The Caribbean region did not win anything out of the negotiations with Europe over the Economic Partnership Agree-ment (EPA) concluded in December, and the departure from the principle of preferential access to one of reciprocity will be at the core of the problems the Cariforum countries will now face.
Addressing the media at State House yesterday on last year’s high and low points, President Bharrat Jagdeo said that the problems might not surface immediately but would be seen in reduced revenue earnings, since goods from Europe would now enter the markets of Cariforum countries duty free affecting the revenue base of those countries which depended on the duties. Cariforum countries comprise Caricom countries and the Dominican Republic.
Jagdeo said that the EPA would affect the economies of the region in several ways but some of the impact may be deferred because its provisions would be executed in a phased manner.
He said there would be more problems negotiating similar agreements with countries such as Canada and the United States which would want the same thing.
The erosion of the revenue base in this manner, he said, would cause significant shock to the regional economies since many were already running on “bare-bone” budgets and they would incur bigger fiscal deficits and have to borrow more money, while their interest rates would go up.
He said that the European Union would say that they had given the region enough time to adjust, but regardless of the time-frame for adjustment, the idea of reciprocity between developed and developing states would place the region at a disadvantage. Even the few sensitive products that had been excluded from the EPA would be treated differently in other protocols.
The EPA, he continued, was a situation the region had been forced into. Even though the EU would claim otherwise, Jagdeo insisted it was a “well thought-out ploy by Europe to dismantle the solidarity of the ACP (African Caribbean Pacific Group of countries) by effectively dividing the ACP into six negotiating theatres – that is six EPAs – and playing one off against the other which they did very effectively.”
Stating that Europe acted in bad faith in the negotiations, he gave the example of sugar and noted that the EU had not kept their commitments made in several agreements including the Sugar Protocol, the Lome Conven-tion and the Cotonou agreement.
Stating that he was not going to do what many others had done and say that the agreement represented the best the region could get out of a bad situation, Jagdeo said, “I resent that characterisation that we won from these negotiations. We did not win anything whatsoever.”
He said there were people in the region who were unwilling to say frankly that the region had lost out in the negotiations, not because of the inability to negotiate, “but because all along they (EU) had the plan to dismantle the preferences and to basically bully the countries into meeting the deadlines we all set together but that could have been adjusted.”
He said he was convinced there was a body of knowledge and opinion associated with development economists of the past who understood the issue of development and the struggles in the sixties and seventies to put development on the agenda in the post-colonial period.
They had ensured there was a series of measures in place through trading and other types of arrangements to support development.
Cariforum is the first group within the ACP to clinch a comprehensive EPA with the EU making it more compatible with the World Trade Organisation trade regulations.
The EPA replaces the Cotonou Agreement which expired on December 31, 2007.
