Sunday, May 18, 2008

Guyana and the wider world. Concluding observations on the Cariforum-EC, EPA

Guyana and the wider world. Concluding observations on the Cariforum-EC, EPA
By Dr. Clive Thomas
Stabroek News. Sunday May 18, 2008

18 weeks later
When I started this evaluation of the Cariforum-EC, EPA on January 20, I had not envisaged that I would still be at it 18 weeks later. In this the final column of the series, I shall respond to what has been easily the most frequent question asked by readers. That is, given the many defects of the agreement, which few should be considered the gravest? Because the EPA is both a documented agreement that warrants immediate analysis and a long-run instrument through which policies, programmes and activities are to be implemented, the final verdict must await its actualisation. However, among the deficiencies, four will become progressively burdensome.
Regional integration
First, the EPA will progressively hamper Caricom’s efforts at promoting open regionalism, utilizing the region’s markets and resources as the platform for liberalisation and progressive engagement in the global economy. To start with, Cariforum is an EC inspired abstraction given legal form in the EPA. This construct is not a Caricom initiative and indeed prior to the EPA there was not even a Caricom-Dominican Republic customs union area. Additionally, Caricom has not yet created within its integration framework regimes for services, investment, intellectual property, public procurement, competition and other trade-related areas. The construction of an EPA with agreements on these matters not already in place constrains Caricom’s capacity to direct their outcomes. The region has therefore, put the cart before the horse. This weakness will become progressively grave.
This will be aggravated by the consideration that organizational structures of the EPA have more sway over Caricom affairs than Caricom’s Secretariat, organs and other bodies.
Financing and the development dimension
Second, it will become progressively burdensome that the most insecure aspect of the EPA is its ‘development dimension.’ This rests largely on the definite provision of EU development assistance to boost Caricom/Cariforum’s institutional, infrastructural, and regulatory capacity at the national and regional levels, so as to promote a sustainable expansion of the region’s exports to the EU and the rest of the world. But as I have revealed no additional funding is provided through the EPA. Promised EC assistance through the 10th EDF and the Aid-for-Trade proposal is not contingent on signing an EPA. This observation is supported by statements of no less an influential spokesperson than the EC Development Commissioner. When asked: “Will there be additional financing beyond the EDF to accompany the EPAs?” his reply was, “This is a question I am often asked. I have to say that as far as the EDF and the Commission are concerned there will be no further funding.”
Similarly, as we saw the EC Aid-for-Trade initiative was laid at the WTO in 2005 and is not EPA-inspired.
Furthermore, the EPA lacks specific, legally binding, time-related provisions for the delivery of assistance through clearly specified mechanisms that are subject to its disputes resolution procedures. In sharp contrast to the detailed trade and trade-related commitments made by Cariforum/Caricom, what is provided instead are best-endeavour good-faith clauses.
Global Europe
Third, the global Europe project as documented by the EC Trade Commissioner, reveals the grand designs behind the EPAs. In the cases of government procurement and the most favoured nation (MFN) provisions we saw that the Global Europe project explicitly targets government procurement as the last major frontier for EU firms to penetrate in the developing world, and the MFN principle is an undisguised counter to what the EC calls “competitive new players.” These are defined as countries or regions with a market share of 1% or 1.5% of world trade, respectively.
Several emerging economies from the South are captured (or are soon to be captured) by this definition.
The absence of a parallel Caricom poject exposes the region to being continuously reactive to EU and other similar external demands. The region’s authorities lack an intellectual base to guide their actions. This does not have to be a unified view of Caricom’s development that is shared by each and every citizen. Such an outcome would be ideal. What is required is that the authorities leading the integration/external trade negotiation process should, like their EC counterparts and its Global Europe Project, articulate a strategic vision, within which their decisions and policy recommendations are framed so as to encourage creative dialogue. The absence of this will be of progressive detriment to the region.
Political economy
The final issue is that, ultimately, the political economy of the EPA is rooted in the EU and other developed states seeking to find a way around the impasse created by the stalled Doha Development Round. It should be remembered that the EC Trade Commissioner has stated that the “WTO already governs the multilateral trading system with striking effectiveness.” Caricom is in no position to claim the same. The EU therefore sees the EPAs as a circuitous, but necessary route towards establishing hegemony of the WTO “as is.” On this important matter Caricom and the CRNM have given no direction and indeed one can expect that after the EPA will come further bilateral deals with the USA and Canada! After that, however, the scope for Caricom to pursue open regionalism and contribute to a multilateral approach to global trade reform will be effectively zero.
The region is locked-in to an EPA-development path, unless the Interim EPAs can provide space for new options. So far this does not seem likely, as Europe and its allies in the ACP are not disposed to consider any option but theirs. And, the present constellation of economic, social and political power among the parties to the ‘partnership’ makes slim, the prospects for other options.

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