of financial aid andthe optimum use of the funds placed atthe disposal of the ACP States by theCommunity. Certain provisions governthe rules applicable to EDF authorizingofficers and paying officers.

It has furthermore been laid down that,for the purposes of the mobilization ofED F resources for which it holds manage-ment responsibility, the Commission willbe represented in each ACP States bya delegate appointed with the consentof the State concerned, whose particularresponsibility will be to see to the correctfinancial .and technical implementationof projects and programmes financedfrom the resources of the Fund.

In order to encourage participation byACP contractors and supply undertakingsin carrying out contracts financed from

the EDF, provision has been made forconsiderable derogations from theprinciple of equality of the terms ofcompetition.

Establishment, services,payments and movementsof capital

These provisions, rather wide in theirpractical scope but essentially technicalin character, are, generally speaking,based on the principle of non-discrimina"tion and the commitment by the partnersto refrain from resorting to any measuressuch as would render impossible thefulfilment of obligations undertaken inpursuance of other provisions of the

Convention.

The institutionsThe institutions of the convention are

the Council of Ministers, assisted by theCommittee of Ambassadors, and theConsultative Assembly.

The Council of Ministers is composedof the members of the Council of theEuropean Communities and members ofthe Commission of the European Com-munities on the one hand, and a memberof the Government of each ACP State,on the other hand.

The office of President of the Councilof Ministers is held in turn by a member

of the Council of the European Com-munities and a member of the Govern-ment of an ACP State, the latter beingappointed by the ACP States.

The Council of Ministers meets oncea year at the initiative of its President. Italso meets whenever the necessity arisesin accordance with the provisions of itsrules of procedure. These rules mayprovide for sectoral or regional meetings.

The decisions of the Council ofMinisters are adopted by the commonaccord of the Community, on the onehand and the ACP States on the otherhand.The Council of Ministers lays down

general guidelines for the work to undertaken in order to give effect to theconvention, and assesses the resultsobtained. It has the power to takedecisions. Such decisions are bindingon the Contracting Parties who musttake measures to implement them.

The Council of Ministers may delegatecertain powers to the Committee ofAmbassadors which is the body generallyresponsible for assisting it in theperformance of its duties.

The Consultative Assembly is made up,on a joint and equal basis, of members ofthe European Parliament representingthe Community .and of representativesappointed by the ACP States. It expressesits opinions in the form of resolutionson matters covered by the convention.

The new convention also includesan arbitration procedure for settlingdisputes regarding the interpretation or

implementation of the convention.

DURATION OF THECONVENTION

The present convention will expireafter a period of five years as from thedate of its signing, i.e. on 1 March 1980.

This was agreed during the final stageof negotiations in order to give maximumimpact to the Community financialoffer. As a result, the ACP will receivefinancial aid far sooner after ratificationthan if the five years were calculated witheffect from the actual entry into force ofthe convention.

Eighteen months before the end ofthis period, the Contracting Parties willenter into negotiations with a view toexamining the arrangements subsequentlyto govern relations between the Com-munity and the Member States on theone hand, and the ACP States on theother.

The Council of Ministers will adoptany transitional measures required up tothe entry into force of the new conven-tion. 1II

Some stati sti cs

--"

""CO" ".

the ACP and

""

the Commun.ity

'" .

taJ

A list of the 46 countries of Africa, the Caribbeanand the Pacific, a few vital statistics and two mapsof the ACPand the Community are given below togive a brief outline of the 55 Lome Conventionpartners.For the G. P. the figures are for 1971, at market

prices rounded up to the nearest 10 million U.

dollars. The percentages in brackets represent anevaluation of each product's share in value of thetotal exports.

The rapidity of change in the ACP often leavesstatistics behind, and we apologise for the dif-ferences there may be between the followingfigures and more recent but unavailable information,especially on population and G. P. Rough estimatesare marked by an asterisk.For the recently independent State of Guinea-

Bissau, trade figures were not available at the timeof .going to press.

