CARIFORUM Economic Partnership Agreement (EPA) Negotiations

CARIFORUM-EU Negotiations as at May 2005

As regards CARIFORUM-EU Economic Partnership Agreement (EPA) negotiations, the Region is engaging the EU at the technical level in the Regional Integration phase. 

Since the launch of CARIFORUM-EU negotiations in Kingston in April 2004, both sides have met twice at the level of Principal Negotiators (July 15 in Brussels in the context of Phase I and November 12 in Barbados during Phase II – the regional integration phase).

In Phase II two main objectives are being pursued, namely, (a) defining the nature of the respective CARIFORUM and EU economic spaces that will assume commitments under an EPA, and (b) identifying the priorities of CARIFORUM regional integration to be supported by an EPA. This Phase also provides important insights into Phase III negotiations, which will focus on market access.

In the current phase of EPA negotiations, technical sessions have been held on Regional Market Access Issues (in Kingston on December 17 to 18, 2004 and in Brussels on March 30 to 31, 2005) and on Regional Services and Investment (in Antigua on April 25 to 26, 2005).  In this process the RNM and the CARICOM Secretariat, in particular the Single Market Unit, as well as representatives of the Dominican Republic, have collaborated very closely both in coordinating CARIFORUM’s positions and in the joint exchanges with the European Commission.

In keeping with the Joint Plan and Schedule, one more technical session on Trade-related areas will be held (in Brussels on May 17 to 18) in Phase II, to be followed by the Second Meeting of the CARIFORUM-EC Regional Preparatory Task Force (RPTF) (May 18 and 20) and the Third Meeting of Principal Negotiators, May 20. The latter meeting will review progress in Phase II, and prepare the way forward.

This phase will conclude in September 2005 with the Fourth Meeting of Principal Negotiators (September 15) and a CARIFORUM-EC Ministerial meeting September 16, in St. Lucia.

Background

There are four phases to the schedule of EPA negotiations that will guide interchange between CARIFORUM and the EC, namely: I) Initial Phase: Establishing the Priorities of EPA Negotiations (April 2004 to September 2004) – the objective of this phase is to establish an understanding of the fundamental concerns and interests of EPA negotiations for both CARIFORUM and the EC; ii) Second Phase: Convergence on strategic approach to CARIFORUM regional integration (September 2004 to September 2005) – the aim of EPA negotiations during this phase will be to establish a common understanding on the priorities for support of Caribbean regional integration, and the targets to be attained by the time of the commencement of implementation on January 1, 2008 and beyond; iii) Third Phase: Structuring and consolidating of EPA negotiations (September 2005 to December 2006) – the objective of this phase of negotiations is to consolidate the discussions and channel the points of common understanding into elements of a draft EPA; and, iv) Final Phase: Finalisation (January 2007 to December 2007) – negotiations during this final phase should concentrate on consolidating the results of the negotiations and completing the EPA negotiations by the end of 2007.  

The ACP-EU Partnership Agreement (Cotonou Agreement), signed in Cotonou in June 2000, establishes a comprehensive framework for ACP-EU relations. At the centre of the partnership are economic development, the reduction and eventual eradication of poverty, and the smooth and gradual integration of ACP States into the world economy. In order to accomplish these objectives, the Cotonou Agreement provides for the conclusion between the Africa Caribbean Pacific (ACP) and the EU of new World Trade Organisation (WTO) compatible trading arrangements. The process began with engagement at the All ACP-EC level.  Negotiations for a CARIFORUM-EU EPA were launched in Kingston, Jamaica, April 16, 2004.

For the purposes of these negotiations, the Caribbean Forum of ACP States (CARIFORUM) represents the regional configuration of the following countries – Antigua and Barbuda, The Bahamas, Barbados, Belize, Commonwealth of Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago.

Africa Caribbean Pacific (ACP) countries and the Euro-pean Union (EU) are negotiating Economic Partnership Agreements (EPAs).

When did they Begin?

EPA negotiations were launched in September 2002.  Negotiations toward EPAs are targeted to come to a close by December 31, 2007. 

What are EPAs?

