16. 2. 76 Official  Journal  of the European  Communities No C 35/1 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
Opinion  on the  Convention  of Lome 
The text  referred  to the Committee  has  not  been  published  in the Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 131st  plenary  session  held  on 25 and  26 June  1975  the Committee,  acting 
on a proposal  from  the Bureau,  decided  to deliver  an opinion  on the abovementioned 
subject  on its own  initiative. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
135th  plenary  session,  held  in Brussels  on 26 and  27 November  1975. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the fourth  paragraph  of Article  20 
of its Rules  of Procedure, 
Having  regard  to the decision  taken  by the Plenary 
Assembly  on 26 June  1975,  as proposed  by its 
Bureau,  to draw  up an opinion  on the Convention  of 
Lome, 
Having  regard  to the decision  taken  by its Bureau 
on 27 May  1975  instructing  the Section  for External 
Relations  to prepare  an opinion  and  a report  on the 
matter, 
Having  regard  to the  oral  report  made  by the 
Rapporteur,  Mr Evain, 
Having  regard  to the opinion  issued  by the Section 
for External  Relations  at its  meeting  on  12 
November  1975, Having  regard  to the discussions  at its 135th  plenary 
session,  held  on 26 and  27 November  1975  (meeting 
of 26 November), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
with no votes  against  and two  abstentions: 
1. General 
1.1. The  Committee  would  draw  attention  to its 
opinion  of June  1974  on questions  connected  with 
the negotiations  between  the  Community  and  the 
African,  Caribbean  and Pacific  States  (1). 
(*) OJ No C 116,  30. 9. 1974. 
No C 35/2 Official  Journal  of the European  Communities 16. 2. 76 
1.2. It  endorses  the  principles  set  out  in that 
opinion,  and  particularly  the  statement  that  'the 
Community  must  not merely  extend  the geographical 
scope  of its cooperation  policy.  It must  make  a 
fundamental  re-appraisal  of this  policy  and  its key 
principles'. 
1.3. In  other  words,  the  Community  must  work 
out is own  blueprint  for  relations  between  the 
industrialized  and  the developing  countries. and commercial  channels  must  be expanded  and 
improved  considerably. 
2.2. This  is why  the  Committee  attaches  great 
importance  to  certain  measures  in  the  trade 
promotion  chapter  which  are  calculated  to lead  to 
new developments.  These  measures  are:  first,  trade 
promotion  activities  on behalf  of the  ACP  States; 
second,  the  establishment  of links  to promote 
cooperation  between  businessmen. 
1.4. Some  of  the  Convention's  innovations 
deserve  to be emphasized,  particularly  the  STABEX 
scheme  and  the say given  to the developing  countries 
in determining  how  the  aid is to be used.  Some  of 
these  innovations  could  be  applied  in a wider 
framework  and  thus  further  a world  development 
aid policy.  But  the  most  important  element  is the 
desire  of the  signatories  to promote  industrial 
cooperation  and  encourage  initiatives  by businesses, 
trade  unions,  and  other  trade  associations. 2.3. The  Convention  does  not  provide  for  any 
quid pro  quos  from  the  ACP  States.  It would  not 
have  been  right  to oblige  these  countries,  which  are 
just beginning  to industrialize,  to grant  free  access  or 
even  'reverse  preferences'  for  EEC  products.  It is 
hoped  that  the  ACP  States  will  be able  to use  this 
precedent  as an  argument  for  obtaining  similar 
concessions  from  other  industrialized  countries,  and 
thus widen  their  own  export  market.  Such  a 
widening  would  help  them  to attract  investments. 
1.5. After  the confusion  and  failures  which  have 
marked  other  international  conferences,  the very  fact 
that the Convention  of Lome  was  signed  at all is of 
great  political  significance,  as this  is an agreement 
based  upon  a mutual  commitment. 2.4. But  the  most-favoured  nation  clause  in the 
Convention  is, we feel,  of great  importance.  Its full 
significance  has yet to be spelled  out,  especially  the 
effect  it may  have  on the terms  on which  the ACPs 
supply  commodities  to the EEC. 
1.6. Furthermore,  as the Convention  is regional  in 
character,  the planned  aid  will  be concentrated  and 
thus more  effective. 
1.7. The  real  work  —  i.e.,  that  of actually 
implementing  the Convention  — is, however,  still  to 
be done.  This  will  require  a major  effort  and  pose 
difficult  problems. 
2. The  trade  aspects  of the Convention 
2.1. Under  the  Convention,  products  from  the 
ACP  States  — other  than  certain  farm  produce 
covered  by a common  organization  of the market  — 
are allowed  free  access  to the  Community  market. 
But if the ACP  States  are to take  full  advantage  of 
the concessions  made,  their  marketing  machinery 2.5. The  Community  is quite  entitled  to try  to 
ensure  that  the  EEC-ACP  cooperation  policy  which 
it is seeking  will  entail  real  guarantees  for  its 
commodity  supplies.  Commodities  must  be supplied 
to the Community  on terms  at least  as favourable  as 
those  applicable  to other  industrialized  countries. 
The Convention  must  protect  the  Community  as 
well as the ACP  States. 
