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RNM UPDATE 0609

May 19, 2006

Prepared by the Communications Division of the Caribbean Regional Negotiating Machinery (CRNM), this
electronic newsletter focuses on the RNM, trade negotiation issues within its mandate and related activities.

- WTO WAIVER FOR CBERA BLOCKED BY PARAGUAY, AGAIN

- HIGH-LEVEL SUPPORT FOR CARIBBEAN POSITION OF CENTERING ‘DEVELOPMENT’ IN EPA

- RNM CONDUCTS SUCCESSFUL CONSULTATIONS ON EPA NEGOTIATIONS IN SURINAME

- NEWS BRIEFS

- UPCOMING EVENTS

WTO WAIVER FOR CBERA BLOCKED BY PARAGUAY, AGAIN

The World Trade Organization (WTO) Council for Trade in Goods (CTG) met May 9 to discuss,
among other things, the ‘United States – Request for Waivers for African Growth and Opportunity
Act (AGOA), Caribbean Basin Economic Recovery Act (CBERA), as amended, and the Andean
Trade Preference Act (ATPA), as amended’. At the last meeting, the outgoing Chair agreed to
advise further consultations on this matter to the incoming Chair, who noted that this item was
discussed in three different CTG meetings in 2005, both formally and informally, with no
agreement.

The delegation of the US presented the waiver requests once again at the CTG session earlier this
month, with a view to addressing the concerns of some Members. The US and the beneficiaries
have had many consultations both in capital and in Geneva with those countries expressing
concern. Many delegations, including Antigua & Barbuda on behalf of CARICOM, all supported the
waiver request by the US, noting the benefits to be derived in boosting trade and economic
development in these countries. Antigua & Barbuda made reference to the document G/C/W/550,
which is a communication from CARICOM countries in support of CBERA. This proposal was
initiated by Guyana, and supported by CARICOM Ministers at the bilateral discussion with the
USTR in Washington, DC last month.

Reaffirming that they do not want to block the waiver proposal, China asked for language to be
inserted in the waiver, to amend it. The US, however, rejected this proposal by China for the
amendment. For its part, Paraguay did not support any of the waivers. They reiterated their
demand for equal treatment as a beneficiary, or the US would have the option of giving them
compensation for economic damage. The US noted that they cannot just add a country to the list,

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and they would not give compensation because, Paraguay has never shown what damage was
done to their economy.

Aware of the lack of consensus, the Chairman took note of the statements and reservations, and
indicated that the item will be reverted to at the next CTG.

HIGH-LEVEL SUPPORT FOR CARIBBEAN POSITION OF CENTERING ‘DEVELOPMENT’ IN


EPA

As small, vulnerable countries, CARICOM states have consistently advanced the view that a
‘development dimension’ must be at the heart of trade agreements it is engaged in. This is
particularly important in the Region’s multilateral undertaking, by way of the WTO arena, but also in
on-going Economic Partnership Agreement (EPA) negotiations.

For some time now, CARICOM has voiced its deep dissatisfaction with the extent to which the
‘development dimension’ is being taken into account in both these negotiating theatres. In a recent
statement, Caribbean Trade Ministers registered their deep concern with the orientation to trade
liberalization favored by the EU in EPA negotiations. They were of the view that the EU’s rhetoric
on development is not matched by its actions.

The Region is, however, pleased that at the highest political level, there is a recognition by the EU
of the need to frontload development, particularly in the approach to EPAs. In the Joint Declaration
signed at the end of the Third CARICOM-Spain Summit, held in Madrid (Spain), May 10 to 11, both
Parties confirmed: “their desire that the Economic Partnership Agreements negotiations between
the EU and the countries of the Caribbean, with the development dimension being an integral part
of those Agreements, proceed at a good pace and they also agreed to follow closely the future
EDF, aimed at providing adequate funding to adjust to the reforms introduced.” There was a
further commitment in the Declaration, where Spain expressed “its will to follow with interest the
position of the countries of CARICOM on sensitive issues such as the effects of the reform of the
sugar sector, preferential access to Caribbean banana and projects and programs maintained by
the EU in those countries.”

The Heads of State and of Government of the EU represented by the Troika and the Caribbean
ACP States (CARIFORUM), met in Vienna, Austria on May 13, on the occasion of the IV Summit of
Heads of State and of Government of the EU and Latin America and the Caribbean. The Parties
emphasized that one of the priority areas for cooperation would be “the successful conclusion of a
development-oriented EPA, with resources within the 10th EDF and other measures for its effective
implementation. They agreed that these areas are crucial to fostering sustainable economic
development and facilitating the smooth and gradual integration of the region in the global
economy. They reaffirmed their commitment to work towards a timely conclusion of the EPA
negotiations to allow entry into force of the agreement by 1st January 2008.”

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RNM CONDUCTS SUCCESSFUL CONSULTATIONS ON EPA NEGOTIATIONS IN SURINAME

On May 8 to 10 the Caribbean Regional Negotiating Machinery (RNM) held consultations with the
public and private sector in Suriname on issues regarding the negotiation of an EPA between
CARIFORUM and the EU. The consultations were organized by the Surinamese Ministry of Trade
and Industry and facilitated by the Chamber of Commerce.

RNM officials brought stakeholders up to date on the principles and objectives of the EPA
negotiations and recent trade and investment flows between the CARIFORUM Region and the EU.
This was followed by detailed discussions with different sectors of their offensive and defensive
interests with respect to the European market.

The consultations were attended by a broad section of stakeholders, from across the public and
private sector, and covered goods, agriculture and services. The government departments which
participated included: Trade and Industry, Foreign Affairs, Transport/Communications, Maritime,
Planning/Development Cooperation, Justice, Labour, Environment, Social Affairs, Health,
Customs, Agriculture and Finance.

The private sector participants included industry associations as well as individual firms, and
covered various productive sectors, such as beer, bananas, crafts, rice, rum, seafoods, soap and
detergents, among others. The services sectors represented included computer and related ICT,
environment, finance, tourism, transportation, among others. The consultations were successful in
exploring Suriname’s interests in the negotiations and increasing national awareness of the EPA
process.

The consultations were part of an ongoing special project spearheaded by the RNM to sensitize
stakeholders in all CARIFORUM states to the issues in the EPA negotiations and obtain input from
producers to inform the region’s negotiating positions. The next national consultations are
scheduled for Grenada, May 22 to 24, followed by St. Vincent & the Grenadines and Guyana,
shortly there after.

NEWS BRIEFS

Third Round of CARIFORUM/EU EPA Talks Concluded

CARIFORUM’s negotiators just concluded another set of bilateral negotiating sessions with the
European Commission in Brussels, May 19. This four-day third Round of technical negotiations for
a CARIFORUM/EU EPA focused on Market Access (goods and agriculture), Services and
Investment, Trade-Related Issues, and Legal and Institutional Issues, which specialist negotiators
on both sides dealt with simultaneously.

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EC Requests Extension of Article XIII Waiver

Recently, the European Communities presented their request for an extension of Article XIII waiver
for the TRQ for bananas of ACP Origin (G/C/W/529). It noted that it would provide legal certainty
for both MFN and ACP producers. It also has the benefit of ensuring that both parties have fair
access to the EC market for bananas.

The request was denied by Honduras, Panama, Nicaragua, and Columbia. They all noted that the
EC has denied its obligations even when handed down by a Panel. They noted that the request by
the EC does not comply with commercial arrangements, nor is it legal. There have been no
“exceptional circumstances” that would require such an extension.

The EC noted that they have been engaged in dialogue with the MFN suppliers based on market
realities. The Chairman noted the statements and expressed that the CTG would revert back to
this item and also continue its consultations.

Lamy Urges Negotiators to find “Second Wind” in Global Trade Talks

In his report to the WTO General Council as chair of the Trade Negotiations Committee on May 15,
WTO Director-General Pascal Lamy said trade negotiators “now need to push to the finish”. “We
can achieve modalities - I am convinced of that, but it is going be hard work... as we all know,
looking at the developments in the world around us, the stakes are too high for us to fail….. We are
now in the red zone, and…we are not far from the red part of this red zone,” he told the General
Council; noting further, “the more we move into the year, the more we risk to fail in our endeavour
to conclude the round.”

Uncertainty has set in in troubled WTO talks, since the failure to meet the modalities deadline last
month. The intensive and continuous negotiating process, formal and informal, on the core issues
of Agriculture and NAMA that kicked into high-gear early this month have proven painfully difficult,
with dire assessments by some as to whether gaps can be bridged in the weeks ahead. In recent
days, Lamy has begun to publicly express deep concern with the nature of the divergences in
positions amongst the big players, especially at a time when the talks suffered a major setback –
by way of the missed April modalities deadline - from which they are still recovering. Lamy
continues to urge Members to ratchet up their engagement, if consensus is to be achieved - “where
it is most badly needed.”

DSB Discusses EC’s First Status Report on Implementation of Sugar Rulings

At its meeting, on May 17, the WTO Dispute Settlement Body (DSB) considered the EC’s first
status report about measures to reform its sugar regime - WT/DS265, WT/DS266 and WT/DS283.
(For details see, respectively: http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds265_e.htm,
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds266_e.htm and
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds283_e.htm).

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UPCOMING EVENTS

- May 22: RNM Experts Meeting on Innovation in an EPA, Brussels

- May 22 to 23: PMU-sponsored technical coordination meeting of ACP regions, Helsinki

- May 22 to 24: RNM Country Mission (market access preparations), Grenada

- May 25 to 26: RNM Country Mission (market access preparations), St. Vincent & the Grenadines

- May 29 to 31: RNM Country Mission (market access preparations), Guyana

- May 28 to 31: 83rd Session of the ACP Council of Ministers, Port Moresby, Papua New Guinea

- June 1 to 2: 31st Session of the ACP-EC Council of Ministers, Port Moresby, Papua New Guinea

- 31 May to 3 June: OECS Technical Negotiating Group Meeting (TNG) and OECS Trade Ministers Meeting,
Dominica

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For More Information Contact:

Nand C. Bardouille
Caribbean Regional Negotiating Machinery
3rd Floor, The Mutual Building, Hastings Main Road, Hastings, Christ Church, Barbados
Tel: (246) 430-1678
FAX: (246) 228-9528

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