The Economic Partnership Agreement (EPA)
What are Economic Partnership Agreements?

• Economic Partnership Agreements are a scheme to create a ‘free trade area’ (FTA) between the European Union (EU) and the African Caribbean and Pacific (ACP) countries. The need for the African Caribbean and Pacific States/ European Union/ Economic Partnership Agreement (ACP/EU/EPA) had its genesis in the realisation that the Lome’ Convention did not live up to expectations.
•  They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with the World Trade Organisation (WTO) rules.
• The EPAs are a key element of the Cotonou Agreement, the latest agreement in the history of ACP-EU Development Co-operation and are to take effect from 2008.

Features of the EPA           

• The key feature is reciprocity which will see the removal of all established trade preferences between the EU and the ACP countries since 1975 as well as the progressive removal of trade barriers between the Regions.
• To fulfill the criterion of being a non-discriminatory agreement, the EPAs are open to all developing countries, thereby effectively terminating the ACP group as the main development partner of the EU.
• The EPA was intended to replace the non-reciprocal trade preferences of the
   Cotonou Agreement, for which the WTO had granted a waiver, ending in 2007. Under WTO rules, the EU could grant preferences, but these had to be either reciprocal, i.e. both sides have to liberalize “substantially all trade” (GATT Article XXIV) or non-reciprocal, but in that case beneficiaries have to be selected in a non-discriminatory way, according to their economic situation. 
             
  Cariforum-European Commission Negotiations
• The CARIFORUM –European Commission negotiations were launched in Kingston, Jamaica in April 2004 and concluded on December 16, 2007 with the initialling of an agreement.
• The negotiations dealt with four areas, Market Access (Goods), Services and Investment, Trade-related Issues (TRI) and Legal and Institutional Issues.
  Three levels of negotiations were established.
• The agreement provides for 92 percent of bilateral trade to be liberalised with the EU granting ‘duty free-quota-free’ (DFQF) access for all products, except arms and ammunition, with a provision for a short transition period for rice and sugar.
• The CARIFORUM States would liberalise 87 percent of their market share over a 25-year period.

The EPA and Guyana

•  Consultations were held in Guyana on the EPA between CARIFORUM and the EU. It was concluded at the Guyana International Conference Centre. Subsequently, Heads of Government of the Caribbean Community (CARICOM) gathered in Barbados to make a ‘signing’ decision on the deal.
• All countries, except Guyana and Haiti, agreed to sign on to the agreement with the European Commission. This decision left Guyana standing alone in its decision not to sign the agreement and to opt for a ‘goods only’ deal.
• Guyana’s decision not to sign on sparked much criticism from other CARICOM Leaders but Guyana’s President Bharrat Jagdeo has been persistent in his stance against the deal which he feels will do more harm than good to the Region.
• Other international experts, diplomats and economists such as Sir Shridath Ramphal, Sir Ronald Sanders, Dr. Norman Girvan and Professor Clive Thomas have also expressed their concerns on the deal.

Reasons Guyana gave for not signing the initial agreement

• CARICOM and other small States have in the past used two main approaches to defend their interests-multilateralism and regional integration. These, President Jagdeo believed will be undermined with the implementation of the EPA in its original form.

• Singapore Issues-There are several issues regarding what has been agreed to in the deal, including the issue of the Region agreeing to negotiate the Singapore issues. These were dropped years ago from the World Trade Organisation’s (WTO) agenda after developing countries argued that they would not be beneficial to the developing countries.

• The MFN (Most Favoured Nation) clause in the agreement will affect CARICOM’s co-operation with South-South partners and South-South co-operation has been a feature in development economics for decades. Some South American partners are crucial to CARICOM countries and the clause will force CARICOM to extend to Europe the same treatment it gives to large partners to the South.

• Countries in close proximity of each other such as Guyana and Brazil have been forging closer ties and planning closer co-operation in trade and other matters. The Agreement will undermine this approach.  

• No Level playing field-There will be no level playing field in terms of trade between the EU countries and CARICOM as the former is far more advanced in goods and services than the latter. Unequal competition will be the order of the day with CARICOM countries especially being at a disadvantage.    

As such President Jagdeo proposed an amendment to the EPA by a protocol. Guyana was subsequently informed that several member states of the EU, particularly Ireland, Denmark, Holland, Italy and Portugal, expressed concern and indicated that the EC should try to find satisfactory conditions for Guyana and Haiti to sign the Agreement in Barbados on October 15, 2008.
Having knowledge that the EC was willing to find a solution to addressing Guyana’s concerns, Guyana made two proposals for signing which will be beneficial for member states:

• A mandatory review of the EPA five years after signature and every subsequent five- yearly period
• A guarantee that in the event of conflict between the Agreement and the revised Treaty of Chaguaramas (RTC), during implementation of the EPA, the Treaty shall prevail.

Guyana signs amended EPA

• Ever since the discussion on the EPA became topical, and even before, President Bharrat Jagdeo being critical of the EPA, he pointed to the fact that Guyana will have to sign the agreement should the Generalised System of Preference (GPS) be imposed, since the country cannot lose revenues from its major exports. 
• With President Jagdeo’s consistency, before the initial signing of the Agreement, the EU included the two clauses for which President Jagdeo lobbied.
• With these in placed, Guyana signed the EPA on October 21, 2008 in Brussels.