Some Lessons of the CARIFORUM-EU EPA

22 October 2009

The CARIFORUM-EU EPA, which was initialled in December 2007 and signed in October 2008, precipitated one of the most intense public debates in the recent history of the Caribbean Community (Caricom). At the core of the controversy lay differing views amongst Caribbean elites on development strategy, trade policy, regional integration, and the manner of engaging with globalisation. This paper suggests some ‘lessons learnt’ from the negotiation process itself and from the efforts of civil society to secure review and renegotiation of the initialled text. It employs a political economy approach that considers issues of ideology, power, governance and politics.  
 
The CARIFORUM EPA controversy summarised
 
Take note of the list below, which outlines the main shortcomings of the CARIFORUM EPA identified by critics. These concerns  relate to both process and content. We might summarise the process concerns as arguing inadequate public involvement in the negotiations process, given the wide ranging, legally binding and indefinite term of the EPA. On content, the bulk of criticism charged that the EPA was inadequately crafted as an instrument of sustainable development and regional integration that unnecessarily compromised the Caribbean’s future negotiating positions in bilateral FTAs and the WTO.  Defenders of the agreement argued that there had been widespread public consultation, that it contained several advantageous features for the CARIFORUM region and that it was the best deal possible under the circumstances.
 
The majority of the controversy within Caricom countries occurred in two phases: in the run-up to the finalisation of negotiations and initialling of the EPA in December 2007; and the following period leading up to the ministerial signature of the EPA in October 2008. The critics included at least one head of government, senior academics, former senior Caribbean officials, civil society representatives, labour unions, several parliamentary opposition parties, media commentators, and several international NGOs, think tanks and experts. Defenders included officials of the Caribbean Regional Negotiating Machinery (CRNM), heads and ministers of regional governments, other government officials, export industry representatives, media commentators, and senior European Commission officials. 
 
Criticisms of the EPA developed into a protest movement with objectives coalescing around (a) postponing the initialling – and, later, the signing of the agreement – to permit greater public consultation and review and (b) renegotiating the agreement with aim of removing its objectionable features and improving its development impact. Initiated by an open letter to Caricom leaders from academic and civil society representatives calling for extension of the time period of negotiations, it received a boost when the President of Guyana broke ranks with his fellow heads of government by declaring ”we got nothing from the EPA” shortly after the agreement was initialled. An online petition by a group of ‘concerned citizens’ calling for a public explanation and review of the EPA garnered support from over 100 academics, civil society leaders, businesspersons and the Caribbean diaspora. Critiques of the EPA were published by academics and concerns on the process were voiced by the Caricom Council for Trade and Economic Development (COTED). As a result, the Caricom Secretariat was tasked with commissioning a review of the process.
 
In March 2008, three of the EPA’s most prominent critics publicly petitioned the governments to ‘renegotiate the EPA’; this was strongly critiqued by the CRNM. The governments gave no official response. By June 2008, the call for renegotiation was being supported by a regional network of civil society organisations and by the Caribbean Congress of Labour, a regional network of labour organisations. By August, Parliamentary Opposition Parties in Jamaica, Trinidad and Tobago, Antigua and Barbuda, St. Lucia and Dominica had come out against the agreement in its existing form. At Caricom’s July Summit the governments agreed to a request from the President of Guyana for an extension of the date for Ministerial signing in order to conduct a public consultation. At Guyana’s consultation – held in August – the private sector, civil society and the parliamentary opposition agreed to support Guyana’s position in favour of renegotiation to limit the scope of the EPA to a so-called ‘goods only’ agreement. However, this was not supported by other CARIFORUM governments, some of which saw export opportunities in services, and most of which were vulnerable to threats from European officials to withdraw duty free market access to their exports. The governments may also have been influenced by the fact that national and regional negotiations on the 10th European Development Fund (EDF) were being finalised at the time.
 
Guyana therefore joined the other CARIFORUM countries in signing the negotiated EPA in October 2008 with one important caveat. A joint declaration was adopted, providing for a mandatory review of the agreement within the first five years and thereafter at five-yearly intervals. The mandatory review opens the possibility of an assessment of the developmental and socio-economic impact of the EPA and of a comprehensive renegotiation by 2013. 
 
Lessons learnt
 
The protests helped to move the EPA into the domain of public debate and to expose it to wider scrutiny. Civil society organisations became involved; cracks in elite consensus were exposed; at least one government broke ranks; and the mandatory review undertaking provides an opportunity for future renegotiation. However, the major objective of renegotiation before ministerial signing was not achieved. What lessons can be learnt?
 
