Economy & Trade, Europe, Headlines, Latin America & the Caribbean

EU: Defiant Guyana to be Punished

David Cronin

BRUSSELS, Oct 10 2008 (IPS) - The European Union is preparing to impose swingeing taxes on goods imported from Guyana as punishment for the Caribbean island’s refusal to accept a free trade accord.

Unlike 13 other governments in the Caribbean, Guyana has opted out of signing an Economic Partnership Agreement (EPA) with the EU.

A document expected to be rubber-stamped by the EU’s foreign ministers Oct. 13 suggests that Guyana will therefore no longer benefit from the favourable treatment scheme for its Europe-bound exports that has been in place since 1975. As a result, it would be subject to higher tariffs on its exports of rice, rum and seafood.

Some leeway is likely to be granted to sugar exports, at least on a temporary basis, according to diplomats. Guyana is the largest sugar exporter in the Caribbean.

Patrick Gomes, Guyana’s ambassador to Brussels, said that the EU’s move could ultimately lead to his country losing 70 million euros (94 million dollars) each year. “For a small economy to absorb that loss would be devastating,” he said, adding that he will be undertaking discussions with EU officials to see if a solution can be found ahead of the foreign ministers’ meeting in Luxembourg.

Their meeting takes place just two days before a formal ceremony in Barbados, at which the agreement will be signed by both EU and Caribbean representatives.

Guyana has indicated that the scope of the agreement is too broad and that it is not sufficiently focused on using trade as an instrument to lift people out of poverty. Although President Bharrat Jagdeo has said that he would be willing to enter into an agreement that is restricted to trade in goods, he has complained that the agreement on the table covers a range of other issues, such as the opening up of services markets and a relaxation of rules on foreign investment.

Although 78 African, Caribbean and Pacific (ACP) countries have been involved in EPA negotiations with the EU, the Caribbean agreement is the only comprehensive one to have been concluded on a region-wide basis.

The negotiations have been overseen by Peter Mandelson, who was the EU’s commissioner for trade before his surprise return to British politics earlier this month, where he has been appointed cabinet minister for business affairs.

Last month, Mandelson said there was “no question of confining any country (that declines to sign an EPA) to outer darkness.” But he maintained that the “only alternative trade regime available” to the EPA under rules set by the World Trade Organisation is the generalised system of preferences (GSP). This involves subjecting Guyana to higher tariffs.

Some African governments are worried that the action taken against Guyana could lead to similar action being taken against them if they do not sign EPAs. An African diplomat, speaking on condition of anonymity, described the EU move as “completely unacceptable”, suggesting that it ran counter to assurances given by the Union earlier this year that it would display flexibility towards ACP countries which express particular concerns about the content of the proposed accords.

The Oct. 13 decision is due to be adopted as what EU officials call an ‘A point’ – an item approved at a meeting without any prior debate.

Paul Goodison from the European Research Office, a group specialising in trade issues, said that the decision would “send a signal to other ACP countries that the European Commission is willing to withdraw their preferences if it doesn’t get its way in negotiations.”

He added: “This is hardly conducive to creating the conditions of flexibility to address the genuine concerns which ACP countries have.”

Members of the European Parliament (MEPs) are also due to discuss the state of play with the EPA talks over the coming week.

David Martin, an MEP since 1984, expressed unease over clauses relating to intellectual property in the agreement with the Caribbean.

The agreement would require the 13 governments to accede to the Patent Cooperation Treaty (PCT). Reached in Washington in 1970, this treaty streamlines the procedures for applying for patents in more than one country.

According to Martin, the likely increase in the filing of pharmaceutical patents in the Caribbean Forum may result in the poor having less access to affordable medicines. “Individual Cariforum (an umbrella organisation of Caribbean countries) countries’ markets are currently too small for multinationals to spend the time and money necessary applying for patents and so naturally generic medicines can be imported or manufactured freely,” he said. “PCT membership could mean that more and more medicines are patented in the Cariforum and in turn medicines will become a lot more expensive.”

Dalindyebo Shabalala from the Centre for International Environmental Law in Geneva branded the intellectual property provisions in the EPA as “extremely troubling.”

In a recent paper, he stated that these clauses are not designed to help the Caribbean develop in a way that benefits its societies and avoids ecological harm but to advance the EU’s own “mercantilist interests”.

It is “astonishing”, he said, that the EU is using this agreement to try to enforce rules originally intended for wealthy countries in poorer ones.