Caribbean wary of trade liberalization
Come midnight December 31, when our preferential trade agreement with the European Union (EU) ends, it is safe to predict that CARIFORUM countries will be nowhere close to being World Trade Organization (WTO) compatible. This is because there are many issues to be addressed so that the Caribbean can be on fair footing with the rest of the developed world.{{more}}
Cariforum, which includes the Caricom states and the Dominican Republic, represents the region at the African Caribbean and Pacific (ACP) grouping which is responsible for negotiating with the EU and the WTO.
The issues of contention arose when the US and Latin American countries took issue with the ACPâs preferential markets in Europe and complained to the WTO, which stipulated that the practice was unfair and should be discontinued. The EU and ACP asked for and received a ten-year extension so that the developing countries of the ACP could gradually adjust to the new realities of trade liberalization.
Caricom, which mainly exports agricultural products to the EU, contends that the Economic Partnership Agreements (EPA) which they are required to enter into put them at a disadvantage at this time, especially those states which require tariffs and taxations to run their economies.
Another issue that is rubbing sore with Caricom is the EUâs decision to negotiate with the ACP by regional blocks; a stipulation which puts Caricom in the same block as the Dominican Republic, which has a different trade culture that would take major efforts to synchronize with the rest of the Caribbean. The common External Tariff in the Dominican Republic is 0 percent, while the average in the OECS is about 35 percent. The DR has always looked to the north and not its southern Caribbean neighbours.
Trade liberalization requires the removal and reduction of tariffs and would open the Caribbean markets to goods and services from across the globe, but Caribbean producers would be unable to compete with goods from outside the region, as producers in the developed world are given subsidies by their respective governments which Caribbean governments are unable to afford.
The Caribbean, with the exception of Trinidad and Tobago already has vast negative trade surpluses, and with the removal of tariffs, many experts belief that the region may well become the dumping ground for inferior goods and services form outside the region.
With those and other concerns in mind, Oxfam International, in collaboration with Caribbean Policy Development Centre and Windward Island Farmers Association (WINFA), held a week of activities in St Vincent, which included a regional consultation on EPAs for journalists, at the Sunset Shores hotel on Wednesday. A massive open-air concert at the Calliaqua playing field last night headlined by Barbadian performer Aja, along with Madzart and other local acts.
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