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CARICOM views EPAs as way forward

The Bahama Journal

CARICOM Views EPAs As Way Forward

By Tameka Lundy

25 June 2007

CARICOM has drawn a direct link between the Economic Partnership Agreement [EPA] that it is negotiating with the European Union and a similar pact for which it is lobbying with the United States of America.

Caribbean leaders are now waiting to see if their multilateral discussions with decision makers on Capitol Hill will bear fruit, or if the grave representations they made during last week’s Conference on the Caribbean in Washington DC fell on dear ears.

An EPA with the US is what Heads of Government desperately want as tangible proof of a more mature relationship with the northern superpower, according to incoming CARICOM Chairman Barbados Prime Minister Owen Arthur.

It is the same kind of relationship that CARICOM is negotiating with the European Union; one that moves beyond mere trade provisions to more strategic areas of focus like capacity building.

"I think that you can conclude with a reasonable degree of probability that if and when the Caribbean settles on and EPA with Europe that sets in train new rules of trade in respect of goods services and investment... and once that becomes concluded and a reality that it could be the trigger that will inspire the development of negotiations to carry us in a similar direction with the US," Prime Minister Arthur said.

He further explained that under international trade rules you cannot have different set of provisions apply to countries in an equal set of circumstances.

The economic relationship with the US is vital to the purposes of Caribbean development since the US, by far, constitutes the region’s largest market, source of technology and source of capital.

Last year there was $19 billion in two way trade between the two and the US imported $2.4 billion worth of goods from CARICOM countries in 2006.

The understandings gleaned through initial negotiations towards the Free Trade Area of the Americas [FTAA], are also viewed as having set the tone for the multilateral relations.

The prime minister, who has lead responsibility for the Caribbean Single Market and Economy [CSME], said he made this point to US congressmen on Capitol Hill.

"...That what we had gotten out of the process to create the FTAA was the commitment and acceptance by the US government that [with] any trade, economic agreement, special and differential treatment would be accorded to small, vulnerable economies ...and that the precepts that were accepted under the FTAA would have to inform the negotiations of the new partnership with the United States of America," he said.

Prime Minister Arthur told participants of the Conference on the Caribbean that while this hemisphere has failed to progress towards the implementation of the FTAA, the Caribbean Community has advanced on its own integration process.

The Caribbean Community’s trade relationship with the US is limited to trade in some goods. However the US has negotiated more advantageous provisions with other countries in this hemisphere that move far beyond that.

Prime Minister Arthur explained that the natural progression would be to reach an understanding where market access for services would also be included.

A commitment from US President George Bush to modernize the Caribbean Basin Initiative [CBI] was welcomed and classified as a substantial breakthrough in that regard.

President Bush has committed to working with Congress to extend and update the CBI and the Trade and Investment Framework Agreement. Both sides have vowed to harmonize the customs procedures consistent with global standards and the advancement of technical trade cooperation.

Though cognizant of the movement towards regionalism and integration, Bahamas Deputy Prime Minister and Minister of Foreign Affairs Brent Symonette admitted that there is a certain level of disconnect between that effort and synergy with the US on the one hand and the average Bahamian on the other.

"A lot of the issues are that the US government is trying to deal with the region as a whole, rather than dealing with individual countries and then trying to find a template that will deal with one country that will apply to all and that does not necessarily gel," he told the Bahama Journal.

"We have issues in The Bahamas and other Caribbean countries, for instance, we were talking about not just trade but financial services and as countries change more from dependence on bananas or sugar or whatever towards financial services, then there have to be different agreements put in place."

Prime Minister Arthur identified an extensive list of essential challenges which the Caribbean must confront to create the conditions conducive to growth and development with social justice, reflecting the eradication of poverty and rampant unemployment.

He referred to societies reorienting their production systems away from dependence on trade preferences; and doing the same with regard to fiscal systems to reduce their dependence on taxes on trade; creating new forms of interventions and engaging in the implementation of development strategies deliberately designed to raise the ratio of both exports and private capital inflows to GDP.

He also mentioned relying on open rather than closed systems at both the economic and social levels to generate new opportunities for small and non-traditional enterprises.