Dionne Rose, Business Reporter

british Labour Party MP Diane Abbott warned yesterday that the Carib-bean will only be able to tap the potential benefits of its free-trade agreement with the European Union (EU) in the context of tighter regional integration.

"I think the region needs to understand for the EPA (Economic Partnership Agreement) to work there has to be greater regional integration," Abbott told a luncheon hosted by the Jamaica Manufacturers' Association yesterday.

"I don't think people have already faced up to that," she said.

Europe proposed a series of regional trade pacts to replace the former umbrella arrangement on trade and development that it had with the more than 70-member African, Caribbean and Pacific (ACP) group of countries.

The Caribbean, however, was the only regional group to conclude a deal by last December's deadline for the completion of negotiations.

Under that EPA, Caribbean products have duty-free access to Europe, while tariffs are to begin to fall away from EU exports to the region over three years. This process will run for up to 25 years.

However, regional critics say that the Caribbean gave up too much in the negotiations and claim that the language in the agreement is not precise enough on the level of development assistance that the EU is to provide the Caribbean.

Difficult to compete

In yesterday's speech, Abbott suggested that in some cases, the Caribbean might find it difficult to compete in Europe on price, but said that branding could be a strong point for the region.

"A strong brand, stronger regional institutions because you are going to have to compete as a region," she said. "There has got to be more regional integration by public sector and private sector."

The potential returns, she said, are significant, given that the EPA has given access to the Caribbean market of 500 million people and a GDP of $16 trillion.

"Now, that is a huge opportunity and everything that is problematic about the EPA, in a sense, pales in significance when you see the size of the opportunities ahead of you," she said.

Abbott, who is of Jamaican parentage and was the first black woman to be elected to the House of Commons, conceded that there were downsides to the EPA.

dionne.rose@gleanerjm.com

"It is not exactly a level playing field and although the EPAs are structured to try and help the Caribbean and give the Caribbean more time to open its markets and so on ... it is as if you put a three year-old on a push bike into the ring with a heavyweight boxer," she said. "It is not an even balance contest," she pointed out.

The Caribbean, she said, might have done better if it had not fallen to the EU's "divide and rule" strategy. But even at this stage, she suggested, all may be lost.

Said Abbott: " I do believe that the region must understand even in this late in the day the importance of not allowing the EU - which far outweighs the region in economic, political and super capital to play divide and rule, you must have one position, you must swing behind the negotiator."