2.6. As  regards  rules  of origin,  the Committee  has 
considered  the  alterations  in the  change-of-tariff-
heading  rules.  It feels  that  these  alterations  are 
justified  to  the  extent  that  they  will  help 
development  in and  cooperation  between  the  ACP 
States.  Care  must  be taken  to ensure  that  the  rules 
are applied  with  this  end in view. 
2.7. It  is difficult  to predict  what  repercussions  the 
opening-up  of the  Community  market  to ACP 
products  may  have  at a time  when  the  Community 
16. 2. 76 Official  Journal  of the European  Communities No C 35/3 
market  is to be opened  up to products  from  other 
countries  and  groups  of countries.  But  it is possible 
that the  level  of employment  and  business  activity 
will be seriously  affected  in certain  sectors  and 
regions.  This  is why  provision  must  be made  now 
for measures  to safeguard  and  create  jobs,  and 
measures  which  can  if necessary  be taken  in certain 
cases  to  restructure  individual  industries.  The 
Community  should  be able  to play  a major  role  here, 
through  the instruments  at its disposal  (Social  Fund, 
Regional  Fund,  EAGGF).  This  role  should  if possible 
be preventive. 
2.8. Generally  speaking,  the  economic  and  social 
repercussions  of the  Convention  may  be felt  first  in 
farming,  and  be much  more  severe  in some  regions 
than in others.  In view  of the  present  level  of 
economic  development  in most  of the  ACP  States, 
farming  will  probably  be the first  industry  to expand 
its exports. 
2.9. An  exact  appraisal  of the potential  impact  on 
agriculture  of the  Convention  would  require  studies 
of each  individual  product.  Such  studies  could  only 
be carried  out properly  by panels  of experts. Community  is unable  to accept  the  ACP  States' 
proposal  that  transfers  be made  on a real  value  basis. 
However,  the  Committee  considers  that  inflation 
should  not  be allowed  to make  the  Community's 
guarantees  meaningless. 
4. Industrial  cooperation 
4.1. This  is a promising  new  idea,  but  it still  has 
to be defined  and  put  into  effect.  Apart  from  the 
financial  provisions,  the Convention  just  lays  down 
the ground  rules  for  industrial  cooperation.  The 
Committee  has  tried  to spell  out  the  objectives  and 
indicate  how  they  should  be attained. 
4.2. Objectives  and  methods 
4.2.1.  According  to the  Convention,  the  general 
aim of industrial  cooperation  is 'to promote  the 
development  and  diversification  of industry  in the 
ACP  States  and  to help  bring  about  a better 
distribution  of industry  both  within  those  States  and 
between  them';  in other  words,  creating  as many 
jobs as possible  and  developing  an industrial  base  in 
the ACP  States  so that  living  standards  can  be really 
improved. 
3. The  STABEX  scheme 
3.1. This  scheme  for stabilizing  export  earnings  is 
a new  departure.  Apart  from  being  used  in 
connection  with  the  Convention,  it could  represent 
an important  contribution  by  the  EEC  towards 
solving  the world  raw  materials  problem. 
3.2. From  the  point  of view  of EEC  businesses, 
the scheme  has  the  advantage  of not  seriously 
interfering  with  market  forces.  Without  affecting 
prices  directly,  it makes  it possible  to improve  the 
stability  of  export  earnings  from  the  primary 
commodities  in question  (11  tropical  products,  some 
derivatives  of these  products  and  iron  ore).  It is of 
particular  benefit  to the  poorest  countries,  since 
these  will  not  have  to pay  back  any  compensatory 
amounts  which  they  receive. 4.2.2.  These  aims  are to be achieved  in part  by the 
free play  of market  forces,  thanks  to the Community 
market  being  opened  up to ACP  products.  But  in 
addition,  financing,  marketing,  training  and  other 
policies  are needed,  which  means  that  both  EEC  and 
ACP  Governments  have  a part  to play. 
4.2.3.  We  must  therefore  ask  ourselves  what  the 
aims  of such  policies  should  be. 
4.2.4.  Between  now  and  1980,  when  the 
Convention  is due  to run  out,  the  impact  of 
industrial  cooperation  will  not  be such  as to create 
serious  economic  or social  problems  in the  EEC  or 
in the  ACP  States.  But  it must  be realized  that  the 
process  will  be irreversible. 
3.3. But  the scheme  will  only  stabilize  earnings.  It 
does  not  take  account  of inflation.  The  Committee 
recognizes  that,  as things  stand  at present,  the 4.2.5.  If  the Convention  is to set a new  pattern  for 
relations  between  the  Community  and  certain 
developing  countries,  it is important  to look  right 
now at industrial  cooperation  from  a medium-  and 
No C 35/4 Official  Journal  of the European  Communities 16. 2. 76 
long-term  angle.  In this  connection  the  Committee 
would  make  the following  preliminary  comments. in the  Community's  interest  to encourage  the  ACP 
States  to  manufacture  products  which  are 
competitive  solely  because  of low  wage  rates. 
