Jagdeo says will only sign if forced to
Guyana was the lone holdout at a pivotal meeting in Barbados yesterday on a controversial regional trade deal with the European Commu-nity (EC) and President Bharrat Jagdeo restated that he would only sign if forced to do so through the imposition of damaging tariffs on the country’s exports.
This was the President’s position at the December 7, 2007 meeting of Caricom Heads of Government in Georgetown prior to the initialling of the agreement later in the month and a shift in his declaration of intent of September 5, 2008 at a national consultation on the Economic Partnership Agree-ment (EPA) also in George-town to sign a goods-only agreement even if he had to “go it alone.” With the rest of the Cariforum (Caricom plus the Dominican Republic) leaders closing ranks in favour of signing, sources say that Guyana would have had no traction on a goods-only deal as this could have thrown the entire deal into jeopardy. Guyana not signing was also not an option as the entire bloc had to be on board. Despite the significance of the meeting, there was no Guyana Government statement last night on the matter.
According to the Barbados Nation, President Jagdeo confirmed Guyana’s opposing stance following an “intense” special summit of Cariforum heads of government and representatives of other countries that make up the 16-member grouping, at the Sherbourne Conference Centre, in Barbados yesterday.
Guyana, which had earlier signalled its willingness to sign a “goods-only” agreement with the EU, was the only firm holdout among the states with Haiti expressing some reservations about certain provisions, including that the final text varied from that sent to the Caribbean Region-al Negotiating Machinery (CRNM), which its representatives said would have to be taken back to that country’s President Rene Preval.
“I said if I had the most to gain and the least to lose, why is it I am opposed to this agreement in its current form?” Jagdeo asked.
“I am opposed to it largely because I feel it is a bad agreement. I have gone through this issue publicly on more than one occasion. I have pointed out that throughout the negotiations even when we met in Guyana in 2007, I said the only reason I’m going to sign this agreement is if Europe imposed GSP (the Generalised System of Preferences, which is a formal system of exemption from the more general rules of the World Trade Organisa-tion) on my country because I don’t have a choice. My exports are vulnerable, but outside of that, I will never subscribe to such an agreement.”
He added that there were many good things about the EPA “but there are some horrendous positions”.
Jagdeo said Guyana argued that it should have been in the forefront of signing the EPA, because it had the most to lose from the imposition of tariffs on its exports going in to the EU, which could exceed US$100 million ranging across sugar, rice, rum, and seafood.
In addition, he said, Guyana was one of the most liberalised economies in the region – it does not have exchange controls, restrictions on foreign investment, and treats foreign and national companies the same way.
“I wish the outcome would have been different,” he said, according to the Barbados Nation, “but it’s not. I have to live with that. I can’t throw up my arms in despair, and life moves on, and we have to continue the battle, and we have to continue to expose the deficiencies of the agreement, and if I were to sign, I’d do so with a clear understanding, with everyone understanding, that I’m not doing this because I feel it’s such a great thing, but I’m doing it in a very pragmatic sense.”
Jagdeo indicated that the heads of government understood his position, and while he acknowledged that the vast majority of the heads had agreed to sign the comprehensive EPA, they did discuss the possibility of collectively taking Guyana’s position to the EU, but no agreement was reached.
Challenges
Should Guyana not sign the EPA, which replaces a seven-year interim trade deal under the Cotonou agreement and which came to an end on December 31, 2007, the CRNM has said that some Guyanese exports would not be affected at all, such as diamonds and bauxite, which together account for 20% of the country’s exports to the EU. Some other products would face relatively small tariff increases because exports would have to be made under the less generous GSP system, rather than duty-free under the EPA. This would affect exports of wood products, heart of palm and shrimps which account for some 7% of exports to the EU.
Exports of sugar, rice and rum would however face tremendous challenges in the EU market. None of these products are covered by the GSP system, and Most Favoured Nation (MFN) tariffs are very high.
According to the CRNM, sugar accounts for 50% of Guyana’s exports to the EU and MFN rates for sugar are prohibitive. Once the Sugar Protocol expires in September 2009, sugar exports to the EU would practically be impossible, the CRNM said.
In relation to rice, Guyana mainly exports husked rice to the EU. These exports are now duty-free under the EPA, which is an improvement compared to the Cotonou agreement, under which only a reduced duty applied. Without the EPA, Guyana would face a tariff of 65 Euro per tonne of rice, which corresponds to a tariff of around 25-30%.
Meanwhile rum exports to the EU, which are exported in the form of bulk rum would face high tariffs – around 30% – if exported under the MFN regime.
As such, while many exports would hardly face major difficulties without EPA market access, Guyana’s three key export products (sugar, rice and rum) could face dramatic consequences, with a complete cease of exports in the case of sugar. Together, these three products represent 70% of all exports to the EU and 30% of Guyana’s total exports. The EPA was negotiated between the EU and Cariforum countries for a four year period and it was scheduled to take full effect from January 1, 2008.
