Caribbean Trade Reference Centre

Caribbean Trade Reference Centre

CARIFORUM-EC Economic Partnership Agreement
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The EPA was signed on October 15 2008 by the European Community and the following members of CARIFORUM: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, the Dominican Republic, Grenada, Jamaica, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago. Guyana later signed on October 20, 2008. Though the Government of Haiti has requested more time to review the EPA, it is anticipated that Haiti will soon become a signatory to the Agreement. The Agreement will officially enter into force pending the completion of the process of ratification by the member states. However, until then CARIFORUM and Europe will provisionally apply the EPA. Through provisional application, the European Community and the signatory CARIFORUM States will be able to benefit from the terms of the Agreement.

Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Jamaica, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, and The European Community have notified the completion of the procedures necessary for provisional application of the Economic Partnership Agreement between the CARIFORUM States, of the one part, and the European Community and its Member States, of the other part (1), in accordance with Article 243 of that Agreement. Consequently the Agreement applies provisionally from 29 December 2008.

The EPA was created through an intense negotiating process which was undertaken within four (4) stages over a period of three years. Phase IV of the negotiating process or the finalization process, which led to the ultimate conclusion of the EPA negotiation in December 2007, was preceded by the critical Phase III of the negotiation process. Launched in September 2005, Phase III of the EPA negotiations underwent a qualitative shift in focus and specificity. Building on Phase I and Phase II discussions which focused on regional integration content, processes and ambition within CARIFORUM, Phase III constituted the structuring and consolidation of negotiations, so that the points of common understanding could be channeled into elements of the EPA Agreement. This Phase continued until the later part of 2006. What follows takes stock of the background of EPA negotiations and the importance of the EPA to CARIFORUM.

Background to the EPA

The Cotonou Agreement and EPA

Having been forged within the broader political context of the ACP-EU partnership, the CARIFORUM-EC EPA takes into account the overall principles and objectives of the Cotonou Agreement. Signed in June 2000, the Cotonou Agreement, which replaces four successive Lomé accords, puts in place a comprehensive framework for ACP-EU relations, centred on economic development, the reduction and eventual eradication of poverty, and the smooth and gradual integration of ACP states into the global economy.

With a view to achieving these objectives, the Cotonou Agreement makes provision for the ACP and EU to engage in WTO compatible trading arrangements. In this vein, Article 36 of the Cotonou Agreement commits the Parties to conclude new WTO compatible trading arrangements, removing progressively barriers to trade between them and enhancing co-operation in all areas relevant to trade.

Fifteen Caribbean countries that make up the Caribbean Forum of ACP States (CARIFORUM) launched EPA negotiations with the EU in April 2004; they are: Antigua & Barbuda, The Bahamas, Barbados, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Suriname, and Trinidad & Tobago.

Phasing of Negotiations

Preceded by an all-ACP phase, there are four regional phases guiding interchange between the two sides; namely: i) Initial Phase: Establishing the Priorities of EPA Negotiations (April 2004 to September 2004) - the objective of this phase was to establish an understanding of the fundamental concerns and interests of EPA negotiations for both CARIFORUM and the EU; ii) Second Phase: Convergence on strategic approach to CARIFORUM regional integration (September 2004 to September 2005) - the aim of EPA negotiations during this phase was 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: this phase of negotiations, ended in December 2006; and, iv) Final Phase: Finalization (January 2007 to late-2007) - negotiations during this final phase concentrated on consolidating the results of the negotiations and completing them.

Negotiating Architecture

The negotiation of the EPA took place at three tiers, namely: Ministerial, Principal Negotiators and subject-specific negotiators.

The Lead Ministerial Spokesperson for EPA for the Region was Dame Billie Miller, Senior Minister and Minister of Foreign Affairs and Foreign Trade-Barbados. The former Director General of the Caribbean Regional Negotiating Machinery (RNM), Ambassador Dr. Richard Bernal, served as the CARIFORUM Principal Negotiator. At the technical level, negotiations were conducted by members of the EPA College of Negotiators.

Regional Preparatory Task Force (RPTF)

The ACP Guidelines for the negotiation of EPAs defined as one of their strategic objectives to foster inter-linkage and complementarity between development strategies supported by the EU, and economic and trade cooperation so as to make them mutually reinforcing. Achieving this objective through the creation of a Regional Preparatory Task Force (RPTF) for the whole duration of the negotiations was considered vitally important.

Both the CARIFORUM and the EC agreed to the establishment of a RPTF, in order to cement the strategic link between EPA negotiations and development co-operation. The mandate of the RPTF was to translate needs for support identified in the course of the negotiations into operational ideas for trade-related and other development assistance, and to work out these ideas up to the level of pre-identification of fundable actions.

While not comprising a formal element of the negotiating structure, the RPTF was closely aligned to it.

