He does accept, however, that the EU was "essentially a trading bloc". The principle underpinning of Lome 1, expecting developed states "to pay more" for the supply of raw materials he believes fails to work due to the clause insisting ACP states "stabilise the existing internal divisions of labour", which obviously brought "increased costs" to the ACP states (George & Bache, 2001: 389). So here LDC's were restricted by regulations in an area they had competitive advantage and could have easily competed. .
GSP was introduced in 1971 for "those countries excluded from the Lome Conventions" and it was originally intended to "offer duty- free access to developed country markets for LDC manufactured exports" (McDonald & Dearden, 1999:335). The Pyramid of Preferences ranks the "ACP associated states" higher than "the Mediterranean countries" which are higher than the "non- associate" countries of Asia and South America (Hitiris, 1998:240). The system was "withdrawn" in 1986 from those countries where "income per capita was greater than $2000" or from where the country's share of EU imports "exceeded 20%"; or, for textiles, which was seen as "sensitive", the share limit was only "10%" (McDonald & Dearden, 1999:335). Countries adversely affected include Brazil, Hong Kong, China, South Korea and Singapore who have seen the withdrawal of the "concessions": and 140 sensitive products, such as "textiles and clothing" (McDonald & Dearden, 1999: 335). This is obviously detrimental to fragile economies when the main source of exports could be .
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textiles, meaning that countries lost competitive advantage, perhaps where they could best compete. McDonald et al argue that it is unfortunately these products that are "of particular importance" to some LDC's (1999: 344).
The January 1995 agreement on the GSP agreed concessions to be represented as "a percentage of Most Favoured Nation (MFN) tariff".
