Transcript Deconstructing the EPA

THE EPA AND CARIBBEAN
DEVELOPMENT
A Critical Perspective
Norman Girvan
Prepared for Civil Society Forum, Jamaica
May 1, 2008
http://normangirvan.info
EPA—democratic governance?
The EPA is
 More than a trade agreement—will impact
many aspects of lives of Caribbean
peoples
 Legally binding, difficult to amend once
legally in force and of indefinite duration
 Wide in scope, covering several areas of
national and regional policy
 Limits governments’ ability to change
future policies in several areas
 Little known and understood by the public
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Part I. Trade Partnership For Sustainable Development
Part II. Trade And Trade-Related Matters
Title I. Trade In Goods
Chapter 1. Customs Duties
Chapter 2. Trade Defence Instruments
Chapter 3. Non-Tariff Measures
Chapter 4. Customs And Trade Facilitation
Chapter 5. Agriculture And Fisheries
Chapter 6. Technical Barriers To Trade
Chapter 7. Sanitary And Phytosanitary Measures
Title II. Investment, Trade In Services And E-Commerce
Title III. Current Payments And Capital Movement
Title IV. Trade Related Issues
Chapter 1. Competition
Chapter 2. Innovation And Intellectual Property
Chapter 3. Public Procurement
Chapter 4. Environment
Chapter 5. Social Aspects
Chapter 6. Protection Of Personal Data
Part III. Dispute Avoidance And Settlement
Part IV. General Exceptions
Part V. Institutional Provisions
Part VI. General And Final Provisions
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Annexes, Protocols and Joint Declarations
•Schedule of Cariforum commitments on liberalization of trade in
goods
•Schedule of Cariforum commitments on liberalization of trade in
services
•Schedule of Cariforum commitments on liberalization of
investment (commercial presence) in non-service sectors
•Protocol I on Definition of "Originating Products" (Rules of
Origin) and Methods Of Administrative Cooperation
•Protocol II on Mutual Administrative Assistance in Customs
Matters
•Protocol III on Cultural Cooperation
•Joint Declaration on Development Cooperation
•Joint Declaration on Bananas
•Joint Declaration on Used Goods
•Joint Declaration on Rice
•Joint Declaration on Undelivered Quantities Under the Sugar
Protocol
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Does the EPA support development?’
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The Cotonou Partnership Agreement, under which EPAs are
negotiated, says that their principal objectives are poverty
reduction & sustainable development
In order for a reciprocal trade agreement between unequal
partners, such as the EU-CF EPA, to contribute to sustainable
development of the less developed partners, there must be
adequate resource transfers for the development of their economic
infrastructure and the supply capabilities of their firms. The EU has
recognized this in their own internal arrangements by the provision
of ‘Structural Funds’ and ‘Social Cohesion Funds’ for their poorer
member states.
There are no additional funding commitments provided through
the EPA to facilitate adjustment to the liberalization of imports
from the EU and to take advantage of export opportunities in
goods and services from CF
Without such additional resources, existing inequalities between
unequal partners are likely to be worsened.
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EPA Asymmetry
The Caribbean gets
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Preservation of existing duty-free quota-free
access in Europe for 97% of exports of goods,
with certain temporary exceptions, and eventual
coverage of 100% (but WTO and bilateral FTAs
will expose CF to more competition)
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Slight improvement in Rules of Origin but no
change in other trade barriers
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Opening of EU service sectors subject to many
conditions
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No binding commitments from EU on
development support to build up supply capacityy
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In return for…
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Phased liberalization of CF markets to the majority of EU
goods over a 15-year period; 13% of imports permanently
excluded from liberalization
Liberalization of the majority of services in the CF market
for EU firms and service providers
Binding commitments on policies in investment,
competition, public procurement, intellectual property and
e-commerce; requiring new institutions and laws.
Dispute Settlement and Implementation machinery leading
to indefinite, institutionalized involvement in Caribbean
forum decision-making processes in trade, development
and regional integration
Establishment of a precedent of a ‘WTO-plus’ FTA to be
used in negotiations with other ACP countries, other
developing countries and
inEPAthe
WTO
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Services: market access for EU firms an regulatory
framework
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75% of CF service sectors in MDCs and 65% in LDCs will
be liberalized to EU
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Each CF country has made market access commitments for
service sectors, as set out in Annex 4.
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It is necessary to assess the potential impact on the
development of CF service industries; e.g. what will happen
in banking and to SMEs in the tourist sector? Will local firms
be displaced or acquired by larger EU firms? How will
investment of EU firms affect national and regional
development plans for services industries?
A Regulatory Framework is specified for computer, courier,
telecommunications, financial, international maritime
transport and tourist services. How will this affect
government’s ability to regulate these sectors in the public
interest?
