Caribbean Net News | 6 June 2008
Trinidad and Tobago to sign EPA
By Stephen Cummings
Caribbean Net News Trinidad and Tobago Correspondent
PORT-OF-SPAIN, Trinidad: Trinidad and Tobago is expected by the end of July 2008 to sign the Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU) along with its regional counterparts.
The Agreement was negotiated by the government and was expected to come into effect on January 1 2008.
A high powered delegation from the region, who were part of the EPA negotiation process, met in Port of Spain on Wednesday to examine the main facets of the EPA and to discuss how to advance the implementation process.
"Government is quite aware of regional and local anxieties concerning the conclusion of this EPA. However, i wish to indicate that in the absence of an EPA coming into effect on January 1, 2008 Trinidad and Tobago’s products entering EU markets would have faced serious obstacles," said the county’s Trade and Industry Minister, Dr Lenny Saith who addressed a gathering.
"In respect of Trade in Goods as of January 1, 2008 Trinidad and Tobago world have been relegated to accepting the Generalized System of Preferences (GSP) arrangement, which provides trade preferences to all developing countries, and major exports would have experienced punitive tariffs," he continued.
"Our major exports into the EU (methanol, ammonia, aerated beverages, juices, sweet biscuits) would have faced immediately the prospect of higher EU tariffs that is, between 2 percent and 30.1 percent. Over TT$735 million worth of exports would have been affected with the imposition of these duties," added Saith.
It was noted that over the last few decades, one of the most important developments in international trade relations has been the proliferation of Free Trade Agreements between various regional groupings. Virtually all developing countries, driven by economic realities, have sought to negotiate these Agreements, most times with parties that are more economically advanced.
A 2007 World Trade Report also states that trade expansion in 2006 was very favorable for developing countries as a group. Their combined merchandise exports grew by 20 percent to US$4.27 trillion while their share in world merchandise exports reached 36 percent, described as an all-time record level.
Trinidad and Tobago’s export performance is also said to be aligned to this trend. The local Central Statistical Office (CSO) has reported that for the period 2002-2006 total exports increased by 271 percent from TT$24.1 billion to TT$89.3 billion while imports increased by 81 percent from TT$21.9 to TT$40.9 billion.
One of the main reasons for Trinidad and Tobago negotiating the agreement was to increase market access for goods and services and to have an agreement, which allows for work and building capacity. The process began in 2001 and continued throughout 2007.
A critical component is that when the Agreement is eventually signed the World Trade Organization (WTO) has to be notified. There will then be a detailed examination of the Agreement in terms of WTO compatibility.
One of the immediate benefits if there is compatibility is that anything that is in the Agreement legally would not face any challenge. For example, with the signing of the EPA, the challenge against bananas in the WTO which was lost by the Europeans no longer applied in the context of CARIFORUM bananas but might apply from some other country that had not signed an agreement such as the EPA.
An effect is that tariffs are expected to go down and that the margin of preference on good and services that obtains now is going to diminish once the Agreement is officially signed.
One of the key issues raised was the question of language barriers within the region, which it was felt could pose a problem in terms of trade penetrating the European markets. Participants at the seminar in Port of Spain, which comprised government, private sector, civil society regional and international as well as special groups, were told that they need to overcome this by innovative ways if they are to be successful in broadening their horizons.
Goods within what was called "Free Zone" was also discussed as it was felt these were not covered under the EPA. It was also said that the EU is already assisting Trinidad and Tobago via a national indicative programme by virtue of the fact that the country is part of the Caricom region. What the EPA adds is new areas of intervention.
Meanwhile, very soon there will be the setting up of a "Fair Trade Commission". This will allow for closer working in harmony with regional competition authorities.