THE EPA, DEVELOPMENT & REGIONAL INTEGRATION: SOME LEGAL ISSUES

1. THE EPA, DEVELOPMENT & REGIONAL INTEGRATION:SOME LEGAL ISSUES Norman Girvan Presentation at Norman Manley School, UWI May 2, 2008 http://normangirvan.info

2. Wide scope of the EPA • More than just about trade—extends into several aspects of national, regional and international policies, laws and regulations • Legally binding, with detailed and elaborate enforcement machinery, of indefinite duration and with a scope for revision that is circumscribed • There is inadequate understanding of the scope, implications and potential impact of the EPA within the public and even at official levels Girvan EPA 27/04/08

3. Part I. Trade Partnership For Sustainable Development Part II. Trade And Trade-Related Matters Title I. Trade In Goods Chapter 1. Customs Duties Chapter 2. Trade Defence Instruments Chapter 3. Non-Tariff Measures Chapter 4. Customs And Trade Facilitation Chapter 5. Agriculture And Fisheries Chapter 6. Technical Barriers To Trade Chapter 7. Sanitary And Phytosanitary Measures Title II. Investment, Trade In Services And E-Commerce Title III. Current Payments And Capital Movement Title IV. Trade Related Issues Chapter 1. Competition Chapter 2. Innovation And Intellectual Property Chapter 3. Public Procurement Chapter 4. Environment Chapter 5. Social Aspects Chapter 6. Protection Of Personal Data Part III. Dispute Avoidance And Settlement Part IV. General Exceptions Part V. Institutional Provisions Part VI. General And Final Provisions Girvan EPA 27/04/08

4. Annexes, Protocols and Joint Declarations • Schedule of Cariforum commitments on liberalization of trade in goods • Schedule of Cariforum commitments on liberalization of trade in services • Schedule of Cariforum commitments on liberalization of investment (commercial presence) in non-service sectors • Protocol I on Definition of "Originating Products" (Rules of Origin) and Methods Of Administrative Cooperation • Protocol II on Mutual Administrative Assistance in Customs Matters • Protocol III on Cultural Cooperation • Joint Declaration on Development Cooperation • Joint Declaration on Bananas • Joint Declaration on Used Goods • Joint Declaration on Rice • Joint Declaration on Undelivered Quantities Under the Sugar Protocol Girvan EPA 27/04/08

5. Impact of legal interpretations on bargaining power in the EPA negotiations • Issue of ‘WTO compatibility’ • Issue of ‘Substantially all trade’ • Issue of Phase 1 vs. Phase 2 negotiations • Issue of GSP as the only alternative to EPAs—meaning of Art. 37.6 • Issue of WTO Waiver and the negotiating deadline of December 31, 2007 Girvan EPA Legal

6. Asymmetry of legally binding obligations in subjects of interest to CF vis-à-vis the EC • Reciprocal trade liberalization between highly unequal partners must be accompanied by substantial investment in physical infrastructure, human resource development and enterprise development in order for the poorer partners to cope with increased competition on home markets and take advantage of export opportunities to the richer partners • Although Ch. 1 and most other chapters have numerous references to development support; they are not quantified and time bound and are hence difficult to monitor and to make subject to the EPA’s enforcement machinery • On the other hand CF’s obligations w.r.t. tariff liberalisation, market access in service sectors, and adoption of new laws, regulations, institutions and accession to international treaties in the ‘WTO-plus’ disciplines are spelt out in detail and most are time-bound and subject to the EPA’s enforcement machinery Girvan EPA Legal

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8. Parties to the EPA (Art 233) • ‘Party’ or ‘Parties’ refer to • European Community (EC), representing 27 member states of EU or • CARIFORUM States “acting collectively” • “Signatory CARIFORUM States” refer to individual states that have assumed rights and obligations as separate entities • The first relate mainly to general understandings and to Dispute Settlement, the second to specific, binding commitments for market access and legislative and regulatory measures • CARICOM not a Party • Implications for integrity of Caricom as an integration arrangement • Implications for bargaining power in implementation Girvan EPA 27/04/08

