THE CARIFORUM- UNITED KINGDOM ECONOMIC PARTNERSHIP AGREEMENT

It should be noted that consequent to the United Kingdom’s decision to leave the EU, it was necessary to conclude an arrangement that would continue to facilitate trade. The agreement concluded is a roll-over agreement, with the provisions of the CARIFORUM-UK EPA being very similar to those of the CARIFORUM-EU EPA.

A. THE CARIFORUM-EU ECONOMIC PARTNERSHIP AGREEMENT

On October 20, 2008, H.E. Dr. Patrick Gomes, Guyana’s Ambassador in Brussels, signed the CARIFORUM-EU Economic Partnership Agreement (EPA) on behalf of the Government of Guyana. The actual conclusion of the Agreement was consistent with both the provisions of the Cotonou Partnership Agreement and the terms of the waiver granted on the Cotonou trade regime at the WTO Ministerial Conference in Doha (November 2001).

The EPA contains provisions on Customs Duties; Rules of Origin; Nontariff Measures; Trade Defense Measures (Anti-Dumping, countervailing measures, multilateral and bilateral safeguards); Customs and Trade Facilitation, Technical Barriers to Trade, Sanitary and Phyto-sanitary Measures, Agriculture and Fisheries, Services and Investment; Current Payment and Capital Movements, Competition Policy, Innovation and Intellectual Property, Personal Data Protection; Public Procurement, and Environmental and Social Aspects of Sustainable Development.

The CARIFORUM-EU EPA is pro-development in two major respects; (a) calibrating commitments that are reflective of the parties’ respective levels of development as well as taking into account differences within CARIFORUM; and (b) enshrining commitments on EU development assistance in priority areas identified by CARIFORUM States. In pursuit of this objective, the EPA contains a Joint Declaration on Development Cooperation that identifies the European Development Fund (EDF) and EU Member States’ Aid for Trade commitments as sources of EU development support. In seeking to address the historically poor rates of EDF disbursement, the EPA also identifies funding of the CARICOM Development Fund as an institutional vehicle to support EPA implementation in the Caribbean.

Key Elements of the CARIFORUM-EU EPA The key elements of the CARIFORUM-EU EPA are:

 Goods Liberalization

The EC immediately liberalized all imports on a duty-free quota free basis apart from short transitions for rice and sugar, while CARIFORUM liberalized 86.9% of the value of its imports within the first 15 years and 86.9% over 25 years. The Agreement will result in the liberalization of 92% of bilateral CARIFORUM-EC trade. It excludes from CARIFORUM liberalization, 493 products or 9.8% of tariff lines equivalent to 13.1% of CARIFORUM imports. CARIFORUM applied a general moratorium on its tariff liberalization commitments on all products for the first three years of the Agreement. For revenue sensitive items such as gasoline, motor vehicles and parts, the moratorium is extended to 10 years (December 2018).

 Other Duties and Charges (ODCs)

Other duties and charges were to be maintained during the first seven years and then phased out over the subsequent three years.

 Quota for Rice Exports

The quota for rice exports increased annually, 187,000 tonnes (29%) for 2008 and 250,000 tonnes (72%) for 2009 and became duty-free quota free (DFQF) compared to the approximately €65 per tonne normally paid. From 2010 DFQF took effect and the distinction between whole grain and broken rice removed.

 The Sugar Protocol (SP)

The Sugar Protocol quotas were maintained on a transitional basis until September 2009 when DFQF was introduced.

 A Chapter on Agriculture

A specific chapter on Agriculture established rules consistent with the objectives of pursuing sustainable development, poverty eradication, enhanced competitiveness and food security. Most notable in the provisions on agriculture is the zero for zero treatment of EU export subsidies, that is, the EU eliminates export subsidies on all agricultural products that CARIFORUM liberalizes.

During the first ten years of the Agreement, the EU excluded CARIFORUM exports from any contemplated use of a multilateral safeguard measure and considered the use of constructive remedies before imposing Anti-Dumping or countervailing duties in respect of products imported from CARIFORUM States.

