Elpert Fitzwarren, Business Writer

A new trade pact is initialled in Bridgetown, Barbados, by the European Commission's deputy director general for trade, Karl Falkenberg at second left, and Ambassador Richard Bernal, director general of the Caribbean Regional Negotiating Machinery at right. Observing are John Caloghirou, head of the Caribbean desk at the European Commission headquarters (left), and Kashma Haraksingh, lead CARIFORUM negotiator on legal issues (standing). A ministerial signature of the Caribbean-EU Economic Partnership Agreement is foreseen no later than April 2008, possibly in Barbados. - Contributed

Early in the morning of December 17, a bleary-eyed Richard Bernal sat in the conference room of a Barbadian hotel signing a ream of documents.

More than 1,000 pages in all. In duplicate.

"That's that," Bernal said as he affixed his signature to the last set of pages.

But that was a little more than just that.

Those pages represented the text of the agreement for an economic partnership agreement (EPA) between 15 Caribbean countries and the European Union (EU).

The document would have to be rushed to Brussels by that Wednesday to meet the December 19 deadline for its formal lodgement at the EU and avoid the expiry of the trade portions of the Cotonou Agreement between the Africa, Caribbean and Pacific (ACP) group of countries with nothing in its place.

The upshot otherwise: Caribbean countries would fall under the World Trade Organization's (WTO) Generalised System of Preferences (GSP), meaning increased tariffs on their exports to the EU; an increased cost of over J$5 billion a year for goods from Jamaica, according to its Prime Minister, Bruce Golding.

We knew it was possible

"We worked through the night Sunday," said Bernal. "We knew we could get an agreement. We knew if we could settle market access - and we had essentially done that - we could get a full EPA."

Bernal, 58, who served for a decade as Jamaica's ambassador to the United States, has for the past six years headed the Caribbean Regional Negotiating Machinery (CRNM), the body that coordinates trade negotiations for the 15-member Caribbean Community (Caricom).

For the EPA negotiations, its mandate included the Dominican Republic, which joined Caricom in a grouping called Cariforum.

That Sunday night, even after Caricom leaders had at an emergency summit a week earlier issued their final negotiating mandate, Bernal, negotiating sources say, was occasionally on the phone to Barbadian Prime Minister Owen Arthur and Jamaica's Golding, urging them to nudge other counterparts back in line behind previously agreed positions.

All the time, Bernal was aware that the Dominican Republic, having already negotiated a free trade agreement with the United States and therefore not finding the EPA requirements to be particularly onerous, was ready to go it alone if the Caricom countries faltered.

There were signs, too, that The Bahamas might have been ready to break ranks. All this added to pressure.

Last week, all the usually gregarious and open Bernal would allow himself to say on the issue was: "It was not always easy to keep Cariforum together."

He warmed easily, however, to the potential of the Cariforum/ EU EPA, the only one of the six they had hoped to complete and that the Europeans were able to sign after four years of negotiations.

"When you have access to a market of 450 million people, I can't tell you what you are going to produce," said Bernal. "But it is an opportunity."

That's what he expects Caribbean governments to now sell to their people - the business and economic opportunity.

In the past, originally under the Lome Convention and then the Cotonou Agreement, ACP countries enjoyed preferential access to the EU market for most of their products. These special regimes have come under increased pressure at the WTO.

The Europeans themselves were also keen for trading arrangements based on greater reciprocity.

Europe's proposed solution was for the series of EPAs, negotiated with regional groups, rather than another umbrella pact with the ACP.

The EU has found the going difficult. As the deadline for the completion of the negotiations approached, several countries signed interim bilateral trade deals to avoid GSP categorisation.

But Bernal said it was in the Caribbean's interest to complete the negotiations.

Area of potential

Unlike most African members of the ACP, which mostly export agricultural products to the EU, the Caribbean sees the provision of services as an area of potential in European markets.

And the region was already getting most of what it wanted without having to give the Europeans everything they asked for. For example, 25 of the 27 European members, the exceptions being Belgium and Slovenia, agreed to accept entertainment as an area open to market access for the Caribbean. "Once we signalled to them that entertainment was a deal-breaker it was relatively easy to get it on board," said Bernal.

Moreover, Bernal and his negotiators reasoned that if the Caribbean had entered an interim agreement, it would mean negotiating without leverage in the future, for largely the EU's interest is in market access, which, essentially is what the interim arrangements cover.

"There is little to trade-off (having signed a deal)," argued Bernal.

Under the deal returned by Bernal, all exports from the Caribbean, with the exception of sugar and rice, will enter Europe duty free and quota free.

"But the agreement is asymmetrical," said Bernal.

What he means is that there is not full reciprocity. On Europe's part, the arrangements kick in on January 1, for the Caribbean the liberalisation of some products will take up to 25 years. And the proposed free trade status will cover only 80 per cent of the potential exports from the EU. The region deemed the remaining 20 per cent to be sensitive products.

"We don't start to liberalise for three years," Bernal explained. "While the tariffs go in that time-frame, for 'other duties and charges' it is seven years."

For some products that are considered revenue-sensitive, like motor cars, the process kicks in at year 10. The Caribbean, however, imports relative few motor vehicles from Europe.

Bernal feels that the Caribbean's performance in sectors such as tourism, entertainment and a few other pockets of services, shows the potential for grasping the opportunities that are likely to emerge with this deal.

"If you reach this level of competitiveness and excellence in one sector," he said, "You can do it in others."

New approach needed

There ought to be a new approach in the region to industrial development, he feels.

"In the past we have looked at the industries where scale mattered, where wages mattered," said Bernal, an economist by training.

"That is no longer for us. What we want to be exporting are downstream products."

With the EPA out of the way and another year left on his contract at the CRNM, the issue now is what next for Richard Bernal?

"Honestly, I don't know," he said.

There are in fact a couple of trade issue negotiations still on the agenda, the most pressing being between Caricom and Canada for a regime to replace the CaribCan agreement.

"We are awaiting their approved list of negotiators and their broad mandate," said Bernal.

Those negotiations, though, should be complete by the third quarter of next year, in time for a Caribbean/Canada summit. In any event, those negotiations are likely to be easier, given Canada being a single country and the Caribbean having worked out many of its positions during the EPA.

There is unlikely to be any trade talks with the United States on the Free Trade Areas of the Americas (FTAA) during the election.

"The FTAA in its current form is dead," said Bernal. "It is not even on life support."

He added: "We need to give some attention to WTO and the Doha Round. But the political conjugation is not right for any agreement, so that will go on for a while."

It seems, therefore, that Bernal could find he has some time on his hands. That is, if he is still at the CRNM.

business@gleanerjm.com