Commentary: European shadow dims Canada - Caribbean trade talks

By Sir Ronald Sanders
(The writer is a business consultant and former Caribbean diplomat)

The fall-out from the controversial Economic Partnership Agreement (EPA) signed between the European Union (EU) and individual Caribbean countries has begun to show itself.

Sir Ronald Sanders is a business executive and former Caribbean diplomat who publishes widely on small states in the global community. Reponses to:
ronaldsanders29@hotmail.com

Two events highlight the legacy of the EPA. The first is the announcement by an official of the Jamaica Finance Ministry, that Jamaica will have to raise its general consumption tax to compensate for revenues that the government will lose from the removal of tariffs on EU imports over time. The second event is a statement by Guyana’s President Bharat Jagdeo that the Caribbean Regional Negotiating Machinery (CRNM) can’t speak for Guyana at the forthcoming negotiations of a Free Trade Agreement between Caribbean countries and Canada.

Those who had opposed many aspects of the EPA had pointed to the reliance by many Caribbean governments on tariff revenues to help finance annual budgets. It was emphasised that when these tariffs were removed, governments would be compelled either to increase personal income tax or increase the level of their sales taxes. The further point was made that while the loss of government revenue from the removal of tariffs from EU goods may be small for some Caribbean governments, similar tariffs would have to be removed from goods imported from other countries such as Canada and the US once Caribbean countries conclude free trade agreements with them.

In the case of the six independent small countries of the Organisation of Eastern Caribbean States (OECS), I had urged that even though they have more EU products excluded from tariff liberalisation than, for instance, Trinidad and Tobago they should have been exempted by the EU, and any other country with which they enter a free trade agreement, from having to remove tariffs given their small size and the inherent constraints on their capacity to manoeuvre.

Now, like Jamaica, all Caribbean countries that are signatories to the EPA will have to replace lost tariff revenues by increased taxes. Fortunately, in the present global financial crisis, increases in taxes to compensate for lost tariff-revenues do not have to be implemented this year. But, the crunch is coming, and it will be worse once the Canada-Caribbean free trade agreement is signed. The EPA, regrettably, has set the minimum standard for negotiation.

Paradoxically, as President Jagdeo has pointed out, while he opposed the EPA to the bitter end, his government has already liberalised imports so that the effect of lost revenues from tariff removals will not be felt as much in Guyana as in other Caribbean countries.

And this brings us to the CRNM and Jagdeo’s statement that it can’t negotiate the Canada free trade agreement for Guyana. This is a lamentable development because every country in the Caribbean would surely do better if the region pooled its best resources to negotiate jointly with other countries.

But, the CRNM brought this situation upon itself. During the Guyana national consultations on the EPA and in its aftermath, more than one representative of the CRNM aligned themselves openly with the position of the EU and its negotiators. A handwritten note from a CRNM official to the EU’s chief negotiator at the Guyana consultations (clumsily left behind) confirmed that situation, as did other events including circulated emails lambasting the Guyana government and others.

Heads of government – responsible to their electorates – are entitled to require loyalty from those employed to negotiate on their behalf. However much CRNM officials may have disagreed with Jagdeo’s criticism of the EPA, they had an obligation to be, at the very least, circumspect about his concerns.

Some good can come of all this if Caribbean governments are prepared to address the weaknesses in the structure and authority for their joint trade negotiations. For a start, each government should have joint national public sector-private sector machinery in place which would work out its own national requirements and negotiate, on that basis, a Caribbean position. Given the nature of the decision-making process by Caribbean governments, the Head of government should be an integral part of such national machinery.

In theory, a structure of this kind already exists in Jamaica, Barbados, and Trinidad and Tobago. But as far as I am aware there is no such working structure in the OECS countries and Guyana.

In turn, Caribbean ministers should oversee every stage of the negotiations ensuring that the mandates from their national machinery are met. Again, in theory, this is the task of the Council of Trade Ministers, but it is clear from the way the EPA negotiations were handled that oversight was far from adequate, and, for most countries, there was no reporting back to a national group.

