by HAROLD BECKLES

WHEN A BARBADIAN CITIZEN exchanges cash for a specific product being sold by a merchant, that transaction is a trade.

If the two agree to transactions over an extended period, usually with special conditions that favour one or both parties, they can be said to have a trading arrangement.

Over time, however, in order to ensure "a level playing field for all", Government has introduced legislation and regulations to control such arrangements. Hence, the Fair Trading Commission (FTC).

Similarly, when governments buy and sell goods and invest at an international level, they are entering into trade arrangements.

The Economic Partnership Agreement (EPA) which has been very much in the news recently is one such arrangement.

Subject to laws

The great majority of these agreements are subject to laws coming out of international treaties such as the General Agreement on Tariffs and Trade (GATT) which came into being after World War II.

Today, they are overseen and evaluated by the World Trade Organisation (WTO), the dominant arbiter in international trade.

The EPA is a trade pact that links the countries of the European Union (EU) and the countries of the CARIFORUM (CARICOM and the Dominican Republic).

Former Prime Minister Owen Arthur has also commented extensively on the EPA in a public lecture titled The Economic Partnership Agreement Between CARIFORUM And The European Union And The Building Of A Post-Colonial Economy In The Caribbean.

It was given at the Cave Hill Campus of the University of the West Indies on March 11, 2008, where he reminded us that it was "the leaders of the Caribbean" who "formally gave a mandate to the region's negotiators to conclude a new and comprehensive Economic Partnership Agreement with the European Community".

The essential terms and conditions of a draft EPA setting out the mandate agreed to by Heads of Government was initialled on the region's behalf on December 16, 2007.

Partnership pact

The EPA was preceded by firstly the Lomé Conventions I to IV (Lomé I in 1975) and thereafter by the Cotonou Agreement which was signed in 2000 as a partnership pact between the African, Caribbean and Pacific (ACP) group of states and the European Community (EC). Cotonou is more comprehensive and far-reaching than a pure trading agreement and is due to continue in force until 2020.

Indeed, the EPA at a glance and Arthur's lecture show that a dominant issue that has forced the EPA to be created after Cotonou, is that of preferences.

WTO regulations cannot accommodate preferential status for states because of its adherence to the principle of free trade. Arthur shows that even while Britain was first negotiating Lomé, it "perpetuated the pre-existing Commonwealth Economic Preferences" even while it sought entry to the European Community".

New trade regime

"The proposed EPA," says Arthur, "is the new trade regime which is intended to replace the preferential, one-way [non-reciprocal] duty-free access to the European market, as was available under the four Lomé Conventions, with a WTO-compatible reciprocal trade regime.

"Under the previous Lomé Conventions," states Arthur, "ACP countries were provided with access to the European market that Europe did not provide to many other developing countries. This became subject to successful challenge in the WTO." (Think of the challenge by Latin American countries to Caribbean bananas exported to the EU.)

After 2001, the ACP and EU "undertook to negotiate WTO-compatible alternatives including EPAs. The CARIFORUM-EC EPA is the first to be negotiated between the sub-regions of the ACP and the European states," according to the Caribbean Regional Negotiating Machinery (CRNM) Information Unit.

Goes further

The EPA, however, goes further than the traditional trade in products like sugar and bananas, and includes non-traditional goods and services.

The CRNM asserts that within the context of trade liberalisation, however, under the EPA, CARIFORUM states have been able to secure new opportunities for the development of businesses, jobs and their economies," according to the foreword to the document titled The EPA At A Glance . . . An Overview Of The CARIFORUM-EC Economic Partnership Agreement.

In agreement

Both the CRNM and Arthur are in agreement on this point.

Yet there have been dissenting voices across the region and the EPA has been strongly criticised by some regional economists, some civil society groups and former CARICOM negotiator Sir Shridath Ramphal, by President Bharrat Jagdeo of Guyana, former Prime Minister of Jamaica Edward Seaga, and former Prime Minister of St Lucia Kenny Anthony.

(This article explaining the EPA and what it means to you is one in a four-part series. Part 2, next week.)

* Harold Beckles is a freelance writer.