Trade protocols and EPAs
Introduced as part of the first Lomé Convention (1975–1980), trade protocols have become one of the characteristics of EU-ACP cooperation, significantly promoting economic development. For example, the banana protocol ensured exemption from customs duties for specific quotas, primarily exported by Caribbean countries.
Market in Cotonou, Benin
© EC - G. Barton
Equally, under the sugar protocol – which expires in two years’ time – 18 ACP exporting countries can sell a quota of 1.3 million tonnes on the EU market at a guaranteed price which is aligned with internal European prices that are considerably higher than the price on the global market. This protocol has promoted economic development in countries like Mauritius, Fiji, Guyana and Barbados. Finally, the meat protocol provides for a reimbursement of 90% of the tax on beef imports from several southern African countries, in particular Botswana and Namibia.
During 2008, the new Economic Partnership Agreements (EPAs) between the EU and all six ACP regions should come into force, and the trade protocols and current non-reciprocal preferential regime will disappear to be replaced by a new reciprocal but asymmetric trade regime. In other words, the EU will offer duty-free and tariff-free entry into its market as soon as EPAs come into force, except for sugar and rice which are subject to a short transition period. ACP countries, on the other hand, will scale back tariffs on imports from the EU gradually over the next 25 years. Simply put, Europe will speed up the opening of its markets while at the same time the ACP market openings are designed to encourage investment, employment and boost growth.
Stabex (1976–2000)
Stabex is the abbreviation for the fund for the stabilisation of export revenue from agricultural products, introduced as part of Lomé I. It has compensated for losses in revenue from exports of products to the EU by ACP countries as a result of fluctuations in prices on the global market. This is on the condition that the losses represented a significant portion of their trade balance. The major beneficiaries of Stabex have been the large-scale producers of cocoa, cotton, coffee, groundnuts and tea. Since 2000, this compensation mechanism has been replaced by another called Flex, which stands for the compensation fund for the short-term fluctuations of export revenues, triggered by both losses of these revenues and the subsequent deterioration of the public deficit.
Sysmin (1981–2000)
The Sysmin fund, introduced under the Lomé II Convention, has enabled countries dependent on particular minerals to receive loans, and subsequently grants, to maintain their production capacity and, if necessary, to diversify their economies. The principal beneficiaries have been Zambia, the Democratic Republic of Congo (then called Zaire), Guinea-Conakry and Jamaica.
This instrument has been replaced by the Flex (see the paragraph above on Stabex). The EU’s support to the ACP mining sector has also been provided so far through the European Investment Bank (EIB).
