RNM UPDATE

February 4, 2000

Prepared by the Communications Division of the Caribbean Regional

Negotiating Machinery (RNM), this electronic newsletter focuses on the
RNM, trade negotiation issues within its mandate and related activities.

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- COMMUNICATIONS PARTNERSHIP STRATEGY

- RNM DONORS MEETING
- GRENADA NATIONAL CONSULTATION
- ACTIVITIES IN JAMAICA
- CARICOM-CUBA NEGOTIATIONS
- CARICOM-DR NEGOTIATIONS

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COMMUNICATIONS PARTNERSHIP STRATEGY

The RNM was created by the Conference of Heads of Government of the

Caribbean Community with a mandate to develop a cohesive trade
negotiating strategy for the Region under the political direction and
supervision of the Prime Ministerial Sub-Committee on External
Economic Relations. The RNM is led by Sir Shridath Ramphal, the
Region's Chief Negotiator, with the assistance of Sir Alister McIntyre, its
Chief Technical Advisor.

Within the context of its mandate the RNM has begun to implement its
Communications Partnership Strategy (CPS), which is conceived as a two-
way information flow between the RNM and its stakeholders --
governments (including inter-governmental bodies), the private sector and
the rest of civil society (labour, academia, NGOs, etc.) -- both within the
Caribbean and beyond.

In order to inform and educate stakeholders about the negotiation

challenges faced and the RNM's work, we will produce and disseminate
on a regular basis a range of communication products to assist you in
keeping abreast of negotiations issues, developments and agendas in
various forums, as well as the RNM's involvement therein. As a first step
in systematizing its information outreach, the RNM has recently produced
a brochure entitled The RNM in Brief with essential information about the
organization, including the nature of its mandate, challenges faced,
sources of funding, structure and functioning, collaborative partnerships,
main activities and some achievements to date. The RNM is aiming to
develop further its web site so that it can serve as a major information and
communications vehicle.

The RNM is also seeking to glean information from stakeholders which

will assist it in formulating policy positions and strategies. In this regard
requests for particular kinds of information will from time time be directed
to specific segments of our stakeholders, for example, the business
community. However, we also welcome general feedback, suggestions
and unsolicited information that may be deemed useful.

The CPS is one of five elements being implemented within the framework
of the RNM's CARICOM Trade Project, which is funded through a grant
from the U.K. Department of International Development (DFID). The
others are technical studies; call-down expertise (whereby regional or
international experts can be made available at short notice to undertake
specific short-term technical tasks and assignments; our Professional
Trainees Program (see next UPDATE); and a computerisation element.

RNM DONORS MEETING

The RNM is financed mainly by regional governments, donor agencies

both regional and external, and with some input from the region's private
sector. Donor assistance has contributed in a significant way to capacity
building and is responsible for training workshops and seminars,
professional apprenticeships, technical studies, information technology
expansion and upgrading, communications development, travel and other
areas. The main sources of such funding to date have been the Caribbean
Development Bank, DFID, USAID, CIDA and the Inter-American
Development Bank.

As part of its institutional planning efforts, the RNM convened a Meeting

of Donors on January 12, 2000 hosted by the the Caribbean Development
Bank and co-chaired by Sir Neville Nicholls, CDB President, and Sir
Shridath Ramphal. Also in attendance were representatives of the
Government of Barbados, the UK and Canadian Governments, USAID,
IDB and UNDP. The meeting reviewed current partnerships and examined
new areas for cooperation. Donor response was very encouraging and a
follow-up meeting is to take place to discuss detailed project proposals
and accompanying budgets to be prepared by the RNM in relation to the
various areas identified for donor cooperation.

GRENADA WORKSHOP

At the request of Prime Minister Dr. Keith Mitchell, the Chief Negotiator
 and other RNM personnel participated in a national consultation in
Grenada on January 14, 2000 involving the social partners on the status
and future direction of the three sets of external negotiations in which the
region is involved -- negotiations towards a successor agreement to the
Lomé Convention, the Free Trade Area of the Americas (FTAA) and
continuing WTO Negotiations. The RNM also took the opportunity to
inform the participants about the status of the region's bilateral trade
negotiations, e.g. CARICOM/Dominican Republic, and the negotiating
strategy being pursued.

The Chief Negotiator indicated that a framework agreement of future

cooperation between the African, Caribbean and Pacific states (ACP) and
the European Union (EU) should be finalised at the next ACP/EU
ministerial session on February 2-3, 2000 (for full results, see next week's
UPDATE). The new agreement would:

-provide for current Lomé preferences to be rolled over for eight years and
would be defined as a "preparatory period", during which the ACP States
will have the opportunity to consider all possible alternative trade
arrangements, including the regional economic partnership agreements or
REPAs (the EU proposal). The EU would seek a WTO waiver for the
rollover period.

-The new financial envelope would be approximately 13.5 billion Euros

and a further 9 billion Euros of unspent funds from previous European
Development Fund (EDF) allocations.

-A new investment facility to provide financing directly to the private

sector with an interest rate subsidy of at least 3 percent below market
rates.

The private sector was strongly encouraged to take advantage of the considerable
financial resources available under the investment facility to assist the private sector in
expanding productive capacity and achieve international competitiveness in the
preparatory period. Similarly, governments would need to utilise the resources of the
EDF to enhance and build capacity to meet the challenges and take advantage of the
opportunities offered by liberalisation.

With respect to the WTO negotiations in Seattle, it was agreed that their breakdown had a
positive outcome for developing countries. It demonstrated the solidarity among
developing countries not to agree to further negotiations in the WTO until there is
"review, repair and reform" of existing agreements. Furthermore, it forced the
industrialised countries to recognise that the negotiating process in the WTO must be
more democratic with the full participation of developing countries. Future negotiations
could not proceed until this is done.

The FTAA was seen as an imponderable and would be greatly influenced by domestic
US politics. It was recognised that the region made considerable progress in advancing
the case for special and differential treatment for small states at the FTAA Ministerials in
Toronto (November 1999) and this was reflected in the Ministerial Declaration. The
region will continue to participate in the negotiations pursuing the case for small
economies.

Finally, there was strong support for concluding trade agreements with the Dominican
Republic and Cuba. These were seen as providing an opportunity for firms to expand
exports of goods and services and diversify the region¹s export base.

ACTIVITIES IN JAMAICA

On Tuesday, January 18th 2000 the RNM was involved in two important activities in
Jamaica which coincided with the meeting of its College of Negotiatiors. The College,
comprising the Region's lead and alternate negotiators for each subject within the FTAA
process, meets periodically in order to review developments within that negotiating
forum and to plan strategy and positions for upcoming meetings.