THE FORTY-SIX ACP

WESTAFRICA

DAHOMEY

Area: 112622 kmPopulation: 2 869 000Capital: Porto- Novo

: $ 280 millionMain products: Manioc, yams, maizepalm oilPrincipal exports: Palm products(34 %), cotton, groundnuts

THE GAM BIA

Area: 11 295 km2Population: 494279Capital: Banjul

: $ 50 millionMain products: Groundnuts, bananas,ricePrincipal exports: Groundnutsand groundnut products (94 %)

GHANA

Area: 238 537 kmfilopulation: 9 600 000~p:ital: ~ccra

: $ 2250 millionMain products: Yams, manioc,cocoa, timber, diamondsPrincipal exports: Cocoa (61 %),timber (19 %), diamonds

GUINEAArea: 246 000 kmPopulation: 4070000Capital: Conakry

: $ 380 millionMain products: Rice, manioc,bauxite, alumina, iron orePrincipal exports: Iron ore (90%),alumina

GUINEA- BISSAUArea: 36125 kmPopulation: 800000Capital: Madina do BoeMain resources: Rice, cola nut,palm oil, palm kernels, groundnuts,timber, fishPotential: Fruit and vegetables,bauxite, oil, zircon, phosphates

IVORY COASTArea: 322 463 kmPopulation: 5410000Capital: Abidjan

: $1 730 millionMain products: Yams, timbercoffee, cocoaPrincipal exports: Timber (29 %),coffe (23 %), cocoa (15 %)

LIBERIAArea: 111 369 kmPopulation: 1 496000Capital: Monrovia

: $330 millionMain products: Manioc, rice, rubber,iron orePrincipal exports: Iron ore (71 %),rubber (16 %), indo diamonds

MALIArea: 1 240 000 kmPopulation: 5257 000Capital: Bamako

:$370 millionMain products: Millet, rice,groundnuts, livestock, cottonPrincipal exports: Cotton (39 %),livestock (33%), fish (14%),groundnuts (7 %)

MAURITANIAArea: 1 032 455 kmPopulation: 1 200 000Capital: Nouakchott

: $ 200 millionMain products: Millet, sorgo,livestock, iron orePrincipal exports: Iron ore (73 %),fish, livestock, gum arabic

NIGERArea: 1 267 000 kmPopulation: 4 243 000Capital: Niamey

: $ 400 millionMain products: Groundnuts,livestock, millet, sorgoPrincipal exports: Groundnuts andprod.s (24 %), livestock (12 %),groundnut oil (9

NIGERIAArea: 923768 kmPopulation: 79778 960Capital: Lagos

: $ 7840 millionMain products: Yams, sweetpotatoes, manioc, oil, cocoa, timberPrincipal exports: (1973) Oil (80

%),

cocoa (10 %), groundnuts

---+

The Courier no. 31 - SPECIAL ISSUE - March 1975

SENEGALArea: 197161 km2Population: 4080 000Capital: Dakar

: $1 020 millionMain products: Groundnuts,phosphates, livestock, millet, sorgoPrincipal exports: Groundnuts andprod.s (35 %), phosphates

SIERRA LEONEArea: 72 326 kmPopulation: 2 627 000Capital: Freetown

: $ 540 millionMain products: Rice, palm nuts,iron ore, diamondsPrincipal exports: Diamonds (63 %),iron ore (10%), palm nuts

TOGOArea: 56 000 kmPopulation: 2092 000Capital: Lome

: $ 300 mini.Main products: Yams, manioc,cocoa, phosphatesPrincipal exports: Phosphates (62 %),cocoa, (26 %), coffee (13 %)

UPPER VOLTAArea: 274122 kmPopulation: 5620000Capital: Ouagadougou

: $390 millionMain products: Livestock, cotton,groundnuts, karitePrincipal exports: Livestock (48 %),cotton (22 %), groundnuts andoil (8 %)

CENTRALAFRICA

BURUNDIArea: 27 800 kmPopulation: 3 700 000Capital: Bujumbura

: $ 220 million (*Main products: Maize, sorgo,manioc, coffeePrincipal exports: Coffee (86 %),leather and hides (6 %), cotton (3 %)

TH. EUROPEANCOMMUNITY

BELGIUM

DENMARK

FRANCE

GERMANY (Fed. Rep.

IRELAND

ITALY

LUXEMBOURG

NETHERLANDS

UNITED KINGDOM

Area: 1528 000 kmPopulation: 256 625 000

P. (total for 1973):UA .850 000 million (*Commerce (1973):Imports: UA 89 506 300000(leading world importer)

Exports:U .A. 89 573 200 000

) 1 Unit of Account was equivalent in valueto U. $1 in 1971. (See p. 32, (1)).

