Guyana will continue its lobby against the EU Economic Partnership Agreement (EPA) in its present form but will ultimately sign it to avoid punitive tariffs, President Bharrat Jagdeo said yesterday.
Should Guyana be forced to sign the EPA to ward off the imposition of the Generalised System of Preferences, President Jagdeo said that Guyana will put its position to the EU to re-negotiate the troubling aspects of the agreement. He added that he knows Guyana would be in a weak position but he will still do so. The outcome, he said, will determine when he will sign the EPA if he must.
Speaking about the outcome of the meeting of Cariforum Heads in Barbados on Wednesday, Jagdeo said that the 13 other heads agreeing to sign the EPA without re-negotiations undermined African, Caribbean, Pacific (ACP) solidarity and multilateralism.
“We could have easily await the (ACP Heads of Government) meeting in Ghana before we made this decision,” he said at a press conference at State House, adding that Cariforum could have better coordinated with the five other regions in a similar position to negotiate better agreements. “We are in a hurry and that is dictated by the pace that the EU has set,” he said.
According to the Cotonou Agreement, the ACP grouping and the EU agreed in 1998 to an interim trade deal on the understanding that they would have negotiated regional EPAs by the end of December 31, 2007 for implementation by January 1, 2008.
Also undermining multilateralism too, he said was the Singapore issues which form part of the EPA but which he said developing countries fought against developed countries at the WTO to drop from its agenda. The Singapore issues deal with transparency in government procurement, trade facilitation (customs issues), trade and investment, and trade and competition.
Now that Cariforum – Caricom countries and the Dominican Republic – have committed themselves to the EPA he said that Europe could legitimately go to the WTO and argue that since countries are prepared to put this in bilateral engagements then they could be put back on the multilateral agenda and in the process undermining multilateralism.
He said too that the Most Favoured Nation (MFN) clause forces the country to extend to European countries more favourable agreements than it would have negotiated with its South-South partners, for example with neighbouring Brazil.
On regional integration, he said that the Common External Tariff (CET) which has been an integral part of Caricom regional integration will be phased out because the region has agreed to different liberalization schedules. “We will review having a CET only in 2035 only after this agreement is fully implemented,” he said.
Jagdeo said that, “Guyana has the most to lose in terms of tariffs… Of all the countries in Caricom we face the highest tariffs… not the tariffs itself but the quantum of money that our products will have to pay to get into Europe if this agreement is not concluded properly and if the GSP (Generalized System of Preferences) regime is imposed on us.”
According to an analysis of the EPA and its impact on Guyana by the Caribbean Regional Negotiating Machinery (CRNM), it was noted that EU trade plays a minor role for Guyana. The country’s total imports from the EU is some 9%. As such, customs revenue raised from EU imports is minimal – around 13% or US$4.4 million of the total customs revenue for 2007. Just about half of the duties, US$2.3 million, was raised from products that were excluded from EPA liberalization.
The analysis noted that in spite of the fact that only 830 out of 6400 products were actually on the exclusion list. The exclusion list was drafted so that it includes many revenue-sensitive products. About 60% of all imports will be liberalized almost immediately, but almost all of the products already have duty rates of 0% or 5%. Only 20% or US$0.9 million of duties on EU imports comes from these products.
The remaining 23% of imports will have their duties phased out over a 5 to 25 year-period. Revenue raised from these products represents 32% or US$1.4 of the total revenue raised from EU imports.
While trade liberalisation reduces or removes border taxes other taxes on the same product could take its place and nothing prevents a government from increasing the excise taxes on vehicles as it reduces customs duty. Gov-ernment revenue may also be reformed by the introduction of value added taxes (VAT), which Guyana has already done.
In relation to regional integration founded on the Revised Treaty of Chaguaramas, Jagdeo said that the region has not even asked the EU to put in place a clause in the EPA which makes provision for the Revised Treaty to take precedence over the EPA should it conflict with the EPA
In the EPA, he said the negotiators have sought to define it in relation to the Cotonou Agreement, the WTO and the International Monetary Fund but not in relation to the revised treaty.
He maintained that Guyana was saying to the others not to sign the EPA in its current form because it feels that the interest of the region was being compromised in many ways but the region appeared to be no longer interested in technical arguments but in politicizing it. Even the CRNM, he said which is supposed to be a technical body is now lobbying for the agreement when it should have been briefing the heads of government about all the options that are available and about the discourse on the EPAs taking place in Europe, Africa and the Pacific. “…but instead they have joined the political bandwagon and creating talking points for the region,” he said.
He reiterated that Cariforum could have used the space created by the regions in Africa and the Pacific to sign a goods-only agreement and deal subsequently with the developmental aspects of the EPA which appears to be the basis of the controversy surrounding the EPA at present.
Asked at the press conference about the potential of the current controversy to break up the region, Jagdeo said that the regional integration movement was strong. (Miranda La Rose)
