The size of Cariforum – Caricom and the Dominican Republic – is one of the major challenges facing the region as a trading partner but regional integration may be one of the solutions in implementing the Economic Partnership Agreement with the European Union (EU), a regional negotiator says.
Delivering the main address at the opening session of the GBTI Business Forum held at Le Meridien Pegasus on Monday, Deputy Senior Director of the Caribbean Regional Negotiating Machinery, Carl Greenidge said that the population of the English-speaking Caribbean was minuscule and even with Haiti and the Dominican Republic included as Cariforum members it was still the smallest regional integration movement in the world.
Speaking to the theme of the business forum ‘The Cariforum/EU EPA – The Challenge to Transform,’ Greenidge told the business leaders and others of the corporate community that part of the challenge facing the Caribbean is to find a trading bloc consistent with its own political aspirations in the international arena. Regional integration for Caribbean countries, he said, was one way of dealing with some of the challenges of size.
Size is a matter the region has to deal with since it has implications with trading partners that are very large while the domestic and regional markets are very small. “It is an issue that is unsolved,” he said, adding that he was not clear as to the region’s vision for dealing with it especially as The Bahamas remains on the borders of the Caribbean Single Market and Economy (CSME) and the Dominican Republic is inside Cariforum but outside of Caricom’s CSME.
Caricom itself, he noted, was taking a long time to establish the CSME.
In the implementation of the EPA, Greenidge said, there are a number of important decisions that governments and corporate entities would have to make and some have a bearing on what should have been important decisions taken but were not over the years at the governmental and corporate level.
“If decisions are not taken consistently we may well find ourselves taken along paths that may not sound most appropriate,” he said.
On the issue of reciprocity, he said that the World Trade Organisation under the Doha accord never embraced reciprocity. In the signing of the WTO in 1995, he said that two principles were embraced – non-discrimination, which attacked preferential treatment, and non-reciprocity.
Speaking about the reality that exists in terms of production and trade, Greenidge said that the narrow economic structure of production and exports constitute a problem. “Where efforts have yielded results by way of diversification,” he said, “this has resulted in the growth of the service sector which now constitutes 40% of the GDP.”
However, even with the growth of the service sector the Caribbean by and large has concentrated mainly on tourism. The movement from one product to another without a variety still remains a concern. Until now, he said, trade was still largely inter–regional instead of intra-regional.
Greenidge said in addition the nature of the region’s trading arrangements in which the bulk of trade is associated with exports to preferential markets, which was outlawed by the General Agreement on Tariffs and Trade (GATT) since 1995 and signed by all Caribbean states, is also discriminatory in nature to certain developing countries. It is on this basis and other agreements not entirely in keeping with the rules and regulations of the WTO “that we find ourselves in difficulty,” he noted.
Regionalization
“While we accept that small size posed a number of difficulties, it is argued that some of the difficulties of size could be overcome and some are controllable. The second point is that regionalization is a mechanism to handle size,” he said.
Noting that attempts by the region to win sympathy and support in international forums for differential and preferential treatment were largely unsuccessful, he said that special preferential treatment was a feature of international trade negotiations from 1964 to 1994. According to the rules of the WTO, however, special and differential treatment is now reserved mainly for Least Developed Countries (LDCs). In the Caribbean there is only one LDC.
Greenidge also explained that the region has tried to get consideration for other vulnerable and low-lying economies at the WTO but has not been successful either. This matter, meantime, is still engaging the United Nations Conference on Trade and Development (UNCTAD), which provides the intellectual framework of analysis for development and trade.
“The truth is that the WTO is the global arena for international trade rules and international trade negotiations and not the EU or UNCTAD,” he said.
In the WTO small countries have not been able to secure the systematic treatment associated with LDCs since many are not trade specific, which makes the idea difficult to sell.
Another challenge, he noted, pertained to tariff liberalization which the WTO was currently reviewing. In this regard, some of the region’s neighbours, including Brazil, could not be persuaded to give special and differential treatment to vulnerable economies in the region.
“And this is with our neighbours,” he said, adding “I dare say that many of our trade problems arise from the fact that the political and diplomatic initiatives do not properly take in account the extent to which we have conflicts between our own interests and those of neighbouring countries.”
Trade liberalization
Another development taking place at the WTO and which will affect the region, Greenidge said, was in relation to the removal of tariffs as part of the process of trade liberalization which is also making products subject to special and differential treatment from the region less competitive.
“This is what is happening. The WTO is proceeding to liberalise trade especially in relation to agricultural products which had previously been excluded from all the previous rounds of negotiations,” Greenidge said, adding that this means that tropical products that depend on preferential access are in danger of being affected first and foremost.
Another challenge, he said was that of the Common Agricultural Policy (CAP) reform which is associated with direct subsidies for European farmers and affects prices for agricultural crops in the EU and determines the price that the region receives for rice and sugar.
In terms of sanitary and phyto-sanitary standards, Greenidge said that the region is currently experiencing difficulties in meeting some of the standards but noted that there is a specific set of provisions to allow the EU to provide assistance if requests are made to deal with this issue. Provision is made for the EU to provide both technical and financial assistance in this regard. This arrangement, he said, predated the EPA.
He briefly touched on the duty-free quota-free market access for Caribbean goods to the EU market with rice and sugar being phased in over a period of time but with the Caribbean opening its market to the EU in a limited way.
Speaking of the EPA which includes a development component and covers public procurement and social aspects, he said that it goes beyond trade in goods to encompass services.
He said that written into the market rules for fairer markets in the Caribbean is that European business in tourism (as an example) is involved in joint venture projects with Caribbean business so as to ensure that the European businesses do not engage in monopolistic practices.
On the issue of intellectual property rights (IPR), Greenidge said that there was extensive discussion of the issue of innovation and the importance the Caribbean attaches to it, as well as the role of science and technology in the development of industries, especially in dealing with some of the challenges of sanitary and phyto-sanitary regulations.
Written into the agreement, he said, was not only a section dealing with intellectual property but in different chapters there are elements that would allow the EU to provide assistance to Caribbean companies either directly or in joint partnerships to identify lines of new products or new processes for producing and selling to the EU
Noting the changes taking place on the trade front in the region, Greenidge said that it includes the digital revolution and information communication technology which means that corporate entities in the market have to be constantly changing to protect their markets and the EPA has an entire section dedicated to development of innovations and how cooperation could take place between the Cariforum and the EU to facilitate innovation.
Stating that information moves very rapidly and comprehensively and adjustment has to be frequent, he said, “There is no such thing as sitting back and being given a guaranteed market. In that context capacity to adjust depends on human skills and mastery of the arena of digitization, ICTs and control of intellectual property.”
(Miranda La Rose)