The first activity was organized in collaboration with the Private Sector Organization of
Jamaica (PSOJ), which hosted a Breakfast Seminar to discuss ŒTrade Negotiations After
Seattle¹. The Seminar was addressed by Chief Negotiator Sir Shridath Ramphal, Chief
Technical Advisor Sir Alister McIntyre and Ambassador Peter King, Lead Negotiator for
Market Access In the FTAA Negotiations. Other members of the panel included the Hon.
Anthony Hilton, Minister of State in the Ministry of Foreign Affairs, Ambassador
Richard Bernal, and Mr. Peter Moses, Managing Director, Citibank Jamaica. The
Seminar examined the outcome of the Seattle WTO Ministerial Meeting and the
prospects for future trade negotiations involving CARICOM countries.

The second activity involved a workshop convened within the framework of the
CRNM/IDB Technical Cooperation Project, which was attended by government officials
and other participants. The purpose of the workshop was to discuss the preliminary
findings of two consultancy studies on "Smallness as a factor in the Lomé, FTAA and
WTO Negotiations" by Dr. Anthony Gonzales, and "Preparing the Caribbean for Joining
the FTAA" by Dr. David Lewis.

CARICOM-CUBA NEGOTIATIONS

Preparations are underway for eventual bilateral trade negotiations between CARICOM
Member States and Cuba. Following an earlier proposal, on 10 September 1998 Cuba
submitted for CARICOM consideration a "Trade Development Agreement between the
Caribbean Community (CARICOM) and the Government of the Republic of Cuba".
Acting on the recommendation of the Seventh Special Meeting of the Council for Trade
and Economic Development (COTED), the Prime Ministerial Sub-Committee on
External Economic Relations and subsequently the Special Meeting of the Conference of
Heads held on 26-27 October 1999 agreed to include Cuba on the priority list for
negotiation of trade agreements with CARICOM and entrusted the RNM to coordinate a
small working group in order to design the Region's approach to the proposed
negotiation.

Accordingly the RNM has taken steps to carry out this mandate. On December 12, 1999
the Chief Negotiator and the Chief Technical Advisor visited Havana for an initial
exchange of views with Mr. Orlando Hernández Guillén, Cuban Deputy Minister of
Foreign of Trade Policy in the Ministry of Foreign Trade and his team concerning the
framework and possible scope of an agreement, as well as a possible time frame for
negotiations.

The RNM also undertook a statistical study of trade flows between CARICOM and Cuba,
including an examination of bilateral trade potential, as well as a tourism study focussing
on Cuba's tourism development and the potential for tourism cooperation. The findings of
these studies were presented at two one-day meetings which the RNM convened in
Kingston, Jamaica, on January 16-17 of private sector representatives and public sector
officials, respectively, in order to learn experiences, consider opportunities and identify
concerns.

These meetings benefited from the participation of Caricom's Assistant Secretary General
Ambassador Albert Ramdin, representatives of Caribbean Export, including the officer in
charge of its Havana office, university academics, as well as (in the case of the former
meeting) Messrs. John Bell and Jean Holder, CEOs of the Caribbean Hotel Association
and Caribbean Tourism Organization, respectively. Additional in-house work is being
done on investment aspects and, in collaboration with Caribbean Export, a study is being
completed on trade control measures in Cuba. Work on payments arrangements is also
planned.

The RNM expects to present to the March 12th Intersessional Meeting of CARICOM
Heads of Government in St. Kitts its proposal in respect of the approach the Region
should adopt for these negotiations.

CARICOM-DR NEGOTIATIONS

Another round of negotiations between CARICOM Member States and the Dominican
Republic took place in Santo Domingo from 24-26 January 2000, under the co-
chairmanship of Mr. Edwin Carrington, CARICOM Secretary General, and Mr. Frederic
Emam-Zadé, Ambassador-in-Charge of Trade Negotiations in the Ministry of Foreign
Affairs of the Dominican Republic. As a result of these discussions conclusion of an
agreement appears within closer reach although some sticky points remain.

The RNM participated in these talks through its Chief Technical Advisor, Sir Alister
McIntyre, pursuant to the October mandate from the Heads of Government that it should
provide strategic guidance to the negotiations, ensure that they be concluded in a timely
manner, and use its good offices to facilitate an outcome which would permit the process
to move forward. The RNM has consequently held diplomatic-level discussions with
Dominican representatives and searched for technical-level solutions, including a
reduction of CARICOM's negative list which had been stalling progress in these bilateral
talks.

Representatives of CARICOM and the Dominican Republic had previously met in

Jamaica (5-7 January 2000) on Rules of Origin and will reconvene in Trinidad and
Tobago on 9-12 February. The outcome of these discussions will facilitate progress in
discussions on the products to be subject to Most Favoured Nation Treatment and Phased
Reduction of Duty. A meeting of the Policy Group will also take place in Kingston on
26-27 February.

Other outstanding matters are the treatment of trade agents in the Dominican Republic as
a consequence of its Law No. 173 on Protection of Importer Agents of Merchandise
Products and the subsequent revision contained in the Foreign Investment Law, No. 16-
95, as well as the treatment to be accorded goods and services produced in Free Trade
Zones.

Finally, it should be noted with respect to Trade in Services that, while CARICOM
favours the commencement of negotiations in this area, it has nevertheless indicated that
it could not do so before the full implementation of its internal regime on trade in
services, in accordance with Protocol II on Establishment, Services and Capital.
Consequently, the agreement between CARICOM and the Dominican Republic will not
for the time being encompass trade in services.

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Recipients of RNM UPDATE are authorized to forward this newsletter to other

addresses.

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Communications Director
Caribbean Regional Negotiating Machinery (RNM)
"Windmark", First Avenue, Harts Gap,
Hastings, Christ Church, Barbados
Tel: (246) 430-1673
Fax: (246) 228-5264
http://www.caribrnm.net

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RNM UPDATE
February 10, 2000

Prepared by the Communications Division of the Caribbean Regional Negotiating

Machinery (RNM), this electronic newsletter focuses on the RNM, trade negotiation
issues within its mandate and related activities.

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Special Issue: EU-ACP Agreement Concluded

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After eighteen months of in-depth negotiations between the 71 ACP countries and the
European Union, just before midnight on February 3 a two-day ministerial meeting in
Brussels resolved issues remaining from last December's ministerial, thus ending the
first phase of post-Lomé IV negotiations .

