Director General, CARIFORUM Directorate

Remarks

Iván Ogando Lora

on the occasion of the

12th Regional Seminar of the

ACP-EU Economic and Social Interest Groups

Santo Domingo

5 – 6 July 2012

Let me take the opportunity to register the sincere thanks of the CARIFORUM Directorateofthe CARICOM Secretariat for the invitation extended by the European Economic and Social Committee (EESC) to attend this important Seminar.

The CARIFORUM Directorate welcomes this initiative and the opportunity to participate in this event, for at least two reasons:

First of all, thisSeminarcomplements a Meeting of CARIFORUM Non-State Actors that the CARIFORUM Directorate is hoping to convene in September of this year, in preparation for the inaugural meeting of the CARIFORUM-EU Consultative Committee.This Seminar presents an important and relevant opportunity to draw attention to our planned interaction with Non-State Actors.
Secondly, this engagement presents a rareopportunity for frank and structured exchangeswith a critically important segment of stakeholders— economic and social interest groups.

I have been asked to contribute to thepresent session ofthe Seminar, entitledAssessment of the implementation of the CARIFORUM-EU Economic Partnership Agreement (EPA). I plan to reflect on the work of the Institutions provided for in the EPA and deal with the work undertaken in these fora in the few years since the EPA came into effect. I will also highlight activity in the areas of Trade in Goods and Trade in Services and Investment as well as in the provisions made for EPA support implementation under the 10th EDF Caribbean Regional Indicative Programme

Ladies and Gentlemen,

As you are all aware the EPAhas been provisionally applied since 29th December, 2008, following its signing in October 2008. While a provisional application allows the terms of the Agreement to take effect, the States also have an obligation to ratify the Agreement. This is traditionally a slow process so that the pace of ratification does not come as a surprise - to date ten EU Member States have ratified the EPA while only five CARIFORUM States have done so, namely Antigua and Barbuda, Belize, Dominica, Dominican Republic and Guyana.

Meetings of three of the Institutions established under the EPA have already been convened and have provided opportunities to address operational issues arising out of implementation of the Agreement.

The first Meeting of the CARIFORUM-EU Joint Council, a Ministerial forum, took place in May of 2010 and the second is expected to be held later this year. The Joint Council is charged with overseeing implementation of the EPA and is supported in the fulfilment of its mandate, by the Trade and Development Committee (T&DC). This Committee had its first meeting in June last year when both CARIFORUM and the EU had an opportunity to voice their concerns over issues in the EPA implementation process. The second meeting of the T&DC is scheduled for the end of September this year.

A Meeting of the third Institution,the Special Committee on Customs Cooperation and Trade Facilitation,was convened here in Santo Domingo last December. This Committee deals with matters which are even more practical and specific than those addressed by the Trade and Development Committee and its Meeting provided a forum for discussion on, among other things, rules for tariff classification, pre-shipment inspections matters, and updating tariff nomenclature.

A fourth institution, the Parliamentary Committee, composed by representatives of the national parliaments from the region and the European Parliament, met in June last year.

The CARIFORUM Directorate is also actively engaged in coordinating CARIFORUM participation in the CARIFORUM-EU Consultative Committee. This Committee will bring together civil society, including private sector and labour organisations, academia, youth, agriculture, and social groups. This Committee is expected to have its first meeting later this year.

Article 232 (2) of the CARIFORUM-EU EPA reads as follows: “Participation in the CARIFORUM-EU Consultative Committee shall be decided by the Joint CARIFORUM-EU Council with a view to ensuring a broad representation of interested persons”.

In this regard the Directorate has been engaging in informal consultations with a view to securing the widest possible CARIFORUM participation in the Committee – with respect to both geographical coverage and range of areas of interest in civil society. The Directorate has benefited from suggestions from the CARIFORUM representatives in the ACP-EU Consultative Committee, a meeting of which was held in Brussels in 2011. In addition, the CARIFORUM Council of Ministers discussed this issue at its Meeting in November 2011 and offered guidance in this regard.

