DEBATING THE EU-CARIFORUM TRADE AGREEMENT

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SIPDIS

SIPDIS

STATE FOR EB/TPP, WHA/EPSC, WHA/CAR
GENEVA FOR USMISSION TO WTO

E.O. 12958: N/A
TAGS: ECON ETRD EINV ECIN TD
SUBJECT: DEBATING THE EU-CARIFORUM TRADE AGREEMENT


1. SUMMARY: A dynamic debate on February 29 about the Economic
Partnership Agreement (EPA) between the EU and CARIFORUM (CARICOM
and the Dominican Republic) at the University of the West Indies
(UWI) highlighted concerns about the lack of civil society
involvement in negotiations, the inadequacies of CARIFORUM's
negotiating mechanism, and the real and perceived asymmetries of the
agreement. Participants also voiced concern that this agreement sets
a precedent for future trade negotiations between the Caribbean and
the U.S. END SUMMARY


2. At a forum entitled "The Economic Partnership Agreement (EPA):
Threat or Opportunity?" on February 29 at the University of the West
Indies' (UWI) Sir Arthur Lewis Institute of Social and Economic
Studies (SALISES),panelists and audience members raised several
concerns about the EU-CARIFORUM trade agreement. Panelists included
David Abdullah of the Federation of Independent Trade Unions and
Non-Governmental Organizations (FITUN); Professor Norman Girvan of
the Institute of International Relations at the University of the
West Indies (UWI); Mr. Stylianos Christopoulos, Charge d'Affaires of
the Delegation of the European Commission in Trinidad and Tobago;
and Ms. Diane Seukaran, Former Minister in the Ministry of Trade and
a member of the Trinidad and Tobago EPA negotiating team. The three
subjects dominating the discussion were CARIFORUM's negotiating
machinery, the asymmetrical nature of both the negotiations and the
agreement, and the implications of this agreement for future
Caribbean trade negotiations dominated the discussion.

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A Role for Civil Society?
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3. While audience members decried the lack of public debate during
EPA negotiations, Seukaran and Abdullah defended the Ministry of
Trade, stating that it did take steps to engage civil society in
discussions. Abdullah noted that FITUN participated in a trade
negotiation advisory committee to the Ministry of Trade, but some
unions may have been unable to articulate their positions because of
a lack of resources. He added that while there is a culture of
negotiation in T&T, the formal system for civil society
participation is inadequate. Seukaran was far less accepting of the
public's criticism, questioning why the public was only now becoming
interested in the EPA, when it had had ample opportunity to engage
in the debate during the negotiation process.


4. According to Abdullah, although the Caribbean Regional
Negotiating Machinery (CRNM) did engage civil society, the CRNM did
not always fully consider civil society input in the later stages of
negotiations, particularly with regards to the fast approaching
deadline for concluding the EPA. Girvan insisted the interests of
exporters drove the negotiating process. He pointed out that had
CARIFORUM not concluded the EPA, the region's exports to Europe
would have faced GSP tariffs, trade terms that would have negatively
affected exporters. He accused the CRNM of being reactionary and
lacking strategic objectives to guide the negotiating process.
Seukaran expressed concern about the inadequate communication
between ministries affected by the agreement and noted that the flow
of information must be improved, not only between ministries but
between the GOTT and the public during the implementation phase.

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Questioning the Negotiating Machinery
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5. Calling the CRNM a "runaway horse", Seukaran stated she was at
times ill prepared for negotiating sessions, often receiving
information intended to inform discussions just hours before
attending talks in Brussels. Moreover, Seukaran did not believe the
Trinidad and Tobago team was well equipped to address the challenges
of negotiating with the EU. She remarked that countries with far
fewer resources than T&T, such as the Dominican Republic and Costa
Rica, were better prepared for the negotiations. Shirley Ann Clark,
a Ministry of Foreign Affairs representative and former negotiator
for T&T at the WTO, echoed Seukaran's concerns about the failure of
T&T to properly prepare its negotiating teams. As a negotiator at
the WTO, Clark said she felt particularly handicapped by what she
identified as T&T's inability to define its trade interests.
Without a clear outline of local interests, she found it difficult
to advocate for T&T's national interests.

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EU Exploitation or Assistance?
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6. A number of audience members criticized both the negotiating
process and the agreement, perceived as favoring the EU. Audience
members implied and in some cases bluntly stated that the EPA was a

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throwback to colonial mercantilist practices. At the same time,
however, contributors complained that the EU was not providing
enough development and implementation assistance to the region in
return for liberalization. Girvan agreed with this latter criticism
about the inadequacy of the agreement's provisions on development
assistance to protect the region from exploitation. Girvan also
pointed to certain technical barriers such as rules of origin and
professional services requirements which put Caribbean firms at a
disadvantage in gaining access to European markets. Further, Girvan
claimed the agreement's intellectual property rights and labor
stipulations, among others, signaled that the EU's primary goal was
to maintain the competitiveness of its firms, not support the
economic development of the Caribbean region. One audience member
was far more blunt, stating that the EPA was about "world
dominance", not development.


7. Christopoulos argued that the trade benefits of the agreement
were marginal for the EU. Instead of trade, he said the EU's
motivations center around stability, security, and peace in the
region. Stability, he noted, is a precondition for trade and
foreign direct investment.


8. While not explicitly stating that the agreement was biased
against T&T, Seukaran stated that as a donor, the EU inherently had
an advantage in negotiations. However, Seukaran did acknowledge
that the EU entered EPA negotiations in order to comply with WTO
requirements. Further, she argued the EU does seek to maintain its
competitive business markets just as T&T strives to ensure a
competitive business environment for its firms. Unlike Girvan,
Seukaran did not cast this goal in a negative light, instead
pointing to its rationality. She noted that the Caribbean also
needs to be WTO and WTO plus compliant in order to compete in the
"real world". Finally, she highlighted that the "colonizers" are no
longer the country's key competitors or trading partners, pointing
instead to Brazil, China, and the ASEAN nations as being fierce
competitors and key markets. Agreeing with Seukaran, Christopoulos
noted the importance of Caribbean competitiveness with respect to
Brazilian and Chinese companies.

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EPA and Caribbean Regional Integration
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9. Girvan noted that since neither CARICOM nor CARIFORUM had the
authority to ratify the EPA on behalf of member states, the EPA was
in effect a series of individual agreements with the EU. In his
assessment, this fact undermines regional integration and pits the
CARIFORUM states against one another, each angling to be the first
to ratify and offer the most progressive tariff schemes. Abdullah
questioned why such an agreement was feasible with an external
party, such as the EU, when similar liberalization could not be
achieved within the CARICOM Single Market and Economy (CSME). In
Christopoulos' estimation, however, the EPA will assist CSME
development by guaranteeing all CARICOM countries the same treatment
within CARICOM as they have granted to the EU.

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The Future of the EPA
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10. While the EPA has been initialed by CARIFORUM, it has not been
signed by Trinidad and Tobago or any other CARIFORUM state.
Seukaran suggested that there is still time for national debate as
T&T reviews the agreement. In fact, she recommended that T&T delay
the signing of the agreement, stating that the EPA is "a full but
incomplete agreement." Highlighting the binding nature of the
agreement, Seukaran suggested that it is important for T&T to review
all 1200 pages of the document to identify element for
renegotiation. A representative from the Trinidad and Tobago
Manufacturing Association agreed, suggesting that T&T needs to delay
the signing in order to negotiate adjustments to the agreement and
allow for "policy space". (NOTE: The EPA was supposed to be signed
in April 2008, but CARICOM leaders pushed this date back to June
2008 at their most recent meeting in the Bahamas. END NOTE) Abdullah
predicted that the EPA would fall apart as the FTAA had. Regardless
of how the debate proceeds, there was general agreement and clear
concerns that the EPA sets a precedent for future CARICOM trade
negotiations with both Canada and the U.S.


11. COMMENT: The initialing of CARICOM's first reciprocal trade
agreement with a developed country trading partner has unleashed
vigorous discussion about whether CARICOM is ready for it, along
with currents of distrust for the EU and the Caribbean Regional
Negotiating Mechanism (CRNM). While the GOTT did not assume a high
profile role in the EU-CARIFORUM negotiations, Trade Ministry Keith
Rowley is publicly defending the agreement. All signs point to

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Trinidad and Tobago signing the EPA and resuming its role as an
instigator of CARICOM trade negotiations with other partners,
starting with Canada and Central America.

AUSTIN