IPS | 21 Feb 2008

CARIBBEAN: Fissures Appear Over EU Trade Deal

By Peter Ischyrion

PORT OF SPAIN, Trinidad, Feb 21 (IPS) — It was not supposed to be so. Soon after beating the Dec. 31 deadline last year, Caribbean leaders were patting themselves on the backs for having reached a "far reaching" Economic Partnership Agreement (EPA) with Europe that they said would help ensure the future socio-economic development of the region.

But just a few weeks before the signing, some key governments appear uncomfortable with the final agreement, even though the region’s top negotiator Richard Bernal insists it was the best deal possible.

"In any negotiations you don’t get everything. The Europeans did not get everything, nor did we," said Bernal, who heads the Barbados-based Caribbean Regional Negotiating Machinery (CRNM).

Newly elected Barbados Prime Minister David Thompson, on his first overseas trip since winning the Jan. 15 general election, says that while his administration "supports the overall objective, we have some specific concerns".

Thompson’s cabinet includes Foreign Trade and Affairs Minister Christopher Sinckler, who until his electoral victory served as coordinator of the Caribbean Policy Development Centre (CPDC), a coalition of regional non-governmental organisations established in 1991 to educate NGOs and the general public on key policy issues.

The CPDC had strong reservations about the EPA, and during his official visit to Trinidad that ended Thursday, Thompson said he had asked Sinckler to review the accord and make recommendations ahead of the CARICOM inter-sessional summit that gets underway in the Bahamas from Mar. 6-7.

Grenadian Prime Minister Keith Mitchell also said he was hoping Europe would listen to the concerns of the region.

"Our friends (in Europe) cannot say seriously that they are on our side and they are our friends and they want to see a fair global competitive atmosphere in the international community and at the same time want us to stick to something that might have negative consequences for our entire population," Mitchell told reporters.

Supporting the agreement are Trinidad and Tobago Prime Minister Patrick Manning, and the new Jamaican prime minister, Bruce Golding. While Manning concedes that the "agreement is unlikely to be ideal for any one country", he still believes that what been "arrived at was the best that was possible in all the circumstances".

Both Thompson and Manning agree that there is need for a "special caucus" that would provide, particularly for the newer Caribbean leaders, an opportunity "for a meeting of the minds" and to "identify exactly where everyone is in relation to the integration movement" and other issues.

There has long been division within the Caribbean over the EPA, which Europe is also negotiating separately with the 79-member African, Caribbean and Pacific (ACP) group of states, to replace a special export regime for cane sugar and other economically critical goods from these countries that had been in place since the mid-1970s.

The ACP has been operating under a special seven-year waiver from World Trade Organisation (WTO) rules that expired at the end of last year. Countries that failed to complete new EPAs in time were warned that they could face higher tariffs on goods exported to the European Union.

Under the new agreement, the Caribbean will now have to open nearly 90 percent of its market to duty-free imports of EU products over the next 25 years.

The new accord calls for 82.7 percent to be liberalised in the first 15 years and there will be a moratorium of three years on all tariffs except those on motor vehicles, spare parts and gasoline coming into the region. Other duties and charges are to be kept during the first seven years and then phased out in the following three years.

Rice will not be among the commodities liberalised by the EC upon entry into force of the EPA.

But even as the ink was drying on the accord reached between the CARIFORUM countries — CARICOM and the Dominican Republic — and Europe last year, Guyana was particularly vocal in its opposition, with President Bharrat Jagdeo saying it was a "situation we were forced into".

"It was a systematic and well thought-out ploy by Europe to dismantle the solidarity of the ACP by effectively dividing the ACP into six negotiating bases with six agreements; playing one off against the other. Europe acted in bad faith in this regard," he said.

"If Europe supported regional integration through lip service and financial flows, and encourages small states to come together in economic partnership agreements so they can have economies of scale, how is it that they don’t want our products to qualify under the rules of origin that they have established now through the EPA?" Jagdeo asked.

He warned that the EPA could now set the standard for other trade agreements with developed countries.

"Once we complete negotiations with one bloc, then Canada and the United States will want the same thing, so what will happen to the revenue base of these countries? They will have significant shortfalls. They do not have many possibilities for cutting expenditure; most of them have bare bone expenditure already, they’ll need to increase expenditure."

Many Caribbean academics, trade unionists and non-governmental organisations have signed a petition critical of the regional governments for not fully informing the Caribbean population about "the far-reaching consequences of the legally and permanently binding articles of the agreement".

Former Caribbean diplomat Sir Ronald Sanders, who served as Antigua and Barbuda’s high commissioner to London from 1995-2004, noted that, "We have an agreement that people are praising but very few people have seen. There are Members of Parliament and persons in government who have never read the agreement and have no idea what it says."

"I have read it and I still don’t understand much of it, and I have been involved in trade negotiations for a long time," he added.

Another distinguished Caribbean economist, Prof. Clive Thomas, who is now director of the Institute of Development Studies at the University of Guyana. argued that using a mixture of bullying, bribery, cajolery, intellectual dishonesty and plain bluff, Europe had been able to "work a monumental deception on the region".

"The EPA was considerably aided by the successful implantation of the EU’s world view of the region and its future among significant sections of the region’s intellectual and ruling elites, including those holding influential positions in the negotiations. In this regard, it is useful to note that the EU has played a crucial role in ’training’ and ’financing’ a multitude of activities and actors serving CARIFORUM’s negotiating remit over the past few years," he added.

But the CRNM, which hosted a regional forum for Caribbean journalists on the EPA last week, has sought to defend the accord, insisting that there had been "open and transparent" consultation with the various stakeholders.