December 21, 2007
EU and CARIFORUM sign full EPA agreement

The first comprehensive Economic Partnership Agreement was initialled on 16 December, 2007, between the European Union and CARIFORUM, one of the regions of the African, Caribbean and Pacific states.{{more}}

The EPA will allow Caribbean goods to enter the European Union duty free and quota free come January 1, 2008, while there is a phased period between three to 25 years for European goods to enter CARIFORUM markets, duty free as well as an important number of exclusions for sensitive products. This is a signal of the asymmetrical nature of the agreement, given the different levels of development between the two sides.

Initialling on behalf of the two sides were Karl Falkenberg, the European Commission’s Deputy Director General for Trade and Ambassador Richard Bernal, Director General of the Caribbean Regional Negotiating Machinery. A ministerial signature of the EPA is foreseen no later than April 2008 possibly in Barbados.

The EPA is essentially a trade and development agreement which covers market access in goods, services and other trade related issues. For market access in goods, the EU on April 1 made an offer to give all ACP countries, including the 15 CARIFORUM countries duty free and quota free access to the EU markets for all goods, except sugar and rice, for which there will be a short transitional arrangement. On the CARIFORUM side, they have been able to give an offer which covers the WTO-required liberalisation of 80 per cent of imports from the EU within 15 years, with transitional periods of up to 25 years for some particularly sensitive products.

One sticking point of the negotiation was Other Duties and Charges which are a major source of government revenue at the port of CARIFORUM countries. The EU agreed that CARIFORUM can retain such duties and charges for seven years in order to prepare the necessary fiscal reform to phase out these border taxes and introduce internal taxes. The EC also committed to give CARIFORUM countries the necessary financial and technical assistance.

With respect to services negotiations, both sides have tabled comprehensive services schedules. At a recent special Heads of Government meeting in Guyana, CARICOM Heads of Government stressed the importance to complement the EC services offer to cover artists and entertainers. In an unprecedented move the EU agreed to provide substantial access to its markets for regional entertainers and performers.

Other trade related issues negotiated include innovation and intellectual property; competition policy and public procurement, which will all contribute to consolidating regional integration and economic reforms in the region.

Development co-operation will be an integral part of the EPA to ensure that the Caribbean states are able to adjust to the new challenges and to maximise the benefits from the opportunities offered by this agreement. The European Union Aid for Trade strategy and co-operation under the Cotonou Agreement offer many opportunities to develop programmes in support of the implementation of this agreement.

Special programmes have also been put in place for sugar, bananas, rice and rum, with a view to help Caribbean states become more competitive and diversify their economies.

It was the first time that Caribbean countries, including the Dominican Republic, negotiated as single group a forward-looking free trade area with a large group of developed countries.