In Madrid on May 18 the Spanish Government as President of the European Union will host the sixth summit of Heads of Government of the European Union and Latin America and the Caribbean. In the margins, a series of bilateral mini-summits will be held including one on May 17 with Cariforum.
The events are meant to cement a new relationship between Europe, Latin America and the Caribbean and result in a wide-ranging political declaration that in part expresses satisfaction about the positive development of relations with the Caribbean. Whether the process will be smooth sailing with the Caribbean is uncertain. As details begin to emerge of new trade arrangements that the European Commission has negotiated with Andean and Central American nations, Caribbean governments have begun to question how serious Europe is about wanting a partnership.
In the area of trade, Europe is hoping that at the time of the summit it will be able to sign association arrangements with Peru and Colombia that include free-trade agreements, and to have concluded similar negotiations with Central America. This in general terms is welcome.
However, to achieve this the European Commission has made new trade concessions to these nations on sugar, rice, bananas and rum that may well provoke a Caribbean protest as this new deal comes shortly after Europe, Latin nations and the ACP had reached in good faith a finite trade agreement on these and other products, albeit in a multilateral context, in Geneva.
According to Caribbean and European officials, Europe has now agreed (as a consequence of an unknown side deal in Geneva) to further market openings that provide Latin nations with additional levels of liberalisation for bananas, sugar, rice and rum.
In the case of bananas the EC has agreed with Colombia and Peru to cut the tariff level from Euro 145 per tonne to Euro 75 per tonne over ten years by 2020 and appears to be moving towards an eventual tariff of Euro 85 per tonne also achieved over a ten year period with Central America.
On sugar, with Colombia and Peru, a zero rate tariff quota has been agreed for 62,000 and 22,000 tonnes respectively increasing by three per cent a year, and it appears consideration being given to a zero quota of up to 250,000 tonnes for Central America in response to a larger request.
On rum, Europe will fully liberalise tariff lines for Colombia and Peru on bottled rum over a three year period, a matter of particular concern to Dominican Republic producers, and introduce small zero-rated quotas on bulk rum, but is likely to make much greater concessions to Central American producers, where parts of the rum industry are dominated by large European multinational spirits companies. On rice, Peru will be given a zero quota for 34,000 tonnes annually increasing by ten per cent a year, and Central America is requesting a quota of 50,000 tonnes a year increasing at a rate yet to be agreed.
While the EC has every right to negotiate bi-regionally new trade arrangements on commodities and value-added products that are sensitive to the Caribbean, the effect is to cause a breakdown in trust.
In Geneva in December numbers were agreed in a multilateral context with the objective of ending the banana dispute and agreeing an approach that would resolve an EU, Latin American and ACP stand-off on tariff reductions on products including rum, rice and sugar.
At that time Europe agreed in the context of any final agreement in the Doha round to cut its Most Favoured Nation import tariff on bananas in stages, from the rate of €176 per tonne to €114 per tonne by 2017. Then the EC said that the agreement was a stable solution in the interest of all parties and would help pave the way for a successful Doha Round.
Europe will of course argue this was separate deal and with some justification that the Caribbean has and is being given time to adjust to such preference erosion, that it has made available financial support albeit through the painfully slow and bureaucratic mechanism of the European Development Fund, and that the Caribbean has to make regional integration work and must take advantage of newer trade opportunities.
However, this is missing the bigger political point. At a time of significant change in global trade, the actions of European trade negotiators are losing for Europe the Caribbean’s support despite there being a continuing propensity at a personal level for those in the region to want to relate. European politicians and officials do not hear what the Caribbean is really thinking because the region is for the most part too polite and on occasions too acquiescent and silent. But the reality is there is in the Caribbean a turning away from Europe towards newer partners who are more empathetic, whose thinking and world vision is closer to that of the region, who are there for the long term, can offer support more rapidly, who implement what they promise and do so in a manner that is less conditional and bureaucratic. These are partners who have seen geostrategic value in a strong relationship and are prepared at the highest levels to visit and receive Caribbean leaders.
Political Europe at the level of its member states should be thinking much harder about the Caribbean and the longer term implications of a process that has allowed officials in the European Commission and in capitals to determine the most important aspects of policy towards a region considered by most politicians as too complicated and containing too many small and sometimes mendacious and difficult nations.
This process of downgrading has occurred in all European capitals and has resulted in the Caribbean feeling that there is not just a lack of interest but an absence of respect by officials who believe that Caribbean is largely irrelevant and somehow has no other options.
Contrast this with the growing and real role being played by China, Venezuela and in time India, and link this to a future world in which the US and China cannot agree. This is not an argument against the region’s changing relationships – such change is on the whole beneficial – but to suggest that if Spain really wants to cement a European role it should think strategically and politically about how Europe can better respond to the nations of Cariforum and how to offset the broader impact of what is being negotiated on trade.
Previous columns can be found at www.caribbean-council.org
