Patrick A Messerlin

Claire Delpeuch

EPAs: A Plan 'A+'

The Economic Partnership Agreements (EPAs) as currently proposed by the European Union (EU) to the African, Caribbean and Pacific countries (ACPs) will prove extremely costly to the ACP economies. This is because, as documented by the note, ACPs have still high or substantial tariffs on imports from the world. If the EU products enter the ACP markets dutyfree, the EU firms could price their products at a (much) higher price than the world price. ACP consumers-households and firms-will be hurt. ACP governments will lose tariff revenues.

That said, there is little doubt that the WTO waiver on the current EU-ACP Agreements will expire by December 31, 2007-mostly for political reasons-and that the EU has no intention to table a Plan B. And alternatives, such as the GSP or the EBA, are unattractive for many ACPs on a purely economic basis,

As a result, the ACPs should take an initiative-a 'Plan A+'. The note explores what could be envisaged in the Doha Round context. The ACP could offer a better access to their markets to the non-EU WTO Members for being allowed by these countries to limit the forthcoming preferential liberalization towards the EU. An attractive, mutually beneficial, Doha-consistent ACP offer would consist in the ACPs cutting substantially their bound tariffs, and modestly their applied tariffs. As bound tariff cuts substantially reduce the current huge uncertainty in trading with the ACPs, they will generate new trade opportunities, more diversified ACP economies, and better regional trade agreements between the ACPs willing to do so. In short, they will deliver a much more progressive and balanced liberalization of the ACP economies than the one envisaged by the current EPAs.

Such an offer is attractive to non-EU WTO Members-from China to the US. These countries are unlikely to be pleased by ACP markets being open to EU firms while remaining closed to their own firms.

The note also explores ways for the ACP countries to conclude 'Interim Agreements' with the EU in 2007-without preempting an attractive, Doha-consistent solution by hasty decisions taken in the EPA context. Du coup, si les produits de l'UE entrent sur les marchés ACP sans payer de tels droits de douane, les firmes européennes pourront pratiquer sur ces marchés des prix (bien) supérieurs aux prix mondiaux. Les consommateurs des pays ACP-ménages et entreprises-en seront gravement affectés, et leurs gouvernements perdront des recettes fiscales.

EPAs: A Plan 'A+

Reste que la dérogation de l'OMC qui permettait le maintien de préférences unilatérales expirera au 31 Décembre 2007, largement pour des raisons politiques, et que l'UE n'a pas l'intention de proposer un 'plan B'. Quant aux alternatives disponibles, comme le SPG ou l'initiative TSA, elles ne sont pas attractives pour nombre de pays ACP, pour des raisons économiques ou politiques.

Les pays ACP doivent donc prendre une initiative-un plan 'A + '. Cette note explore ce qui pourrait être fait dans le cadre de l'agenda de Doha. Ainsi les pays ACP pourraient-ils offrir un meilleur accès à leurs marchés aux Membres hors-UE de l'OMC, en échange d'un accord de ces Membres sur une libéralisation limitée des pays ACP vis-à-vis de l'UE. Une offre attractive, mutuellement bénéfique et compatible avec l'agenda de Doha consisterait en une réduction appréciable des droits de douane consolidés des pays ACP, et modeste de leurs droits de douane appliqués. Comme les baisses des droits de douane consolidés réduiront fortement la grande incertitude actuelle liée aux échanges avec les pays ACP, ils engendreront de nouveaux flux commerciaux, une plus grande diversification des économies ACP et de meilleurs accords régionaux entre les pays ACP désireux de poursuivre cette voie. En somme, ils engendreront une libéralisation des économies ACP bien plus progressive et équilibrée que celle proposée par les APE.

Une telle offre serait aussi attractive pour les Membres hors-UE de l'OMC, de la Chine aux Etats-Unis, lesquels n'ont aucun intérêt à voir les marchés ACP s'ouvrir totalement aux entreprises européennes tout en restant largement fermés aux leurs.

Cette note examine enfin des pistes permettant aux pays ACP de conclure des 'Accords intérimaires' avec l'UE en 2007, sans pour autant compromettre une solution attractive dans le cadre des négociations de Doha par de décisions hâtives dans le cadre des APE.

Introduction

Almost eighty African, Caribbean and Pacific countries (ACPs) are at the crossroads. On the one hand, their current tariff structures will make the Economic Partnership Agreements There is thus a need for the ACPs to take an initiative-to design their own "Plan A+"-for reducing the costs that the EPAs, as currently conceived, will impose on their economies. Organization (WTO). But, how could the ACPs that are not eligible for these schemes, or that would not find them attractive, limit the costs generated by the EPAs? This note explores the wide range of opportunities offered by the ongoing Doha Round negotiations that the ACPs should thoroughly examine. A companion note [Bouët et al. 2007] provides estimates of the benefits flowing from these opportunities.

Some of the

The need for a Plan A+

Why will the EPAs be costly to the ACPs? The main reasons are captured by the following example (for recent and more detailed analyses, see [START_REF] Delpeuch | One Minute to Midnight: Is There Still Time to Rethink EPAs?[END_REF] or [START_REF] Delpeuch | EPAs: Thinking Outside the European Box[END_REF]). Nigeria's average bound2 tariffs vis-à-vis the rest of the world are 150 percent in agriculture (farm and food products) and 66 percent manufacturing (NAMA) as shown in Annex Table A. If the EU products enter the Nigerian markets duty-free, the EU firms could

price their products at a (much) higher price than the world price-up to 1.5 and 0.6 times more in agriculture and in NAMA, respectively. The EU firms would need to charge such high prices when they are inefficient, compared to the exporters from non-EU countries. In short, the preferences granted by the ACPs in the EPAs are equivalent to ACPs subsidies to inefficient EU firms. But, the EU firms could also charge such high prices when they are efficient, simply to grab the rents generated by the high tariffs imposed by the ACPs on imports from non-EU sources. Of course in such circumstances, Nigerian consumers-and that includes Nigerian firms (it is often forgotten that firms are large consumers)-will hardly benefit from any liberalization gains, while the Nigerian government will lose tariff revenues. It could be said that this example provides too dark a picture of the situation because effectively applied tariffs may be lower than bound tariffs. Table 1 suggests that this caveat should be treated with great caution. First, half of the ACPs have average applied tariffs higher than 15 percent in agriculture and one fourth have average tariffs higher than 15 percent in manufacturing-tariffs above 15 percent already constitute serious barriers to trade.

Second, the 'peak' (highest) applied tariffs are very high-almost 50 percent on average for all the ACPs in agriculture, and 40 percent in manufacturing. These peak tariffs are the most important ones from an economic perspective because they are concentrated on products domestically produced, and because, as shown by economic analysis, they are the source of the largest welfare costs for the country imposing them. Last but not least, many ACPs tariffs are still not bound. As a result, they can be increased without restraint, hence represent huge risks for foreign traders. For instance, half of the African ACPs have bound less than a third of their tariff lines. Indeed, the increase of imports from the EU following the implementation of the EPAs is likely to induce ACPs governments to raise their unbound tariffs on non-EU imports. This economically unsound, but politically driven reaction from the ACPs should be expected if the estimates provided by Bouët et al. [2007] are verified.

The opportunities offered by the Doha Round

As the WTO waiver on the Cotonou Agreements expires by December 31, 2007, and as the EU has shown no intention to table a Plan B, some ACPs might decide to turn back to existing schemes-the Generalized System of Preferences (GSP), or, in the case of the Least Developed Countries among the ACPs, Everything but Arms (EBA). However, the estimated impact of such decisions provided by the companion note [Bouët et al. 2007] strongly suggest that such alternatives are unattractive, either on a purely economic basis (the GSP) or from a political point of view (the EBA option is fundamentally an unilateral, hence reversible, EU decision)3 .

Alternatively, the eligible ACPs might want to use the "Duty free-Quota free" (DFQF) option adopted at the 2005 Hong Kong Ministerial of the World Trade Organization (WTO). Such an option has the advantages to be based on a robust multilateral commitment from the importing countries, and to open to the eligible ACPs the markets of the advanced and willing emerging economies (not only the EU markets). But, as of mid-November 2007, this option

is not yet definitively adopted, and it is based on a 97 percent (not 100 percent) share of imports from the eligible countries-a provision that could seriously restrict its economic impact on the eligible countries.

As a result, almost all the ACPs have different, but equally strong, incentives to look for an initiative of their own in the WTO that would reduce, as much as possible, the costs of the preferences that the ACPs should give to the EU under the EPAs.

In short, such an ACP initiative would look like the following: the ACPs would offer better market access to non-EU WTO Members for being allowed by these countries to limit the forthcoming preferential liberalization towards the EU-in short, for 'rebalancing their EUnon EU tariffs'. It is beyond the scope of this note to specify by how much the ACPs could be allowed to limit their forthcoming preferential liberalization towards the EU. The magnitude of such a limit could only be settled by negotiations. It could range from no forthcoming preferential liberalization (in this case, the ACPs would have obtained a new 'full waiver' by offering some opening of their markets to non-EU countries) to a substantial preferential liberalization (in such a case, the ACPs would have obtained a 'partial waiver').