4.2.6.  First  of all,  local  and  regional  markets,  and 
the industries  supplying  them,  must  be encouraged  to 
achieve  self-sustaining  growth.  This  means  that: 
— a certain  priority  must  be given  to expanding  and 
diversifying  farming,  and  particularly  the 
production  of food  crops.  Here  we must  ensure 
that Community  food  aid  programmes 
supplement,  and  do not  discourage,  the  planned 
output  of food  products  for local  consumption, 
— industrialization  should,  to a large  extent,  satisfy 
the needs  of local  and  regional  markets,  and  not 
be aimed  exclusively  at supplying  world  markets. 
The ACP  States  ability  to protect  their  industries 
is reinforced  by  the  fact  that  they  have  not 
pledged  themselves  to apply  reverse  preferences  to 
Community  products.  This  should  enable  the 
ACPs  to press  ahead  with  the  development  of 
their  economies, 4.3. Access  to the Community  market 
4.3.1.  Selling  on the  highly-diversified  Community 
market  poses  quality,  price  and  marketing-
organization  problems  which  the  ACP  States  are  ill-
equipped  to resolve.  And  so,  in the  interests  of 
efficiency,  machinery  should  be set up to help  with 
the marketing  of ACP  products,  and  ensure  that  the 
ACPs  know  what  the  requirements  of  the 
Community  market  are. 
4.3.2.  In  order  to implement  the  Convention,  it 
will have  to be decided  exactly  what  forms  this 
relationship  should  take.  Any  initiatives  likely  to 
make  this  easier  should  be encouraged.  In Germany 
and the  Netherlands,  for instance,  trading  companies 
and occupational  interest  groups  have  set up State-
backed  organizations  to  facilitate  the  sale  of 
developing  countries'  products.  Consideration  could 
be given  to the  adoption  of new  initiatives  along 
these  lines,  within  the  framework  of the  Convention 
of Lome. 
the technology  to be used  by the  ACP  States  in 
their  industrialization  should  be suited  to local 
economic  conditions.  The  use  of  advanced 
technology  is justified  in certain  cases,  but  in 
others  it may  be  preferable  to pursue  the 
Convention's  objectives  by using  less  complex 
processes  which  are  appropriate,  in particular,  to 
local  working  conditions  and  the  local  labour 
market. 4.4. Sub-contracting 
4.4.1.  Sub-contracting  is one  of the ways  of setting 
up industry  which  fall  within  the  cooperation 
objectives  set by the Convention.  But  for this  to be a 
success,  a number  of problems  would  have  to be 
overcome. 
4.2.7.  The  aim  of self-sustaining  growth  does  not 
exclude  a certain  reapportionment  of  industrial 
expansion  between  the  Community  and  the  ACP 
States.  Opening  up  Community  and  other  large 
markets  to ACP  products  should  help  the ACP  States 
to establish  new  industries  which  are  capable  of 
facing  world  competition. 4.4.2.  Generally  speaking,  sub-contractors  are 
located  in industrial  centres,  near  their  customers. 
Sub-contractors  develop  in  step  with  industrial 
complexes  and  adapt  themselves  to their  technical 
requirements.  Sub-contracting  is no longer  regarded 
as a supplementary  activity,  but  as  a highly-
specialized  industry  in its  own  right  capable  of 
producing  goods  more  efficiently  and  cheaply  than 
its customers.  Sub-contractors  have  to  be  fully 
geared  to their  customers'  production  schedules,  and 
this ties  them  to a nearby  location. 
4.2.8.  This  will  have  to be  a gradual  process, 
however.  It is not  in the  ACP  States'  interest  to 
provoke  excessively  radical  changes  in the pattern  of 
economic  activity  in the  Community,  with  resulting 
risks  of economic  and  social  imbalance.  Neither  is it 4.4.3.  But  in certain  cases,  sub-contracting  could 
develop  in the  ACP  States.  It would  even  be highly 
desirable  to  encourage  the  setting-up  of  sub-
contracting  units  wherever  a country's  level  of 
industrialization  permits.  These  units  could  initially 
16. 2. 76 Official  Journal  of the European  Communities No C 35/5 
supply  local  industry  and  subsequently  expand  into 
the regional  market. 
4.4.4.  Finally,  in certain  cases  they  could  supply 
Community  industries.  But  this  will  only  happen  if 
their  cost  advantage  is adequate,  if they  can  meet 
deadlines  and  if they  can  conform  strictly  to the 
technical  specifications  laid  down  by their  customers. 
4.5. Training there  is a dearth  of skilled  production  workers  and 
supervisors.  This  situation  should  be remedied  by 
encouraging  the  training  of skilled  workers  and 
apprentices,  and  by  providing  supplementary  and 
continuing  training.  However,  this  must  not  preclude 
assistance  by the  Member  States  with  the  training  of 
senior  executives. 
4.5.6.  The  Convention  rightly  stresses  training  on 
the spot.  The  trade  unions,  employers'  associations 
and similar  bodies  have  a role  to play  in the running 
)f the relevant  training  centres. 
4.5.1.  An  essential  part  of the  Convention  is the 
training  of supervisory  staff  and,  indeed,  workers  in 
general  (including  farm  workers)  in the  ACP  States. 
