In 1995, the U.S. government went to the World Trade Organization to determine whether the Lomé IV agreement had violated WTO rules. Subsequently, in 1996, the WTO`s dispute resolution body ruled in favour of the applicants, effectively ending the cross-subsidies that ACP countries enjoyed for many years. However, the United States remained dissatisfied and insisted that all preferential trade agreements between the EU and ACP countries cease. The WTO`s dispute settlement body has set up another body to discuss the issue and has concluded that agreements between the EU and ACP countries are not compatible with WTO rules. Finally, the EU negotiated the WTO with the United States in order to reach an agreement.   But the problem this conflict poses to developing countries could be more serious. 71 African, Caribbean and Pacific (ACP) states are subject to the Lomé Convention, a convention that was established in the 1970s and commits the European Union to promoting trade with its former colonies. The Lomé Convention is a trade and assistance agreement between the European Economic Community (EEC) and 71 countries in Africa, the Caribbean and the Pacific (ACP), first signed in Lomé (Togo) in February 1975.
Under the Lomé Convention, the European Union has proposed preferential conditions for banana imports from the Caribbean. If another WTO ruling forces the EU to fully disprove the already tense Lomé Convention, new free trade agreements are to be concluded, which will expose these developing countries and their fragile industries to the full force of the „free“ market. Five Generations of ACP-CE Agreements The new partnership agreement between the 15 Member States of the European Union (EU) and the African, Caribbean and Pacific (ACP) states marks five generations of agreements between sovereign ACP-CE states. It is the most important financial and political framework in the world for North-South cooperation. This particular partnership is characterized by its non-reciprocal trade advantages for ACP countries, including the unlimited entry into the market of 99% of industrial products and many other products, particularly for the least developed countries (LDCs), which are in the ACP 39 group. In addition, aid envelopes for each ACP country and region are regularly updated. One of the unique features of the ACP-CE agreement is the dialogue and joint management of its content by the Community and the ACP states. ACP states are free to submit applications negotiated with the COMMUNITY. Institutions provide ongoing dialogue; an annual ACP/EU Council of Ministers, periodic meetings of the Acp Ambassadors Committee, which receives technical assistance from a permanent ACP secretariat based in Brussels. Acp parliamentarians and members of the European Parliament meet twice a year in a joint assembly where partnership issues are discussed. A „national indicative programme“ (PIN) is negotiated between the European Commission and an ACP state and sets development targets, particularly in primary or health education.
B and includes an annual spending commitment for each country, tailored to these needs. The PMI is funded by the European Development Fund (EDF), the financial protocol for each agreement to which EU Member States contribute. Traditionally, the EDF allocates funds to regional cooperation, other EU overseas countries and territories (PTOM), humanitarian aid and emergency aid, and non-governmental organisations. Additional loans from the European Investment Bank (EIB), particularly for infrastructure, have also become a feature of cooperation.