An outside review group made up of qualified Caribbean professionals, including from NGO’s, would also be a sensible addition to the negotiating process. Since they would not be part of the intimacy of the negotiations, their objective advice to Caribbean negotiators and national oversight groups would bring a valuable dimension to the process.

This leaves the relationship between the CRNM and the CARICOM Secretariat to be resolved. Governments might consider taking the position that the CRNM should now be absorbed into the CARICOM Secretariat—as recommended in an independent report commissioned by Caricom one year ago-- becoming a division of the Secretariat responsible for all trade negotiations and subject to the direction and authority of a Special Ministerial oversight Committee.

CARICOM is still tinkering with ‘a new governance architecture’ which the flurry of meetings scheduled for the end of this month will almost certainly not advance. Meanwhile, the negotiations with Canada are upon us.

The Canadians themselves would not want a repeat of the EU-EPA debacle. They want to negotiate an agreement which has the support of all the countries and over which there will be no recriminations. They would welcome informed national guidance of a negotiating mandate to a single Caribbean team.

Therefore, all Caribbean governments should lose no time in setting-up effective national machinery to inform and monitor a single Regional negotiating team and to be actively involved in reviewing every stage of the negotiations.


BARBADOS-CARICOM-Regional academics call for re-shuffling of CARICOM’s quasi cabinet
Fri, 16 Jan 2009 20:05:00

BRIDGETOWN, Barbados, CMC – Two regional academics have expressed concern that the Caribbean Community (CARICOM) integration movement is being stymied and have called for a re-ordering of portfolios within CARICOM’s quasi cabinet.

“I honestly think that a reshuffle is required,” said lecturer in political science at the University of the West Indies, Cave Hill Campus, Dr. Tennyson Joseph, while suggesting that the matter could be handled in much the same way as ministers are conferred with portfolios at the domestic level of government.

“You actually look at commitment and skill and personal ability, for example, before you give someone a ministry of agriculture or a ministry of tourism etc. and what we have in CARICOM is where a Prime Minister may inherit a portfolio,” he said.

Joseph was particularly critical of the David Thompson administration in Barbados, stating, quite frankly, ‘the language and pronouncements that are being made would lead one to conclude that the current leadership is not pro-integration”.

The St. Lucia-born political scientist also recalled that when the late Sir John Compton was re-elected in 2006, he had asked that the Vincentian Prime Minister Dr. Ralph Gonsalves be allowed to take on the CARICOM governance portfolio.

Given a growing public perception of a slow down in the integration process over the last two to three years, he believes a reshuffling is currently in order.

Noted Professor Norman Girvan also expressed similar sentiments during a radio programme in Barbados on Friday evening, which sought to assess the state of play within CARICOM.

However, Girvan went further to illustrate what he termed the current state of “paralysis” within the 15 member regional grouping that is scheduled to have a regional single market and economy (CSME) fully in place by 2015 and is currently working towards free movement of people, goods and services.

On the contentious issue of free movement of skilled nationals, Girvan said there has really been no progress since the last CARICOM summit in Antigua last July.

In fact, he said at least two technical meetings that were scheduled to be held last year to take forward the issue did not materialise.

Professor Girvan believes the problem is one of leadership and has pointed to what he sees as a general lack of “enthusiasm” on the part of present day CARICOM Heads of Government.

“The fact of the matter now is that the CARICOM economic integration process is in a state of paralysis, call a spade a spade,” Girvan said.

Joseph also expressed the view that there was general support among the populace for Caribbean integration. He further argued that the CSME remains a “structural necessity” given the global situation.

But he said there was a need for a “technical institutional framework” to ensure that the momentum does not slow with the change of governments, as has occurred recently on several occasions when CARICOM electorates went to the polls.

Girvan noted that a proposal was made as far back as 1992 to establish a CARICOM Commission, as a possible governance mechanism and again, as recently as a year go, but this still had not been acted upon.

