Sir Ronald Sanders, business executive and former caribbean diplomat, is voicing his concern, as to the possible consequences of Caribbean heads of government signing an Economic Partnership Agreement (EPA) with the European Union (EU).
The EPA is a scheme created to form a Free Trade Area (FTA) between the European Union (EU) and African, Caribbean and Pacific (ACP) countries.
Under the EPA, trade would occur in a non-discriminatory nature with open reciprocity. This would involve the removal, in phases, of all trade preferences previously established between ACP countries and the EU.
With the increase in reservations and concerns expressed by members of the business sector among others, the CARIFORUM-EC (European Commission) EPA is now being brought under significant scrutiny.
As the agreement stands, Antigua and Barbuda has nothing to gain and lots to lose if it decides to sign the EPA as it is presently, Sir Ron told the Antigua Sun.
He explained that opening the markets in Antigua and Barbuda to products coming from the EU would not be beneficial, since Antigua and Barbuda exports nothing to the EU from which it would derive any benefit.
“Antigua exports nothing to the European Union, but imports a number of products. The pertinent question is, why would you give European products duty free entry into your country, when you are not sending anything to them in return for which you are getting duty free entry?” the Caribbean diplomat asked.
On top of Antigua and Barbuda’s lack of exporting power, there is the issue of the loss of funds previously accumulated by tariffs and duties that were placed on European products.
According to Sir Ron, the EPA includes provisions that force the removal of tariff barriers coming from Europe into Antigua. Supporters push the claim that when these barriers are removed the cost of the imported goods will go down.
However, consumers may find themselves blindsided by the installation of new taxes, which according to Sir Ron, would be used to replace the money that used to be accrued from the various tariffs and duties.
“What will happen is that the government will lose the revenue which it now derives from the tariffs and duties it places on those products…one good guess is that to replace that revenue, is by taxing the local population either by income tax (PIT) or by value added tax (VAT).
"I suspect there will be some argument that both PIT and VAT are high enough as it is.”
In terms of trade with other countries, Sir Ron stated that establishing an EPA with Europe will inspire other countries, with which Antigua and Barbuda trades, to alter their existing arrangements.