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The EPA conundrum

Jamaica Observer, Jamaica

The EPA conundrum

By Anthony Gomes

21 May 2008

There are strident calls for the Economic Partnership Agreement (EPA), due to be signed by Cariforum in July, to be amended, varied or simply not signed. Any possible renegotiation of the treaty, it is acknowledged, might come at a potentially intolerable cost. The strongest demand for change emanates from within the academic community that has raised certain valid issues, which should have been addressed earlier during the negotiations that officially ended on December 31, 2007.

The legal status of initialled EPAs, currently Cariforum’s situation, is described by Dr Lorand Bartels, lecturer in International Law and Fellow of Trinity Hall, University of Cambridge. The following relevant excerpts are informative:

"Under international law, initialling an agreement demonstrates that the text is authentic and definitive, ready for signature, or although unusual, ready for provisional application. But an initialled text does not itself impose any obligations on the parties. The parties to an agreement are only under an obligation to implement its terms once it has entered into force, which takes place upon ratification or after ratification, if this is specified in the treaty (as it is in the interim and full EPAs). On signature (but not on initialling), a country enters into an obligation not to defeat its object and purpose prior to its entry into force.

"Provisional application may subsequently be terminated by notifying the other party. However, terminating the provisional application of an agreement may indicate an intention not to ratify the agreement, which could result in the EU withdrawing the preferences it had already granted. Therefore, if parties have concerns about content of the agreements, it may be advisable to refrain from provisional application until the dispute clauses are first revised". It is not known if Cariforum intends to apply the agreement provisionally, but the above caution is worthy of note.

"WTO law sets minimum requirements covering free trade in goods. It does not require the inclusion of liberalisation "multiplier" clauses, such as MFN or standstill clauses.

Moreover, the WTO Transparency Decision specifically provides for the possibility of renegotiating an already notified agreement. This has been done on five occasions to date. The only requirements are that the renegotiated agreement be re-notified to the WTO and that it remain WTO legal. This leaves a great deal of scope for renegotiating aspects of the agreements which are not required for WTO legality (for example, the MFN clause and the standstill clauses could be removed without compromising WTO validity)."

According to this dictum, there is room for renegotiation of some aspects of the EPA, but at what price? However, the MFN clause is one of the major concerns for Cariforum and certain third countries, notably Brazil, that has already referred the issue to the WTO for debate.

Professor Bartels continues: "Arguably, it would be unreasonable to hold an ACP country to a standard higher than that which the EU member states apply in their own treaty practice. Consequently, there is a case that a minimum of four years between signature and ratification would be a "reasonable period of time" for an ACP country to endorse the agreement. ACP countries are not precluded by treaty law or WTO law from renegotiating initialled agreements, so long as the resulting agreement is still WTO legal."

This then is an avenue to be explored if COTED decides to move for selected amendments. The main thrust of the implementation plan, however, should be to exploit successfully the opportunities created by eventually signing the agreement.

Another concern raised by observers is the loss of sovereignty relative to the powers vested in the Joint Cariforum-EC Ministerial Council, the principal institution for oversight of the operation and implementation of the agreement. Its functions include examining proposals and recommendations for the review of the agreement. To attain the objectives of the agreement, the council shall have the power to take decisions in respect of all matters covered by the EPA. The specific reference to the council’s powers relative to the EPA seems designed to exclude reference to the authority and jurisdiction of The Revised Treaty of Chaguaramus and the Caribbean Court of Justice (CCJ). It remains possible, however, that at some time these institutions could be opposed on certain unforeseen overlapping issues.

Other critical points cited were the limiting of Caricom’s "policy space", that is the amount of flexibility available for manoeuvre in policy formulation by the Joint Council and its three other supporting institutions, that is, the Joint Cariforum-EC Implementation Committee, The Joint Cariforum-EC Development Committee and The Joint Cariforum-EC Consultative Committee.

Another criticism is the inadequate funding from the 10th European Development Fund (EDF), amounting to 2.2 million Euros per country for development/adjustment.

Finally, the regional preference granted to the DR has also created some disquiet. In essence, any preference granted by one Caricom member to another must include the DR. This has created a very beneficial windfall for the DR that is still negotiating outstanding items in its trade agreement with Caricom.

We await the EPA Implementation Plan being developed by the Caricom Secretariat. Hopefully, it should indicate the way forward for Cariforum by unravelling the many complexities contained in this first ever treaty of indefinite duration, and selecting those items of concern for eventual review with the EC.