EU-CARIFORUM EPA Remains a Slow Starter
A study claims that the objective of meeting economic growth in the Caribbean region has not been met even after two years of signing the Economic Partnership Agreement between the EU and the Caribbean Forum (CARIFORUM). Even at the time of signing the pact was mired in controversy that the Caribbean region would suffer from the influx of superior finished products from the EU bloc.
However, the study conducted by the Jamaica-based Caribbean Policy Research Institute (CaPRI) and the Centre for International Governance Innovation (CIGI) finds contrary to claims that the agreement would prove disastrous for the Caribbean economies, the economic effects on the four countries studied - Jamaica, Guyana, Trinidad and Tobago and St. Lucia - would likely be minimal.
Though it underscores that the deal has not caused any serious damage to these economies but there are no visible gains in the region either. Chargé d'Affaires of the EU Delegation Bob Baldwin told IPS that "We are not surprised by the findings of the CaPRI study as the EU had always maintained that the Caribbean had more to gain than to lose in an EPA which was designed to provide better market access and better rules of origin than any other EU trade regime, allow time and space for domestic firms and industries to adjust gradually, and strongly support the existing Caribbean ambition for regional economic integration."
The CaPRI report informed overall exports were estimated to increase by one percent or roughly $22.8mn and total imports were expected to increase by 0.6 percent, or about $16mn leaving a positive balance of around $6.8mn. In the context of trade deficit it is over 200 times that figure, however, this is obviously a negligible change.
It also says Jamaica would make marginal improvement on its trade balance with Europe and St. Lucian economy while losing out on manufacture imports is set to boost the tourism industry by more than four percent. St. Lucia is better placed than Jamaica, the principal reason being the larger share of services in its economy.
In the case of Guyana, whose head of state Bharat Jagdeo has stoutly defended his decision to sign the EPA, the CaPRI researchers found that the country's agricultural economy was always likely to be the least vulnerable to competitive imports from the EU. Guyana’s agricultural activity constitutes almost a third of GDP, nearly five times the share for any other country in the region, and is where more than 20 percent of the employed labour force finds work.
Baldwin admitted that it was now important not to lose too much time in making progress on the implementation of the agreement, which has been slow. He added that €165mn in grant funds was available under the European Development Fund to support such efforts.
By Jose Roy