RNM UPDATE 0714
October 29, 2007
Prepared by the Information Unit of the Caribbean Regional Negotiating Machinery (CRNM), this electronic newsletter focuses on the RNM, trade negotiation issues within its mandate and related activities.
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THE
ECONOMIC PARTNERSHIP AGREEMENT: SCHEDULE OF NEGOTIATIONS
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CRNM CONVENES A REFLECTIONS GROUP MEETING
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WOMEN’S DEVELOPMENT AND THE
EPA
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NEWS BRIEF
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UPCOMING EVENTS
THE
ECONOMIC PARTNERSHIP AGREEMENT: SCHEDULE OF NEGOTIATIONS
Recent commentary in the media has given the misleading
impression that the CARIFORUM (CF) countries are being
forced by the European Union (EU) to conclude an Economic
Partnership Agreement (EPA) by the end of 2007. It implied
that this puts the Region’s negotiators at a disadvantage
and suggests that a more prudent course of action would be
to extend the duration of the negotiations. Its most extreme
exposition takes the form of the sound bite: “no agreement
is better than a bad agreement”. This is simply incorrect
and is a disservice to the negotiating structure, the apex
of which is the CARIFORUM Heads of Government. The mandate
to the negotiators as repeatedly reiterated by the Ministers
and Heads has been to finish the negotiations on the
schedule mutually designed and agreed to by the CF and the
EU. The rationale of these instructions is that the Region
would be worse off without an EPA in place on January 1,
2008, and that completion at a later date would put the
region in a disadvantageous position.
Current Arrangements
The current arrangement is based on the Cotonou Agreement
that was signed in 2000 after the expiration of Lome IV. It
provided a framework of political and economic partnership
between the African, Caribbean and Pacific countries (ACP)
and Europe, and was designed to provide the foundation on
which to construct a WTO compatible trade agreement, namely
the EPA. The EPA negotiations present opportunity to craft a
trade arrangement with an important historical trading
partner, complemented and supported by development
cooperation to assist in meeting the costs of adjustment,
implementation and international competitiveness.
The political circumstances that allowed the preferential
arrangements which were the core of the Lome agreements and
the Cotonou Agreement have changed dramatically. This is
graphically illustrated by the erosion of the EU sugar and
banana regimes at the behest of developing country members
of the WTO. Therefore, achieving the EPA is fundamental to
CARIFORUM interests of repositioning these economies in a
new global context. In light of these considerations,
CARIFORUM Member States, since inception of the EPA
negotiation process some five years ago, have been
systematically engaged in a calculated exercise to
capitalize on this opportunity to evolve a new trading
relationship with Europe to promote the sustainable
development of CARIFORUM including the strengthening of
regional integration.
Negotiating Structure
The Region, despite its size and financial constraints, has
deployed a world-class team of negotiators who, utilizing
the technical advice of the Caribbean Regional Negotiating
Machinery, are directed by mandates stipulated by the Heads
and are supervised by Trade Ministers. The negotiating
positions are formulated through a thorough, transparent and
intensive consultative process involving technical working
groups, which include participation from Member States,
regional institutions, the private sector, academics,
technical experts and civil society.
Completing Negotiations on Schedule
If an EPA is not in place by the 1st January,
2008 the CARIFORUM countries would have to conduct trade on
the basis of the EU’s GSP regime, which is less advantageous
because its product coverage does not include several
important CF exports and some other exports would incur
tariffs. Completing the negotiations on schedule allows the
Region to avoid operating under the GSP scheme.
The possibility of extending the duration of preferences has
been suggested. However, the WTO waiver, which permits
access to the current preferential provisions of the Cotonou,
will expire on December 31, 2007. The Cotonou Agreement
itself acknowledges the expiration of these preferences at
the end of 2007. After this time, it will not be possible to
activate a temporary extension of a WTO waiver for a trade
regime that has ceased to exist. To extend access to the
current trade regime, the ACP and the EU would have to agree
to the establishment of a new Protocol to resuscitate the
trade regime before a new waiver could be sought. Reaching
such an agreement would take some time to achieve and it
would be difficult to secure passage except on the basis of
reciprocity.
Even if all this was implemented, successfully attaining the
waiver would be improbable in an international political
environment, where other countries, including non-ACP
developing continually seek to ‘level’ the playing field by
dismantling preferential trade arrangements. Mobilizing
adequate international support for another waiver is highly
unlikely.
