special rnm update (developments in relation to the preparation for the negotiation of a...

8/9/2019 Special RNM Update (Developments in Relation to the Preparation for the Negotiation of a CARICOM-Canada Trade

1/6

CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a richsource of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by theInformation Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is toprovide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance tothe Caribbean.

http://www.crnm.org

IIssssuuee::

JJuunnee 99,, 22000099

The COTED was invited to consider the findings of a

paper on the Treatment of Development in the

CARICOM- Canada negotiations which has also been

circulated to the CARICOM Member States for

review.

This paper outlines the objectives and principles which

should inform the development of specific proposals in

relation to the treatment of development in the

negotiations with Canada.

The preparation of this paper was mandated by a decision

of the 31st

Special Meeting of the COTED on External Trade

and was informed by the conclusions which emanated

from discussions held March 28, 2009 in Barbados amongst

representatives of the CARICOM and OECS Secretariats,

the Caribbean Regional Negotiating Machinery (CRNM),

academia and other civil society interest groups.

In this special issue, CRNM invites you to get involved in

the discourse on development and encourages you to

review a summary of the main points made in the Paper on

the Treatment of Development in the CARICOM- Canada

negotiations which is provided below.

DDeevveellooppmmeennttss iinn RReellaattiioonn ttoo tthhee PPrreeppaarraattiioonn ffoorrtthhee

NNeeggoottiiaattiioonn ooffaa

CCAARRIICCOOMM--CCaannaaddaa TTrraaddee && DDeevveellooppmmeenntt

AAggrreeeemmeenntt

SSPPEECCIIAALL

RRNNMM UUPPDDAATTEE


2/6


http://www.crnm.org

Summary

Paper on

THE TREATMENT OF DEVELOPMENT

IN A CARICOM-CANADA TRADE AND DEVELOPMENT AGREEMENT

Basic Principles

The Paper outlined the basic tenets of development and suggested what the pro-development focus and objectives of a new tra

agreement with Canada ought to be. These main objectives and guiding principles as outlined in the Paper are outlined below:

1. Development should be a distinguishing feature and should infuse all aspects of a CARICOM-Canada Trade and DevelopmeAgreement. It should contribute to growth, enhanced competitiveness, employment, improved welfare and food security and a

to the reduction of poverty and gender disparities in CARICOM.

2. A CARICOM-Canada Trade and Development Agreement must support and preserve the integrity of the regional integration spain the context of the CARICOM Single Market and Economy (CSME) and the OECS Economic Union. The Agreement should reaffiand give expression to the objectives of the Caribbean Community as set out in Article 6 of the Revised Treaty of Chaguaramas

follows:

a) Improved standards of living and work;b) Full employment of labour and other factors of production;c) Accelerated, co-ordinated and sustained economic development and convergence;d) Expansion of trade and economic relations with third States;e) Enhanced levels of international competitiveness;f) Organisation for increased production and productivity;g) The achievement of a greater measure of economic leverage and effectiveness of Member States in dealing with th

States, groups of States and entities of any description;

h) Enhanced co-ordination of Member States foreign and [foreign} economic policies; andi) Enhanced functional cooperation, including-

(i) More efficient operation of common services and activities for the benefit of its peoples;

(ii) accelerated promotion of greater understanding among its peoples and the advancement of their social, cultu

and technological development;(iii) Intensified activities in areas such as health, education, transportation, and telecommunications.

3. The Trade and Development Agreement must reflect the principle of asymmetry which recognizes and responds to differences


3/6


http://www.crnm.org

the levels of development between CARICOM and Canada on the one hand, as well as among CARICOM countries. Special a

Differential Treatment provisions in the Agreement must recognise the differences intra-CARICOM and seek to preserve the pol

space enshrined in the CSME which addresses those differences. In this regard, the Agreement should incorporate spec

provisions compatible with, and similar to, those of Chapter Seven Disadvantaged Countries, Regions and Sectors of t

Revised Treaty of Chaguaramas. It must reflect differences among Caribbean economies by level of development, resou

endowment and size, and the extreme vulnerability of the small islands that are prevalent in the Region.

