Issue:

09/ 01
January 31, 2009

RNM UPDATE
WTO Update
on Agriculture
In spite of the efforts made, the year 2008 Highlights of the Agriculture Text
did not culminate in the conclusion of the
Doha Round. The July 2008 failure of the Agriculture
mini‐Ministerial, which was attributed to In contrast with the previous drafts, the
lack of convergence on challenging issues current text proposes single numbers rather
including the Special Safeguard than ranges for determining:
Mechanism (SSM), led to negotiation Market Access (Using the tiered reduction
fatigue. This state persisted well into formula),
October threatened to undermine the
legitimacy of multilateralism. o For Developed Countries: Regarding
reductions for tariffs in the top tier ‐
Nevertheless, in spite of this slowdown in the pace of above 75%, tariffs to be cut by 70%
the negotiations efforts were made to convene a over 5 years rather than by 66 – 73%
Ministerial before the end of 2008.
o For Developing Countries: Regarding
These efforts, which were sustained in November reductions for tariffs in the top tier –
2008 through a series of meetings, yielded new draft above 130% , using the two‐thirds
Agriculture and NAMA texts. The following are some rules, tariffs to be cut by 46.7% over
of the highlights of the negotiating text on 10 years rather than by 44 – 48.7%.
Agriculture.

CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich
source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the
Information Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is to
provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to
the Caribbean.
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Overall Trade‐Distorting Domestic
(OTDS)
o It is proposed that the EU reduce
OTDS by 80% (in contrast with the
previous ranges of 75 or 85 %); and
the US by 70% (in contrast with
previous ranges of 66 or 73%).
Support o Alternatively, countries may
impose safeguard duties that are
12 percentage points above
existing bound tariffs when
import increases rise 40% above
average levels, or 8 percentage
points above existing bound
tariffs when import surges rise
20% above average levels.

Special products (for Developing countries) Refinement of flexibilities for different categories
of countries including Small Vulnerable
o 12%, rather than 10‐18% of products Economies (SVEs)
may be designated as Special
Products. o Suriname is allowed to fix its
bound tariffs at the average for
o Up to 5%, rather than 6% of products the rest of the CARICOM States
could be exempted completely from
cuts. The perspective emanating from the developing
countries was that insufficient considerations had
o Overall tariff cuts on special products been given to the interests of developed
are to be 11% rather than 10‐14%. countries.

Even the Chair of Agriculture acknowledged that

Sensitive Products the text does not reflect the progress attained in
discussions on longstanding preferences under
o For Developed countries: 4% of talks on Tropical Products and preference erosion.
products could be sensitive. This is particularly true in relation to bananas. The
Chair emphasized that having being advised that
o For Developing countries: 5.3% or 8% “certain material changes had occurred which, in
can be sensitive. the view of at least one set of Members, vitiated
any assumptions about what might even be
hypothetically possible”, the new text remains
Revised provisions on the Special Safeguard unchanged from the July 2008 version.
Mechanism (SSM)
Latin American banana producers have strongly
o Countries allowed to impose safeguard duties advised that the Geneva Agreement on Bananas
that are ½ current bound tariffs when import cannot be reopened to negotiation and that it was
increases are more than 40% greater. a standalone deal. However, it should be recalled
that for the Caribbean and the wider ACP group, it
o Countries allowed to impose safeguard duties is understood that the Geneva Agreement on
that are 1/3 of current bound tariffs when Bananas was contingent upon the securing of a
import increases are 20% greater. deal in July mini‐Ministerial.

CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich
source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the
Information Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is to
provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to
the Caribbean.
http://www.crnm.org
Given the level of importance of the treatment of
long standing preferences to the ACP group, a
Doha deal is inconceivable in the absence of
convergence on bananas.
However, the pressure to resolve the issue has
been exacerbated by the WTO Appellate Body
Banana ruling on November 26, 2008 that
condemned the EU’s banana regime which was
found to be in violation of the WTO rules,
specifically Article II of the GATT. The Appellate
Body confirmed a WTO Panel ruling that the EU
tariff €176 per tonne exceeded the limit indicated
in its tariff schedule. Costa Rica, the coordinator
at the WTO of the tropical products countries, has
been speculating that the EU will propose an offer
on bananas by next month. The EU faces the risk
of trade sanctions if they fail to comply with the
Appellate ruling.
Notwithstanding the EU’s obligation to comply
with the WTO rules, consideration will have to be
afforded to ACP states because of the deleterious
effects of a significant reduction of the MFN tariff
and the resulting erosion of the ACP’s margin of
preference.
Another issue which still remains contentious is
the SSM. The Caribbean has strongly supported
the G33 proposal which calls for:
1. the automatic triggering of the safeguard
measure;
2. availability to all agricultural products;
3. the consideration of both price and
volume‐triggered safeguards;
4. the consideration of both additional
duties and quantitative restrictions as
response measures;
5. and the design of the mechanism to
facilitate simple, effective and easy
implementation
CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich
source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the
Information Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is to
provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to
the Caribbean.
http://www.crnm.org
Challenges persist, however, in resolving several
components of the SSM including, the triggers for
application of the SSM, the frequency and
duration of use, and the coverage.
While the release of the draft text was intended
to show the level of convergence that has been
attained thus far, it the text also illustrated the
level of divergence. The texts therefore, were
unsuccessful in catalyzing a breakthrough. As a
result, the incentive for the convening of a
Ministerial by the end of 2008 was absent.
Lack of political will of member states has been
identified as a major stumbling block to progress
in the Doha Round. Recently, former WTO
Director‐General (1993‐1995) Peter Sutherland,
expressed doubt about the level of commitment
of member states such as the United States of
America and India to successfully concluding the
round. The former WTO Director‐General’s
comments allude to the use of national
‘distractions’ such as national elections to excuse
the deprioritization of the Doha Round.
It should be recalled that the United States of
America concluded Presidential Elections in
November 2008 and that the new President
Barack Obama only assumed office in January this
year. It should also be noted that the State
Election in India is scheduled for May this year.
Mr. Sutherland posed the question of whether “It
is not good enough for Ministers to say ‘We have
an election coming up’. Just as is it good enough
to say ‘We’ve just had an election’.”
However, turns in domestic politics are more than
tangentially linked to the potential outcome the
Doha negotiations. At this early stage in the life of
the Obama administration, the nature of US
external trade policy with respect to multilateral
negotiations is still unclear. Furthermore, given
India’s prominence in the negotiations,
particularly its role in helping to consolidate
solidarity amongst developing countries and the
leadership of Kamal Nath, changes in the
vanguard in India could also present challenges
for the negotiations.
All of this uncertainty may engender hesitation on
the part of member states to make concessions at
this stage of the negotiations.
On the other hand, the growing uncertainty about
the integrity of the international economic
climate is a primary incentive to conclude the
Round urgently. It should be recalled that former
US President George Bush before demitting office,
attempted to lead the G20 to collectively address
the global financial crisis. Within the Caribbean,
during the recently concluded 13th meeting of
COFAP, emphasis was also placed on collective
financial action to deal with the effects of the
crisis.
The principle is clear – the opening of markets
would help alleviate the pressures on the
international economic system because wider
market access within the context of the Doha
Development Agenda could unlock the potential
for wealth creation especially amongst developing
countries. In addition, it is thought that securing
deeper liberalization commitments under the
rules based system of the WTO would help
prevent countries from resorting to
protectionism, which would cause further
retraction of markets and exacerbate the global
economic crisis.
Notwithstanding these political and economic
considerations, in the absence of a realistic
solution to the immediate impasse, the conclusion
of the Doha Round will continue to be elusive and
the multilateral process may become increasingly
compromised.
******
CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich
source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the
Information Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is to
provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to
the Caribbean.
http://www.crnm.org
CRNM ptharticipates in
the 13 Meeting of
COFAP
The Caribbean Regional Negotiating Machinery
(CRNM) participated in the Thirteenth Meeting of
The Council for Finance and Planning (COFAP),
which was held in Bridgetown, Barbados. The
Meeting of Officials began on January 27, 2009,
while the meeting session of the Ministers of
COFAP convened on January 29, 2009.
Amongst other things, the COFAP examined issues
related to the development of the region’s single
economic space. Included in these deliberations
was consideration of the revision of the CARICOM
Investment Code in light of the region’s
commitments under the EPA and other bilateral
agreements.
The CRNM team, led by the CRNM Director
General, Ambassador Henry Gill, made a number
of presentations.
The CIC seeks to facilitate the marketing of
CARICOM member States as a single investment
location through outlining minimum general
standards of protection to investors from Third
States,. The CRNM made several suggestions for
improving the Code and also observed that
elements of the draft seemed to be inconsistent
with the objectives of the Community with
respect to investment relations with third States.
The meeting agreed that there would be a
comprehensive review of the Code and its
relationship with provisions in bilateral
investment treaties (BITs) and other trade
agreements. The CRNM was concerned that the
draft had provided for the Code to be subsidiary
to all external investment arrangements thereby
undermining the principal objective of creating a
common CARICOM legal framework for
investment.
Ambassador Gill re‐assured the meeting the EPA
does not present any impediments to the
attainment of the stated objectives of the CIC. He
observed that the EPA, in contrast to the Code,
does not seek to create protection standards to
foreign investors. It was designed only to create a
framework for the progressive liberalization of
investment
The COFAP also addressed issues related to the
development of the region’s single economic
space, including the Caribbean Development Fund
(CDF). In this regard, the COFAP discussed
progress attained since the CDF became
operational in October 2008.
Additionally, the progress made in devising a
window within the CDF to channel and mobilize
development support resources from Europe to
CARIFORUM member states in accordance with
the CARIFORUM‐EC Economic Partnership
Agreement (EPA) was also examined.
The CDF is to manage the financial instruments
designed for CARIFORUM development
assistance. However, it is envisaged that
disbursement flows from the EPA related financial
instruments, which include the 10th European
Development Fund (EDF); the WTO Aid for Trade
(AfT); and the European Investment Bank (EIB),
will be kept separate from other instruments of
the CDF intended to specifically assist the
development of CARICOM.
The COFAP also addressed broader issues of
immediate significance to the region, including
the strategic financial planning to manage and
address the repercussions of the global financial
crisis.
In this regard it was decided to establish a Task
Force to examine all the issues carefully and to
report their findings to COFAP. The CRNM is to be
represented on the Task force and to contribute
to its work.
A new debt initiative for middle income
developing states discussed under the Agenda
item ‘Designation of CARICOM States as Small
Vulnerable Highly Indebted Middle Income States’
which was first discussed at the HOG Conference
in Antigua, was also examined by the COFAP.
In the course of that discussion the meeting
called for further examination and more careful
elaboration of the proposals, for the need to keep
an eye on parallel work in other regions and for
the Task Force, the report of which was before
the meeting, to fully take account of the needs of
those states in the region which need to borrow
on the capital market. The Task Force is to report
to the next Bureau and to the Heads in July.
******

