John Myers Jr, Business Reporter

Bernal

The Caribbean, unlike its African partners in the ACP, had no cushion against open competition for the European Union's (EU) 450-million market other than a replacement trade agreement, Ambassador Dr Richard Bernal has suggested in response to critics of the Economic Partnership Agreement (EPA).

African countries, he said, were already safeguarded under the seven-year-old Everything but Arms (EBA) pact.

"The African countries have a fundamentally different situation from us, apart from the fact that many of them were LDCs - much poorer, much less developed than us," Bernal said at the annual GraceKennedy Foundation's an-nual lecture series.

Most, he added, "were given duty-free, quota-free treatment years ago".

The EBA initiative, which was adopted in 2001, grants duty-free access to imports of all products from some 49 least developed countries (LDCs) without restriction, except for arms and ammunition.

The tariff elimination is in phases for bananas, rice and sugar over the period 2006 to 2009.

Situation not urgent

Africa, though it, too, is negotiating an EPA with the EU, already had some security under EBA and, therefore, their situation was not as urgent as the Caribbean's, said Bernal.

CARICOM, he added, was seeking a similar type of deal.

But the EPA which was agreed last December has faced heavy criticism, most publicly from academics such as Professor Norman Girvan and Vaughan Lewis, who say the pact was signed in haste and could end up hurting Caribbean producers.

The development component, to assist regional countries prepare their industries for increased competition from much more resourceful and technologically advanced entities in Europe, was also said to be deficient.

Settle for GSP

But Bernal, CARICOM's chief negotiator and outgoing head of the Caribbean Regional Negotiating Machinery (CRNM), reiterated at the April 29 lecture in Kingston that not finalising the EPA would have presented certain dangers.

"Our exports would have been at a disadvantage," he said. "We would have had to (settle with) a GSP."

Under the GSP (or Generalised System of Preferences), CARI-COM's exports to the EU would be subject to tariff.

Additionally, the ambassador said, "we would have put at risk the remnants of the preferential arrangements with sugar and banana and we would have left ourselves open to challenge from other developing countries in the WTO (World Trade Organisation)."

Except for sustainable development, he noted that the EPA contained provisions for export expansion and diversification, increased investments, strength-ening institutional capacity, improving adjustment capacity and international competitiveness.

Bernal emphasised that the CRNM was not pressured to conclude negotiations for EPA, which replaces that section of the 2000 Cotonou Agreement dealing with trade. That component expired December 31, 2007.

Gradual opening

The EPA requires CARIFORUM - CARICOM plus the Dominican Republic - to open up 85 per cent of its market on a phased basis over 25 years to European goods, as opposed to Europe which is required, said Bernal, to fully open its market of some 450 million immediately to goods and certain services from the region.

He said the remaining 15 per cent, consisting of goods and services considered sensitive - 75 per cent of which is agricultural goods - is protected and therefore prevents competition from Euro-pean products.

Bernal contended that it was imperative that the region aligns its preferences, given the changing market dynamics.

"Preferences are being eroded, not only in Europe but CARIB-CAN, the specialised programme from Canada. It has been renewed for a couple years, but after that it's going to end," the trade am-bassador said.

john.myers@gleanerjm.com