October 21, 2020

EPA and the private sector

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David-jessopBy David Jessop From Trinidad Express Newspapers

A little over five years ago the countries of Cariforum signed an Economic Partnership Agreement (EPA) with Europe. This asymmetrical free trade arrangement was meant to improve exports of Cariforum goods and services to Europe and to encourage regional integration.

The agreement which was then, and still is contentious, is likely again to become the subject of debate as the year goes on. Speaking in Montego Bay on April 15 at Caribbean Export’s third Cariforum-EU Business Forum Percival Marie, the director general of Cariforum, made clear that recently completed technical studies undertaken separately by Caribbean and European experts suggest that the agreement has not brought the benefits expected either in trade or investment.

According to Mr Marie, the reports conclude that problems remain in relation to many of the areas covered by the EPA: the cultural protocol has not been activated; visa and other access requirements make it difficult for professionals or entertainers to do business in Europe; there are no quality services to support the private sector; business support organisations in the region remain weak; the need for technology transfer has not been addressed; information flows on market opportunities remain poor; it has not yet been possible to agree on the mutual recognition of professional qualifications; there is an absence of support for tourism; and Cariforum has human resource limitations on what it can deliver.

The review will be considered in mid-July by Europe and Caribbean governments, but a cursory review of publicly available EU trade statistics confirms that the EPA has not brought the benefits envisaged.

Although in 2011 total trade between the two regions came to over Euro 8 billion, Cariforum continued to run a deficit with the EU. In fact a snapshot of the five year’s statistics up to the end of 2013 indicates that only in one year, 2008, did Caribbean exports at six billion euros, exceed imports from Europe.

A further breakdown shows that after discounting oil and related products, machinery and transport equipment, and chemicals, only around 45 per cent of what was exported from the region to Europe was in the form of foodstuffs, beverages, tobacco, manufactured goods and various other miscellaneous items.

While the available limited evidence does suggests a continued positive trend for Cariforum services exports to Europe and a consistent services trade surplus in the years immediately following the signature of the EPA, experts suggest that these figures principally relate to tourism; but again the principal promoter and beneficiary was the Dominican Republic.

In services areas away from tourism where one might hope to see growth, given the EPA opened up much of European services market, Cariforum services suppliers indicate that they continue to find market access difficult.

So after five years of the EPA, export led growth in goods and services to Europe remains elusive, particularly from the Anglophone Caribbean.

Unfortunately for the Caribbean, during that period the rest of the world has not been standing still.

As speakers at CEDA’s conference pointed out, new initiatives and solutions need to be led by the private sector, working in conjunction with Caribbean Export and like-minded national agencies in the region able to operate free of the inertia that affects so much delivery in the region.

More practically this ought to mean only selecting for support those companies that have genuine comparative advantage, for instance in value-added sectors such as cocoa and chocolate; herbs and spices; music; and higher education. It means too, a constant focus on those companies and entrepreneurs who genuinely have the capacity to export a product or service that is competitive and for which there is a demand commensurate with the scale of production.

It is to be hoped that there again might be serious reconsideration given to the establishment of a Cariforum Business Council, perhaps organised on federal lines so as to embrace the big sectoral associations, able to regularly dialogue at the level of the Council of Ministers, perhaps with an arm, that can with the support of the EU and CEDA, can manage hands-on support that enhances private sector capacity and export-led growth in the niche sectors that have now been identified

In this respect the Caribbean already has a model which over the years has demonstrated how the private sector can leverage its own and European resources and successfully deliver programmes that advance value added propositions and exports in the form of the regional rum industry association, WIRSPA. Not only has its programme worked but it successful organisational structure may provide useful information to the EC and Cariforum and a model that others in the region might consider emulating.

—David Jessop is a consultant to the Caribbean Council

For more on this story go to: http://www.trinidadexpress.com/commentaries/-EPA-and-the-private-sector-300400781.html

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