Rather, this note explores the critical first step of the process-the ACP initiative -both the substance of the initiative as well as its benefits for ACP countries.

It is often said that the non-EU WTO Members would not entertain such an ACP initiative because it would infringe the WTO disciplines on preferential trade agreements (GATT Article XXIV).4 This is far from certain. The non-EU industrial countries or the emerging economies will not like to see ACP markets being open only to EU firms while remaining closed to their own firms-especially since ACP tariffs are so high and/or uncertain (unbound). As a result, many non-EU countries may be open to reviewing EU-ACP trade relations with some sympathy for the ACPs, all the more if the ACPs were to offer them some market opening of their own. This open mind from the non-EU WTO Members is all the more plausible if, as suggested by the companion note [Bouët et al. 2007], the trade diversion away from the imports from non-EU countries to imports from the EU is large.

Paradoxically, the only WTO Member that has no trade-related interest in reviewing the EPAs is the European Union itself. This is because the EPAs combined with the current ACPs tariffs will undoubtedly make life much more difficult for U.S, Chinese, etc., exporters to the ACPs, and much easier for the EU firms. However, as stressed in the conclusion, the EU has also development-related interests in reviewing the EPAs. If the currently proposed EPAs would benefit some European exporters, the EU clearly has a long-term stake in the development of the ACPs.

Step 1: Sketching the ACP initiative

In such a context, what could the ACPs present in the WTO in order to get a green light for limiting as much as possible their need to reciprocate against EU preferences? For simplicity sake, what follows focuses on the NAMA sector. This sector is easier to examine because the text tabled by the Chair for the Doha Round is relatively simple (the Agriculture Chair text has had to take into account many specific issues). But, a similar exercise could be done for agriculture.

Column 1 of Table 2 gives the status that 65 ACPs have in the Doha NAMA negotiations.

(The other ACPs are only observers to the WTO, a status that will not prevent them from being part of an agreement.) As shown in Annex Column 3 provides the binding commitments put forward in the NAMA Chair text for each of these six status groups. Column 4 gives the tariff-cut formula when available. [c] Small and vulnerable economies with a bound tariff average (in NAMA) at or above 50 percent.

[d] Small and vulnerable economies with a bound tariff average (in NAMA) at or above 30 percent, but below 30 percent.

[e] Small and vulnerable economies with a bound tariff average (in NAMA) below 30 percent. For the DC1 group, the NAMA text tables a 90 percent binding commitment and the use of a

Swiss formula for cutting bound tariffs, with a Swiss coefficient ranging from 19 to 23). 5 The NAMA text also defines three alternative options for making exceptions to the Swiss coefficient. One of these options consists of binding 100 percent of the tariff lines and using a Swiss coefficient increased by 3 points (for instance, a coefficient of 26 if the finally agreed coefficient is 23). This option is by far the most economically sound [START_REF] Messerlin | The Doha Round: Where Do We Stand[END_REF]. As a result, the DC1 group of the ACPs could offer to the WTO Members a 100 percent binding commitment with a Swiss coefficient of 26 as the 'price to be paid' for lower commitments by these ACPs towards the EU under the EPAs. The focus on the Swiss coefficient element of the offer is imposed by the fact that the three DC1-type ACPs for which data are available have already a very high binding coverage (96.6 to 100 percent).

For the DC2 group, the NAMA text tables a 90 percent binding commitment, with an average level of bound tariffs not exceeding 28.5 percent. The DC2 group of ACPs could table a proposal with the same binding coverage (a real effort for almost all of them), possibly combined with a lower average bound level, say 27 percent-both offers being the 'price to be paid' for lower commitments by these ACPs towards the EU under the EPAs.

For the various SVEs, the NAMA text tables a 90 percent binding commitment, with an average level of bound tariffs not exceeding three different thresholds (depending on the type of SVEs). These ACPs could table a proposal with the 90 percent binding target and (since such a binding offer would represent a true effort only for two SVE-type ACPs) with an average bound tariff that is, approximately, one percentage point lower than the level currently scheduled by the NAMA Chair text.

Finally, for the LDCs group, the NAMA text includes a 'substantial increase' in tariff bindings which is currently undefined. The LDC group of ACPs could then use the 80 percent threshold included in the EPAs as defining the coverage of their binding commitment in the Doha Round-a true effort for two-thirds of them. They could also consider the offer of an average bound level not exceeding 28.5 percent because it would homogenize the various EPAs regions in terms of 'average' level of protection, hence enhancing regional integration among ACPs.

All these suggestions show a wide range of opportunities for the ACPs in the Doha Round which could allow them to get the green light for limiting their future preferential liberalization towards the EU.

Step 2: Calculating the magnitude of the ACP initiative Table 3 aims to give a concrete sense of the outcome of all these proposals for the ACPs (for which the necessary information for assessing these proposals is easily available). 6 Column 2 provides the Swiss coefficients associated to the above proposals. When ACPs exhibit lower applied tariffs than those indicated in the above proposals (such as for Madagascar, Mali or Senegal), the Swiss coefficients are those keeping roughly unchanged the average applied tariff. Swiss coefficients are useful for two reasons. First, they allow direct and easy comparisons among the various proposals. Second, they can serve as the basis for calculating the impact of the various deals to be considered by the ACPs, as does the companion note [Bouët et al. 2007].

6 Table 3 is based on two assumptions. First, data on tariffs are expressed in the Harmonized System at 6 digits. Negotiators may use more disaggregated tariffs. However, such a difference has generally no impact on tariff averages (of course, it may have on peak tariffs). Second, when no binding tariff was mentioned in the data, a 30 percent tariff was added to the existing applied tariff. That explains the differences between Table 3 and Table B in the Annex. Table 3 shows that the above proposals would deliver three key results. First, the ACPs would substantially cut their bound tariffs-on average, by almost half, as shown by columns 3 and 4. Second, the ACPs would modestly cut their applied tariffs (on average by 10-15 percent, as shown by columns 5 and 6), meaning that the ACPs would avoid significant tariff revenue losses. Last but not least, the ACPs would substantially cut the 'tariff water' (that is, the difference between the bound and applied tariffs) in their tariff structures, as shown by comparing columns 8 and 9. More precisely, the share of tariff lines for which there is still some tariff water (bound tariffs higher than applied tariffs) remains large (80 percent), but the remaining tariff water is often lower than 10 percent-when it is higher, it is because the ACPs in question have already low applied tariffs (for instance, Madagascar, Mali or Trinidad and Tobago).

The positive economic impact of cuts in bound tariffs and in tariff water should be stressed because it is generally ignored. Cuts in ACPs bound tariffs would reduce substantially the uncertainty in trade with the ACPs, and they are all the more important for the ACPs because the small size of their economies already leads foreign exporters to pass over them in favor of other, larger, markets. The final level of tariff water for the ACPs included in Table 3 would be roughly 10 percent-a quite affordable risk for foreign traders, while still offering some flexibility to the ACPs governments in case of turbulences. In other words, substantial cuts in bound tariffs and tariff water represent a true market opening, creating new trade flows and opportunities.7

The Plan A+ would also offer more opportunities of diversification to the ACP economies, enhancing the emergence of industrial sectors, as observed in Kenya and in a few other ACP economies. Last but not least, it would allow the ACPs willing to define 'external common tariffs' (customs unions) to do so in a WTO-consistent way (contrary to what is happening)killing two birds with one stone. In short, the Plan A+ would generate a more progressive and balanced liberalization of the ACP economies than the one envisaged with the current EPAs.

This crucial conclusion deserves a final remark. It is not yet possible for trade models to estimate the impact of decreasing risks in trade due to smaller tariff water. It is thus important to keep in mind that the companion note [Bouët and al. 2007] does not take into account a critical aspect of the above proposals-underestimating their positive impact on the ACPs.

The 'Interim Agreements': Playing for time

Tables 2 and3 suggest quite a broad range of possible, balanced, and mutually profitable agreements. However, doing nothing on the EPA front before December 31, 2007, would send the wrong message to the other WTO Members (and to the EU). As a result, how is it possible to combine the sketched ACP initiative with the EPA negotiations?

The 'Interim Agreements' on the EPAs between the EU and the ACPs, to be signed within the next few weeks, should have two goals. They should show that the ACPs are willing to move forward and take initiatives. They should not preempt the negotiations between the ACPs and the non-EU countries by hasty decisions taken in the EPA context before December 2007.

What follows explores various possibilities, to be combined or not.

The products with no noticeable domestic production. These products would probably be among the 80 percent of trade that would be liberalized by the ACPs in the EPAs as currently conceived, and among those with low or moderate tariff rates (it is beyond the scope of this technical note to go into details to define them). For the many small ACP economies, these products may represent a substantial proportion of the 80 percent of tariff lines to be liberalized.

