Economic Partnership Agreement…Guyana will sign if faced with punitive taxes

Oct 12, 2008 News

– President Jagdeo

This Wednesday, CARIFORUM leaders will sign the controversial Economic Partnership Agreement with the European Union.
Minister of Foreign Affairs, Carolyn Rodrigues, said that at present she was unaware of any ‘drop dead’ date for the signing of the EPA, but were Guyana to be faced with a real threat of punitive taxes on its exports to Europe, “President (Bharrat) Jagdeo has already said that we will sign.”
She noted that the Administration was still working with CARIFORUM leaders to have the two clauses that were suggested in a declaration as an appendage to the EPA.
The two clauses aim to have the Treaty of Chaguaramas take precedence over the EPA, were there to be conflict between the two, and to have the impact of the EPA reviewed every five years.
An article emanating from Brussels on Friday had hinted that the European Union was preparing to impose taxes on goods imported from Guyana as punishment for the “Caribbean island’s” refusal to accept a free trade accord.
The article referred to a document that is expected to be rubber-stamped by the EU Foreign Ministers on October 13, suggesting that Guyana would therefore no longer benefit from the favourable treatment scheme for its Europe-bound exports that have been in place since 1975. As a result, it would be subject to higher tariffs on its exports of rice, rum and seafood.
Patrick Gomes, Guyana’s Ambassador to Brussels, is quoted in the article as saying that the EU move could ultimately lead to this country losing 70 million euros (US$94 million) each year.
“For a small economy to absorb that loss would be devastating,” he said, adding that he will be undertaking discussions with EU officials to see if a solution can be found ahead of the Foreign Ministers’ meeting in Luxembourg.
Their meeting takes place just two days before a formal ceremony in Barbados, at which the Agreement will be signed by both EU and Caribbean representatives.
When asked to comment on the report, President Jagdeo said that it was not entirely accurate. He said that there is no stipulation that Guyana must sign the EPA on October 15.
When contacted for a comment on Guyana’s position, EC’s Ambassador to Guyana, Geert Heikens, had said that it would be highly unlikely that the agreement in its present form would be changed before any signature.
He also alluded to the fact that there would be a Ministerial Joint Council, following the signatures, that would oversee the EPA; and at that stage, any concerns could be addressed and possibly changed.
He noted that the signatures were important to be acquired as soon as possible, given that the EU has already opened its market to duty-free and quota-free access to CARIFORUM countries in violation of the WTO (World Trade Organisation).
According to Ambassador Heikens, if Guyana did not sign on to the EPA by November 1, then there would be no trading agreement with Guyana; hence, as is required by the WTO, GSP (Global System of Preferences) will have to be applied.
This will see tariffs being imposed on Guyana’s exports to the EU, making them uncompetitive.
Although 78 African, Caribbean and Pacific (ACP) countries have been involved in EPA negotiations with the EU, the Caribbean agreement is the only comprehensive one to have been concluded on a region-wide basis.
The negotiations have been overseen by Peter Mandelson, who was the EU’s Commissioner for Trade before his surprise return to British politics earlier this month as cabinet minister for business affairs.
President Bharrat Jagdeo has long condemned the reciprocity aspect of the EPA, as well as the services component, and has been calling for a ‘goods only’ agreement to be signed, with a two-year grace period to properly monitor the services component of the deal.
This notion was rejected by the EU Chief Negotiator, Karl Falkenberg, who said, during a recent consultation on the EPA in Guyana, that the deal will not change and Guyana must sign or face the consequences.
The Caribbean Community (CARICOM) Secretariat recently wrote to the European Commission (EC) regarding President Jagdeo’s intention to sign a “goods only” Economic Partnership Agreement with that trading block come October 15.

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Economic Partnership Agreement…Guyana will sign if faced with punitive taxes

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