ICFTU ONLINE...

205/981001/ND

FEATURE

By Natacha David.

What will the future partnership between the European Union and the ACP (Africa, Caribbean, Pacific) countries be like? The trade union movement is calling for the democratisation of development programmes, and warns of the negative social effects of a WTO-dictated approach focusing solely on free trade.

Brussels, October 1 1998 (ICFTU OnLine): Will the spirit of development aid that has governed relations between the European Union and the ACP countries survive neo-liberal globalisation? That is the issue at stake in the renegotiation of the Lomé Convention which began on Wednesday in Brussels. As a basis for negotiation, the European Commission has presented a draft which foresees the creation of a network of free trade agreements between the European Union and the different ACP regions. In the first stages, there will be no change in their preferential access to the market. As from 2004, however, the ACP countries will have to open their markets to European exports. Exceptions may be made for the 40 least developed countries in the ACP group.

The Lomé Covention governs the system of preferential trading arrangements between the European Union and the 71 ACP countries. The origins of the Convention can be traced back 60 years, when the old European colonial powers signed preferential trading agreements (the Yaoundé Convention in 1963 and 1969) with, initially, 18 young independent States, to help promote their development. Later, in 1975, the Member States of the European Union signed the first Lomé Convention with 46 States in Africa, the Caribbean and the Pacific. After three revisions (1980, 1985 and 1989) and the more recent update in 1995, it is due to expire at the end of the century. It is with this historic deadline in view that the current "post-Lomé" discussions are being held.

The Convention gives free access to the EU market (without customs duty) to the vast majority of ACP exports (without requiring a reciprocal arrangement for EU exports). Altogether the EU absorbs 21 per cent of developing country exports. Some agricultural products such as sugar, bananas, rum and beef are excluded from this system, and are the subject of specific agreements. There are two financial instruments under the convention covering agriculture and mining (stabex and sysmin) aimed at guaranteeing stable earnings, to an extent, for ACP exports in these sectors, providing mechanisms to ensure guaranteed incomes. With a budget of more than 14 billion ecus for the period 1996 to 2000, financed by the contributions of Member States in the form of loans and non-refundable aid, the Lomé Convention represents 55 per cent of total EU aid to the developing world (and total European aid amounts to 45 to 55 per cent of world development aid, while the United States provides 20 per cent and Japan 18 per cent).

However the primary objective, development, has not been achieved. The ACP countries still account for 35 of the 45 poorest countries in the world. Neither has the system of preferences prevented the ACP’s share of the EU market from falling, from 6.7 per cent in 1976 to 3.6 per cent in 1995.

This failure can be attributed to several factors, including the lack of transparency and democracy in the Convention, as well as the lack of consistency on the EU side. All too often European aid does not even make up for the damage caused to the developing countries by other community policies, such as the massive subsidies granted to European agriculture. This failure is further accentuated by the steady liberalisation of world trade which is cancelling out the positive effects of the Convention on ACP trade. Although it has been granted an exemption until 2000, the preferential system is also in direct contradiction with the rules of the WTO, an issue which will have to be resolved in negotiating the future of the Convention.

Over the last two years, the European (ETUC) and international (ICFTU and WCL) trade union movements have been working on and have formulated proposals for the future convention. Since its revision in Mauritius in 1995, the Lomé Convention has had a political dimension added, which makes democracy and the existence of a state of law conditions for the continuation of the partnership. The European and international trade union trade union movement welcome this political dimension but believe the future partnership should give a greater role to non-government agents, namely the trade unions, the NGOs, the private sector and other components of civil society, to strengthen the decentralisation of aid. The democratisation of the programmes, from elaboration through to implementation, will require for example that the trade unions have access to autonomous funding to help improve the welfare of the people, and participate fully in the democratic life of the countries concerned.

But how can the goals of economic and social development aid be reconciled with the conditions for integrating into the global market? Here lies the obvious contradiction in the EU’s approach, which is criticised by the unions for not seeking to develop mixed economies. "The goal of rapidly integrating the ACP countries into world trade and the promotion of the private sector with guarantees of international investment seem to predominate, and risk making social progress subject to illusory economic growth" objects the trade union movement.

The trade union movement believes that rather than giving priority to neo-liberal globalisation as dictated by the WTO, "positive integration into the world market should be a gradual process, with transitional measures, accompanied by serious guarantees as to the economic and social impact, which will require the prior evaluation of the potential benefits for the ACP countries". Before reducing the tariff barriers to the entry of European goods into the ACP countries, urgent questions need to be answered about the social costs arising from this, particularly in terms of education and health.

The European and international trade union movement insist that the Preamble to the Convention should make explicit reference to the ILO Declaration on social rights. The observance of social rights, indivisible from civil, political, economic and cultural rights, without discrimination, constitutes the basis of any State of law, which is why the trade union movement demands that these rights be considered as essential criteria, in every cooperation contract, for the content of programmes and their evaluation.

The trade union movement is also demanding that the EU show its solidarity with the ACP countries within the big international institutions (IMF, World Bank and WTO) and when elaborating its trade and macro-economic policies. The trade unions insist that the new Convention must be in line with the commitments made at the Copenhagen social summit, if it is to lead to lasting development.

International Confederation of Free Trade Unions (ICFTU)
Boulevard Emile Jacqmain 155, B - 1210 Brussels, Belgium. For more information
please contact: Luc Demaret on: 00 322 224 0212 - press@icftu.org

ICFTU OnLine