Provision  is made  for  a number  of measures,  the 
scope  and  practical  details  of which  are  clearly 
specified  in the Convention. 4.5.7.  Cooperation  between  Community-based 
firms  and  local  centres  should  likewise  be 
encouraged.  Finally,  we  should  look  for  new 
formulas  based  on,  say,  US and  Canadian  experience 
and involving  the  secondment  of  experienced 
supervisory  and  technical  staff  to ACP  States  where 
they  would  help  train  local  personnel. 
4.5.2.  Under  the  Convention,  the  Centre  for 
Industrial  Development  has  the  job  of:  (i) helping 
the ACP  States  prepare  their  training  programmes; 
(ii) providing  relevant  information  and  advice.  4  ^ Method  1 
4.5.3.  But,  there  is no  body  to coordinate  the 
various  measures,  and  preclude  duplication  of work. 
The Committee  therefore  suggests  that  use  be made 
of Article  74  (9)  and  Article  80  (5)  of  the 
Convention,  which  authorize  the  Council  of 
Ministers  to set up committees  and  ad hoc  working 
groups.  These  could  form  a sort  of clearing  house 
for training  matters,  act as initiators  and  liaise  with 
training  centres  throughout  the Community. 
4.5.4.  In  its opinion  on questions  connected  with 
the negotiations  between  the  Community  and  the 
African,  Caribbean  and  Pacific  States,  the Committee 
proposed  that  'a Training  Committee  be set  up at 
Association  Council  level'.  It went  on to state:  'This 
would  be  responsible  for  organizing  in-service 
training  courses  in the  most  appropriate  places  . . . 
for the reception  of grantees'.  The  Committee  thinks 
that all the  relevant  socio-economic  interest  groups 
should  be represented  on such  a training  committee. 4.6.1.  Whatever  form  the  institutions  of  the 
Convention  take,  industrial  cooperation  will  require 
the active  involvement  of businesses,  trade  unions 
and employers'  associations.  While  it is mainly 
governments  who  promote  industry  in the  ACP 
States,  in the Community  this  is essentially  the job  of 
private  and  state-owned  companies  of various  legal 
forms.  Any  methods  used  should,  therefore,  ensure 
genuine  contractual  relations  between  the  Member 
States  and  ACP  governments,  on the  one  hand,  and 
business  companies,  on the other. 
4.6.2.  If  such  relations  are  not  established, 
differences  of approach  may  arise  which  could  block 
initiatives  and  thereby  jeopardize  the  whole  success 
of industrial  cooperation. 
4.5.5.  Lastly,  training  needs  must  be determined. 
There  is no shortage  of senior  executives  in the  ACP 
States,  especially  in politics  and  administration.  But 4.6.3.  In  the  Committee's  view,  two  things  must 
be done  to further  industrial  cooperation:  provide 
information  and  create  a business  climate  based  on 
mutual  trust  (quite  apart  from  increasing  contacts). 
No C 35/6 Official  Journal  of the  European  Communities 16. 2. 76 
4.7. The  provision  of information 
4.7.1.  First  of all,  in the Community,  information 
must  be supplied  to the  public  in general  and  to 
economic  and  social  interest  groups  in particular.  If 
people  in the  Community  are  to accept  what  the 
Convention  is trying  to do,  they  must  be familiar 
with  the evolving  situation  in the ACP  States. one should  proceed  case  by case  and  country  by 
country,  rather  than  in an overall  manner.  The 
approach  must  be specific  and pragmatic. 
4.8.4.  The  steps  necessary  to expand  industrial 
cooperation  will  only  be taken  if sufficient  security  is 
afforded,  that  is to say  security  for  the  persons 
involved  and  protection  for investments. 
4.7.2.  Conversely,  it is essential  to ensure  that 
ACP  leaders  have  a better  appreciation  of the  real 
function  of businesses  in the Community's  economy, 
and the  role  of trade  unions  in representing  the 
interests  of wage  and  salary  earners. 
4.7.3.  Furthermore,  specific  information  about 
opportunities  in the ACP  States  must  be available  to 
businesses  and  executives,  technicians  and  specialists 
of all kinds  in the  Community.  Such  information 
should  be made  as accessible  as possible  to users  (in 
other  words,  the machinery  should  not be centralized 
in Brussels).  It should  be both  specific  (e.g.,  about 
taxation,  costs,  legislation  concerning  working 
conditions,  company  law),  and  reliable  (in  other 
words,  the liaison  with  the relevant  ACP  authorities 
must  be sufficiently  close  to ensure  that  data  an local 
conditions  is accurate). 4.8.5.  Industrial  cooperation  involves  transferring 
supervisory  and  technical  staff  and  workers  from 
Member  States  to the  ACPs  and  vice  versa.  During 
their  stay  and  while  travelling,  these  people  should 
enjoy  freedom  of movement  and  adequate  security 
under  the  law.  Any  risk  to their  security  would 
hamper  the  recruitment  of  personnel  vital  to 
industrial  cooperation,  and  would  thus  jeopardize 
the success  of such  cooperation. 