The ACPs could agree on eliminating the tariffs on such imports from the EU. But, at the same time, and pending the results of the 2008 negotiations in the WTO forum, the ACPs could impose a 'value-added tax' (VAT) on imports from the EU at the same rate(s) as the corresponding tariffs imposed on imports from non-EU sources. As a result, ACP protection would remain non-discriminatory, since the imports from the EU and those from the non-EU sources would be taxed at the same rate. And there would be no infringement of the WTO 'national treatment' (even if, as is likely, the VAT is levied only at the border in ACPs) since there is no domestic production that would be exempt from the tax.

The products with non-sensitive domestic production. These products are likely to constitute the rest of the 80 percent threshold imposed by the EPAs (to the extent that the previous products do not account for 80 percent, on their own). The VAT option on imports from the EU is excluded since it would infringe the WTO national treatment principle.

Alternative options could be (i) not to include these products in the Interim Agreements, hoping for results on the 'rebalancing' exercise from the Doha negotiations in early 2008, or (ii) to begin to reduce the tariffs on imports from the EU for the products with the lowest tariffs on imports from non-EU countries (that is, those with the lowest risk of trade distortion between EU and non EU sources of imports), or (iii) to begin a slow and progressive elimination of the tariffs on imports from the EU, or (iv) some combination of the previous options.

The products with sensitive domestic production. These products are likely to be concentrated in the 20 percent 'not to be liberalized' in the current EPA context-once again, conditional on an agreement by WTO Members on the European Commission's proposals for thresholds (90 percent for the bilateral trade, and 80 percent for the ACP part of the bilateral trade).

Conclusion

The ACPs are the only countries that can resolve, in a beneficial way for their economies, the dilemmas posed by the expiration of the Cotonou waiver and the Commission's proposed EPAs. They could rightly argue that the current insistence of some WTO Members on strict respect for GATT Article XXIV (reciprocal trade concessions) has a perverse outcome in this particular case. After all, the ACPs are required to enforce reciprocity, hence grant preferences-huge, since the ACPs have high bound tariffs-at precisely the time when the EU is de facto reducing the preferences it is granting to them.8 But such an argument would have very little weight in the absence of an initiative from the ACPs themselves.

The European Union's position also deserves a final remark. In the face of genuine alternatives, to insist on the EPAs as currently conceived would be to reveal that the European Union is more interested in extracting preferential access from the ACPs-in other words, in excluding efficient competitors (including China) from their markets-than in following a development-friendly trade policy. If the EU's commitment to development is as strong as it regularly claims it is, then the EU should be a strong supporter of 'rebalancing' the ACPs market access commitments via-à-vis the EU, following the ACP initiative in the WTO forum. WTO, UNCTAD and ITC "World Tariff Profiles" (2007) when data was not avaible in member informatio Notes: Bound tariffs are not dated. Applied tariffs are almost always 2001 data, unless not available and thus earlier data. Indeed, for practical reasons, applied tariffs were needed in HS1996, and not HS 2002, so as to be comparable to bound tariffs. avg = average, max = maximum, [obs] = observer status at the WTO.

[a] Developing countries with 'non-low' binding coverage [b] Developing countries with low binding coverage (lower than 35 percent).

[c] Small and vulnerable economies with a bound tariff average (in NAMA) at or above 50 percent.

[d] Small and vulnerable economies with a bound tariff average (in NAMA) at or above 30 percent, but below 30 percent.

[e] Small and vulnerable economies with a bound tariff average (in NAMA) below 30 percent.

bound tariffs applied tariffs

Agriculture (farm and food) Manufacturing (NAMA) bound tariffs applied tariffs

  ACPs might simply decide to turn back to existing schemes-the Generalized System of Preferences (GSP), or, in the case of the Least Developed Countries among the ACPs, Everything but Arms (EBA). Or they might want to use the forthcoming "Duty free-Quota free" (DFQF) initiative adopted at the 2005 Hong Kong Ministerial of the World Trade

  Sous leur forme actuelle, les Accords de Partenariat Economiques (APE) proposés aux pays d'Afrique, des Caraïbes et du Pacifique (ACP) par l'Union Européenne (UE) seront des plus coûteux pour les économies ACP. La raison en est que les pays ACP imposent encore des droits de douane élevés ou appréciables sur leurs importations, comme le montre cette note.

	'
	Patrick A. Messerlin
	Claire Delpeuch
	18 Novembre 2007
	SOMMAIRE

(

  EPAs) as currently proposed by the European Union (EU) extremely costly to their own economies, for reasons explained in the first section. On the other hand, the WTO waiver on the Cotonou Agreements will expire by December 31, 2007, mostly for political reasons, and the EU clearly has no intention to table a Plan B. 1

Table 1 . ACPs current bound and applied tariffs: an overview

 1

	Overall
	binding

Table 2 . The ACPs between the EPAs and the Doha Round: the basic configurations in the NAMA case

 2

	Doha	Number

  Commitments tabled by the NAMA Chair in the Doha Round Discussions to be held in early 2008 should aim at precise definition and negotiation of the ACPs initiative. Column 5 of Table2simply aims to give a sense of what, concretely, might be envisaged. Before examining Column 5 in detail, it is crucial to stress that concessions made in the WTO are expressed in bound tariffs-a useful degree of flexibility, compared to concessions made in the EPAs that are defined in applied tariffs.

Table 3 . ACPs, EPAs and the Doha Round: the NAMA case

 3 Sources: WTO Member Information (www.wto.org). WTO, UNCTAD and ITC, "World Tariff Profiles" (2007) when data was not avaible in Member Information files. See notes in Table1.Notes: [a] difference between bound and applied tariffs. [b] percentage of tariff lines with tariff water.

		Doha	Swiss		Average tariffs			Tariff water [a]
		status coefficient	bound	applied	coverage	average
				initial	final	initial	final	(final) [b]	initial	final
		1	2	34	56	7	8	9
	Central Africa
	Cameroon	DC-2	60	47,9	26,4	17,4	17,4	68,7	30,5	9,0
	Gabon	DC-1	23+3=26	16,2	9,6	17,3	9,6	55,0	-1,1	0,0
	Eastern Southern Africa
	Burundi	LDC	70	49,0	27,8	21,9	18,6	62,6	27,1	5,9
	Madagascar	LDC	70	34,3	22,7	5,6	5,6	99,4	28,7	17,1
	Rwanda	LDC	40	91,8	27,1	17,8	16,7	56,2	74,0	9,3
	Kenya	DC-2	60	45,1	25,2	14,8	12,9	95,9	30,3	12,2
	Wstern Africa
	Mali	LDC	70	32,3	20,7	10,5	9,0	85,7	21,8	10,1
	Senegal	LDC	70	30,0	21,0	11,6	11,6	100,0	18,4	9,4
	Ivory Coast	DC-2	60	33,9	20,4	11,6	10,6	80,4	22,3	8,8
	Nigeria	DC-2	60	56,9	28,5	25,2	21,3	65,0	31,7	3,3
	Carribbean Region
	Guyana	SVE-1	40	50,7	22,3	9,6	8,8	96,3	41,1	12,7
	Trinidad and Tobago	SVE-1	40	50,8	21,9	6,6	6,2	94,6	44,2	15,3