As I mentioned earlier, the Directorate isplanning a consultation with regional civil society stakeholders in September in order to establish a list of Caribbean representatives in the CARIFORUM-EU Consultative Committee. I will usethe opportunity of this Seminarto have an informal exchange of views on that matter.

In general, these fiveinstitutions will ensure that the terms of the EPA are given effect and that –for CARIFORUM –the expectations of benefit set out in the Agreement are fulfilled, even as these States work to honour the obligations undertaken in the EPA.

Let me turn to the situation of Trade in Goods. The provisions of the EPA in the area of Trade in Goods have been recognised as unique in the experience of most of the CARIFORUM States, in that they provide for an exchange of preferential access between these developing countries in the Caribbean and a number of developed countries of the European Union,a major player in Trade in Goods. For most CARIFORUM States, the EPA represents the first reciprocal preferential trade agreement with developed partners.

CARIFORUM States, for many years, some for more than thirty years, have enjoyed one-way duty free and quota free access into the market of the European Union, the membership of which, you will know, has increased over the years to twenty-seven and is to be further expanded next year. For a number of reasons, however, and time does not allow me to expandon these today, that non-reciprocal access could not be maintained and CARIFORUM States must now face the harsh reality of the opening up of their markets to goods from the EU which will enjoy preferential access, even asthe CARIFORUM States continue to benefit from the duty free and quota free access into the EU. Fortunately, that preferential access into CARIFORUM States is asymmetrical and is not total. The removal of tariffs, in those areas where it has been agreed, will, in many cases, be phased-in over periods ranging from five to twenty-five years following the signing of the EPA in 2008. That phased reduction of duties was scheduled to begin on 1 January 2011 – at the end of a three year period in which CARIFORUM States were not yet obligated to introduce tariff reductions. Regrettably, to date, only six CARIFORUM States have made the tariff reductions which were scheduled for 1 January 2011. Of course, while CARIFORUM States are aware of their responsibilities and commitments under the EPA, honouring them has been made more difficult by the global effects of stagnation, with little to no economic growth, high unemployment and burdensome national debt in most of the major trading partners as well as in CARIFORUM States themselves. As a result, despite the efforts of the Secretariat to draw the attention of CARIFORUM States to this obligation to commence tariff reductions the level of compliance with this requirement continues to be disappointing – and this in face of the fact that a second reduction is due on 1 January 2013.

Ladies and Gentlemen,

In the context of the EPA, it is envisaged that the removal of the tariffswouldpresent challengesfor regional producers of competing goods. Where such difficulties can be demonstrated, there areprovisions for temporary adjustment of the pace of tariff reductions to reduce the harm to producers in CARIFORUM — but any accommodation which may be enjoyed does not remove the commitment to the elimination of the tariff bythe agreed dates.

Some of our CARIFORUM exporters have already benefited from the introduction, of relaxed rules of originunder the EPA. Some items produced in CARIFORUM which hitherto the signing of the EPA,did not enjoy preferential — duty free and quota free — access tothe EU now qualify for such access. In this context, let me remind you that the arrangements in the EPA affectnot only our trade with continental Europe but also trade with our neighbours in the region — Martinique, Guadeloupe and French Guyana. The goodswe sell in those markets enjoy duty free and quota free access once the requirements in the rules of origin are met.

With respect to the implementation of the Services and Investment component of the EPA, significant efforts have been madeto bring our services suppliers into a position where they can securethe access into the EU market which the EPA provides.

Extensive in-country consultations with services suppliers have been conducted. Reviews of the respectivelegislation ofCARIFORUM States have been conducted to identify the areas ofamendment required for trade in services under the EPA. Legal experts and trade in services specialists have collaborated to assist CARIFORUM States to bring national legislation into conformity with the requirements of the EPA. In addition, it has been necessary to expose regional architects and engineers to the requirements which will assist themin completing agreements with like groups of architects and engineers in the EU to enable them to derive benefits from the EPA. The reality is that much preparatory work is necessary before the CARIFORUM States can begin to enjoy the benefits of trade in services under the EPA.

