ADDRESS DELIVERED BY MINISTER OF FOREIGN AFFAIRS, FOREIGN TRADE AND CONSUMER AFFAIRS,
Dr. HON. DOUGLAS W. SLATER AT THE CARIFORUM-EU ECONOMIC PARTNERSHIP AGREEMENT (EPA)
TRADE IN GOODS CONSULTATION
Conference Room, National Insurance Services (NIS)
Kingstown, 7th March, 2012
Good morning and welcome to this national consultation on Trade in Goods under the CARIFORUM-EU Economic Partnership Agreement (EPA). The Ministry of Foreign Affairs, Foreign Trade and Consumer Affairs welcomes this opportunity to partner with the EPA Implementation Unit of the CARICOM Secretariat, to heighten awareness of the Agreement and to encourage local businesses to position themselves to take advantage of the opportunities under the EPA.
In October 1998 St. Vincent and the Grenadines along with the other members of CARIFORUM signed the EPA. This effectively signalled the end of trade with the EU under preferential terms and at the same time, a commitment by CARIFORUM to provide reciprocity to EU goods and services entering our markets.
Having committed ourselves to this Agreement and in full recognition of our obligations under international law, the Government through the Ministry of Foreign Affairs, Foreign Trade and Consumer Affairs established on the 17th October 2011, an EPA Implementation Unit. The Unit was established to assist the country in meeting its commitments under the EPA and through a programme of consultation and collaboration, to prepare the public and private sectors and Business Support Organizations to take full advantage of the opportunities under the EPA.
The EPA has been around for sometime, yet there are still questions about its usefulness to the development agenda of St. Vincent and the Grenadines and indeed of CARIFORUM member states. I view this Agreement as a platform to expand businesses by creating predictable market access. It is designed to promote economic growth and by means of joint ventures and other strategic partnerships, allows for access to EU technology and ultimately technology transfer. In essence, it provides opportunities for greater trade between the Parties.
The role of the private sector, producers of goods and services, is central to this process. The EPA is designed to deliver increased access to the markets of the participating countries on better terms than those available to others. In other words, goods produced locally can enter the European market duty free and in unlimited quantities. This applies not only to primary goods or raw materials, but also to manufactured goods.
Prior to the EPA, it was generally the case that the more value that was added to the product, the higher the rate of duty on entry. Now all exports from St. Vincent and the Grenadines to Europe are duty free. This signifies that we can export our furniture, bottle water, beer, pepper sauces and seasonings to Europe duty free, once they pass the Rules of Origin criteria. Let’s not forget that Europe begins right here in the Caribbean, in our neighbours to the north: Martinique and Guadeloupe. I have been advised that you will be hearing much more on Rules of Origin from our distinguished team of experts from CARICOM over the course of this workshop.
The flip side of the coin is that European goods can also enter the Caribbean markets duty free and herein lies the challenges of the EPA. This undoubtedly will impose some strictures on the finances of central governments, which depend to a large extent on those tax revenues that would be foregone at the ports of entry. In 1995, St. Vincent and the Grenadines joined the World Trade Organization (WTO). The rules of that organisation impose restrictions on the level of protection that countries can apply and stipulate the level of liberalization that must be achieved. CARIFORUM has succeeded in the EPA in taking those restrictions to the limit and in keeping its liberalization to the lowest possible level.
While Europe has opened its entire market to duty free entry immediately, CARIFORUM negotiated a phasing of its market opening over a 25 year period, commencing in 2008. This it is expected will give businesses sufficient time to adjust to the inevitable increased competition. The EPA Implementation Unit in the Ministry is currently working along with the Customs and Excise Department to introduce the tariff schedule that will eventually reflect the tariff rates offered in the EPA.