Table A . ACPs current bound and applied tariffs

 A

		Regional	Doha									Overall
	Countries	groupings	status									binding
				avg	max	avg	max	avg	max	avg	max	coverage
	1	2	34	5	6	78	91 0	1 1	1 2
	Central Africa
	Gabon	CEMAC	DC-1	59,9	60,0	22,7	30,0	16,2	60,0	17,3	30,0	100,0
	Cameroon	CEMAC	DC-2	80,0	80,0	22,9	30,0	78,7	80,0	17,4	30,0
	Congo	CEMAC	DC-2	30,0		22,6		14,7		17,7		16,1
	Central African Rep.	CEMAC	LDC	30,0		22,1		37,9		17,4		62,5
	Chad	CEMAC	LDC	80,0		22,1		75,0		17,4		13,5
	Eq. Guinea	CEMAC	LDC			22,1				17,4
	Sao Tome Principe		[obs]
	Eastern and Southern Africa
	Kenya	EAC-COMESA	DC-2	96,9	100,0	19,2	40,0	92,3	100,0	14,8	40,0	14,6
	Zimbabwe	COMESA-SADC	DC-2	139,6				10,8				21,0
	Burundi	COMESA	LDC	94,6	100,0	34,8	40,0	35,9	100,0	21,9	40,0	21,8
	Congo DR	COMESA-SADC	LDC	98,2		12,8		95,9		11,9		100,0
	Djibouti	COMESA	LDC	48,4		21,7		39,9		29,1		100,0
	Eritrea	COMESA	LDC			17,3				16,7
	Ethiopia	COMESA	LDC			17,3				16,7
	Madagascar	COMESA-SADC	LDC	30,0	30,0	6,0	20,0	25,7	30,0	5,6	30,0	29,7
	Malawi	COMESA-SADC	LDC	121,3		14,7		42,4		13,3		31,2
	Rwanda	COMESA	LDC	73,7	100,0	14,2	30,0	91,8	100,0	17,8	30,0	100,0
	Somalia	COMESA	LDC
	Uganda	EAC-COMESA	LDC	77,7		19,0		50,6		11,7		15,8
		COMESA-SADC	LDC	123,3		18,8		42,2		13,2		16,7
	Mauritius	COMESA-SADC	SVE-3	119,6		7,1		19,1		3,0		17,8
	Comoros	COMESA	[obs]			26,2				13,1
	Seychelles	COMESA	[obs]
	Sudan	COMESA	[obs]	74,3		14,6		91,9		19,4		100,0
	South Africa
	Botswana	SACU-SADC	DC-1	38,4		9,3		15,7		7,8		96,6
	Swaziland	SACU-COMESA-SADC DC-1	40,8		9,3		15,7		7,8		96,6
	Namibia	SACU-SADC	DC-2	40,8		9,2		120,0		11,7		13,4
	Angola	SADC	LDC	52,8		9,6		60,1		6,8		100,0
	Lesotho	SACU-SADC	LDC	200,0		9,0		60,0		7,8		100,0
	Mozambique	SADC	LDC	100,0		16,4		6,6		11,4		13,6
	Tanzania	EAC-SADC	LDC	120,0		19,0		120,0		11,7		13,4
	Western Africa
	Ivory Coast	ECOWAS	DC-2	14,9	64,0	14,8	20,0	9,0	25,0	11,6	20,0	33,1
	Ghana	ECOWAS	DC-2	97,1				34,7				14,3
	Nigeria	ECOWAS	DC-2	150,0 150,0	33,6	100,0	66,0	150,0	25,0	100,0	19,2
	Benin	ECOWAS	LDC	61,8		14,3		11,4		11,6		39,3
	Burkina Faso	ECOWAS	LDC	98,1		14,3		13,1		11,6		39,2
	Gambia	ECOWAS	LDC	103,5				56,1
	Guinea	ECOWAS	LDC	39,7		14,6		10,0		11,5		38,9
	Guinea Bissau	ECOWAS	LDC	40,0		14,3		50,0		11,6		97,8
	Liberia	ECOWAS	LDC
	Mali	ECOWAS	LDC	59,1	75,0	15,5	25,0	15,5	60,0	10,5	25,0	40,6
	Niger	ECOWAS	LDC	83,1		14,3		38,1		11,6		96,5
	Senegal	ECOWAS	LDC	29,8	30,0	14,8	20,0	30,0	30,0	11,6	20,0	100,0
	Sierra Leone	ECOWAS	LDC	40,3		16,4		48,5		13,1		100,0
	Togo	ECOWAS	LDC	80,0		14,3		80,0		11,6		14,0
	Mauritania		LDC	37,7		12,4		10,5		10,5		39,3
	Cape Verde	ECOWAS	[obs]			11,7				10,2
	Carribbean region
	Cuba		DC2
	Haiti		LDC	21,3		5,7		18,3		2,4		89,2
	Suriname		LDC	19,9				17,1
	Antigua Barbuda		SVE-1	105,0		15,0		51,4		8,9		97,9
	Barbados		SVE-1	111,2		30,0		72,9		11,0		97,9
	Belize		SVE-1	101,4		20,7		51,5		9,3		98,0
	Dominica		SVE-1	112,2		20,4		50,0		8,3		94,8
	Grenada		SVE-1	101,0		16,9		50,0		9,2		100,0
	Guyana		SVE-1	99,9	100,0	21,6	100,0	50,7	100,0	9,6	70,0	100,0
	Saint Kitts and Nevis		SVE-1	108,6		13,3		70,8		8,6		97,9
	Saint Lucia		SVE-1	114,6		14,8		53,9		8,0		99,6
	Saint Vincent Grenadines	SVE-1	91,7		16,6		54,5		8,9		99,7
	Trinidad and Tobago		SVE-1	91,7	156,0	16,6	67,5	50,8	100,0	6,6	45,0	100,0
	Dominican Republic		SVE-2	39,6		13,1		34,2		7,8		100,0
	Jamaica		SVE-2	97,1		17,2		42,4		5,8		100,0
	Bahamas		[obs]			24,1				31,2
	Pacific region
	Papua New Guinea		DC	48,3		16,7		30,1		3,7		100,0
	Tonga		SVE			25,3				15,8
	Fiji		SVE-1	48,9		25,7		40,0		7,8		52,3
	Solomon Islands		SVE-1	76,3		17,5		79,6		14,1		100,0
	Samoa		[obs]
	Vanuatu		[obs]			33,2				13,8
	Cook Islands
	Kiribati					24,9				16,3
	Marshall Islands
	Micronesia					4,6				4,5
	Nauru
	Niue
	Palau					2,7				3,0
	Timor-Leste
	Tuvalu
	Source: WTO member information (www.wto.org) and

This note does not question the political or legal justification for EPAs. Rather, it takes them for granted and tries to offer solutions as beneficial to ACP countries as possible. Similarly, the note takes for granted the absence of alternatives offered by the Commission, and it does not address the question of the appropriate EU reaction.

Once a tariff rate is bound, it cannot be raised without compensating the affected trading partners or allowing those partners to retaliate.

Moreover, the rules of origin used under the EBA make EBA preferences very difficult to use. For more details on the rules of origin problems (and a comparison with the rules of origin used under AGOA), seeCollier and Venables (forthcoming).

It should be stressed that the currently proposed EPAs have not been presented to other WTO members, hence might be challenged by some of them. Moreover, the non-ACP developing countries negotiating preferential agreements with the EU have an interest in 'better' EPAs in order to avoid any negative precedents that could impact their own bilateral negotiations with the EU.

The Swiss formula is T = [rt/(r+t)] where 't' is the initial tariffs, 'T' the post-negotiation tariffs, and 'r' the reduction coefficient (hereafter the "Swiss coefficient"). In what follows, the expression "a Swiss19" means a Swiss coefficient of 19. For illustration sake, a tariff of 300 percent would be cut down to 17.9 percent (with a Swiss19) to 21.4 percent (with a Swiss23) and 23.9 percent (with a Swiss26).

Contrary to what is often believed, particularly in the negotiating circles, cuts in applied tariffs are not the only ones to create new trade flows.

This is due both to the Doha Round negotiations and to the fact that the EU is negotiating numerous bilateral agreements.

[a] Developing countries with 'non-low' binding coverage [b] Developing countries with low binding coverage (lower than 35 percent).

[c] Small and vulnerable economies with a bound tariff average (in NAMA) at or above 50 percent.

[d] Small and vulnerable economies with a bound tariff average (in NAMA) at or above 30 percent, but below 30 percent.

[e] Small and vulnerable economies with a bound tariff average (in NAMA) below 30 percent.

Commitments tabled by the NAMA Chair in the Doha Round


Managing Transition in an Artistic Company With Entrepreneurial Management: A Case Study of Groupe Bernard Loiseau

Thomas Paris, Frédéric Leroy Although entrepreneurship plays an important role in the dynamics of the arts sector [START_REF] Hagoort | Art Management: Entrepreneurial Style[END_REF]Henry, 2007), little has been written on the subject. The artists, or the producers, often have to develop their own structure to realize a personal vision or an art project. Moreover, the characteristics of artistic companies and institutions are such that the leader's personality plays an influential role: It has a more marked impact on production in the arts sector than in other sectors. Therefore the question of leadership in artistic companies and institutions is an important one [START_REF] Lapierre | Leadership and Arts Management[END_REF].

The personalization of artistic organizations makes succession a key issue. What happens to an organization when its founder leaves? How does it evolve, and under what conditions? To what degree can and should the organization's artistic production continue to be influenced by the founder?

The issue of succession helps define the category of creative industries [START_REF] Caves | Creative Industries -Contracts Between Art and Commerce[END_REF], as it is a fixture of the various sectors grouped together within the category. It also applies in sectors that may appear very different, whether or not they fall into the arts domain strictly speaking. In fashion, publishing, architecture, the theatre and haute cuisine, the departure of the founder-creator often poses a serious challenge [START_REF] Landry | A Conceptual Framework for Studying Succession in Artistic and Administrative Leadership in the Cultural Sector[END_REF]. How can an organization carry on without the person responsible for both its impetus and its image?

This issue, which employees of creative companies confront on a regular basis, entails some basic theoretical questions. Although [START_REF] Lapierre | Leadership and Arts Management[END_REF] suggests a division of labour between leadership and management in a creative organization, studies on the management of creative organizations are divided into those that focus on the leadership and those that centre on the organization itself. In the leadership approach a person's ability to convey a vision is key, while the organizational approach is concerned with management, structure and the various tools that are used. It is the eternal debate about creativity: Does it originate in the individual or in the system? [START_REF] Lampel | Balancing Act: Learning From Organizing Practices in Cultural Industries[END_REF].