CARIFORUM’S Situation
While these realities are common to all ACP States alike,
the consequences of not having an EPA in place by the end of
2007 are not equal for all ACP States. Failure to establish
an EPA will inevitably lead to the implementation of the EU
Generalized System of Preferences (GSP) in 2008. In the
absence of an EPA, African States, most of which are
classified as Least Developed Countries (LDCs), will
continue to benefit from non-reciprocal preferential access
to the European market under the special ‘Everything but
Arms’ arrangement under the GSP scheme. From the African
perspective, this may be regarded as satisfactory until an
EPA is established. It is well documented that CARIFORUM
States with the exception of Haiti, which are not classified
as LDCs, face no such acceptable alternative under the GSP
system. Therefore, for CARIFORUM in particular, the
necessity of meeting the deadline for the completion of the
EPA is pragmatic and does not emanate from pressure from the
EU.
The Challenge
While establishing an EPA in accordance with the negotiating
schedule is in the interest of CARIFORUM, achieving this end
is a serious challenge. However, failure is not an option.
Resolving the outstanding issues in time is not only
desirable but attainable. Furthermore, the prospect of
completing the negotiations is enhanced by the current
political will on both sides to achieve an EPA of mutual
interest.
CRNM CONVENES A REFLECTIONS GROUP MEETING
A CRNM EPA Development Reflections Group
Meeting was convened on Thursday, 25 October 2007 in
Jamaica. The Meeting convened regional
development experts to
discuss the issues of development and the EPA. Principal
participants included the
renowned Caribbean academic and intellectual,
Sir. Alister McIntyre;
Director of the Friedrich Ebert Stiftung (FES)
in Jamaica,
Judith Wedderburn; and
President of the Caribbean Association of
Industry and Commerce,
James Moss-Solomon.
Member States, in their approach to
development in the EPA, have also focused on the negotiation
of an agreement which is infused with provisions that
specifically address the very tenets of development within
each subject –specific discipline in the Agreement.
CARIFORUM was also able
to secure a commitment from the EC, as expressed by the
Joint Statement of the III CARIFORUM-EC Ministerial
(November 2006), to deliver funding support for development.
This agreement allows for the specific identification of
CARIFORUM development priorities in each relevant technical
discipline to be supported by EU-funded programmes designed
to address identified needs.
CARIFORUM
Member States thought that it would be
further critical for the EPA to include a specific
development ‘chapter’ that would further expressly
contextualize development at the very apex of the
Agreement. It has been agreed between Parties, ad
referendum to craft a ‘chapter’ to establish provisions
on sustainable development, regional integration,
development cooperation or funding, international
cooperation, and monitoring.
The Reflections Group Meeting was designed to
engage CARIFORUM constituents in further consultation about
the adequacy of the provisions of the Development Chapter
and to provide opportunity to input recommendations on the
expansion of the Chapter’s provisions.
The recommendations that emanated from the
Meeting will be presented this week for review and
discussion to the CARIFORUM Technical Working Group by
CARIFORUM’s Principal Negotiator, Ambassador Richard Bernal.
WOMEN’S
DEVELOPMENT AND THE EPA
A fundamental theory in international
economics is that trade leads to wealth creation and welfare
gains. Trade liberalization facilitates trade amongst
nations by removing the barriers to trade such as import
tariffs. Thereby, businesses and consumers alike benefit
from the resulting improvement in economic efficiency and
overall productivity gains.
However, for developing countries free trade
is often not enough to help these countries mitigate the
factors that challenge their ability to be competitive in
the international trading environment, and therefore, their
capacity to reduce poverty and secure economic growth. In
short, for developing countries especially, free trade on
its own does not secure sustainable development. It follows
that Free Trade Agreements (FTAs), which tend to be focused
primarily on trade liberalization, are inherently limited in
their potential as development tools for developing
economies.
The realization of economic efficiency,
brought about through trade liberalization, creates gains
but causalities as well. At the level of the firm, the
‘winners’ are comprised of those that successfully adapt to
increased competition and the ‘losers’ tend to be those that
are displaced because of chronic inefficiencies. The process
of ‘weeding out’ the inefficient affects the division of
labour and the allocation of labour, and could result in the
restructuring of labour markets where shifts may occur in
the allocation of labour from small to larger firms, and
from less productive sectors to highly productive sectors.
While theoretically this effect of trade
liberalization results in the efficient allocation of
resources across productive sectors, it is often challenging
for an economy to completely reabsorb displaced labour. The
resulting unemployment left unmanaged could eventually
compromise productivity and economic growth. In developing
countries especially, it is critical that the negative
effects of trade liberalization are managed to prevent
economic destabilization.