Government during the Twenty‐Ninth Meeting of

the Conference of Heads of July 2008 agreed that
a legal opinion should be sought on the feasibility
of devising the window within the CDF. The
COFAP reviewed and considered the progress
made in this regard.

CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich
source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the
Information Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is to
provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to
the Caribbean.
http://www.crnm.org
 CRNM continues
Regional EPA Ambassador Gill also briefed members of the
private sector and civil society during a seminar
Briefings in Dominica on trade negotiations which opened on Monday
19th January 2009. The meeting was co‐chaired
by Dr. Douglas and the Ambassador of the
Commonwealth of Dominica to CARICOM, H. E.
Charles Maynard.
The Director‐General of the Caribbean Regional
Negotiating Machinery (CRNM), Ambassador
Henry Gill met with the members of Cabinet of
******
the Commonwealth of Dominica on Tuesday 20th
January 2009 in order to brief them on the state Please visit our website for more information on
of play of trade negotiations in which the Region the
is involved. CARIFORUM-EC
Economic Partnership Agreement
Prior to the briefing session, Ambassador Gill paid
http://www.crnm.org
a courtesy call to the Honorable Vince Henderson,
Minister of Foreign Affairs, Immigration and Labor
of the Commonwealth of Dominica

The Cabinet briefing also addressed the latest

developments in the provisional application of the
CARIFORUM‐EC Economic Partnership
Agreement. Pending the completion of national
ratification processes and thus, the official entry
into force of the Agreement, the EPA, by
agreement of the Parties, is being applied by the
signatory CARIFORUM States and European Union
to ensure that both parties enjoy the benefits,
including preferential market access.

Earlier that morning, Ambassador Gill and the

Director of Trade in the Dominican Ministry of
Trade, Industry, Consumer and Diaspora Affairs,
Dr. Eisenhower Douglas also participated in a
morning ‘call‐in’ radio program and fielded
questions from the public about the EPA
particularly with respect to the future of the
banana industry, the opportunities in capitalizing
on services provisions of the Agreement and
opportunities for funding and building
CARIFORUM export capacity and competitiveness.

CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich
source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the
Information Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is to
provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to
the Caribbean.
http://www.crnm.org
 NEWS ITEMS

International News

Costa Rica expects EU offer on bananas next month

Costa Rica expects the European Union to make a new offer on bananas next month in an attempt to resolve the world's
longest‐running trade dispute, Foreign Trade Minister Marco Vinicio Ruiz said on Friday 30th Janauray 2009. Settling the row
would end a decades‐long dispute that has poisoned relations among dozens of countries and remove an obstacle to an
overall deal in the World Trade Organisation's Doha round to free up global commerce.