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Services liberalized for Contractual Service Suppliers
from the Caribbean (Art 83)
Legal advisory services in
15) Market Research and Opinion
international public law and
Polling
foreign law
16) Management consulting
2) Accounting and bookkeeping
17) Services related to 16
3) Taxation advisory
18) Technical testing and analysis
4) Architectural
19) Related scientific and technical
consulting
5) Urban planning and landscape
architecture
20) Maintenance and repair of
equipment, including
6) Engineering
transportation,
7) Integrated Engineering
21) Chef de cuisine
8) Medical and dental
22) Fashion model
9) Veterinary
23) Translation and interpretation
10) Midwives
24) Site investigation work
11) Services provided by nurses, 25) Higher education services
(privately-funded)
physiotherapists and
26) Environmental
paramedical personnel
27) Travel agencies and tour
12) Computer and related
operators'
13) Research and development
28) Tourist guides
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14) Advertising
29) Entertainment services other
1)
than audiovisual services
Employees of CSS – conditions of access
1.
2.
3.
4.
5.
6.
7.
8.
Must be working with a firm with a service contract in an EU
member state not exceeding one year’s duration
Must have at least 1 year’s working experience with the
supplying firm as well as 3 years’ professional experience
With certain exceptions*, must possess a university degree or
equivalent qualification and professional qualification required
in receiving state. Mutual recognition agreements necessary.
Stay limited to cumulative period of six months in any 12month period or duration of contract, whichever is less
Access limited to performance of contract
Number limited to what is necessary to fulfill contract as
determined by local laws
Other ‘discriminatory limitations’ are allowed, including
limitations on the number of employees permitted entry as a
result of ‘economics needs tests’ in the receiving countries.
Other conditions are specified in Annex 4.
* Fashion model services, chef de cuisine services, and entertainment
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services other than audio-visual
.
Services liberalized for Independent
Professionals (IPs) ( Art 83)
1) Legal advisory services in international public
law and foreign law
2) Architectural services
3) Urban planning and landscape architecture
services
4) Engineering services
5) Integrated Engineering services
6) Computer and related services
7) Research and development services
8) Market Research and Opinion Polling
9) Management consulting services
10) Services related to management consulting
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11) Translation and interpretation services
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Conditions of access of IPs (Art 83)
1.
2.
3.
4.
5.
6.
Must be engaged in the supply of a service on a
temporary basis in the other Party and must have
obtained a service contract not exceeding 12 months.
At least 6 years professional experience.
A University degree or equivalent qualification and
professional qualification required by local regulations.
Mutual recognition agreements necessary
Stay limited to cumulative period of 6 months in any 12
month period or duration of contract, whichever is less.
Other ‘discriminatory limitations’ are allowed, including
limitations on the number of employees permitted entry
as a result of ‘economics needs tests’ in the receiving
countries.
Other conditions are specified in Annex 4.
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Mutual Recognition Agreements
Necessary for all individuals providing services (CSS and IPs) Article 85)
1.
2.
Caveat: Nothing in EPA shall ‘prevent Parties from requiring
necessary qualifications and/or professional experience in
territory concerned’
Professional bodies to be encouraged to jointly develop
recommendations on MR for Trade and Development Committee
(TDC) within three years
3.
Priority to accounting, architecture, engineering and tourism.
4.
TDC reviews to determine consistency with EPA
5.
6.
If approved by TDC, Parties negotiate MRA ‘through their
competent authorities’
Agreement must conform with WTO particularly Article VII of
the GATS.
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Possible asymmetries in Movement of
Natural Persons
1.
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3.
4.
5.
6.
7.
Most firms establishing ‘Commercial Presence’ are likely to be
EU firms setting up business in CF countries.
Such firms will be allowed to bring in in ‘Key Personnel –
Managers and Specialists – for up to 3 years and Graduate
Trainees for up to 1 year. The qualifications for these categories
are stated in general terms with few conditions attached.
Most of the CF interest in services is in the ‘Movement of
Natural Persons’ into the EU.
The required qualifications and experience related to this
category are very precisely stated, with many more
reservations and conditions applying.
Contractual Service Suppliers and Independent Professionals
have no right to bring in ‘Graduate Trainees’
Existing immigration, visa, work permit and residency
regulations will continue to be in force.