Gender inequalities that may be inherent in
the division of labour and the allocation of labour, add
dimension to this challenge, as trade liberalization affects
men and women differently. In Caribbean societies, where
women tend to less capable of adapting to economic change
because of differentiated and unequal access to and control
over resources, the labour market and governance systems,
women are more at risk of becoming the ‘losers’ of trade
liberalization. The concerns about the relationship between
women, development and FTAs are therefore legitimate.
In contrast to FTAs however, the Economic
Partnership Agreements (EPAs) being negotiated between with
the African Caribbean and Pacific (ACP) States and the
European Union (EU), though also based on trade
liberalization, transcend the limitations of ordinary FTAs
because of the additional focus on sustainable development.
The EPAs, as economic trade tools, are designed to help
fulfill one of the objectives of the Cotonou Agreement which
is to facilitate the
“smooth and gradual integration of the ACP
States into the world economy, with due regard for their
political choices and development priorities, thereby
promoting their sustainable development and contributing to
poverty eradication in the ACP countries.”
Common approaches to development assistance
between developed and developing countries tend to
facilitate cooperation through the establishment of funding
instruments in support of development. The EPA will provide
for the allocation of funding instruments to support
CARIFORUM development vis-à-vis the implementation of the
EPA. However, the CARIFORUM approach to EPA development
issues has gone beyond this provision for development
cooperation. It has additionally focused on the negotiation
of an agreement which is infused with provisions that
specifically address the very tenets of development within
each subject –specific discipline in the Agreement.
The CARIFORUM approach to the EPA is
therefore comprehensive – incorporating complementary
mechanisms designed to mitigate the trade liberalization
adjustment challenges and the costs of implementation facing
the region; programs to address constraints that impede
capacities in competitive production; and financial
instruments to address specific EPA related development
priorities.
In addition to this development infusion,
CARIFORUM has successfully negotiated, ad referendum,
the inclusion of a development chapter establishing
provisions on sustainable development, regional integration,
development cooperation or funding, international
cooperation, and monitoring.
When holistically implemented, the EPA
because of its core emphasis on development as outlined,
could significantly help women overcome inequalities that
challenge their ability to benefit from trade
liberalization. Moreover, it is expected that both the
Preamble of the EPA as well as the provisions of the
development chapter, will expressly acknowledge the need
integrate gender-sensitive approaches and the
need to provide
support to address gender inequalities.
A gendered analysis using a
human rights approach, though having its limitations, is
useful here to illustrate some of the ways the EPA will
address the needs of Caribbean people, including women.
Using this approach,
three major needs of women have been identified which
are security – food and access to basic services; effective
participation in the labour market; and participation in
decision making/governance. These rights, as expressed by
the International Covenant on Civil and Political Rights,
the International Covenant on Social, Economic and Cultural
Rights, and the Convention on the Elimination of All Forms
of Discrimination Against Women, have been identified as
critical to the full participation of women in the economy.
Security
Basic access to essential services and food
security are linked to maintenance of health which is
essential to the productive participation of human labour in
any economy. In the EPA,
food security has been protected by the
provision for the inclusion of a safeguarding mechanism
which allows CARIFORUM’s tariff schedule to be recalibrated
in the event that access to foodstuff essential to food
security is compromised. In addition to this, the EPA
provisions on intellectual property related to plant
varieties will ensure that Member States can establish
certain limitations to the exclusive rights of plant
breeders. These exceptions not only protect small farmers by
allowing them to save and use protected farm saved feed or
propagating material, but they would enhance the safeguard
of food security as well.
Furthermore, it is expected that the
economic gains attained through the application of the EPA
could help governments improve the management of the
deployment of basic services such as health, sanitation,
water and energy.
Effective Participation in the Labour Market
The EPA is designed to extend and improve the
level of market access for CARIFORUM exports to the European
market. However, market access is not enough to attain
economic growth through trade. Therefore the EPA facilitates
the necessary cooperation with Europe to assist Caribbean
industries development competitively and improve scientific,
technical, human and institutional capabilities, which would
enable firms to benefit from the improved market access.
Women, in as far as they are involved the
labour force, stand to benefit significantly from these
improvements in productive capacities which tend to lead to
the increase in the number and quality of job
opportunities.
The EPA itself cannot manage the removal of
restrictions that may impede the inclusion of women in the
productive labour force. Rather, this is largely the remit
of Member States and requires continuous social dialogue and
adaptation. However, the EPA will include provisions that
acknowledge that economic growth should not come at the
expense of social development. Therefore it will expressly
recognise the principles enshrined in core labour standards
and the decent work agenda, including the principle of
non-discrimination with respect to employment. These
provisions in the EPA will help to ensure that women, as a
vulnerable group, are included equitably in the process of
human capital building.
Additionally, the EPA provides new
opportunities for sectoral growth for both established and
emerging industries. In established industries like
agriculture, women as well as men play critical roles.
However as FAO studies indicate, despite their contribution,
women are the least to benefit from development processes in
agriculture because of gender bias and latent gender
blindness which permeate policy development and planning.
Furthermore, women tend to be more at risk to employment
displacement as a result of restructuring to enhance
competitiveness.
In the CARIFORUM EPA negotiations,
agriculture has been treated with significance especially
because of the relationship between traditional export
commodities like sugar, rice and bananas and the viability
of CARIFORUM societies and economies. Though it has been
recognised that transformation of these sectors is necessary
to improve production capacities, such processes have been
treated with a high degree of sensitivity, with special
consideration to highly vulnerable groups such as small
farmers. Enhancement in production capacity of these
traditional export sectors and even non-traditional export
sectors would be greatly enhanced if women in particular
have equitable access to agricultural inputs, technology and
training. The EPA, in its Chapter on agriculture, will make
provisions to establish the improvement of CARIFORUM
production capacity through, inter alia, innovation,
training, financial assistance and investment promotion, and
thereby, facilitate entry points for women’s development and
retention within the agricultural sector.
The area of services is another example of
prospects for women in the labour market. The EU has tabled
access to a wide range of services sectors including
contractual services. Furthermore, CARIFORUM independent
professional services providers who are graduates have also
been given access. Graduate trainees also have opportunities
for internships in the European Union.
While this level of services access goes
beyond the commitments made by the EU in the GATS in some
instances, CARIFORUM negotiators are currently seeking
special provisions on sectoral development
vis-à-vis
the tourism industry and the promotion of
cultural industries, including access for entertainment,
recreation and sports services, which are principal
developmental sectors for most CARIFORUM economies. Securing
these provisions would allow these economies to realise
tangible benefits in these services sectors throughout the
life of the Agreement.
The
tourism sector
in the Caribbean is a primary employer of women. Like many
other Caribbean productive sectors, it is affected by both
horizontal and vertical gender segregation. Horizontally,
women and men are placed in different occupations – women
tend to dominate roles as chambermaids, waitresses and
flight attendants and men dominate roles as gardeners,
bartenders, and pilots. Vertically, lower level occupations
with lower wages and little upward mobility are dominated by
women. In contrast higher level occupations attracting
higher wages are dominated by men. The sustainable
development and promotion of this sector, could facilitate
higher returns which can be distributed along all levels of
the supply chain of this and related sectors, and enhance
the income generation, employment and business prospects for
women in tourism.
The cultural services sector is also an entry
point for the employment of women including self employment.
However, as noted in the
literature, in underdeveloped cultural services
industries in the Caribbean, export opportunities for
cultural practitioners are constrained by, inter alia,
deficiencies in packaging and branding of
cultural products, weak marketing and distribution channels,
and historical, institutional and commercial bias against
indigenous content in the home market that stunts local
entrepreneurship, investment and market development.
Cultural practitioners, because of these export constraints
facing the industry, tend to operate within the
informal sector, which overall is a larger source of
employment for women than men. Given the documented
relationship between the employment of women in the informal
sector and the perpetuation of poverty, the successful
negotiation of development opportunities for cultural
industries within an EPA could significantly assist the
elimination of poverty, particularly amongst women.
Participation in decision making and
governance
Gender inequalities have often engendered the
exclusion of women from decision making processes, including
those pertaining to trade negotiations. The CARIFORUM EPA
negotiations process, as designed by Member States,
facilitates the best possible negotiating position. As such,
consultations at all levels of the negotiations process, has
been transparent and inclusive – facilitating crucial input
from the private sector, civil society and governments. The
resulting CARIFORUM negotiating positions are reflective of
these positions, especially accommodating considerations for
critical and vulnerable sectors, industries, and societal
groups.
Beyond the negotiations phase, inclusivity
and transparency have been further incorporated as
fundamental principles of the EPA process. The provisions
for the monitoring of the EPA within the development chapter
will provide for the establishment of regular evaluation of
the EPA based on development benchmarks to assess its
efficacy as a tool to assist the achievement of sustainable
development and the eradication of poverty. The assessment
of these benchmarks should include gendered analyses, and
the results could be used to re-shape of the Agreement’s
provisions if the primary benchmarks are not attained. The
participation of the full gambit of interests groups, within
the Region’s civil society and the private sectors will
therefore be critical to this process.
Conclusion
The preceding highlights some instances
illustrating that the EPA, when holistically implemented,
will present opportunities for the economic development of
women. The extent to which this is achieved in practice will
depend considerably on the degree to which they are
integrated within the productive labour force. National
Governments and development interests groups must cooperate
more during the planning of national policies to resolve
gender inequalities which impede the inclusion of women.
Furthermore, such cooperation will be essential during the
monitoring of the EPA to ensure that gendered analyses, as
well as other important considerations are incorporated in
the EPA evaluation. Continual research and dialogue will of
course be necessary complements to this exercise to ensure
objective, fact- based assessment influences the EPA
implementation process.
NEWS BRIEFS
Regional News
CRNM DG Updates the Jamaican Private Sector on the EPA
Director
General of the CRNM, Ambassador Dr. Richard Bernal, met with
the top leadership of the Jamaican Private Sector on Tuesday
October 23, to discuss the business implications of the
economic Partnership Agreement (EPA) with the European
Union. The meeting included representatives from the Private
Sector Organization of Jamaica, Jamaica Exporters
Association, Jamaica Manufacturing Association, Small
Business Association of Jamaica, Jamaica Chamber of Commerce
and a number of company representatives. The meeting,
chaired by Ambassador Ellen Bogle, laid out concerns about
the pace at which the region was negotiating the EPA, and
the anticipated benefits of being the first region amongst
the ACP states to finish negotiations.
CARICOM–Canada Trade
Negotiations Proceed
On Thursday October 18, 2007, CARICOM and
Canadian Chief Negotiators convened a negotiations meeting.
This was the first meeting held since the official launch of
negotiations in Barbados in July this year. The objective
of the meeting was to review the scope of the negotiations
and to discuss a preliminary plan and schedule for
negotiations. CARICOM was represented by Chief Negotiator,
CRNM Director-General Ambassador Dr. Richard Bernal. Canada
was represented by their Chief Negotiator and former High
Commissioner to Jamaica, Kathryn McCallion.
International News
WTO Hearings on Banana dispute opened to the
Public
At the request of the parties in the
dispute “European Communities — Regime for the Importation,
Sale, and Distribution of Bananas: Recourse to Article 21.5
of the DSB by the United States” (DS27), the compliance
panel has agreed to open its meeting with the parties and
third parties on Tuesday, 6 November 2007, and Wednesday, 7
November 2007, for observation by WTO Members and the
general public at the WTO in Geneva.
At the request of the parties in the
dispute “EC — Bananas” dispute (complaint by the United
States, DS27) the compliance panel has agreed to open its
meeting with the parties and third parties on Tuesday, 6
(am) and Wednesday, 7 November 2007, for observation by WTO
Members and the general public at the WTO Headquarters in
Geneva. The public sessions are expected to start at 10 a.m.
and finish at 1 p.m. on Tuesday, 6 November and to
re-commence at 11 a.m and conclude during the afternoon of
Wednesday 7 November.
Brazil expresses optimism about WTO talks
The G20 group of developing nations will hold a high-level
meeting next month to discuss proposed changes to tariffs on
farm and industrial goods that are proving the main
stumbling block for the current round of global trade talks,
Brazil's foreign minister said Wednesday.
Celso Amorim, Brazil’s Foreign Minister, expressing optimism
that a deal can be reached in the Doha negotiations, has
encouraged the other members of the G20 to engage and
participate in this upcoming meeting.
UPCOMING EVENTS
November
30 – 2 13th TNG on EPA Market
Access on Services, Kingston
05&07 WTO Trade Policy Review Body – OECS
05-09
CARICOM-Central America Trade
Negotiations, El Salvador
06
WTO Committee on Trade and
Development – session on Aid for Trade
12
Meeting
of CARIFORUM/DOMs/OCTs Task Force on Trade and Investment,
Barbados
12-16 Government of Mexico and OAS Dept
of Trade, Tourism and Competitiveness, Seminar on
Administration of Free Trade Agreements in the Area of
Services, Puebla
19-20 Meeting of COTED Officials,
Georgetown
22-23 Twenty-fourth Meeting of the COTED,
Georgetown
19-23 GENEVA WEEK
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For More Information Contact:
Marsha Drakes
Programme Officer-Trade Information
Caribbean Regional Negotiating Machinery (RNM)
3rd Floor The Mutual Building
Hastings Main Road
Hastings, Christ Church, Barbados
Tel: (246) 430-1678
Fax: (246) 228-9528
marsha.drakes@crnm.org
Previous issues of RNM UPDATE are archived on and can be downloaded from the RNM website:
http://www.crnm.org/rnm_updates.htm
The ‘RNM DRAFT CALENDAR 2007 ', that provides an account of hemispheric and multilateral trade meetings, is available on the RNM website.
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