‘Time out’ on the promises of European Union Partnership

In October 2008, when the 15 member countries of CARIFORUM (CF) individually signed a full Economic Partnership Agreement (EPA) with the collective European Union (EU) of 27 countries, much was made of the promise of increased benefits to Caribbean countries. Two and half years later, the promise remains unfulfilled.{{more}}

At the time of signing, observers stressed the importance of setting-up two bodies throughout the CF countries which are the 14 independent states of the Caribbean Community (CARICOM) plus the Dominican Republic. These two bodies were: a unit in each country to ensure implementation of the many demanding clauses of the EPA; and the other was a unit to monitor the delivery of the promises that the EPA proffered. It was also anticipated that the CARICOM Secretariat would have established similar oversight bodies for the CF countries as a whole.

As it turned out, the CARICOM Secretariat established an implementation unit, but not a monitoring one. Similarly, some countries established implementation units, but none have set up machinery to monitor the delivery of the EPA pledges.

Yet, if any CF country is to seek a review of the EPA, it will have to do so based on evidence of non-delivery, based on effective monitoring and recording of the EU’s failure to deliver.

Hopefully, governments will establish monitoring units soon, or at the very least, authorise the setting-up of such a unit by the CARICOM Secretariat on behalf of all CF countries.

But, it is becoming increasingly clear that, even though two and half years have passed, CF governments were not ready to implement the EPA that they were the first to sign in the expectation that great benefits would flow, not only from an early signing, but also from signing a “full” EPA, rather than one that simply complied with requirements of the World Trade Organisation (WTO). The WTO-plus EPA, which was signed, was justified on the basis that CF countries would be able to access the EU market for services. Among the services touted were: architects, accountants, chefs, and musicians. Access to the EU market has proven to be extremely difficult for many reasons, among which is: these Caribbean service providers can only access the EU market under Mutual Recognition Agreements (MRA), but the structures for recognition do not exist in many CF countries.

Thus far, only five CF countries – Antigua and Barbuda, Barbados, Dominican Republic, Grenada and Jamaica – have established implementation units, but even these are said to be “constrained by insufficient financial and personnel resources”, according to a report produced by the European Centre for Development Policy Management. This problem is not likely to ease anytime soon, given the financial constraints faced by almost all the CF states.

At the time the EPA was signed, the CARICOM Secretariat had identified hundreds of measures that CF states would have to implement. If the EU is genuinely interested in a “partnership”, it should consider making funds available, swiftly and without its usual bureaucratic delays, to fund the full operationalization of these units in each CF state, on a dedicated and accountable basis. So far, under its Caribbean Aid-for-Trade programme, Britain has helped to fund the few implementation units that now exist. The EU should also strengthen the implementation unit in the CARICOM Secretariat. After all, it has to be recalled that this is a “partnership” between 27 giants collectively and 15 dwarfs individually. It is only fair that the giants should give their “partners” the assistance they need.

When the EPA was being signed, a few commentators – experienced in negotiations in the WTO and elsewhere – had warned against the early signing of the EPA and had spoken out strongly against the signing of a WTO plus agreement. We were described as “nay-sayers”. But, it seems that the concerns we expressed are coming to pass. Among them were that governments of small economies would find it extremely difficult to replace the revenues they would lose from removing tariffs on EU imported goods. As the commitments of these governments under the EPA kick-in, this will become a huge problem for small states whose economies are in the doldrums and are already burdened with high taxation and debt.

In the event, the “nay-sayers” cannot be blamed for the failure to put implementation and monitoring units in place. Nor can they be blamed for the governance issues that now bedevil the CF countries, and that are now adversely affecting the process of managing the EPA process. The so-called “nay-sayers” can also not be blamed for the failure to mobilise the private sector in many – if not all – CF countries to take advantage of the opportunities the EPA provides. It is obvious that in many of these countries only a very small number of companies understand the provisions of the EPA or are able to utilise them to access the EU market. Here again, the EU should dedicate funds, in the spirit of partnership, to launch information, education and facilitation campaigns for the region’s private sector.

It is now generally known that the EU Aid-for-Trade facility is a big disappointment. The resources that have been made available since the EPA was signed have fallen far short of what the Caribbean was given to expect. In this connection, the EU should do better, particularly as some CF countries signed the EPA only on the basis of threats to their banana, rum and sugar industries by the negotiations for the European Commission (EC). And, as it turned out, the EC reneged on commitments in all three areas, particularly rum and measures to support the banana industry.

Clearly, CF governments need urgently to settle their difficulties of governance and they have to put implementation and monitoring machinery in place. But they should face up to the European Commission, which pushed many Caribbean countries into signing the EPA. It is time Caribbean governments demand a pause in the EPA arrangements, especially in light of the adverse effects of the global financial crisis that broke just as the EPA was signed.

If CARICOM governments could pause the Single Market and halt work toward a Single Economy amongst themselves, they should be able to tell the EU that it is appropriate to take “time-out” from the EPA for reflection, revision and re-negotiation of many difficult aspects of it.

(The writer is a Consultant and former Caribbean diplomat)

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