Thus on balance, the flow of Natural Persons from the
Caribbean to Europe may be much more difficult than in the
other direction
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‘WTO-plus’ provisions in the EPA
The EPA includes binding commitments on
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Competition – policy, practice, regulations
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Public Procurement - transparency
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Investment – treatment of
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Services - beyond WTO commitments
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Additional Intellectual Property protection
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E-commerce
The first three are known as the ‘Singapore Issues’
and were rejected for inclusion in the Doha
Round negotiations of the WTO by developing
countries, as this would mean additional
restrictions on their development policy options
and impose onerous implementation obligations
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Impact of WTO-plus provisions
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Pre-empt and proscribe government policies in key
areas of development
Pre-empt CSME regimes in services, investment,
competition, public procurement, intellectual
property, e-commerce which have not yet been
completed
Involve changes in laws, regulations and
implementations and compliance costs
Compromise the region’s negotiating positions in the
WTO and in bilateral trade agreements with Canada,
the US and other trading partners
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Why WTO-plus?
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The EC argues that these provisions enhance the
development potential of the EPA
This argument derives from the ideology of neoliberal globalisation position, which leads to the
use of ‘trade’ agreements to ‘lock in’ neo-liberal
policies by sovereign states, giving them the
force of international treaty law
Critics argue that this method of securing policy
changes is undemocratic and non-transparent.
Note that securing WTO-plus provisions in
bilateral trade agreements (BTAs) is a major
objective of the EU’s ‘Global Europe Project’
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Competition – Example
“The Parties and the Signatory CARIFORUM States
shall progressively adjust, without prejudice to
their obligations under the WTO Agreement, any
State monopolies of a commercial nature or
character, so as to ensure that, by the end of the
fifth year following the entry into force of this
Agreement, no discrimination regarding the
conditions under which goods and services are
sold or purchased exists between nationals of the
Member States of the European Communities and
those of the CARIFORUM States, unless such
discrimination is inherent in the existence of the
monopoly in question”
(Article 129.4, emphasis added)
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The Public Procurement Chapter
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General Objective
Definitions
Scope
Transparency of Government Procurement
Methods of Procurement
Selective Tendering
Limited Tendering
Rules of Origin
Technical Specifications
Qualification of Suppliers
Negotiations
Opening of tenders and award of contracts
Information on contract awards
Time Limits
Bid challenges
Implementation
Review Clause
Cooperation
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National Treatment’ in the EPA
Prevent policies fostering development of local/regional firms
Examples
Article 27 1.
“2. Originating imports shall be accorded treatment no less
favourable than that accorded to like domestic products
in respect of all laws, regulations and requirements
affecting their internal sale, offering for sale, purchase,
transportation, distribution or use. ..(Art 27.2)
3 No Party or Signatory CARIFORUM State shall establish or
maintain any internal quantitative regulation relating to
the mixture, processing or use of products in specified
amounts or proportions which requires, directly or
indirectly, that any specified amount or proportion of any
product which is the subject of the regulation must be
supplied from domestic sources.”
Exceptions: (i) payment of subsidies to national producers (ii)
public procurement (iii) provisions of Art. 23
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National Treatment in Investment
and Services (Article 68)
“In the sectors where market access commitments
are inscribed in Annex 4 and subject to any
conditions and qualifications set out therein, with
respect to all measures affecting commercial
presence, the EC Party and the Signatory
CARIFORUM States shall grant to commercial
presences and investors of each other treatment
no less favourable than that they accord to their
own like commercial presences and investors’
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JOINT CARIFORUM-EC COUNCIL
TRADE AND DEVELOPMENT
COMMITTEE
Implementation Committee
COMMITTEE ON CUSTOMS COOPERATION AND TRADE FACILITATION
PARLIAMENTARY COMMITTEE
CONSULTATIVE COMMITTEE
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Reading the EPA
(Art 233)
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‘Party’ or ‘Parties’ refer to
• European Community (EC), representing 27
member states of EU or
• CARIFORUM States “acting collectively”
• “Signatory CARIFORUM States” refer to
individual states that have assumed rights and
obligations as separate entities
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CARICOM as a juridical entity not a Party
Many references to Committees with wide
powers (see Implementation Committee
slide)
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Joint EC-Cariforum Council
Part V Articles 227-229
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Composition: Members of the Council of the EU,
members of the EC, and representatives of the
CF states.
In matters where CF states agree to act
collectively “One representative of the CF states
will act on their behalf”
Responsible for operation and implementation of
the Agreement and to “ensure that the Objectives
are fulfilled”
Decisions are by consensus and are binding and
Parties “shall take measures to implement them”
Other responsibilities set out in 19 paras.
Read ‘Institutional MachineryGirvan
of the
EPA’ at http://normangirvan.info
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EPA 27/04/08
Trade and Development Committee
Articles 230-231, references in several other Articles
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Composed of Senior Officials – CF one
representative in matters of collective
action
56 functions and responsibilities set out in
Article 230 and other references
Special Committee on Customs Cooperation
and Trade Facilitation – 13 functions,
powers and responsibilities
Further details in ’Institutional Machinery of the EPA’
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Towards regional disintegration?
