Statement to the European Parliament on the EPA Havelock Brewster

It is to be regretted that this process of conception of the Agreement, one that purports to represent an Economic Partnership between a group of some of the largest and most wealthy States in the world and a group of poor micro-States, had not been more transparent, more democratic and more pro-development. A good opportunity to craft a best- practice model of international development cooperation has been missed…

Download full address: Havelock Brewster

ACP PRESS STATEMENT (November 15, 2008)

http://www.acp.int/en/coa/bananaconcern.suriname08.html


The banana companies in African, Caribbean and Pacific (ACP) States maybe forced out of business following the European Union’s decision to negotiate a Free Trade agreement (FTA) with Central American countries in what the ACP Group describes as on “too generous” terms.
The ACP Group expressed shock that only a week after the EU signed the first Economic Partnership Agreement (EPA) with an ACP region (CARIFORUM), which supposes to secure, and expand preferential access for ACP bananas into the EU market, the EU has gone ahead to negotiate an FTA with the Central Americans in terms which pose serious threat to ACP preferences.


The EU’s market access offer for bananas in the Framework of the FTA under negotiation might include an initial reference import tariff for bananas, which will be lower than the current applied tariff. Also, there will be a rapid decrease over a relatively short period to a final import tariff landing zone, which is lower than the figure that was indicated by ACP countries as the minimum tariff for the necessary preference that would enable them to continue their export of bananas to the EU.


The ACP understands that the EU plans to lower the current levy on competing bananas from certain Central America States of 176 euros per tonne to 95 euros over ten years.


The Chairman of the ACP Banana Working Group, Ambassador Gerhard Hiwat of Suriname, said that the new offer to Central America would mean the end of the banana industry in all the banana producing countries of the ACP Group.


The chairman believes that EU’s action also contradicts the objectives of the EPAs it signed with the Caribbean and interim agreement initialed with some African Banana exporting countries, and seriously questions the ACP-EU partnership.


The Ambassador of the Dominican Republic, His Excellency Dr Fredrico Alberto Cuello Camilo, re-iterated that the EU is negotiating with Central America on “too generous” terms.


He said that if the negotiation between the two parties is successful it would put ACP exporters out of business, adding that it would also result in the dislocation of economies and loss of jobs in the ACP countries concerned and might even impact on neighboring countries.


The Ambassador stated that in his country alone 15,000 families depend on bananas for employment, and they have also employed a lot of Haitians.Dr Cuello Camilo said that most of the economies that rely on bananas would collapse if the EU pushes ahead with the planned agreement with Central America.


The Ambassador of Jamaica, Her Excellency Mrs. Marcia Gilbert-Roberts, said the reduction of tariff from 176 Euros to 95 Euros would make it impossible for her farmers to compete on the European market.



Delegates from African banana exporting nations like Côte d'Ivoire, Ghana and Cameroon did also express the same concerns. The Charge d’Affairs of the Eastern Caribbean States, Dr Arnold Thomas, said that banana has been a source of livelihood of the states he represents and now it has been threatened.


The ACP appeals to the EU to honour the partnership and cautions that it’s the EU’s actions towards the Central Americans, would not send a right signal to the regions that have yet to sign off to an EPA.

The free trade agreements (FTAs) result in more unrestricted capital flows and financial services

http://www.thecornerhouse.org.uk/pdf/document/facilitate.pdf

The FTAs negotiated by the US and EU with developing countries also include a chapter on services and (sometimes a separate chapter on) investment. In the case of the EU's FTA negotiations with ACP countries in the Economic Partnership Agreements (EPAs) this results in GATS 'plus plus' as can be seen in the EPA signed between the EU and the Caribbean group (i.e. Cariforum States):

• because of GATS art. V, developing countries have to make quite substantial liberalisation commitments,
• the EPA includes elements which are not yet decided in the GATS negotiations or even elements which have been rejected in GATS negotiations,
• liberalisation of investment in non-services sectors is being subjected to the to the same rules as services investment, which include a hybrid mix of different GATS rules.

During FTA negotiations, the financial services sector is a major target of EU to achieve liberalisation. This can also be seen by the many articles on liberalisation of financial services in the FTAs the EU has signed with Chile and Mexico. The Caribbean EPA contains far reaching, sometimes modified[1], elements of the GATS Annex on financial services and the GATS Understanding on Commitments in Financial Services (see above).

During current FTA negotiations, the EU tries to introduce obligations on authorities to implement standards which would guarantee stability for their financial services sectors - an attempt which the Caribbean negotiators refused. The international standards which the EU wants to include in FTAs are many of those which are described in chapter 1 and which were hardly negotiated by developing countries, are:

• the Basel Committee's "Core Principle for Effective Banking Supervision",
• the International Association of Insurance Supervisors' "Insurance Core Principles",
• the International Organisation of Securities Commissions' "Objectives and Principles of Securities Regulation",
• the OECD's "Agreement on exchange of information on tax matters",
• the G20 "Statement on Transparency and exchange of information for tax purposes" and
  the Financial Action Task Force's "Forty Recommendations on Money Laundering" and
  "Nine Special recommendations on Terrorist Financing".

