The Week in Europe
By David Jessop


Will the rapidly changing international political environment alter the
approach of Europe and the United States to international trade
negotiations? Will this have a positive or negative effect on the objectives
of trade negotiators? These are the questions that are in the minds of many
Trade Ministers as the world tries to return to some semblance of normality
after recent events in the United States.

The answers may not be long in coming for the Caribbean as all three of the
trade negotiating processes in which the region is involved are now moving
forward. That is to say for a post 2008 agreement with Europe that will
bring over time a near to two way free trade area between the EU and the
Caribbean; hemispheric negotiations for a Free Trade Area of the Americas
(FTAA); and for the opening of a new round of global trade negotiations
through the World Trade Organisation (WTO) aimed at removing barriers to
trade.

The first signs of any new approach may come in a matter of days. A small
group of Ministers from African, Caribbean and Pacific (ACP) states will
meet from October 1 to 3 in Nairobi with the European Trade Commissioner,
Pascal Lamy and senior trade officials from the European Commission.

The meeting of the Joint ACP-EU Ministerial Trade Committee will consider
amongst other matters the possibility of a new WTO round being opened when
the world's trade ministers meet in Doha in November. It is also meant to
begin to debate the possible shape of the next EU/ACP trade negotiations.

However in both cases the discussion is unlikely to be easy as not only are
significant differences likely to emerge between the EU and the ACP but the
ACP group itself is far from united about how to proceed over either issue.

As far as future EU/ACP arrangements are concerned, Europe wants to
negotiate separately from the end of 2002, economic partnership arrangements
with the regions of the ACP. This approach, let alone the objectives of any
such negotiation is still far from being agreed in either the Caribbean or
in the ACP.

As a result the emphasis at the meeting may be more on the opening of a new
WTO trade round. Europe clearly wants rapid progress although it recognises
in private that a meeting in the Arabian Gulf in November in the light of
recent events may make this difficult to achieve.

At the Nairobi meeting, which will be attended by ministers from Jamaica,
the Dominican Republic and St Lucia, it is likely that the EC will urge ACP
Governments to back a new round. Europe will argue that it is an essential
confidence boosting measure. It will suggest this will ensure that the
recession lurking before September 11 and the possibility of global economic
collapse triggered by terrorism can be offset by the confidence and growth a
new round would generate.

This will be the message from the EU's Trade Commissioner, Pascal Lamy, who
announced just before leaving for Nairobi that his purpose was to "rally
support among ACP countries for launch of new WTO Round". "This meeting with
our ACP partners is", he said, " very important.... (We) must address the
concerns and interests of ACP and developing countries as a matter of
urgency".

How the Commissioner intends to achieve the support of more developed ACP
nations remains to be seen but it is fair to say that it is unlikely that he
will make much progress unless he has substantial concessions to make on the
issues that most concern ACP states. Even then it is likely that ACP
ministers will not be drawn into any substantive discussion.

There are a number of reasons for this. Firstly there is a real sense that
as the year has gone by, the idea of there being what is known as a
comprehensive round has diminished and that the scope of any agreement that
might be reached on further global trade liberalisation will be limited.
Secondly there is no ACP position. The ACP meeting originally intended to
consider this in early September in Nigeria was cancelled. Thirdly there is
no formal Caribbean position for the simple reason that the region will not
meet to agree how to proceed until October 20/21 in St Lucia. And finally
there is the very real fear that the emotion associated with recent events
and security led responses to international issues may be used to bounce the
ACP into agreeing to accelerating negotiating processes without real thought
as to the practical impact on the interests of developing nations.

This latter factor is already apparent in the case of the granting of fast
track trade negotiating authority to the US President. There is the
increasing likelihood that the US President may be given by the US Congress
authority to take forward without further detailed reference to Congress
both a new trade round and a hemispheric trade arrangement with the Americas
as a whole. The basis for this is security led. To quote the US Special
Trade Representative, Bob Zoellick:  "trade is about more than economic
efficiency, It promotes the values at the heart of this protracted
struggle". In other words the US sees trade liberalisation as a crucial part
of the attack on international terrorism.

This may not be welcome in a Caribbean that is looking more and more
unstable. The region's rapidly collapsing, tourism and airline industry,
worth in excess of US20 billion per annum, and threats to its offshore
financial services industry are likely to make Caribbean Governments wary of
rapid liberalisation. Exhortations to hurriedly start trade negotiations
will not be easy to reconcile with the region's already dangerously weakened
markets.

Areas such as the Caribbean are vulnerable as a result of the dramatic
collapse in international confidence and the downturn in the global economy.
They need time to think. New partnerships can be built with both the US and
the EU. However the prerequisite will be that both super powers first
recognise that in trade as with security, genuine interdependence has to be
to the mutual benefit of all the involved parties.

If this does not occur, precipitate decisions on new trade arrangements may
come to haunt the world's most powerful nations. If they attempt to rush
through solutions that are primarily to their benefit this could well result
in the eventual impoverishment and the long-term instability of vulnerable
regions that they now need as partners.

David Jessop is the Executive Director of the Caribbean Council for Europe
and can be contacted at [log in to unmask]
September 28th, 2001