With respect to formal negotiations, the Region’s external trade agenda has been primarily focussed, on the one hand, on safeguarding its interests in the multilateral arena under the World Trade Organisation’s (WTO) Doha Round. On the other hand, in the bilateral realm, dedicated focus has also been directed at pursuing a Trade and Development Agreement with Canada, the Region’s third largest trading partner.

Under the bilateral negotiations with Canada, the Region has engaged in three Rounds thus far. The first two Rounds involved fruitful preliminary exchanges which led to greater clarity on positions and perspectives on a number of issues on the negotiating agenda. In addition, through those exchanges, Canada had shared the texts and explained its proposals on a range of negotiating subject areas.

The information provided proved helpful to CARICOM during its own regional consultations which have been aimed at finalizing its initial text proposals in accordance with the overall mandate from the Heads of Government. Therefore, during the third Round, which was held 4-8 April, 2011, the Region was able to present written proposals in a number of subject areas, which included Safeguards; Agriculture and Fisheries; Alcoholic Beverages; Technical Barriers to Trade; Sanitary and Phytosanitary Measures (SPS); Facilitation of Business Persons; Institutional Issues; Dispute Avoidance and Dispute Settlement; and Development Cooperation. Framework texts on Trade in Services and Investment were also presented. CARICOM also had an opportunity to present its broad approaches in a number of sectors of particular importance, such as Tourism, Culture, Information and Communications Technology (ICT), Telecoms, E-Commerce, and Energy Services.

Overall, CARICOM’s proposals reflect the careful and detailed work the Region has been undertaking. As much specificity as possible was expressed in order to reflect not only the Region’s interests but also its trade-related development priorities. CARICOM’s texts clearly demonstrated the Region’s approach to the treatment of development through

i) the elaboration of a separate chapter on Development Co-operation focussing on broad principles, and

ii) the inclusion of specific provisions on co-operation designed to develop and support aspects of the Region’s trade related capacity across the subject areas under negotiation.

The joint discussions during the last Round facilitated explanation and clarification of the various proposals, allowing both sides to identify areas of possible convergence and divergence. Canada also signalled that CARICOM’s specific proposals and the ensuing discussions provided important inputs for Canada’s ongoing internal consultations.

The next steps towards a fourth Round will in part be informed by a detailed programme of work which CARICOM and Canada were also able to identify during the last Round. It is anticipated that the fourth Round will be held in the Caribbean.

Regarding the Doha Round, CARICOM has actively participated in the intensified slate of negotiations spanning all facets of the multilateral trade round. Particular interest was reserved for the Negotiating Groups for Rules, Trade Facilitation, Trade and Environment, Trade-Related Aspects of Intellectual Property Rights (TRIPS), Agriculture, Non-Agriculture Market Access (NAMA), Services and Dispute Settlement. The Region also invested particular interest in advancing the Work Programme for Small Economies and the horizontal treatment of development.

The intensified pace of negotiations has sadly not realised the desired results. Most notably, the ambition of releasing revised texts in all Negotiating Groups by Easter 2011 remained elusive. Instead, Members were offered Chairmen’s reports coupled in some instances with minor modifications in the draft texts. Further, WTO Director General (DG) Mr Pascal Lamy in an April 21 statement warned that the differing level of ambition in sectorals on industrial goods was “effectively blocking progress and putting into serious doubt the conclusion of the Round this year. This is a grave situation for the Round and for all of the efforts and aspirations it embodies.”

The DG’s letter confirms that the Doha Development Agenda (DDA) currently stands on the verge of collapse. The tension, particularly between the US and China, on NAMA sectorals is becoming unmanageable. At its core, the issue is one of the interpretation of the Doha Ministerial mandate. According to the US, the economic landscape on which Doha was predicated no longer obtains. The most significant change is the rise of advanced developing countries that should be treated differently from other developing countries. On the other hand, Brazil, China and India argue that development is the core pursuit of the DDA and not the narrow mercantilist interest of the industrialised countries.

It should be noted that although the issue of sectorals does not directly impact the Caribbean, the Region has concrete interests in the treatment of the issue. For example, although gems and jewellery currently benefits from preference treatment, the sector is constantly exposed to the threat of inclusion in sectorals. The effect of such inclusion would be to reduce the participating countries’ tariffs to zero, thereby removing any preference margin enjoyed by the Caribbean. Even more importantly, failure to complete the Round would result an ill-defined delay in establishing a multilateral trading system with the pursuit of development placed at its core.

A failure to conclude the DDA in a timely manner would heap irreparable damage to both Least Developed Countries (LDCs) and Small Economies. It is for this reason that the European Union (EU) recently tabled a compromise proposal on NAMA sectorals. G7 Members are currently studying the proposal with a view of retrieving the DDA from its current brink. Members are also considering alterative scenarios to ensure that the DDA does not fully collapse. One proposal is to suspend the pursuit of the Single Undertaking and instead limit talks to issues germane to the interests of LDCs.

The Small Vulnerable Economies (SVEs) Group - the Group to which most CARICOM countries are affiliated – is also interested in adding their own slate of issues that could benefit from this truncated DDA slate. In case WTO Members agree to such a demarche, principal Caribbean interest would be (a) implementation of the capacity-building pillar of trade facilitation negotiations (especially in light of the completion of Member’s needs assessments); (b) making SVEs exempt from any disciplines in fisheries subsidies (the aim of the negotiations is to limit the environmental damage due to overfishing, however the Caribbean’s share of global fishing catch is too miniscule to inflict damage); and (c) reforming the Dispute Settlement Body in a manner that would enhance the treatment of small economies (this is most cogent in light of the experience of Antigua and Barbuda in the internet gaming case and other Caribbean countries whose rights in preference erosion cases were limited to third party status).

In case Members agree to suspend DDA negotiations, the Caribbean’s core interest would remain safeguarding the development gains already established in the draft modalities. This would entail, inter alia, preservation of the current texts on tariff reduction modalities, preference erosion and treatment of the Trade Related Technical Assistance (TRTA) pillar in Trade Facilitation. The Region would also be interested in pursuing multilaterally the African Caribbean Pacific Group of Countries/European Union/Most Favoured Nation (ACP/EU/MFN) Suppliers’ Agreement on Preference Erosion/Tropical products that accompanied the conclusion of the long-standing trade dispute on bananas. On May 31, the Trade Negotiations Committee (TNC) will reconvene and it is anticipated that the WTO Membership will then decide on the future of DDA talks.

CONTACT: piu@caricom.org