The meeting was jointly presided over by the Portuguese President of EU and the Hon.
John Horne of St. Vincent and the Grenadines serving as the President of the ACP.
Indeed, Caribbean Ministers have made an inestimable contribution to the negotiations,
holding the Presidency at the beginning and end of the process; they have served on the
ACP Bureau and spoken on all critical issues in the Pleanry Meetings of the ACP and the
joint ACP-EU Ministerial Counicls; led the Trade Negotiating Group in the person of
Minister Hilton throughout the negotiations, and the Central Negotiating Group through
Deputy Prime Minister Miller and Minister Horne at the beginning and end of the
negotiations.

Since 1975 successive Lomé Conventions have assured ACP signatories, including
CARICOM members, preferential access to the EU market for the vast majority of their
merchandise exports, as well as sizeable development funding. The present agreement
expires on 29 February 2000. No one ever expected the Lomé era to be permanent and
both sides have been committed to reaching a successor agreement with a WTO-
consistent trade regime, but CARICOM and ACP countries need suitable transitional
arrangements in order to avoid inevitable economic disruption from too sudden an
exposure of their firms and economies to the full blast of international competition.

Difficult as this challenge was for our negotiators, the process was further complicated by
EU objectives regarding political issues and its approach to the subject of migration,
which were anathema to the ACP. What has been agreed to is a Framework Agreement
for the Successor Convention and the 'roll-over' of the present Lomé Trade Regime,
which are critical for providing the Caribbean breathing space to develop competitiveness
in transiting to a more open trading system. In the words of the RNM's Chief Negotiator,
Sir Shridath Ramphal, the agreement "is not the best that can be envisagedŠ.but overall it
represents a considerable advance on the arrangements contemplated by the EU at the
start of the negotiationsŠ", as expressed in the European Commission's Green Paper.

The new 'Partnership Agreement' provides for an eight-year rollover of the present Lomé
arrangements. During this period a second post-Lomé phase of negotiations will take
place beginning in September 2002 on the subject of WTO-compliant alternative trade
arrangements, negotiations for which will be concluded by 2008. The new agreements
will then be implemented over a transitional period, the length of which is negotiable.
Dialogue is at the very core of the Partnership, enabling the parties to discuss openly
fundamental development issues and any subjects of mutual interest. Other main features
of the new agreement are summarised below.

Good Governance
EU insistence on the inclusion of "good governance" as an "essential element" of the
Convention met with Caribbean resistance arising out of concerns about the high level of
conditionality and intrusiveness implicit in EU proposals, and eventually good
governance was included as merely a fundamental element, attracting sanctions only in
respect of "corruption" including "acts of bribery leading to corruption".

The Trade Regime

This was the centre-piece of negotiations and Minister Hilton of Jamaica lead the Trade
Negotiating Group throughout the negotiations. The ACP overcame the EU's initial intent
that we choose the trade model for the Successor Convention in the Framework
Agreement and rejected the Commission's insistence that in the Preparatory Period the
ACP should have no negotiating option save Regional Partnership Agreements (REPAs).
Thus the right was secured to decide against REPAs and negotiate alternative trade
arrangements. A joint ACP-EU Ministerial monitoring mechanism will function during
the 8-year Preparatory Period to build ACP capacity and protect ACP development
interests.

With a view to ensuring that during the Preparatory Period of 8 years ACP access is not
effectively eroded by other arrangements made by the EU with third parties or even with
ACP LDCs, the EU and the ACP have agreed Œto examine all necessary measures in
order to maintain the competitive position of the ACP in the EU market during the
preparatory period¹. It is made clear that this will extend beyond tariffs to include, inter
alia, calendar requirements, rules of origin, sanitary and phytosanitary measures and
implementation of specific measures addressing supply constraints in the ACP countries.
The Ministerial Trade Committee will act as a review mechanism. The stated objective is
Œpreserving the benefits of the ACP-EU trade arrangements¹.

Bananas. The Trade Group was able to finalise agreement on Œthe Second Banana
Protocol¹ in which the EU agrees Œto examine and where necessary take measures aimed
at ensuring continued viability of (ACP) banana export industries aimed at ensuring
continuing outlet for their bananas on the Community Market¹. This does not remove the
uncertainties attendant on the WTO ruling and the negotiations still in train, but it
preserves the EU commitment for access for ACP bananas and reverses the EU¹s initial
refusal to have the matter dealt with at the level of ŒProtocol¹, but only of a
ŒDeclaration¹.

Rum. A package of measures has been secured to help ACP producers (mainly
Caribbean) in the transition from 'bulk' to 'branded' rums consequent on the 1997 EU/US
'White Spirits (zero for zero) Agreement'. The joint Declaration secured in December has
been concretised by agreements on machinery to ensure rumspecific funds to implement
the Declaration. Caribbean producers (WISPRA) contributed significantly to these
results.

Rice. While the EU remained adamant in its refusal to entertain any increase in the quota
or decrease in the levy, they have agreed in a Joint Declaration on Rice to essentially the
same financial arrangements for support of the industry as were secured in December for
rum. ACP rice producers (essentially Guyana and Suriname) have expressed their
satisfaction with the outcome.

Tourism. At Caribbean insistence, specific language has been agreed acknowledging for
the first time the sector as an area for special assistance. The agreed paragraphs have been
inserted in the Framework Agreement itself rather than relegated to the Compendium
which is a new instrument linked to the text, but not part of it, and designed to contain
operational details with the advantage of being more easily updated than the text by
decision of the Joint Council.

Intellectual Property Rights, Fishery Issues, Food Security and Rules of Origin. A
Declaration of major importance was issued preserving the principle of Non-
Discrimination between ACP states as an overall EU commitment, notwithstanding
special arrangements, in the context of the agreement of multilaterally, in favour of
LDCs.

Export Compensation. The agreement provides for compensation for shortfalls in

export revenue. For certain states (including island states and landlocked states) the
threshold for activating the facility is a 10% shortfall (down from the EU proposal of
15%).

Duration
The new agreement will be in force for 20 years, an effective doubling of the level of the
existing Lomé IV Convention; whereas earlier Conventions lasted only 5 years. Almost
as important is the understanding reached that even this duration of 20 years does not
constrain the level of alternative trade arrangements to be negotiated during the
preparatory period, starting therefore in 2008.

Financing
Financial Envelope. The European Development Fund (EDF) envelope agreed to was
13.5 billion Euros, in addition to European Investment Bank (EIB) funds of 1.7 billion, a
total of 15.2 billion Euros. There is, additionally, approximately 9 billion Euros of
uncommitted EDF funds which will carry over the new 9th EDF. The EU also heavily
underlined its determination to quicken the pace of disbursement through its new
programming, which could materially enhance ACP benefits.

