The View from Europe
By David Jessop

Regular readers of this column will know that in
recent weeks I have written about the implications of
the impending negotiations between the European Union
and the group of African Caribbean and Pacific states
(the ACP). These have focussed on the way in which
they relate to other international trade negotiations
in which the Caribbean is involved.

In response to the many emails I have received about
how the European negotiations will be conducted and
their effect let me return to first base to describe
how these negotiations will take place and what they
will be about. 

In just over two months time, on September 27th
negotiations will begin between the European Union
(EU) and the ACP. They are intended to lead to the
creation of economic partnership agreements (EPAs)
between the EU and the regions of the ACP. 

The ultimate objective of EPAs, for the EU, is to
achieve over time reciprocal free trade between Europe
and the Caribbean. That is, open and unrestricted
competition between the two regions in each other’s
markets in almost all areas of trade whether it be in
goods or services. 

Initially, the negotiations will involve the EC and
all ACP states but at an agreed time they will take
place by region. For these purposes the Caribbean will
be one regional negotiating group consisting of all
Caricom member states. Countries in the region not
participating will be therefore the French DOM, Puerto
Rico, and the British and Dutch Dependent Territories.
It appears at this stage Cuba will also not
participate. Although a full member of the ACP group,
Cuba is neither a signatory to the EU/ACP Cotonou
Convention or a full member of Caricom. Despite ACP
and Caribbean protests, the EU has said Cuba can not
be a signatory to the ACP/EU Cotonou Convention unless
it meets certain criteria relating to civil society.

The negotiations are expected to take place in two
phases. The first phase will deal with general matters
of principal and the second phase will take place
bilaterally between the EU and regional trade
groupings. It is possible there may be a third phase
involving reconciling across the ACP, region-specific
texts. 

The European Commission, which leads for Europe when
it comes to the detail of the negotiations, wishes
region-specific negotiations to start as rapidly as
possible and even suggests that the bid/offer process
on tariff reductions could take place in parallel with
the first general phase of ACP/EU discussions. 

Despite this most EU member states suggest that region
specific negotiations will be undertaken after phase
one is complete and should start in 2004. Although
there are differing opinions within the ACP on the
timetable with some African nations wanting to adopt
the EC timetable, the Caribbean would like phase one
to be from 2002-2004 and the region-specific
negotiations from 2004-2006.

The negotiations are expected to last in total for at
least five years and are likely to be unusually
complex and difficult, as parallel negotiations will
be taking place in the WTO and in the case of the
Caribbean for a Free Trade Area of the Americas
(FTAA). 

The first phase of EU/ACP negotiations are expected to
take place in Brussels while the second phase will
predominantly take place in the region concerned. In
the case of the Caribbean EPA, the Europe is expected
to negotiate with Caricom.

It is likely that liberalisation will be asymmetrical
with Europe providing rapid access after 2008 for
almost all Caribbean products except perhaps those
agricultural commodities deemed sensitive (e.g. sugar
and rice). In contrast the region will be expected to
offer tariff reductions phased in over a variable time
scale. These are expected to cover almost all goods
and services but may well in the case of certain
Caribbean economies involve certain items being taken
off the table for an agreed and sometimes lengthy
period and/or being covered by special safeguard
measures. 

Prior to entering into region specific negotiations it
is likely that the region will try to obtain special
and different treatment at the WTO in view of it
vulnerability. What this means in practice and whether
this happens or not remains to be seen but present
feeling in Geneva are that this may in the end simply
come down to some nations being offered longer
transition periods for liberalisation than those that
may be agreed generally at the WTO.

The negotiations are also expected to cover issues
such as technical barriers to trade that presently
limit access to certain markets, the regulatory
environment and a wide range of other issues affecting
European companies trading with, investing in and
providing professional advice, consultancy and other
services in the Caribbean 

What the negotiations are about, how they will be
phased and whether region specific two-way free trade
areas are to come into being by 2008, 2020 or at a
later date are matters on which no consensus yet
exists. 

It is not easy at this stage to identify in detail the
specific ways in which Caribbean economic interests
may be affected. Much will depend on what concessions
the Caribbean makes first in tariff reductions in the
FTAA process, the manner in which these are taken
forward to the WTO Ministerial in 2003. 

There remain fundamental philosophical differences
between most of the ACP and the EU over what the
negotiations should address. The ACP believe that
negotiations should be about achieving the ACP’s
development objectives on a sustainable basis; should
address issues of economic growth and poverty
reduction; and should not be primarily about economic
integration with the EU. 

For this reason, the negotiations may well be very
slow in their early stages, as they will revolve
around trying to achieve a consensus on texts that
enshrine general principles acceptable to all. But
once these differences are overcome and guidelines
agreed, the detailed negotiation are likely to
accelerate, rapidly affecting all Caribbean interests.

David Jessop is the Director of the Caribbean Council
and can be contacted at
[log in to unmask]
July 19th, 2002


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