WTO hopes for renewed Doha push this year

The World Trade Organisation hopes that trade powers will renew efforts to reach a deal in the long‐running Doha talks to
free up global commerce this year, WTO Director‐General Pascal Lamy said on Thursday. Lamy, speaking at the U.K.
Department for International Development, said developing countries were particularly at risk from the slowdown in trade
caused by the global crisis. "Today it is clear that trade is one of the casualties of this economic crisis and that we run the
risk that one of the engines of growth in fact, one that is very important for many developing countries stalls," he said,
according to a text of his remarks issued by the WTO

Ethiopia to respond to WTO’s queries

The Ethiopian government is to respond to the queries presented by the European Union, the governments of the United
States and Canada related to Ethiopia’s application for WTO membership. Ethiopia applied for WTO membership on January
13, 2003. In December 2006, the Ethiopian government submitted a Memorandum of Foreign Trade Regime (MFTR) for the
WTO which opens the long journey to WTO accession.

Demilew Mekonnen, representative of the WTO affairs at The Ethiopian Ministry of Trade and Industry said that last July
and August the EU, the US and Canada submitted more than 100 questions on Ethiopia’s MFTR. “The questions are based
on our response to the queries forwarded by the US government previously,” Demilew said. He said the answers were
prepared, adding that the ministry will send the reply to the WTO within three months. “If things go according to schedule,
we will send our response by March,” he added.

Regional News

Government bails out CL Financial

One of the Caribbean's largest companies ‐ Trinidad‐based CL Financial ‐ is in big trouble. The Trinidad and Tobago
government and the country's Central Bank have stepped in to bail out the company, which has investments in energy,
banking, alcohol and food, and insurance. The Central Bank, government and CL Financial have signed an agreement which
will provide monetary support for CL financial services companies.

Guyana to import sugar to meet domestic needs

Sugar‐producing Guyana has been forced to look outside to meet its domestic demand for the sweetener, a government
spokesman has confirmed. However, the head of the Presidential Secretariat, Dr. Roger Luncheon has indicated that “In
order to avoid any disruption of supplies, the Guyana Sugar Corporation has made a decision to import bagged brown sugar
for the local market."

St. Lucia Launches Services Coalition

The launch of the St. Lucia Coalition of Service Industries took place on January 28, 2009 in Castries. Project Manager of the
Barbados Coalition of Service Industries, Michelle Hustler delivered the feature address.

The establishment of national services coalition across the region is part of a CARICOM initiative aimed at increasing
regional services exports.

CRNM UPDATE is the flagship electronic trade newsletter of the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich
source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the
Information Unit of the CRNM, the newsletter focuses on the CRNM, trade negotiation issues within its mandate and related activities. Its intention is to
provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to
the Caribbean.
http://www.crnm.org
 NEWS ITEMS

Regional News (continued)

Cuba cannot attend Summit of the Americas

Cuba is out of the 5th Summit of the Americas being hosted in T&T from April 17 to 19. Foreign Affairs Minister Paula
Gopee‐Scoon as well as Ambassador Carlos Luis Alberto Rodriguez, head of the national secretariat in charge of
preparations for the summit, made this clear at a press conference on Wednesday. Gopee‐Scoon said T&T had very friendly
relations with Cuba and would like nothing more than to see that country’s head of State, President Raul Castro, here for
the summit, along with US President Barack Obama and Venezuelan President Hugo Chavez. However, Ms. Gopee‐Scoon
explained that the timing is not right. She said since taking office earlier this month, President Obama had given notice of
his intention to soften the US’s frosty relations with Cuba but it was too soon to expect Cuba to be formally invited to Port‐
of‐ Spain for the summit.

Upcoming Events

February 2009

2nd Twenty‐Third Meeting of the Community Council of Ministers Georgetown, Guyana

2nd – 3rd Trinidad and Tobago Petroleum Conference Port‐of‐Spain, Trinidad & Tobago

3rd – 4th WTO General Council Geneva, Switzerland

4th CRNM Regional Consultation on Energy Services Sector Port‐of‐Spain, Trinidad & Tobago

4th – 5th Gender and Women’s Rights: Analysis of the EU/CARIFORUM EPA ‐ Jamaica Country Study Kingston, Jamaica

5th – 6th UNECLAC Expert–Group Meeting on the CARIFORUM – EU EPA Port‐of‐Spain, Trinidad & Tobago

6th Symposium on The Diversification of CARICOM Exports: Opportunities and Challenges, UWI, Mona, Jamaica

9th – 12th 15th Session of the ACP Parliamentary Assembly and Inter‐Sessional Meetings of the ACP‐EU Joint Parliamentary
Assembly, Brussels, Belgium

12th – 13th Task Force Workshop on Trade and Inv for FCORs and OCTs on the CARIFORUM – EU EPA Guadeloupe

19th – 20th UNECLAC, Expert Group Meeting on the EPA Port‐of‐Spain, Trinidad & Tobago

25th – 27th Caribbean Regional Meeting of the ACP‐EU Joint Parliamentary Assembly, Georgetown, Guyana

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