 MFN Treatment

Both CARIFORUM and the EU automatically conferred on each other any better treatment granted by one Party to a major trading partner. Such entities are defined as countries or regional blocs garnering 1%, or 1.5% and above, of world merchandise exports. This MFN provision covers both goods and services.

 Services

The EU liberalized 94% of W120 (services sector list under the GATS) list of sectors while the respective figures for CARIFORUM LDCs and MDCs are 65% and 75%, respectively. The 4th Meeting of the Joint CARIFORUM-EU Council in 2014 agreed to the establishment of a Special Committee on Services to address matters pertaining to this important sector. Owing to the EU internal procedures, the formal decision for the establishment of this Working Group has not yet been adopted.

In the case of the temporary movement of natural persons (Mode 4) the EU has granted market access for Caribbean professionals in 29 sectors for Caribbean Contractual Service Suppliers (CSS) to enter the EU to supply services once a contract has been secured. This includes entertainment services for all EU Member States - except Belgium and Italy. The EU has liberalized 11 sectors for temporary entry by CARIFORUM Independent Professionals (IPs) or self-employed persons.

CARIFORUM access to the EU entertainment market is complemented by a Protocol on Cultural Cooperation that provides for greater collaboration on all cultural fronts and with special provisions on audiovisual activities. In particular, coproduced audiovisual products involving European and Caribbean creative teams will qualify as European works and thereby satisfy cultural content rules in all EU member states. However, service providers from most CARIFORUM States including

Guyana, continue to have challenges in accessing the EU having regard to the EU visa regime. This issue has consistently been raised with the EU and the response has largely been that the competence for visas remain with the EU Member States.

 Rules on Investment

The EPA treats with rules on investment seeking to confer predictability and transparency on market access in agriculture and forestry, manufacturing, mining and service sectors in both EU and CARIFORUM.

The EPA also contains obligations that will ensure that investors safeguard the environment and maintain high labour, occupational health and safety standards. Furthermore, the Agreement prohibits the Parties from lowering environmental and social standards in order to attract investment;

 Trade and Innovation

On the issue of trade and innovation, there are provisions of that seek to improve CARIFORUM competitiveness through the development of CARIFORUM innovation systems in partnership with the EU and through access to relevant EU support programs.

The Development Chapter

The principles of the Agreement have been captured in the Development Chapter which seeks to ensure that trade capacity is developed in a manner consistent with the discharge of the Region’s commitments under the Agreement. To this end, there are five elements captured in the Chapter, namely sustainable development, regional integration, development cooperation (funding), international cooperation and monitoring. It should also be mentioned that the EPA provides for the establishment of development benchmarks to orient the regular evaluation of performance under the Agreement.

The Joint Declaration on Development Cooperation includes a commitment to channel some EPA support through the CARICOM Development Fund. Furthermore, the Trade Partnership for Sustainable Development (Development Chapter) includes support for infrastructure while the preamble of the Agreement states that full account should be taken of the CARICOM Development Vision.

I. FUNDING

The sole source of funding of EPA implementation remains the resources already committed by the EU to CARIFORUM under the EDF. Under the 11th EDF Regional Indicative Programme (RIP) there has been no specific allocations for EPA support, but implementation is generally covered under the thematic area of Regional Integration and Trade. CARIFORUM and its Member States continue to call for dedicated funds for EPA implementation as is the case for other Regional EPAs.

II. STATUS OF IMPLEMENTATION OF THE AGREEMENT

The CARIFORUM-EU EPA has not yet entered into force but continues to be provisionally applied. One requirement for the entry into force of the EPA is its ratification by all the Parties. October 2018 marked the tenth anniversary of the CARIFORUM-EU EPA between CARIFORUM States and the European Union (EU) and its twenty-eight Member States. Guyana ratified the EPA on June 14, 2012.

Tariff Reductions - Status Report by CARIFORUM States

Article 16 requires CARIFORUM States to implement phased reductions of customs duties on goods originating in the EU Party over a period of twenty-five (25) years after

signature of the EPA in accordance with Appendix I to Annex III (the Schedule of Tariff Liberalization of the CARIFORUM States). CARIFORUM States were required to effect tariff reductions on 1 January 2011; 1 January 2013; 1 January 2015; 1 January 2017 and 1 January 2019. Guyana, through an Act of the National Assembly, has

implemented the EPA Tariff Liberalization Schedule for goods on January 15th 2011. All required tariff cuts are therefore automatic.