Investment Facility. This remains one of the more innovative mechanisms in the new
Agreement. The arrangement will be managed by the EIB and available to ACP private
sector entities, including 'commercially run public sector entities, including revenue
generating economic and technological infrastructure critical for the private sector'.
However the amount reserved for this facility is small‹2.2 billion‹with an interest rate
subsidy that must not exceed 3%.

WTO Waiver
It is arranged that the agreed text will be forwarded prior to 29 February to the WTO by
the EU with a request for a waiver in relation to the rollover arrangements of the trade
regime during the preparatory period. The EU also confirmed that it is putting in place
arrangements to ensure that there would be no disruption in EU customs arrangements for
access of ACP products under the new arrangements, notwithstanding the gap between
the end of Lomé IV and the securing of the waiver.

Cuba
Although not a matter for the negotiations themselves, the ACP advanced the possibility
of Cuba becoming a signatory to the new Agreement. A resolution sponsored by the
Caribbean and adopted by the ACP as a whole has been transmitted to the EU and
political action now needs to ensue with a view to accelerating procedures to enable this
to happen.

Signing
The signing of the new agreement is expected to be in late May and the venue will be
Fiji.

Sequel
The next step is the beginning of the process of developing a strategy for the Caribbean
and the ACP as a whole in its approaches to the Preparatory Period bearing in mind that
negotiations for alternative trade arrangements will begin in September 2002.

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Recipients of RNM UPDATE are authorized to forward this newsletter to other

addresses.

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Henry S. Gill
Communications Director
Caribbean Regional Negotiating Machinery (RNM)
"Windmark", First Avenue, Harts Gap,
Hastings, Christ Church, Barbados
Tel: (246) 430-1673
Fax: (246) 228-5264
http://www.caribrnm.net

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RNM UPDATE
February 16, 2000

Prepared by the Communications Division of the Caribbean Regional Negotiating

Machinery (RNM), this electronic newsletter focuses on the RNM, trade negotiation
issues within its mandate and related activities.

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- RNM PROFESSIONAL TRAINEES PROGRAM UNDERWAY

- FTAA NEGOTIATIONS UPDATE
- UPCOMING BILATERAL TALKS
- REGIONAL TRAINING WORKSHOP FOR BELIZE

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RNM PROFESSIONAL TRAINEES PROGRAM UNDERWAY

Implementation of the first phase of the RNM Professional Trainees (PT) Program is
underway with six Trainees from CARICOM countries taking up assignments in different
countries during the month of January. Trainees were selected from a long list of
applicants by a panel comprising RNM personnel and the Head of the UWI Consortium
Graduate School at Mona, Jamaica.

This fellowship program is aimed at enhancing the Region's trade negotiations capacity
by exposing Trainees to a 10-month apprenticeship comprising: (a) an assignment at an
RNM (or affiliated) office where the Trainee would be guided in trade policy and
negotiations-related research and be exposed to a negotiations environment; (b)
participation in at least one major trade policy/negotiation course; (c) a short attachment
of variable duration (1-3 months) at an international institution actively involved in trade
negotiations. In addition, it is hoped to expose PTs to an actual international trade
negotiation (for example, within the FTAA or WTO contexts).

Trainees have been assigned individually to the RNM offices in Bridgetown, Kingston
and Washington D.C. (two in the latter), as well as to Geneva where the RNM currently
maintains a presence, and to the Port-of-Spain office of the Inter-American Institute for
Co-operation in Agriculture (IICA), which shares a collaborative arrangement with the
RNM. In June-July two more Trainees will commence their assignments.
The present PT Program is one of five elements being implemented within the framework
of the RNM's CARICOM Trade Project (CTP), which is funded through a grant from the
U.K. Department of International Development (DFID). Eight fellowships are available
over the two-year life of the CTP.

The RNM expects to increase substantially the availability of Professional Trainee

fellowships in the course of 2000, as a result of indications from international donors of
their willingness to provide funding for this purpose.

FTAA NEGOTIATIONS UPDATE

Pursuant to the mandate provided by Ministers at the Toronto Ministerial in November

1999, a new phase of FTAA negotiations commenced in January 2000, with the specific
goal of producing consolidated texts by March 2001 for submission to the Ministers in
Buenos Aires. While acknowledging that the texts emanating from each of the nine
negotiating groups will have varying degrees of consensus, Ministers felt that it was
crucial to move forward in order to ensure that the process remains dynamic.

Thus far four negotiating groups and two consultative groups have met in Miami and
have agreed on their work programme for the next twelve months. It is expected that
developments in the WTO discussions, particularly in the area of Services and
Agriculture, will have an effect on the negotiations within the FTAA. The process will
therefore have to be conducted within the framework of developments taking place at the
wider multilateral level.

CARICOM has also assumed the Chairmanship of the Negotiating Group on Investment
(NGIN), in the person of Mr. Winston Dookeran, the Governor of the Central Bank of
Trinidad and Tobago. Mr. Dookeran, along with a support staff from the Tourism and
Industrial Development Company of Trinidad and Tobago Ltd. (TIDCO) and the
Ministry of Trade and Industry, formally began his duties yesterday, February 15, 2000 in
Miami. In addition to the Chairmanship of the NGIN, CARICOM also holds the Vice
Chairs for the Negotiating Group on Market Access (NGMA) and the Consultative Group
on Smaller Economies (CGSE). Mr. Samuel Chandler, Permanent Secretary in the
Ministry of Foreign Trade of Barbados has been appointed as the Vice Chair of the
NGMA and Ambassador Leonard Archer of the Bahamas has been appointed as Vice
Chair for the CGSE.

In keeping with the agreement to hold a special Trade Negotiations Committee (TNC) to
deal with the issue of smaller economies, RNM's Washington Office has begun to
prepare, for submission to the Heads of Government and Ministers of Trade, specific
measures in each issue area which CARICOM will seek to negotiate in the context of the
FTAA. It is likely that CARICOM will propose that the special TNC on smaller
economies coincide with the holding of the TNC in Barbados scheduled for mid-2000.
UPCOMING BILATERAL TALKS

A Working Meeting of CARICOM-Cuba Trade Officials will be held in Kingston,

Jamaica, on February 24-25, in order to advance preparations for the negotiation of a
CARICOM-Cuba Trade and Economic Cooperation Agreement. The RNM was
mandated to co-ordinate a small working group in order to design the Region's approach
to the proposed negotiation and has taken steps (outlined in RNM UPDATE February 4,
2000) in this regard. The Working Meeting will inter alia review the draft agreement
proposed by Cuba and consider approaches to developing two-way trade in goods and
services, as well as examine the way forward and adopt a plan of action. The meeting will
be preceded by a CARICOM Preparatory Meeting on February 23.

