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Expectations for the December 2005 WTO
Ministerial were scaled back just weeks ahead of its convening.
Agreement was however reached at that meeting and in some cases
long-standing differences were bridged. Widely touted as a key
achievement was agreement on a deadline of 2013 to eliminate all
trade-distorting agricultural export subsidies. But such high
profile compromises obscure some inconvenient facts. Namely,
the overall agreement was decidedly modest, postponing key
decisions on market openings, as well as a detailed framework.
Major differences abound, especially on balancing market
openings in Agriculture with those in industrial good. Therefore
it was not surprising that the ambitious agenda to arrive at
modalities in both Agriculture and non-agricultural market
access by the initial deadline of April 30 2006 negotiations was
proven impossible. The result was a complete breakdown of the
negotiation process in July 2006.
For the Caribbean, there was a deep sense of
disappointment with the conduct of global trade
negotiations. Already strained by the modicum of progress
spanning several years of negotiations, the WTO negotiating
agenda reflected a bias towards the interests of developed
countries. On the one hand, the Region has been eager to
participate in a process that was supposed to have placed the
interests of such small, vulnerable countries at its centre. On
the other, the Caribbean has had to confront a negotiating
agenda hamstrung by issues of importance to the big players,
which have placed at risk efforts to anchor development issues
in the negotiating agenda.
In retrospect, the outcome of the 2005
Ministerial, which then appeared to have salvaged WTO
negotiations, injected fresh momentum, however modest, in an
otherwise lackluster process.
But the fact is, that Ministerial represented
only a small step on the long road to the completion of the Doha
Round; and disturbing still is that the calculus of the
trade-offs that prevailed at the Ministerial were such that the
interests of much
smaller
countries in the negotiating agenda were largely dismissed. The
process of forging consensus that reflects a
balanced
outcome post-Hong Kong, therefore, still faces an
uphill battle.
The resuscitation of the stalled negotiations
must be prioritised in order to move the development agenda
along. The real watershed for Doha Round talks, if it
materializes, will be a demonstrated commitment to advancing the
interests of the WTO’s smallest, most vulnerable Members;
importantly, rectifying the ‘development deficit’ that has
stained these talks since their inception.
Commodities under Fire, Region Looking Ahead
Difficulties with Doha negotiations notwithstanding, the Region
now confronts a situation where two of its key agricultural
commodities face an uncertain future, further to fomer WTO
rulings in regards to Sugar and Bananas. Times are unfavourable
for preferential trade regimes. Therefore the Region has been
left to confront a situation where in the case of the two
industries, tens of thousands of farmers are at risk of
displacement, and economies put under even more strain.
Amidst all this, the Caribbean is undeterred. The perils that
confront the Region in its external trade policy undertakings
only deepen the resolve of this small grouping of countries to
press ahead with their trade interests.
The Region has clear offensive interests in this regard, that it
is eager to advance. The Caribbean’s future is in Services, and
there is a commitment in the Region to foster mature and
competitive service economies. The composition of trade with
respect to the Caribbean has changed over the last decade,
increasingly away from goods towards services. Merchandise
exports as a percentage of total exports of Caribbean countries
(with the exception of Trinidad & Tobago and Haiti) have fallen,
a trend particularly pronounced for most of the Organisation of
Eastern Caribbean States (OECS). For the Dominican Republic,
Jamaica and Haiti, apparel exports have retained an important
place in their respective economic landscapes, however the
decline in merchandise exports is a trend that has taken root in
the Region, partially compensated by the steady increase in
services exports, primarily tourism.
There is a commitment in the Region to advance investor-friendly
regimes and improve the overall business environment in the
Caribbean. In this vein, efforts by those Member States party
to the CARICOM Single Market and Economy (CSME) to forge ahead
with the CARICOM Single Economy, now that the Single Market has
been established, are critical.
The key is for the Region to
restructure
and
reposition,
to enable it to successfully meet its development goals, and the
CSME is crucial in this effort. Now more than ever, CARICOM
Member States must build on and take advantage of the synergies
that exist between the Single Market initiative and the wider
Region’s external trade efforts, so as to consolidate
negotiating positions.
Negotiations with the EU at Advanced Stage
Critical to shaping the nature of the respective economic spaces
that will assume EPA commitments on January 1, 2008 are efforts
to strengthen the regional integration process between CARICOM
Member States and the Dominican Republic. This integration is
being facilitated through the framework of the CARICOM-Dominican
Republic Free Trade Agreement (FTA), under which the Region is
committed to progress in those issues which constitute the
Built-in Agenda of the Agreement.
With a total of four phases, the third phase of EPA negotiations
was launched in September 2005. This phase is characterised by
a qualitative shift in focus and specificity of the EPA
negotiations where the structure and scope of the EPA is defined
according to approaches to trade liberalization and the
promotion of sustainable development in CARIFORUM.
Moving Ahead with Bilateral Trade Arrangements
CARICOM and Mercosur are poised to advance a bilateral trade
arrangement, further to exploratory meetings between the two
parties in 2005. As regards the engagement of CARICOM and
Canada in a free trade arrangement, divergences in the
approaches and levels of ambition of the two sides need to be
addressed, in order for negotiations to advance.
Passage of the Central American Free Trade Agreement (CAFTA) by
the US Congress marked a milestone for CRNM Member State the
Dominican Republic, as regards its trading relationship with the
United States. The Dominican Republic’s legislature in turn
ratified the Agreement, with the trade pact being touted by the
Dominican Administration as holding the potential to attract new
investment to the Dominican Republic and catalyze exports. The
DR, after an arduous process of legislative reform, was finally
considered compliant in CAFTA implementation in March 2007.
Priorities for 2007
Looking ahead, 2007 will present challenges for
Caribbean trade policy, not just because of the sheer volume of
consultations and negotiating sessions on the Caribbean’s
negotiating roster, but notably because many of the arrangements
(especially the EPA) it is involved in are at critical stages.
Consistent with their mature state, the Region
will be prioritizing these negotiations in 2007. In this vein,
the CRNM’s work programme will be similarly focused. |