Ten year Moratorium - motor vehicles, parts and components

The issue of errors in Appendix I of Annex III to the EPA, raised at the First Meeting of the Trade and Development Committee in 2011, has not yet been resolved. CARIFORUM States are presently reviewing technical work to confirm the nature and number of tariff lines to be covered by the moratorium and a proposed schedule for tariff reduction.

Guyana has submitted its schedule but due to some errors, there is need for it to be revised. This issue is being handled in collaboration with the Guyana Revenue Authority.

Tariff Classification

The EPA is currently expressed in HS 2002 and most CARIFORUM States including Guyana are applying the HS 2012. In keeping with the obligation to apply the most current version of the HS, the two Sides have agreed to the establishment of a joint technical working group, which Guyana (GRA) is a member, to update Appendix I to Annex III and Annex II to Protocol I to HS 2017. Member states are to indicate whether any errors exist in the National Tariff Schedules prepared by the EU. Guyana has

implemented HS 2017 in January 2019.

Geographical Indications

Article 145 contemplates the elaboration of a CARIFORUM-EU Agreement on the protection of geographical indications. Under the Agreement the Parties will submit a list of GIs they wish to have protected. The EU has submitted its list of products, and an initial submission from CARIFORUM to the EU was made. This submission includes submissions from Guyana.

At the national level, Guyana is seeking to build on the success of an ACP EU TBT Project to promote the certification of quality products in Guyana. This project saw the identification and registration of the first three GIs in Guyana for Demerara Rum, Demerara Sugar and Demerara Molasses. A second project, approved by the ACP-EU TradeCom II Programme, is currently being implemented to continue work on registering three more GIs. Those products identified are Guyana Rice, Greenheart and Heart of Palm.

Services

In the area of Services there are challenges that have impeded the access envisaged by CARIFORUM and by extension, the ability to maintain meaningful presence in the EU market. CARIFORUM has recognized the importance of the temporary entry framework in the Agreement in facilitating the access envisaged, especially in sectors where the region may possess a comparative advantage such as in the area professional services.

CARIFORUM identified a number of challenges which continue to impede its services suppliers from accessing the EU market, including:

 the impact of the EU’s visa regime and the need to have EU Member States address the impact of the regime directly;  the application of nationality and residency requirements (especially in the area of professional services); and  the domestic regulatory environment in the EU (namely visas requirements, licensing procedures and requirements and qualification procedures and requirements) that would not be not subject to scheduling.

The focus for CARIFORUM is on (i) the regulatory environment in the EU and (ii) the identification of sectors that can benefit from technical assistance and support to enhance cross border trade under the Agreement. It is anticipated that the Special Committee on Services that will be established will address these matters.

At the national level, with the resuscitated Guyana Coalition of Service Providers, this could be used to implement the EPA obligations and more importantly, to take advantage of the benefits under the EPA through the identification of priorities for the Services Sector.

Guyana is also actively involved in discussions on a Draft CARIFORUM Mutual Recognition Agreement. Simultaneously, the Ministry has drafted Regulation Bills for the Architecture and Engineering Services sectors and is currently engaging stakeholders on these with the aim of establishing legislation that will regularize those sectors. These are with the Ministry of Legal Affairs for review.

III. MECHANISM FOR NATIONAL EPA IMPLEMENTATION

The CARIFORUM-EU EPA is a comprehensive agreement that requires the involvement of several government and private sector agencies. Most of the national positions have come through one on one discussion with agencies or through discussions at the NACEN. This should be supplemented with a dedicated Technical Working Group on EPAs and to co-opt all the relevant agencies involved EPA implementation.

An initiative was started in June 2018 to establish an EPA Committee with focal points in each of the agencies to bring awareness of the EPA, a managed and coordinated approach to EPA implementation and developing better country positions. While focal points were named, for several reasons, the initial meeting never took place. It is proposed that that process be revisited with letters going out again requesting the nomination of focal points. This will strengthen EPA implementation for Guyana.