The question of succession allows us to break down the dividing line, in that it raises the issue of the respective roles of the leader and the organization. Once the founder-creator is gone, what is the company left with?

To answer this question, we chose the case of one of France's emblematic hotel and restaurant businesses, built around a gourmet restaurant. The firm was suddenly confronted with the issue of succession when its chef, Bernard Loiseau, committed suicide while still heavily involved in every aspect of the business. Loiseau was the firm's founder, charismatic leader and chief spokesman. A longitudinal study of the company, conducted by means of interviews over several periods between 2006 and 2012, sheds light on how the questions of succession and creative style were addressed within this organization and are addressed within artistic organizations in general.

We begin the article with a review of the literature. Although little has been written about the question of style or a stylistic framework for succession within artistic and creative organizations, we examine the streams of research that deal with similar subjects: succession in family-owned businesses and organizational identity. We then present our case study, highlighting key events in the succession process at Groupe Bernard Loiseau. We conclude by discussing the question of style and succession within artistic and creative organizations.

Succession in Artistic and Creative Organizations: A Paradoxical Dearth of Research

Strong personalization is a characteristic of artistic and creative organizations, be they companies built around the work of a single creator [START_REF] Svejenova | An Individual Business Model in the Making: A Chef's Quest for Creative Freedom[END_REF], companies with different creators [START_REF] Catmull | How Pixar Fosters Collective Creativity[END_REF] or major institutions. Some of the company profiles published in the International Journal of Arts Management cover a period in the life of an organization when a particular leader is dominant [START_REF] Cardinal | Zarin Mehta and the New York Philharmonic[END_REF][START_REF] Brockhaus | Family Business Succession: Suggestions for Future Research[END_REF], 2007;[START_REF] Cameron | Mikhaïl Piotrovsky and the State Hermitage Museum[END_REF][START_REF] Vigneault | Richard Monette, Antoni Cimolino and the Stratford Shakespeare Festival: The King and the Dauphin[END_REF]. Strong personalization can be linked to the overwhelming influence of the author of a contribution, to a romantic vision [START_REF] Becker | Art Worlds[END_REF] or to the importance of the notion of leadership in the arts sector [START_REF] Lapierre | Leadership and Arts Management[END_REF].

Paradoxically, the weight of individuals in the research on artistic and creative management is accompanied by a lack of research on the issue of succession. However, succession has been the subject of numerous studies in the field of entrepreneurship, particularly in family-owned firms where it has been identified as critical. For example, Le Breton [START_REF] Breton-Miller | Toward an Integrative Model of Effective FOB Succession[END_REF] note that less than 10% of all family-owned companies survive past the third generation, while [START_REF] Brockhaus | Family Business Succession: Suggestions for Future Research[END_REF] points out that succession management plays a key role in the life of family-owned firms and should be analyzed from the angle of the family, management and property ownership in order to elicit the perspectives of the various stakeholders.

Studies on transfer and succession in family-owned businesses highlight the key success factors in these processes. Le Breton [START_REF] Breton-Miller | Toward an Integrative Model of Effective FOB Succession[END_REF] describe the predecessor (relationship with the successor, motives, personality, needs), the successor (motives, talents, development, career, external experiences, education and training) and basic rules with respect to planning, shared vision and family harmony. Cabrera-Suárez, De Saá-Pérez and [START_REF] Cabrera-Suárez | The Succession Process From a Resource-and Knowledge-Based View of the Family Firm[END_REF] show that one of the challenges in the process is the successor's ability to acquire the knowledge and skills of the predecessor in order to sustain and develop the company's performance. [START_REF] Hofer | The Transition to Professional Management: Mission Impossible?[END_REF] propose a conceptual model for the transition from a oneperson entrepreneurial type of management to a functional type of management. They show that this kind of transition is particularly difficult. Other studies have focused on the different factors that are likely to influence the succession process. [START_REF] Handler | Succession in Family Firms: The Problem of Resistance[END_REF] and [START_REF] Handler | Succession in Family Business: A Review of the Research[END_REF] describe some of the factors at play when there is resistance to succession. These can pertain to the founder (attachment, reluctance to delegate or to retire) or can be inter-individual (family conflicts interfering with the business), organizational, or environmental (culture and structure of the organization, degree of environmental stability).

The founder tends to exert a particular influence on the succession process. [START_REF] Wasserman | Founder-CEO Succession and the Paradox of Entrepreneurial Success[END_REF] demonstrates that the succession of the first generation is linked to the founder's attachment to the firm. [START_REF] Davis | In the Founder's Shadow: Conflict in the Family Firm[END_REF] observe the importance of the "generational shadow," particularly that of the founder. Finally, [START_REF] Miller | Lost in Time: Intergenerational Succession, Change, and Failure in Family Business[END_REF] discuss the weight of the past, suggesting that problems can result from the development of a poor relationship between the organization's past and its present situation.

All of these observations, based on a variety of family-owned businesses, seem to be reflected in artistic and creative companies, where strong personalization serves to increase the influence of the founder. Furthermore, the delicate nature of succession is confirmed empirically, with this particular phase appearing to be critical in many cases [START_REF] Paris | Manager la créativité -Innover en s'inspirant de Pixar[END_REF]. Yet this aspect of artistic and creative organizations has not received the attention it warrants.

Data Collection and Analysis

This investigation was based on a longitudinal study carried out from an inductive perspective. The researchers contacted the directors of the company two years after Loiseau's death in order to determine how the matter of succession had been handled.

We conducted interviews in four phases. During the initial phase we met with Dominique, Loiseau's widow and with the new managing director of Groupe Bernard Loiseau. We then held two interview and observation sessions at the company's site in Saulieu. A year later we conducted six filmed interviews with people we had met previously. Finally, we returned in order to complete our research by holding informal discussions with staff members. During each of the last three phases we also made observations, either as customers (dining room or hotel) or as observers (kitchen).

We carried out interviews with 18 employees in diverse positions. The interviews were conducted by two researchers and lasted one to two hours. Most of these employees had known Bernard Loiseau personally and had been witness to the events. The interviews were partly open-ended and partly structured, based on several guidelines and specific questions on the following topics: curriculum; role in the organization, before and after Loiseau's death; the organization of work before and after Loiseau's death; the reorganizing process and how it was carried out; any significant changes since Loiseau's death as well as any opposition or resistance to these changes.

We complemented these interviews with a document analysis. We consulted corporate documents; books and articles in specialty magazines by or about Loiseau as a chef and features of his cuisine; restaurant guides, particularly the Michelin guide; and articles by leading writers on gastronomy.

After this phase of formal research, we continued to meet regularly with some members of the management team, who kept us informed of any changes within the company.

We used short debriefings after each interview to reorient, develop and clarify. We then spent many hours in discussions with each other, identifying potential interesting themes. We grouped our interview transcripts and observational notes into two clusters, one for June 2006 and one for March-June 2007. Our analysis followed a two-part structure. We first triangulated the interviews to reconstruct an objective narration of the events following Loiseau's death. We then reread the transcripts and notes individually a number of times and watched the filmed interviews to identify references to the identity, style and spirit of the company during each period.

The Case of Groupe Bernard Loiseau

The recent history of the Bernard Loiseau enterprise, an iconic firm in French haute cuisine, makes it a particularly interesting case study of succession in artistic and creative organizations. In France, haute cuisine enjoys a status close to that of an arta culinary artand chefs are highly respected. Chefs often consider their creations works of art and their cuisine is marked by subjectivity. In the case of Groupe Bernard Loiseau, the chef was also the founder, a charismatic leader and the person responsible for putting the company in the spotlight. His sudden death raised the issue of succession in a very dramatic way, especially with regard to artistic organizations. Would the business be able to survive without him? Under what conditions, and with which creator, manager and stylistic framework?

Bernard Loiseau's La Côte d'Or

Loiseau, depressed and overworked, took his own life on 25 February 2003 at his home in Saulieu. At the time he was chef at one of the 20 or so restaurants that made up the elite of French gastronomythose to which the Michelin guide had conferred three starsas well as one of the most celebrated chefs in French haute cuisine, its spokesman and recipient of the most media coverage.

Loiseau assumed the management of the legendary hotel and restaurant La Côte d'Or in 1975 (he would buy it in 1982), at the age of 24. Prior to that, he had served as an apprentice at Troisgros in Roanne, one of Michelin's three-star French restaurants, then as chef at a restaurant on the fringes of Paris, where he began to be noticed by the media, and, finally, as head chef at a Parisian restaurant, where he was singled out by the critics as a future "great."

La Côte d'Or in Saulieu, in the heart of Burgundy, had long been a prime destination on the road to the Alps, the south of France and Switzerland. It had acquired an international reputation under the guidance of Chef Alexandre Dumaine . When it was awarded a third Michelin star in 1951, it joined the ranks of France's seven elite establishments. For many years, the prestige of La Côte d'Or was such that it was a must for well-known figures from the worlds of politics and show business.