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Parties to the EPA are the EC, CF states ‘acting
collectively’ and 15 Signatory CF states. Neither
Caricom nor Cariforum is juridically a Party
Most binding obligations are with ‘Signatory CF
states’, implying that they are treated as
individual juridical entities for purpose of
compliance with these obligations
In implementation, this will tilt bargaining power
even more heavily in favour of Europe.
Dominican Republic will be a major player
Cariforum states may end up competing with one
another in implementation, possible widening of
intra-regional inequalities and regional
disintegration.
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Marginalization of CSME?
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EPA is EU-DR-Caricom ‘Single Market’ for Goods,
Services, and Capital and ‘Single Economy’ in Intellectual
Property, Competition, Public Procurement, e-commerce,
Environment and Social Aspects
The EPA organs of governance may rival those of Caricom
e.g.,
What will the authority of the Conference of Caricom Heads
of Government, or the Caricom Council for Trade and
Economic Development (COTED) vis-à-vis that of the Joint
EC-CF Council and the Trade and Development Committee?
The purpose of the CSME was
to create a single economic space to enhance
competitiveness and foster the development of regional
firms and production networks for successful exporting to
world markets; and
pool bargaining power.
Is this path effectively foreclosed by the EPA ?
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How did we get to this?
Critical points in the EPA negotiations (1) 2000-2004
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2000 – Cotonou Partnership Agreement sets out
EPA objectives, architecture & time-table for ACP
2000 – EU gives duty free quota free access to its
market to all Least Developed Countries including
non-ACP
2001 – Doha WTO meeting agrees to waiver for
EU-ACP non-reciprocal trade preferences to
12/2007
2003 - Phase 1 negotiations with all ACP concluded
without binding agreement on Phase 2
2003 – Cancun WTO Ministerial ends with rejection
of ‘Singapore Issues’ from scope of Doha Round.
2004 – Phase 2 negotiations begin with 6 separate
ACP groups; Cariforum negotiations within a
‘WTO-plus’ framework
that includes some of the 28
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Singapore Issues
The second phase: 2004--2007
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2004: EC determines that GSP tariffs are the only
alternative for countries that don’t wish to sign
EPAs. Bargaining power shifts decisively towards
the EC.
2005-2007 Doha Round at WTO deadlocked; EC
adopts its ‘Global Europe’ project focusing on
bilateral agreements that are WTO-plus.
2006-2007 CF negotiations proceed on a WTOplus agreement; the main stumbling block is
scope and speed of import liberalization
End 2007 – EC pressures several African and
Pacific countries to sign ‘Interim EPAs’ using
threat of imposition of GSP tariffs;
CF makes last-minute concessions in market
access and initials WTO-plus agreement
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So what happens now?
Option 1: Review, Revise
& Re-negotiate
 Option 2: Sign now, make
the best of it, and try to
change it later if necessary
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Implement, then revise?
The Revision Clause relates to
•
•
•
extending the scope of commitments
(e.g. in services, public procurement,
investment)
including Europe’s Overseas Countries
and Territories,
varying of specific measures by the
implementation committees
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The renegotiation option
A Commonwealth-ACP High Level Technical Meeting held in
Cape Town, S.A. April 8-9, 2008 included several ACP
Ministers, senior officials, NGOs, resource persons: some
conclusions:
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To ensure that EPAs are pro-development EC and
ACP should review and renegotiate contentious
issues.
There is still legal space to do so
ACP unity needs to be maintained/restored
ACP should engage with other stakeholders in
Europe
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Decision of Caricom Heads 7-8
March 2008
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Heads ‘noted that a number of Member
States were still examining the text of the
EPA which in some cases would require
the tabling of this Agreement in national
parliaments’.
‘They committed themselves to take the
necessary steps to complete these internal
consultations in a timely manner to
facilitate signature and provisional
applications of the agreement by 30 June.’
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Report – ‘EPA signing delayed –
Golding’
"For a number of reasons including the time that
needs to be allowed for individual member states
to carefully examine the text of the agreement,
(and) recognizing that there have been two
changes of government since the start of this
year, it was felt that it was necessary for new
governments to advise themselves properly
before committing to the agreement," said Mr.
Golding at the 19th Inter-sessional CARCOM
heads of Government meeting in the Bahamas.
http://www.radiojamaica.com/content/view/6209/2
6/ (9 March 2008)
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Prime Minister Thompson of
Barbados on CSME and EPA
Speech to TTMA 15/04/08
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‘Powerful case’ built against the signing of the
EPA
‘We must recommit ourselves as a region to the
full implementation of the Single Market and
Economy while negotiating in WTO and
bilaterally’
‘There is still room for negotiation on the EPA,
within the 3-year moratorium before formal
ratification of the Agreement’.
The EPA ‘constitutes an imperfect basis from
which to move forward into the brave and
unknown world of the 21st century’.
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