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African Caribbean Pacific–European Union (ACP-EU) partnership agreements

The trade and development relationship between the European Union (EU) and the African, Caribbean, and Pacific (ACP) countries has been shaped by a number of formal treaties and agreements since the end of World War II. The aim of these agreements has been to promote, with EU participation, opportunities for growth and development among the ACP countries by both direct and indirect policy measures. The more direct methods have included development funds, investment loans, and compensatory payments, while indirect methods have centered on trading arrangements and protocols that favor exports fromACPcountries in a bid to generate growth.Underpinning these specific aspects, though, has been a more general focus on engendering wider social, political, and economic development as part of an understanding (often referred to as the acquis) between the EU and the ACP countries, which reflects the fact that the relationship is not only a trading club.
The Treaty of Rome, which established the European Economic Community (EEC) in 1957, included a section entitled ‘‘The Association of the Overseas Countries and Territories.’’ This made specific provisions for the relationship between the EEC and the overseas territories and former colonies of member states under Articles 131 to 136. The association with former colonies of the six members of the EEC was designed ‘‘to promote the economic and social development of the countries and territories and to establish close economic relations between them and theCommunity as awhole’’ (Article 131, Treaty of Rome). In practice, these arrangements had their greatest effect on the former French colonies in West Africa and the Caribbean. Preferential trading arrangements formed themajor part of the association with a commitment to review the policy after five years.

The Yaounde Conventions

The first review produced a new set of arrangements embodied in the first Yaounde Convention (or Yaounde I) signed on July 20, 1963, in the Cameroon capital by 18 countries of the Association of African States and Madagascar (AASM) and the six EEC states. Yaounde I aimed to encourage the development of the AASMcountriesmainly by allowing preferential treatment of their manufactured exports into the EEC, but with only limited preference for agricultural exports. In return, the EEC was permitted to export limited volumes of manufactures to the AASM with similar duty arrangements. In addition to trade provisions, there was also agreement on technical and financial issues, on rights of establishment that allowed for, among other commercial features, the establishment of companies in associated states, and also on the institutions that would oversee the governing of the convention. The agreement ran from 1964 to the end of 1969.
Countries that were not part of the Yaounde I sought associate status.Under theArusha Agreement signed in Tanzania on September 24, 1969, Kenya, Tanzania, and Uganda negotiated associate status with the EEC. This came into force at the same time as the second Yaounde Convention (Yaounde II), whichwas in effect from1971.While reenforcing the preferential and reciprocal trade arrangements, Yaounde II also included provision for investment by the EEC in the associated states. Specifically, funds were provided mostly for the European Development Fund (EDF) with a small amount going to the European Investment Bank (EIB) for loan-supported project work.The specific aimwas to broaden the relationship between the two groups, from trade policy to wider development areas. The Arusha Agreement only contained trading elements and none of the financial aid offered under Yaounde II.

From Yaounde to the ACP

In 1975, the developing country signatories to the Yaounde´ Conventions formed a new alliance with the 20 Commonwealth countries associated with the United Kingdom (UK). The new body was called the African Caribbean and Pacific (ACP) Group. The terms of this new body were established within the Georgetown Agreement. The main aim was to coordinate negotiations for ACP countries with the EEC, a process that had begun in 1973 as part of a review of Yaounde´ II. The negotiations were concluded with the signing on February 28, 1975, of the first Lome´ Convention (Lome´ I) in Togo, by 46ACP countries and the then nine EEC Member States.
Lome I had a number of provisions but the key ones again related to trade. Free access formost ACP exports to the EEC, although unlike Yaounde´ II without reciprocal terms, lay at the heart of it. In addition, the agreement introduced specific protocols for sugar, rum, bananas, and beef and veal. In the Sugar Protocol, for example, the EEC agreed to volume import quotas of raw (cane) sugar fromACP producers at a guaranteed minimum price. The protocol reflectedtheUK’s entry into the EEC and its established trading agreements with its former colonies. ACP sugar producers were allocated quotas for exports with the aim of aiding their producers without harming EEC producers of beet sugar. The other commodities had similar export quota and guaranteed price arrangements, although beef and veal saw refunds of tax at 90 percent on imports.
In addition to these trade arrangements, the convention also provided for a Council ofMinisters. This body was drawn from members of the Council and Commission of Ministers for the EEC and representatives from each ACP country, with the presidency alternating between the two groups. The other significant innovation was a change in the nature of EDF financing. The STABEX (shorthand for stabilization of export earnings) scheme aimed to provide stabilizing finance when export earnings fell due to a decline in prices for a producer’smain (often primary) exports. This reflected the concerns about volatility in world commodity prices and the impact on exporters and countries’ macroeconomic planning and policies. Coupled with further EDF and EIBmonies, the conventionmoved explicit financial aid more prominently into the relationship between the EEC and the ACP, albeit with a continued emphasis on expenditure on infrastructure.
Lome II was agreed and signed in 1979. Although it did not offer new trading provisions, within its EDF provisions it did introduce SYSMIN (stabilization of export earnings from mining products), a system of loans for helping the mining industries in those countries that relied heavily on exports of minerals for revenue generation, to diversify into other sectors. Lome III (1984) signaled a shift from direct encouragement of export-led growth to encouragement of self-sufficiency and especially security of food supplies. Rural development was promoted as a means of achieving these goals. Finally, Lome IV (1990) covered a 10-year periodwith a fiveyear review of financial support. However, it also became apparent that wider social issues, such as the environment, women’s roles, and diversification of the economywere givenmuch greater prominence as the ACP countries continued to develop. The EU recognized a desire for greater self-determination of policy.
A major review of the Lome Convention came in 2000. The Cotonou Agreement of 2000 was signed in Benin and built on the Lome´ acquis but took a new, longer-term approach to the political, trade, and development aspects of ACP-EU relations. Globalization had appeared to pass many ACP countries by, with their share of foreign investment flows being very small and their trade shares equally limited. Tied to decreasing donor aid, this presented a problem that the Lome´ IV had not dealt with. Indeed, compliance with World Trade Organization (WTO) rules meant protective trade arrangements could no longer provide an answer even if they were desired. Instead, focus on poverty reduction via good governance, macroeconomic stability, and new trading arrangements increased. To integrate ACP countries more fully with global markets, the EU liberalized virtually all imports from least-developed countries (LDCs), not just ACP countries, under a General System of Preferences (GSP). The protocols for sugar and beef and veal remained, however. Funding was now via grants totaling 11.3 billion euros and for risk capital, which totaled 2.2 billion euros.
In 2001 the EU concluded its amendment of the GSP and developed its ‘‘Everything but Arms’’ policy. This policy extended duty-free access to all LDC exports apart from arms and munitions, with some restrictions still applying over a longer period for bananas, rice, and sugar. Of the 48 LDCs, 39 were ACP (Cotonou signatory) countries.
The WTO continued to put pressure on the EU to move away from preferential treatment of ACP exports, and in 2002 Economic Partnership Agreements (EPAs) became the focus for ACP-EUtrading relationships. The negotiations with regional groupings sought to encourage partnership, regional integration, development, and ultimately integration of the ACP countries into the WTO. EPAs were scheduled to be in place by 2008.
Given the scope, scale, and relative complexity of the various ACP-EU agreements, it is possible to view them as central to a continuing process of different countriesworking together formutual benefit. Although not comprehensive in either geographic or economic coverage, ACP-EU agreements have played a major role in shaping trading policies for many countries and have offered possible options for others to follow. See also European Union; international trade and economic development; World Trade Organization

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