This meeting will be followed on February 26-27 by the Second Meeting of the
CARICOM-Dominican Republic Policy Group to conclude the Negotiations on the Plan
of Action Annexed to the Agreement Establishing the Free Trade Area between the
Caribbean Community and the Dominican Republic. The Draft Agenda indicates among
the items for discussion the Criteria to be applied under Rules of Origin, the Special
Safeguard Mechanism to apply to certain agricultural products, treatment to be accorded
goods produced in free trade zones, treatment that trade agents will receive, adoption of
arrangements to govern Temporary Entry of Business Persons and other Services-related
issues, as well as arrangements to deal with Government Procurement. The Meeting will
be preceded by a CARICOM caucus on February 25.

The RNM will be represented at the Sixth Meeting of the CARICOM-Cuba Joint
Commission to be held in Santiago de Cuba on 28-29 February. The Agenda includes a
Review of Agreements adopted at the previous meeting of the Commission in such areas
as Trade, Transport, Agriculture and Fisheries, Human Resource Development, Science
and Technology, as well as Natural Disasters and Meteorology; in addition to an
exchange of views on such topics as the ACS, Caribbean Follow-up to the EU/Latin
American Summit, preparations for the South Summit and Issues of concern to
CARICOM and Cuba in the WTO.

REGIONAL TRAINING WORKSHOP FOR BELIZE

The RNM is organising a Training Workshop on Market Access and Rules of Origin to
be held in Belize from March 21-24. The Workshop is aimed primarily at senior officials,
privates sector representatives and representatives of regional agencies. It will provide
participants with a broad overview and understanding of issues relating to market access
and rules of origin in the context of international trade.

Detailed Terms of Reference include the definition and evaluation of the different
methods and modalities for the reduction of tariffs in any programme of trade
liberalisation; detailed review and examination of the methods for dismantling Non-Tariff
Barriers, including the process of tariffication involving the computation of tariff
equivalents; identification and evaluation of the various Rules of Origin Regimes that
could be adopted in a Free Trade Agreement; examination of the critical trade policy
issues arising in the FTAA Market Access negotiations; examination of the issue of
special and differential treatment for developing countries as it relates to Market Access
provisions in FTAs and in Multilateral Agreements.

This Workshop is the third in a series of training activities devoted to important trade
negotiation subjects. Previous Workshops were held on Government Procurement in
Guyana in September 1999 and on Intellectual Property Rights in St. Lucia in December
1999.

These Training Workshops are being carried out within the framework of the
CRNM/IDB Regional Technical Cooperation Project, which is funded by an IDB grant
(including a contribution from the Japanese Special Fund) and by local counterpart
funding from CARICOM member states. The objective is to provide CARICOM
countries with the ability to participate effectively in, and negotiate, multilateral, regional
and bilateral trade and economic initiatives, by improving both the skills and knowledge
base available to the region in matters relating to external trade negotiations.

Persons wishing further information on the Workshop or the CRNM/IDB Project in

general may contact the Project Manager, Mrs. Jacqueline Wade, at jwade@caribrnm.net

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Recipients of RNM UPDATE are authorised to forward this newsletter to other

addresses. We welcome suggestions for additions to our mailing list. If, on the other
hand, you wish to be removed from the list, kindly inform us.

---------------------------------------------------------------------------------------------
Henry S. Gill
Communications Director
Caribbean Regional Negotiating Machinery (RNM)
"Windmark", First Avenue, Harts Gap,
Hastings, Christ Church, Barbados
Tel: (246) 430-1673
Fax: (246) 228-5264
http://www.caribrnm.net
RNM UPDATE
February 22, 2000

Prepared by the Communications Division of the Caribbean Regional

Negotiating Machinery (RNM), this electronic newsletter focuses on the
RNM, trade negotiation issues within its mandate and related activities.

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Special Issue: Small States and Globalisation

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A global conference held in London on February 17-18, under the

chairmanship of Prime Minister Owen Arthur of Barbados, marks an
important milestone in the struggle by small states to get the international
community to recognise that smallness, vulnerability and volatility are for
them not abstract matters, but are major impediments to their development
and constitute a sound basis for claiming special and differential
treatment.

At the opening of the conference the Barbados Prime Minister stated: "this
is the first time that [the international community] has shown the political
will to devise specific measures to deal with those vulnerabilities... The
timeliness and importance of this initiative on small states...cannot be
emphasised enough. We are now at a cross roads where the successful
integration of small states into the global economy is absolutely necessary
if most of them are not to become failed societies and historical footnotes" .

The Global Conference on the Development Agenda for Small States, as it

is officially termed, is the result of an initiative by Commonwealth Heads
of Government in establishing a Ministerial Mission on the challenges
facing small states. The Mission, led by Prime Minister Arthur, met with
the President of the World Bank in July 1998, with the result that the Bank
and the Commonwealth Secretariat established a Joint Task Force on
Small States.

The purpose of the Task Force was to assess Bank instruments for small
states and consider alternatives and adaptations to address these states'
unique problems, which include their vulnerability to marginalisation,
natural disasters and external economic shocks. A subsequent Interim
Report was prepared and considered by the Commonwealth Heads of
Government in November 1999 in Durban, South Africa. The London
conference was convened as part of the process for preparing the final
draft report of the Task Force, which is to be considered by the World
Bank¹s Development Committee in April 2000.
 The Caribbean had engaged in an intensive process of deliberation on the
Interim Report of the Task Force, and submitted a comprehensive set of
comments on the report which were circulated at the conference, where
they were considered and debated by a range of stakeholders. The RNM
has been actively involved in this process pursuant to a mandate in this
respect from the Heads of Government of the Caribbean Community.

The process to date has identified a set of key policy issues that call for a
continuation of some current action, the introduction of proposed new
initiatives and the dynamic development of an ongoing agenda of future
work. These are summarised under the following four headings:

1. Tracking volatility, vulnerability and natural disasters

• Recently concluded work of the Commonwealth demonstrates that most

small states are more vulnerable than larger developing country
counterparts, and the analysis proposes that this vulnerability should be
taken into account in programmes of assistance provided by the
multilateral development, finance and trade institutions.
• Small state vulnerability and special characteristics, coupled with weak
private sector capacity, contribute to perceived riskiness and difficulty in
attracting private investment, necessitating a relatively high level of
continuing official assistance and the continued application of flexible
graduation procedures at the multilateral institutions.
• In view of strong risks and the consequences of prevalent natural disasters,
new approaches developed by the World Bank to disaster mitigation and
insurance in the Caribbean, as well as the intention to co-operate in
developing and supporting risk pooling arrangements, were welcomed.
• Many small states remain dependent on commodity production and the
Bank was encouraged to further work on commodity price risk
management and to pay attention to issues and commodities of relevance
to small states, bearing in mind that different kinds of risks require a
combination of different approaches.
• Many small states have vulnerable physical environments as well as
vulnerable economies, and it is crucial to ensure sustainable development
through protection fo the environment as well by supporting small states
with both advice and finance.

