International NGO knocks Caribbean EPA

BRIDGETOWN, Barbados, April 23, 208 – Caribbean negotiators in the economic partnership agreement (EPA) with the European Union (EU) have been knocked by Oxfam International for giving up too much in the services sector. 

The Caribbean was the first of the six African, Caribbean, Pacific (ACP) regions to initial a full agreement with the EU by the December 2007 deadline and while the EU has held the Caribbean EPA up as a model, a recent analysis by Oxfam has characterised the agreement as a bad precedent.

In its report released on Monday entitled ‘Partnership or Power Play? How Europe should bring development into its trade deals with African, Caribbean’, Oxfam said Caribbean countries had placed themselves on a “slippery slope” by opening up essential services to the private sector.

According to the international non-governmental organisation (NGO), several Caribbean countries have given European companies the right to provide primary, secondary, and tertiary education, medical and dental services, and sanitation and wastewater services. Thus, Oxfam stated, EPAs could hinder the ability of Caribbean governments to provide quality and affordable essential services. Furthermore, it argued, should the European providers fail to assist countries in meeting national development objectives and unexpectedly undermine access for the poorest and most vulnerable people in society, the EPA provisions would make it very difficult for countries to alter conditions of those foreign providers. 

According to Oxfam, the Caribbean agreement liberalises up to 75 per cent of its services sectors and, although there are significant variations between countries, the range of sectors is still very wide, ranging from accounting, book-keeping, and financial services to medical and health services, and tourism.

The Caribbean has benefitted significantly from foreign direct investment (FDI) inflows from its international business sectors and the EPA furthers this by providing European companies with the right to establish a local presence in telecoms, banking, retail, and courier services. However, Oxfam expressed concern that Caribbean countries could in fact risk losing FDI benefits because their liberalisation commitments take away their full flexibility to regulate, including in a discriminatory manner, against foreign firms. 

“Under the deals, governments are largely prohibited from treating foreign and local companies differently, favouring joint ventures over wholly foreign-owned ventures, limiting the number of suppliers, or providing requirements that foreign-service companies train and employ local people or that they provide benefits to local communities affected by the service,” Oxfam warned. 

The EPA agreement also seems to have opened up some of the Caribbean’s most vulnerable and declining sectors to international competition. According to the Oxfam analysis, manufacturing has been largely opened with very few countries placing limits on the entrance of foreign investors or retaining their right to regulate manufacturing activities.

In food and beverage manufacturing, for example, only four countries have placed limitations on the activities of European companies. Agriculture has also been liberalised with only eight countries placing some limits on investment. Grenada, for instance, stipulates that foreign companies can invest only in export sectors. 

In concluding the analysis, Oxfam pointed out that Europe’s importance as a trade partner to ACP countries was on the decline and therefore the developing countries should stay away from locking themselves into a “bad deal” with Europe.

The British-based NGO called on the Caribbean, its African and Pacific counterparts and European nations to ensure that the agreements were vigorously debated in their parliaments and allowed thorough scrutiny by independent evaluators before any deal was signed or committed into law. 

The Caribbean Forum grouping of CARICOM and the Dominican Republic is scheduled to fully sign the EPA into effect on June 30, 2008, after reviews of the agreement have been completed by regional governments.