Commentary: CARIFORUM - EU Economic Partnership Agreement - what to do with it now
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| Published on Thursday, February 7, 2008 |
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By Amitava Chaudhuri
Details of the EPA are now available and informed deliberations for evaluating its influence and building public confidence can begin in earnest. Essentially it is and it will remain for a while, an agreement between two sides that are unequal in experience and resources to seize opportunities in each others’ markets. So the question that will soon arise in the Caribbean is what needs to be done now.
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| Amitava Chaudhuri is currently the Adviser from the Commonwealth Secretariat to the Department of Trade and Consumer Affairs in the Office of the Premier, British Virgin Islands. Earlier he has worked in Central Asia, South Asia and southern Africa with two national governments, the UN system and the EU. |
To begin with one needs to ask some questions. Was the EPA a result of WTO stipulations? Were its terms a result of the EU’s wish to empower the Caribbean people? Whatever the answers are, perhaps the implications of the EPA to both sides are not quite as they appear. At this juncture what is important is to note that so far achieving influence and market access through globalization, which manifests itself in several ways including though EPAs, seem to have had the net effect of helping only the developing world.
A brave new world
There is a new fundamental shift in the world today. One finds it strewn with companies from the larger emerging economies buying businesses in rich countries as well as poor. Economic theory did not think this should happen. Capital is something that flows from rich to poor, not the other way round. It seems, therefore, that any assumption made at the genesis that the developing nations would not be able to measure up to the demands of globalization is fundamentally incorrect. There is a valuable lesson in all this. With a bit of innovative thinking, work and discipline, it is not very difficult today for a developing nation or a group of nations to do quite well. The larger emerging nations have shown the way. The smaller nations need to adapt to their circumstances and follow.
The Caribbean nations would do well to keep this in mind while going about handling the EPA as it unfolds. They should also be practical and realistic. Despite all that may be there about DFQF access and capacity building assistance, in the short run it will not be easy to substantially improve their positions in the present circumstances. This is really all to the good, since a system of preferential arrangement for exports and mentoring from people who are also competitors merely serves to increase dependency and needs to be done away with anyway.
Beyond the horizon
This then seems to be the right opportunity for the Caribbean. While continuing to supply the EU market with its exports, they can look elsewhere into the various emerging markets around the world. This can be done within the terms of the EPA and perhaps with a little improvement in their competitiveness which is not hard to do. The time is right. Today some of the rich nations are mired in debt. The emerging markets in general have far higher growth rates and they are keen for tie ups with new sources of supply. Many of them would like to set up joint ventures with domestic enterprises in their suppliers’ countries. This can turn locally produced excellence into innovation.
And what about sourcing for the wide ranging import requirement of CARIFORUM’s 20 odd million people? Today almost all goods and services can be sourced from countries like China, India, Malaysia, South Africa, Brazil and Russia often at most competitive prices. The mathematics of landed prices with suitable duties in the Caribbean needs to be worked out. Need a new $3000 car for the daughter? Look at India. Value for money jams, jellies, juices, sauces? South Africa can be wonderful. Perhaps the time has come for the Caribbean nations to reconsider the possibilities.
And at home
While venturing further out into the world, the Caribbean nations would do well to keep a close eye on domestic happenings. The EPA can have a substantial impact on agriculture, fishery, tourism, financial services and telecommunication. This could in turn have unintended effects on various areas including land prices and the presence of non-Caribbean enterprises which do not make a major contribution to the local economy.
While diversification of their economies should be the aim of each Caribbean country, it is necessary to continue to carefully nurture the current performers and to govern in the larger interest at all times. There is potential right across the Caribbean for growth, value addition and sustainable development in agriculture, fishery, tourism, financial services and telecommunication. The nations need to play a bigger role in these activities. The people of the Caribbean own the natural resources involved in these areas and have the exposure to easily increase their involvement in them.
Knowledge and Skills
How can skills and capabilities be augmented which will allow the Caribbean region’s private sector to compete well in their own markets and in overseas markets? One needs to keep in mind that in the market place you are either a mentor or a competitor. You cannot be both. It is necessary to separate the two roles wherever possible and source all skills ranging from agriculture to alternative energy initiatives, competitively from across the world.
Today, in addition to competitive finance, there is probably more efficient expertise, managerial and entrepreneurial prowess available in the developing world than in the richer world. Managers and experts from developing countries learn early in life to appreciate and deal with the difficulties inherent in their environments. They learn to be resilient and adaptable and they understand the issues involved very well, making their expertise much more relevant.
A part of globalization
The two sides in the EPA are unequal at present but need not continue to be so given adequate growth of diversified external linkages and internal good governance. Since it is competition and transparency that globalization promotes, such a course of action by the Caribbean nations should be quite in order. Let there be greater competition everywhere including in the Caribbean market.
It is to the credit of Caribbean nations that they have already had the experience of several bilateral trade agreements and international trade initiatives. One needs to revisit these initiatives, look at workable import and export prices for groups of goods and services, do some strategic thinking all the while looking at and a little beyond their immediate geographical region.
Timing and improvisation
In life and in business, the timing and sequence of events can be everything. It is imperative for Caribbean governments and the private sector to draw up and implement action plans as early as possible for careful monitoring of the domestic sectors, building up more ties externally and more capacity internally - in cost cutting, anti dumping procedures, economic mapping exercises, value addition, training and skills.
They must thank the EPA for bringing about a break with the past and for the opportunities it provides - intended or otherwise. But most of all they must tell themselves that like in their music they can improvise like nobody else and compete against anybody - which indeed they can. And if they do it well, they would be quite gratified by the results. | | | | Reads : 1009 | | | |
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