4.8.6.  The  Convention  does  not  specifically 
mention  investment  guarantees.  It simply  states  that 
'the Community  and  its Member  States  ...  shall 
endeavour  to  set  up  measures  to  attract  the 
participation  of their  firms  and  nationals  in the 
industrial  development  efforts  of the  ACP  States 
concerned',  and  calls  for such  steps  as are necessary 
to promote  effective  cooperation. 
4.8. The  business  climate 
4.8.1.  The  Convention  makes  it clear  that  each 
ACP  State  is free  to decide  how  it wishes  to 
cooperate  with  the  Community.  The  Convention 
also emphasizes  that  businesses  must  'adhere  to the 
aspirations  and  the  development  objectives  of those 
ACP  States'. 4.8.7.  If  initiatives  are  to be  encouraged,  the 
problem  of guaranteeing  investments  against  political 
risks  will  have  to be examined  at Community  level. 
An overall  approach  could  be  taken,  covering 
investment  in any  non-EEC  country.  The  question 
could  also  be examined  jointly  with  those  signatories 
of the  Convention  of Lome  which  are  interested  in 
EEC  private  enterprises  setting  up in their  territories. 
The aim  would  be to arrive  at investment  guarantee 
arrangements  which  would  further  their  economic 
development. 
4.8.2.  The  Committee  fully  approves  this 
principle,  but  if each  ACP  State  is to have  a free 
hand,  it is essential  that  businessmen  be  fully 
informed  and  have  stable  conditions  in which  to 
operate. 
4.8.3.  Accordingly,  so as to ensure  that  industrial 
cooperation  is successful,  it is vital  that  the  ACP 
States  be encouraged  gradually  to specify  what  they 
want  to be done  and  what  they  are  prepared  to 
allow  Community-based  businessmen  to do.  Here 4.8.8.  In  an  opinion  of  February  1974,  the 
Committee  agreed  that  there  should  be a Community 
system  of  private  investment  guarantees.  The 
Committee  also  asked  that  social  considerations  be 
taken  into  account  when  arranging  guarantees  (for 
instance  projects  should  have  to comply  with  the 
rules  of the ILO). 
The Committee  reiterates  the views  expressed  in the 
opinion  of February  1974.  It trusts  that  this  matter 
16. 2. 76 Official  Journal  of the European  Communities No C 35/7 
will quickly  be  taken  up  again  and  that  the 
Community  will  introduce  a system  of guarantees 
against  political  risks.  This  system  should  be so 
devised  that  it will  encourage  a flow  of investments 
— particularly  from  medium-sized  EEC  firms  — that 
will respond  effectively  to the  ACP  States'  needs. 
The Committee  notes  that  the  Commission  puts 
forward  some  interesting  suggestions  in its proposal 
to set up a European  Export  Bank. 
4.8.9.  Creating  a climate  favourable  to industrial 
cooperation  also  means  that  it should  be possible  for 
any disputes  between  individuals  and  the signatories 
of the Convention  to be raised  under  an appropriate 
procedure.  Furthermore,  the Committee  on Industrial 
Cooperation  should  genuinely  be able  to 'examine 
the problems  in the  field  of industrial  cooperation 
submitted  to it by the  ACP  States  and/or  by the 
Community  and  suggest  appropriate  solutions'. 
Setting  up a fully-fledged  system  of arbitration  under 
the Convention  should  also  be considered. 
4.8.10.  In  addition,  the  Community  should 
attempt  to work  out,  in conjunction  with  the  ACP 
States,  what  procedures  best  correspond  in practice 
with  the  policies  of the  latter  (e.g.,  technical 
assistance  and  marketing  agreements,  capital  input  in 
the form  of joint  ventures,  patent  agreements, 
investments  with  majority  control,  and  so on). 
4.8.11.  One  could  even  try to devise  new  vehicles 
for cooperation,  such  as 'development  agreements' 
under  which  the  management  and  control  of 
businesses  located  on ACP  territory  would  eventually 
be wholly  or partially  transferred  to the  relevant 
ACP  States.  Such  transfer  would  be effected  after  a 
specified  period,  and  take  place  by mutual  consent. interested  EEC  companies.  In carrying  out  this  task 
it will  have  to vet projects  thoroughly  and  not  bow 
to the inevitable  pressures  which  will  be brought  to 
bear.  Otherwise  the machinery  for cooperation  will 
rapidly  become  discredited. 
4.9. Economic  and  social  interest  groups  must  be 
involved  in industrial  cooperation. 
5. Problems  of technical  and  financial  assistance 
5.1. The  amount  of financial  assistance  provided 
for in the Convention  of Lome  is 3-7  times  greater 
than that  disbursed  under  the Yaounde  Convention, 
while  the number  of beneficiaries  has risen  from  19 
to 46. The  Committee  would  stress  that  the various 
forms  of  aid  available  from  the  European 
Development  Fund  (grants,  loans  on special  terms, 
risk capital,  quasi-capital  aid),  together  with  the 
funds  from  the European  Investment  Bank  and  the 
46 States  should  enable  a wide  range  of needs  to be 
adequately  met. 