2. Strengthening Capacity

Small state assistance must address their problems of limited capacity,

both in the public and private sectors, in the context of which some of the
issues to be highlighted are:
• The continuing need to accumulate knowledge about policies and
approaches that work and do not work for small states, and to share
knowledge and experiences among states within and across regions
through, for example, the Commonwealth Secretariat's dedicated small
states web site.
• Tackling limited capacity through regional approaches wherever feasible,
which requires donors to enhance their lending and non-lending services
to encourage and support such co-operation, particularly through assisting
regional organisations dealing predominantly with small states.
• Limited public sector capacity results in inadequate participation in
international trade negotiations, a problem which can be tackled through
various forms of assistance and support from multilateral bodies and
donors, including aids such as the recent creation of an Advisory Centre
on WTO Law and eventual representation innovations which would allow
small states to be represented collectively at discussions where they so
wish.
• Multilateral institutions can help in dealing with utilities' regulation and
competition policy, issues of considerable importance given the
prevalence of monopoly and oligopoly suppliers in small states.
• In order to minimise the burden of donor requirements on limited
administrative capacity, donors are urged to join together country by
country, in country-led partnerships to align their objectives, rationalise
their support and simplify their procedures. Helping to build country
capacity and forge closer working relationships with regional
organisations would help in this regard.

3. Issues of Transition to the Developing Global Trade Regime

• The work of the Task Force has shown that while small states need to
adapt and transform their economies to benefit from globalisation and the
increasingly global trading environment (with trade policy regarded as
part of sound economic development strategy), many small states will face
special difficulties in making this transition and will need time to adjust to
changes in the external trade environment and to sequence changes in their
economies. While it would be hardly appropriate to accord them LDC
treatment, small vulnerable states merit special consideration in dealing
with crucial areas of economic transformation, including length of
transition period. The WTO also needs a fundamental review of its current
accession process as it affects small states and the associated costs for
these countries.
• There was recognition of the major fiscal consequences of trade
liberalisation for small states and a sense of encouragement that the IMF is
taking a pragmatic approach to advice being given to small states that risk
losing a major source of fiscal revenue with falling tariffs, agreeing that
for some open, small economies low, flat-rate tariffs may be a component
 of an efficient tax system. Small states will need technical assistance from
the IMF and others in tax administration.

4. New Opportunities and Challenges from Globalisation

• As they seek to reposition their economies some small states will need
external support and advice regarding enabling environments and the right
kind of public policy support to encourage new activities, including
service sector ones.
• The right to compete in international financial markets through the
provision of onshore and offshore financial services was recognised.
Amidst concern about OECD positions on Harmful Tax Competition and
on Financial Stability, the OECD's indication of willingness to engage
constructively with small states on tax competition issues was welcomed,
in view of the importance of financial services to small economies.
• Finally, it was affirmed that work on the opportunities that information
technology and electronic commerce can bring to small isolated states
suggests that these technologies can be a major source of help in their
development, but many small states need support in developing the correct
public sector infrastructure and regulatory framework for high quality/low
cost telecommunications services in order to make these opportunities
reality.

It was concluded that as multilateral institutions and donors co-operate in helping to take
this work programme forward, they will need to continue to be guided by the views and
experiences of small states themselves, as the Task Force itself has been. The
continuation of the Task Force's work should be but a stepping stone to continued
attention to small state issues on the part of the international development community.

--
Henry S. Gill
Communications Director
Caribbean Regional Negotiating Machinery (RNM)
"Windmark", First Avenue, Harts Gap,
Hastings, Christ Church, Barbados
Tel: (246) 430-1673
Fax: (246) 228-5264
http://www.caribrnm.net
RNM UPDATE
March 17, 2000

Prepared by the Communications Division of the Caribbean Regional

Negotiating Machinery (RNM), this electronic newsletter focuses on the
RNM, trade negotiation issues within its mandate and related activities.

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Special Issue: SERVICES TRADE NEGOTIATIONS

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Caribbean countries are in fact the most service-dependent of all

developing countries in the Western Hemisphere, based on indicators such
as the sector's contribution to gross national product, employment and
overall exports (that is, of goods and services). The traditional focus on
trade in goods may obscure the fact that, between 1989-97, CARICOM's
service exports averaged approximately 54 percent of overall exports.
Omitting Trinidad and Tobago, whose energy-based economy distorts the
regional picture somewhat, the CARICOM average rises to 61 percent.
These figures compare with a 23 percent average for Latin America and
the Caribbean as a whole over the same period, and 24 percent for Central
America and service-reliant Panama taken together.

Though tourism accounts for the bulk of CARICOM services exports,

diversification has been taking place, and the growing importance and
potential of other sub-sectors --financial services, information and
professional services, transportation, telecommunications, entertainment
services, health services, ship registry and others-- is now well recognised.
Accordingly, the outcome of international negotiations will have a
significant impact on the sector's future.

RNM ACTIVITY IN THE FIELD OF SERVICES

Since the start of the current year the RNM has been devoting
considerable attention to the subject of international trade negotiations in
services on various fronts. The subject is still a relatively "new issue" on
the international negotiating agenda and our region's experience in this
regard is limited. Yet the implications of such negotiations are far-
reaching given the importance of the sector in its own right and linkages
with the goods sector. In this connection four aspects of RNM activity are
summarised:

1. WTO Negotiations

The agreement reached at the end of the Uruguay Round of multilateral

trade negotiations included a "Built-in Agenda" for future negotiations,
which included the subject of Services. This means that, nothwithstanding
the failure of last December's Seattle Ministerial to agree on a Declaration
to launch a new round of negotiations, a mandate exists to continue these
negotiations. This was due to the fact that not all services-related issues
had been resolved by the end of Uruguay Round and also because only
limited commitments were undertaken by most countries in their
schedules.

