The Week in Europe

By David Jessop

 

Sometime early next year the European Commission (EC) will produce a Communication (policy paper) on its development policy towards the Caribbean. In the past Europe has pursued its development objectives within the framework of a broad based approach to the African Caribbean and Pacific group of states (the ACP) and through strategy papers containing region specific indicative programmes.

 

A similar approach has already been taken with respect to development policy in Africa. On October 12 the EC’s College of Commissioners agreed a Communication proposing a strategic partnership between the European Union and Africa. The document suggests how Europe might support Africa’s return to sustainable development through measures to encourage security, effective governance, trade, interconnectivity, social cohesion and environmental sustainability. 

 

The decision to create a Caribbean policy responds to the changed relationship between Europe and the region after 2008 once an Economic Partnership Agreement (EPA) comes into being and the need for new approaches to supporting regional integration. The requirement for a Caribbean strategy also reflects new thinking about the way Europe funds development assistance throughout the world. The EC intends to end the stand-alone multi-annual financing approach of the European Development Fund and harmonise all of Europe’s development procedures. This will involve development assistance for the ACP being inserted into Europe’s still to be agreed 2007-2012 budget (known in the jargon of Brussels as the Financial Perspectives) so that funds for the Caribbean are a part of the EC’s annual budget provisions.  

 

In developing a Caribbean policy, a wide-ranging internal debate is underway in Brussels. Officials are also engaged in a low-key dialogue with Caribbean representatives and other interested parties to see what the future parameters for regional programmes might be. Although no firm decisions have been taken, it is clear that project assistance is at an end and that European officials preference is for large decentralised programmes that contribute in the most efficient manner to overall regional development. Although there are no specifics and everything has still to be agreed, this could mean for instance at one extreme, all European support going to a substantial regional development fund administered in the region. This could be similar to that being proposed by Prime Minister Arthur of Barbados, which aims to bring less developed parts of the region such as the Eastern Caribbean up to levels of development closer to those of near neighbours. At the other end of the spectrum it
 could mean initiatives that twin universities, schools, municipalities, businesses, parliaments and civil society in Europe and the Caribbean.

 

In part, the internal debate within the EC has focussed on concerns that many of the region’s governments are locked into past models of development and that there is little new thinking about the types of measure that might change the region’s trajectory or economic velocity. 

 

A similar view is held in European capitals where it is now common to hear that the region lacks active political leadership. The sense is that while the region’s problems have been clearly identified and discussed at length, the key component that is lacking is action. The blame is laid at the feet of self-seeking politicians, an inefficient public service, a lack of any real accountability in government and what a recent report for one EU member state described as ‘a model that encourages political tribalism and inertia in government that contrasts markedly with the open dynamism of larger entities in the region’s private sector’.   

 

There are important truths in all of this, but it is only a part of the story. Europe continues to ignore the fact that small economically weak states are to a significant extent unable to set their own agenda and are constantly at the mercy of external forces. 

 

If evidence of this were needed one only has to look at the latest decision handed down by the World Trade Organisation (WTO) on the EU’s proposed single tariff on bananas. In a second ruling on the subject, WTO arbitrators decided on October 27 that the latest EU proposal (a single tariff of Euro187 per tonne and a duty-free quota of 775,000 tonnes for bananas for the ACP) would not maintain market access for third country suppliers principally in Latin America. 

 

The effect is to prolong the uncertainty that has prevailed in the Caribbean banana industry since Latin producers with US support first began their ‘war’ in the mid 1990s. But the most alarming aspect of this latest ruling is that it makes no recommendation about a solution. This means that the waiver agreed for the present tariff quota arrangements will cease to apply on January 1, 2006, for ACP banana exports to the EU leaving Europe it seems with the single option of extending the present regime and facing a further WTO challenge.  

 

Dominica illustrates what this absence of predictability means. 

 

Because of its size and terrain it is a nation unlikely to ever see any significant benefit from the process of global trade liberalisation. It simply has not the critical mass necessary to compete globally. It has only just begun to recover from a recession after adopting a painful IMF programme.  In other words, although Dominica has observed all of the strictures of the international system, the same system has once again flattened it as effectively as any hurricane. To quote its Prime Minister, Roosevelt Skerrit: “The multilateral trading system has once again let down the smallest, weakest and most disadvantaged players in the world's economy in favour of the wealthy and powerful”. “It is not only the farmers, who could suffer from the destruction of the banana industry in Dominica but the entire economy and society”.

 

When the Cotonou Convention was agreed between Europe and the ACP in 2000 it was envisaged that there would be a preparatory period up to 2008 during which ACP states could consolidate regional integration processes, diversify their economies and begin to prepare for a transition to an economic partnership agreement with Europe over ten or so years after an EPA came into force. Although never stated explicitly, it was envisaged that this pause before moving forward would enable the region to plan and adjust for its future. 

 

Instead what the region has seen is the acceleration by Europe of the reform of its sugar regime, a failure to find a way to resolve the banana dispute and a greater willingness to strike deals at the WTO with Brazil and India, than to actively promote special and differential treatment for small vulnerable states. 

 

In deciding to produce a Communication on the Caribbean, Europe needs to recognise that the substance of its future development policy towards the Caribbean cannot be isolated from the havoc now being caused in tiny economies by the crusade for trade liberalisation.

 

David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]

November 4th, 2005

 


		
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