First, a major problem for the protest movement lay in the fact that it was going against the cumulative weight of decisions taken over the entire prior course of the negotiations; decisions which established the contours and content of the agreement and set up a process which the principal actors had a strong interest in bringing to its predetermined conclusion. Thus, the all-ACP phase of the EPA negotiations (2001-2003), when ACP bargaining power was greatest, concluded without firm commitments from the EU on key issues such as the operationalisation of the ‘development dimension’, additionality of development assistance, addressing non-tariff barriers, exclusion of WTO-plus rules that restrict ACP ‘policy space’ and provision of acceptable non-EPA alternatives for exporting to the EU. Failure to maintain ACP unity on these issues meant that they would be addressed in the regional EPA negotiations, where bargaining power was much weaker and they were resolved mainly in favour of the EU. The ACP also failed to build political alliances with individual EU member states and civil society which might have acted as a counterweight to the European Commission Trade Directorate.   
 
Second, the failure of Caricom governments to politically educate the public on the implications of EPAs weakened their negotiating position with the EU and increased their vulnerability to domestic pressures. Third, CARIFORUM’s agreement to negotiate a ‘full’ EPA broke ranks with the rest of the ACP and with the developing country bloc in the WTO, undermining international alliances.  
 
Fourth, the EPA protests came too late, were too ‘technical’, and too lacking in political support to persuade the governments to reopen negotiations. To have succeeded in this objective they would have had to command widespread political and popular support – such as mass demonstrations, strong parliamentary opposition, and business lobbying – which did not happen. 
 
Fifth, the relatively amorphous character of governance in CARIFORUM and Caricom complicated the challenges for citizen advocacy. There is no institutional mechanism for citizen involvement at the regional level, such as, for example, a regional parliament. There are also overlapping structures of decision-making in Caricom on trade and economic integration and the CRNM is perceived to have operated with a significant degree of autonomy in the negotiations process. CRNM dependence on donor funding may have been a contributing factor. Language differences also posed difficulties for cross-CARIFORUM political collaboration among civil society organisations.
 
Conclusion: a Technification-Sweetification-Treatyfication Syndrome?
 
The EPA and similar negotiations may be characterised by what we call a ‘Technification-Sweetification-Treatyfication’ (TST) syndrome. Technification refers both to the issues that are the subject of negotiations – issue technification – and to the language that is employed to explain the issues to decision-makers, stakeholders, and the general public – discourse technification. Whereas issue technification is intrinsic to the substance of trade agreements – rules and obligations have to be formulated in precise legal and technical language – we would argue that discourse technification is the result of a (conscious or unconscious) political decision to restrict participation in decision-making by employing language that renders the substantive issues inaccessible to non-specialists. Negotiators also have an incentive to retain a monopoly over understanding the technical aspects of the agreement, as this maximises their leverage and provides a means of rebutting critics.
 
Sweetification is the exaggeration of potential benefits and minimisation of potential costs in ‘selling’ the EPA – such as inclusion of promises for development assistance and export opportunities in terms that render them difficult or impossible to legally enforce. The full implications of the agreement only become apparent in the implementation stage and over an extended period of time.
 
Hence the crucial role of Treatyfication – endowing the EPA with the force of international treaty law, buttressed by binding arbitration that is enforced by the threat of trade sanctions in the event of disputes. Treatyfication therefore subverts democratic governance and national sovereignty. The way to counter this TST syndrome is by a programme of technical demystification, popular education, and political organisation. 
 
Note may also be taken of the ‘participation dilemma’ that affects civil society in trade negotiations. Mechanisms for CSO involvement in negotiations provide an opportunity to impact outcomes and they can be a device for political co-optation and of legitimisation of bad outcomes. The answer to the dilemma is simultaneous participation at both the technical and political level and both within the negotiations process and in the public domain.  
 

Note: Main criticisms of the CARIFORUM-EU EPA
 

1. Inadequate public consultation

2. Development cooperation in EPA not quantified and time-bound

3. Absence of concrete programmes to equip Caribbean firms to cope with competition

4. ‘National treatment’ limits ability of governments to foster development

5. Market presence not just market access -other barriers to exporting to EU not addressed

6. Stringent eligibility requirements for services exports.

7. ‘WTO-plus’ – inclusion of services, investment, intellectual property, public procurement, competition policy
·         unnecessary for WTO-compatibility
·         limits ’policy space‘ of Caribbean governments
·         pre-empts Caricom Single Market and Economy (CSME)
·         compromises negotiating position of ACP and G77 in the WTO
·         compromises Caricom negotiations with US and Canada

8. MFN Clause inhibits South-South trade cooperation

9. Regional Preference Clause
·         abolishes special treatment of Caricom’s LDCs
·         merges CSME with Dominican Republic (DR)

10. Supranational governance machinery stronger than Caricom’s

11. Caricom not a Party to the Agreement – promotes regional fragmentation

12. Despite EPA, sugar and bananas still under pressure

13. Aid for Trade (AfT) is highly uncertain in quantity, timing and allocation

Norman Givran is Professorial Research Fellow at the UWI Graduate Institute of International Relations at the University of the West Indies in St. Augustine, Trinidad and Tobago.

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