Jamaica Observer | Sunday, April 20, 2008
EPA - could have dire consequences
Anyone could be forgiven for wanting to fall asleep whenever the new Economic Partnership Agreement (EPA) between Europe and the Caribbean comes into the conversation. The language in the 1,000-page document and the language used is so complex and dry that only professional diplomats can understand it. (And even some of them are pretending).
The Caribbean needs to pay attention, because the economic consequences of this new agreement are heading towards it like an express train with potentially catastrophic consequences.
The positive side of EPA is obvious. It will guarantee the region access to the European Union (EU) which is the largest single market on the planet with over 500 million potential customers. But trade liberalisation works both ways. The EPA also gives EU countries access to the Caribbean market in a way that they have not had before. There is some dispute as to what this means in practise. Experienced Caribbean diplomatic observers claim that: the EU will now be able to compete with local companies for government contracts; EU service companies in tourism and banking will have greater access to Caribbean markets; 80 per cent of imports from the EU will eventually be able to enter Caribbean markets at lower duties than they currently pay and, in some cases, they will pay no duty at all.
The Caribbean Regional Negotiating Machinery negotiated this agreement and its people deny some, if not all, of this analysis. Inevitably the EPA is a lop-sided agreement.
The former prime minister of Barbados, Owen Arthur, made an important speech about EPA last month. He said "Everyone involved in the exercise understood that an EPA with the European Union would mark a fundamental break with the past. Everyone also understood that it could come to herald the beginning of a new kind of future for the Caribbean in which the new power relationships and new rules of engagement are strange and testing for the Caribbean".
The problem is that "everyone" was not involved in the process. In truth very few outside the diplomatic elite really understand the EPA and its consequences.
For instance how many people grasp that the EPA is designed to force greater regional integration in both the public and private sector? How many know that the agreement also commits the region to a whole new set of institutions including: a joint Cariforum-EC Council; a joint Cariforum-EC Trade and Development Committee; a Cariforum-EC Parliamentary Committee and a Cariforum-EC Consultative committee?
As yet there has been no discussion in the region about how these committees will be made up, what the balance of representation will be between different Caribbean countries and (above all) how this network of committees will be made accountable to ordinary people? There is also talk of a new Caribbean Regional Development Fund. But there is no detail about: who will manage it, where the new money will come from and what will be the criteria for handing it out.
Many of the cheerleaders for EPA say it will force the Caribbean to be more productive and competitive. But one man’s productivity is another man’s job cut. Are trade union leaders across the region prepared for this?
It is also not clear how much money the EU is prepared to make available as transitional or development funding to make the EPA work. In 2007, the EC development commissioner, Louis Michel, said that there would be over a billion Euro to support the EPA. But, more recently, the ambassador and head of the European Commission Delegation in Jamaica has spoken about a much smaller sum of money.
Way back in 2005 the British Government’s Department for International Development said "Each ACP (African, Caribbean and Pacific) group should make its own decisions on the timing, pace, sequencing and product coverage of market opening in line with individual countries national development plans and poverty strategies. We will not force trade liberalisation on developing countries either through trade negotiations or aid conditionality". But, the truth is, trade liberalisation HAS been forced on the region. The British government also went on to say "Developing countries can benefit from liberalisation in the long run, provided they have the economic capacity and the infrastructure they need to trade competitively.
However, without the capacity or the right conditions, trade liberalisation can be harmful."
Currently the Caribbean does not have the capacity or the right conditions and the discussion about how to move in that direction has scarcely begun. The prospects, as even the British government hints, could be dire.