Caribbean Struggles to Make Complex Trade Deal with EU a Reality

The CARICOM Secretariat has signaled that implementation of the EPA will be the major agenda item.

PORT OF SPAIN, Trinidad, May 16, 2011 (IPS) – When Caribbean journalists met in Antigua in late March to discuss the Economic Partnership Agreement (EPA) that was signed between the European Union and the Caribbean Forum (CARIFORUM) countries in 2008, they were told that the absence of tax treaties, foreign exchange controls and language barriers were among the factors preventing the full implementation of the accord.

Sonia Allyson Francis, a specialist with the EPA Implementation Unit of the Guyana-based Caribbean Community (CARICOM) Secretariat, also listed ignorance of cultural norms, customs and values, and the cost of travel as other challenges to the implementation of the EPA.

“Persons aren’t able to key-in in terms of what are their actual development cooperation needs and that’s why we have a delay in implementing the services and investment aspect of the agreement,” she said.

Now, as the CARICOM Council for Trade and Economic Development (COTED) – one of the principal organs within the 15-member regional grouping and comprising finance, trade and economic ministers – gets ready to meet in Guyana on Thursday, the CARICOM Secretariat has signaled that implementation of the EPA will be the major agenda item.

Issues include the tariff reductions set for this year and the first meeting of the Trade and Development Committee under the EPA on Jun. 9 and 10.

The head of the Implementation Unit at the Secretariat, Branford Isaacs, welcomed Grenada’s announcement that it has established its own EPA Implementation Unit in keeping with the provisions of the agreement. “As respective CARIFORUM states strengthen their EPA implementation capacity, CARIFORUM will be better positioned to advance on EPA implementation,” he said.

In October 2008, CARIFORUM, comprising the CARICOM grouping and the Dominican Republic, signed the EPA with the 27-nation European Union.

The optimism of some Caribbean technocrats regarding the trade deal is, however, not shared by former Jamaican prime minister Edward Seaga, who said his country will not benefit from the accord.

Seaga, 80, who is now chancellor of the University of Technology (UT), said in a public lecture last month that the EPA, just like the CARICOM Single Market and Economy (CSME) which allows for the free flow of goods, labour, services and skills within the regional grouping, was not the way forward, and in fact would be a hindrance to Jamaica’s overall development.

Seaga, who served as prime minister from 1980 to 1989, said that with countries now negotiating EPAs for open markets, Jamaica would not benefit from the CARIFORUM-EU EPA for a number of reasons.

“Poor countries will not be able to develop because it’s a one-way flow of benefits, widening the gap between rich and poor nations. The Jamaican economy is a strong importer but weak exporter. As such, it will not benefit from increased export earnings in the CSME or the EPA schemes. It is a supermarket, not a factory,” Seaga said.

At the launch of the 10th European Development Fund (EDF) Regional Private Sector Development Programme in Barbados in mid-April, the head of the European Union Delegation to Barbados and the Eastern Caribbean, Valeriano Diaz, said the programme is the first initiative to be approved under the 10th EDF EU-CARIFORUM Caribbean Regional Indicative Programme (CRIP), through which the EU is providing 232 million dollars largely to assist the region in the implementation of the EPA.

“EPA implementation remains a priority for the EU and we are pleased that the inaugural meeting of the Trade and Development Committee will take place here in Barbados on the 9th and 10th June,” he said, noting that the EU and CARIFORUM are currently preparing a package of assistance to CARIFORUM and regional governments for, among other things, the overall coordination of the implementation of the EPA- agreement.

He said this would also include enacting and implementing legislation, regulations and procedures in the areas of competition law, public procurement, trade and customs; enhancing the policy framework and system of support measures for improving competitiveness of agriculture and the fisheries sector and improving the regional and national capacity to assist companies to comply with international regulatory requirements.

“There can be no doubt that the EU remains committed to the continued thrust in making the Caribbean a viable and vibrant region for international trade and investment. We have invested a considerable amount of financial and human resources in this regard,” Diaz said.

The two-day meeting in June will allow senior Caribbean and European officials to meet for the first time under the aegis of the CARIFORUM-EU Trade and Development Committee, the second highest institution, after the Joint Council, which met in inaugural session in May 2010.

It is also expected that the meeting will address an EU proposal for a special committee on trade and investment for Haiti.

Meanwhile, a review of the legislation of the Organisation of Eastern Caribbean States (OECS) with regard to implementation of their Trade in Services and Investment obligations under the EPA is nearing completion and a draft report has already been submitted.

Allyson Francis said that the consultant’s findings indicate “there will be a need for legislative changes, as regards allowing EU nationals to enter these (OECS) states to provide services and in the granting of national treatment.”

“There is also a need for policy and legislative development in areas where legislation is not in place, such as professional services and e-commerce,” she said, adding that the next step will be the convening of a meeting for the OECS sub-regional grouping, to further examine the findings of the consultancy.

That meeting is scheduled for next month.

A similar consultancy, launched earlier this year, looked at the situation in Barbados, Belize, Guyana, Jamaica and Trinidad and Tobago.

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