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TRADE: Caribbean Draws Line in the Sand with EU

Bert Wilkinson

GEORGETOWN, Guyana, Dec 13 2007 (IPS) - Barbados is the venue for a new round of talks starting this week that could make or break efforts to forge an agreement between Caribbean nations and the 27-member European Union for a new trade and aid pact that must be concluded by the end of the month in order to comply with World Trade Organisation (WTO) rules.

Negotiations between the two trade blocs for a new Economic Partnership Agreement (EPA) to replace the 2001 Cotonou Agreement have hit a dead end over a series of market access issues related to the list of products that will attract customs duties in the new atmosphere of free trade that is supposed to start in January.

But major stumbling blocks remain, as Caribbean leaders made clear at the end of a special one-day summit in Guyana last weekend, called to give regional negotiators a new mandate to break months of deadlock.

The weekend meeting was the second time in less than six weeks – following a meeting in Jamaica last month – that Caribbean leaders left their capitals to discuss negotiations for the EPA, which will replace previous umbrella agreements that offered mostly duty-free shelter for exports to the EU running into the hundreds of millions each year.

Owen Arthur, prime minister of Barbados and chairman of the Caribbean Community, warned of the economic losses of not having an agreement with Europe as the new year is ushered in, but said that the region might have to live with the fact of no deal within the deadline if the refusal of some European nations like France to allow Caribbean entertainers and artists to work in Europe continues.

Supported by the nodding heads and sombre faces of Guyana’s Bharrat Jagdeo, Jamaica’s Bruce Golding, Grenada’s Keith Mitchell, Trinidad and Tobago’s Patrick Manning and Caricom Secretary-General Edwin Carrington, Arthur said the entertainment industry is one area where the Caribbean produces a world-class product that could compete with anything, anywhere on the globe. The row over entertainers could be the latest negotiating roadblock if Barbados does not yield a compromise.

“For us to entertain the notion of having a partnership agreement with another set of countries, but discriminate against that thing which is the most West Indian of all, would be a betrayal. I would not be able to justify having an EPA with Europe where we are liberalising trade in cell phones and whatever else but tell our cultural workers, ‘we are very sorry, this is not for you’. So it is fundamental and it is strategic. It is simply not on,” he said.

Arthur talked about “drawing a line in the sand” on entertainment in spite of the dangers of the new year rolling around without a deal on paper.

He and Golding argued that the time had come to take a stand on the entertainment issue, given the fact that in the early hours of the summit leaders had instructed their negotiators to add vehicles, mobile phones and petrol to the list of products that would not longer attract duties, all in the name of forging a deal. Europe had been holding out for market access on these items.

Entertainment is near and dear to the hearts of Caribbean people, with more than 25 million tourists visiting the region every year. Jamaica’s government, for example, has said that Sean Paul, the global reggae icon, earns more annually than its banana industry, which is hanging by a thread because of rule changes in Europe and opposition to special treatment by U.S.-owned Latin American producers. There are countless others like Sean Paul, including Shaggy and Buju Banton.

Golding notes that while the region fights for a breakthrough the question of free movement in Europe for Caribbean entertainers, governments should start searching for years of recouping lost revenues from mobile phone, petrol and vehicles under the new regime.

“There’s a great deal of fiscal calibrating that would have to be done by individual countries,” he said, noting that the duty-free system would be phased in over a 10-15 years period “but we have time to ensure that we build into the programme sufficient time to allow us ourselves for that adjustment.”

The EU has made it clear that failure to meet the month’s end deadline will mean that regional goods will face similar duty levels as those paid by other countries under its general system of preferences.

Some Caribbean exports could attract duties of up to 30 percent outside of an EPA, and “there are countries that would lose 75 percent of their exports,” Arthur said. “Allowing our trade relationship to end on Dec. 31 without putting something in place that gives us continued access to the duty-free market would lead to the disappearance of entire industries.”

Such is the dilemma the region faces at the talks in Barbados Dec. 13-14. Countries in Africa and the Pacific are also fighting to hammer out details as 2007 comes to a close. Some have signed deals already, but others are holding out, fearing that unfettered market access for EU goods will overwhelm their fragile economies.

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