Accordingly, on February 25 the special session of the WTO Services

Council formally launched the new negotiations on Services. Members
agreed to work in the next few months on guidelines and procedures for
the new negotiations. Overall, the negotiations will comprise two phases:
the "rules-making" phase during which Members will negotiate new rules
for services on subsidies, safeguards and government procurement; and
the "request and offer" phase, where Members will negotiate further
market access. While work in the first phase will mostly take place in the
existing services committees - mostly in the Working Party on GATS
rules - market access negotiations will take place in special sessions of the
Services Council.

Work continues apace in different WTO bodies. The Committee on

Specific Commitments is currently drafting procedures for the certification
and modification of services schedules and continues its work on the
classification of services. The Working Party on Domestic Regulations
carries on its task of drafting disciplines for all services sectors. The week
of 10 April was agreed as the date for the next round of services meetings.

2. FTAA Negotiations

The sixth meeting of the FTAA Negotiating Group on Services (NGSV)

took place in Miami, Florida from February 29th to March 3rd, 2000 with
delegates from twenty-five countries in attendance, including
representatives of the Bahamas, Barbados, Jamaica, St. Lucia and Trinidad
& Tobago. Mrs. Pamela Coke Hamilton represented the RNM as
Technical Advisor.

The CARICOM group held three caucuses to discuss negotiating strategy,

positions and future action to be taken by CARICOM countries in order to
be adequately prepared to negotiate. The CARICOM representatives also
met with the new Chairman of the Negotiating Group on Services, Mr.
Peter Allgeier of the United States. CARICOM representatives took the
opportunity to raise the issue of smaller economies and their treatment in
the NGSV.

In addition discussions were held on the outstanding technical assistance

projects which remained to be carried out in CARICOM countries,
particularly with respect to the completion of the Questionnaire on
Measures Affecting Trade in Services, which had previously been
circulated. In this regard, it was agreed that the UN Economic
Commission for Latin America and the Caribbean (ECLAC) should
ensure that its planned training seminar for CARICOM officials would be
held before the deadline date of June 30, 2000 for submission of responses
to the Questionnaire. Discussions are underway between the RNM/IDB
Project Manager and ECLAC representatives concerning the possibility of
holding this seminar in May. It is hoped that CARICOM countries will be
fully represented at this seminar. Maximum benefit will be derived if
officials with direct responsibility for the completion of the questionnaire
are sent.

Finally, CARICOM presented its views on the work program for the group
over the next year, highlighting the fact that there were issues of great
importance to CARICOM countries which needed to be addressed in the
NGSV before moving to the actual preparation of text. Included among
these issues was the question of Movement of Natural Persons, Mobility
of Professional Service Suppliers, Recognition of Professional
Qualifications, Smaller Economies, and Domestic Regulations.

3. Reflection Group Meeting on Services

As part of an ongoing effort to formulate the Region's Services negotiating

strategy, the RNM will be holding a High-Level Reflection Group
Meeting on Services in Nassau on the weekend of March 25-26th. The
Reflection will be inaugurated by the Rt. Hon. Hubert Ingraham, Prime
Minister of the Commonwealth of the Bahamas, and will be attended by
the RNM's Chief Negotiator Sir Shridath Ramphal and Chief Technical
Adviser Sir Alister McIntyre.

The Reflection will bring together regional and international expertise,

including government officials and trade negotiators; academics from the
University of the West Indies and other institutions; senior officials of the
CARICOM and OECS Secretariats, UNCTAD, the WTO, World Bank
and OAS Trade Unit; as well as independent consultants.
The agenda comprises panels on the following themes: Evaluation of the
General Agreement on Trade in Services (GATS); GATS 2000 and New
Directions in Services Trade Liberalisation; the FTAA Process and
Services in a Post-Lomé Arrangement; Services Liberalisation and
Regulatory Reform; the Services Sector in the Caribbean; as well as
sector-specific focus on telecommunications, maritime transport, financial
services and insurance, entertainment, information services and e-
commerce. It is expected that discussions will result in the product of a
document outlining negotiating strategy proposals.

The holding of the Services Reflection has been facilitated through

support from the RNM's CARICOM Trade Project, which is funded by the
UK Department for International Development (DFID).

4. CRNM/IDB Training Workshop on Services

Further activity is being planned with the framework of the CRNM/IDB

Project in the form of a training seminar on Services, which will take place
in May in Barbados. The workshop will target government officials and
private sector participants. It will be the fourth within the this Project (a
Training Workshop on Market Access and Rules of Origin will be held in
Belize from March 21-24; see RNM UPDATE February 16, 2000). Details
of the Services workshop will be communicated in due course. These
workshops are supported jointly by IDB and counterpart regional
financing.

ANTIGUA AND BARBUDA'S PRIME MINISTER ALLOCATED

CARICOM SERVICES PORTFOLIO

The recently concluded Eleventh Inter-Sessional Meeting of the

Conference of Heads of Government of the Caribbean Community, held in
Basseterre, St. Kitts and Nevis, on 13-14 March, in keeping with an earlier
decision in the Consensus of Chaguaramas of October 1999 to constitute a
quasi-cabinet of individual Heads of Government in order to spearhead
action in sectors critical to the Region's integration and its vision of
development into the twenty-first century, has agreed to the distribution of
additional portfolios. In this regard Prime Minister Lester Bird has been

given the portfolio of Services (including information technology and

telecommunications).

According to a press release issued by his office dated 16th March, Prime
Minister Bird has commented that "Services including information
technology and a knowledge-based society is the path to future economic
 development globally and for the region. In this connection, I am alert to
the great responsibility that has been given to me".

Mr. Bird has indicated that he will be "establishing a small, professional

unit of persons drawn from Caribbean countries to help him formulate
policy guidelines and undertake studies of key sectors". He said that the
unit will benefit from the "negotiating expertise of the Caribbean Regional
Negotiating Machinery (RNM)", but the initial work will have to be done
by the unit".

Prime Minister Bird acknowledged that in the area of Services, there is

much to be done "to ensure that the CARICOM area modernises quickly
and has the capacity to compete at a global level with other countries and
regions of the world".

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Recipients of RNM UPDATE are authorised to forward this newsletter to

other addresses. We welcome suggestions for additions to our mailing list.
If, on the other hand, you wish to be removed from the list, kindly inform
us.

