Caricom trade negotiator Ambassador Richard Bernal. - File Lavern Clarke, Business Editor
A new trade pact with Europe will likely emerge by year end, given pro-gress on the negotiations, says top regional expert Ambassador Richard Bernal.
But the true test of whether the final CARIFORUM-European Union pact will bring the region any market advantage - whatever the market concessions built in - will rest on how well the private sector utilises the transitioning periods being built into the Economic Partnership Agreements (EPA) to reposition industries and companies, and to seek out winners.
"We can negotiate market access," said Bernal in a Financial Gleaner interview Wednesday, "but we also have to be ready to compete."
In fact, Bernal the diplomat while alluding to - but not fully defining - banana and less so sugar as "sunset" industries, said the potential in those sectors is in the valued-added products.
Within the EPA, the talks range across development assistance, market access, services and investment, the specificities of competition/procurement/data protection policies, and legal and institutional issues linked to complaints and dispute settlements.
One phase of the technical negotiations centre on refining what Bernal called different "baskets of liberalisation", which will define the timelines - ranging from zero to about 25 years for different foods and services ?— under which countries will get to adjust to reduced tariff structures.
But, said the trade ambassador, in a warning to the private sector: "If you can't adjust in 15-20 years, you are dead."
But Jamaica's private sector also has its own concerns about limitations on market access resulting from government and state inaction.
Douglas Orane - one of the most influential corporate bosses and head of Jamaica's largest conglomerate measured by revenues and assets, GraceKennedy Limited - said Wednesday that his company continues to face non-tariff barriers for pork products and Tastee cheese entering Europe.
The barriers pertain to health standards, according to GraceKennedy staff, who said that while the company's factories are HACCP compliant, the government had not finalised the standardisation programme to unfetter exports.
Protection
Part of the trade EPA negotiation process involves the creation of different lists of goods the parties want protected from competition, those requiring special provisions to allow for readjustments, such as sugar.
The CARIFORUM group includes Caricom andDominican Republic. Cuba is not a participant in the EPA.
It's understood that the Caribbean's list of exclusions initially covered about half its current trade with Europe, but there is a recognition that the list needs to be culled to a more reasonable level.
The European Union is Latin America's second most important trading partner. Exports to the EU in 2005 were valued at ?70.9 billion, and imports ?62.2 billion, according to European Commission figures.
Jamaica's own trade figures, compiled to 2003, recorded exports to the United Kingdom and European Union combined at US$358.4 million, while imports were larger at $384.8 million.
Bernal does not comment on specifics of negotiations but Financial Gleaner sources with knowledge of the process say one of the challenges facing the regional negotiating team is the protectionist stance adopted by the European Union over its services industries, the area in which the region has some of the best opportunity for markets - current and future.
"There are a lot of services that Europe wants to be protectionist on," said the trade source. "But they want us to open up financial services and telecoms."
Bernal's only comment on the technical aspect of the services discussions that were said to be underway in Brussels this week was: "We're actively talking about this."
He noted, however, that services presented some of the best "sunrise" opportunities for the region, emphasising that "health services is one potential industry" waiting to be exploited.
Making small steps
Jamaica has been making small steps in this area. Billionaire Michael Lee Chin is transforming the Medical Associates Hospital in Kingston into a facility into a state of the art facility for medical tourists, the Caribbean Health Management Consultants Limited are also building out a market for itself in health tourism. Those facilities follow the MoBay Hope diagnostic clinic in Montego Bay, which sits next door the renowned Half Moon hotel, servicing its guests as well as the wider city and environs.
The Caribbean is ahead of the other five regions of the African Caribbean Pacific (ACP) group in similar negotiations with the European Union, having established a college of negotiators that pulls experts from the private sector, academia, and public sector to boost the Caribbean Regional Negotiating Machinery (CRNM) team.
Bernal, whose 30-plus year career has straddled diplomacy, academia, government service and the private sector, had reassuring words for businesses who must compete in a market free of preferential treatment.
"We have managed to do well in the global economy," he said Monday night at a Rotary Club meeting at the Hilton Kingston. "We have the talent and resources to succeed."
lavern.clarke@gleanerjm.com
