The existence of trade preferences for developing countries is the second area of the global trading environment with particular significance for Africa. The Lom Convention, signed in 1975 and extended in 1980 and 1985, gives certain products originating in developing countries in Africa, Asia, the Caribbean, and the Pacific duty-free access to the EU market. Although the Lom Convention is due to expire in 2000, there is no cause for alarm. First, these agreements typically apply to goods with low value added for which the MFN tariff is already low or zero. Fourth, preferences under the two systems apply only to particular products, are not legally bound, and may be removed at the discretion of authorities in the industrial countries.
Market access is therefore uncertain, discouraging long-term investment in export industries.
These two paths are not mutually exclusive. Regional trading arrangements. Regional trading arrangements can contribute to economic efficiency, trade, investment, and growth. A few countries have gone beyond this, harmonizing investment regulation incentives and tax treatment, as well as standards and technical regulations. Regional trading arrangements may be beneficial if they result in a broadly similar degree of nondiscriminatory trade reform.