4. Regional firms should be placed in the best position to take advantage of opportunities created by the Agreement, includibuilding of capacity and enhancing competitiveness, and should minimise the negative effects arising from trade liberalisation. T

agreement must also take into account the prevalence of firms within the Region that are small by global standards.

5. The negotiation of the Development component of the Agreement should go beyond best endeavour commitments and shouresult in specific, actionable, monitorable and time-bound commitments.

6. A re-orientation of development financing and support is required to buttress the development strategy as defined by tcountries of the Region, improve the institutional arrangements for its delivery and contribute to capacity building of the priva

and public sectors. Taking into account the Economic Partnership Agreement (EPA) with the EC and the Regions objective

negotiating a Trade and Development Agreement with Canada, it is incumbent on CARICOM to ensure aid effectiveness a

coherence of support for Regional Co-operation and Integration by the Development Partners. Such support should addre

priorities determined by the Region, take advantage of synergies and complementarities among development partners, be effect

in delivering expected outcomes, and should be subject to measured evaluation.

Identifying Specific Development Outcomes

Recognising the importance of ensuring the relationship between the architecture of the provisions in external trade agreements a

measurable outcomes which are commensurate with the Regions interests, the Paper also specified some of the desired outcomes a

benefits of a Trade and Development Agreement with Canada. The salient points are outlined below:

1. In the current global economic environment, taking into account the Regions peculiar position as small, vulnerable economirecognising the differences in levels of development between CARICOM and Canada and within CARICOM, and the still nasce

nature of the regional integration process, a Trade and Development Agreement between unequal partners should

anchored on a set of pro-development provisions which include but are not limited to the following:

(i) Special and Differential Treatment asymmetrical commitments in favour of CARICOM. SDT provisions shonot be limited to longer transitional periods and technical assistance but include provisions that effective

address the constraints of small size and vulnerability, especially as it relates to market size and scale of econom

activity.

(ii) Trade Capacity Building for Competitiveness (address supply-side constraints, development of regioinnovation systems, e-commerce regulatory framework). Improved market access must encompass bo

traditional and non-traditional exports and new areas of trade

(iii) Co-operation for the implementation of commitments; (commitments linked to the delivery of technical afinancial assistance; institutional co -operation and information exchange etc.)


4/6


http://www.crnm.org

(iv) Adjustment to long-term liberalisation (fiscal support and debt relief etc.)

7. The CRNM Study, Impact of CARICOM-Canada Tariff Liberalization (2008), concluded that given the present economic structure astructures of production in individual Member States, the estimated additional tariff access benefits to be derived from

agreement with Canada do not appear to be significant, especially if improved rules of origin are not considered. However, tra

liberalisation commitments and adjustments to trade policy undertaken by CARICOM in an agreement with Canada, should be

less favourable than those undertaken in the CARIFORUM-EC Economic Partnership Agreement (EPA). In contrast, the major ga

from an agreement with Canada would appear to lie in the area of services/investment and strong provisions on tradevelopment support and co-operation.

8. A Trade and Development Agreement that progressively removes barriers to trade between the Parties must result in increasand effective market access for Caribbean exports into Canada. It must also involve support for the development of exportab

goods and services through, inter alia, the development of human resources and physical infrastructure, the stimulation

increased investment and the improvement of the policy framework within the Community. CARICOM would require developme

financing and support to stimulate and complement private investment flows in order to capitalise on export opportunities. Su

development financing and support can be directed at enhancing export competitiveness, modernising infrastructure, hum

resource development, as well as formulation and management of regulatory regimes.

9. While obtaining effective access to the Canadian market for CARICOM services providers is a priority, a Trade and DevelopmeAgreement must also be supportive of the development of a dynamic services sector in the Region that would be internationacompetitive. In this regard an Agreement must be supportive of business facilitation for CARICOM services providers, t

development of the supply side capacity of the sector and of the institutional and regulatory framework for services in CARICOM.

