Publication Name
Caribbean Paper
Volume, number, page
10
Year of Publication
2010
Organization Name
Centre for International Governance Innovation
Caribbean Policy Research Institute
Acronym
CIGI
CaPRI
Publisher
CIGI
City
Waterloo
Web Page
Country of Publication
Canada
Full Date
September 2010
ISBN or ISSN
1915-6421
Category
Academic articles
Theme
BILATERAL RELATIONS UE - LAC
Subregion - European Union
Keyword(s)
European Union
Caribbean
Economic Relations
Trade
Foreign Policy
Development Co-operation
CARICOM
CARIFORUM
Abstract
The Economic Partnership Agreement (EPA) signed in
2008 signalled a new era of trade relations between
the European Union (EU) and the Caribbean Forum of
African, Caribbean and Pacific States (CARIFORUM).
Caribbean exporters previously had greater duty-free
access to the EU market than European exporters enjoyed
in the Caribbean, along with quotas that enabled them to
avoid price competition with rivals from outside the Lomé
ACP (Africa, Caribbean and Pacific) bloc.
With the advent of the World Trade Organization (WTO)
in 1995, the EU and the Caribbean were forced to negotiate
new terms of engagement. The EPA represented a shift
towards a more liberal trading regime in which greater
reciprocity is the norm.
Critics of the EPA believe the new trade regime will inhibit
the development of new (particularly manufacturing)
industries in the region and worsen the fiscal accounts
of Caribbean countries. This paper, however, concludes
that the aggregate negative impact of the EPA on
Caribbean states will be modest, although it will likely
produce challenges for smaller Caribbean governments.
In particular, this paper emphasizes that the EPA will
not be effective without the successful implementation
and operation of the Caribbean Single Market Economy
(CSME), which requires Caribbean governments to plan
and coordinate economic activities together. The EPA
provides the opportunity for the region to build the
framework that will allow it to compete in a liberalized
global economy, where a competitive environment is
necessary for survival.
2008 signalled a new era of trade relations between
the European Union (EU) and the Caribbean Forum of
African, Caribbean and Pacific States (CARIFORUM).
Caribbean exporters previously had greater duty-free
access to the EU market than European exporters enjoyed
in the Caribbean, along with quotas that enabled them to
avoid price competition with rivals from outside the Lomé
ACP (Africa, Caribbean and Pacific) bloc.
With the advent of the World Trade Organization (WTO)
in 1995, the EU and the Caribbean were forced to negotiate
new terms of engagement. The EPA represented a shift
towards a more liberal trading regime in which greater
reciprocity is the norm.
Critics of the EPA believe the new trade regime will inhibit
the development of new (particularly manufacturing)
industries in the region and worsen the fiscal accounts
of Caribbean countries. This paper, however, concludes
that the aggregate negative impact of the EPA on
Caribbean states will be modest, although it will likely
produce challenges for smaller Caribbean governments.
In particular, this paper emphasizes that the EPA will
not be effective without the successful implementation
and operation of the Caribbean Single Market Economy
(CSME), which requires Caribbean governments to plan
and coordinate economic activities together. The EPA
provides the opportunity for the region to build the
framework that will allow it to compete in a liberalized
global economy, where a competitive environment is
necessary for survival.