‘Economic Partnership’ & Asymmetrical Integration An EU-Caribbean Tale

Norman Girvan

Workshop on Alternative Trade St Mary’s University Halifax, N.S. 1-2 November 2013

Story line

• • • • Economic Partnership Agreements (EPAS) between the EU and developing countries in Africa, the Caribbean and the Pacific as concrete legal-institutional expressions of asymmetrical neoliberal economic integration between countries and groups of countries EPAS as elements of a global strategy by GN of ‘bilateralisation’ of trade negotiations in response to resistance from the GS for extension of the regime of global neoliberalism via the WTO The EU variant of the global strategy—’Global Europe’ as a strategy of (a) intra-EU class power—consolidating the rule of capital—(b) neoliberalising relations with the Global South ( c ) further positioning of EU capital in access to ACP resources and markets vis-à-vis China, the US and other competing poles Content of EPAS as (a) pro-unequal development, (b) anti projects of autonomous regional integration within regions of the Global South; exemplified by the Caribbean EPA

EPAS- The General Case

• • • • • EPAS replace the trade-aid regime of the Lomé Convention – EU ACP (76), 1975-2000, development oriented As designed by the EU, EPAS mandate detailed reciprocity of treatment between the ‘partners’ in merchandise trade, trade facilitation, services, investment, government procurement, extended IP coverage, competition, e-commerce, with weak provisions for labour and environmental standards The huge asymmetries between the EU bloc and ACP countries in size and level of development Pre-existing international specialisation of ACP countries in export of food and raw materials and consumer services and the import of manufactured goods and producer services: colonial model EPAS equate development with integration into the world economy via enhanced primarisation and incorporation into global commodity chains

EPAS & Bilateralisation

• • • The WTO 1994 as global neoliberalism Push-back by GS and G-NGOs – Seattle-Doha Cancún GN – Bilateral FTAS & BITS as counter-strategy – ‘Free Trade’ as mystification – NAFTA as the forerunner & model – – WTO as a project of ‘Global Naftaisation’ FTAA as a project of ‘Hemispheric Naftaisation’ – US – GS FTAs – Korea, Singapore, Chile, etc.

– EU - ACP

FTAS – Strategic advantages GN

• • • • • Circumvents opposition from largest GS – ‘picking off the compliant’ GS ‘Strategy of encirclement’ of oppositional GS – WTO+ becomes standard accepted practice Divides GS and weakens collective BP Pre-existing 1-way preferences as negotiating weapon Trade negotiating assets – N-S asymmetry employed to maximum effect

• •

‘Global Europe’ – EU Neoliberal project (2006)

‘EU will pursue bilateral trade agreements with major emerging economies to secure new and profitable markets for EU companies’ exports and investments and access to energy and others resources’. BTAs would aim to include – rules securing European investments, – stronger Intellectual Property rights coverage and enforcement provisions, including Geographical Indications, – reduction of non-tariff barriers to EU exports and investments anti-dumping mechanisms, national treatment, and competition policy and (d) opening up of public procurement markets. – Inclusion of services in BTAs.

• • • •

EU uniquely well positioned

The quarter-century long Lomé Convention had reinforced, and added new layers to, the centuries-long economic, institutional and cultural dependency linkages between Europe and SSA, the Caribbean and some Pacific countries; and between EU officials and ACP political and functionary elites Lomé was ruled ‘incompatible’ with the WTO; creating a legal context for negotiating its replacement within the framework of these dependency linkages Trade-aid dependency linkages were turned into crucial sources of leverage by the EU in negotiating The Cotonou Partnership Agreement (2000) and the Economic Partnership Agreements (EPAS) which replaced Lomé Cotonou – Mandated (R)EPAS ACP bloc fragmented into 6 – Trade unbundled from Aid – Development equated with ‘integration into world economy’ – WTO rules as floor not ceiling – opened way to WTO-Plus

• • • • • •

The Caribbean Case

Caricom Single Market and Economy (CSME) --a neoliberal, Open Regionalism, project adopted by a bloc* of countries in 1989 as a response to globalisation – Background to the CSME – ideological, political, economic Aims: grow regional enterprises, diversify production, strengthen competitiveness At the time when negotiations for the Caribbean EPA commenced in 2004, the CSME was still incomplete. The two processes were handled by different Caricom entities and political authorities; with no coordination Caricom negotiators accepted the EU WTO-plus negotiating template – ideological congruence The Caribbean EPA – finalised in 2007-2008 - effectively kills the CSME

The EPA – CSME Conundrum

• • • Schemes of neoliberal integration Different development models Differences are reflected in scope, sequencing, and embedded policies

CSME development model

• • • • • • Goods, services, labour and capital move freely across the regional space, enabling firms to source inputs at lowest cost and reap economies of scale, organise regional production integration, and facilitating the growth of regional enterprises capable of competing on international markets Common policies by regional governments in agriculture, industry, transport and services to support private sector-led growth Sectoral ‘drivers’ of regional growth selected for common policies and functional cooperation – beginnings of industrial policy FDI welcome, but implicit privileging of locally/regionally owned enterprises Competition on global markets is on the basis of an integrated regional economy and led by regional enterprises. Integration is the basis for effectively responding to globalisation

• • • •

EPA development model

Creation of a seamless market and policy space incorporating all of Caricom plus the Dominican Republic plus the entire EU 27,wthin which – Liberalisation of 90% of all merchandise trade, majority of services & investment, capital, technical and managerial personnel for EU firms – Common policies for trade facilitation, services and investment, public procurement, Intellectual Property, competition, e-commerce – ‘National Treatment’ of EU firms, goods and service suppliers Given incompletion of the CSME in services, investment, public procurement, and common policies, EPA forecloses CSME as platform for developing Caribbean regional enterprises as basis for global competiveness – CSME is sidelined and/or collapsed into Cariforum-EU integrated economic area Non-tariff barriers, Rules of Origin, etc. in EU market remain in place – barriers to Caribbean firms exporting Given existing asymmetries in size, technology, marketing, etc. of firms, EPA implicitly privileges a model of development via global sourcing by EU firms of raw materials, food and low-cost labour; subcontracting to local firms of low-end activities (‘maquiladorisation’?)

Why EPA?

• • • • • Caricom’s elites ideological confusion and policy incoherence on development and role of regionalism Ideological co-optation of key regional elites to EU thinking and agenda Lack of coordination between EPA negotiating process and CSME implementation process EU threat to impose tariffs on CF exports EU aid as incentive to conclude on EU terms

Can the regional option be salvaged?

• • • • • • Insert Caricom as a juridical entity as a Party to the EPA on behalf of its 14 member states Clarify relationship between EPA and Caricom Treaty in text of the EPA Defer implementation of WTO-+ provisions in EPA pending WTO agreement or CSME completion Incorporate effective evaluation, review and revision mechanism into EPA Insert performance indicators on development cooperation and development outcomes Overhaul Caricom governance arrangements to expedite CSME implementation in priority sectors and ensure coherence between CSME project and external negotiations.

Thank you!