Foreign Trade
The CARIFORUM EU Economic Partnership Agreement.
The Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU) was signed in Barbados on 15th October 2008 and ratified on the 27th of July, 2015. It seeks to liberalize trade and investment between fifteen (15) CARIFORUM States and the twenty-seven (27) European Union (EU) countries on a reciprocal, but asymmetric basis.
The Agreement is a comprehensive free trade and economic agreement. The EPA covers the areas of (i) Market Access for both Industrial and Agricultural products; (ii) Services and Investment; (iii) Trade-related issues – competition policy, the environment, transparency in government procurement, innovation and intellectual property, social aspects and personal data protection – and (iv) Legal & Institutional Issues.
The Agreement essentially provides for free trade between the two sides in both goods and services with the Caribbean being allowed a period of up to twenty-five (25) years to liberalise its import trade in goods from the EU. The Agreement also emphasizes and provides for, development cooperation and financial and technical assistance, CARIFORUM countries being the beneficiaries. Emphasis is also placed on regional integration.
The EPA enables CARIFORUM States and the EU to satisfy their obligations under the WTO, by liberalizing “substantially all trade” between them under a comprehensive Trade Agreement.
The EPA was created through an intense negotiating process which was undertaken within four (4) stages over a period of three years. Phase IV of the negotiating process or the finalization process, which led to the ultimate conclusion of the EPA negotiation in December 2007, was preceded by the critical Phase III of the negotiation process. Launched in September 2005, Phase III of the EPA negotiations underwent a qualitative shift in focus and specificity. Building on Phase I and Phase II discussions which focused on regional integration content, processes and ambition within CARIFORUM, Phase III constituted the structuring and consolidation of negotiations, so that the points of common understanding could be channeled into elements of the EPA Agreement. This Phase continued until the later part of 2006. What follows takes stock of the background of EPA negotiations and the importance of the EPA to CARIFORUM.
The EPA concerns not only trade in goods, livestock and agriculture and fisheries, but also trade in services, facilitation of the investment in products and trade issues between the countries. Furthermore, the European Union decided to provide specific development assistance to improve CARIFORUM structures, enhance competition and create regional economic operators’ capacity to exploit the market access opportunities provided under this Agreement.
SOME KEY DATES IN CARIBBEAN-EU RELATIONSHIP
- 28th February 1975, the first ACP-EEC Convention signed in Lome, Togo and the Caribbean’s “Special Relationship” with the EU began. Barbados was one of six CARICOM States to join other developing countries from Africa and the Pacific to form the ACP Group.
- November 1992, the Caribbean Forum (CARIFORUM) of the African, Caribbean and Pacific Group of States was formally established; following the accession of the Dominican Republic to the Lomé IV ACP-EC Convention.
- 23rd June 2000, ACP-EU Partnership Agreement signed in Cotonou, Benin.
- 14th November 2001, ACP & EU secured a WTO waiver to allow the Cotonou Agreement’s non-reciprocal market access arrangements to remain in force until 31st December 2007.
- 27th September 2002, Economic Partnership Agreement (EPA) negotiations began at all-ACP level in Brussels, Belgium.
- 16th April 2004, CARIFORUM-EU regional EPA negotiations launched in Kingston, Jamaica.
- 16th December 2007, EPA negotiations completed and text initialled by the two Chief Negotiators in Bridgetown, Barbados.
- 1st January 2008, guaranteed duty free access into EU market for CARIFORUM goods instituted.
- 15th October 2008, EPA signed in Bridgetown, Barbados.
- 29th December 2008, provisional application of EPA commenced.
- On 1st January 2011, after a three-year moratorium, phased reduction of tariffs by CARIFORUM countries began. This gradual tariff reduction process is scheduled to continue over the 25-year period to 2033.
The EPA is an important arrangement for CARIFORUM, given its role in advancing regional integration. The EPA is unique amongst other arrangements involving the Caribbean, in that it is the first and only bi-regional agreement encompassing the CARIFORUM configuration. It provides the framework to support and provide impetus for regional integration amongst CARIFORUM.
Underpinned by a development dimension, the Agreement takes into account the differences in levels of size and development, thereby creating a bi-regional agreement with wider scope than just a traditional Free Trade Agreement.
The ‘development package’ is critical to the provision of the development financing necessary to build the export capacity and infrastructure of the Caribbean’s private sector, so as to take advantage of market access opportunities presented. Allied to this, the package constitutes technical and financial assistance which will be used be used to put in place an enabling environment in Caribbean countries for foreign investors.
Importantly, the EPA arrangement provides for the establishment of a stable and secure trading environment for goods from the Caribbean. It also facilitated the negotiation of a Services and Investment framework between CARIFORUM and the EU, for the first time. The EPA is expected to open the door to an improved trade and investment relationship with Europe. In recent years, trade and investment flows from Europe to the Caribbean (with the exception of the Dominican Republic) have been growing at a slower pace. The EPA is intended to be an enabling mechanism for the revitalization of these flows. It is intended to stimulate greater investment between Europe and the Caribbean, through mutual removal of barriers to investment, as well as the enhancement of the attractiveness of the Caribbean economic space in respect of foreign investment opportunities. The Agreement is also intended to stimulate Caribbean exports of non-traditional products and services, encouraging and supporting diversification in these economies.
Therefore, from the Caribbean perspective, the partnership with Europe is expected to position the Region to take advantage of a more dynamic trade and investment relationship.
