David Jessop, Trade Writer

Tourists at the Spanish-owned Riu Hotel in Ocho Rios, St. Ann, October 21, 2007. The new trade agreement with the European Union stresses fair competition between Europe and the Caribbean in the lucrative hospitality sector. - File

THE LANGUAGE on tourism contained in the recently initialled Economic Partnership Agreement (EPA) with Europe is a clear example of the benefits that flow when a Caribbean industry, ministers and trade negotiators are able to develop a close working relationship and a common set of negotiating objectives.

Despite the highly technical nature of the 'language' of services, the first detailed textual draft was produced by the Caribbean Hotel Association, a private sector body.

After a number of adjustments by trade negotiators for technical, legal and other reasons, the final text agreed contained much of the language originally proposed. This was despite strenuous resistance from the European Commission, which for months argued for a minimal text on tourism.

Central to tourism's interests in the EPA are: a three-page annex which covers issues that range from ensuring fair competition to the areas in which development support might be provided to enhance competitiveness; and many pages of schedules that spell out the ways in which individual Caribbean nations will open many areas of their tourism product to European participation.

Throughout the EPA, there are references to the environment, to training, to the entry into Europe of staff such as chefs to develop their skills.

The agreement also makes it clear there will be accompanying development support for the industry how this is to be accessed has yet to be spelt out.

Establishing a precedent

Most important for the hotel sector, a large consumer on imported goods, the EPA contains hundreds of pages of schedules relating to the timing and phasing of the removal of tariffs on imported goods. While many food items - for example, all wines and spirits and items such as linen - are excluded from tariff liberalisation, there are many others that the tourism sector consumes or requires that will become tariff free over time.

As with almost every other aspect of the EPA, the exclusions list, the tariff reduction schedules and the services, language has an importance that goes beyond Europe. It establishes a precedent that will affect similar negotiations to take place with Canada, Mercosur, and possibly the United States.

Specifically, the annex on tourism provides a framework for fair competition, identifies some of the industry's development needs and establishes a basis for discussing these.

It contains a paragraph on anti-competitive practices that, for instance, could be used to stop a European tour operator establishing a dominant position through unfair pricing.

In the context of the industry's needs the EPA indicates that Europe will find ways with Cariforum governments and representatives of the tourism industry to encourage the commercial transfer of technology to support the industry's development, in areas such as IT.

Consultative mechanisms

It suggests that support will be forthcoming to engage small and medium-size enterprises more in the tourism sector; proposes the mutual recognition of industry qualifications; and encourages the introduction of environmental and quality standards applicable to tourism. It also suggests that European technical and development support will be made available for the upgrading of national accounting systems so that governments can understand better the role of tourism in the economy, thus increasing the global competitiveness of the industry.

It further proposes supporting the development of internet marketing strategies and the creation of sustainable tourism standards.

In order to achieve this, the text proposes the creation of a consultative mechanism with Europe and the provision of development support.

Beyond this, the schedules attached to the EPA indicate the commitments made to opening the Caribbean tourism services market to Europe and the precise areas where restrictions will apply.

Space does not permit a detailed exploration of what Jamaica or other nations have agreed to, but it is necessary to know that the EPA is very specific about what will and will not be possible for European operators in areas such as the operation of hotels and restaurants; the letting of furnished accommodation; beverage serving with entertainment; travel agencies and tour operators; tourist guides; hotel management; renting yachts and so on.

On each page of the schedule there is a column that deals with limits on European market access and another column that deals with whether the service provider will be offered the same treatment as nationals of the country concerned.

Under each column, each Caribbean nation has then identified whether they intend placing limits in one of four areas.

What this means is that it will be necessary for every part of the industry, those who supply it and those who represent its interests, to fully explore at the earliest possible date through seminars and discussion, the implications for future competition in areas as diverse as ground transport and spa services.

david.jessop@caribbean-council.org