Dichotomy in EU/ACP Economic Partnership Agreements

THERE are seven regional groupings comprising ACP/EPA countries, with five in Africa, one in the Caribbean and one in the Pacific.
The fifteen signatory Caribbean Forum of African, Caribbean and Pacific (CARIFORUM) States to the EPA are the independent CARICOM Member States and the Dominican Republic.
This was the construct in trading blocs ostensibly configured, taking into consideration the peculiarities of individual countries, to create synergistic dynamics that would optimise the development paradigm of ACP member states and enhance their trading leverage to influence and facilitate the expansion of the growth parameters of these developing nations, especially in relation to global financial equations, and extant and emerging challenges in the international trading demographics.
However, the fears of the once-colonized nations that their former colonizers would once again use the peculiar vulnerabilities of the ACP states as leverage to enforce a dichotomy of advantages skewed toward benefiting the European confederation of nations, at the expense of ACP states, did not prove groundless; especially with 39 of the world’s 49 least-developed countries (LDCs) being ACP countries, most of them in Africa.
The genesis of the EPA lies in the trade chapter of the Cotonou Agreement, which was formulated to reduce poverty, promote sustainable development and growth, with better governance and the gradual integration of ACP countries into the world economy being essences of the broad agreement.
Also, the Lome Convention had not lived up to expectations, so the Economic Partnership Agreements evolved as a scheme to create a ‘free trade area’ (FTA) between the European Union (EU) and the African Caribbean and Pacific (ACP) countries and are key elements of the Cotonou Agreement, which reached its lifespan in 2010.
The non-reciprocal and discriminating preferential trade agreements offered by the EU being incompatible with the World Trade Organisation (WTO) rules were also an agenda item at most international trade fora and this, too, served as a catalyst to the development of a friendlier and more equitable model.
According to the broad framework agreed upon, EPAs are projected to focus on: individual ACP country’s geography and structure – emphasising vulnerable landlocked and island topographies; the need for ACP countries to take ownership of their development and design their own strategies for achieving growth and prosperity; the involvement of non-government bodies in EPA negotiations, including civil society and members of the business community; and development levels – focusing on the least developed countries.
The three main planks are political dialogue, development support, and economic and trade cooperation.
The major area targeted is the development of trade capacity because, although ACP exports have had preferential access to EU markets for the last 30 years, the volume of their exports has actually gone down and the EPAs were ostensibly structured to counter this trend by providing a menu of measures to aid and facilitate the expansion of ACP trading parameter.
However, all the EU-structured EPAs were instead configured to
short-change the ACP countries and, in the instance of CARIFORUM, as expressed in a statement by the president of the ACP Council of Ministers, Hon. Carolyn Rodrigues-Birkett, Minister of Foreign Affairs of Guyana at the 20th Session of the ACP-EU Joint Parliamentary Assembly on 4 December 2010 in Kinshasa – Democratic Republic of Congo, who said, inter alia:

“You will recall that the ACP entered into EPA negotiations under the premise that EPAs would be tools for development through trade. We never envisaged the latter as being an end in itself, and that is why we have been very concerned to see the trend that these negotiations have taken. We contend that the conclusion and smooth implementation of comprehensive and balanced Economic Partnership Agreements, that would help to speed up the sustainable development of the ACP States and the strengthening of regional integration, must remain a joint and shared aim of the ACP and the EU.”

Minister Rodrigues-Birkett also noted that the demands of ACP States in this regard are very legitimate, as they are founded on the provisions of the Cotonou Agreement.

“However, as my predecessors in the ACP Council have stated in various fora, there is a big difference in policy pronouncements at EU level and actual practice at technical level during negotiations,” the Guyanese foreign minister stated.

“For this reason, we feel that there is need to issue new policy guidelines for the negotiations,” she said.

And in a feature address at the opening ceremony of the third Regional Meeting of the ACP-EU Joint Parliamentary Assembly (Caribbean), on February 25, 2009, at the Guyana International Conference Centre, His Excellency President Bharrat Jagdeo, said, inter alia, that: “…in the current international financial meltdown, the cost of borrowing is so high that it is already adversely impacting the Caribbean region.”

He also stated that Caribbean countries are very vulnerable to natural disasters, and a disaster like a hurricane can destroy an entire economy, because these natural disasters generally induce long-term disruptions as a result of the region’s limited financial and technical coping mechanisms.

He reiterated that the many problems facing the region are magnified because of the size of the region and the concomitant limited financial and technical resources and outlined these in fine details.

