Economic Partnership Agreement… Guyana’s signature dependent on upcoming consultations

Jul 12, 2008 News

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Guyana’s official signature to the Economic Partnership Agreement, which is due to come on stream at month’s end, is dependent on an imminent consultation process to be conducted shortly.
That process would include several scholars and academics from within and around the region.
According to Head of the Presidential Secretariat, Dr Roger Luncheon, the announcement was first made at the recently concluded Conference of CARICOM Heads in Antigua, and is borne out of the fact that the  signing of the agreement had long-term consequences, “some quite negative, that were not previously highlighted, particularly those on regional development.”
He noted that the consultations are expected to commence by month-end.
The object of the consultation, as outlined by Dr Luncheon, is to spell out to Guyanese the untoward effects of signing on to the EPA, and have a national response on whether to sign or not.
“Untoward in the sense that they were not highlighted.”
Dr Luncheon outlined that the CARICOM Regional Negotiating Machinery (CRNM), which conducted the negations with the Europeans, was operating on an authority that was based on what the community at large supported.
“The disclosures that are surfacing now are that there are issues that have not been brought to our attention …our fear is what generally comes out of media reaction, and suddenly the administration would be to blame…One intention of the consultation is to advise Guyanese thoroughly.”
President Bharrat Jagdeo has long proclaimed that the European Commissioners responsible for the negotiations, that what was initialed on December 31 last, were bullying the developing world into the new EPAs.
“The EU Commission, especially in the form of Peter Mandelson, is currently engaged in economic blackmail.”
The President made the assertion following the 12th Special Meeting of CARICOM Heads, where discussions centred primarily on the EPA that had to be reached by the region by December 31 to avoid facing punitive tariffs from the EU.
“They have consistently bullied the African, Caribbean and Pacific sugar producing countries (ACP) into reaching the agreement by December 31,” said President Jagdeo.
According to one criterion set out by the EU, the EPA must be WTO (World Trade Organisation) compatible.
Jagdeo related, however, that Europe has several agreements that are not WTO compatible, including those impacting its agriculture sector.
“We don’t see them making any changes to that, but they wanted us (ACP) to be WTO compatible by December 31…If they don’t do this, then it would give us more time to have a more effective negotiation.”
He noted that the EU did not want the ACP countries to have an agreement that contained good liberalization policies as well as a development dimension which is enshrined in the Cotonou Agreement (CA).
Jagdeo emphasised that the EU did not want that to happen, in spite of the fact that they (EU) had some really “ridiculous provisions…We have had to basically give in.”
On such example was the fact that the EU did not want to have Caribbean entertainers to go into Europe, given that, according to the Europeans, entertainment is a big part of their culture and they have an issue with liberalising it.
This position was vehemently ventilated at the meeting, where the CARICOM Heads unanimously agreed that there will be no EPA if the EU does not open up its market to Caribbean cultural officers and entertainment artistes.
 “This is an issue on which the Caribbean will draw a line in the sand…no liberalisation for our cultural workers, then no agreement…and all Heads will sign a letter in support of the stance…the agreement must benefit the people of the region,” said Prime Minister of Barbados, Owen Arthur.
In the absence of a trading agreement with the EU, ACP countries will be exposed to the general system of preferences, which in turn would attract duties on everything exported.
“Because of the vindictiveness of the officials, we can’t trust them not to impose tariffs,” said Jagdeo.
He, however, did emphasise that he did not believe that most of the European countries subscribed to what was being played out, in that many may not be aware of the position of the Commission. 
EPAs with ACP countries are a new approach to trade relations between the EU and African, Caribbean and Pacific regions.
The EPAs are intended to be broad agreements, helping first of all to build regional markets and diversify economies in the ACP regions before opening up trade to build increased, balanced and sustainable trade between the two regions.
The EPAs will replace existing arrangements that are protected from legal challenge by non-ACP developing countries only by a WTO waiver that expires at the end of the year.
Meeting an end-of-year deadline for agreeing new arrangements is vital if Europe and the ACP are to ensure that ACP countries obtain the best possible access to the EU market, and strengthen Caribbean economic integration and development without fear of legal challenge from non-ACP developing countries.

 
The priority for both sides is to avoid having to move ACP countries to less generous WTO-legal tariff schemes by signing new agreements that enhance current advantages, which are protected under WTO law and are fair for both the region as a whole and the wider developing world.
Meanwhile, the ACP countries are still upset by the recent move by the European Union (EU) to unilaterally denounce the ACP/ EU Sugar Protocol which has been in existence since the first ACP/EEC LOME Convention, signed on February 28, 1975.
Minister of Agriculture, Robert Persaud, is on record as saying this is seen as a betrayal and it also serves as a timely reminder of the state of the sugar industry, not only locally but within the ACP States, which will have significant socio-economic implications.
Under the Protocol, the European Community undertook to import, at guaranteed prices, specific quantities of cane sugar which originate in ACP countries, for an indefinite duration.
On June 23, 2000 the ACP and EU signed the Cotonou Partnership Agreement, which replaced the LOME Convention.
The Cotonou Agreement preserved the LOME trade provision until the end of 2007, and committed the parties to negotiate WTO-compatible trading arrangements to be implemented from January 2008.
In time, the one-way preferential agreement that governed CARIFORUM/EU trade will come to an end; nevertheless, CARIFORUM will continue to enjoy its preferential access to Europe, but over a period of 15 years CAROFORUM countries will liberalise up to 80 per cent of imports from the EU.
Only two products will not enter EU duty free and quota free, namely sugar and rice.
Rice will be liberalised in 2010; but, in the interim, the quota for rice in 2008 will be 187,000 tonnes, the following year 250,000 tonnes, and after that it will be duty free and quota free access to Europe.
As it relates to rum, the market arrangement will be for duty free and quota free access.
Caribbean rum is regarded as extremely competitive on the international market, hence the local producers remain concerned that some residual tariffs that applied to competing products from other regions would be retained for some time, which in the end will happen.
Duty will continue to be paid on European wines and spirits.
The agreed quantities for the export of sugar to September 2009 are an additional 60,000 tonnes for access.
Of the additional quota, 30,000 tonnes are for Sugar Protocol (SP) holders Belize, Guyana and Jamaica, while the remaining 30,000 tonnes will be for the Dominican Republic.
The EU had previously offered additional access only to the Dominican Republic, which had no quota under the Sugar Protocol.
As it relates to cumulation, a time-bound restriction has been placed on cumulation within CARIFORUM for certain sugar-based products and rice during the periods that quotas will apply.
For rice, it will be until December 31, 2009, and for sugar until September 30, 2015. The EU has also agreed to review the list of products for which cumulation will not be allowed after three years, with a view to reducing the list.
The EPA was initialed after some two an half years of strenuous deliberations, and clears the way for European-funded technical assistance for tax reforms to reduce CARIFORUM States’ reliance on trade taxes. A three-year moratorium will be applied in each phase before tariff reductions commence.
CARIFORUM member states will remove export duties on imports to the European Commission within three years (by December 31, 2010).

 

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