EPA to Contribute to Specific Objectives, Principles

In an effort to support and promote such objectives as sustained growth, enhancement of the Caribbean’s role in the international community, facilitation of Caribbean structural transformation, and the adjustment of Caribbean economies in a manner and at a pace conducive to economic and social development, the CARIFORUM-EC EPA is guided by a number of principles. They include: (a) supporting and building upon the regional integration process; (b) promoting the development objectives of countries of the Region, while being consistent with their development strategies; (c) encompassing Special and Differential Treatment, including provisions that go beyond existing WTO measures in addressing the constraints of small size and vulnerability; (d) flexibility such that countries can individually calibrate the pattern and schedules of implementation, consistent with their national circumstances, while pursuing the objective of regional integration; (e) incorporating and improving on the Lomé and Cotonou acquis regarding market access, for traditional and non-traditional Caribbean exports; and (f) a binding commitment to engage in consultations on any matter deemed necessary in order to safeguard the benefits of the Agreement.

CARIFORUM Regional Integration and the EPA

It was thought that a well-designed EPA should complement the existing Caribbean regional integration process, that is framed in the context of measures stated in the CARICOM-Dominican Republic Free Trade Agreement (C-DR FTA) and the Revised Treaty of Chaguaramas establishing the Caribbean Community including the CARICOM Single Market and Economy (CSME). There is no mandate or programme to pursue at this time a more ambitious integration agenda beyond the scope of the C-DR FTA.

CARIFORUM’s regional integration processes were framed by two paramount principles; namely, those of variable geometry and differentiation. The former takes account of the variance in scope and implementation level of both the CSME and the C-DR FTA. The latter takes account of extending to Less Developed Countries (LDCs) special and additional trade measures.

Both CARIFORUM and the EC share the conviction that deeper regional integration forms an important tool for development. Strengthened regional regimes can enable increased competitiveness, enhanced flows of investment, the harnessing of sustained growth and the delivery of sustainable development.

The pursuit of development is a multi-dimensional undertaking. Seeking to capture the benefits accruing from trade integration also requires accompanying adjustment measures and institutional capacity building.

The ‘Development Dimension’: EPA, A Tool for Caribbean Development

The EPA is more than just a Free Trade Agreement. Accordingly, there is centrality of development in the EPA. The Joint CARIFORUM-EC Plan and Schedule underscored the need to address the sustainable development of the Caribbean region. In fact, the ACP and EU were guided by Article 37 (7) of the Cotonou Agreement that EPAs should "take account of the level of development of ACP states and the socio-economic impact of trade measures on the ACP, and their capacity to adapt and adjust their economies to the liberalization process."

However, it is important to observe that injecting the development dimension into the EPA had to transcend notions of asymmetry, in spite of its obvious importance. It is well established that if market access opportunities are to be seized by the Caribbean, supply-side constraints must be overcome so as to enable increased exports from the Region.

EPA’s Importance for CARIFORUM

The EPA is an important arrangement for CARIFORUM, given its role in advancing regional integration. The EPA is unique amongst other arrangements involving the Caribbean, in that it is the first and only bi-regional agreement encompassing the CARIFORUM configuration. It provides the framework to support and provide impetus for regional integration amongst CARIFORUM.

Underpinned by a development dimension, the Agreement takes into account the differences in levels of size and development, thereby creating a bi-regional agreement with wider scope than just a traditional Free Trade Agreement.

The ‘development package’ is critical to the provision of the development financing necessary to build the export capacity and infrastructure of the Caribbean’s private sector, so as to take advantage of market access opportunities presented. Allied to this, the package constitutes technical and financial assistance which will be used be used to put in place an enabling environment in Caribbean countries for foreign investors.

Importantly, the EPA arrangement provides for the establishment of a stable and secure trading environment for goods from the Caribbean. It also facilitated the negotiation of a Services and Investment framework between CARIFORUM and the EU, for the first time. The EPA is expected to open the door to an improved trade and investment relationship with Europe. In recent years, trade and investment flows from Europe to the Caribbean (with the exception of the Dominican Republic) have been growing at a slower pace. The EPA is intended to be an enabling mechanism for the revitalization of these flows. It is intended to stimulate greater investment between Europe and the Caribbean, through mutual removal of barriers to investment, as well as the enhancement of the attractiveness of the Caribbean economic space in respect of foreign investment opportunities. The Agreement is also intended to stimulate Caribbean exports of non-traditional products and services, encouraging and supporting diversification in these economies.

Therefore, from the Caribbean perspective, the partnership with Europe is expected to position the Region to take advantage of a more dynamic trade and investment relationship.


EPA Reference Documents CARIFORUM-EU Economic Partnership Agreement

Fact sheets on the Cariforum-EC EPA: