Today we continue the series on the Economic Partnership Agreement

by HAROLD BECKLES

THE TASK of negotiating the EPA was an arduous one and took several years.

Former Prime Minister Owen Arthur recognised it in his public lecture at Cave Hill Campus, UWI, as "an extraordinarily difficult and at times contentious and controversial exercise".

The CARIFORUM states had not only the formal negotiating structure mentioned in the first article in this series, but also a secretariat of technocrats and specialist personnel trained in trade negotiations who staff the Caribbean Regional Negotiating Machinery (CRNM).

The latter has offices in Jamaica and Barbados, with the local office location sited in Hastings Main Road, Christ Church.

The CRNM literature (see website www.crnm.org) does not spell out its motivation directly in any single document, but it is possible to derive from its website literature and from the following broad assessments, the mandates on which CARIFORUM negotiations were based:

* As a trade agreement, the EPA is WTO-compatible (whereas its predecessor and interim equivalent until 2020, Cotonou, is not).

The EPA removes duties and other barriers in liberalising trade but ensures, at the same time, recognition for the vulnerability of small developing states and excludes some sensitive CARIFORUM goods and services from the liberalisation process to shield them from European competition.

* The EPA is committed to maintaining sustainable development in the CARIFORUM states. It seeks not only to expand trade, encourage investment and create new businesses, but to do so by securing from the EU itself, the kind of financial assistance, technical co-operation and know-how that will allow CARIFORUM states to improve their economies and help them in implementing the EPA itself.

* The EPA is committed to strengthening regional integration.

It takes steps to ensure that in a highly competitive global economy the CARIFORUM states can diversify and strengthen their economies precisely because it seeks to strengthen their ability to compete both externally and with each other (download/see Improving Competitiveness For Caribbean Development, a report of the Caribbean Trade and Adjustment Group).

* The CRNM recognised that timing and scheduling were critical.

It therefore, sought to conclude negotiations within a timeframe which recognised that in the absence of an EPA, the CARIFORUM states, except Haiti, would need to resort "to the less favourable European Generalized System of Preferences (GSP) programme (over 257 of the region's exports would be taxed on entry to the EU putting most of them, including eight important exports, out of business", [source: The EPA At A Glance...]

As a corollary to the foregoing, the CRNM has the following seven objectives within its provisions and negotiating guidelines:

* Implement rules to maintain fair trade between Europe and CARIFORUM states, especially in terms of disparities in development ("asymmetrical" qualities) between the two sides;

* provide opportunity for CARIFORUM states to access goods and services from EU for which they lack a comparative advantage (a country has a comparative advantage in the production of a good, for example cloth, if it can produce cloth at a lower opportunity cost than another country);

* improve CARIFORUM's access to European technology and scientific thinking;

* expand and improve CARIFORUM's industries and economic growth;

* increase employment and business opportunities;

* improve competition within CARIFORUM's domestic markets"; and

* ensure sustainability of development relating to best practices in trade that prevent environmental degradation, and undermining of labour standards, labour rights and human rights.

We can therefore compare the mandates and objectives with what was achieved in the final EPAin terms of projections for traditional and non-traditional exports.

The following figures taken from The EPA At A Glance . . . and Arthur's lecture apply to CARIFORUM's traditional exports and emphasise Arthur's observation that with the EPA in place, the "Caribbean has locked in with immediate effect duty free and quota free access for all of its goods in the European market, save for two [sugar and rice] where two-year transition arrangements have been made."

Liberalisation of about 90 per cent of trade between the parties concerned is the usual benchmark of WTO-compatibility.

Arthur emphasised however that "while all of Europe's imports from the CARIFORUM will be liberalised, CARIFORUM will liberalise 86.9 per cent of the value of its imports, with 82.7 per cent in the first 15 years".

The programme provides for either exclusions and/or long phase-in period of up to 25 years for sensitive Caribbean products most of which are in the agricultural sector.

Projections For Sugar Under The Transitional Arrangements:

* From 2008 to 2009, the CARIFORUM states will be able to export an additional 60 000 tonnes of sugar into Europe. This quantity is to be shared between CARICOM and the Dominican Republic.

* Post-2009 CARIFORUM sugar will be imported duty free into Europe. A qualification exists for the period between 2009 and 2015 during which Europe "could still impose tariffs on CARIFORUM sugar", if quantities imported from the ACP as a whole exceed 3.5 million tonnes and the amount from ACP countries which are not Least Developed Countries (LDCs ) exceeds 1.38 million tons. Haiti is the exception here.

Projections For Rice Under The Transitional Arrangements:

* For 2008, CARIFORUM rice exporters will receive an increased quota of 187 000 tonnes. For 2009, the increased quota will be 250 000. These quotas will be duty free as compared to the old duty of £65 per ton.

* From 2010, the EU will accept CARIFORUM rice entirely duty free and quota free.

* For CARIFORUM rice producers, there will be no distinction between whole grain and broken rice – hence, benefits from higher-priced market for whole grain rice.

* Licensing and related arrangements pertaining to the rice quota will be diligently assessed to ensure that CARIFORUM rice producers get maximised returns.

Projections For Bananas:

* For bananas, the duty free and quota free provisions apply from the start of the agreement; effectively, as from January 1, 2008.

* The agreement's Joint Declaration On Bananas requires the EU to "assist in funding the CARIFORUM banana industry's socio-economic adjustments to the changing trading environment".

Projections For Non-Traditional Goods And Services:

Where Investment and ecommerce are concerned, according to The EPA At A Glance, CARIFORUM states will be greatly enabled in the relevant sectors by "the opening-up" of CARIFORUM markets to EU technology and scientific expertise.

The CRNM Information Unit points out that the chapters of the agreement under Title 2: Investment, Services and e-commerce contain comprehensive provisions to facilitate and attract investment within CARIFORUM, to develop and improve the CARIFORUM services sector, and to provide common rules on e-commerce."

NEXT WEEK: Examining the arguments that have been put forward against the EPA.* Harold Beckles is a freelance writer.