10. Towards a Sequencing Strategy in a Two-Tier Post-Lomé Framework


11. Conclusion

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10. Towards a Sequencing Strategy in a Two-Tier Post-Lomé Framework

In a basic sense, Lomé IV and the mid-term review has started a process of transition along the lines described above. More emphasis has been placed on diversification and competitiveness through STABEX, trade adjustment, enterprise development including private sector development and the special banana facility to deal with this sensitive sector. At the end of Lomé IV, the next phase of transition to a FTA by the year 2005 could be introduced. This should involve a new EU/ACP Convention for 5 years extending one-way non-reciprocal trade preferences and fine-tuned to include, where feasible, other targeted areas as services and investment (necessary for sector competitiveness and diversification and to ensure some parity with what pertains in other EU FTAs). This Parity Transition Phase could last for 5 years and could be based on the acceptance of reciprocity in a FTA on the part of the region by the year 2005. This reciprocity would have the necessary phase-ins and safeguards, respect some criteria for differentiating groups of countries in terms of the timing of acceptance of reciprocal commitments, and seek to comply with the WTO full reciprocity in ten years.

An EU/CARIFORUM Dialogue has already started. Once the EU has completed its new co-operation arrangements with Cuba, CARIFORUM could be extended to include Cuba. Under this umbrella, a wider integration project should be sponsored. The EU should now get involved with the ACS by sponsoring cooperation projects and seeking to deepen the ACS in the years ahead. An evaluation of where cooperation and integration have led would be in order by the year 2005 to see whether a shift can be made from CARIFORUM and the ACP to the ACS.

The EU has already introduced a two-tier policy in Africa by introducing reciprocity for South Africa. South Africa, however, must be part of the EU link with Africa and by extension the ACP. It is conceivable, therefore, that in the post-Lomé arrangement, a two-tier system would evolve, with one group of ACP countries accepting reciprocity based on the criteria elaborated above and which would include some Caribbean countries, and another group with non-reciprocity. Even if the region does not manage to develop its stand-alone geographical framework with the EU by the year 2005, the ACP framework or some variation may still be capable of handling these relations.

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11. Conclusion

In assessing the options, the concept of simultaneous FTA movement to NAFTA/FTAA and the EU, based on phased or relative reciprocity along with requisite development assistance to facilitate competitiveness and parity over a transitional period, has been advanced. Ideally, the above strategy is perceived as providing market access on a more secure basis and enlarging market size necessary to make the region more competitive for investment. The assumption, of course, is that in the light of universal trade liberalization, a FTA is a more attractive basis for these countries on which to trade than Lomé, GSP or MFN.

Countries that have liberalized their economies and undertaken structural reforms should not have too much difficulty in this regard. Furthermore, if the Caribbean can keep its key Lomé commodity and financial arrangements for some transitional period, this option would be even further enhanced.

The transitional period to post-Lomé has to be skillfully managed in order to ensure that adequate restructuring takes place. Such an effort has already started with bananas and structural adjustments in general. It must, however, get underway in several other areas. The Caribbean has to be perceived as making the necessary reforms as well as widening and deepening the integration process.

There is a wide consensus in the region about the importance of a new deal with Europe in light of changing circumstances. Strategic analysis, however, has not thrown up a course of action that adequately links the past with the future by taking into account present and anticipated changes in circumstances. There is thus a strong rationale for a new relationship with the EU that promotes reciprocity and non-discrimination in trade but at the same time incorporates some existing and additional development provisions. Ideally, as a first option, FTA with the EU is to be preferred. Its feasibility can only be fully assessed as events unfold in the coming years.