5.2. Financial  cooperation  should  continue  to be 
coordinated  with  the aid given  by other  bodies  such 
as the  World  Bank,  so as to avoid  overlapping. 
Account  should  also  be taken  of the  bilateral  aid 
granted  by  certain  countries.  Furthermore,  the 
poorest  nations  should  be  given  preferential 
treatment  (e.g.,  they  should  receive  outright  grants), 
and only  the less  concessional  forms  of aid should  be 
available  to the more  developed  countries. 
4.8.12.  But  the  essential  thing  is  to  gain 
acceptance  for  the  idea  that  industrial  initiatives 
depend  on firms  being  able  to plan  ahead  for  a 
sufficiently  long  period  of  time.  There  is no 
contradiction  between  allowing  the  ACP  States  a 
completely  free  hand  in choosing  how  they  want  to 
develop  their  economies,  and  asking  them  to ensure 
that the  conditions  they  lay  down  are  reasonably 
stable. 5.3. The  aims  of financial  aid must  be precisely 
defined.  The  European  Development  Fund  must 
finance  only  those  projects  which  directly  further  the 
development  of the  ACP  countries  and  are  likely  to 
generate  subsidiary  benefits  (creation  of jobs,  etc.). 
The Centre  for Industrial  Development  should  have 
the final  say in the selection  of industrial  projects. 
4.8.13.  This  is  particularly  important  to 
businesses,  which  will  have  to negotiate  (directly  or 
indirectly)  with  governments. 
4.8.14.  The  Centre  for Industrial  Development  is 
to draw  up lists  of projects  and  circulate  them  to 5.4. It  is important  to step  up the  aid  to small-
and medium-sized  firms  which  is envisaged  in the 
Convention.  Yaounde  II provided  for  aid to small-
and medium-sized  firms,  but the relevant  provisions 
were  so imprecise  that  they  were  not implemented.  A 
special  protocol  to the Convention  of Lome  sets  out 
a two-stage  system.  Under  this  system  the European 
Development  Fund  opens  up a credit  line  for  a 
No C 35/8 Official  Journal  of the European  Communities 16.2.  76 
financial  body  or development  bank  and  the  latter 
then  draws  on this  credit  line  and  makes  loans  to 
small-  and  medium-sized  firms. 
5.5. The  machinery  would  appear  to be flexible. 
The decision-making  is decentralized  and  checks  by 
the competent  Community  authorities  on  the 
utilization  of credit  lines  are  to be ex post  facto. 
This  will  prevent  the  procedure  from  becoming  too 
cumbersome.  Setting  up  small-  and  medium-sized 
firms  in the  ACP  States  can  make  a major 
contribution  towards  greater  flexibility  and 
diversification  of the  economy.  The  ventures  to be 
encouraged  could  originate  either  in the  ACP  States 
or in the  Community.  In the  latter  case,  financial 
machinery  should  be set up to help  local  interests 
eventually  to take  the firms  over. the Centre  for  Industrial  Development,  whose 
statutes  and  rules  of operation  are  to be adopted 
by the Council  of Ministers,  acting  on a proposal 
from  the Committee  of Ambassadors. 
6.1.1.  The  Convention  of Lome  also  provides  for 
the participation  of the  'economic  and  social  sectors 
of the  Member  States  and  the  ACP  States'  in the 
establishment  of new  relations  between  the  ACP 
States  and  the Community. 
6.1.2.  This  involves  both  the  participation  of 
Community  firms  and  nationals  in the  industrial 
development  of the  ACP  States  (Articles  26 and  38) 
and 'cooperation  between  economic  operators  in the 
Member  States  and  the  ACP  States'  for  the  purpose 
ol promoting  trade  (Article  13). 
6. Institutional  questions 
6.0.1.  The  Convention  of Lome  sets  up  three 
institutions,  viz. : 
— the  Council  of  Ministers,  'which  is to  be 
composed,  on the  one  hand,  of the  members  of 
the Council  of the European  Communities  and  of 
members  of the  Commission  of the  European 
Communities  and,  on  the  other  hand,  of a 
member  of the  Government  of each  of the  ACP 
States'  (Article  70), 
— the  Committee  of Ambassadors,  which  is the 
counterpart  of the  Council  at ambassadorial 
level,  that  is to say  it comprises  representatives  of 
the Member  States,  the Commission  and  the ACP 
States  (Article  76), 
— the  Consultative  Assembly,  'which  is to  be 
composed  on a basis  of parity  of members  of the 
Assembly  on the  side  of the  Community  and  of 
the representatives  designated  by the  ACP  States 
on the  other'  (Article  80);  the  Consultative 
Assembly  'may  set  up  ad  hoc  consultative 
committees  to undertake  such  special  activities  as 
it may  determine'. 
6.0.2.  The  Convention  also  provides  for 
implementing  bodies,  viz.: 
— the  Committee  on Industrial  Cooperation,  whose 
composition  is to be determined  by the  Council 
of Ministers, 
— other  ad hoc  committees,  which  may  be set up by 
the Council  of Ministers, 6.1.3.  The  Convention  also  provides  for  the 
establishment  of links  to promote  such  cooperation 
(Article  13)  and  the  organization  of contacts  of all 
kinds  between  the  industrial  policy-makers, 
promoters  and  firms  of the Community  and  the ACP 
States  (Articles  33 and  36). 
