David Jessop

In a matter of days, ministers from the Caribbean and Europe will meet in Brussels to try to resolve their differences over the scope of the Caribbean economic partnership agreement (EPA): The development-oriented free trade pact meant to come into force at the end of 2007.

This will not be easy. Although the two sides have been negotiating at a technical level for more than a year on the details, many matters of principle have yet to be resolved.

This is largely because of what the Barbados' Foreign Minister, Dame Billie Miller, described earlier this month as the "seeming disconnect" between the views articulated by senior officials of the European Commission and positions taken by their trade negotiators.

This, she suggested, highlighted the need for EU member states to become more involved in the EPA process.

Negotiators' Approach

This careful language refers to the sense in the Caribbean that while the European commissioners for trade and development have been speaking about EPAs supporting development and regional integration, this has not been reflected in the approach taken by their negotiators. At worst, the region sees the European position as mercantilist, reflecting its desire to open new markets; or at best, a naïve one-size must-fit-all approach to a region that contains nations at very different levels of economic development.

Speaking recently to the European Parliament, Jamaica's Minister of Foreign Affairs and Foreign Trade, Anthony Hylton, spelt out the matters of principle involved. A Caribbean EPA, he said, must facilitate regional integration while recognising that Cariforum is not as yet a seamless economic space. The design and phasing of the Caricom integration process must remain a matter for the Caribbean. It required Europe's respect and its recognition that regional integration could only be a gradual process.

Effective Assistance

For this reason, he argued, Europe must provide effective assistance that takes account, in a flexible manner, of regional variations and differing relationships. It was not reasonable for Europe to seek single Cariforum-wide commitments. Rather, the EU should recognise the variable geometry of the region and make resources available that meet the Caribbean's own development objectives.

The region wanted binding commitments on market access for goods and services; on rules in areas such as intellectual property; and, on European development cooperation. It was not prepared to agree to market access without there first being market building. Nor was the region without this willing to further liberalise its services sector or make concessions in areas of good governance in the face of European pressure.

This is not how the European Commission see matters. Shortly after Minister Hylton's remarks, the Trade Commissioner, Peter Mandelson, speaking in Luxembourg said that he was highly conscious of the difficulties involved in regional integration for some ACP states. He said that the EU would show the maximum flexibility, would come forward with substantial development assistance commitments, had no commercial agenda for ACP markets, and no aggressive liberalisation agenda.

Unfortunately, this politically correct language has not been matched by the substance of what Europe has so far offered.

The EPA negotiations are now moving into an intensely political phase in which it is unlikely that any significant progress is likely until Caribbean and European Ministers can agree a way forward with the European Commission which negotiates trade arrangements with little reference to EU Governments.

But if all of this was not difficult enough, an old issue in new clothes is about to emerge politically into the negotiations. It relates to the position of agriculture and in particular to sugar and bananas.

For the past few months it has been apparent in the region that countries that remain heavily dependent on agriculture and see a significant future for their sugar and banana industries have felt marginalised by the consensus and among trade negotiators that places the majority of the emphasis in the negotiations on what is sometimes described as the new Caribbean economy.

According to Renwick Rose, the Coordinator of the Windward Island Farmers Association (WINFA), there is a dangerous view in the region that agriculture is at an end with the development of services.

"We think it must not be one or the other. We have room for both and both must go forward. We are pinning our hopes on the service industry but it makes no sense if we continue to earn money from the service industry and it is draining out to pay for food imports," Rose said.

It is a view that will in a different way raise its head politically is in next weeks ministerial discussions in the context of both sugar and bananas.

As matters now stand there is an all-ACP sugar protocol with Europe that offers a declining guaranteed price and access within country specific quotas. Europe has not been clear on it future approach on sugar in an Economic Partnership Agreement but seems to want to disaggregate these arrangements by region and offer in the context of each EPA a regional quota possibly leading eventually to quota free access.

This might benefit Guyana, Belize and possibly Jamaica as each in different ways are seeking to reduce their production price and increase output. However, it is far from clear whether as a co-signatory to a regional EPA, the Dominican Republic will also seek the same level of access or how other ACP sugar producers would react.

In the banana sector there is presently a single tariff and quota arrangement for ACP bananas under arrangements that are now the subject of a new challenge from Ecuador at the World Trade Organisation. An EPA might seek to liberalise access at an all ACP level. However, given the increased competition that this would create, the result would be the continued erosion of the Caribbean market share in Europe.

What this suggests is that the unresolved position of sugar and bananas in an EPA may become highly contentious.

In London earlier this month, Belize's Prime Minister, Said Musa, made clear that an EPA must provide meaningful and enhanced market access to European markets for products of interest to the region.

The country's foreign minister, Eamon Courtenay, was more direct.

"Our fear is that we will negotiate an EPA that is acceptable on services, have a development chapter that is well supported but that the European Commission will not agree on a new basis for arrangements for agriculture within an EPA. We want country specific agreements and quotas that enable us to achieve our long term plans. Our objective is long term market access. For bananas, a tariff change alone is not a solution. We want a well managed regime. We do not want other ACP producers cutting up the market on an 'everything but arms' basis from which only the biggest producers will benefit. Europe and our negotiators must understand this," he said.

The EPA negotiations are now entering a critical phase. Draft texts are being tabled. The whole process will require political convergence at a regional and European level. Irrespective of progress in other areas, an EPA would have little value for tens of thousands of Caribbean farmers if it does not address fully the longer term developmental role of sugar and bananas.

David Jessop is director of the Caribbean Council. Email: david.jessop@caribbean-council.org