The Week in Europe
By David Jessop


For much of the last two years the focus for the Caribbean at the World
Trade Organisation (WTO) has been on the long-running banana dispute.
However, this issue, which still defies rapid resolution, is about to be
joined by others of equal importance to the region

The dispute between the EU and US over the creation of an EU single market
in bananas has become more complex as each month has passed. March and early
April have been no exception.

On March 17 the WTO's dispute arbitrator ruled that Ecuador could, after the
disputes panel of the Geneva based body meets this month, retaliate against
the EU. It could do so against up to US$200m worth of EU exports and
services because of Europe's failure to come up with proposal for a banana
regime that is in compliance with WTO rules. Also in March, the WTO found
against the US for the pre-emptive manner in which Washington had sought to
impose similar sanctions against the EU before authorised to do so. However,
the WTO accepted, as with Ecuador, that retaliation by the US against the EU
over the banana issue was permissible with WTO agreement.

While these rulings tend to encourage the EU towards resolution of the
banana dispute, a far more significant issue has arisen. This relates to the
vital question of a waiver - an exception to WTO rules - that is required by
the EU and 71 African, Caribbean and Pacific States (the ACP). This is
necessary if Europe is to continue to extend special trade arrangements for
most ACP goods entering the EU up to 2008, without challenge from any other
nation.

On April 5, the EU and Jamaica, on behalf of the ACP, submitted a request to
the WTO's Council for the Trade in Goods. This sought the extension of most
existing EU/ACP trade provisions plus the agreement of WTO members to a
basis for gradual movement to a new trade regime to be created after 2008.
The details are contained in the recently negotiated post Lomé arrangement,
to be known as the Suva Convention or partnership agreement. However, the
application was met with a far from positive response from a number of
nations including Latin banana producers and for different but related
reasons by US trade negotiators. 

Although it appears likely that an eight year waiver will eventually be
granted, no one knows when. Threats by Panama in particular to hold up the
waiver process until the EU reforms its banana regime may mean that this
will take some time. Under WTO rules if the 90-day period in which waivers
are expected to be acted upon is not met, then informal consultations have
to take place at the request of the ACP and EU. If no simple decision is
then possible, a three-quarter-majority vote of WTO members is required to
have the waiver agreed. 

To make the issue more complex still it has become clear that a wide range
of WTO members may try to use the waiver application to seek advantage or to
protect a range of other interests during the period of consultations. On
one hand a number of developing nations outside of the ACP believe the EU
must now come up with similar preferential access initiatives for them in
order the protect their less preferential schemes. At the other end of the
spectrum, US trade officials, while making clear they will not block the
waiver, are intent on ensuring that in agreeing, the US does not forfeit any
rights in its banana dispute with the EU.

The WTO are now expected to schedule discussion of the waiver request for a
General Council meeting on July 7. However, the continuing uncertainty over
when a final decision will be reached and the possibility that delay may
open up opportunities for new legal challenges on commodity issues such as
sugar, mean that the issue will require constant and high levels of
Caribbean diplomacy.

As if this were not enough there are other WTO challenges which will impact
on the region.

There is a dispute pending between the US and EU over trademark protection.
This relates to a politically charged and led dispute between Bacardi and a
French Company, Pernod Ricard, which markets the Cuban rum, Havana Club. On
March 10 the EU agreed to start a disputes settlement process with the US at
the WTO. The case involves US legislation specially drafted by the US
Congress to take account retrospectively of a US legal dispute involving the
two rum brands.  This legislation seeks to strip US trademark protections in
the US market for marques that are deemed to have been expropriated. The
case, which is complex, alleges that the US is violating through section 211
of the US Omnibus Trade Bill international trademark legislation. It is
likely that while the US presidential race is in progress and US Congress is
considering relations with the WTO that progress towards a disputes panel on
this issue will be slow. However, if the case, which all EU member states
are committed to pursue, is not resolved politically it carries other
dangers. It will resurrect simmering differences between the EU and US over
the US extra territorial Helms/Burton legislation relating to Cuba.
 
Then there are TRIPS, the WTO's agreements on trade-related aspects of
intellectual property rights. A meeting in Geneva in March agreed that this
year legislation on intellectual property in Belize, St Lucia and Trinidad
would be reviewed while that in Antigua, Barbados, Grenada, Guyana, St
Kitts, St Vincent, Jamaica, Suriname, Cuba and Dominica and the Dominican
Republic will be considered next year. Also for review and probable
liberalisation will be the General Agreement on Trade in Services (GATS).
Caribbean companies involved in everything from record production to brand
ownership, banking and tourism and their governments  will ignore both
processes at their peril.

And finally there is the still unresolved question of the opening of as
further round of global trade liberalisation discussions following the
collapse of the Seattle ministerial meeting in November 1999. This was meant
to set a new trade agenda that would open up gradually all markets to
external competition. Discussions are still underway among various groupings
in the developed world as to how to move this process forward but there is a
growing sense that once the new US President is in place, the EU, US and
other developed nations will again try to drive the process forward.


Caribbean Governments and the private sector in particular, have been slow
to awake to the need to be highly active and monitor developments in Geneva.
The range of WTO issues now affecting the region point to the new reality in
international trade. No one should underestimate the potential of decisions
to be taken in the coming months at the WTO to disrupt almost every single
Caribbean industry. 

David Jessop is the Executive Director of the Caribbean Council for Europe.
April 14, 2000. 

   


 

  
 

Dr. Amanda Sives
Postdoctoral Research Fellow in Caribbean and Caribbean Diaspora Studies
Institute of Commonwealth Studies
28 Russell Square
London, WC1B 5DS

Tel: +44 0207-862-8865
Fax: +44 0207-862-8820
Website: http://www.sas.ac.uk/commonwealthstudies/



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