1. Introduction

[page-number of print-ed.: 7]

1. Introduction

This paper briefly reviews the nature of ACP-EU economic and political relations since independence in regard to the Pacific area. It then considers the implications of the Lomé Convention’s end for the region. The first section considers the evolution of the relationship between the EU states and the ACP. [The analysis focuses on the relations between the EU and the Pacific ACP states, although it must be remembered that until the Mastricht Treaty, the EU, in the strict sense, did not exist. Moreover, in the context of the Pacific, two of the individual European colonial powers (Great Britain and France) were and remain influential as individual states in the post-colonial era.]
The second part considers some of the many economic constraints that have inhibited the development of the region and looks at the ways in which the EU, through the Lomé Convention, has assisted the development of the region.

It will be argued that while the EU has been the region’s second largest donor, and probably the largest and most important for the small island states, [Australia remains the largest donor to the Pacific ACP region, but two-thirds of the Australian regional aid budget goes to assist PNG, its former colony, in which it has substantial mining, petroleum and geopolitical interests.] the aid has at the same time warped the development path of the islands. Due in large measure to the relatively abundant supply of aid and the trade preference provided by the EU, Australia, New Zealand and Japan, the small island states have developed an aid dependency that is remarkable. However, as we shall see, almost 45% of aid to the Pacific ACP states is in the form of technical assistance. [This figure is only for the seven smaller Pacific ACP states and excludes PNG.]

Because the Lomé Convention encompasses both trade and economic relations between ACP states and the EU, it has impacted the economies of the region in a far more significant way than policy makers appear to be aware. [The Summary of the discussions for the Green Paper being prepared by the EU for the future of its relations with the ACP states makes almost no mention of the Pacific ACP states. The only comment – that the region was ‘autarchic’ – is at best curious, since the Pacific ACP states have trade penetration ratios (exports plus imports/GDP) in the vicinity of 80-90%. This demonstrates not only the very understandable lack of interest that the EU has in the Pacific ACP states but also a lack of understanding of the region that is incomprehensible following a century of colonial rule and over two decades of formal association under the terms of the Lomé Convention.]
The Lomé Convention has created, through trade preference and the exportation of the Common Agricultural Policy (CAP) to the region, what is in effect the continuation of colonial economic structures long after they would have otherwise died a natural death. In one way, the trade preference has been the most efficient mechanism for the disbursement of aid to the poorest elements of society without the direct intervention of state bureaucracies. However, as we shall see, a substantial portion of that aid has been appropriated by third parties.

One underlying element in this discussion should be made explicit. The EU obviously plans to curtail substantially its economic assistance to the Pacific and those other regions that are not of direct geopolitical and economic interest. This is understandable: nations and regions do not give aid only out of generosity. There is self-interest, and the self-interest of EU policy in the far southern seas of the Pacific is by no means obvious in Brussels. Yet what the EU has done through the Lomé Convention has substantially affected the development of a large group of small nations. As such, one cannot escape the impression that the year 2000 would provide a very convenient break with Europe’s colonial past. Removal of the last vestige of European post-colonialism, the Lomé Convention, would be a neat and clean ending for a century that

[page-number of print-ed.: 8]

began with Europe at the height of its colonial power. However, from the vantage of the Pacific, it is neither neat nor clean. The EU has through its almost unconscious generosity created serious economic distortion for which it has at least a moral obligation to assist in cleaning up. The Pacific tuna industries, the Fiji sugar industry and Melanesian tropical tree crop sectors remain perilously dependent upon EU trade preferences. Their abandonment by the EU would cause an economic disaster in a region already reeling under aid cuts from other donors as well as the loss of trade preference.