“What it means is that we have governments and leaders of the day with the façade of sovereignty because the substance is not there.

“We are being dictated to by our external trading partners and we are being buffeted by the world economy,” he said.

“Our leaders are not prepared to take a qualitative leap into collective sovereignty and until and unless they are willing to do that, we are going to continue in a state of paralysis and go into a state of more and more fragmentation,” the professor warned.

CMC kj/09

The President did it! CRNM Couldn't?

New Amendments to the CARIFORUM EPA forged by Guyana acting ALONE

"Regrettably, the CARICOM partners failed to respond positively to his requests to do so, even though these changes would be in the interests of all."

An e-mail received from Prof. Norman Girvan should be a source of comfort as the CARICOM leaders sit today to sign the CARIFORUM EPA. The Prof. simply said:

"This statement has my full support.
Norman "
--------------------------------------------------------------------------------------
A Declaratory Amendment to the EPA Paves the Way For Guyana to Sign

By Havelock R. Brewster

"Despite the intransigence of the European Commission, and the failure of CARICOM partners to cooperate with Guyana in addressing the glaring shortcomings of the CARIFORUM- European Union Economic Partnership Agreement, the Government of Guyana has succeeded in getting two important improvements made to the Agreement, through a Declaration to be appended to it. "

This will provide for:

• A mandatory evaluation of the costs and other deleterious effects of the Agreement in five yearly periods so as to determine where the terms of the Agreement and/or of their application need to be amended; and
• Some degree of protection for CARICOM as it proceeds to develop the Single Market and Economy, given that the EPA prematurely incorporates policies and measures that have not yet been developed and/or adopted within CARICOM itself.

These protections and the mechanism for revision of the EPA will now permit the Guyana Government to be a party to the EPA to be signed on October 15.

The President had said from the start that Guyana would not be a signatory to the Agreement unless forced to do so under duress, given the substantial losses that Guyana would incur due to the punitive tariffs that would be applied to its exports, particularly of sugar, rice and rum.

He proceeded therefore to seek the cooperation of the other CARICOM States in getting the EC to amend the most harmful provisions, or lack of provisions, in the Agreement. Regrettably, the CARICOM partners failed to respond positively to his requests to do so, even though these changes would be in the interests of all. Guyana had long warned of these harmful provisions.
They include, among others:

• the weak or non-existent development dimension that was supposed and promised as the center-piece of the so-called Economic Partnership Agreement with the European Union- a French-sponsored review actually referred to the Agreement as “änti-development”;
• the curtailment of Caribbean development policy-space in several important respects;
• reneging on commitments undertaken in respect of the WTO negotiations;
• a number of unsatisfactory features in respect of the provisions on Services and WTO-Plus issues like investment, intellectual property rights, government procurement, e-commerce, and on Trade in Goods as well;
• pre-emption of CARICOM's development of regional integration instuments in those very areas , including certain of them presently, actively, under negotiation in CARICOM;
• the astonishing give-away of the MFN;
• the inexplicable absence of any mechanism for evaluation of the cost and other effects of the Agreement, and commitment, if need be, to revision of the terms, or application, of the relevant provisions;

Without support from the Caribbean Community as a whole, it has not been possible to get all these issues substantively addressed now. Moreover, an initiative through the Grouping of African Caribbean and Pacific countries for a Presidential engagement with the European Union, to be organized by October 31, on such issues - that also affect the African and Pacific States - has been ignored by CARIFORUM.

The Declaration therefore, while it does not address upfront all the issues, ensures that there is adequate protection to ensure that harmful effects are detected, arrested and corrected periodically. It is unquestionably an important concession secured from the EC, for CARICOM as a whole, and one that Guyana can live with.

Guyana to sign controversial EPA under threats

"President Jagdeo last week said top officials of the European Commission and governments in Europe had confided in him that some CARICOM members had asked them to “lean hard” on Guyana to sign the EPA with the EU in its current form. Mr. Jagdeo told reporters at his office the unnamed CARICOM members argued that they would lose face if Guyana were to succeed in getting key changes to the agreement."


