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EPA implementation discussed, including climate change concerns

26 September 2010

At the 31st meeting of CARICOM heads of government from 4-7 July 2010, agriculture was identified as ‘a priority sector for allocation of financial and other resources’, with its importance for ‘food and nutrition security and for the development of the economies of the Community’ being recognised. Particular importance was attached to establishing ‘effective agriculture, health and food safety systems, sanitary and phytosanitary measures, and the operationalisation of the Caribbean Agriculture, Health and Food Safety Agency (CAHFSA).

Heads of government also agreed to consolidate their positions on climate change issues for the forthcoming UN conference on climate change (November 2010). Climate change, according to a press article by former Caribbean diplomat Sir Ronald Sanders, ‘is already having a disastrous effect on small island states’, and the low lying coastlands of Belize and Guyana (which are below sea level) are both endangered. Yet, it was pointed out that these vulnerabilities are not taken into account either in the access of affected countries to the concessional financing required to get to grips with these challenges, or in terms of the trade agreements which these countries are required to sign up to.

Press commentaries have noted that ‘nowhere in the EPA is there an acknowledgment by the EU that its greenhouse gas emissions are adversely affecting climate change and harming small island states and states with vulnerable coastlines. And, nowhere is there a correlation drawn between the cost of such harmful effects and trade benefits that could be granted.’ The call has therefore been made for greater access to concessional financing to be granted to affected small-island and vulnerable economies, and for the adaptation of trade rules and trade agreements via the establishment of ‘a special category of special and differential treatment.’

Meanwhile, on the fringes of the heads of government meeting, Guyanese President Bharrat Jagdeo maintained that his government had been ‘right in holding out until the last minute to get a “better deal” for the Caribbean’, since ‘many of the things we said came to pass and the agreement is haunting us in our negotiations with others.’ Jamaica’s prime minister, meanwhile, conceded that there have been ‘implementation shortfalls’ under the EPA process. According to press reports, the region is still eagerly awaiting the initiation of ‘a $15 million support programme … aimed at enhancing the competitiveness of Caribbean exports.’ Antigua and Barbuda’s Prime Minister Baldwin Spencer said in a press interview that one of the challenges confronting the region is how to ‘extract from the European Union the billions of dollars that they have available for the Caribbean’, and which ‘for some unknown reason … we have been unable to access.’

In the light of the ‘weak global economy and the actions taken by the EU since the signing of the agreement in 2008’, CARIFORUM heads of state called at the July summit meeting for ‘an assessment of the impact on the projected benefits under the agreement.’

Meanwhile, private sector commentators have claimed that the Caribbean private sector perceived ‘little forward movement’ under the EPA. This is despite the support extended by EU member state governments to the operation of a number of national implementation units. Private sector commentators claimed that outside the Dominican Republic, ‘most businesses in the Caribbean are not export ready in relation to international markets,’ and that this was giving rise to ‘a widespread cynicism about the EPA’.

These concerns need to be seen against the backdrop of ‘the cost of the global financial and economic crisis … estimated at a huge 10% of GDP in 2009’, with 10 out of 14 Caribbean countries experiencing negative growth and eight countries of the Eastern Caribbean Currency Union contracting by an average of 7.3%. According to a UN Economic Commission for Latin America and the Caribbean (ECLAC) report, some six Caribbean countries are forecast to experience further economic contraction in 2010.

Editorial comment

The long-term economic difficulties facing the majority of CARIFORUM states provide the background for the implementation of the CARIFORUM-EU EPA. According to Eurostat figures circulated before the EU-Latin America & Caribbean summit in May 2010, some 11 out of 15 CARIFORUM countries have seen the value of their exports to the EU decline since 2000. In countries such as St Kitts & Nevis and Grenada, the decline has been a massive 91.7% and 80% respectively, while the value of Jamaican exports to the EU has fallen 60% in euro terms. It is only the export performance of oil-exporting Trinidad & Tobago and the strong export performance of the Dominican Republic (+85%) which have resulted in the 16.6% increase in regional exports to the EU.

This decline in the value of Caribbean exports at the national level is largely attributable to developments in the agricultural sector, notably the process of price reductions in the sugar and rice sectors and the erosion of the market position of Caribbean suppliers in the banana sector. The notable exception in this regard is the Dominican Republic, where banana and sugar exports to the EU are increasing in value. The difference in performance exposes the reality that many CARICOM economies have not been able to bridge the gap in economic activity left by the decline of primary agricultural exports. It is in this context that such high hopes and expectations are being invested in the EPA process.

There are concerns at the level of the private sector that, at a time when the focus should be on effectively supporting the Caribbean private sector in undertaking effective production and trade adjustments in response to accelerating processes of preference erosion, many regional governments are still preoccupied with getting to grips with regional institutional development issues.


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