EPA with Europe not delivering on full potential for Caribbean region

A recent evaluation of the CARIFORUM–EU Economic Partnership Agreement (EPA) has uncovered several shortcomings that have been contributing to Caribbean firms not taking greater advantage of the partnership.

Felipe de la Mota, Team Leader for Regional Integration and Trade programmes in the Caribbean at the EU Delegation in Barbados and the Eastern Caribbean, said the study showed that while there was progress in the implementation of the agreement, though “uneven” among countries, it was not delivering to its full potential.

“This is due to a number of shortcomings that we do see now,” he said, pointing out that the evaluation also showed that not having the tariff preference agreement in place would result in significantly lower bilateral trade in goods between the EU and CARIFORUM states.

About 180 stakeholders from the region, including business support organisations, public administrators, and private and civil society representatives, were interviewed in the study.

The EPA is a trade and development partnership, signed in 2008 by the 15-member CARIFORUM bloc and the EU’s 28 member states, to make it easier for people of both regions to invest in and trade goods and services with each other.

Pointing to the weaknesses identified, Felipe said there was insufficient implementation of tariffs and liberalisation commitments, continued maintenance of discriminatory policies, unjustified quantitative restrictions and lack of transparency.

“There are still insufficient domestic regulations against anticompetitive practices protecting intellectual property rights for the confidentiality of personal data,” he added.
“In terms of challenges, what the report does identify is that the main one we have seen is raising awareness of the EPA among the private sector. Clearly, what we are doing is not enough.”

Felipe said overcoming capacity constraints, both at the level of public administration and business operators, was linked to the “political willingness” in countries to fully implement the EPA.

He reported that authorities from the EU were already working with CARIFORUM members to adopt a suitable monitoring system “to adequately keep track of progress made, which is not always easy”.

Pointing out that the EU was already providing some level of technical and financial support to address the shortcomings, he said there was a €21 million (US$24.6 million) grant for improving quality infrastructure services to reduce barriers to trade.

This work is being done in collaboration with the CARICOM Regional Organisation for Standards and Quality (CROSQ) and the German Metrology Institute, and should result in improvement in in several areas.

“We are also hoping to improve the sanitary and phytosanitary aspects of trade, in partnership with the Inter-American Institute for Cooperation and Agriculture (IICA), and we are helping each and every CARIFORUM member states to address specific issues at the national level related to EPA and CSME [CARICOM Single Market and Economy] implementation through an on-demand standby facility we set up together with the Caribbean Development Bank,” he reported.

Felipe was addressing a recent joint University of the West Indies (UWI) and European University Institute (EUI) online dialogue on the topic COVID-19 and Trade: Sharing the Experiences of the Caribbean and Europe.

While insisting that it was about time the EPA work to the benefit of the region, he acknowledged that a fully functioning EPA may not be enough.

“Ultimately, you can only sell if people want to buy your product and for that you need to be more competitive, more innovative, more disruptive or just better marketed, or a combination of these ideally. This requires working on several fronts at the same time,” Felipe suggested.

He said the EU would also seek to help the region by facilitating more innovative financing options.

“In this sense, we are going to be introducing, in the coming financial period starting in 2021, the use of financial guarantees to continue to support this by helping to de-risk the private sector in their investments. The banks can’t be forced to invest, but they can be encouraged to do so through innovation and competition,” he said.

Stating that the EU remained ready to assist regional economies address challenges to trade between the two regions, he said it would also help to strengthen the links between academia and industry, as well as linkages between higher education institutions across the region.