CAMEROONArea: 475442 kmPopulation: 6 200 000Capital: Yaounde

: $1160 millionMain products: Cocoa, coffee,timber, bananasPrincipal exports: Coffee (26 %),cocoa (23 %), timber (12 %),alumina

CENT. AFR. REP.

Area: 622 984 kmPopulation: 1 660000Capital: Bangui

: $ 240 millionMain products: Rice, manioc, millet,bananasPrincipal exports: Diamonds (40%),coffee (23 %), timber (21 %),cotton

CHADArea: 1 284000 kmPopulation: 3850000Capital: N' Djamena

: $310 millionMain products: Millet, sorgo, cottonlivestockPrincipal exports: Cotton (69 %),meat

SPAIN

9932

...'

CONGOArea: 342000 kmPopulation: 1 300 120Capital: Brazzaville

: $ 300 millionMain products: Bananas, groundnutscoffee, rice, timber Principal exports: Timber (42 %),diamonds (20 %)

EQUATORIAL GUINEAArea: 73000 kmPopulation: 310000Capital: Santa Isabel

: $ 60 millionMain products: Cocoa, coffee,bananas, palm kernels, timberPrincipal exports: Cocoa (46 %)

GABONArea: 267 667 kmPopulation: 950 000Capital: Libreville

: $340 millionMain products: Manioc, bananastimber, cocoa, minerals Principal exports: Oil (36 %),

timber (32 %), manganese (17 %)

RWANDAArea: 26338 kmPopulation: 4 000000Capital: Kigali

: $ 230 millionMain products: Bananas, sweetpotatoes, beans, coffeePrincipal exports: Coffee (61 %),tin (23%), tungsten (10%),hides (4 %)

ZAiREArea: 2 345 000 kmPopulation: 22800000Capital: Kinshasa

: $1 750 millionMain products: Copper, zinc,manganese, palm oil, coffeePrincipal exports: Copper (61 %),diamonds, coffee

EASTAFRICA

BOTSWANAArea: 600372 kmPopulation: 690000Capital: Gaberones

: $100 million (~Main products: Livestock, hides,diamondsPrincipal exports: Livestock(+carcasses) (80 %), hides (9

ETHIOPIAArea: 1 221 900 kmPopulation: 26100000Capital: Addis-Ababa

: $1 990 millionMain products: Millet, sorgo, barley,wheat, livestock, coffee, maizePrincipal exports: Coffee (38 %),hides (13 %), vegetables (9 %)

KENYA

Area: 582646 kmF'ttpulati~n: 11 850 000Capital: Nairobi

: $1 850 millionMain products: Sugar, wheat, maize,coffee, drinks, soapPrincipal exports: Coffee (22%),oil products (12%), tea (11

LESOTH 0

Area: 30 000 kmPopulation: 980 000Capital: Maseru

: $100 million (~Main products: Wool, livestock,maize, wheatPrincipal exports: Mohairwool (32 %), livestock (22 %),diamonds (19 %)

MADAGASCAR

Area: 587 000 kmPopulation: 7 655 134Capital: Tananarive

: $1 020 millionMain products: Rice, sugar, coffee,groundnuts, spicesPrincipal exports: Coffee (29 %),vanilla (9 %), rice (9 %), sisal (3 %)

MALAWI

Area: 118000 kmPopulation: 4950 000Capital: Zomba (future: Lilongwe)

: $ 500 millionMain products: Tea, tobacco, tung(oil), cotton, groundnutsPrincipal exports: Tobacco (30 %),tea (17 %), groundnuts (7 %)

MAURITIUS

Area: 1 843 kmPopulation: 850 000Capital: Port- Louis

: $ 230 millionMain products: Sugar, teaPrincipal exports: Sugar (93 %)

SOMALIA

Area: 637657 kmPopulation: 3 000 000Capital: Mogadishu

: $210 millionMain products: Livestock, sugar,bananasPrincipal exports: Livestock,coprah (45 %), bananas (26 %)

SU DAN

Area: 2 505 813 kmPopulation: 16 420 000Capital :Khartoum

: $1 900 million (*Main products: Sugar, sorgo, cottonchrome, gum arabicPrincipal exports: Cotton (56 %),gum arabic (9 %), ground nuts (9 %)

SWAZILANDArea: 17 000 km2Population: 420 000Capital: Mbabane

: $80 millionC':'Iain products: Sugar, livestocktimber, asbestos, coal, iron orePrincipal exports: Iron ore (26 %)sugar (23 %), timber (19 %), cottonasbestos