IV. EPA INSTITUTIONS

The implementation of the EPA entailed the establishment of the following institutions:

o Joint CARIFORUM-EU Council

The Joint CARIFORUM-EU Council (Joint Council) is the highest EPA Institution, it meets at the Ministerial level every two years. On the CARIFORUM side, one of its members, usually the Chair –in-Office, is designated the CARIFORUM High Representative and speaks on behalf of CARIFORUM States at meetings of the Joint Council. The Joint Council is tasked with:

 supervising the implementation of the EPA;  responsibility for the operation and implementation of the Agreement;  monitoring the fulfilment of the objectives of the Agreement;  the examination of any major issues arising within the framework of the

Agreement; and  the examination of any other bilateral, multilateral or international question of common interest to the Parties or affecting trade between the Parties.

The Joint Council is one of the two main EPA institutions that has decision-making power. It may make decisions in respect of all matters covered by the Agreement.

o CARIFORUM Trade and Development Committee The CARIFORUM-EU Trade and Development Committee (TDC) is the main subsidiary body to the Joint Council and is composed of senior officials. The TDC assists the Joint Council in the performance of its functions and its main responsibilities include:

 Monitoring and assessing the implementation of EPA commitments;  Undertaking action to avoid disputes or to resolve them;  Taking action to facilitate trade, investment and business opportunities among the members;  Monitoring and evaluating the results and impact of implementing the Agreement;  Monitoring and reviewing the implementation of the development cooperation provisions of the Agreement;

 Making recommendations to the Parties and coordinating actions with donors; and  Preparing and coordinating meetings of the Joint Council.

The Trade and Development Committee is the other main EPA institution which has decision-making power. It is also empowered to make recommendations to the Joint Council and may set up sub-committees/special committees to carry out specific tasks.

o CARIFORUM-EU Parliamentary Committee CARIFORUM-EU Parliamentary Committee allows for the exchange views on the implementation of the Agreement by parliamentarians and comprises of Members of the European Parliament on the one side, and members of the CARIFORUM States’ legislatures on the other side. The Parliamentary Committee is not a decision-making body. However, it may make recommendations to the Joint CARIFORUM-EU Council and the CARIFORUM-EU Trade and Development Committee. It also has the power to request the Joint CARIFORUM-EU Council to supply it with information. The EPA also provides that the Parliamentary Committee is to monitor and review the implementation of the provisions and to cooperate with the Joint Parliamentary Assembly under Article 17 of the COTONOU Agreement.

o CARIFORUM-EU Consultative Committee

Participation in the CARIFORUM-EU Consultative Committee (Consultative Committee) is decided by the Joint Council, with a view to ensuring a broad representation of all interested parties. The Consultative Committee consists of representatives of organizations of civil society. It is made up of forty (40) representatives from standing civil society organizations, twenty-five selected by the CARIFORUM States and fifteen (15) in representation of organizations located in the European Union.

The CARIFORUM-EU Consultative Committee was established with the task of assisting it to promote dialogue and cooperation between representatives of organizations of civil society, including the academic community, and social and economic partners. The dialogue is to encompass all economic, social and environmental aspects of the relations between the Parties to the EPA, as they arise in the context of the implementation of the EPA. Mr. Clement Duncan, representing the Guyana Manufacturers and

Service Association is currently serving on the Consultative Committee.

The other subject-specific Committees established by the Joint Council are:

 Special Committee on Customs Cooperation and Trade Facilitation (SCCCTF)  Special Sub-Committee on Development Cooperation  Special Committee on Agriculture and Fisheries

V. FIVE YEAR REVIEW

The Joint Declaration concluded at the signature of the EPA provided for the mandatory review in five-year intervals. The first such review was done in 2015 and the second is expected to be done this year. The process has commenced with studies done by the EU and the CARIFORUM Directorate. The review will culminate in the meeting of the Joint CARIFORUM-EU Council and the Trade that should be held in the latter part of this year.

To guide the preparation of the CARIFORUM States in connection with this review, the 23rd Meeting of the CARIFORUM Council established a group of technical experts. The mandate of this group includes the examination of the subject specific review commitments. In keeping with the Terms of Reference, the objective of this Project is to present a detailed legal and policy analysis of issues which the CARIFORUM States should examine closely in connection with the upcoming 2020 review.

