WORLD TRADE
ORGANIZATIONWT/L/325
22 October 1999
(99-4647)
General Council
3, 4 and 8 November 1999Original:  English
EC - THE FOURTH ACP-EC CONVENTION OF LOME
Report of the Parties to the Convention
Under the Decision of 14 October 1996
The following communication, dated 21 October 1999, has been received from the Parties to
the Convention of Lomé.
_______________
1. Introduction
On 14 October 19961, the General Council decided to extend until 29 February 2000 the
waiver for the fourth ACP-EEC Convention of Lomé granted by Decision of the CONTRACTING
PARTIES of 9 December 19942, including the terms and conditions set out thereunder. The waiver
applies to the provisions of paragraph 1 of Arti cle I of the General Agreement on Tariffs and Trade
(GATT), to the extent necessary to permit the European Communities to provide preferential
treatment for products originating in ACP States as required by the relevant provisions of the Fourth
Lomé Convention, without being required to extend the same preferential treatment to like products of
any other WTO Member. In accordance with paragraph 5 of the waiver Decision, the Parties to the
Convention herewith provide a report on the implementation of the preferential treatment covered bythe waiver. This report covers the year 1998.
2. Preferential treatment under Lomé IV
Trade development is one of the most important objectives of the Lomé Convention.
Article 15 a states that  “trade development shall be aimed at developing, diversifying and increasing
the ACP States’ trade and improving their compe titiveness.... The Contracting Parties undertake to
use all the means available under this Convention, including trade cooperation, financial and technical
cooperation for the achievement of this objective”.
Moreover, article 167 says that “in the field of trade cooperation, the object of this
Convention is to promote trade between the AC P States and the Community... In pursuit of this
objective, particular regard shall be had to securing effective additional advantages for ACP States’
trade with the Community, and to improving the conditions of access for their products to the market
in order to accelerate the growth of their trade and, in particular, of the flow of exports to the
Community”.
                                                     
1 Document WT/L/186 of 18 October 1996..
2 Document L/7604 of 19 December 1994.WT/L/325
Page 2
To fulfil these objectives, the Lomé Convention grants, according to Article 168, duty free
access into the EU market for products originating from ACP states. This provision has no exception
for industrial products (chapters 25 to 97 of the harmonised system), but for agricultural products
covered by the Common Agricultural Policy, the level of preference is variable and depends of the
product. For those products covered by a Common Organization of Market, the preferential treatmentis given according to the provisions of Annex XL of the Convention. In this annex, the import
treatment defined at the level of the tariff nomenclature applicable to agricultural products and
foodstuffs originating in the ACP states, is established according to the Common organizations of
market. In addition to the annex XL of the Lomé Convention which applies for all ACP states, the
product protocols on bananas, rum, beef and veal and sugar establish the preferential treatment for a
list of countries. Overall, for agricultural products, only 6 per cent of the tariff headings are excluded
from any preference.
Eighty-five per cent of industrial ACP exports to the EU are duty free on an MFN basis, and
only about 8 per cent have a substantial margin of preference higher than 5 per cent. Concerning
agricultural products 42 per cent of all ACP exports are duty free on an MFN basis, annex XL grants
free treatment to another 33 per cent of ACP agricultural exports and the product protocols on 21 percent. Only 4 per cent of total ACP agricultural exports to the EU remain dutiable, with for most of
them, a preferential margin according to annex XL provisions or to the protocol on beef and veal.
Of the 71 ACP contracting parties of the Lomé Convention, 55 are presently members of the
WTO. Moreover, Cape Verde, Ethiopia, Samoa, Seychelles, Sudan, Tonga and Vanuatu are observer
governments to the WTO. All of them, save the first two, have applied to join the WTO.
Thirty-nine of the ACP States are included in the UN list of 48 Least Developed countries
(See annex 1).
