New EU/ACP Agreement

Contact: John Emmanuel

Wednesday, February 09, 2000 - With arrangements under the Lome Convention coming to an end in February, 2000 a new twenty-year agreement to replace the giant trade and aid Convention linking African, Caribbean and Pacific (ACP) States and the European Union (EU) has been agreed upon.

The negotiations ended last week in Brussels and included banana protocols under which Caribbean fruit was guaranteed duty free entry into Europe, coupled with financial support that developing countries received for loss in export earnings under STABEX.

Permanent Secretary in the Ministry of Foreign Affairs and International Trade Earl Huntley says, "Prior to the negotiations on the STABEX issue, the Europeans had indicated that they were going to scrap it and so there was a fight throughout the negotiations to try to keep some element of it."

He says the EU has instead agreed upon a new financing system to replace STABEX assistance under which, if export earnings fall by 10%, developing states stand to benefit from a package of assistance.

According to Mr. Huntley, "There was a problem with that for island developing states because it was felt that 10 % was very high. You would have to suffer a truly major disaster to benefit whereas now, for example, under STABEX they keep getting support very regularly. At the December negotiations it was agreed that island developing states... like Haiti for example, land locked countries, they would have taken a 2% fall in earnings. At the last set of negotiations we discovered that the 2% was no longer in the text."

Mr. Huntley says however a declaration was received from the EU indicating that it would reexamine cases from countries that failed to benefit from the 10% clause. He says a second banana protocol has been agreed to under which the EU would examine and put measures in place to ensure the viability of the banana industry in ACP states is maintained. "The difference between this banana protocol and the last one is that it’s broader and now applies to all ACP states not just those like the Caribbean etc. who benefited under the last Lome," Huntley said.

The Permanent Secretary who was present at the negotiations, together with Minister for Foreign Affairs and International Trade Honourable George Odlum and Ambassador Edwin Laurent, says what now has to be worked out with the EU, WTO and the United States is the nature of access to the European market in a mutually beneficial way that will not discriminate against the Latin American banana producers.

An eight-year rollover period has been approved whereby the arrangement under the last Lome will continue to apply before the new one comes into effect.

The new 20-year deal is worth over 13 billion euros. (1 euro is 0.98 U.S. Dollars)

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