The Cariforum-EC Economic Partnership Agreement (EPA) is more than just a trade agreement: its scope embraces many subjects that have up to now been solely or mainly within national and regional jurisdiction (Box 1). As a legally binding international instrument with elaborate implementation and enforcement provisions, it embodies a higher degree of supranational governance than the corresponding arrangements in the Caribbean Community. It will, inevitably, condition the scope and content of future agreements made between Caricom and other major trading partners and the region’s stance in WTO negotiations. There is a sense, therefore, in which the EPA sets up a framework for the future evolution of the economic, social and environmental policies of Caricom states, both separately and collectively; and for the terms on which the region engages with the global community.
In light of this it can be reasonably argued that that there should be full public disclosure of the EPA texts, supported by ample explanation of its meaning and implications by the CRNM and by regional governments and by provision of adequate opportunities for public discussion and feedback. The principles of transparency and democratic governance, to which both Caricom and European governments are committed, require no less. Changes in constitutional arrangements of an equally far-reaching nature, such as the adoption of Republican status and the establishment of a Caribbean Court of Justice, have been the subject of public and Parliamentary debate in several countries of the region prior to their adoption. In contrast the final stages of the EPA were rushed to conclusion, with little opportunity for the public to become familiar with its provisions and to deliberate on its implications.
Although the agreement was initialed over one month ago and is to receive Ministerial signature in less than two months, it has yet to be made freely available within the Caribbeanii. Information provided on the EPA from official sources has been highly summary and selectiveiii. It often raises ‘more questions than answers’; and it is sometimes difficult to separate fact from interpretation. This is not helpful to building public confidence in the alleged benefits of the EPA and public cooperation in carrying out EPA obligations. This situation needs to be rectified as a matter of urgency.
This articleiv focuses on just a few features of the EPA that appear to have significant implications for national and regional development, for the region’s autonomy in policy-making and for its ability to fashion a CSME that responds to its own choices and prioritiesv. I believe that the issues that arise buttress the arguments for full public disclosure, public explanation and public discussion of the EPA.
Broad scope of the EPA
The Caribbean was the only one of six negotiating ACP groups to push ahead with the conclusion of a ‘comprehensive’ EPA in the original time-frame (the EC had offered ACP groups the option of negotiating a more limited Interim Agreement in order to meet the negotiating deadline of December 31, 2007; with an additional year allowed for negotiation of the other aspects the agreement). The comprehensive agreement includes obligations in the subject areas of Investment, Competition Policy and Government Procurement; subjects which developing countries as a whole, including the Caribbean, had rejected for inclusion in current WTO negotiations. Their reasoning was that inclusion of these subjects in the scope of the WTO agreement would involve further surrender of autonomy in domestic policy making. Strictly speaking, therefore, it was not necessary for these to be included in the EPA in order for it to be ‘WTO-compatible’, as required by the Cotonou Agreement that mandated EPAs with the ACP group. However, Europe pushed for the inclusion of these subjects in EPAs, mainly because they provide additional protection and opportunities for EU firms and investors.
The Cariforum EPA also provides for heightened Intellectual Property protection that goes beyond the relevant TRIPS (Trade Related Intellectual Property Rights) agreement in the WTO. Other subjects that are not within the scope of current WTO agreements are Current Account Payments; the Environment, Social Aspects; and Cultural Cooperation.
Whether the inclusion of the ‘WTO-plus’ subjects in the EPA is good for the region can only be determined by an examination of what obligations the region has undertaken and what it is getting in return. In general, the inclusion of these subjects involves exchanging the kind of policy flexibility that would allow governments to discriminate in favour of local firms and suppliers, in return for expected benefits in the form of additional private investment and development assistance. To some degree this requires a ‘leap of faith’ in the operations of market forces and in the resources and good faith of donors. EPA obligations are legally binding, immediate and of indefinite duration. Additional private investment may or may not materialize. Development assistance in specified forms, quantities, and time-frames is not included in the EPA. If additional investment and development assistance are not forthcoming, there is no provision within the EPA for the promised beneficiaries to be released from their obligations.
This issue may be illustrated with regard to the EPA chapter on Innovation and Intellectual Property (IP). A comment prepared at my request by a team of experts at the South Centre observes thatvi:
Chapter 2 of Title IV of the draft EPA text covers issues linked with key aspects of socio-economic development of the Cariforum states (CF). One can easily assess the different levels of engagement of the parties under Section 1 and Section 2. Section 1 largely provides for non-binding commitment, declaratory statements, and matters that will be defined during implementation. Section 2 largely establishes binding TRIPS-plus standards that should be implemented by the parties. If Section 1 is assumed to be of interest for Cariforum (CF), then what they are getting from the EPA will be largely promises that may face the inherent difficulty of determining their scope and the kind of measures that can be considered as adequate implementation of the commitments. The implementation of Section 2 is straightforward, involving the introduction of domestic laws to implement the section that can be easily verified and assessedvii.
Another fact of considerable significance is that the comprehensive EPA covers several subjects that are not yet settled in the Caricom Single Market and Economy (CSME), or have not yet been fully implemented. This is the case for Financial Services, Other Services, Investment, Competition, Government Procurement, E-commerce, Intellectual Property, Free Circulation of goods, and the Environment. It has been argued that inclusion of these subjects within the scope of the EPA provides a boost to CSME completion. However, this assumes that the provisions of the EPA regime in these areas represent what is best for the CSME. The counter argument is that it would have been better for Caricom to complete its legal and policy regimes in these areas first; which would have provided it with a stronger position from which to negotiate. It is not clear that the pros and cons of these different alternatives were assessed. The issue now is whether and how far the design and implementation of the relevant CSME regimes will be driven by the requirements of EPA-compliance.
2. Development Cooperation
The EPA begins with a chapter on a Trade Partnership for Sustainable Development which speaks to several development issues of interest to the region and endorses a range of development-supporting measures. The text as a whole is replete with laudable references to development cooperation in different sectors and subject areas. The question is how far these are stated in a way that binds the EC and EU states to undertake specific actions and measures and within spe
cific deadlines, to which they can be held to account. The agreement itself contains no funding commitments. These are contained in the European Development Fund, which is part of the Cotonou agreement which runs until 2020. It would appear that the EDF is now being conveniently regarded by the EC as a complement to the EPA. According to a CRNM release, the 10th EDF
”is estimated at