9. Conditions of access for Natural Persons employed to Service providers • Must be working with a firm with a service contract in an EU member state not exceeding one year’s duration • Must have at least 1 year’s working experience with the supplying firm as well as 3 years’ professional experience • With certain exceptions*, must possess a university degree or equivalent qualification and professional qualification required in receiving state. Mutual recognition agreements necessary. • Stay limited to cumulative period of six months in any 12-month period or duration of contract, whichever is less • Access limited to performance of contract • Number limited to what is necessary to fulfill contract as determined by local laws • Other ‘discriminatory limitations’ are allowed, including limitations on the number of employees permitted entry as a result of ‘economics needs tests’ in the receiving countries. • Other conditions are specified in Annex 4. * Fashion model services, chef de cuisine services, and entertainment services other than audio-visual . Girvan EPA 27/04/08

10. Conditions of access of IPs (Art 83) • Must be engaged in the supply of a service on a temporary basis in the other Party and must have obtained a service contract not exceeding 12 months. • At least 6 years professional experience. • A University degree or equivalent qualification and professional qualification required by local regulations. Mutual recognition agreements necessary • Stay limited to cumulative period of 6 months in any 12 month period or duration of contract, whichever is less. • Other ‘discriminatory limitations’ are allowed, including limitations on the number of employees permitted entry as a result of ‘economics needs tests’ in the receiving countries. • Other conditions are specified in Annex 4. Girvan EPA 27/04/08

11. Mutual Recognition AgreementsNecessary for all individuals providing services (CSS and IPs) Article 85) • Caveat: Nothing in EPA shall ‘prevent Parties from requiring necessary qualifications and/or professional experience in territory concerned’ • Professional bodies to be encouraged to jointly develop recommendations on MR for Trade and Development Committee (TDC) within three years • Priority to accounting, architecture, engineering and tourism. • TDC reviews to determine consistency with EPA • If approved by TDC, Parties negotiate MRA ‘through their competent authorities’ • Agreement must conform with WTO particularly Article VII of the GATS. Girvan EPA 27/04/08

12. Legal Implications of ‘WTO-plus’ commitments • The EPA contains far-reaching commitments on Services, Customs Cooperation and Trade Facilitation, Competition, Public Procurement, Intellectual Property, Investment, that go beyond the scope of current WTO obligations • The legislative, regulatory and institutional obligations could be onerous and costly and need to be thoroughly evaluated as they were not legally necessary for a WTO-compatible EPA • Circumscribe ‘policy space’ for the fostering of agricultural, industrial and service development • As the CSME regimes for these areas are not yet in place, they will likely be driven by the requirements of EPA compliance Girvan EPA Legal

13. JOINT CARIFORUM-EC COUNCIL TRADE AND DEVELOPMENT COMMITTEE COMMITTEE ON CUSTOMS CO-OPERATION AND TRADE FACILITATION PARLIAMENTARY COMMITTEE CONSULTATIVE COMMITTEE Girvan EPA 01/05/08

14. Joint EC-Cariforum CouncilPart V Articles 227-229 • Composition: Members of the Council of the EU, members of the EC, and representatives of the CF states. • In matters where CF states agree to act collectively “One representative of the CF states will act on their behalf” • Responsible for operation and implementation of the Agreement and to “ensure that the Objectives are fulfilled” • Decisions are by consensus and are binding and Parties “shall take measures to implement them” • Other responsibilities set out in 19 paras. Girvan EPA 27/04/08

15. Comparison with Caricom Governance • Art. 28 of the RT of C states that decisions of the Conference of HoG ‘shall be binding’ • Art. 240 states that decisions ‘shall be subject to the relevant procedures of Member States before creating legally binding rights and obligations’ • Once the EPA is ratified by Member States, Is there an equivalent caveat regarding decisions of its organs? • The enforcement machinery of the EPA appears to be considerably more robust than that of the RT, and will be backed by the considerable human, technical and financial resources of the EC as well as the original imbalance in economic power Girvan EPA Legal

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17. Trade and Development CommitteeArticles 230-231, references in several other Articles • Composed of Senior Officials – CF one representative in matters of collective action • Powers can be delegated from the Joint Council • 56 functions and responsibilities set out in Article 230 and other references • Special Committee on Customs Cooperation and Trade Facilitation – 13 functions, powers and responsibilities Girvan EPA 27/04/08