The Parties also take note of the "Ten Key Principles for Information Exchange" promulgated by the Finance Ministers of the G7 Nations, and will take all steps necessary to try to apply them in their bilateral contacts

Worrying restrictions to control capital flows
A very worrying aspect of the FTAs such as the Caribbean EPA is that it restricts even further the authorities' capacity to control capital flows. The rules go beyond what is being agreed in the GATS which already prohibits restrictions on all payments for current transactions in sectors which have been liberalised under GATS. It also goes further than what the Cotonou agreed about capital movements. However the Caribbean EPA -which is based on the model for all FTAs the EU is currently negotiating- goes further to:

• prohibit restrictions on all payments for current transactions between residents of the signatory countries,
• prohibit restrictions on the free movement of capital relating to direct investments with regard to transactions on the capital account of balance of payments,
• to require that measures ensuring the integrity and stability of a Party's financial system shall not be more burdensome than necessary to achieve their aim, and shall not discriminate against financial service suppliers of the other Party in comparison to its own like financial service suppliers,
• to limit the ways safeguard measures with regard to capital movements can be taken: only "in exceptional circumstances" when payments and capital movements between the Parties cause or threaten to cause serious difficulties for the operation of monetary policy or exchange rate policy in one or more [signatory States]; and only those safeguard measures with regard to capital movements "that are strictly necessary may be taken" for a period not exceeding six months.

Such rules prohibit countries to have the necessary flexibility to prevent a financial crisis or to act during times of financial crisis to protect the financial and other needs of the society of the host country. There are some provisions to deal with balance of payments problems, but these are made conditional.[2]

[1] For instance the rule in the Caribbean EPA on introducing new financial services is somewhat more nuanced than the GATS and stipulates: Each Party shall permit a financial service supplier of the other Party to provide any new financial service of a type similar to those services that the Party permits its own financial service suppliers to provide under its domestic law in like circumstances. A Party may determine the juridical form Š a decision shall be made within a reasonable time the authorisation may only be refused for prudential reasons is required

[2] See the Caribbean - EU EPA: Part VI - General And Final Provisions

Letter from Ireland, Netherlands and Denmark

Letter seeking Justice for ACP

Rt. Hon. Baroness Ashton
Commissioner for Trade at the
European Commission
BRUSSELS

The Hague, November 7, 2008


Dear Baroness Ashton,

We would like to take this opportunity to congratulate you on your appointment and we look forward to welcoming you personally at next week’s Development General Affairs and External Relations Council.

As you will be aware, negotiations between the EU and ACP countries on the Economic Partnership Agreements are at a critical stage. We welcome the comments you made at the recent European Parliament hearing, and particularly your commitment to giving a different character to ongoing regional negotiations.

By concluding interim agreements focussing on the trade in goods at the end of 2007, we were able to avoid trade disruption for most of the ACP countries concerned. However, as we are sure you will agree, we have much to do to ensure that EPAs genuinely live up to the goals formulated in the Cotonou Partnership Agreement. We therefore need to ensure that EPAs will actively support regional integration and contribute to a regulatory framework that will stimulate economic development.

If we are to succeed in this, we must be prepared to show more flexibility towards the countries and regions concerned in the next rounds of negotiations. In May of this year, the European Council already underlined how important it is to take a flexible approach to the transition from interim agreements to regional Economic Partnership Agreements and called on the Commission to make full use of the flexibility and asymmetry permissible under current WTO law so as to reflect the different development levels and development needs of the ACP countries and regions. Judging by the vast majority of reactions received from the

To demonstrate our commitment to building trust and confidence with our ACP partners, we believe that the EU should build on the dialogue that has already begun over the past year by responding positively to the specific ACP proposal for an EPA meeting at joint ministerial level. An informal ministerial meeting in the near future would underpin the ‘new approach’ that you have eloquently referred to in the European Parliament and could bring a new political impetus to the ongoing negotiations.

We are sure that, with a renewed political emphasis and stronger efforts at the technical level to address the issues highlighted above, the negotiations can be brought to a conclusion that is conducive to development. Again, we look forward to meeting you in person at the development GAERC next week when there will be an opportunity to discuss EPAs further. We would be very interested to hear your views on the topics outlined above and look forward to a fruitful exchange of views.

Yours sincerely,

Ms Ulla Tørnæs
Minister for Development Cooperation
Denmark

Peter Power T.D.
Minister of State for Overseas Development,
Department of Foreign Affairs
Ireland.

Bert Koenders
Minister for Development Cooperation
Kingdom of The Netherlands

Source: OXFAM

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 "
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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.

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