Despite his disappointment at the turn of events, Mr. Jagdeo said Guyana remains a strong member of CARICOM. “I don’t allow setbacks on one issue to daunt me…I can’t hold the future of the people of this region hostage based on my current likes or dislikes.”

GUYANA CHRONICLE
Wednesday, October 15 2008

GUYANA will sign the controversial new trading agreement with the European Union (EU) under threats to its main exports to the bloc and in solidarity with other countries in the Caribbean, President Bharrat Jagdeo announced yesterday.

But he said Guyana will press for the mounting of a massive lobby for a better Economic Partnership Agreement (EPA) within the 79-nation African, Caribbean, Pacific (ACP) group.

He maintained that the signing of the agreement by the Caribbean Community (CARICOM) and the Dominican Republic at this time is a betrayal of the ACP.

Mr. Jagdeo has opposed the agreement and has pushed for two clauses to be included before Guyana signs on:

** The first is that in its implementation should any of the provisions of the EPA conflict with the CARICOM Revised Treaty of Chaguaramas the revised treaty would take precedence, thereby safeguarding the regional integration process.

** The second is for a review of the EPA every five years to look at the socio-economic impact of the agreement on the people of the region and a commitment by Europe to address the adverse impact.

Mr. Jagdeo said Guyana fought for the inclusion of these two clauses and now other countries are shamelessly taking credit for them.

He said Guyana will also sign on to the EPA if the Generalised System of Preferences (GSP) under World Trade Organisation (WTO) rules is imposed on this country’s exports to Europe.

Head of the Delegation of the European Commission to Guyana, Mr. Geert Heikens, told reporters here, on Monday, that for countries not signing the EPA, there will be no agreement and the GSP will be applied according to WTO rules.

Heikens said the EPA would benefit both parties noting that it addresses not only goods but services and trade issues as well.

President Jagdeo last week said top officials of the European Commission and governments in Europe had confided in him that some CARICOM members had asked them to “lean hard” on Guyana to sign the EPA with the EU in its current form.

Mr. Jagdeo told reporters at his office the unnamed CARICOM members argued that they would lose face if Guyana were to succeed in getting key changes to the agreement.

“I firmly believe it’s a bad agreement for the region and that’s why I continue to fight and seek changes to the agreement…(but) some countries seem more interested in saving face than getting a better agreement”, he said.

Despite his disappointment at the turn of events, Mr. Jagdeo said Guyana remains a strong member of CARICOM. “I don’t allow setbacks on one issue to daunt me…I can’t hold the future of the people of this region hostage based on my current likes or dislikes.”

He said the push by some in the region to sign the deal on October 15 was a “slap in the face” of other members of the ACP that took a stand at their summit which ended earlier this month in the Ghana capital, Accra.

It could undermine ACP unity, he warned, and said the Accra decision can lead to a better EPA for the bloc.

The summit agreed that a troika representing the entire grouping should meet by the end of this month and lobby Europe on the concerns raised about the current EPA and “try to get a more favourable EPA” for the ACP.

“It was agreed that a troika will continue to pursue our concerns at the highest level in the European Union”, he said.

He stressed that by not signing the EPA, Guyana has more to lose than any other CARICOM member and it should have been in the front row of those moving to conclude the new arrangement.

Fifty-three percent of this country’s imports from Europe already come in without any tariffs, so that Guyana, in the first five years, does not have to commit to any serious liberalisation.

It also stands to lose the most because it is the largest commodity exporter to Europe, he maintained.

