ANNEX A
THE PYRAMID OF PRIVILEGE
As explained in the main text, the EU's differential
trade policies are extremely complex and affect many more states
than simply the ACP. This appendix fills out some of the details
of the "pyramid of privilege" presented in Figure 1
of the main text.
The position of each band in the hierarchy presented
in Figure 1 reflects its relative liberality (with the more liberal
accords at the top). This positioning involves a degree of personal
judgement since different agreements are not always directly comparable.
However, the position of the top two bands above the next two,
and the relative position of the GSP and the Super GSP are uncontentious.
Hence, the area of judgement is primarily in relation to the position
of Lomé and (some of) the bilateral agreements.
The Relative Position of Lomé
The Lomé Convention's claim to be at
the apex of the hierarchy can be supported in at least five ways:
— it provides the most extensive set
of trade preferences, covering all industrial products that
meet the rules of origin as well as most tropical and mineral
products and some CAP items;
— the coverage of CAP products includes
(but is not limited to) very deep, albeit quota-limited, preferences
on items covered by special protocols, providing access (at high
prices) for items that are suffocated, by EU protectionism, from
other sources;
— the tariff reductions and relief
from non-tariff barriers tend to be particularly deep, e.g., duty-free
access for all industrial products and also full relief from the
Multifibre Arrangement;
— it contains a built-in mechanism
to negotiate extensions to the coverage of the most sensitive
items;
— unlike the GSP (but like the bilateral
agreements) it has provided a high degree of certainty.
The Other Regimes
But this pre-eminence is being eroded by improvements
in the next layer in the EU's hierarchy, which is formed by the
bilateral agreements that it has signed with almost all of its
geographical neighbours to the south and east, from Morocco via
Israel and Turkey to Poland and Hungary. This band includes the
Europe Agreements. Each of these agreements is different, but
in general they provide substantial preferences although sometimes
on a more limited number of products than those covered by the
Lomé Convention. Because the Europe Agreements (and those
with Cyprus and Malta) foreshadow full EU membership, they could
be placed in a higher tier than the others (and Lomé).
But this is a question of judgement on the weight to be accorded
future possible changes in status as against the actual
market access currently provided.
The fourth tier of the hierarchy is formed by
the standard GSP. This is currently available to most developing
countries. In general terms, the product coverage of the GSP tends
to be more limited than under the other agreements, and often
the cuts in MFN tariffs or relief from non-tariff barriers are
less generous. At the base is the small group of (substantial
trading) states that receive only MFN access.
One band of the hierarchy remains to be explained:
the Super GSP. It is a superior tranche of the GSP that provides
more favourable treatment than the Standard. During the mid-1980s,
the EU began to accord to countries on the UN's list of least
developed states an improved GSP which, on many commodities, provided
access terms that were as favourable as those under the Lomé
Convention (although without the contractuality and the relief
from non-tariff barriers).
Then, in 1990, the Union agreed to extend, initially
on a temporary basis, this Super GSP to four countries of the
Andean Pact (as it then was)—Bolivia, Colombia, Ecuador
and Peru—partly as a result of US pressure to join in an
anti-narcotics drive and partly because of Spanish desires to
improve policies towards Latin America. In 1991, the EU accorded
to the countries of Central America, again on a temporary basis,
Super GSP treatment for their agricultural, but not their industrial,
exports. These extra preferences were continued in the new GSP
which came into effect in 1995 and 1996, and were extended to
Venezuela.
Tariff Levels
In terms of tariff-linked market access alone,
there is considerable similarity between the "top" three
tiers: Lomé, the bilateral accords and the Super GSP. These
agreements cover no fewer than 121 states. An analysis of EU tariffs
on the products of most interest to developing countries as exporters
has shown that discrimination between the "higher preference"
states is less extensive than might be supposed from the plethora
of different agreements [Stevens, 1997]. Moreover, the generalised
liberalisation under the Uruguay Round has effectively concentrated
tariff preferences on a relatively small group of sensitive industrial
products (such as footwear and clothing) and on temperate agricultural
items (notably various fruits, flowers and vegetables).
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