Thread by @Jim_Cornelius

@PaulConnew @MrHarryCole Good. Right so under normal WTO/GATT rules a member country can't just say ... oh Bangladesh is poor, so we'll let them off the hook, because its against the rules.

So that's why GSP was suggested by UNCTAD. It allowed a general exception for developing countries ...

@PaulConnew @MrHarryCole By general it means that the favours shown to a developing country must apply fairly to other developing countries in the same development bracket. However each developed nation is allowed some flexibility in how the GSP is designed.

Now the next bit is VERY important.

@PaulConnew @MrHarryCole So now we have to go back to the beginning, and the founding of the EEC and the Treaty of Rome in 1957.

In the original Treatythe colonies of the founding 6 nations were granted associated membership of the EEC with tariff, free quota free access EU markets.

@PaulConnew @MrHarryCole Now the deal was basically a reciprocal affair, in that the former colonies had to open up their markets too, so this meant is was allowable under GATT as an FTA, but in reality the old colonies were allowed to keep many tariffs and it flouted the rules.

@PaulConnew @MrHarryCole This relationship changed a bit over the years and I'll zip past that to the point where the UK joins the EEC in 1973.

At the time the UK had a preference itself which flouted the GATT rules whereby bananas were tariff free from the Caribbean. Here's a discussion in Hansard.

@PaulConnew @MrHarryCole So at the time a tariff of £7.50 was on bananas from elsewhere, but Caribbean bananas were tariff free. As the F&CO minister who is speaking notes this was in contravention of GATT.

When the UK joined the EEC they wanted to maintain this situation

Link: api.parliament.uk/historic-hansa…

@PaulConnew @MrHarryCole So to cut a long story short this was agreed in the Accession Agreement of 1972

The countries were initially given association membership like the colonies of the original 6.

Then in 1975 the situation was formalised in the Lomé Convention.

aei.pitt.edu/7561/1/3173505…

@PaulConnew @MrHarryCole So these countries, mostly old colonies, became known as the ACP group and they formed their own association. They were granted near complete tariff elimination on all products in semi-reciprocal deals.

However it was not to last. acp.int

@PaulConnew @MrHarryCole In 1990s USA and Latin American countries objected to the special preferences that these countries were given. They argued that because the ACP countries didn't have to fully liberalise their own markets it was against WTO rules. So began the Banana Wars. europarl.europa.eu/news/en/headli…

@PaulConnew @MrHarryCole As the link in the previous tweet explains. the EU lost. WTO ruled that the banana preferences were against MFN rules as it showed preference to certain countries and not to others.

The others being ones where US companies like Dole, Del Monte and Chiquita had large plantations.

@PaulConnew @MrHarryCole SO this meant the EU had to rethink how to treat the old ACP countries in a WTO compatible way. IT was decided to do two things. 1. to put the least developed on the new EBA scheme (launched in 2001) and the more developed ones on a new WTO compatible type of deal called EPA.

@PaulConnew @MrHarryCole EPA stands for Economic Partnership Agreement. The EPAs were announced in the Cotonou Agreement in 2000.

So now we're up to date.

ec.europa.eu/europeaid/regi…

@PaulConnew @MrHarryCole ACP countries were moved from tariff free Lomé Convention arrangements to either EBA, or EPA under the Cotonou Convention. Before those not eligible for EBA signed they retained their tariff free access up to a deadline in 2014.

Most ACP countries signed EPAs during this period.

@PaulConnew @MrHarryCole Here is part of the text of the EPA for the East African Community (EAC) states (Burundi, Kenya, Rwanda, Tanzania, Uganda) Like EBA it is tariff free for Everything but Arms.

trade.ec.europa.eu/doclib/docs/20…

@PaulConnew @MrHarryCole Now, you mentioned Nigeria. This is an intersting case.

Nigeria is an ACP country and received the benefits of tariff free access under Lomé.

But before that in 1966 they applied for associate membership of the EEC.

cia.gov/library/readin…

@PaulConnew @MrHarryCole So they were looking to benefit from tariff free access to the EEC (as were Kenya, Uganda and Tanganyika) even before the UK joined the EEC in 1972. The Biafran war disrupted this though and by 1975 there were party to the Lomé agreement.

@PaulConnew @MrHarryCole So Nigeria were on a 0% tariff regime up to 2000 WTO ruling and beyond, and as they are one of the richer ACP countries they were not eligible for EBA. EBA is designed to benefit the countries on the right-hand side of this graph.

@PaulConnew @MrHarryCole That means that in order benefit from tariff free access Nigeria would have to sign up to an Economic Partnership Agreement.

But they have not done so. The agreement is there waiting for the Nigerian Presidents's signature, but he has not yet signed. edition.cnn.com/2018/04/06/afr…

@PaulConnew @MrHarryCole Why not, you might ask? Well because it's a WTO compatible FTA and that means both sides have to open up their markets to imports from the other party. The Nigerian President is very reluctant to do this. Tariffs in Nigeria are very high. It's a source of revenue.

@PaulConnew @MrHarryCole So lets put all this on a map. Here's one I made earlier. GSP/EBA and FTA/EPA shown. What this means is that every country on here apart from those left white is on a 0% tariff regime.

@PaulConnew @MrHarryCole Nigeria is on standard GSP rather than EPA because it's not on the LDC list, but it is classed as a low-to-middle income country meaning its eligible for GSP.

The table below shows you the benefits of EBA and standard GSP, GSP+ and EPAs.
Link: trade.ec.europa.eu/doclib/docs/20…

@PaulConnew @MrHarryCole And as for the benefits of EBA to the LDCs themselves look at this report from the Executive Director of the Centre for Policy Dialogue in Bangladesh. It gives them an advantage over countries like China.

un.org/en/development…

@PaulConnew @MrHarryCole So to summarise:

Most developing countries are 0% trough non-reciprocal EBA or a reciprocal EPA. Those that aren't are on a GSP greatly reducing tariffs and in Nigeria's case it could be on 0% tomorrow if the President singed.

@PaulConnew @MrHarryCole And the EU have been giving developing countries special treatment for longer than anyone else. ACP countries still meet regularly with the EU Parliament.

@PaulConnew @MrHarryCole That's enough for tonight.

I could also show you how the EU's GSP/EBA compared to the USA's GSP/AGOA. The USA has acted rather unfairly in its relationship with developing countries.