The Economic Partnership Agreement: Business Implications and Opportunities was the running theme of a two-workshop series that was organized by Jamaica Trade and Invest (JTI), the Ministry of Foreign Affairs and Foreign Trade, and the Office of the Prime Minister. These workshops were initiated particularly in light of the Caribbean’s signing of the Economic Partnership Agreement in December 2007 and the multiple benefits to be derived.
The agencies collaborating on this effort have foreseen lucrative benefits in investing in the services sector, and as such, this sector comprised the focus of the first workshop, which was held on Monday March 3, 2008 between 8:00 a.m. and 12 noon at Jamaica Trade and Invest. This workshop was devised to assist players in local business to make strategic decisions in light of the opportunities that will now exist in terms of trade between the EU and CARIFORUM.
The second workshop, which was held March 6, 2008, focused on agro-processing, which represents a significant portion of the local manufacturing sector, where significant opportunities for growth have been identified. This workshop, which ran from 8:30 a.m. to 12 noon at JTI’s Head Office, provided insights on how to conduct effective and efficient business in this sector.
The main aim of both workshops was to sensitize persons interested in conducting business between Jamaica and the European Union on the opportunities and implications related to doing business in designated sectors - this in light of the signing of the Economic Partnership Agreement (EPA) by the EU and CARIFORUM (an amalgamation of CARICOM and the Dominican Republic). The main goal of the EPA is the achievement of a more predictably open EU market for goods, services and investment coming out of CARIFORUM. The primary objectives of signing this agreement are promotion of sustainable development, eradication of poverty, and the gradual integration of CARIFORUM into the world economy.
Both workshops, as such, elaborated on the numerous opportunities/benefits for Jamaica in particular, in light of the signing of the agreement. Among the benefits to be derived are duty free/quota free access to EU market for all products, except rice and sugar, and improved access for Jamaican services suppliers (including entertainers and professionals).
There are also possibilities for increased investment and technological transfers an enhancement of capacity in trade-related issues such as environmental protection, public procurement policies, personal data protection and maintaining core labour standards. Trade liberalization between Jamaica and the EU should commence in 2011 and will continue until 2032, when full EPA benefits should be realized.
In spite of these benefits, the EPA has implications for future trade agreements with the US and Canada. There is also the threat of possible dislocation of vulnerable and uncompetitive local industries (social implications). In order to fully benefit from this agreement, Jamaica and other members of CARIFORUM will find the need to enable institutional reform and legislative review, among other actions.
Europe represents Jamaica’s second largest traditional market, with approximately 490 million persons. In 2006, Jamaica’s exports to the EU were valued at US$342.6 million. Imports of mostly machinery and transport equipment, foodstuffs, fish, electronics, etc. were from the UK, Germany, Spain, Finland, Sweden, France and the Netherlands. Major exports of mostly food products (fish, bananas, vegetables and cocoa), sugar, alcohol and alumina went to the UK, the Netherlands, Germany, France and Slovakia.
Trade between Jamaica and the European Union has been thriving in recent years. In 2006, Jamaica imported goods from the EU worth US$344.8 million, and that year, Jamaican based exporters earned US$525 million in revenue from the EU. Importers spent US$400 million in purchasing goods from that market. Between 2002 and 2006, exports to the EU grew by 4% per annum, while imports declined by 9% per annum.
Great employment dislocation based on loss of market access to the EU as well as competition for development assistance (with Africa and the Pacific) represent two chief thrusts in the signing the EPA. It also represents proactive action to ensure that our preferences would not constantly be under threat of action by the World Trade Organization (WTO).
A total of €132 million has been allocated to CARIFORUM’s Regional Indicative Programme, with €33 million allocated directly to EPA participation and commitment making. This allocation will be programmed in such a way that 85% would go to the Focal Area of Regional Cooperation/Integration and EPA Capacity Building and 15% would go to the non-focal area of vulnerabilities and social issues. EU member states have committed to extending development assistance of €1 billion by 2010, even though geographical allocations are not yet determined.
