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EPA: the Opposition's view point
published: Sunday | March 30, 2008

Anthony Hylton, Contributor

The Parliamentary Opposition's best contribution to the debate concerning the economic partnership agreement (EPA), is not to join the cacophony of noise surrounding this matter, but to articulate its own concerns and to provide the rationale for its decision to support a focus on implementation of an amended EPA.

The signing of the Cotonou Agreement between the Africa, Caribbean and Pacific (ACP) group and the European Union (EU) countries in 2000, signalled the beginning of the end of a privileged relationship between the former colonies and their colonisers in metropolitan Europe. The significance of the Cotonou Agreement lay in the fact that the agreement postponed the reality of an EPA five years later than Europe thought desirable or necessary. Europe sought to end the Lomé preferential arrangement from as early as 2003. The ACP group resisted on the grounds, principally, that our productive sectors in our individual countries, as well as the public institutions supporting the sectors, were not ready or equipped to undertake such far-reaching obligations. In the event, an eight-year preparatory period was agreed with the appropriate transition periods to be negotiated in the EPA.

Difficult negotiation

It was always going to be a difficult negotiation between the ACP countries and an enlarged EU of 27 largely developed countries. This was made even more difficult by the divide-and-rule strategy employed by the EU to split the ACP group, which had become a potential global asset for Europe and ACP countries in the World Trade Organisation (WTO) and elsewhere. The CARIFORUM group, including Jamaica, its CARICOM partners and the Dominican Republic, excluding Cuba, was identified as one of the six regions to emerge from a splintered ACP group.

There should be no doubt but that the negotiations were always going to be a David and Goliath story, with the EU and its superior negotiating institution, the European Commission (EC), arrayed against a less-than-cohesive CARICOM and an even more dysfunctional CARIFORUM. Let us be clear also, that the Caribbean Regional Negotiating Machinery (CRNM) contributed greatly to balancing the scale. With its coordinating role and technical inputs, it contributed immeasurably to the negotiation. Any review of the negotiation and of the role played by the CRNM can never detract from the fact of the CRNM's singular contribution in this negotiation.

Fundamentally, the six disparate ACP groups facing a unified EU speaking with one voice through the EC and playing the strong hand that was dealt it expertly by the ultimate poker player, Commissioner Peter Mandelson was, and remains, a formidable force. All the EU had to do was to give the Lomé preferences enshrined in Cotonou to all non-ACP developing countries and preferences would be no more. This process has already started with the Everything But Arms Initiative by the EU in which all Least Developing Countries (LDCs) were granted duty-free quota-free access to the EU market for goods and services not including arms. Similarly, the case of banana and sugar is instructive in this regard. Our access to the EU market for goods and services produced locally would be uncertain at best, and any expectation of further development assistance from the EU would be severely undermined.

The present Opposition, therefore, understood the negotiating dynamics and was, while it formed the government, always committed to negotiating an EPA that did not disadvantage Jamaica and the region and which supported the regional integration movement. It should be noted here that once the EPA is signed by the current administration, the Jamaica Labour Party's historic diffidence towards CARICOM integration would effectively be abandoned or otherwise dead, since the essence of the EPA is its underlying support for regionalism.

Opposition's concerns

It is precisely because the Opposition appreciated the far- reaching or tectonic shift implied by the EPA that I wrote expressing concern about concluding the negotiations by December 31 or seeming to capitulate under threat of imposition of tariff on Jamaica and CARIFORUM goods. See Observer and Gleaner articles dated October 5 and 10, 2007, respectively.

In that article, I set out the Opposition's concern regarding the real imbalance in the agreement where CARIFORUM's obligations are in the main legally binding and enforceable, while the EU's undertakings are in some instances illusory and in others, practically unenforceable.

This issue is exemplified by the absence of a justiciable or enforceable com-mitment either as to the availability or timing of much-needed additional resources by the EU to support the adjustment process directly resulting from the EPA obligations. Our concern about the scope of the agreement to cover areas not yet settled in the CARICOM arrangements, e.g. government procurement, are for very much the same reason, i.e., lack of resources to adequately meet the challenges inherent in these far-reaching obligations.

However, our greatest concern then and now is the severe limitation on policy option by future governments implied by the 11th-hour acceptance of the Most Favoured Nation (MFN) clause, proposed by Europe and recommended for acceptance by Prime Minister Bruce Golding (portfolio responsibility for external negotiations) to the rest of CARIFORUM governments in the dying moments of the negotiations.

The MFN clause obliges Jamaica and its CARIFORUM partners to give to Europe more favourable treatment/benefit than it gives to a third party with which it enters into a subsequent agreement. The EC's principal argument that developing countries with more than one per cent of world trade should be treated as a developed country partner was obviously bought hook line and sinker by CARIFORUM leaders, chief among them our own Prime Minister.

A more critical analysis, however, would inform that an MFN clause that covers potential agreements between CARIFORUM countries and other developing countries, such as Brazil, China, Russia, India or Malaysia, is a historic blunder with far-reaching implications.

Europe would have achieved one of its key trade-policy objectives which is to drive a wedge between the larger developing countries and smaller developing countries like those of CARICOM, with the ultimate strategic benefit to be derived from pending WTO negotiations where the division among developing countries would redound to the benefit of the EU and its developed country partners. Such a key trade concession should only have been made, if at all, in a multilateral negotiating forum such as the WTO, given the far-reaching implications for Jamaica and developing countries, more generally.

Implementation focus

More specifically, this agreement undermines the spirit, if not the letter, of the enabling clause in the General Agreement On Tariff and Trade (GATT), which authorises preferential agreements between and among developing countries which until now, included these larger developing countries. It further undermines Article 24 of the GATT '94 where it unnecessarily restricts the right of future governments to enter into bilateral or regional agreements involving any of these larger developing countries on a preferential or asymmetrical basis. For all intents and purposes, long-standing plans by CARICOM to negotiate an agreement with Mercosur, including Brazil, is dead in the water, not least because Brazil has signalled its concerns with this development and may challenge in the WTO the inclusion of the MFN clause in the EPA .

Foreign policy interests

Additionally, the implications of the MFN clause for our wider foreign-policy interests could be detrimental unless we engage in pro-active diplomacy with our developing country partners principally in Africa and Latin America. See Observer article by this writer, explaining the foreign-policy implication of the EPA on October 25, 2007.

Even if the concerns expressed herein are fully addressed, and the Opposition expects that they will be, especially the MFN clause, it would still not change one central fact on which the Opposition and the Government are agreed, i.e., the urgent need for a paradigm shift in the thinking and attitude on the part of the public and private sectors as well as the wider society if we are to meet the challenges not only of the EPA, but of globalisation itself. For example, the tri-partite discussions for a partnership for progress, which failed to reach a positive outcome under the previous administration, must now be settled. The Opposition is not convinced that merely adding its voice to the discordant note struck by sincere and well-respected voices locally and in the region will better explain or prepare our productive sectors and the wider population for the severe challenges ahead!

Instead, the Opposition will be viewing critically, the implementation strategy, plans and programmes put forward in the Government's Budget. This, we believe, is likely to yield far greater benefits to the country and the region without sacrificing the much-needed clarity that this debate requires on the altar of political expediency. The stakes are too high!! This is a challenge we must meet together because failure is not an option.

G. Anthony Hylton is Opposition spokesman on foreign affairs and foreign trade and former minister of foreign affairs and foreign trade.

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