After three and-a-half years of stressful negotiations, the Caribbean and European negotiating teams have concluded the first Economic Partnership Agreement (EPA). Both parties completed the massive task around 1:30am on Sunday, 16 December at the Grand Barbados Hotel in Bridgetown, Barbados.
As of January 2008 all exports in goods and services originating from within the Cariforum countries (CARICOM plus DR) will receive duty-free and quota-free access in Europe. Eighty percent of the goods produced in Europe will receive duty free access to the Caribbean markets within the next 15 years.

Also included as part of the EPA with the EU is development assistance for each nation to the tune of EU2.5 million as well as special exceptions for Haiti. Though there has been much discussion regarding signing of the EPA supporters argue that it was the best deal that the region could have gotten under the limitations set by the World Trade Organization (WTO)

What distinguishes the EPA from similar free trade agreements is that it covers areas like the movement of people, intellectual property and the concern tax revenue based economies. Add to this the specif list of the protected goods under the EPA and the lengthy liberalization schedule and many consider this to be a landmark agreement.

The EPA replaced the Cotonou Agreement, signed in 2000 as an extension and modification of the Lome Accords. In itself Cotonou was unique in linking development assistance and trade relations. Different from free trade agreements negotiated by the United States, Europe has incorporated a major development cooperation chapter with donations and assistance as part of the package. This is no different with the EPA.

The Caribbean EPA, bringing reciprocity to trade with continued development cooperation funding. The agreement had to be completed by December 2007 when the WTO waiver on the preferential trade arrangements in the Cotonou Convention expires. Had no agreement been signed the region would have entered into a Generalised System of Preferences (GSP), which would have limited the access to aid and limited commerce with the EU

With the stalling of WTO’s Doha Round and the Free Trade Area of the Americas, the EPA with Europe had become the only substantive trade negotiation that the Caribbean as a region is involved in. 

The EPA objectives are to promote socially and environmentally sustainable economic development, and help small Caribbean states play a meaningful role in the international community. Additionally, the aim is to support Caribbean reforms to reduce economic vulnerability, and promote new development. Finally the aim is to ensure changes occur at a pace that protects economic and social development.

The EU is the Caribbean’s second largest trading partner. Aluminum, rum, sugar and bananas (and oil) are the main exports to Europe. Trade in goods is worth just over €3 billion a year. This income is important for the Caribbean, but exports have not diversified into higher-value goods and services.

The EPA hopes to bring together two regions, each with their own history of regional integration. It will be one of the first-ever region-to-region, development-oriented North-South trade agreements. And it will go beyond the current, limited trade arrangements for Caribbean goods entering the European Union. The EPA will be a means for Europe to help the Caribbean improve competitiveness, diversify its exports, and build regional markets.

This EPA is about creating jobs and wealth through trade. It will do this by building regional markets and helping to build a clear and transparent framework for doing business in the region.  The EPA is based on regional integration and gradually opening up markets to improve competitiveness and reduce prices. To manage the social impact of change or the sensitivity of small markets, the EPA will include special and differential treatment, including flexibility over what products and services the Caribbean will liberalize and when.

Director General Richard Bernal, speaking on the EPA, contradicted the concerns of critics by explaining that in the face of an increasingly global economy this was the best option for the region. Bernal added that if it were possible to get preferential one way treatment the CRNM would have tried to get it, but with pressure from the World Trade Organization (WTO) and movement by countries towards trade liberalization this was impossible, adding "this is fantasy not a reality, this is fiction not fact." The DG added that contrary to critical opinion the region was not bullied into the agreement. "The need to move towards reciprocity had been known since the Lome and Cotonu agreements. We might not like globalization, but it is a reality. Not everybody makes it in globalization, there is no guarantee everybody will benefit, but the global economy equals global competition. We are competing in today's world. This is a trade agreement, not an aid agreement. This is a hand up, not a hand out and if you can't compete in 25 years you can't compete in 50 or 100 years." As for the DR's role in the EPA negotiations the country was applauded for its efficiencies during the process. In fact, CRNM officials agreed that the DR, because of its CAFTA negotiations with the US, had all ready been ahead of the curve and that it was CARICOM who had to make concessions for the DR. The DR, according to SD Gill, could have held out longer for certain concessions under the agreement, but sacrificed and accommodated to CARICOM.

Updated 18 April 2008