After the departure of Dumaine in 1963, and before Loiseau took over, La Côte d'Or had more or less sunk into oblivion. Its geographical location had become less attractive now that there was a highway 25 kilometres away, heading east and south from Paris. Loiseau's gamble was high-risk: Make enough people come to Saulieu to obtain three Michelin stars. In 1977, two years after he arrived, Loiseau got his first Michelin star and a rating of 17/20 in the Gault & Millau guide. In the years that followed he was awarded a second star (1981) and hired men who would become pillars of La Côte d'Or: Hubert, restaurant manager (recruited in 1980), Eric, maître d'hôtel (1981), andPatrick, head chef andsecond-in-command (1982).

After several months of construction in 1990, to provide the restaurant with three dining rooms and new kitchens, La Côte d'Or was rewarded in March 1991 with three Michelin stars. The consequences were enormous. La Côte d'Or acquired an international reputation and drew customers from around the world. The restaurant developed rapidly and hired new kitchen and dining room personnel in order to ensure impeccable service. The staff grew from 20 in 1986, to 40 in 1990, to 75 in 2000. Despite its location off the beaten track, La Côte d'Or became a venue that was well worth the detour. A loyal circle of customers developed who would return once or twice a year.

In 1998 Groupe Bernard Loiseau went public and raised 13 million francs, which allowed it add deluxe touches to the hotel (a tower, a spa overlooking a garden and a swimming pool), and in 2000 La Côte d'Or was listed by Virtuoso, a prestigious and highly selective network of 350 American tour operators.

This period was also marked by a diversification of activities, with the development of consulting services on the launching of new restaurants, partnerships (branding) and the opening of three restaurants in Paris. It was also marked by the polishing of Loiseau's image as the ultimate chef, spokesman for French cuisine.

Bernard Loiseau as Chef

Loiseau belonged to the generation of chefs who advanced to the forefront of the nouvelle cuisine movement in the 1970s. One of the guiding principles of that movement was a rethinking of traditional dishes to make them lighter and more refined. The idea was to use less fat in main courses and less sugar in desserts so as to rediscover the natural taste of the products and better distinguish their flavours. In this cuisine the focus is above all on taste and the achievement of both gustatory force and finesse. This involves a search for impeccable produce, often local or regional, and simplicity of presentation, each dish having been created around one main product and two complementary productsnever moreso as not to dilute the original flavours in the palate.

What was important to Loiseau was to restore and enhance the taste of meat, poultry and fish. This involved new preparation techniques. One of the innovations was to make strong sauces from the cooking of the product. To bind sauces, he used neither cream nor flour but vegetable purées (onions, carrots), which serve to thicken while highlighting the flavour. Loiseau had no compunction about reclaiming and revisiting the great Burgundian classics. With frogs' legs, for instance, he kept the original ingredientsgarlic and parsleybut changed the traditional recipe to produce a dish that was lighter and less fatty. The frogs' legs were simply browned in butter and served with a garlic purée and a parsley coulis. However, a simple presentation did not imply a simple preparation process. The purée was made from cloves of garlic blanched several times in different pots of hot water to eliminate the unpleasant compounds of the garlic, then sweetened with a little milk. The spurs and calf muscles were removed from the frogs' legs to make the cooking process more uniform. The same process is used for Sandre à la peau croustillante et fondue d'échalote sauce vin rouge, one of Loiseau's classics. The sauce is made by reducing Syrah red wine. The wine is heated for several hours without ever coming to a boil, so that the evaporation process is slow and gradual. Seven litres of wine are cooked for seven hours to yield one litre of wine concentrate, which is then whipped with butter and seasoned. The shallots are cooked at length in compote, which makes them a little sweeter and a good complement to the tangy taste of the wine sauce.

Management of the Establishment

One of the challenges of managing a great restaurant is meeting costs. Staff-related costs represent between 45% and 60% of expenditures, because a team must be sufficiently large and specialized to meet the requirements of quality and coordination in the serving of meals. The use of numerous trainees and apprentices allows the establishment to provide training for young people and bear the costs of maintaining a large team. The ingredients and raw materials are another key expense (roughly 30%). The dishes listed on the menu should be available when customers order them, which means that fresh produce must be on hand and will be thrown out if not used. The profit margins of top restaurants are quite small (around 5%); to exceed the break-even point one has to have a large number of covers without compromising the quality of the dishes or the service. Given these circumstances, location, listings in the best restaurant guides, chefs' awards and media visibility are all essential for success.

As the management of a great restaurant is a risky business, always at the limits of profitability, top restaurants try to develop additional activities, often capitalizing on the chef's name. Such activities include consulting, training, derivative products, advertising and gourmet columns in the media. The addition of a hotel can boost revenues if the costs are well controlled and the location is attractive; it also allows customers to consume alcohol without having to drive afterwards.

In 2003 La Côte d'Or was run in a traditional way. The reception desk was responsible for reservations, for both the hotel and the restaurant, and for greeting guests upon their arrival and seeing them off after their meal or their stay. It included receptionists and a doorman in charge of parking cars and handling luggage. The rooms were the responsibility of the housekeeper and a team of housemaids. In the dining room, the maîtres d'hôtel welcomed the customers, offered them menu advice and took their orders; they were in charge of the seating plan, the quality of the service and customer relations during the meal. Five chefs de rang were responsible for five to seven tables each, while waiters brought in the dishes and the dessert trolley. The waiters served as the link between the kitchen and the dining room so that the chefs de rang could be present in the dining room at all times. The dining room was staffed by some 20 people, and everything was done to ensure that diners had the shortest wait possible between courses and that all those at the same table were served at the same time.

The sommellerie was responsible for the purchase, storage, sale and serving of beverages: water, wine and after-dinner liqueurs. The wines represented between 30% and 40% of the restaurant's turnover but about 80% of its margin. La Côte d'Or's wine cellar, like the cellars at any fine-dining restaurant, was stocked with a wide variety of wines.

The kitchen comprised three activities: creation of new dishes, preparation of dishes and support activities (purchasing, administration, personnel management). The chef was in charge of creating new dishes, the menu and recruitment. He was also behind the passe, the table where the plates are arranged and controlled before being taken into the dining room by the waiters. The chef could be assisted by one or more sous-chefs, with whom he shared responsibility for administration, management of kitchen staff and creation of new dishes.

Preparation of the dishes was handled by the team, which worked in a pyramidal structure organized into domains, each directed by a head chef: pantry, fish, meat, fish courses, meat courses, pastry. The domain chefs were responsible for their domain as well as for receiving and storing the products that they needed. Each domain chef had several assistants who carried out one or more tasks (peeling, chopping, cooking). Before the loss of Loiseau, the kitchen team comprised 22 people managed by Patrick Bertron with the assistance of two sous-chefs, who were also domain chefs.

The kitchens of top restaurants feature a rapid turnover of assistants and domain chefs because young chefs go from one establishment to another in order to perfect their craft. Loiseau's chef assistants, who were between 18 and 25 years of age, stayed an average of 18 months.

The composition and preparation of dishes were carried out to perfection by Loiseau and Bertron. Bertron was responsible for teaching skills in the kitchen. He described the dishes, the spirit in which they were to be created and how they were to be prepared. He showed the teams how to arrange a plate and put the finishing touches on it. The chefs could also consult specifications for the composition of the dishes and how to prepare them (ingredients, measures, cooking time, photos). These specs were also used to describe the dishes to the waiters so they could give diners proper advice. But it was above all know-how, experience and philosophy that were key in producing the best possible dishes and that were transmitted in the kitchen by the chef to his sous-chefs and teams. It entailed education of the sensestaste, sight, touch, smell and even hearing. All of the senses were mobilized to determine whether a meat or fish was well cooked or if a sauce had the force required for a particular dish.

"Old Style" Management

There were several specifics in the way that La Côte d'Or hotel and restaurant were run, all related to Loiseau's personality and omnipresence. Onsite from morning to night seven days a week, with only the occasional few days' vacation, he greeted guests in the reception area when they arrived and bade them farewell when they left. Concerned with every detail, he was available to all members of his staff, ready to guide, motivate or correct. As a boss, Loiseau was very demanding and was apt to fly into a rage if he thought that some aspect of the service was lacking. At the same time, he was paternalistic in his relationships with his employees, always prepared to advise and encourage. He showed real affection for his staff, and that affection was reciprocated.

Loiseau's omnipresence did not prevent him from assigning important tasks to those he trusted. This ability to delegate resulted in a keen sense of family shared by all; the staff felt that the lines of communication were open at all times. The style that Loiseau wished to convey was that of an inn where guests feel at home and the atmosphere is not stiff and stilted but warm and relaxed; this was reflected in the way that the establishment was run.

