This is the third part of a ten-part series by David Jessop explaining the provisions of the Economic Partnership Agreement, which the Cariforum countries will sign with the European Union in June.
When the View from Europe returns this series will appear elsewhere in this newspaper.
The language on tourism contained in the recently initialled Economic Partnership Agree-ment (EPA) with Europe is a clear example of the benefits that flow when a Caribbean industry, ministers and trade negotiators are able to develop a close working relationship and a common set of negotiating objectives.
Despite the highly technical nature of the ‘language’ of services, the first detailed textual draft was produced by the Caribbean Hotel Association, a private sector body. After a number of adjustments by trade negotiators for technical, legal and other reasons, the final text agreed contained much of the language originally proposed. This was despite strenuous resistance from the European Commission who for months argued for a minimal text on tourism.
Central to tourism’s interests in the EPA is a three page annex and many pages of schedules. The annex covers issues that range from ensuring fair competition to the areas in which development support might be provided the industry to enhance its competitiveness. For their part, the schedules spell out the ways in which individual Caribbean nations will open many areas of their tourism product to European participation.
Throughout the EPA there is also other language with importance for tourism. There are references to the environment, to training, to the entry into Europe of staff such as chefs to develop their skills. The EPA also makes clear there will be accompanying development support for the industry, although how this is to be accessed has yet to be made clear.
Most importantly for the hotel sector, a large consumer of imported goods, the EPA contains hundreds of pages of schedules relating to the timing and phasing of the removal of tariffs on imported goods. While many food items, all wines and spirits and items such as linen are excluded from tariff liberalisation, there are many other items the tourism sector consumes or requires that will become tariff free over time.
As with almost every other aspect of the EPA the exclusions list, the tariff reduction schedules and the services language has an importance that goes beyond Europe. It establishes a precedent that will affect similar negotiations that will take place soon with Canada, Mercosur and possibly the United States as well.
Specifically the annex on tourism provides a framework for fair competition, identifies some of the industry’s development needs and establishes a basis for discussing these.
For instance it contains a paragraph on anti-competitive practices that for instance could be used to stop a European tour operator establishing a dominant position through unfair pricing.
In the context of the industry’s needs the EPA indicates that Europe will find ways with Cariforum governments and representatives of the tourism industry to encourage the commercial transfer of technology to support the industry’s development in areas such as information technology.
It also suggests that support will be forthcoming to engage small and medium-sized enterprises more in the tourism sector; proposes the mutual recognition of industry qualifications; and encourages the introduction of environmental and quality standards applicable to tourism. It also suggest that European technical and development support will be made available for the upgrading of national accounting systems so that governments can understand better the role of tourism in the economy; increasing the global competitiveness of the industry. It further proposes supporting the development of internet marketing strategies and the creation of sustainable tourism standards.
In order to achieve this, the text proposes the creation of a consultative mechanism with Europe and the provision of development support.
Beyond this the schedules attached to the EPA indicate the commitments made to opening the Caribbean tourism services market to Europe and the precise areas where restrictions will apply.
Space does not permit a detailed exploration of what each nation has agreed to but it is necessary to know that the EPA is very specific about what will and will not be possible for European operators in areas such the operation of hotels and restaurants; the letting of furnished accommodation; beverage serving with entertainment; travel agencies and tour operators; tourist guides; hotel management; renting yachts and so on.
On each page of the schedule there is a column that deals with limits on European market access and another column that deals with whether the service provider will be offered the same treatment as nationals of the country concerned. Under each column each Caribbean nation has then identified whether they intend placing limits in one of four areas.
What this means is that it will be necessary for every part of the industry, those who supply it and those who represent its interests to fully explore at the earliest possible date through seminars and discussion, the implications for future competition in areas as diverse as ground transport and spa services.
David Jessop is the (Executive Dirrector of the Caribbean Council for Europe)
