At the beginning of the twenty-first century, the European Union (EU) stands out as an important regional organisation. It entertains formalised relations with almost all other (groups of ) states. Although much of its attention is devoted to internal integration, obviously the European Union cannot and does not wish to be an isolated entity. Instead it has expressed the desire and ambition to take up a prominent place in the working of international relations. In addition to the general goal of forging good relations with (potential) political and economic partners across the globe, the Union also wishes to use its place in international relations as a vehicle for advocating some of the values it considers important. Among these values are democracy, social welfare, human rights and liberalism.The EU perceives development cooperation policy as an important tool to serve both missions. Accordingly, an impressive and unique record of development cooperation activities and of structural and comprehensive policy has been built over time. Until the 1990s, the African, Caribbean and Pacific (ACP) states unequivocally were Europe's most preferred developing country partners, and ACP-EU relations were the most visible and important component of the EU development cooperation programme. ACP-EU relations started at the very creation of the European Economic Community in 1957 and were elaborated first in the Yaoundé and then in the Lomé Conventions and the 2000 Cotonou Agreement. In many peoples' eyes the Lomé Convention came to symbolise EU development cooperation, more so than any other agreement (Grilli, 1993). It linked the EU with a large group of developing countries, many among the poorest, in an innovative agreement which declared itself to operate on the basis of equality of partners. In the 1970s the Lomé Convention was held up as a model for the future of North-South relations in general and EU development policy in particular. The Convention embodied many novel features which seemed to suggest that the EU was prepared to buck the trend in international development and take on board some of the arguments

An important area in which the Single European Act (SEA) has failed to agree a common policy is in its approach towards the developing countries. This paper examines the changing nature of the relationship between the European Community (EC) and its developing country partners, in particular the African, Caribbean and Pacific (ACP) states, as the EC moves toward a more integrated community. It argues that as the EC attempts to incorporate the former Eastern bloc into free market liberalism with new policies of association, ACP interests are in danger of becoming marginalised

On 23 June 2000 the Cotonou Agreement was signed, replacing the twentyfive-year-old Lomé Convention. There was a distinct feeling of change in Cotonou and the new Agreement is seen as radically overhauling its predecessors and setting a new basis for partnership between the ACP and EU states. It is too early to provide in-depth analysis of the Cotonou Agreement, not least because in many ways Cotonou provides a kind of interregnum between the existing Lomé Conventions and future, as yet to be determined, Regional Economic Partnership Agreements. This is most obvious in the case of the trade-related aspects of the Agreement. Negotiations started in September 2002 for progressive implementation from 2008 onwards, creating, in effect, a ten-year transition period. It has been argued in various corners that Lomé was in need of overhaul. Not only were the instruments less than effective, but the international context had changed so drastically over the period involved that the articles of agreement appeared anachronistic. It is hard to disagree with this analysis, although many of Lomé's failings lay not so much in the actual policies (some of which, as we have pointed out, were highly commendable) but in their management and implementation. The Cotonou Agreement places key emphasis on political dialogue (Article 8). It makes good governance a fundamental and positive element, while respect for human rights, democratic values and the rule of law become essential elements (Article 9). Peace-building policies and conflict prevention and resolution feature more prominently than before (Article 11). The inclusion of migration extends the agreement and accommodates growing European concerns explicitly (Article 13). The Cotonou Agreement also proposes finally to end the preferential trade margins accorded to non-least developed ACP states in favour of more liberal free trade agreements strongly shaped by the WTO agenda (Article 36). These changes need to be seen in the context of the April 2000 elaboration of new Commission guidelines for development policy. These include the desire

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In 1975 the EU operated a pyramid of preference in terms of market access and disbursement of development assistance to non-member states. The ACP countries were at the top of this pyramid, enjoying the most preferred status in the EU market for their exports, including duty free access for all industrial products and 80 per cent of agricultural exports. In addition there were special Protocols for bananas, sugar, beef and rum which guaranteed access to the EU market for specific quotas of these products. It is now argued that the ACP no longer occupies this position, or at least that the pyramid has changed shape. Hill, for example, argued that there are now concentric circles of favoured nations rather than a pyramid (1993: 324). Other partners are being offered virtually the same level of preferences, and tariffs have in general been gradually lowered throughout the period. For example, the Community has offered a GSP scheme since 1971, which allows preferential access for industrial exports (and limited agricultural exports) from all developing countries. Extension and enhancement of the GSP meant that the tariff difference between Lomé and the GSP became only 2 per cent (Dickson, 2000). Many ACP states will have their preferences further reduced under the Cotonou Agreement and will probably enter new reciprocal regional or sub-regional agreements by 2008. Thus the comparative advantage which the ACP states had in 1975 has been significantly eroded. This chapter seeks to identify the main determinants of EU trade policy in relation to the developing countries. It asks why the EU has adopted trade liberalisation (and the conclusion of regional and sub-regional partnership agreements) rather than any other option for the future of its relations with the ACP, and in stark contrast to previous policies. The working hypothesis is that the EU has committed itself publicly to trade liberalisation for a number of reasons. In part this occurred as a result of external pressures-for example to reform the CAP-which increased during the Uruguay Round of GATT negotiations. The Commission is keen to be seen to be moving in the right direc