Management remained very informal. The accounts were kept in order but management was in the "old style," without rigorous follow-up. The top priority was the quality of service. In both the kitchen and the hotel, each employee went ahead and made the purchases related to his or her position without necessarily asking for an estimate and with no centralized control. No cost was questioned so long as the purchase met high standards of quality. This autonomy nevertheless went hand in hand with a spirit of economy, as Loiseau paid close attention to any restaurant expense that did not directly involve what went on the plate. In the kitchen, the demand for the very best products meant a choice of suppliers without a call for bids or negotiation of prices. For Loiseau, one could not put a price on excellence. Likewise, as the quantities purchased were based on a rough estimate of the number of covers expected, produce that could be used but whose slight deterioration meant that it no longer met the restaurant's high standards was often discarded.

The Initial Decisions Post-Bernard Loiseau

After Loiseau's death, his widow, Dominique Loiseau, believed it was essential to communicate the fact that the establishment continued to operate, with the same teams, the same services, the same quality, the same welcome, the same concern with excellence. Although Loiseau embodied his establishment in the eyes of the public, it was now vital to focus on the professionalism of the team that kept the business running on a daily basis, to reassure customers that La Côte d'Or had not depended exclusively on him.

One of the first challenges was to retain a motivated staff. Although many employees said that they wished to stay on, they had just lost their leader. Other challenges were to reorganize the way the establishment was run, to compensate for the few departures that did take place and to adapt to the absence of Loiseau in all the different roles he had played. The organization was centred on Loiseau and it was inconceivable that he be replaced: No one would throw himself into the tasks as he had, nor bring together the qualities of creativity, leadership and communication as he had. It was essential to put into place a more formal organization but without altering style or quality. Dominique Loiseau hired a general manager, an outsider to the world of gastronomy, who was put in charge of reorganizing the staff and adopting more stringent management methods. Loiseau took over some of her husband's functions herself, particularly in the areas of public relations and the welcoming of guests. Patrick Bertron, the sous-chef, was made chef. The other changes in the organization were oriented towards internal promotion. In the dining room, two chefs de rang who had been with the firm for over 15 years were promoted to maîtres d'hôtel to replace the maîtres d'hôtel who had chosen to leave.

The establishment was renamed Relais Bernard Loiseau. Public relations, which previously had focused on the cuisine, now highlighted the hotel and its services. The menu was expanded to include less expensive selections in order to build a local clientele. The immediate result of Loiseau's death had been a substantial drop in the number of reservations and cash inflow. Some of the less affluent customers, who had come after hearing Loiseau on the radio, seemed lost. In the short term, it was necessary to trim the sails without compromising on quality. A reorganization process was launched.

On the financial level, all expenditures were carefully reviewed. Procedures were set up for ordering, with all purchases now subject to approval through a hierarchy and managers being asked to find ways of cutting costs. Inventory tracking, personnel management and the hiring process were also revamped. With the drop in turnover, strong management seemed a requisite to make the business profitable again. The kitchen was more closely monitored. Procedures were reinforced, in particular regarding the inventory and the calculation of recipe costs. Margin rates were set in order to fix a sale price based on the cost of the materials. Specifications were established for each recipe, indicating in detail the ingredients used and the quantity.

In fact the way of doing business was overhauled. Loiseau's management style, which his team members described as "communicative," "small-farmer-like," "craftsman-like," "family . . . professional" and "informal," was replaced by a more structured, formal style. For management, the real challenge lay in establishing a more rigid management system to sustain the business without compromising on quality in any way.

The Firm's Identity

The menu was also changed. At first, in an effort to stabilize the situation, it remained Loiseau's menu, changing according to the season. Bertron, backed by Dominique Loiseau, chose to respect the principles of Bernard Loiseau's creations, and even reinforce them so as to convince the staff, customers and restaurant critics that nothing had changed. But the management, like the new chef, also believed that the establishment should innovate and offer new dishesvery soon, customers would expect it to be creative. Little by little, the chef, with the blessing of Dominique Loiseau, entered a creative phase. The menu began to evolve, eventually comprising traditional fare and a range of new dishes, with a clear distinction between the two cuisines.

Tensions came to the fore. The changes to the establishment met with resistance and gave rise to a series of conflicts, both major and minor. The more senior staff members, such as Hubert, the restaurant manager and Bernard Loiseau's long-time friend, became keepers of the flame. Hubert was seen by many as Loiseau's right-hand man and the embodiment of his style. He was highly respected and well liked by both staff and customers.

First, the organization was criticized for imposing procedures that threatened the quality of service and the firm's traditional style. Some staff members, mostly those in senior positions, felt that cost control and the adoption of reporting tools were detrimental to quality and the spirit of conviviality. The new approach was considered too managerial.

But the revolt mostly concerned Bertron's creations and the changes made to the menu. Certain dishes were judged incompatible with the Loiseau style and were severely criticized, particularly by the dining room staff. Tensions mounted between the dining room, where the staff were mostly long-time employees who had been part of Loiseau's adventure, and the kitchen, where only the chef had even known Loiseau, all the other employees having been there only a year or two as apprentices. In the dining room, the chefs de rang and maîtres d'hôtel, who advised the customers and took their orders, intimated that they could not sell the creations of Bertron well as those of Loiseau. Hubert, a pillar of the firm, engaged the new chef in bouts of arm-wrestling. A tense situation turned into open conflict.

Behind the conflict, beyond the classic issue of succession, the firm's identity and stylistic framework were at stake. When Bertron embarked on his new creative process, he meant to emphasize the "base" invented by Loiseau and introduce more variety in the palate. His cuisine gradually found its personality, its style, and became more inventive. "In Loiseau's cuisine," explains one of his maîtres d'hôtel, "you started from a particular taste point and there was only one line of development that reached a crescendo. In Bertron's cuisine, there's always a progression of tastes, but it is more of a spiral. There are more flavours in the palate, more connections between flavours; they stay longer, or return. With Loiseau it was more linear. With Bertron it's a rotation of flavoursthere's a back and forth . . . a more complex play of flavours."

New techniques were introduced and there were more products on the plates, including ingredients that Loiseau had disliked using, such as saffron. In the dining room, some members of the senior staff let Bertron know that this was inconsistent with the Loiseau style. "Bertron started to bring in a touch of whimsy," says a maître d'hôtel, "and we were worried that he would graduate to a cuisine where you don't know what you're eating any more. In the case of Loiseau, it was the product that was highlighted. We were concerned because it was not the Loiseau style and we were running the risk of producing the cuisine of the man in the street." A sous-chef comments, "It was very hard to convince the waiters to accept innovation. We made a lobster bouillon with lobster ravioli and stuffed cabbage. We wanted to serve the bouillon in a teapot. It caused a scandal. They told us, 'You didn't work with Monsieur Loiseau; you don't know how to work'."

Management, which believed that the business would survive if it continued to be creative, did not give in on the question of the Loiseau style. To defuse the situation and give new impetus to the firm, which was still in shock from the loss of its founder, Dominique Loiseau chose to turn towards the future, maintain a managerial orientation and support the creations of Bertron. A decision was taken to part ways with Hubert, one of the historic pillars of the firm. It was a risky move but the price that had to be paid to ensure a renaissance and the viability of the firm. The decision came down in January 2005 and served to traumatize the staff all over again.

Groupe Bernard Loiseau in 2013

By the summer of 2013 the company had survived the critical period following Loiseau's death as well as the financial crisis of 2008. In 2013 Relais Bernard Loiseau received three Michelin stars for the 10th consecutive year since Loiseau's passing. The financial situation is healthy. The stormy relationship between the dining room and the kitchen is no more and Bertron's cuisine has been accepted by the senior staff. This happened gradually, as the results improved. Bertron is now established in his role as chef and can offer daring creations that adhere to the Loiseau style without complying with detailed specifications. Orders are evenly divided between the Loiseau classics and the Bertron creations.

The work since 2003 has been aimed mainly at consolidating what already existed: optimization of the infrastructure, maintaining of a warm and hospitable atmosphere true to the Loiseau style, improved management techniques, more rational operations so as to attain or increase profitability at all of the group's establishments, and investment in modernization and decor to uphold the quality of services and sustain the appeal of the Loiseau brand. At the same time, careful consideration has been given to the development strategy, which since 2007 has taken the form of different operations. In 2008 a new restaurant, Loiseau des Vignes, was launched in Beaune, Burgundy, based on an original concept: a wide variety of wines available by the glass. This restaurant received its first Michelin star in 2010, a year that made Loiseau des Vignes one of the most profitable restaurants in the group. Two other restaurants were due to open in 2013, one in Dijon (in Burgundy) and one in Japan.

At the same time, the teams are working on partnerships to promote the firm's image in France and abroad. The restaurant in Saulieu is the group's flagship restaurant and its public relations focus, but it must be supplemented by activities that generate a profit and enhance the firm's image. In 2009 partnerships were formed with three leading companies in Burgundy, each highly respected in its field: Bichot wines, Fallot mustards and Boudier liqueurs. This does not mean simply selecting high-quality products, affixing the brand name and retailing them; it involves co-creating with the partners and combining their know-how. The specialists in the partner firms were closely associated with the chef, sommelier and pastry chef at Loiseau in developing the three product lines. These partnerships will allow the company to diversify its sources of revenue (in the form of royalties), still with a small turnover, and above all enhance the image of the Loiseau brand in France and elsewhere.

