Eight Cariforum states have taken steps to reduce tariffs in accordance with a trade pact with the European Union and the region has expressed concern over the planned differentiation in EU development policy which could see some countries losing aid as they are classed as middle income.
The Second Meeting of the Joint Cariforum-EU Council under the Economic Partner-ship Agreement (EPA) last week examined challenges that have arisen in the implementation of the EPA, with a view to ensuring that errors are resolved and the agreement remains on track.
In a press release, the Caricom Secretariat said 13 of the 15 signatory Cariforum states attended the Brussels, Belgium meeting with eight delegations led by ministers. The 15 signatory Caribbean Forum of African, Caribbean and Pacific (Cariforum) States to the EPA are the independent Caricom member states and the Dominican Republic.
The meeting formally agreed to amend the EPA, in order to allow the incorporation of the commitments of The Bahamas into Annex IV of the EPA which addresses Investment, Trade in Services and E-commerce. In the lead up to this decision, The Bahamas’ representative made a statement in which he referred to the importance of the EPA for economic development in that country.
The meeting also considered reports on efforts to establish Institutions of the EPA which have not as yet been convened. “In this regard, there were deliberations on efforts to bring into operation the Consultative Committee under the EPA. These deliberations were inconclusive as the EU Delegation indicated that it is required to refer a number of elements for consideration by the EU Council, given that positions previously endorsed by that body needed to be amended if there is to be agreement with respect to proposals tabled by CARIFORUM,” the release said.
With respect to the naming of arbitrators, Cariforum and the EU agreed to exchange the list of five arbitrators and agreed to engage in discussions to derive the five neutrals which would complete the slate of 15 arbitrators.
Tariff reductions
Eight Cariforum states have taken action to reduce their tariffs on goods from the EU and the remaining states are engaged in efforts to put in place the tariff reductions required. Cariforum also pledged that every effort would be made to meet the deadline of January 1, 2013 for the second round of tariff cuts.
In a press release the Ministry of Foreign Affairs said Guyana and the seven other member states have started implementation of their scheduled tariff reductions which will be phased over 25 years, until the end of 2032.
The meeting also focused on a number of matters of particular concern to Cariforum states which have been discussed between the two sides over the past year. Two of these matters pertain to provisions in the Agreement that Cariforum considers do not reflect its understanding of the position previously adopted by the two sides. The first concerns the arrangements applicable to Cariforum states regarding the reduction of tariffs on motor vehicles and parts, while the other concerns the rate of duty on certain paper and paper board products applied by Trinidad and Tobago. In both cases, the two sides were unable to arrive at an agreement for adjusting the provisions of the EPA and the Joint Council concluded that these issues would remain on the Agenda for further consideration.
Cariforum repeated its concern that certain exports to the French Caribbean islands attract taxes higher than those on similar goods from other countries, including EU member states. The EU indicated that these internal taxes were authorized under the EU arrangement and in certain provisions of the EPA, and that they are not discriminatory. Cariforum called attention to the fact that the provisions governing taxation on international trade do not permit the application of such discriminatory charges and also pointed to the inclusion in the EPA of a provision which also prohibited such discrimination. The EU undertook to further engage Cariforum to resolve this particular problem.
Errors
Cariforum had previously identified some errors involving the incorrect transpositions of specific applied tariff rates on some products and the moratorium agreed on motor vehicles and parts in the EPS tariff schedule and sought the Joint Council’s intervention to correcting same, the ministry said. Minister of Foreign Affairs Carolyn Rodrigues-Birkett and her colleagues disagreed with the EU’s position that there was no error and pointed out that as was the case in Jamaica, she had informed the Guyana parliament of the moratorium as this was the negotiated position. She urged the EU to recognize the error and to work with Cariforum in correcting same.
The Joint Council agreed to the issuing of a Joint Declaration dealing with restrictions based on age regarding used vehicles imported into Barbados, Jamaica, Suriname and Trinidad and Tobago. It also took note of the efforts being undertaken by Cariforum to prepare for the monitoring of the operation of the EPA which would help in determining its impact, including the costs and consequences of implementation. The meeting agreed that this exercise was important and urgent, especially given that the first five-yearly review of the EPA is due in 2013.
Cariforum reiterated its deep concern with regard to differentiation, which is being contemplated by the EU in connection with its new development policy. Cariforum posited that GDP per capita should not be the only indicator for determining the approach to differentiation, but that other factors should be taken into account including levels of poverty, vulnerability, climate change and idiosyncrasies associated with small-island developing states and low-lying countries (SIDS) development challenges.
The EU reported that its approach to differentiation was undergoing internal consultations and that it had noted the concerns and views expressed by Cariforum. Guyana’s foreign minister had echoed the view expressed by Cariforum and in a separate press release urged the EU to reconsider its position on differentiation which may see Cariforum countries losing much needed development assistance because of their classification as middle income countries as determined by the GDP per capita. Rodrigues-Birkett also submitted that the EU should consider that many of these countries experience frequent natural disasters such as hurricanes which result in a perpetual state of reconstruction. “This situation will get worse as climate change has resulted in more intense and frequent disasters. The high indebtedness and the impacts of the global economic crises must also be included in the equation,” she said.
The foreign minister stressed that the vulnerabilities are real and informed the EU of the work which the Region has recently engaged the Economic Commission for Latin America and the Caribbean to undertake in codifying a vulnerability index for the region with the aim of establishing a scientific approach to the issue.
The Cariforum-EU meeting was held at the Headquarters of the Council of the European Union on October 26.
