Why is Lomé Incompatible?
The cornerstone of the General Agreement on Tariffs and Trade (GATT) is that WTO members extend most-favoured nation (MFN) treatment to each other. It is associated with the concept of reciprocity in which non-discrimination among trading partners is an integral part. Since Lomé gives preferential market access to some, but not all, developing countries, present Lomé trade arrangements are therefore incompatible with WTO rules. In October 1996, a special waiver exempting the Lomé Convention from WTO rules was extended until February 2000. Under the GATT provisions, three important exceptions to the MFN treatment are allowed: non-reciprocity, differentiation and regional trade arrangements. The first is contained in Part IV of the GATT and it relieves developing countries of a need to reciprocate to developed countries for the latter’s commitments in multilateral trade negotiations. The second is the “Enabling Clause” which provides a permanent legal basis for preferences to developing