3
3. Performance under Lomé IV
In addition to the Lomé trade provisions which are a very valuable part of the Convention,
and still grant the best access to the European market, Lomé IV bis Convention which has been
concluded in Mauritius in November 1995 has reinforced the trade development provisions to bring a
stronger linkage between aid and trade components in  order to foster the growth of exports. These
provisions should help ACP economies to diversify their exports into non-traditional products, to
become more competitive in the world market, to establish domestic trade and fiscal policiesnecessary for the development of economic and trading ties, to dedicate public investments in order to
finance physical infrastructure, to develop skilled labour, and to attract foreign direct investment to
develop supply capacity.
After four consecutive years of increased ACP exports towards the EU, these exports
decreased 7.5 per cent in 1998, roughly to the level of 1996. The decrease is mainly due to the fall of
prices of primary products, such as petroleum a nd diamonds, which are the two most important ACP
exports by value to the EU. By contrast, EU exports to the ACP increased by 10 per cent in 1998, the
fourth consecutive yearly increase. As a result, the trade balance, which was negative for the EU up
until 1997, turned positive in 1998, with an exports/imports ratio of 105 per cent.  (see statisticalannex).
In 1998, the EU imported Euro 21.3 billion from ACP countries, the top five products
representing almost 45 per cent of the total (petroleum 16 per cent, diamonds 8 per cent, coffee 7 per
cent, cocoa 6 per cent and cane sugar 4 per cent). However, due to the fall in price of petroleum anddiamonds, the relative value of this top five products in the total of imports actually decreased since
                                                     
3 See WT/L/325/Add.1.WT/L/325
Page 3
they represented almost 50 per cent in 1997. The main exporting ACP states are Nigeria (Euro 2.9
bn), Ivory Coast (Euro 2.7 bn), Cameroon (Euro 1.4 bn), Ghana (Euro 1.2) and Mauritius (Euro 1.1
bn).
The EU exported Euro 22.5 bn to ACP countries in 1998.The attached tables comparing imports from ACP countries to the EU, the US, Canada and
Japan in 1998 show that, mainly because of the preferential access granted under the Lomé
Convention, relative imports into the EU from these countries were higher than in comparable import
markets. 54 per cent of total ACP exports to QUAD countries are directed to the EU. When we
exclude fuel, which represents 51 per cent of ACP exports to the US and 17 per cent to the EU, the
EU share of total ACP exports to QUAD countries is 64 per cent.
4. Fulfilment of the terms and conditions attached to the waiver
The Parties to the Convention have met the terms and conditions attached to the waiver. Any
changes in the preferential treatment for products originating in the ACP States have been and will
continue to be notified to the WTO. Furthermore, the parties to the Convention wish to assure theother WTO Members that they will, upon request, promptly enter into consultations with any
interested WTO Member with respect to any difficu lty or matter that may arise as a result of the
waiver.WT/L/325
Page 4
ANNEX 1
Present ACP States Parties to the Lomé Convention (71)
Angola  * Ghana * Saint Vincent and the
Grenadines *
Antigua and Barbuda * Grenada * Samoa
Bahamas Guinea  * Sao Tomé & Principe
Barbados * Guinea-Bissau  * Senegal *
Belize * Equatorial Guinea Seychelles
Benin  * Guyana * Sierra Leone *
Botswana * Haiti  * Solomon Islands*
Burkina Faso  * Jamaica * Somalia
Burundi  * Kenya * South Africa * (1)
Cameroon * Kiribati Sudan
Cape Verde Lesotho  * Suriname *
Central African Republic  * Liberia Swaziland *
Chad  * Madagascar * Tanzania  *
Comoros Malawi  * Togo  *
Congo (Brazzaville) * Mali  * Tonga
Congo (Democratic Republicof) *Mauritania  * Trinidad and Tobago *
Côte d’Ivoire * Mauritius * Tuvalu
Djibouti * Mozambique  * Uganda  *
Dominica * Namibia * Vanuatu
Dominican Republic * Niger  * Zambia  *
Eritrea Nigeria * Zimbabwe *
Ethiopia Papua New Guinea *
Fiji * Rwanda  *
Gabon * Saint Kitts and Nevis *
Gambia  * Saint Lucia *
* ACP States currently members of the WTO (55)
(1) The trade provisions of the Lomé Convention do not apply to it.Least Developed Countries (UN list) in italics (39)
__________