Guyana’s exports to Europe include sugar, rice and rum.

http://www.guyanachronicle.com/topstory.html#Anchor-A%20Declar-62498

Mandelson Considered a Roughneck

It has always been our contention that one man, Peter Mandelson, held all the ACP to ransom, when in truth and in fact, his masters sing a different tune and dance to a different rhythm. Below is an article which states: "One of Mandelson's last acts as EU Trade Commissioner was to threaten Guyana, one of the poorest countries in the world, with financial penalties that could amount to €70m a year because the Guyanese government has so far refused to join an Economic Partnership Agreement (EPA) between the Caribbean Community (CARICOM) and the European Union." This is the man we are dealing with. It has been men like these that have defined the destiny of the world. Like the Pope that divided the world into three. See more below...

How Guyana brought out the bully in Mandy

Our pro-rich, neo-liberal system allows men like Mandelson to thrive, says Matthew Carr

Peter Mandelson donned his ermine robes and took his seat in the Lords yesterday, allowing him to return to the Cabinet. However, his spectacular political resurrection was marred by further sleaze allegations, this time regarding his possibly nepotistic relationship with a Russian billionaire.

According to the Sunday Times, the former EU Trade Commissioner recently enjoyed the hospitality of the aluminium tycoon Oleg Deripaska on his £80 million yacht in Corfu. Mandelson has denied these reports and rejected suggestions that his relationship with Deripaska might have anything to do with the EU's forthcoming reduction on tariffs on imports of raw aluminium from six to three per cent. The reports have again raised question marks about the "flawed judgment" of the scandal-prone politician known as "the prince of darkness". But the discussions about Mandelson's character miss a more fundamental point about the economic and political realities of the world we now inhabit.

One of Mandelson's last acts as EU Trade Commissioner was to threaten Guyana, one of the poorest countries in the world, with financial penalties that could amount to €70m a year because the Guyanese government has so far refused to join an Economic Partnership Agreement (EPA) between the Caribbean Community (CARICOM) and the European Union.

Guyana has criticised various "anti-developmental" conditions of the agreement, including the relaxation of barriers on foreign investment and clauses on intellectual property rights that would make it more difficult for Caribbean countries to patent their own generic medicines.

Similar criticisms of the EU's "free trade colonialism" have been made by other developing countries involved in the EPA negotiations. Various NGOs have also condemned the agreement, arguing that weak Caribbean economies will be swamped by more powerful European producers. Christian Aid has urged Caribbean governments not to sign the agreement, which is due to be formalised tomorrow, calling it "the relationship of the bully to the bullied".

Only Guyana has so far held out, despite a threat from the EU Commission to withdraw its preferential tariff status unless it complies. But the Guyanese Prime Minister Bharrat Jagdeo has admitted that he will have to accept the agreement despite its "anti-developmental character" to avoid economic disaster. No wonder that a report commissioned by the EU's rotating president, Nicolas Sarkozy, condemned the tactics - "pressure, paternalism and threats" - used by the EU commission during these negotiations.

We should not be surprised that the former communist-turned-peer played a key role in railroading lowly Guyana to the negotiating table. Long before he began to rub shoulders with Russian tycoons, the architect of New Labour was one of the more starry-eyed and zealous courtiers of the rich and powerful and has always assiduously pursued their interests. It is easy to be revolted by Mandelson's combination of smarm and flint-eyed opportunism, but it would be a mistake to interpret his political trajectory to deficiencies of character.

For Mandelson, ­ like the New Labour project itself, ­ symbolises the bullying arrogance of the neo-liberal creed that has dominated the world for the last three decades.

It is a world in which powerful countries prise open the economies of the poorest so that private corporations can control their food, their water and their electricity, where governments claim to be powerless to intervene in the workings of the 'free market' and yet are suddenly able to produce undreamt-of sums of money to bail out banks when they fail - our banks, not those of Russia, Argentina or Thailand which once went to the wall without receiving any bail-outs or offers of assistance.

We may well wonder at the motives of Gordon Brown for bringing one of his former political enemies back into the government. But as we shake our heads at the cynicism and moral blankness of the "prince of darkness" we might pause to consider that these vices are not just his: ­ they are part and parcel of the system that allows such men to flourish.
FIRST POSTED OCTOBER 14, 2008
The First Post