Trade Negotiations Insights • Volume 7 • Number 8 • October 2008
Breaking the mould: Guyana and a ʻgoods onlyʼ Caribbean EPA
by Patrick Gomes (1)
The current debate on the merits and drawbacks of signing the already initialled EPA between the European Commission and CARIFORUM has dominated headlines in the Caribbean media and beyond. From trade negotiators and civil society organisations to trade law specialists and ACP-EU offi cials, the spectrum of voices is vast. Such interest refl ects the magnitude of what is at stake and is to be welcomed.
At the heart of discussions is the move towards reciprocal trade between 78 ACP states, including 35 of the world’s least developed countries, and 27 EU countries, with an estimated GDP of almost €13 trillion. The debate was initially portrayed as an ideological battle over the advantages of signing a comprehensive EPA. (2) But many more fundamental and contentious issues are now emerging.
Situating the debate
Guyana’s President Bharrat Jagdeo can be credited with raising pertinent questions, which have much in common with what European Commission President José Manuel Barroso identifi ed as ‘contentious clauses’ in the interim EPAs. (3) It is both illogical and inconsistent with the EU’s notion of policy coherence to treat issues as contentious in some ACP regions but indisputable in the Caribbean. To ignore these unanswered questions on the EPAs now would be reckless in terms of public policy formulation.
It is of the utmost importance that the Caribbean EPA is not given the dogmatic status of a holy writ or that it is used to set a benchmark for what is acceptable between two unequal partners. The much acclaimed EPA model could easily betray the acquired benefi ts or aquis as well as the very spirit of Cotonou.
As such, contrasting CARIFORUM views should be encouraged as benefi cial to the ACP and as a contribution to understanding the use of trade as an instrument of development.
Guyana and the ‘goods only’ EPA
Fully cognisant of the substantive difference in law between a signed agreement and an initialled one as being “authentic and defi nitive, ready for signature but which does not itself impose obligations on the parties,” Guyana has publicly expressed fundamental concerns with several aspects of the Caribbean EPA provisions.(4)
The main reasons for Guyana’s concern stem from; a) unnecessary expansion beyond the requirements of WTO-compatibility; b) barriers to enhancing the production, supply and trading capacity of ACP countries (Articles 34 & 35 of Cotonou); c) limiting the potential for regional economic integration through a CARICOM Single Market and Economy; d) imposing onerous conditions for a safeguard mechanism; e) introducing a Most Favoured Nation (MFN) provision that favours the EU at the expense of South-South cooperation.
This last point is particularly poignant. At the insistence of the EU, the MFN clause became a non-negotiable principle of the EPAs. Under this provision, Caribbean countries are obliged to extend to the EU, on a tariff line basis, any more favourable treatment conceded to any other developed - or major developing country - when negotiating new free trade agreements. The implications are two fold: while the MFN clause will clearly be a restrictive force in the negotiations the Caribbean is set to pursue with Canada, its adoption will act as a benchmark and set a dangerous precedent for other ACP regions.
In search of sustainable development
Much can be learned by keeping the Cotonou Partnership Agreement, which sets out the underlying rationale for ACP-EU trade relations, as the starting point for discussions. This text states unambiguously that any new agreement must be WTO compatible – a principle which Guyana fully respects.
Moreover, these new arrangements are meant to “foster the smooth and gradual integration of the ACP States into the world economy, with due regard for their political choices and development priorities.” While many political commentators have overlooked the implications of this, it forms the basis of Guyana’s decision to want to sign a ‘goods only’ EPA. Nevertheless, Guyana believes it is perfectly acceptable that sister CARIFORUM countries are ready to pursue opportunities and undertake obligations in trade in services in the EPA.
Towards a genuine partnership for integration
Clearly there are deep-seated issues, characterised by “contentious clauses,” misgivings and serious reservations across all the EPA negotiating regions. As such, the EPA process cannot be considered satisfactory or successful to date. This can be seen not only in the number of agreements but by the yardstick of the objectives and principles of Cotonou itself. What has been achieved for those countries which initialled in December 2007 is simply the construction of a sound basis of minimum requirements for WTOcompatibility and the evasion of an imposition of the less-favourable GSP trading arrangements.
Guyana has listened to the concerns raised by civil society, NGOs, academics and other ACP negotiators, and despite being party to an initialled text, is willing to consider the shortfall in the development dimension of the EPAs and how South-South cooperation might be undermined. Many in the Caribbean have voiced support for the EPAs as the best deal possible. But taken in their entirety, Guyana does not favour the signature, provisional application and ratifi cation of the current CARIFORUM EPA.
The Government of Guyana is committed to a mutually satisfactory outcome of the EPA process that honours what was agreed under the Cotonou Agreement. It will accept the application of all the CARIFORUM EPA provisions, except those on services and trade related issues, as these are not required for WTO-compatibility. It will continue to examine the scope for flexibility while maintaining that no region of the ACP is worse off than another under the terms of the EPA.
Monitoring for the future
Moreover, Guyana wishes to propose that prior to - or at the time of signing - both parties sign a binding Joint Declaration agreeing to undertake a comprehensive and formal review every fi ve years after its entry into force for the duration of the agreement, to determine the extent to which its objectives are being met. This would include monitoring the costs, implications and consequences for sustainable development, regional integration and the overall transition into the global economy and making amendments as may be required by the review.
As EPAs are not an end in themselves for trade to promote development, it is imperative that present and future generations know that both parties to the EPA rigorously pursued a mutually satisfactory and successful outcome to this great endeavour.
1. H.E. Dr. Patrick I. Gomes is the Ambassador of Guyana to the EU in Brussels.
2. See: Renegotiate the CARIFORUM EPA, Havelock Brewster, Norman Girvan and Vaughan Lewis, Trade Negotiations Insights, Volume 7, Number 3, April 2008.
3. See Barroso’s concluding remarks at the Africa-EU Lisbon Summit, December 2007.
4. Lorand Bartels, Informal COMSEC Exchange, March 2008.
5. Article 34 of the Cotonou Agreement.