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Guyana accuses Europe of trade bullying

Financial Times | July 22 2008

Guyana accuses Europe of trade bullying

By Canute James in Kingston

The Caribbean could suffer economically if a proposed free trade agreement between several regional countries and the European Union is signed because of damaging flaws in the deal, according to Bharrat Jagdeo, Guyana’s president.

“We were a junior partner in the negotiations and Europe had all the cards,” he said. “Europe negotiated in bad faith. We were bullied into this.”

Mr Jagdeo’s concerns, and reservations by some governments, economists and academics, have caused several delays in the signing of the pending Economic Partnership Agreement (EPA) between 16 Caribbean countries and the EU.

Signing has been tentatively set for next month but is likely to be delayed again as Grenada’s new government, which took office this month, says it needs time to study the terms.

Trade between the two regions is worth more than €3bn ($4.8bn), according to the EU.

The EPA will replace several decades of preferential access to Europe for a range of Caribbean exports, mainly commodities. But conflicting views on the new deal have set off a trenchant debate in the region.

David Abdullah, the head of Trinidad and Tobago’s federation of independent trade unions, said the deal would provide new markets only for EU businesses.

“If this agreement is signed, it will wipe out domestic production and we will become dependent on Europe for food,” he said. “Also, our manufacturers will be unable to compete internationally.”

“We won nothing from the negotiations,” said Mr Jagdeo. “We might have to sign but it would be under duress. It would be another instance of Europe using its trade and economic might to bully a developing country.”

But Bruce Golding, Jamaica’s prime minister, said the region would be damaged if it did not sign, since World Trade Organisation regulations would prevent a return to the old preferential trade system.

“We do not have to sign it. But if we do not, then every item we are sending to Europe will attract duties. Did we get all that we asked for? No. Did we get a good deal? Yes.”

Mr Golding said the Caribbean could not afford to give up market opportunities of the value that the EPA offered. “We spend too much time competing with each other, instead of getting together to compete with the rest of the world.”

The Dominican Republic would also benefit significantly from the EPA, according to Bernardo Vega, an economic analyst and a former Dominican ambassador to the US. It would be attractive for investors, and would deliver more to the Dominican economy than it is getting from its participation in the Dominican Republic-Cafta free trade agreement with central America and the US.

He said resistance to the reciprocal trade deal by some Caribbean countries was because they had been protectionist for too long. “It is more problematic for them to open up to free trade. This will cost many a loss of customs revenues.”

Richard Bernal, who led the Caribbean negotiations, said that despite the criticism and concerns, the trade pact was not only a good deal but the only sensible option for the region. “In any negotiations, you do not get everything you want. The Europeans did not get everything, nor did we.”

 source: FT