B. CARIFORUM-UNITED KINGDOM ECONOMIC PARTNERSHIP

AGREEMENT

I. BACKGROUND

On June 23, 2016, through a referendum, the people of the United Kingdom (UK) voted to leave the EU and thereby triggering the start of negotiations under Article 50 of the Treaty of Lisbon.

Concerned that the UK leaving the EU means the UK’s membership in the CARIFORUMEU Economic Partnership Agreement (EPA) comes to an end and the current trade arrangement governing Caribbean exports to the UK market will lapse. At a CARIFORUM Ministerial Consultation on ACP/European Union (EU) Post-Cotonou Relationship and BREXIT in March 2017, Ministers agreed that CARIFORUM should take action to protect its trade interests with the UK in light of BREXIT.

Further, CARIFORUM Ministers and UK Secretaries of State for Trade Policy and Development Cooperation met, at the House of Lords in the UK, in March 2017 to exchange views on BREXIT. At that meeting, the UK advised that its approach to its postBREXIT bi-lateral trade relationships would be to roll-over the EU’s existing third country agreements, including the CARIFORUM-EU EPA and to allow such an arrangement to take effect from BREXIT.

CARIFORUM Ministers also met with the UK Secretary of State for Trade Policy in Brussels in November 2017 where the UK advised of its desire to avoid disruption in the trade of its partners when it would have left the EU. It wished to have a seamless process which would ensure uninterrupted market access and other EPA benefits for itself and for CARIFORUM in the roll-over trading agreement. They further agreed that those

discussions will be a technical exercise to ensure continuity in their preferential trading relationship, rather than an opportunity to renegotiate existing terms.

Trade officials from CARIFORUM and the UK held four rounds of informal technical discussions in keeping with the approach agreed at the Ministerial level. The technical dialogue between the CARIFORUM States and the UK focused on the technical amendments only to those elements necessary to ensure continued operability after the UK leaves the EU, without materially altering the scope or substance of existing commitments, rights and obligations.

Based on the outcome of the dialogue, on March 22, 2019, in the margins of the 25th Meeting of the CARIFORUM Council of Ministers, Ambassador David Hales signed the CARIFORUM-United Kingdom Economic Partnership Agreement and a Memorandum of Understanding (MoU), on behalf of the Government of Guyana in Saint Lucia. The Honourable George Hollingberry, Minister of State for Trade Policy of the Department of International Trade signed on behalf of the United Kingdom.

II. KEY FEATURES OF THE CARIFORUM-UK EPA

o Treatment of References to the Cotonou Agreement (CPA)

The two sides recognized the interdependence between the CF-EU EPA and the CPA and aim to replicate this in one agreement. They also agreed to and have incorporated into the CARIFORUM-UK EPA the Fundamental Principles including the Essential and Fundamental Elements of Cotonou and its political dialogue procedure.

o Treatment of Time-bound Commitments that run from Entry Into

Force of the Agreement

The Agreement includes a MoU which is a political statement that asserts the ambition of all parties to ratify the agreement promptly; outlines the political ambition and areas for discussion.

o Governance Structure of the Agreement

The Agreement incorporates all the joint institutions of the CF-EU EPA including the technical committees on Agriculture and Fisheries and the Special Committee on Services. The two sides have agreed to revisit the governance structure of the EPA at the earliest possible to streamline.

III. DEVELOPMENT COOPERATION

On the issue of Development Cooperation, the UK intends to:

 Honour commitments made to the EU budget during the period of its membership including the 11th EDF (2014-2020);  Provide £360m of approved programmes that support trade and economic development in the Caribbean; and  Implement a new programme of direct support to build on previous support to the

EPA that will provide around £5m of new resources with three components:

Technical Assistance for EPA Implementation through TAFT II, funding for

CARICOM Institutional Support and Private Sector Support (Market Awareness and Intelligence and Export Readiness)

For the full text of the agreement, please click here to go to the Foreign Trade Information System of the Organisation of American States

http://www.sice.oas.org/TPD /CAR_GBR/Texts/CAR_GBR _EPA_index_e.asp