TANZANIAArea: 940 000 kmPopulation: 13980000Capital: Dar-es-Salaam

: $1 470 millionMain products: Sisal, cashew nutscotton, coffee, diamondsPrincipal exports: Coffee (19 %),cotton (13 %), sisal (9 %),diamonds

UGANDAArea: 236000 kmPopulation: 10 330000Capital: Kampala

:$1 340 millionMain products: Manioc, sugar, beerphosphates, copper, coffeePrincipal exports: Coffee (66 %),cotton (15%), copper (10%),tea (5 %)

ZAM BIAArea: 753 000 kmPopulation: 4515 000Capital: Lusaka

: 1 620 million~ain products: Maize, copper, coalZinCPrincipal exports: Copper (95 %)

THECARIBBEAN

BAHAMASArea: 14000 kmPopulation: 190 000Capital: Nassau

: $430 millionMain products: (Tourism), sugarproducts, pharmaceuticalsPrincipal exports: Oil products (32 cement (12 %), sugar

-4-

The Co\Jrier no. 31 - SPECIAL ISSUE - March 1975

The 46 ACP'location

The following is a list of the 46 inde-pendent countries in Africa, the Carib-bean and the Pacific which have enteredinto the new agreement with theEuropean Community:. Nineteen states :hitherto associatedwith the Common Market until January31, 1975 by the Yaounde Convention:Burundi, Cameroon, Central AfricanRepublic, Chad, Congo, Dahomey, Ga-bon, Ivory Coast, Madagascar, Mali,Mauritania, Mauritius, Niger, Rwanda,Senegal, Somalia, Togo, Upper Voltaand Zaire..Twenty-one Commonwealth States,to which theEEC had offered specialagreements on Great Britain s adhesionto the Common Market:

In Africa: Botswana, Gambia, Ghana,Kenya, Lesotho, Malawi, Nigeria, SierraLeone, Swaziland, Tanzania, Uganda,Zambia.

In the Caribbean: Bahamas, Barba-dos, Guyana, Grenada. Jamaica, Trini-dad and Tobago

In the Pacific: Fiji, Western Samoa,Tonga.. Six countries of Africa with nospecial relationship with the countriesof the EEC which had been invited tojoin the above-mentioned because theireconomies are "comparable : Ethiopia,Liberia, Sudan, Guinea, Equatorial Gui-nea and Guinea- Bissau.

BAR BADOSArea: 430 kmPopulation: 249 000Capital: Bridgetown

: $160 millionMain products: Sugar, transportmachinery and equipment, vegetablesPrincipal exports: Sugar (45 %),oil products (13 %), transportequipment

GRENADAArea: 300 kmPopulation: 96 000Capital: St. George

: $40 millionMain products: Cocoa, bananas,nutmegPrinci pa I exports: Cocoa (40 %),nutmeg (30%), bananas (24%)

GUYANAArea: 214 970 kmPopulation: 775000Capital: Georgetown

: $ 300 millionMain products: Sugar, rice, bauxite.aluminaPrincipal exports: Bauxite andalumina (48%), sugar (34%), rice

COUNTRIES ASSOCIATED WITH THE EECkJi':nl Lome Convention (AyP)

- 1315

COMMISSION OF THE EUROPEAN COMMUNITIESDirectorate-General" Information200, rue de la Loi - B-1 049 Brussels - BelgiumTel. 735.00.40

Bonn:Zitelmannstrasse, 22

5300 Bonn - DeutschlandTel. 23.80.41Telex 886648 EUROP D

Berlin:KurfUrstendamm, 1021000 Berlin 31 - DeutschlandTel. 886.40.

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Geneve:Rue de Vermont, 37 -CH- 1202 Geneve - SuisseTel. 34.97.

Circulation: Use Grundmann

THE COURIEREUROPEAN COMMUNITY

AFRICA. CARIBBEAN . PACIFIC

Commission of the EuropeanCommunities

PUBLISHER:Erich Wirsing

~i . ~DITOR: Alain LacroixSecretariat: Colette Grelet

Nico Becquart

200, rue de la Loi1049 Brussels (Belgium)

Tel: 7350040 and 7358040Telex: COMEUR BRU 21877

ASSISTANT EDITORS: Lucien Pagni

Barney Trench