Let me draw your attention to the establishment in the CARIFORUM Directorate of the CARICOM Secretariat of an EPA Implementation Unit which has the mandate to provide assistance to all CARIFORUM States –public and private sector -in their efforts to implement the EPA. Of course, the individual CARIFORUM States have set up their own entities which are promoting implementation at the national level – these national Units liaise intimately with the regional Unit in the CARIFORUM Directorate and provide,in large measure,the link between the States and the Secretariat in the EPA implementation process.

Implementation exercises have been undertaken with assistance provided by the Caribbean Export Development Agency to support efforts of CARIFORUM goods exporters and services suppliers to access the EU, throughstudy tours and promotional exercises. While much has already been done, there is still the need to redouble efforts and, to this end, the regional institutions are playing a major supporting role.

The CARIFORUM Directorate is movingto enhance its collaboration withCARIFORUM States by convening a meeting of National EPA Coordinators and Heads of national EPA Implementation Units and similar entities in CARIFORUM States. This session, which is planned for early August and which will be held here in Santo Domingo, will provide a forum for sharing of experiences and for clarification of the terms of the EPA, where this is necessary. It will also allow for discussion on items which are expected to form part of the agendas of the Meetings of the Joint Council and the Trade and Development Committee, both of which are scheduled to be convened in the second half of 2012.

As you may be aware, the EPA does not make specific provisions for financial support to build the capacity of CARIFORUM States to honour commitments made in the Agreement or to take advantage of itsprovisions. In this regard, the main source of financial support for EPA implementation comes from the Development Finance Provisions under the Revised Cotonou Agreement. Complementary support is also being received throughAid for Trade (AfT) commitments of EU Member States.

In this regard, almost 45% of the resources under the 10th EDF Regional Indicative Programme, covering the period 2008-2013, have been indicatively allocated for EPA Capacity Building over a number of areas. The two main provisions for EPA support in CARIFORUM can be summarized as follows:

1-The 10th EDF Regional Private Sector Development Programme, valued at 28.12 million Euros is currently being implemented by Caribbean Export. It contains provisions for enhancing competitiveness and innovation, trade and export development, etc. It also includes provisions for direct assistance at enterprise level, including through a matching grant scheme to assist firms in developing capacity for export to the EU.

2-The 10th EDF EPA Capacity Building Programme which is valued at 46.5 Million Euros. This provides support for fiscal reform and adjustment, a Sanitary and Phytosanitary system programme to address issues related to access to the EU market for fisheries and agricultural products, provisions to address issues regarding Technical Barriers to Trade (TBT), support for national coalitions of Services providers for the development of the services sector, and further support for the regional rum industry.

In addition tothese two mayor initiatives, a proposal for a programme to support and facilitate participation of CARIFORUM Civil Society in the Regional Development and Integration Process has been submitted for funding consideration to the EU. This proposal, for 4.2 million Euros is aimed, among other things, at facilitating a more effective role of CARIFORUM Regional Civil Society, in the promotion of social dialogue and the social aspects of the EPA with CARIFORUM Governments.

Ladies and Gentlemen,

The implementation of the EPA presents our region with both challenges and opportunities for securingbetter access to a world economy that is in constant change. Since CARIFORUM States signed the EPA, the EU has finalized free trade agreements with Korea, Peru and Colombia, as well as an Association Agreement with six Central American Countries. Each of these agreements represents an erosion of the preferential terms that CARIFORUM negotiated with the EU. The region therefore needs to redouble its efforts to take full advantage of the provisions of the Agreement andto establish itsproducts and services in the European market in an efficient and competitive manner. However, EPA is only an instrument.Its implementation is not an end in itself. We must always bear in mind that the ultimate goal for us is to use this instrument in the most efficient way to increase our competitiveness and productivity in order to enhance the standard of living of the people of the CARIFORUM States.

I thank you