Guyana’s Head-of-State was unequivocal in his condemnation that the initial EPAs were not the best agreements, and he argued as follows:
1. Some of the developed world’s strongest advocates of reciprocity in the EPA and of Free trade have moved to protectionism at the first sign of trouble, as with their current experience with the international financial meltdown. And even if their legislature removes protectionism, they will practice it at the sectoral level.
2. It begs the question therefore that if these developed countries breach open trade with their social safety nets and large per capita GDP, how then can the small developing countries countenance reciprocity in the EPA?
3. Perhaps a call for a moratorium on the EPAs, until the world financial meltdown is resolved, is in order.
4. There has been an erosion of the trust that was rooted and characteristic in the initial cooperation agreements between the ACP and the EU. Even in the Cotonou Agreement where it speaks about good faith negotiations, consultations and WTO compatibility, these issues were somewhat ignored in relation to the new EPAs. Hence, the need for us to study the issues before we seek to change them is instructive.
5. The negotiations for the EPAs were affected by the fact that these good faith and consultation clauses in the Cotonou Agreement were ignored to a large measure and the ACP was hardly construed as an equal partner, as was evidenced by the threats for us to sign the new agreements by certain dates or face sanctions. The fact of the matter is that real partnerships do not begin with threats.
6. In the future, we have to ensure that we are a little less trusting in the ACP as we pursue agreements.  The Joint Assembly is a good point for the two sides to start rebuilding the broken trust.
7. Guyana’s opposition to certain aspects of the EPA is principled and only seeks to safeguard its and the region’s interest, in accordance with the action of other nations who seek to protect their trade and other interests.
8. Mrs. Kinnock and many other ACP-EU parliamentarians must be commended for their support in ensuring that inclusion of clauses on the comprehensive review of the EPA shall be undertaken not later than five (5) years after the date of signature and at subsequent five yearly intervals, in order to determine the impact of the Agreement and the implementation of the EPA will pay due regard to the integration processes in CARIFORUM, including the aims an objectives of the CARICOM Single Market and Economy as outlined in the Revised Treaty of Chaguaramas.
9. Implementation of the EPA is still a challenge in Guyana’s case. There is a whole range of supply side problems to address, for which there is no money. The institutional capacity is not available to add to the competiveness of our products. The banking system is shallow, the infrastructure is limited and these factors add to the cost of doing business. We therefore cannot produce more and take advantage of the markets. These are all supply side issues that mitigate against us being able to take advantage of larger markets.
10. We can also argue that the investments we need in our economy now are not coming because there is no money; and so, investment has dried up in our region.
He also numbered among his concerns the issues of climate change, the narco-trade and human trafficking, Cariforum-European Commission Negotiations The CARIFORUM –European Commission negotiations, which dealt with: Market Access (Goods), Services and Investment, Trade-related Issues (TRI) and Legal and Institutional Issues, were launched in Kingston, Jamaica in April of 2004 and concluded on December 16, 2007 with the initialling of an agreement.

The agreement provided for 92 percent of bilateral trade to be liberalized, with the EU granting ‘duty free-quota-free’ (DFQF) access for all products, except arms and ammunition, with a provision for a short transition period for rice and sugar: The CARIFORUM States would, in turn, liberalise 87 percent of their market share over a 25-year period.

Subsequently, CARICOM Heads of Government met in Barbados to make a ‘signing’ decision on the deal.

PRESIDENT JAGDEO’S FIRM STANCE
Consultations, which were held in Guyana on the EPA between CARIFORUM and the EU, saw all countries agreeing to sign on the agreement, except Guyana and Haiti.

Guyana’s President stood resolutely alone, determined to opt for a ‘goods only’ deal, which heralded much criticism and scorn from regional heads of states, and even Guyana’s opposition political enclaves; but President Jagdeo emphatically reiterated at various fora that the deal offered by the EU would have proven disastrous to the region.

Support for the stance taken by Guyana’s president came from other international experts, diplomats and economists, such as Sir Shridath Ramphal, Sir Ronald Sanders, Dr. Norman Girvan and Professor Clive Thomas, all of whom also expressed their concerns on the deal.

President Jagdeo said among the main reasons for his refusal to sign the agreement in its original format was that CARICOM and other small States have in the past used two main approaches to defend their interests – multilateralism and regional integration, which he was convinced would have been undermined with the implementation of the EPA in its original form; the issues regarding what had been agreed to in the deal, including the issue of the Region agreeing to negotiate the Singapore issues were dropped years ago from the World Trade Organisation’s (WTO) agenda after developing countries argued that they would not be beneficial to the developing countries; the MFN (Most Favoured Nation) clause in the agreement will affect CARICOM’s co-operation with South-South partners and South-South co-operation has been a feature in development economics for decades, because some South American partners are crucial to CARICOM countries and the clause will force CARICOM to extend to Europe the same treatment it gives to large partners to the South; countries in close proximity of each other, such as Guyana and Brazil have been forging closer ties and planning closer co-operation in trade and other matters, an approach that the agreement was threatening.
And the major one was that there will be no level playing field in terms of trade between the EU countries and CARICOM, as the former is far more advanced in goods and services than the latter. Unequal competition, President Jagdeo argued, will be the order of the day, with CARICOM countries especially being at a disadvantage.

He in turn proposed an amendment to the EPA by a protocol. Guyana was subsequently informed that several member states of the EU, particularly Ireland, Denmark, Holland, Italy and Portugal, expressed concern and indicated that the EC should try to find satisfactory conditions for Guyana and Haiti to sign the Agreement in Barbados on October 15, 2008.

Having knowledge that the EC was willing to find a solution to addressing Guyana’s concerns, Guyana made two proposals for signing which will be beneficial for member states.

These were a mandatory review of the EPA five years after signature and every subsequent five-yearly period, and a guarantee that in the event of conflict between the Agreement and the revised Treaty of Chaguaramas (RTC), during implementation of the EPA, the Treaty shall prevail.

Although President Jagdeo, who had stated: “…because Europe has consistently negotiated in bad faith and because they may want to prove a point, I don’t trust the commission to send a signal to these countries that they have to pressure them to conclude the EPA’s,” acknowledged the fact that if Guyana failed to sign the agreement, the Generalised System of Preference (GPS) could have been imposed.

But this would have also proven disastrous to Guyana through lost revenues from its major exports. the President, nevertheless, maintained his stance, despite being mocked at by his counterparts and criticized by opportunistic opposition elements.

However, his consistency was vindicated when, just before the initial signing of the Agreement, the EU included the two clauses for which he had so ardently lobbied.
Thus it was that Guyana signed the EPA on October 21, 2008 in Brussels.

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