The Week in Europe
By David Jessop

In Washington, in the early 1980s, I asked a very senior State Department
official with responsibility for policy co-ordination in Latin America, to
explain the ultimate objectives of US policy in the Caribbean. Then the US
government was faced with a Grenada that seemed to become more revolutionary
by the day, by ever-deepening ties between the island Caribbean and a
possibly hostile Cuba and a growing Soviet interest in establishing new
bases in the Caribbean. "Peace and quiet" was his genuinely felt reply. 

Two decades later he might be satisfied. The politics of hegemony and the
desire to destabilise US interests are no longer on the agenda. Instead, if
still working, this influential official would see a region, that at face
value would seem to have achieved his stated objective, leaving the US or
Europe with little more to do than react when matters go wrong.

Indeed it could be argued that in the post cold war Caribbean, problems
abound, but in the apparent absence of any immediate threat, or strong
leader, peace and quiet now appear to equal complacency. The result is that
the region is largely reactive and with some notable exceptions, seemingly
disinterested in trying to set the international agenda on the future issues
that threaten to destroy national or regional equilibrium. 

On September 20 in Brussels, the European Commission's College of
Commissioners agreed to introduce regulations that will provide all least
developed countries (LDCs) from 2005 on, the same access for their products
to the European Union market as that presently given to African, Caribbean
and Pacific states. In practical terms this means that in a little over four
years the Caribbean and other ACP nations will see sugar, bananas, rice and
rum from 48 very low cost or heavily subsidised producers in nations such as
Bangladesh, Cambodia or Somalia competing against them in the EU.

The proposal by the EU to open its market to the world's poorest nations
will grant rapid duty free and quota free access for most products from the
world's LDCs. Although for bananas, sugar and rice, implementation will take
place in three stages up to 2008 (the year when the present trade aspects of
the trade aspects of the new ACP/EU Cortuno Partnership Arrangement come to
an end) almost all other LDC products will by 2005 have the same levels of
access as Caribbean producers presently enjoy. 

In other words, the region and it should be said EU states, are faced with a
number of significant practical and moral challenges. Both will have to
determine how they should react to a situation in which some of their
poorest global partners may begin to erode the market position of existing
suppliers of sugar, bananas, rum and rice or in the EU's case, domestic
producers.

Although the EC's announcement is not a complete surprise and the
Caribbean's negotiators expressly negotiated a declaration in the new ACP/EU
agreement to allow for consultations in such an eventuality, the EC's policy
paper on LDCs illustrates just how little is now certain. It changes the
ground rules just four months after the new Cortuno Convention was signed. 

Earlier this year, the Caribbean Chief Trade Negotiator, Sir Shridath
Ramphal warned of this. In St Kitts, he informed Caribbean Heads of
Government that the time up to 2008, the date when new trade arrangements
with Europe have to be in place, would not be a rest period.  Rather it
would be a time of intense preparation and vigilance, of looking forward
rather than back.

On September 25 and 26 the region will take the first steps towards trying
to come to terms with the mind-boggling inter-related intellectual challenge
of determining what will be best for the Caribbean in its trade r
elations with Europe and the Americas after 2008. As this is being written,
a group of regional specialists, extra-regional consultants and advisers are
gathering in Jamaica to review studies on the economic options open to the
region. What is decided at this meeting will inform further studies and
recommendations for Caribbean heads. It will lead gradually to the creation
of a strategy for the next negotiations with Europe that begin in September
2002. 

This meeting of experts will look at alternative trade arrangements to those
that presently exist with the EU; the ways in which the region might develop
the capacity to compete in global markets; how to use existing and new
multilateral arrangements to enhance the central role now envisaged for
tourism and services; and the steps necessary to achieve greater efficiency
in financing if the region is to adapt rapidly.

Space does not permit me here to relate briefly anything other than the
ideas being developed for alternative trade arrangements. 

Under the terms of the Cortuono partnership agreement the ACP have to be
agree, prior to September 2002, an alternative trade arrangement to replace
its present non reciprocal, preferential arrangement with the EU. But
critically, all of the studies undertaken by independent consultants show
conclusively that Europe's preferred alternative to preference - economic
partnership arrangements - will have a negative impact on regions such as
the Caribbean. 

As a result a process of new thinking beyond existing boundaries has begun.
This concentrates on creating a family of trade measures rather than a
single mechanism and recognition that in place of old style preferential
arrangements it will be necessary to find solutions that make use of new
areas of trade policy to provide advantage in relation to services,
intellectual property and investment.
 
Most importantly this new thinking suggests leaving behind the 1960s
concepts of single trade arrangements by constructing a package of measures
within a framework agreement. Thus a family of measures might include
enhanced arrangements under the Generalised Scheme of Preferences for some
manufactured exports; special provision for the continuation of the banana
and sugar protocols, most probably for a limited period, within new World
Trade Organisation agreement on agriculture; and arrangements on services
involving variable levels of reciprocity, in order that the region has time
in which to see its new economy develop.

The subtlety of these ideas, which are complex, difficult to deliver and are
still some way from being agreed, is that they would provide the ACP the
continuing opportunity to negotiate from strength as a group. They would
also allow the Caribbean or any region within the ACP the choice of
combining some or all aspects of the family of measures depending on
national or regional circumstances.

Achieving consensus on this type of approach will not be easy. It will
require on the part of many a leap in imagination and the abandonment of any
desire to fight old battles or replicate past arrangements. But crucially
the future is being created now and peace and quiet is not an option.

David Jessop is the Executive Director of the Caribbean Council for Europe
and can be contacted at [log in to unmask]
September 22nd, 2000  





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