How beneficial or not to the Caribbean is the Economic Partnership Agreement (EPA) between the 27-nation European Union (EU) as a bloc and the 15 small Caribbean members of CARIFORUM individually?
Five years after the EPA became operational, this issue is still being debated. But, it is a sterile debate. The EPA – with all its flaws, and there are many – is a done deal, binding on all the governments.
It does have a provision in Article 5 of the Joint Declaration that mandates its “comprehensive review not later than 5 years after the date of signature”, but not one government has sought to invoke such a review due by October 2013. Under the terms of the EPA, by now, there could also have been reviews of at least five aspects of the Agreement had they been invoked.
In any event, a “review” should be based on facts and evidence that are compiled to justify it, but where in the Caribbean has any government or regional institution gathered the necessary information? And even if the information is gathered, where is the plan – worked out by Caribbean governments and the private sector – that addresses what they want to change?
These questions are being raised in this commentary because on the publication of my last commentary (Export-led growth: Who will lead? Part 2), I received the following message from a respected British friend who, like me and many others, objected to the EPA while it was being negotiated and after it was signed and its full impact revealed.
The message said: “I fear that you have been exceptionally kind to the EU in this piece and ignored the disparity between the parties to the EPA’s. They may have been negotiated within CARIFORUM but they are bilateral instruments whose main purpose was to secure better access for European exporters in to the Caribbean rather than for exporters from individual Caribbean participants in CARIFORUM.
“Access to the EU market remains constrained by non-tariff barriers well beyond the capacity of individual private sector companies operating on a small, Caribbean scale to overcome. This was just what the Commission intended. And the loss of protection in local markets will further undermine the capacity of the local private sector to compete on the EU market.
“The whole structure of the EPA as agreed with the Caribbean is flawed, and as we know was part of preparations for negotiations with Africa rather than the Caribbean, where the issues were rather different and more difficult for the EU trade negotiators. And whilst there is an appearance in the EPA’s of opening the EU market to trade in services this promise has been thwarted with a whole range of non-tariff issues.”
Of course, in previous commentaries and lectures, I made all the points that the writer expressed in the above message. Indeed, in Bristol in June 2007 on the docks where slave ships left Britain to transport enslaved Africans for brutal exploitation in the Caribbean, I delivered a lecture entitled, “The Commonwealth Caribbean and the new colonialism: risks and resistance in an age of globalization” in which I warned of the disadvantages that Caribbean countries would experience; the unfairness of the proposed EPA in which a tiny country like St Kitts-Nevis, for example, would be individually entering a reciprocal relationship with all 27 nations of the EU collectively; and I railed in particular at the Caribbean agreeing to go beyond the requirements of World Trade Organisation (WTO) rules in opening up their markets to the EU.
These observations were ignored even though they were made in chorus with others such as Norman Girvan, Havelock Brewster, Clive Thomas, and Shridath Ramphal.
Governments were intent on signing the EPA and many praised it highly. Since then many experienced trade negotiators and regional economists, have criticised the ways that the promises of the EPA have not been fulfilled, and called for mechanisms to be established to gather the information that would justify a review of it.
The EPA was meant to be an instrument that would govern reciprocal trade between the EU and CARIFORUM countries as well as provide for rules on investment and a development component. But, the majority of CARIFORUM countries are no better-off for it.
As I pointed out in my last commentary, since the EPA became operational, exports of goods from Caribbean countries to the EU has remained stagnant declining from US$5.8 billion in 2007 to US$5.7 billion in 2011; in trade in commercial services, CARIFORUM countries exported US$6.2 billion in 2009 while the corresponding figure for 2011 was US$6 billion. Further, inflows of EU investment to the region decreased from US$29.0 billion in 2009 to US$24.9 billion in 2011.
Against the background of this information alone – and in the reality of their declining economies and poor trade performance, except for Guyana and Suriname both of which have benefitted from the high price of gold exports – CARIFORUM countries should already have called for a review of the EPA. But the time has passed for blaming the EU for looking after its own interests.
In the absence of work by Caribbean governments and institutions that would justify arguments for a review, and in the further absence of any region-wide meetings between Caribbean governments and the region’s private sector to map a plan that would inform negotiations for change in the EPA, there is little point in continuing to lament the unfairness of it. Lamentation may be good for the soul, but it does not feed stomachs.
The choice that confronts Caribbean governments and the private sector is either to do the joint work that would justify a review of the EPA, or implement the EPA more effectively than has been done over the last five years.
If the choice is the latter, then the region’s private sector must identify what is needed for them to take advantage of whatever opportunities exist in the EPA, and governments must act to facilitate such requirements.
If all parties simply remain supine and silent, unwilling to pull the region’s resources together to integrate production; to perfect the Caribbean Single Market; to create pan-CARIFORUM companies that are financially viable and managerially-capable of penetrating foreign markets, then the blame rests squarely at their feet.
(Sir Ronald Sanders is a Consultant, former Caribbean Diplomat and Visiting Fellow, London University)