The Week in Europe
  By David Jessop   
  They are in places no more than 100 hundred miles distant. Some are members or associate members of Caricom. They have close cultural, linguistic and family ties that spread across the Caribbean. They are a part of the region, yet apart. 
   
  They are the British and Dutch overseas territories in the Caribbean and their cousins, the French the Départements d'Outre-mer (DOM). 
   
  The British overseas territories (Anguilla, the British Virgin Islands, Cayman, Montserrat and Turks and Caicos) are almost all in a process of a form of constitutional advancement that does not necessarily imply a desire for independence. With the exception of Montserrat they are quietly some of the wealthiest small islands in the world with GDP figures that in certain cases exceed those of most developed countries. 
   
  The Dutch overseas territories are also in a similar economic situation but are in a state of constitutional flux. Under a new political structure, agreed with the Dutch government in late 2005, the federation of the Netherlands Antilles will be dissolved by July 2007. Curacao and Sint Maarten will each become autonomous territories of the Netherlands. Bonaire, Sint Eustatius and Saba will become ‘kingdom islands’, a newly-created status that has still to be defined in detail. Aruba is already a state apart from the Federation with a status of its own. 
   
  In contrast, the DOM (Martinique, Guadeloupe, and Guiane) are Europe in the Caribbean. They are remote parts of France sending elected representatives to the French Congress and the European Parliament. They are formally, in the language of the European Commission (EC), the ‘outermost regions’ of Europe and as such have special provisions enshrined in an article of the European Treaty. This recognises that because of their ‘remoteness, insularity, small size, difficult topography and climate, as well as economic dependence on a few products’, the DOM are ‘permanently’ and ‘severely restrained in their socio-economic development’: a legal definition of special and different that the rest of the region would be glad to have.
   
  As a consequence, Europe has adopted three well-funded priorities for action for the DOM. These are: to promote accessibility; to improve competitiveness through the creation of an economic environment that favours the establishment of businesses; and to prioritise regional integration in a manner that develops trade in goods and services with neighbouring countries with the ultimate objective of integration into the surrounding geographical area. 
   
  Yet irrespective of the unusual range of ties that the overseas territories and the DOM have to Europe, they are all faced with a challenge for which there is no precedent.
   
  The creation of an Economic Partnership Agreement (EPA) between the independent Caribbean and Europe (and the Caribbean Single Market and Economy) will potentially have the economic effect of isolating the overseas territories from the independent Caribbean. It will create different trade relationships with Europe and with neighbours in the region.
   
  Paradoxically after 2008 in the case of the DOM, an EPA will have the reverse effect. As a part of Europe, albeit remote, the DOM will then be subject to the phasing in of the same trade reciprocities as are agreed for Continental Europe.
   
  At a policy level Europe’s draft communication on the Caribbean seeks to encourage as ‘a part of the wider integration process’, co-operation between the independent Caribbean, the DOMs and the overseas territories. This, the document suggests, will be in the field of trade but also in other areas of common interest, such as migration, transport, health, justice and security. 
   
  The European Commission has given some thought to the detail but regards the matter as complex. It is already struggling to find ways to incorporate some form of variable geometry into an EPA that takes account of the very different levels of development of Caricom members. This, it is suggested, makes it less than likely that Europe will want to find a way to incorporate the overseas territories into an EPA unless specifically requested to do so. The EC has also had to recognise that in the case of the British and Dutch overseas territories it cannot act without the agreement of the member states concerned. Despite this, the EC has held a seminar for the DOM and Overseas Territories and is engaged in a direct dialogue that will involve as the year goes on, direct exchanges with the Development Commissioner on these and other issues. 
   
  In the independent Caribbean these are not matters much considered.  At the level of an EPA the Caribbean Regional Negotiating Machinery is aware of the issues but as yet has undertaken no specific studies or consultations and is not seeking to incorporate any special language or provision into a draft EPA relating to the DOM or any overseas territory. For its part Caricom is aware of the difficulties posed by Montserrat which as a full member, and if the UK were ever to agree, could become a part of the CSME and then potentially of a EU/Caribbean EPA.  
   
  In the overseas territories the implications of an EPA or the CSME have not been thought about to any great extent. The British Virgin Islands is considering the implications of both, but most other British overseas territories are hoping that greater clarity will be forthcoming from London and Brussels on the issue. 
   
  Much better prepared are the DOM. In all three there is concern and a gradual move to try to seek economic advantage from a changed economic relationship using European regional funds to try to identify opportunities for economic integration with Caribbean neighbours.
   
  It is easy to argue that for the most part trade between Caricom members, the Overseas Territories and the DOM is minimal and that as such the CSME and EPAs are of little consequence, enabling the DOM and overseas territories to continue in economic isolation. But the reality is that Europe and the independent Caribbean are about to take far-ranging decisions that may effect on overall competitive environment in which all nations in the region operate. 
   
  For example, inn an EPA there will be negotiations on trade in services involving potentially the liberalisation of financial services and tourism: matters close to the economic heart of every overseas territory. The DOM will undergo a sudden integration into regional economy as a result of a trade arrangement with Europe. More generally the negotiations will also lead over time to a new economic future for the region in which all are located.  
   
  No one would argue that the initial impact of the CSME or an EPA on the non-independent Caribbean other than the DOM will be great in the short term. Despite this, it is startling how little thought or research has gone into the ways in which the independent and for the time being non-independent Caribbean will relate to one another in the future.
   
  David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]
  Previous columns can be found at www.caribbean-council.org
  February 17th, 2006
   

		
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