Anthony Hylton, Contributor

Hylton

The Caribbean and the European Union are locked in negotiations for a new trade agreement to supersede the trade aspects of the current Cotonou Agreement. In line with the objectives and scope of the projected new agreement and the commitment of support to the ACP countries in the Cotonou Agreement, there is a commitment to complete negotiations of these Economic Partnership Agreements (EPAS) by the end of 2007.

I, on behalf of Jamaica the Caribbean and the wider ACP Group, led those negotiations and secured the seven-year preparatory period in the Cotonou Agreement of 2000. The 14 members of the Cariforum Group have been in good-faith negotiations with the European Union since the process was launched here in Jamaica in September 2004.

A number of important issues have been resolved, in principle, but there are some vital-interest matters for the Caribbean and frankly, the ACP, which are outstanding. In inter-national negotiations, countries ensure that they deploy the resources and take the time necessary to secure their vital interests. The European Trade Commissioner Peter Mandelson has now threatened that unless an agreement is in place by December 31, 2007, the European Commission will unilaterally impose tariffs on all previously tariff-free Caribbean exports to Europe.

This is indeed a mighty threat both because of what it portends for Caribbean economies and for the negotiating process. In order for an agreement to be in place for December 31, 2007, the European Commission and Cariforum negotiators have set a deadline of October 17, 2007, to complete all technical negotiations and have an agreement initialled. This artificial but real deadline is to allow EU and Cariforum member countries and the European Commission time to undertake their internal processes.

By issuing the not-so-subtle threat Europe is requiring the Caribbean to sacrifice its vital interests in two weeks, so that it can have ten weeks, to satisfy its internal processes. It is this kind of imbalance which has bedevilled the EPA process since the conclusion of the Cotonou Agreement. Well we recall that the ink on the Cotonou Agreement was not dried before the EU pronounced its "everything but arms" initiative in favour of Least Developed Countries (LDCs) and in clear breach of the terms of the Cotonou Agreement.

Sword of the imposition

In order to achieve agreement in the time frame EU Commissioner Mandelson, and Louis Michel, the Development Commissioner, were to meet with Cariforum Heads of Government in Montego Bay, Jamaica, October 4-5, to attempt to extract political agreement under the sword of the imposition of tariffs on all Caribbean exports into the European Market.

A very strange approach to trade negotiations, especially for an agreement intended, among other things, to assist in the eradication of poverty and the promotion of Caribbean sustainable development. As David Jessop correctly wrote in The Sunday Gleaner of September 20, "This appears to be unique. In most trade negotiations, the final and political part of the process is assigned to ministers rather than Heads of Government."

Cariforum Heads of Government are well advised to stay with precedent. The outstanding issues are technical and go to the heart of the prospects for sustainable economic and indeed broader Caribbean development. They are not political.

Furthermore, Cariforum Heads of Government could commit themselves in a situation where European Heads of Government could renege on commitments by the EU Commissioners.

But what does the threat of the EC Trade Commissioner mean? For one, it means a threat to unilaterally abrogate a treaty negotiated in 1975 and restated on five occasions since. In 1975 the ACP, led by former Prime Minister, then Foreign Minister, P.J. Patterson, negotiated a Trade Agreement as part of the wider Lome 1 Convention, with the European Economic Community in which the EEC granted tariff-free entry to ACP Exports without reciprocity. The non-reciprocity was not given, it was negotiated.

The trade components of the Lome 1 Convention was hailed universally as a model for trade agreements between developed and developing countries and Europe as a pioneer and trailblazer. To threaten to unilaterally abrogate this agreement is an indication of how far Europe has retrogressed in its support for real development. Then again, the ACP should not be surprised, since the European Union has also served notice to unilaterally terminate the 32-year-old sugar protocol under which its sugar refineries and consumers were the original and substantial beneficiaries. Recall that both the quantity and the price of sugar negotiated into the protocol were for the benefit of Europe.

The threat and substantive basis behind the threat would also unilaterally abrogate the Cotonou Agreement.

Cotonou Agreement

The Cotonou Agreement en-visioned the Economic Partnership Agreement (EPA) as a tool for ACP Development. It was specifically to assist in:

1. Poverty eradication.

2.The promotion of ACP sustainable development.

3. The integration of ACP states into the Global Economy.

4. Facilitating the involvement of the Private Sector and Civil Society Organisation into the decision-making and implementation processes.

There was a clear and explicit understanding between negotiators that the EPA should be a market building instrument for the ACP. It was not a market opening or market penetration instrument for the EU. This was clearly stated by the then and still current Development Minister of Germany, for the EU, and myself for the ACP.

What then are the major sticking points to agreement? These, as I understand it, include:

1. The demand by the European Union for duty-free access for substantially all its export to the Cariforum countries.

2. The demand for a higher level of access by European service providers to Cariforum Markets than is provided under the WTO Agreement.

3. A relatively short time frame for the realisation of the bulk of this increased access.

4. A failure or refusal of the EU to identify or negotiate the level and terms of the financial resources to be provided for the related adjustment and implementation cost of EPA.

5. A failure of the EU to provide treaty assurance that the level of financial and technical assistance traditionally provided for broad base development will not be adversely affected. Put differently, assurance that resources provided for the EPA are additional and not merely a reallocation.

6. The EU's effort to use the EPA negotiations to force a widening and a quickening of the pace of integration in the Caribbean.

Furthermore, overhanging these fundamental issues lies the issue of trust in negotiation. The EU's reinterpretation of the Cotonou Agreement, the slow pace at which the resources were made available for the analyses of the potential impact of the proposed EPA, the treatment of major commodities, such as sugar and bananas, and the threatening approach to the negotiations are all weakening the trust which is so vital to successful negotiations.

Overarching issue

In the case of the Caribbean, and in particular the CARICOM countries, there is also the overarching issue of the implications of the agreement it concludes with the European Union for any trade negotiations it might conduct subsequently with the United States and Canada, as well as for current negotiations in the WTO. Also important is its continuing relationship with the ACP group and the ACP-wide arrangements which will be needed for the full implementation of the EPA. It needs to carefully evaluate the potential impacts and the time and resources required to do so.

I am convinced that these issues are capable of resolution in open, good faith and sensitive negotiations.

In conclusion, it is clear that the negotiations are balanced on a knife's edge and much is at stake for the Cariforum countries. It is possible for the EU to either pull the knife and slice-and-dice the Cariforum countries or work with the Cariforum countries, to broaden the knife's edge and create a platform for genuine development of the Cariforum countries.

We remind Cariforum leaders that there is indeed a fine line between murder and suicide, but they should resolve never to let murder pass for suicide.

Anthony Hylton is Member of Parliament for St. Andrew West and a former Minister of Foreign Affairs & Foreign Trade.