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19. ‘Regional Preference’ ClauseArt. 238.2 • Requires ‘Signatory CF states’ to give each other the same treatment that they give to the EU • Effect is to require Caricom LDCs (OECS & Belize) to give to the Dom Rep the same concessions as to the EU, contrary to the provisions of the Caricom-DR FTA • Is it consistent with Ch. 7 of the RToC on Specially Disadvantaged Countries, Regions and Sectors? • What happens in the event of a conflict between the EPA and the RT? Girvan EPA Legal

20. What role for the CCJ under the EPA? • Is there an overlap of jurisdiction over Dispute Avoidance/Dispute Settlement? • Disputes in the areas of Competition, Intellectual Property, Public Procurement, Customs Administration etc. Will be subject to EPA machinery, what role will be left for the CCJ in these ‘Single Economy’ areas? • If the CSME regimes for these are the EPA regimes, will the EPA machinery not supersede the CCJ and the RToC? Girvan EPA Legal

21. ‘Most Favoured Nation’ ClauseArt. 19 • Inserted in all EPAs on the insistence of the EC negotiators • Effect is to require CF to give to the EU the same concessions they may give in a future trade agreement with China, India, Brazil or MERCOSUR • Brazil has complained that this is contrary to the letter and spirit of the GATT ‘Enabling Clause’ on Special and Differential Treatment for Developing Countries and will undermine South-South Cooperation Girvan EPA Legal

22. How much scope is there for revision of the EPA after it is signed, provisionally applied and ratified?Revision Clause Article 246 (1) .1. “The Parties agree to consider extending this Agreement with the aim of broadening and supplementing its scope in accordance with their respective legislation, by amending it or concluding agreements on specific sectors or activities in the light of the experience gained during its implementation. The Parties may also consider revising this Agreement to bring Overseas Countries and Territories associated with the European Community within the scope of this Agreement.” 2. “As regards the implementation of this Agreement, either Party may make suggestions oriented towards adjusting trade related cooperation, taking into account the experience acquired during the implementation thereof. 3. The Parties agree that this Agreement may need to be reviewed in the light of the expiration of the Cotonou Agreement.” Girvan EPA 27/04/08

23. Revision Clause (continued) Article 246 (2) and (3) 2. “As regards the implementation of this Agreement, either Party may make suggestions oriented towards adjusting trade related cooperation, taking into account the experience acquired during the implementation thereof. 3. The Parties agree that this Agreement may need to be reviewed in the light of the expiration of the Cotonou Agreement.” (i.e. in 2020. Emphasis added) Girvan EPA 27/04/08

24. Commonwealth-ACP High Level Technical Meeting April 8-9, 2008 - Ministers, senior officials, NGOs, resource persons • “To ensure that EPAs are pro-development EC and ACP should review and renegotiate contentious issues. • “There is still legal space to do so • ACP unity needs to be maintained/restored • “ACP should engage with other stakeholders in Europe Girvan EPA 27/04/08

25. Decision of Caricom Heads 7-8 March 2008 • Heads ‘noted that a number of Member States were still examining the text of the EPA which in some cases would require the tabling of this Agreement in national parliaments’. • ‘They committed themselves to take the necessary steps to complete these internal consultations in a timely manner to facilitate signature and provisional applications of the agreement by 30 June.’ Girvan EPA 27/04/08

26. Report – ‘EPA signing delayed – Golding’ "For a number of reasons including the time that needs to be allowed for individual member states to carefully examine the text of the agreement, (and) recognizing that there have been two changes of government since the start of this year, it was felt that it was necessary for new governments to advise themselves properly before committing to the agreement," said Mr. Golding at the 19th Inter-sessional CARCOM heads of Government meeting in the Bahamas. Girvan EPA 27/04/08

27. Prime Minister Thompson of Barbados on CSME and EPASpeech to TTMA 15/04/08 • ‘Powerful case’ built against the signing of the EPA • ‘There is still room for negotiation on the EPA, within the 3-year moratorium before formal ratification of the Agreement’. • The EPA ‘constitutes an imperfect basis from which to move forward into the brave and unknown world of the 21st century’. • ‘We must recommit ourselves as a region to the full implementation of the Single Market and Economy while negotiating in WTO and bilaterally’ Girvan EPA 27/04/08