ACP and the EU should seek WTO waiver to complete EPAs Monday, October 15, 2007 3664 Reads Discuss 1 Comments 1 Prints 1 Sent

Sir Ronald Sanders

EU warns days of preferences for the Caribbeal are over What is known is that the EU wants ACP countries to liberalise their economies giving greater access to EU goods, investment and services. Negotiating any contract under the tyranny of the clock is almost a certain guarantee of endless problems in the future. The haste that is being urged on African, Caribbean and Pacific (ACP) governments to agree an Economic Partnership Agreement (EPA) with the European Union (EU) by the end of December is a prescription for such a problematic contract. In the Caribbean’s case it is even worse. The EU is pushing for a Caribbean agreement by the end of October. Yet, these EPA’s will be binding for a long time to come, and they will affect the lives of every man, woman and child in the region. There has never been a stronger case for carefully considered agreements, particularly in light of the experience of the EU unilaterally denouncing agreements as they did with the Sugar Protocol that gave sugar producing ACP countries preferential access to the EU market. After some Caribbean heads of government met Peter Mandelson and Louis Michel, two EU Commissioners, in Jamaica last week a set of mixed signals emerged. On the one hand, some reports indicated that no agreement had been reached by the two sides and at least two Caribbean leaders – Owen Arthur of Barbados and Bharat Jagdeo of Guyana – indicated that there is contemplation of legal action against the EU for its unilateral denouncement of the Sugar Protocol. On the other hand, regional negotiators were talking of agreement in a wide number of areas and a “narrowing of the gap” on some issues including how sugar would be treated. In fact, the optimism of some regional negotiators was such that there was talk of two sets of meetings over the next few weeks between the Caribbean and the EU with a view to agreement by the end of October. If these mixed signals confused the real results of the encounter between the EU and the Caribbean in Jamaica, what was clear is that few people know what is actually being negotiated and agreed. It is therefore anyone’s guess how the private sector and the trade union organisations in the Caribbean can make informed decisions on the terms of the EPAs. Certainly, the general public has no means of doing so since the public information that exists on the detail of these negotiations is very sparse. What is known is that the EU wants ACP countries to liberalise their economies giving greater access to EU goods, investment and services including national treatment for EU companies. On the other hand for key commodities, such as sugar and bananas, what is on offer by the EU for access to their markets is far less than the ACP countries have enjoyed in the past. “The days of preferences are over”, the EU says, and ACP countries must compete in the open market according to WTO rules – rules fixed by the industrialised nations which prospered on the basis of protectionism and preferences, and whose wealth sprung from the exploitation of ACP countries. In the Caribbean’s case, its economies are already wide open. Virtually any product from any part of the world can be imported into the region. And, with regard to investment, the Caribbean has bent over backwards to give incentives for foreign investments.

Eu's strategic interest is really in Africa The question also arises as to why the EU is pushing the Caribbean to be the first region to conclude an EPA? The answer resides less in the Caribbean and more in Africa. By the same token, the tariffs imposed on imports help governments to pay for goods and services they must deliver to their societies. The alternative to tariffs is more taxes on income, increased value added taxes that push up the cost of living, and taxes on the productive sector such as tourism making them less competitive internationally. National treatment in ACP countries for EU companies could push medium and small size enterprises out of business. While it is prudent in negotiations not to publicise every aspect of them lest they be jeopardised, these are not ordinary negotiations – they are about locking-in economies to arrangements that will materially affect people’s lives. It is in the public interest that more and better particulars be disclosed and debated. The question also arises as to why the EU is pushing the Caribbean to be the first region to conclude an EPA? The answer resides less in the Caribbean and more in Africa. The EU’s strategic interest is the African market where it is facing increasing competition from China and India. In the words of one informed official, “EPAs are a clear instrument aimed at giving EU business preferential treatment in one of its more lucrative markets.” But, negotiations in Africa have not gone well. For instance, in Southern Africa, South Africa has led the way in refusing to include anything but commodities in an EPA; it has resisted incursions into the services and government procurement services. However, if an agreement could be reached with the Caribbean, the EU could then insist to all four sub-regions of Africa, and to the Pacific that it can offer no better terms than the Caribbean has agreed. Faced with an EPA they could not accept, countries of the Economic Community of West African States (ECOWAS) decided to ask the EU to approach the WTO to extend the terms of the Cotonou agreement for a further year to facilitate the EPA negotiations. A similar plea has been made by the Executive Director of the Caribbean Policy Development Centre Chris Sinckler. That is precisely what should happen. The ACP should convene a meeting at ministerial level to agree to urge the EU to join with them in calling on the WTO to extend the terms of the Cotonou agreement for a further year. If four regions of the world – Europe, Africa, the Caribbean and the Pacific – were to make such a call at the WTO, it is difficult to see who would oppose it successfully. Canada and the US would support it – they have already sought waivers for their bilateral trade arrangements. And, it is fairly certain that India and China would not oppose it. Even Latin American countries would think carefully about upsetting four regions of the world. Logic points in the direction of such a call to the WTO. It requires one government in the ACP group to actively initiate it. And, should it succeed, the ACP group should take advantage of the extended time to unify their own position in the negotiations with the EU and so bargain more effectively as one. Sir Ronald Sanders is a business consultant and former Caribbean diplomat.

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