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Caribbean and Brexit: Securing market access

By Elizabeth Morgan From Jamaica Gleaner

The European Union (EU) Summit addressing Brexit held on October 18 has come and gone with no UK withdrawal agreement and no date for another summit. While the EU has said that not enough progress was made, the view from the British side is that the agreement is 95 per cent complete.

The outstanding five per cent, however, is so difficult that a no-deal outcome is still a very strong possibility. Intense negotiations are ongoing in London and Brussels in the effort to make the UK’s withdrawal a reality by March 31, 2019.

As the UK-EU negotiations continued, senior officials of the African, Caribbean and Pacific (ACP) Caribbean Forum (CARIFORUM) have been quietly continuing negotiations with the UK to roll over the provisions of the CARIFORUM/EU Economic Partnership Agreement (EPA) in preparation for the UK’s withdrawal from the EU with or without a deal.

No deal means implementation on April 1, 2019, and a deal could mean implementation on April 1, 2021, after a two-year transition. This rollover will preserve CARIFORUM’s preferential access to the UK market.

While the Caribbean continued work on this agreement, on October 24, 2018, the UK minister of state for trade policy in the Department of International Trade, George Hollingbery, met with the ACP trade ministers during their meeting in Brussels. In his briefing, Minister Hollingbery told the group that he expected trade between the UK and ACP countries to further increase once the UK left the EU, as the ACP is important to British commerce. The minister further informed that Britain would be:

– maintaining its programmes of unilateral (non-reciprocal) preferences [e.g., Generalised System of Preferences (GSP) and Everything but Arms (EBA) for Least Developed Countries (LDCs)], having already adopted its 2018 Taxation (Cross-border Trade) Act;

– rolling over the provisions of the EPAs;

– aiming to increase trade and investment in ACP states utilising the UK’s Aid for Trade Programme, among other measures;

– and contributing to the benefits to be derived from upholding the global rules-based economic system. The UK would be returning to full membership of the World Trade Organization (WTO) having its own voice in support of the multilateral trading system.

The minister pointed out that the UK would be setting its own tariffs and rules, but would not be discarding EU regulations and would be abiding by global rules. This point should be specifically noted.

It will be recalled that about 39 ACP members are also members of the Commonwealth, having joined the ACP-EU partnership under UK sponsorship. It will also be recalled that this summer, Prime Minister Theresa May visited three ACP/Commonwealth countries in Africa (South Africa, Kenya and Nigeria) promoting trade. The Commonwealth is now working to implement its Connectivity Agenda for Trade and Investment adopted by heads of government in April.

In fact, Baroness Patricia Scotland, Commonwealth secretary general, also briefed the ACP trade ministers still looking at ways for the ACP and Commonwealth to collaborate in trade.

Minister Hollingbery, in his remarks, had reiterated that post-Brexit, UK policy would be to increase its trade with non-EU countries.

There remains a question, however, of the priority which the UK will accord to the small developing countries of the Caribbean and the Pacific as it seeks to rapidly regularise and improve trade with the larger members of the Commonwealth and ACP, as well as other countries.

Caribbean opportunities to discuss Brexit at high political levels should be presented at the upcoming meetings in November of the CARICOM Council for Trade and Economic Development in Georgetown, Guyana, and the CARIFORUM Council of Ministers in St Lucia. Both bodies will have to approve the rollover agreement with the UK.

It is my view that the Caribbean still needs to undertake a thorough examination of its trading relations with the UK, EU, ACP and the Commonwealth to determine the region’s policy positions going forward. This is bearing in mind that work is still continuing in CARICOM on the CSME and in CARIFORUM, between the Dominican Republic and CARICOM, to determine the intraregional integration platform on which these trading relationships should be properly established.

– Elizabeth Morgan is an international trade policy specialist. Email feedback to [email protected].

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