The Matter of Succession

The recent history of the Loiseau firm, aside from the dramatic events, highlights the structural issues affecting artistic and creative organizations in matters of succession. How does an organization carry on without the person who embodied it, including its production? We call this the paradox of creative organizations.

The Paradox of Creative Organizations

Immediately after Loiseau's death the company was in a paradoxical and rather intriguing position. Staff members felt lost, and seriously questioned the future of the firm without its ownerthe chef who had imprinted his style, the charismatic manager, the person who brought in the customers and motivated the employees. At the same time, they knew how to run the business and knew that they were the only ones who could make it run smoothly on a daily basis. Most of the management team had been by Loiseau's side for years, some from the very outset. Although Loiseau had been very "present," he had also delegated, including the creative tasks. His head chef, Patrick Bertron, had worked with him for over 20 years and had helped to create the dishes, testing them and offering ideas. He had become a replica of Loiseau, to the point where Loiseau had no compunction about saying that Bertron "could do" Loiseau better than he could himself, such was his knowledge of the techniques, the dishes and the cuisine. Herein lies the paradox of creative organizations. For the teams there was a sense of loss and soul-searching about the firm's ability to survive without its leader, but at the same time there was a conviction that they were the pillars of the establishment and were indeed capable of running it. This paradox raises the question of the role of a creator who is omnipresent yet delegates many of the tasks. What did the organization lose with the loss of Loiseau? A company's survival lies in the answer to this question.

Flexibility of the Stylistic Framework

The paradox was eventually resolved. In art and creation, the idea of a stylistic framework is key. Whether it is called a stylistic framework, or a style or an identity, it involves at least two points of view, that of the customers, who might have expectations regarding the company, and that of the staff. Identity is what serves to reassure in times of troublefor example, when a charismatic leader, after years of success and being entrusted with charting the course for the organization, is no longer around. When the absence of the leader, who represented the firm in the eyes of the clientele and instilled confidence in the employees, translates into a loss of confidence, then anything new is cause for concern.

In a crisis such as that experienced by the Loiseau firm, when the future is uncertain, adhering to a stylistic framework offers reassurance. The creative industries are characterized by the nobody knows property [START_REF] Caves | Creative Industries -Contracts Between Art and Commerce[END_REF] that translates uncertainty about the eventual success of the creations proposed. When faced with uncertainty, one's proven talents earn the trust of customers, and this trust is passed on to the staff. Loiseau's reputation had served as a form of security for his employees, something that his successor could not provide. The defiance towards Bertron was therefore structural. The firm's style was a lifesaver for the staff: In times of uncertainty they held on to what had made the firm a success and looked to the past for a framework by which it might evolve. As the leader was no longer there to provide the framework, it was the style they clung toin other words, the formalization of what constituted its principles. But the notion of style clashed with its definition. Where was the identity of Groupe Bernard Loiseau? In its cuisine? In the supremacy of taste over everything else? No cream, no butter? No "frills" on the plate? Three flavours in each dish? Formalization could well lead to very restrictive rules, including the rejection of anything that had not been created by Loiseau. The firm's identity would then boil down to its Jambonnettes de grenouille à la purée d'ail et au jus de persil and Sandre à la peau croustillante et fondue d'échalotes, sauce au vin rougein other words, to the dishes that had been created by Loiseau. The notion of style can quickly conflict with that of creation.

When the orientation imposed by the new chef had passed the testthe customers came back, the restaurant kept its Michelin stars, the business was beginning to show a profit once againthe question of style seemed to no longer exist. It dissolved because the teams did not need it any more; the new chef was starting to gain legitimacy.

This episode suggests that the notion of style is ambiguous with respect to succession. It is a constant that customers and staff can turn to in times of uncertainty, but perhaps also the main loss resulting from the departure of the creator. The company must accept the fact that style is a personal matter, something on which it cannot capitalize in order to continue to create. Nevertheless, style took root in the organizationthe processes, the know-how, the teams and the new creations became imbued with it. Although Bertron had his own unique personality, his cuisine drew on continuity; his personality as a creator developed in the fertile ground of Loiseau's cuisine, as did the expertise of the teams. Bertron's personal style developed around the supremacy of taste.

Succession in Creative Companies

The case of Groupe Bernard Loiseau confirms the results of research on succession in familyowned companies. In fact the phenomena of resistance seem to be structural [START_REF] Handler | Succession in Family Firms: The Problem of Resistance[END_REF][START_REF] Handler | Succession in Family Business: A Review of the Research[END_REF]. The influence of the founder [START_REF] Davis | In the Founder's Shadow: Conflict in the Family Firm[END_REF] and past [START_REF] Miller | Lost in Time: Intergenerational Succession, Change, and Failure in Family Business[END_REF]) also appear to be important factors in the process.

The transition from a one-person entrepreneurial process to a functional type of management is considered the most sensitive factor [START_REF] Hofer | The Transition to Professional Management: Mission Impossible?[END_REF]. The way in which the firm was run during Loiseau's time typifies the various characteristics of companies managed in an entrepreneurial manner: highly centralized decision-making, over-dependence on a single individual for survival and growth, limited repertoire of managerial skills and training, and a paternalistic atmosphere.

In relation to the literature on succession, the case has two characteristics. The first is related to the sudden loss. Most of the studies on transfers are concerned with succession linked to the retirement of the founder, whose shadow hangs over the company [START_REF] Davis | In the Founder's Shadow: Conflict in the Family Firm[END_REF]. In this case, the founder's shadow hung particularly heavily over the company because he died suddenly. This is undoubtedly related to the other characteristic: the creative aspect. In artistic and creative companies, the personality of the founder weighs heavily if the entire organization has served his vision and if his personality is part of the firm's product. The difference between a creative company and others is that its production is the creator himself. What the Loiseau enterprise produced was "Bernard Loiseau." This added to the difficulties of succession and the weight of his personality on the organization. [START_REF] Cabrera-Suárez | The Succession Process From a Resource-and Knowledge-Based View of the Family Firm[END_REF] show that the successor's ability to acquire the knowledge and skills of the predecessor is big part of the challenge in succession. The result is slightly different in the case of artistic and creative organizations. The successor must not only possess the skills of a creator but be able to apply them in a way that affirms his own unique personality and style. Consequently, he has to free himself from those skills he used when he was working for another creator. Style is an intrinsic skill that cannot be passed on.

Conclusion

The case of Groupe Bernard Loiseau raises, in a dramatic way, a number of issues that come up regularly in cultural or creative companies and institutions. Behind the question of succession lie the respective roles played by the individualmanager or creatorand the organization. And behind the question of the stylistic framework lies that of the formalization of activities, particularly creative ones. The Loiseau story illustrates the delicate balance that creative companies and institutions must strive to maintainthat between the intuition of a particular individual and the processes that need to be followed.

The Loiseau paradox masks a number of other elements, not least the division of labour in the creative process. [START_REF] Becker | Art as Collective Action[END_REF][START_REF] Becker | Art Worlds[END_REF] shows the extent to which creative activity is a collective activity. Our case study confirms the previous finding that creative work entails a division of labour [START_REF] Paris | Manager la créativité -Innover en s'inspirant de Pixar[END_REF]. The only task that Bernard Loiseau did not delegate was the decision whether to include a particular dish on the menu. Such a decision requires the intuition, vision and subjectivity of the creator. Loiseau was the person who charted the course for the firm and who was most trusted by staff. After his death, the employees knew how to run the company but there was no one who could fill his shoes in terms of leadership.

Perhaps the main lessons of this case are the intriguing cohabitation of the rational and rationalizing aspects of management in creative activities and the need for subjectivity in all matters pertaining to art.

Thomas Paris is a researcher at CNRS (GREG HEC) and an associate professor at HEC Paris, where he is director of the master's program Média, Art, Création. His work is concerned mainly with management, economics and organizational models in the creative industries (cinema, music, fashion, publishing, architecture, advertising, haute cuisine and design).

Frédéric Leroy is an associate professor of Strategic Management at HEC Paris. His research interests cover the areas of Mergers&Acquisitions, organizational learning processes and organizational knowledge, routine and creativity.

Abstract

The important role of entrepreneurship in the dynamics of the arts sector and the influence of the leader's personality make succession a key issue in creative industries. What happens to an artistic organization when its founder leaves? How does it evolve? Can it adopt a style of management that is compatible with the founder's absence? This article focuses on the case of Groupe Bernard Loiseau, an iconic French company in the culinary arts whose owner and chef died suddenly. It sheds light on how the question of succession and that of style were addressed in this organization and how they are addressed in artistic organizations in general.

Keywords

Succession, culinary art, entrepreneurial management, creative industries