Where there is no strategy the people perish

Where there is no strategy the people perish
Wednesday, May 28, 2008

Source: Jamaica Observer Editorial

The popular Biblical admonition says that "where there is no vision the people perish". We would like to add, for the sake of Caricom, that a vision is no use unless there is a strategy to realise it.

Let's face it, the Caricom countries have not perished, but economic growth has been disappointing, to say the least. The exceptions are those blessed with energy resources or those who shelter funds avoiding taxation and scrutiny. The fragile economic foundations of Caricom countries are being threatened by a combination of escalating prices for oil and food, the recession in the US economy, crime and drug trafficking.

For the past half-a-century, the region has sought to enhance growth and structural diversification by various forms of collective action. The template has, for the last 30 years, been the deepening degrees of economic integration, with the current incarnation being the Caricom Single Market and Economy (CSME) which sets out broad goals and principles.But we should not need to stress that for the CSME to be a vehicle of economic progress there must be a development strategy, which, to date, has been absent, as evident in the lack of preparedness to engage constructively in pursuing the new export opportunities.

This glaring failure is highlighted by the recent angst over the Economic Partnership Agreement (EPA) with the European Union. Even more worrying is the steady decline in the ability to supply the local market, resulting in increasing imports. Take the case of domestic food production: the region's agriculture ministers were recently in Guyana, desperately and belatedly devising a response to the food crisis. Their response will constitute an emergency version of the Jagdeo Initiative for agriculture, but what is needed is an overall development strategy.

The region needs a new development strategy that goes beyond the CSME paradigm. We must stop recycling politically correct platitudes that are unrelated to the national, regional and global realities. The recommendations of "Towards a Development Vision and the Role of the Single Economy" bear a remarkable similarity to those that informed the West Indies Federation of the middle of the last century. It is devoid of fresh thinking and offers nothing useful that can help the governments of the region with the fundamental problems of crime, unemployment, dependence on imported food and the exponential increase in the price of oil.

We urge that a new development strategy be formulated by the end of this year, based on new, solutions-oriented thinking. Which means avoiding 'rounding up the usual suspects' to regurgitate the past. A creative, technically sound and intellectually virile team must be commissioned to chart a practical course to overcome the challenges facing the region.

The Heads of Government must convene a special session to agree on the development strategy for the next decade. The agenda for this meeting must be free of perennial items such as cricket - sacrilegious as this might sound - and a Caricom passport. We must avoid paralysis by analysis and end the tendency to note work done and commission additional work.

To ensure effective implementation of the strategy, a new governance structure for Caricom is critical and, as we have said before, must involve a reorganisation of the Caricom Secretariat based on a management audit by a reputable firm. This, for obvious reasons, is not a task for officials from member states or former employees of the Caricom Secretariat.

EPA Conundrum

The EPA conundrum
ANTHONY GOMES

Jamaica Observer

Wednesday, May 21, 2008

There are strident calls for the Economic Partnership Agreement (EPA), due to be signed by Cariforum in July, to be amended, varied or simply not signed. Any possible renegotiation of the treaty, it is acknowledged, might come at a potentially intolerable cost. The strongest demand for change emanates from within the academic community that has raised certain valid issues, which should have been addressed earlier during the negotiations that officially ended on December 31, 2007.

The legal status of initialled EPAs, currently Cariforum's situation, is described by Dr Lorand Bartels, lecturer in International Law and Fellow of Trinity Hall, University of Cambridge. The following relevant excerpts are informative: "Under international law, initialling an agreement demonstrates that the text is authentic and definitive, ready for signature, or although unusual, ready for provisional application. But an initialled text does not itself impose any obligations on the parties. The parties to an agreement are only under an obligation to implement its terms once it has entered into force, which takes place upon ratification or after ratification, if this is specified in the treaty (as it is in the interim and full EPAs). On signature (but not on initialling), a country enters into an obligation not to defeat its object and purpose prior to its entry into force.

"Provisional application may subsequently be terminated by notifying the other party. However, terminating the provisional application of an agreement may indicate an intention not to ratify the agreement, which could result in the EU withdrawing the preferences it had already granted.

Therefore, if parties have concerns about content of the agreements, it may be advisable to refrain from provisional application until the dispute clauses are first revised". It is not known if Cariforum intends to apply the agreement provisionally, but the above caution is worthy of note.
"WTO law sets minimum requirements covering free trade in goods. It does not require the inclusion of liberalisation "multiplier" clauses, such as MFN or standstill clauses. Moreover, the WTO Transparency Decision specifically provides for the possibility of renegotiating an already notified agreement. This has been done on five occasions to date. The only requirements are that the renegotiated agreement be re-notified to the WTO and that it remain WTO legal. This leaves a great deal of scope for renegotiating aspects of the agreements which are not required for WTO legality (for example, the MFN clause and the standstill clauses could be removed without compromising WTO validity)."

According to this dictum, there is room for renegotiation of some aspects of the EPA, but at what price? However, the MFN clause is one of the major concerns for Cariforum and certain third countries, notably Brazil, that has already referred the issue to the WTO for debate.

Professor Bartels continues: "Arguably, it would be unreasonable to hold an ACP country to a standard higher than that which the EU member states apply in their own treaty practice. Consequently, there is a case that a minimum of four years between signature and ratification would be a "reasonable period of time" for an ACP country to endorse the agreement. ACP countries are not precluded by treaty law or WTO law from renegotiating initialled agreements, so long as the resulting agreement is still WTO legal."

