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Caricom eyes Brazil’s alert

Trinidad and Tobago Express

Caricom eyes Brazil’s alert

By Rickey Singh

5 March 2008

When Ministers of Caricom’s Council for Finance and Planning (COFAP) meet in The Bahamas tomorrow, they are expected to consider the implications for this region of reservations expressed by Brazil at the World Trade Organisation (WTO) on provisions of the Economic Partnership Agreements (EPAs) being negotiated with the European Commission (EC)

Brazil has informed the general council of the WTO that among its concerns of proposed EPAs between the EC and African, Caribbean and Pacific (ACP) group of countries, are the More Favourable Nation (MFN) clauses that could prove harmful for "South-South trade".

Specifically, it has argued that once confirmed, the MFN clauses "will discourage or even prevent third countries from negotiating Free Trade Agreements (FTAs) with EPA parties that will create major constraints to South-South trade..."

The Brazilian alert has come amid persistent divisions among some governments and regional institutions of Caricom over the EPA initialled with the Europeans last December, including trade in goods and services and particularly the "development dimension".

A major player in economic and political developments in the Latin America-Caribbean region, Brazil’s statement to a recent meeting of the WTO’s general council, followed conclusion of negotiations for the first comprehensive EPA between officials of the European Commission and CARIFORUM (Cariforum plus the Dominican Republic).

Brazil’s objection to the MFN clauses in the EPAs - of which that initialled by CARIFORUM and the EC is one of six regional accords -has surfaced against the backdrop of continuing disagreements within the Caribbean over the concluded arrangements for the Caribbean.

Tomorrow’s meeting of the Caricom council is scheduled to consider the "financial and development implications" of the EPA. The meeting will also review the status of arrangements for completion, by year end, of the "framework agreement" to make a reality of Caricom’s Single Market and Economy targeted for 2015.

Consideration of the CARIFORUM/EC accord by both COFAP and the Community’s Council for Trade and Economic Development (COTED), will be forwarded for decisions by CARICOM’s leaders who begin their inter-sessional meeting in Nassau on Friday.

The leaders are arriving in The Bahamas with the intention of having "candid and mature deliberations" on a range of vital issues, according to ministerial sources. A majority of them are said to be leaning towards endorsement of the EPA initialled with the EC as "perhaps the best possible deal under prevailing circumstances".

Among leaders reportedly so inclined are the Prime Ministers of Trinidad and Tobago, Jamaica and the Windward Islands chain of banana-exporting countries - St Lucia, St Vincent and the Grenadines, Grenada and Dominica.

However, even as ministerial and the leaders’ delegations were preparing for their meetings in The Bahamas, a trio of leading regional thinkers -Havelock Brewster, Norman Girvan and Vaughan Lewis - returned to earlier calls for a thorough review for re-negotiation of the EPA.

In a memorandum that lists "19 areas of concern in the EPA", they stressed that a "window of opportunity" still exists to re-negotiate the concluded accord since it has not yet been officially signed and, therefore, is not "a done deal".

For Brazil, on the other hand, which has communicated its own concerns to governments of the ACP countries, it has raised the implications of the MFN provisions in the EPAs because the conditions being asked of ACP states "are unfair, especially within the context of a (WTO) Development Round..."

In framing its objections in more general terms, Brazil has requested at the level of the WTO, to hear from the European Commission, "the rationale for devising these EPAs in the format (done)" and, particularly, to seek confirmation of the MFN clauses it thinks will affect third parties in their negotiations with ACP countries.

Meanwhile, as Caricom leaders focus on Brazil’s alert to the WTO the Caribbean Association of Industry and Commerce has hailed the EPA concluded between the EC and CARIFORUM as ushering "a new era in relations" between two regions known to be significantly different in size and level of development.