Belize and CARIFORUM make major trade agreement (EPA) with EU
Posted: 28/12/2007 - 10:53 AM
Author: Colin
A Ministry of Foreign Affairs and Foreign Trade release, dated December 21, 2007, has announced a major trade agreement that will impact on Belize greatly in the years to come. CARIFORUM (CARICOM & the Dominican Republic) has completed what it terms as a comprehensive EPA (economic trade agreement with the EU (European Union)) covering trade in goods, services and other related issues such as competition, innovation and intellectual property, etc.
The agreement comes after formal discussions started in 2004. Under the EPA, all exports from CARIFORUM into the EU will enjoy duty free status. CARIFORUM has agreed to an 85% list of EU products that will be allowed duty free access into CARIFORUM markets, staggered over a 25-year period. A select group of EU products, 15%, considered sensitive items, will not have duty free access to our region. These are goods for which we have the capacity to be competitive if we are allowed the opportunities to develop our potentials.
Over a 10-year period the EU will provide technical assistance to CARIFORUM to help it amend Other Duties and Charges (ODC’s) with the intent to make our tax regime compliant with the WTO (World Trade Organization).
In respect to BANANAS, the EU has extended duty free, quota free market access. Additionally, the banana industry will continue to receive funds under a Special Framework of Assistance (SFA) in the interest of helping the industry to increase productivity and competitiveness. CARIFORUM and the EU will decide on the use of such funds in their respective countries.
In respect to the SUGAR industry, CARIFORUM countries have an offer of duty free, quota free market access. In addition to this, until September 30, 2009, any undelivered quantities within the region would be reallocated, made up by other CARIFORUM states. Also, the region would receive an allocation of an additional 60,000 tons, one half of which would go to the Dominican Republic, the other half being shared among the other member states…contingent on CARIFORUM renouncing the EC Sugar Protocol*.
In respect to SERVICES, markets were secured for entertainment services with 25 of the 27 EU member countries. Temporary entry will be allowed for persons from the region interested in providing services, and/or involved in tourism related activities.
The Ministry of Foreign Affairs and Foreign Trade informs that the Legal Text for the agreement will be circulated to relevant parties for review before the Agreement is signed in March 2008, and provisional application takes effect in April 2008. The Ministry of Foreign Affairs and Foreign Trade will be holding meetings in the near future to update and educate stakeholders and the private sector so they “fully understand the new trading environment and how they can benefit.”
The Deputy Director of the Directorate of Foreign Trade, Mrs. Erla Cantun Coleman, told Amandala on Thursday that the trade agreement was timely because bananas, shrimps, and citrus products were due to start paying duties to enter the EU markets shortly. She said the agreement allows for protection for our agriculture products, for example chickens, beans, and papayas, and manufactured goods, for example beer.
Liberalizing of the service sector, she told us, will allow easier access to the EU for independent professionals, for example engineers and architects. Also, local entrepreneurs in entertainment and recreation who want to sell their products in the European Union will be allowed to link up with American investors.
Chief-Executive-Officer of the Banana Growers Association (BGA), Mr. Jose Alpuche, told Amandala that he is still waiting to see the full text of the agreement, but if it is implemented as they understand it, it will mean “exciting times” for bananas.
“For the first time we’ll (Belize bananas entering the EU) be free of quota and free of tariffs,” he said.
The BGA has already taken advantage of the agreement to expand their customer base. Beginning January 1, 2008, the BGA will be selling a small quantity of Belize bananas to the Dole Food Company. This means that Fyffes will no longer be the sole purchaser of Belize banana.
Speaking on the EPA, former government economist and present UDP Cayo South Area Representative, Hon. John Saldivar, told us that his party is still waiting for the “details” of the agreement. From what he had seen in the release he thought the terms for bananas “looked good…at least temporarily,” and he said he was “comforted that it is a regionally negotiated agreement.”
Honorable John Saldivar said that from a general perspective, if your economy is prepared you can take advantage of opportunities that will be presented by trade liberalization. But it is not good news if you are unprepared, he cautioned.
*The 1975 Sugar Protocol allows ACP (African/ Caribbean/Pacific) countries guaranteed access for fixed quantities of sugar to EU markets at preferential prices for an indefinite period of time. ACP countries have fought tooth and nail to not relinquish this extremely beneficial arrangement, which they have termed a “legally binding agreement.”
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