This then is an avenue to be explored if COTED decides to move for selected amendments. The main thrust of the implementation plan, however, should be to exploit successfully the opportunities created by eventually signing the agreement.

Another concern raised by observers is the loss of sovereignty relative to the powers vested in the Joint Cariforum-EC Ministerial Council, the principal institution for oversight of the operation and implementation of the agreement. Its functions include examining proposals and recommendations for the review of the agreement. To attain the objectives of the agreement, the council shall have the power to take decisions in respect of all matters covered by the EPA. The specific reference to the council's powers relative to the EPA seems designed to exclude reference to the authority and jurisdiction of The Revised Treaty of Chaguaramus and the Caribbean Court of Justice (CCJ). It remains possible, however, that at some time these institutions could be opposed on certain unforeseen overlapping issues.

Other critical points cited were the limiting of Caricom's "policy space", that is the amount of flexibility available for manoeuvre in policy formulation by the Joint Council and its three other supporting institutions, that is, the Joint Cariforum-EC Implementation Committee, The Joint Cariforum-EC Development Committee and The Joint Cariforum-EC Consultative Committee.

Another criticism is the inadequate funding from the 10th European Development Fund (EDF), amounting to 2.2 million Euros per country for development/adjustment.Finally, the regional preference granted to the DR has also created some disquiet. In essence, any preference granted by one Caricom member to another must include the DR. This has created a very beneficial windfall for the DR that is still negotiating outstanding items in its trade agreement with Caricom.

We await the EPA Implementation Plan being developed by the Caricom Secretariat. Hopefully, it should indicate the way forward for Cariforum by unravelling the many complexities contained in this first ever treaty of indefinite duration, and selecting those items of concern for eventual review with the EC.

Guyana- Jamaica Rice Spat

Guyana - Jamaica Rice Spat

Source: Trinidad and Tobago Express

May 7, 2008

WHEN writing in this column two weeks ago on the scrambling by Caribbean Community governments to face up to the challenges of a deepening international food crisis, little did I realise that Jamaica and Guyana were heading for a serious row over Caricom's Common External Tariff (CET) as it relates to Guyanese rice shipments to the Jamaican market.

People in Trinidad and Tobago may be indulging in bantering over Agriculture Minister Arnold Piggott's surprise to hear that this country is also affected by a "food crisis''. Perhaps Piggott should have a chat with his boss, Prime Minister Patrick Manning, who is now seemingly anxious to release arable lands for increased food production.

For sure, Jamaica's threat to override Guyana's resistance to a standing 25 per cent suspension of the CET to enable it to import rice at more favourable prices from outside Caricom is no laughing matter.

Guyana has for years been and remains Caricom's single largest producer and exporter of rice for the regional market. Rice is one of the commodities protected by the CET against unauthorised imports from extra-regional competitors who benefit from significant subsidies at home.

Jamaica's Minister of Industry and Commerce, Karl Samuda, has warned that his government would not sit idly while Guyana defaults on rice shipments to his country (some 52,000 tonnes were shipped in 2007), and especially since the commodity could be obtained on a dependable basis at lower prices from non-regional sources.

Competitive sources for subsidised rice exports to this region have largely been the US and Thailand against which Caricom producers like Guyana and Suriname cannot afford to compete. Hence, the protection of the CET as a mechanism to prevent unfair competition to the detriment of a local industry.

Trinidad and Tobago, now reportedly again contemplating the possibility of commercial rice production, has recorded its own past failures to get a waiver of the CET to permit importation from extra-regional exporters of parboiled rice normally purchased from Guyana.

In the circumstances, it is difficult to see how Caricom's Council for Trade and Economic Development (COTED), the body that maintains oversight on the application of the CET, can possibly allow Jamaica's quest for a suspension.

Guyana's Agriculture Minister, Robert Persaud, has already publicly signalled to Minister Samuda that his country was certainly in no mood to endorse the suspension of the CET.

This, Persaud contends, would be to consciously work against "not only our own national interest in a very vital sector, but also undermine the very mechanism, the CET, we have established in the wider interest of the economies of Caricom...''

Strong stand indeed. The Guyanese minister must also be aware that just recently Trinidad Cement Ltd (TCL), with production operations also in Guyana, has found it necessary to refer to the Caribbean Court of Justice (CCJ) a dispute it has with the Guyana government for an alleged failure to impose the CET against non-Caricom suppliers of cement for the local market.

Guyana has accused TCL of having defaulted on arrangements to satisfy the demands of the local market, Consequently, it has decided to defend the legal action to be pursued by TCL before the CCJ.

For its part, Jamaica has also been claiming defaults in rice shipments from Guyana. The Guyanese private sector - producers and exporters - as well as the government, have denied this claim. They have countered that Jamaica was engaged in "misrepresentations'' in order to secure sources of foreign rice supplies at prices disadvantageous to Guyana's rice industry and national economy.

This latest spat over rice shipments between Guyana and Jamaica is expected to engage the attention of COTED.

Parties to any trade dispute pertaining to the functioning of the CET under the revised Caricom Treaty are free to access the CCJ, if dissatisfied with a decision by COTED. The CCJ has original jurisdiction on trade disputes within Caricom and its ruling is binding.

Article 83 of the Caricom Treaty makes clear that the criteria for a suspension of the CET has nothing to do with comparative prices for a foreign sourced commodity but its availability, as required, and approved quality of the Caricom product.

Whatever the outcome of this "rice spat'' it is simply one aspect of widening pressures being experienced by the region's economic integration movement and generated by the escalating worldwide food crisis.