6.1.4.  Finally,  the  Convention  empowers  the 
Council  of Ministers  to 'make  all the  arrangements 
that are  appropriate  for ensuring  the maintenance  of 
effective  contacts,  consultations  and  cooperation 
between  the  economic  and  social  sectors  of the 
Member  States  and  of the  ACP  States'  (Article  74 (6)). 
6.2.1.  Without  waiting  for  the  implementation  of 
the Convention,  an Interim  Committee  has  been  set 
up which  has  the  same  composition  as the  future 
Committee  of Ambassadors.  This  Interim  Committee 
has formed  a number  of sub-committees  which 
partly  correspond  to the  bodies  provided  for  in the 
Convention. 
6.2.2.  These  sub-committees  consist  solely  of 
government  and  Community  representatives.  No 
provision  has  been  made  for  any  participation  of 
social  and  economic  interest  groups  who  should  be 
represented  in order  to give  real  substance  to the 
Convention  in the  fields  of industrial  and  trade 
cooperation.  The  same  problem  could  arise  in 
connection  with  rural  development  (Article  46), 
agricultural  cooperation  and  training. 
6.2.3.  Consequently,  the  Committee  thinks  that 
Article  74 (6) is of crucial  importance.  This  Article, 
as stated  above,  stipulates  that  'the  Council  of 
Ministers  may  make  all the  arrangements  that  are 
16. 2. 76 Official  Journal  of the  European  Communities No C 35/9 
appropriate  for  ensuring  the  maintenance  of effective 
contacts,  consultation  and  cooperation  between  the 
economic  and  social  sectors  of the  Member  States 
and of the ACP  States'. 
6.2.4.  The  Committee  has  reached  the  following 
conclusions  regarding  the  involvement  of  its 
members  in:  (a)  the  implementation  of  the 
Convention;  (b)  the  work  of the  various  bodies  set 
up. 
6.2.5.  It  believes  that,  at the  present  time,  it would 
be unrealistic  to suggest  creating  a fully-fledged 
Economic  and  Social  Committee  under  the 
Convention,  chiefly  because  there  is such  a large 
number  of ACP  countries,  and  their  political  and 
economic  structures  vary  considerably. 
6.2.6.  It  considers,  however,  that  steps  should  be 
token  to work  out  other  arrangements  for  creating 
and maintaining  contacts  between  representatives  of 
economic  and  social  interest  groups  in the  Member 
States  and  the  ACP  States.  It therefore  suggests  that 
an annual  or biennial  joint  conference  be held,  under 
Article  74 (6),  for an initial  experimental  period.  The 
Committee  considers  that  it should  be  associated 
with  the  work  of this  conference  by some  procedure 
which  will  have  to be worked  out. 
6.2.7.  Without  prejudice  to  the  need  for 
representatives  of European  socio-economic  interest 
groups  to participate  in the  bodies  set up under  the 
Convention,  the  Committee  thinks  it desirable  that  it 
should  be involved  in the  work  of the  Convention's 
executive  bodies,  in particular: 
— the  Committee  on  Industrial  Cooperation 
(Article  35), 
— the  other  committees  set up by the  Council  under 
Article  74 (9) of the Convention, — the  Centre  for Industrial  Development  (Article  36). 
6.2.8.  The  Committee  could  be involved  in the 
work  of these  committees  by issuing  opinions  on the 
basis  of regular  reports  on  their  activities.  The 
arrangements  should  be such  that  real  account  can 
be taken  of these  opinions. 
6.2.9.  The  Convention  bars  members  of  the 
Economic  and  Social  Committee  from  membership 
of the  Consultative  Assembly,  and  the  Committee 
does  not  think  it should  recommend  any  change 
here.  It feels  that  a clear-cut  distinction  should  be 
maintained  between  the  duties  of a parliamentary 
body  and  the  Committee's  task  as a socio-economic 
consultative  body. 
6.2.10.  On  the  other  hand,  if non-parliamentarians 
were  asked  to  sit  on  any  ad  hoc  consultative 
committee  set up by the  Consultative  Assembly,  the 
Committee  could  possibly  offer  to assist  with  matters 
which  normally  come  under  its terms  of reference. 
6.2.11.  The  Committee  notes  that  there  are 
consultative  bodies  similar  to the  Economic  and 
Social  Committee  in a number  of  ACP  States, 
including  Cameroon,  the  People's  Republic  of the 
Congo,  the  Ivory  Coast,  Gabon,  Niger,  Senegal  and 
Togo. 
6.2.12.  The  Committee  has  demonstrated  in the 
past that  it is a useful  forum  for  meetings  between 
the representatives  of all  sectors  in the  Member 
States. 
6.2.13.  This  is why  the  Committee  should  as far 
as is practicable,  develop  its contacts  with  similar 
consultative  bodies  in  the  ACP  States.  The 
Committee  should,  in general,  be a meeting  place  for 
representatives  of the  economic  and  social  interest 
groups  of the Member  States  and  the ACP  countries. 