Stabroek News was unable to contact President Jagdeo or any senior government official who accompanied him to Barbados yesterday on how the outcome of the meeting has affected Guyana’s position. Asked whether there would be any statement from the government on the outcome of the meeting last evening, press affairs officer within the Office of the President, Kwame McCoy told the Stabroek News there was going to be none at that stage. McCoy had earlier announced that the President was going to hold a press conference at the Cheddi Jagan International Airport Timehri immediately on his arrival into the country from Barbados last night but this was later cancelled.
When contacted to find out what were the possible implications there could be for Caricom if Guyana does not sign the EPA, a spokesperson for the European Commission delegation to Guyana asked the Stabroek News to be excused for not giving a comment on the issue before the end of the Caricom Heads meetings.
Collective pause
Host Prime Minister David Thompson said no new date had been fixed for the formal signing but it could be late this month or early in October. The date for the signing of the agreement has been rescheduled on a number of occasions and more recently to Guyana’s opposing stance on the signing of the agreement in its current form.
The deadline for the signing of the EPA is October 31, 2008 and Stabroek News has learnt that an October 15, 2008 date is tentatively set for the signing of the EPA in Barbados.
Earlier in the day yesterday, the Barbados Nation reported President Jagdeo repeating his appeal for the leaders to have a “collective pause” and to review the EPA which was initialled on their behalf last December.
Thompson dismissed the appeal, saying now was the time for action and “time is not on our side”.
He told reporters: “I think the time for pausing has ended. Pausing will only end up being the thief of time in this particular instance.”
The Barbados leader admitted that the EPA was “not perfect”, but pointed out that “no agreement ever is”.
In an apparent dig at Guyana, he said he was concerned about “persons who previously supported certain scenarios that we would have pushed for (who were) now pretending that they know nothing about it and are acting as if they are the biggest advocates for us not signing”.
Addressing the opening session of the summit, Thompson said: “Today is no time for us as leaders of this region to vacillate for posterity will judge us harshly if we do so.”
He urged heads of government to “take the correct decision on behalf of our Caribbean people”.
He reminded the leaders that they had committed to ending the negotiations on the EPA by last December 31 and to have new trading arrangements with Europe in place by January 1, 2008 at the latest.
“When we did so we all fully understood that an EPA with the European Union would represent a fundamental turning-point in our economic relations with Europe and have major implications for the Caribbean in the context of the global economic environment,” he added.
He warned yesterday that reopening negotiations on a new EPA at this late stage could cause the collapse of a new platform of trade with Europe.
“My own view is that the entire process will collapse,” he told reporters at Sher-bourne Conference Centre, minutes before the opening of the 14th special meeting of the Caricom Heads of Government.
He was commenting on calls by Guyana and a number of regional agencies and prominent figures to delay signing the full agreement until areas of concern are re-negotiated.
Jamaica’s Prime Minister Bruce Golding on the other hand also made the point ahead of the Caricom Heads special summit that stiff duties on Caribbean exports to Europe are just one of the penalties the region will face if it does not hurry up and sign a new trading arrangement with Europe.
“There is the danger, and I would say the imminence, of Caricom exports being subjected to GSP (Generalised System of Preferences)…,” the Jamaica leader told reporters on his way to the meeting.
“Can we afford on November 1 to have duties that average out at 20 per cent, 20 per cent, being applied to exports from Caricom countries? Our exports can’t withstand that.”
Golding spoke against the backdrop of calls for Caricom leaders not to sign the EPA until they have negotiated areas of concern.
“If we reopen the negotiations, the issues that will be reopened are not just the ones that we are concerned about,” he said.
“The Europeans are going to want to list their items as well for reopening and I don’t think that we want to go around that mulberry bush.”
Golding takes the position that the trading relations between Caricom and the EU became illegal at the start of this year, with the old trading regime having been folded up at the end of 2007.
“The European Union, in an act of good faith said we go ahead and give you our end of the deal in terms of trade and wait for you to sign for your end of the bargain to come on line,” he explained.
“If we appear to be unwilling to sign, I believe there is going to be a change in that position.
“Any country could now file a complaint to the World Trade Organisation to say that the deadline of December 31, 2007 has passed and we are still continuing arrangements that came to an end in 2007 and we could be called to book.”
According to Golding, Jamaica does not have any “overriding concerns” about the EPA and was “absolutely ready to sign it”.
He added: “Did we get all we want? No. Did we get a good agreement? Yes. Could we have gotten a better agreement? I doubt it. Should we seek to reopen the negotiations? I don’t think that’s possible.”
On the issue of whether an EPA could be in place for a limited number of Caribbean Forum countries (Caricom plus the Dominican Republic), Golding pointed out:
“We negotiated as a group. The agreement arrived at in December, 2007 represented a consolidation of Caricom and the Dominican Republic.
“It could be argued that, look, this thing was a package and if one country pulls out then the package unravels.”