EU, the Caribbean Begin Trade Negotiations

Negotiations are underway in Kingston, Jamaica, between the European Union (EU) and the Caribbean’s fifteen member states in order to hammer out an economic collaboration agreement. The process, scheduled to be wrapped up in 2007, will contribute to further open up trade between both regions and set up clear-cut commercial guidelines, according to a press release issued by the European Community.

“The elimination of trade barriers among Caribbean countries is the necessary complement to gain virtually full access to the European market that other countries are already benefiting from right now. This is no doubt going to beef up the region and strengthen its ties with the EU,” European Trade Commissioner Pascal Lamy was quoted as saying.

In the same breath, Poul Nielson, European commissioner for Development and Humanitarian Aid, said investment fostering and productivity raise, in a backdrop of regional integration and in the light of market enhancements, will make Caribbean producers get a tighter grip of international markets.

The Caribbean stands for the fourth ACP region (Africa, Caribbean & Pacific) that negotiates an economic collaboration agreement with the EU. Africa’s three regions (West, Central and East) harbingered these agreements a few years ago.

In keeping with the Cotonu Agreement, signed by 77 ACP countries and the EU back in 2002 and 2003, a first round of negotiations included discussions over future economic cooperation treaties.

The first stage of negotiations concluded with major understandings on such key issues as market access, trade, services and the agreements’ development scope.

The fifteen Caribbean states that will begin negotiations with the European Union are Antigua & Barbuda, Bahamas, Barbados, Belize, Dominique, the Dominican Republic, Granada, Guyana, Haiti, Jamaica, St. Kitts & Nevis, Santa Lucia, St. Vincent & the Grenadines, Surinam and Trinidad & Tobago.

The EU is the Caribbean’s second-largest trade partner (bested only by the U.S.) with roughly 19 percent of all exports to the region and 16 percent of its imports, according to official figures published in the year 2002.

Caribbean exports to the UE totaled nearly €3 billion in 2003, with the Dominican Republic –the number one Caribbean exporter to the European Union- taking a third of the pie with €1 billion.

Europe’s top imports from the Caribbean are rum (11 percent of the total), sugar (8 percent) and bananas (5 percent), as well as aluminum-related minerals for an additional 8 percent.

Virtually all made-in-the-Caribbean items and goods have free access to the European markets, though in the case of sugar and bananas the EU only imports limited quantities.

For its part, the Caribbean imported nearly €4.1 billion worth of manufactured goods in the course of 2003.

In addition, the EU is the biggest provider of subsidized aid to the region with €57 million earmarked in virtue of the Regional Indicative Program for the Caribbean, a fund pieced together in an effort to support regional integration.