10. The stimulation of investment will be enhanced via the adoption of best practice investment provisions in the Agreement and, almeasures and support programmes that promote and facilitate both CARICOM Member States efforts to significantly increa

inflows and Government of Canada efforts to encourage outflows to these countries.

11. Trade development support must therefore facilitate structural transformation of Caribbean economies which would reduce tRegions acute economic vulnerability, build export capacity in new areas of economic activity and bring about a level

international competitiveness leading to sustainable development. A pro-development approach to trade liberalisation should a

allow for adjustment in a manner, at a pace and in a sequence which avoids economic and social dislocation. Assistance

developing safety nets in anticipation of potential social fallouts from the free trade provisions must also be addressed inDevelopment Chapter.

The Issue of Financing Development

In addressing the financing of the development component, it is worthwhile to observe the way in which the issue has been treated

other bilateral trade agreements between Canada and other developing countries. As the Paper identified, it is likely that duri

negotiations with CARICOM, Canadas may adopt a similar approach taken during the negotiation of their agreement with Peru. In t

Peru-Canada bilateral free trade agreement, a distinct chapter on Trade-related Cooperation was included. The objectives of whic

amongst other things, are to promote sustainable economic development and contribute to the reduction of poverty through tra

through initiatives which (1) emphasize the expansion of the production and export capacities of small and medium sized enterpris

and (2) promote the stimulation of competitiveness and innovation.

It is important to note however that the Peru-Canada Agreement does not include a binding commitment of funding to support t

implementation of these trade-related co-operation initiatives. Rather, appropriate international donor institutions, private sec


5/6


http://www.crnm.org

entities and non-government organisations would be invited to assist in the development and implementation of the initiatives.

Consistent with the CARICOMs policy vis--vis the negotiation of external trade agreements with developed country partners, wh

was exemplified in the negotiation of the CARIFORUM-EC Economic Partnership Agreement (EPA), the exclusion of a bind

commitment of funding support is unacceptable to the CARICOM Region.

Canadian officials have signalled to CARICOM that while Canada is receptive to the incorporation of a development dimension and t

inclusion of cooperation in the scope of the agreement, The Canadian mandate is to negotiate a Free Trade Agreement. Regarded

such from the Canadian perspective, the agreement with CARICOM and Canada cannot feature commitments which address t

institutionalization of financing cooperation in the manner featured in the EPA.

With respect to financial assistance, in addition to the donor support to the Region sponsored by the Government of Canada throu

the Canadian International Development Agency (CIDA), in 2007 the Prime Minister Harper of Canada pledged Can$600 million over

years. At the moment, only Can$167 million of that funding has been programmed, leaving Can$433 million still un-programmed.

Canada initially signalled that the sum pledged by the Canadian Prime Minister constituted the total package of assistance from Cana

to the Region for development cooperation and Aid for Trade. Since that time, it is apparent that there has been a softening of t

position. In recent exchanges between CARICOM and Canada, it has been conveyed by the Canadian officials that the Can$600 milli

ought not to be seen as the full extent of resources that could be available to the Region.

There may therefore be some room for flexibility in the negotiation of the treatment of financing development. However, befo

CARICOM can capitalise on this, the Region must be very clear about identifying its specific trade-development needs and quantifyi

the required resource assistance to address these needs.

The identification of trade-related development support needs must proceed from a holistic assessment of current technical assistan

programmes at the regional and national levels in order to identify gaps and avoid overlap with the EPA and other initiatives.

suggested in the Paper, consultation with the private sector will be necessary to determine their technical assistance needs to suppo

the development and expansion of business initiatives in Canada.

