Milled rice exported from Guyana and Suriname to the European Union (EU) will increase to 187,000 tonnes in 2008 and 250,000 tonnes in 2009 under the new Cariforum-EU Economic Partnership Agreement (EPA).
Rice exports to the EU will be liberalized – become duty-free and quota-free – in 2010, according to David Hales, Caricom Secretariat Programme Manager – External, Economic and Trade Relations and one of the negotiators for the Cariforum team.
Addressing the media across Caricom through a teleconference hosted by Caricom Secretary-General Edwin Carrington in Georgetown yesterday, Hales said that of the four main Cariforum exports to the EU, rum and bananas would enter Europe duty free/quota free (df/qf), while rice would be liberalized in 2010. Sugar would be phased in at a later date.
The EPA, negotiated in individual regional groupings, replaces the Cotonou Agreement signed between the EU and ACP countries from January 1, 2008.
Bananas entering Europe df/qf from the start was not the “preferred desire of Cariforum but we were not able to convince Europe otherwise to maintain a managed market only for Cariforum,” he said. Other regions in the African, Caribbean and Pacific (ACP) grouping had signalled very early in the negotiations that they were in favour of df/qf access for bananas entering the European market.
Because of the intense competition regional banana producers face all over the world, the Caricom Heads of Government had sought assurances from the EU trade and development commissioners in October that some assistance would be forthcoming to those countries which would want to improve their productivity and competitiveness as well as those that would be forced to go out of production because of the removal of preferences.
The deal on sugar was among the last issues on which agreement was reached. Hales said that even after df/qf access is given for sugar to the European market it would be under certain conditions to ensure that there will not be a glut of sugar on the EU market affecting the process.
Apart from the 30,000-tonne quota given to the Dominican Republic and 30,000 tonnes allocated to other Caricom sugar producers up to September 2009, Hales said, the EU has also agreed that during the transition period from duty free to quota free should any country be unable to meet their allocated quota, the quota would be reassigned among the Cariforum countries. Hales felt this was a significant achievement, since if the Dominican Republic were to fall short of its quota another Caricom country could fill the gap and earn at least 12 million euros immediately. This reallocation would cover the 2008 and 2009 period after which the Sugar Protocol comes to an end.
Meanwhile, Guyana’s representative on the negotiating team, Neville Totaram, told the media that a time-bound restriction was placed on cumulation within Cariforum on sugar-based products and rice during the periods that quotas will apply – for rice until December 31, 2010 and for sugar until September 30, 2015.
However, the European Commission, he said, agreed to review the list of products for which cumulation will not be allowed after three years, with a view to reducing the list.
The rules of origin applying to imports under the General System of Preferences, which take effect from January 1, allow under certain conditions, for cumulation of origin. Where those conditions are met, inputs from other countries are considered as originating in the exporting country. Provisions on cumulation thus extend the possibilities for producers in beneficiary countries to use such inputs.
Speaking generally, Hales noted that Cariforum, which comprises Caricom countries and the Dominican Republic, is the only region of the ACP that has concluded a full EPA with the EU. The other regions have concluded interim agreements which relate only to trade in goods. However, he explained that that aspect of the trade in goods was not an interim arrangement that could be changed. What it meant, he said, was that the trade aspect was concluded but there were other elements such as services which would be negotiated at a later date.
By completing a comprehensive trade agreement, Hales said, Cariforum would now enter into a new era of trade relations with the EU. Over time, the one-way preferential agreement that governed Cariforum/EU trade would come to an end.
Cariforum would continue to enjoy its preferential access into Europe but over 15 years during which time they would liberalise up to 85% of imports from the EU. There would be some imports from the EU that would continue to be excluded from preferential access into Cariforum and over those 15 years, there would also be a phased reduction of tariffs applied to EU produce. There are some sensitive products for which the liberalisation period would cover 20 or 25 years.
Hales noted that the services agreement which covers the largest sector of the regional economy is primarily responsible for employment and many recognize it is the key to the region’s future and was therefore a significant achievement for Caricom.
This issue was expanded on by Totaram at a Ministry of Foreign Trade press briefing later in the day. In addition to the demand for a market access offer in `Entertainment Services’ – which includes theatre, live bands, circus and discotheque services – the two sides agreed to a Protocol on Cultural Cooperation, he said.
The cultural cooperation protocol, which would be annexed to the agreement, provides a framework for cooperation and technical assistance on cultural and entertainment services and for support to Cariforum culture and entertainment service providers.
The services agreement in the EPA, according to Totaram, is the first ever entered into by Caricom and it is significant in scope and coverage.
or Guyana, as well as for Caricom, he said, the services agreement was a comprehensive undertaking and Guyana’s services offers are significant. He feels that a full assessment by Guyana would need to be undertaken, given the developmental prospects for economic diversification and job creation in the services sector. (Miranda La Rose)