EPA negotiations are aimed at concluding WTO-compatible trading arrangements that will be introduced gradually, removing progressively barriers to trade and enhancing co-operation in all areas relevant to trade. 

EPAs represent the trade component of what is called the Cotonou Partnership Agreement (CPA) .  The CPA was signed in 2000 and is set to enter into force on 1 April, 2003, having attained the required number of ratifications (52 on the ACP side and 15 on the EU side).  The Partnership constitutes a template for a ‘new' relationship between the ACP and Europe for the next twenty years.

The CPA replaces development and trade relations that previously existed for a quarter century through a series of Lomé Conventions .   These Lomé Agreements afforded non-reciprocal trade preferences to the ACP Group.

EPAs will take the place of the conventional preferential trade regime that had enabled non-reciprocal access to the EU market by ACP Countries. The objectives of EPAs, as enshrined in Article 34 of the CPA, is the eradication of poverty, the gradual integration into the global economy and sustainable development of ACP countries.  These objectives will be pursued in a manner supportive of regional integration efforts in the ACP Group.

When on stream EPAs will comprise enhanced ‘development-oriented' reciprocal trade agreements between ACP regional groupings and the EU.  These agreements will include special and differential and asymmetric treatment to take account of the varying levels of development of the ACP Group. 

How are Negotiations Conducted?

Both the ACP and EU agree that negotiations will take place in two phases.  There is an all-ACP phase or Phase I ( covering subjects of common interest to ACP countries ) and Phase II, that has been described as a ‘regional' phase.  The first phase could extend until September 2003 when more substantive negotiations for Phase II could begin.

Negotiations will be conducted at two levels, namely Ministerial and Ambassadorial. At Ministerial level, meetings take place between the ACP Council of Ministers (which takes on the political leadership of negotiations) and EU Trade Commissioner Lamy who may be accompanied by other Commissioners. On the ACP side, Ministerial Spokespersons address the six negotiating subjects and would thus vary according to the issues under discussion. At Ministerial level the Caribbean Region is lead Spokesperson on Services (Barbados) and Alternate on Development Co-operation (Trinidad and Tobago) and on Trade-related Issues (Jamaica).

At Ambassadorial level, the main meetings generally are at the plenary level with the Chairman of the Committee of Ambassadors as the Spokesperson on the ACP side. Each of the six ACP Ambassadorial Spokespersons lead the discussions on the ACP side. At Ambassadorial level, the Region is Lead Spokesperson on Legal Issues (Haiti) and Alternate on Market Access (Eastern Caribbean States) as well as on Agriculture and Fisheries (Guyana).

The Experience of the Six Months since Negotiations Started 

The experience, as of March 2003 since the launch of negotiations, has been one where too much attention to procedural aspects of negotiations has bogged down the process.  This has resulted in little discussion of substantive issues. Owing to the slow pace of EPA negotiations some ACP countries are now questioning the advisability of launching Phase II negotiations at the level of ACP regions. 

Areas of Divergence with the EU

Differences remain between the ACP and EU.  Namely, on the issue of ‘phasing' (allied to which is the issue of ‘geographical configuration' – reference to regional groupings to be formed amongst ACP Countries to pursue EPA relationships with the EU); time lines of the negotiation; and, the substance of issues to be discussed. 

In addition, there is no convergence, between the two sides, on whether Phase I should be a ‘legally binding all ACP-EU Agreement' at the end of Phase I or a mere understanding. This derives from fundamental differences in conception of the purpose of the first phase on the part of each side.  A position that does not auger well in this regard is Commissioner Lamy indicating that the EU would not refuse to enter into negotiations with any region if they are ready prior to Phase I coming to an end.

The Caribbean Perspective on EPAs

In negotiating EPAs the Caribbean is not pursuing a traditional free trade area.  Rather, EPA negotiations are about jointly seeking new ways of bringing our economic relations into line with changing realities; realities which promote our development and facilitate our further cooperation.

For these EPA negotiations to have meaning, they must make a net contribution to our economic growth and development.  Development must be the focus of EPA negotiations such that they go beyond issues of financial and technical assistance to embrace regulatory aspects of the agreement.   

The ACP Group has the responsibility of devising proposals in the context of EPAs that will make a real difference to their economic prospects.