The Paper indicated that the identification of subject-specific proposals that are actionable, monitorable, andtime-bound will need

be filtered through selected criteria or tests which meet the development objectives and guidelines identified above. The follow

indicative cluster of negotiating issues provides a focus for the purpose of organising the drafting of specific proposals:

a) Trade in Goods; Trade in Services; Rules of Origin;b) Technical Barriers to Trade (TBT); Sanitary and Phytosanitary Measures (SPS); Technology and Innovation;c) E-commerce; Government Procurement;d) Intellectual Property Rights; Competition Policy; Environment;e) Investment; Fiscal Adjustment to Liberalization;f) New issues ( e.g. Energy; Infrastructure; Food Security; Primary Commodities; Social Development including Labor a

Gender Issues; Small and Medium Sized Enterprises (SMEs).

Other considerations Establishing nuances in the treatment of development

The Paper seeks to establish a systematic framework or approach to the treatment of development which is consistent with ma

general schools of thought on the issue. Nothing in the scope and substance of the recommendations is peculiar to trade negotiatio

with Canada. Many elements are already reflected in the Regions external trade policy. In the EPA, for example, the provisions a

designed to engender development through freer trade, and in the majority of instances are expressed in terms which go beyond be

endeavour language. Furthermore, Special and differential treatment has been given effect in several dimensions of the EPA provisio

At this juncture, therefore, the challenge for the Region is not a conceptual one but how to advance the treatment of developme

operationally to push the envelope with respect to devising meaningful strategies and practical proposals in a from acceptable to t


6/6


http://www.crnm.org

other Party to the agreement, which must be convinced.

In this regard, the recommendations of the Paper could be more deeply considered. For example, the Paper recommends th

proposals should be formulated on issues related to Social development, such as Gender. Amongst other things, a gendered approa

to the architecture of trade agreements would ensure the inclusion of provisions which prevent trade liberalization from deepening

widening social inequality between the welfare of men and the welfare of women across various stratifications of class, race, creed e

In short, a gendered approach could better ensure the complementarities of the agendas of economic development through fre

trade, and gender equality.

In future trade agreements, it may be necessary to better safeguard these complementarities through the inclusion of speciformulations and negotiating proposals. The challenge is really one of determining how this should be done. The negotiators would

required to identify novel ways through which the architecture of trade agreements could be specifically altered to both cushion t

adjustment to trade liberalization and maximise export opportunities for productive sectors which may be markedly gender sensitive.

this regard, the generation of gendered micro-economic and macro-economic analyses of productive sectors would be critical to p

point pockets of gendered sensitivity or vulnerability. The sectors which should be subject to special safeguards or remedied throu

the prioritization of a range of development assistance would need to be identified and then agreed to by both Parties.

In terms of the establishment of negotiating priorities, securing financial development assistance has often been placed at the ap

However, enshrining finance as a prerequisite of trade agreements is not an approach that any major cooperation partners fin

acceptable today. Many contend that they already provide adequate development assistance. For this reason there is a reluctance

move beyond facilitating capacity to enhance trade through Aid for Trade (AfT) programmes. In some of the preliminary debates in t

African, Caribbean and Pacific Group of States (ACP) over financing to support the EPA, Europe rejected calls for funds beyond tho

with this objective. Given that such an attitude will likely persist in future engagements with other major partners, the Region will ha

to devise practical strategies and approaches to address this.

Final Comment: The Way Forward

The recommendations outlined in the Paper are not only useful to advancing the treatment of development in the CARICOM-Cana

trade negotiation, but it is also useful to the process of advancing discourse on the treatment of development in the regions extern

trade policy. It is anticipated that the Paper will be attached to the Regions Negotiating Brief. However, the preparation of the Pap

constitutes only an initial phase in the discussion on development. As the Negotiating Brief itself evolves, the issue of the treatment

development should be progressively distilled and refined. It will therefore be necessary for all stakeholders across various sectors a

constituencies to continue to be proactive in their involvement in the discourse on development and to provide feedback to nation

governments to support the process of identifying proposals which meet the Regions development objectives in the negotiation w

Canada.

******

special rnm update (developments in relation to the preparation for the negotiation of a...

Documents