Done  at Brussels,  26 November  1975. 
The Chairman 
of the  Economic  and  Social  Committee 
Henri  CANONGE 
No C 35/10 Official  Journal  of the  European  Communities 16. 2. 76 
ANNEX 
to the opinion  of the Economic  and  Social  Committee 
The following  amendments  were  rejected  during  the discussion: 
Item  2.7 
Replace  the third  sentence  by: 
'The  objectives  and  principles  of cooperation  have  to be worked  out  and  jointly  agreed 
right  now.  They  must  be based  on harmonious  growth  and  allow  implementation  of the 
economic  and  social  measures  needed  in the ACP  States'. 
Voting: 
For: 3; against:  large  majority;  abstentions:  4. 
Item  2.8 
Insert  the following  after  the first  sentence: 
'Special  attention  should  be paid  here  to the French  Overseas  Departments'. 
Reason  for proposing  amendment 
The French  Overseas  Departments  (Martinique,  Guadeloupe,  French  Guyana  and  Reunion) 
are particularly  worried  about  competition  from  ACP  rum,  bananas,  pineapples  and  vegetables 
resulting  from  implementation  of the Convention  of Lome  and  its Protocols. 
Voting: 
For: 21; against:  39; abstentions:  12. 
Item  2.8 
Add the following  after  the first  sentence: 
'We must  plan  ahead  right  now  with  a view  to minimizing  adverse  effects  on tarm 
incomes'. 
Voting: 
For: 25; against:  33; abstentions:  15. 
Item  3.3 
Add the following  at the end  of the paragraph: 
'This  is why  the  Convention  cannot  be really  put  into  effect  until  talks  have  begun  on 
reforming  the international  monetary  system', 
16. 2. 76 Official  Journal  of the European  Communities No C 35/11 
Voting: 
For: 22;  against:  32; abstentions:  14. 
Item  4.2.2 
Reword  last  sentence  as follows: 
'But in addition,  the  sovereign  rights  of the  countries  concerned  must  be respected  by 
negotiating  agreements  on financing,  marketing,  training  and  other  policies.  This  means 
that.  . . (rest  unchanged)'. 
Voting: 
For: 1; against:  large  majority;  abstentions:  7. 
Item  4.2.6 
Reword  as follows: 
'The  Section  considers  it essential  to promote  the  establishment  of industries  which  further 
the objectives  laid  down  independently  by each  signatory  state  to the  Convention. 
It follows: 
— that  industrialization  should  take  place  gradually,  so as to ensure  that  industry  meets 
the requirements  of its national  market  and  the  social  needs  of each  ACP  State  and 
can become  an effective  component  of the  world  market, 
— that  the  technologies  used  are  consistent  with  the  industrialization  goals  set  by the 
individual  ACP  States, 
— that  the  abovementioned  objectives  of industrialization  should  serve  as a model  for the 
expansion  and  diversification  of farming  (including  food  crops).  Here  we must  ensure 
that Community  food  aid programmes  supplement,  and  do not  discourage,  the planned 
output  of food  products  for  local  consumption'. 
Voting: 
For: 8; against:  large  majority;  abstentions:  17. 
Item  4.5.6 
Amend  to read: 
'The  Convention  rightly  stresses  training  on the  spot.  The  Section  considers  that  in this 
connection  the  trade  unions,  employers'  associations  and  similar  bodies  of the  ACP  States 
have  a role  to play  in running  the  relevant  training  bodies,  and  giving  them  impetus. 
A contribution  from  the EEC  countries  would  be desirable'. 
Voting: 
For: 4; against:  large  majority;  abstentions:  15. 
No C 35/12 Official  Journal  of the  European  Communities 16. 2. 76 
Item  4.8.2 
Add the  following  sentence  at the  end  of the  paragraph: 
'These  conditions  must  not,  however,  include  political  stipulations  which  are  unacceptable 
to the  ACP  countries'. 
Voting: 
For: 1; against:  All  other  votes  cast. 
Item  4.8.9 
Delete  the  words  'system  of arbitration'  in the  penultimate  line  and  replace  them  by 'system 
for settling  disputes'. 
Voting: 
For: 4; against:  47;  abstentions:  14. 
Item  5.5 
Seventh  line,  add  after  'of the  economy': 
'provided  that  due  regard  is had  to the  economic  objectives  of the  countries  concerned, 
and the  firms  take  shape  around  large  industrial  units'. 
Voting: 
For: 1; against:  large  majority;  abstentions:  7. 
Opinion  on  the  proposal  for  a Council  Directive  on  the  approximation  of the 
laws  of the  Member  States  relating  to taximeters 
The text  referred  to the  Committee  was  published  in Official  Journal  of  the 
European  Communities  No  C 168  of 25 July  1975,  page  8. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 16  July  1975,  the  Council  referred  the  abovementioned  proposal  to  the 
Economic  and  Social  Committee  in accordance  with  Article  100  of the  Treaty 
establishing  the  European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
135th  plenary  session,  held  in Brussels  on 26 and  27 November  1975. 
The full  text  of the  opinion  is as follows: