By IPS Correspondents
ST JOHN'S, Antigua, Jul 7 2008 (IPS)

Caribbean leaders appear to be no closer to a consensus position on the controversial Economic Partnership Agreement (EPA) that was initialed last December following negotiations between the European Union and the Caribbean Forum countries.

A communiqué issued at the end of the four-day Caribbean Community (Caricom) summit that ended here on the weekend acknowledged that while several countries “expressed readiness to sign”, Guyana remained deeply wary of the agreement.

In his address at the start of the meeting, Guyanese President Bharrat Jagdeo accused the European Union of adopting “bully boy tactics” during the EPA negotiations and warned that the deal could lead to intra-Caricom competition and even fragmentation.

“The EPA will define our external trade policy with all other trading partners. Are we satisfied with this? Will we allow the Most Favoured Nation clause to stand? Each state will have a bilateral relationship with the EU. Caricom is not a party to the EPA,” Jagdeo said.

At the summit, leaders did agree on some new regional integration mechanisms, but expressed “deep disappointment” at Britain’s decision not to allow Montserrat to participate in the Caricom Single Market and Economy (CSME) that facilitates the free movement of goods, skills, labour and services in the Caribbean.

Jagdeo noted that one study indicates there are 336 identified areas for implementation under the EPA, and 300 outstanding areas for action under the CSME.

“I feel that in the region we should only do what is required to make the EPA World Trade Organisation (WTO) compatible,” Jagdeo said, adding that it should be a “goods only agreement”.

Antigua and Barbuda’s Prime Minister Baldwin Spencer, who will be the chair of the 15-member Caricom grouping over the next six months, said that the EPA had been “fully debated” during the summit with the leaders taking “quite some time examining the pros and cons.”

“We recognise that there were issues involved but I think in the final analysis we were able to arrive at a position which seeks to ensure that the process continues and that Caricom will sign on the EPA with certain thoughts in terms of ensuring that commitments will remain intact.”

St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves said the EPA, which is now likely to be signed in Barbados in the next two months, represents a “new world situation” in which the preferential treatment for Caribbean goods and services has disappeared.

“We are in a liberalised trading environment that if we didn’t fashion some agreement …we would have been left with having an imposition of the General System of Preferences. You may say that it is the modern globalised world and a proverbial gun to our heads, but we have to make the best of the world in which we find ourselves.”

“I am not going out there and sing the praises and say it is manna from heaven; there are features of the agreement which are helpful and there other features which are problematic,” he said at the end of summit news conference.

“We have to realise that in the relationship [with the EU], we were subordinate partners and it does not mean we have to roll over and play dead, but you try to find as much space as you possibly can to advance the concerns and welfare of our people,” Gonsalves said.

In a recent column. David Jessop, director of the Caribbean Council, noted “a change of political mood in many small states across the world about trade liberalisation” and predicted that “delay will almost certainly be the region’s chosen approach on the EPA”.

Jessop warned that free trade “has potentially become an issue for the streets as the price of everyday living accelerates beyond governments’ ability to control.”

Competition for markets between the Caribbean and Latin American producers is also becoming increasingly bitter, with leaders slamming moves by Latin American countries to substantially reduce the tariff on bananas entering the European market.

They said that while the EPA would shield the Caribbean’s preferential access to the European market from further legal challenge in the WTO, “developments in negotiations under the Doha Development Agenda (DDA) threatened to reduce severely the EU’s Most Favoured Nation (MFN) tariff on bananas, which is the instrument that enables the region to continue exporting profitably to the European market”.

The Latin Americans, who were granted quota-free access to the EU market in January 2006, have increased their exports by 10 percent since then. Caribbean leaders warned that to heed the calls for substantial reductions in the EC tariff would be to “severely damage the interests of Caribbean producers”.

“If the outcome of the WTO Doha Development Agenda negotiations are to be balanced, there must be suitable treatment for bananas and other products that are the subject of long-standing preferences and that if this were not to be the case, Caribbean countries would find it impossible to join in any consensus that may emerge in the current talks,” the communiqué added.

The weekend summit was held in a country where 43 years ago, the leaders of Barbados, Guyana and Antigua and Barbuda agreed to the “Dickenson Bay” agreement that eventually lead to the formation of Caricom, and the summit provided an opportunity for the new crop of regional leaders to issue a declaration re-affirming their commitment to the deepening of that relationship.

A new Caricom Travel Card was approved to “facilitate hassle-free travel within the region for nationals and legal residents of Caricom without compromising the security of the Community”, although some said their economies were not ready for the CSME’s deadline of 2015.

Barbados Prime Minister David Thompson, who was elected to office in January, said his country did not have the capacity to “to implement the freedom of movement and we are not going to move to that state until we have that capacity.”

“We are not going to build an underclass in our country of people who are going to be exploited,” he added.

Even as Jamaican Prime Minister Bruce Golding complained of an overly “heavy” agenda, the regional leaders also took time to criticise the political situation in Zimbabwe, saying the election of President Robert Mugabe did not reflect the will of the people.

They said that the two rounds of voting had been marred by “spiralling political violence, intimidation and harassment” and that they were condemning “this unacceptable trampling of the democratic and electoral processes in Zimbabwe”.

Excerpt: