Davies
Lavern Clarke, Staff Reporter
A NEW sense of urgency has gripped Jamaican policymakers and businesses as the deadlines for new trading arrangements and the removal of preferential cushions loom closer.
With it, attempts are being made to whip up interest in international trade issues as the country prepares to enter what it acknowledges will be tough negotiations this year.
In three weeks, on April 1, Jamaica and other countries are expected to present their recommendations on tariff structures to inform 'Market Access' negotiations for the Free Trade Area of the Americas (FTAA) that commence on May 15.
As those preparations continue, Jamaica is also engaged in discussions on the Cotonou Agreement that brings preferential trade arrangements with Europe to an end in 2008.
Cotonou is an agreement between the European Union and the African Caribbean Pacific (ACP) group which, in accordance with new world trade rules, seeks to wean the countries from preferential access to Europe's markets. Preferences violate the Most Favoured Nation principle of the WTO agreements which states that a trade benefit extended to one nation, must be extended to all signatories.
Negotiations begin in September, and in the meantime, the EU has established a 2.2 billion euro Investment Facility to smooth the transition.
The funds, to be managed by the European Investment Bank, will be available to all ACP countries when the Cotonou Agreement, signed June 23, 2000, is ratified. Cotonou requires the ratification of two-thirds of the 85-member ACP grouping, and all 15 EU member countries.
Gerd Jarchow, head of the Delegation to the European Commission in Jamaica, said Thursday that the process was originally expected to be completed by mid-year, but there is a hold up on the EU side as some members are now caught up with internal matters.
No limit
There is no limit on the amount each country can access under the fund, Mr. Jarchow told Sunday Business, but loan dispersals will be done on a first come-first served basis and the viability of programmes submitted to the EIB.
The investment facility is not likely to be available before year-end, said Jarchow.
Jamaica, meantime, is finalising with the EU Delegation here, the framework for a 20 million euro Private Sector Development Programme under the EU's Country Support Strategy (CSS), said the Ministry of Foreign Affairs. The euro currently trades at J$41.5614.
The funds will be available to companies, and are intended to finance the "development of globally competitive firms and industries" in readiness for the full impact of globalised trade, says the Ministry.
On February 27, the EU and Government of Jamaica signed a five-year agreement for the CSS and a National Indicative Programme (2002-2007), for 100 million euro. The major portion, 73 million, will provide macro-economic, structural adjustment and other support, while 27 million is earmarked for emergencies and shoring up the private sector against "adverse effects of the instability of export earnings," said the EU.
Multilateral trade
Currently, a new round of multilateral trade negotiations was launched by the WTO in January to end three years later in 2005.
The FTAA, when it is formulated will encapsulate 34 countries of diverse sizes and economies in the Americas, including the super-rich such as the United States as well as the very poor, but excluding Cuba.
The agreement will open up all 34 markets to each other, but given the size differentials and levels of development the larger nations are likely to have the competitive edge when the agreement is implemented in 2005. The smaller countries have lobbied successfully so far for acknowledgement that certain concessions are required if they are to remain viable players under the arrangement.
Caribbean nations within CARICOM are negotiating as one, in order to give strength to the region's positions.
Market access is considered the most fundamental of issues within a free trade agreement, and the fate of domestic businesses rest on what concessions can be negotiated. The spirit of free trade involves the elimination of tariffs, but there are instances where concessions can be negotiated for reduced rates, over total removal.
Jamaica's proposal is not so much to seek restrictions on who can enter, but to demand the removal of restrictions on the movement of its labour so that professionals can take their skills and services to any corner of the FTAA they choose.
There is a somewhat muted push locally to develop comparative advantage in the area of services. This is seen as one of the more viable propositions, as businesses acknowledge that they are unlikely to command the capital to invest in similar technology and attain the economies of scale that large corporations and conglomerates already enjoy.
Dictatorship by bureaucracy
Meantime, the nation state, or more specifically how it is to be safeguarded, has emerged as a sub-text of the negotiations. Increasingly the decisions that a country can make about its own welfare is permitted to the extent that it does not violate agreed trading rules.
The issue was mentioned last Saturday at a trade policy seminar at the University of the West Indies, Mona, by Finance Minister Dr. Omar Davies, within the context that Governments are now required to cede much of their authority to non-elected bureaucrats at the World Trade Organisation.
It presents, he said, real danger of a "dictatorship by bureaucracy" and warned that elected Governments must be forceful in laying down what they want for their countries.
Opposition spokesman on Foreign Trade, Senator Oswald Harding, said the realities demanded adequate financing for the Regional Negotiating Machinery and the Foreign Affairs and Foreign Trade Ministry, the latter's allocation now being 0.5 of one per cent of the budget, to tackle talks at the WTO level.
"We cannot allow political differences to divide and weaken us as we confront the rest of the world," he told the seminar.