------------------------------------------------------------------------------------------

Henry S. Gill
Communications Director/
Team Leader CARICOM Trade Project,
Caribbean Regional Negotiating Machinery (RNM)
"Windmark", First Avenue, Harts Gap,
Hastings, Christ Church, Barbados
Tel: (246) 430-1673
Fax: (246) 228-5264
http://www.caribrnm.net

* * *

RNM UPDATE
March 22, 2000

Prepared by the Communications Division of the Caribbean Regional Negotiating

Machinery (RNM), this electronic newsletter focuses on the RNM, trade
negotiation issues within its mandate and related activities.
************************************************************

CARICOM-DOMINICAN REPUBLIC FREE TRADE AGREEMENT

REACHED

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On the night of Sunday March 19 representatives of the Caribbean

Community and the Dominican Republic finalised three days of intense
negotiations in Basseterre, St. Kitts and Nevis, with agreement on the
specifics of a bilateral free trade agreement (FTA).

The CARICOM side was led by Mr. Edwin Carrington, Secretary-General

of the Caribbean Community and included representatives from Dominica,
Guyana, Jamaica, St. Kitts and Nevis, Trinidad and Tobago, as well as the
Caribbean Regional Negotiating Machinery (RNM).

H. E. Frederic Emam-Zade, Vice-Minister of Foreign Affairs and

Ambassador-in-Charge of Trade Negotiations, led the Dominican
Republic's team.

This achievement culminates 16 rounds of negotiations over nearly four

years since the initiation of bilateral talks in Kingston, Jamaica, in July
1997. The entire process can be divided into two stages. The first resulted
in an agreement to create a Free Trade Area that included Trade in Goods
and Services, Investment and Economic Co-operation.

This initial agreement, which was signed on August 22, 1998 by Prime
Minister Kenny Anthony of St. Lucia (on behalf of the Community) and
President Leonel Fernández, constituted the framework within which
specific elements were to be negotiated subsequently, for example,
product lists of goods that would be liberalised immediately on the entry
into force of the agreement, those that would be liberalised on a phased
basis and those that would be granted Most-Favoured-Nation (MFN)
Treatment, that is the same treatment enjoyed by all other WTO members;
rules of origin and the status of free zone products; government
procurement rules; the use of trade agents in the Dominican Republic, and
so on.
For this reason a Plan of Action was annexed to the 1998 Agreement,
defining the targets for the second (more technically difficult) stage of
negotiations. The agreement reached at Basseterre is in essence, therefore,
a Protocol (with its Attachments) to implement the previously signed
FTA. The new texts were initialled by the leaders of the CARICOM and
Dominican Republic Negotiating Teams and appear in an Aide Memoire
issued jointly.
The Protocol contains inter alia Articles on Market Access with Respect
to Trade in Goods; Treatment of Goods and Services Produced in Free
Trade Zones (FTZs)/Export Processing Zones (EPZs); Special
Arrangements for Trade in Selected Agricultural Products; Application of
Dominican Republic Law 173 to CARICOM Entrepreneurs; Market
Access with respect to Trade in Services; Reciprocal Promotion and
Protection of Investment; Government Procurement; and Temporary Entry
of Business Persons. Six Attachments refer to the treatment accorded to
different lists of goods, rules of origin criteria and the Certificate of
Origin, the List of Agricultural Products subject to Special Arrangements
and an Annex on Temporary Entry of Business Persons.

The MFN list, one of the main bones of contention throughout, has been
considerably reduced. It comprises around 50 products/categories, of
which about 19 were submitted by the Dominican Republic. These are the
goods that will not receive special treatment under the FTA. They include
soft drinks, chocolate products, cosmetics, juices, some agricultural goods
(including soaps) and oils and fats.

Products eligible for phased reduction of the MFN Duty will face zero
duty by 1 January 2004. They comprise about 20 product headings, and
include such items as anthuriums, ginger lilies and orchids; coffee;
sausage; bacon; pasta; biscuits; jams, jelly, passion fruit juice; rum;
essential oils, perfumes and toilet waters; boxes and containers; tableware
and plastic items; certain footware items; and mattresses. The rate at
which duties are phased out will depend on the date of entry into force of
the agreement.

The tariff on all other items will be eliminated immediately.

Other salient aspects of the accord are that items produced in Free
Zones/Export Processing Zones shall be imported within the FTA at the
MFN rate unless otherwise agreed at some later stage, and the fact that
highly restrictive origin rules on apparel within Chapts. 61 & 63 were
established. However no agreement was reached regarding apparel Under
Chapter62 (knitted items).

Indeed, a number of issues are still unresolved. Consequently, both sides

agreed that in advance of the entry into force of the Agreement,
discussions would take place at the political level to resolve outstanding
matters concerning the treatment of certain waters, including mineral
waters and aerated waters containing sugar and other sweetening matter or
flavoured, and certain other non-alcoholic beverages.
With respect to assembly goods the Parties have agreed to develop, within
12 months of the entry into force of the Agreement, criteria which would
be applicable under the Rules of Origin, pending which MFN rates will
apply. This will be processed through the Joint Council established to
supervise the implementation and administration of the 1998 Agreement.

In addition the schedule of Special Arrangements for Trade in Selected

Agricultural Products is to be completed. This category is included in
recognition of the need to avoid adverse impact on the demand for local
production resulting in serious losses to producers/farmers, and having
regard to the seasonal and perishable nature of agricultural products. The
Parties have therefore agreed with respect to listed products eligible for
duty free treatment, that they may apply the MFN rate of duty during the
period identified in the schedule.

Quite apart from such unresolved issues, the agreement itself defers the
negotiation of specific commitments on Trade in Services for a later stage.
However a timetable has been established, including the commencement
"without delay" of the exchange of information on the services sector of
each Party and exchanges of views on possible elements for a service
regime, followed by the drafting of the relevant documents. An indicative
date of 1 January 2001 has been set for the commencement of negotiations
for the establishment of the services regime of the FTA with an indicative
completion target of 30 June 2001. In this regard they have agreed to pay
special attention to Tourism and Entertainment; FTZs/EPZs; Financial
Services; Professional Services; Design; Construction (skilled workers);
Informatics; Telecommunications; and Transportation.

The Protocol will be signed at a date and venue to be agreed after the
Spanish and English texts are reconciled, and the agreement will
eventually enter into force when internal procedures of both sides have
been completed. The Dominican Republic indicated at the negotiating
table that it was hopeful the agreement could gain congressional
ratification by September, and that it would definitely do so by January
2001.

Through this agreement the Caribbean Community has committed itself to

its first full-fledged, bilateral free trade agreement of a reciprocal nature.
An important feature is that the Less Developed Countries of CARICOM
shall not be required to extend to any imports from the Dominican
Republic entering their territory treatment other than the MFN rate of duty
up to the year 2005. This provision will be reviewed by the Parties in the
year 2004. The CARICOM-DR agreement is substantially broader in
range of products and disciplines than CARICOM's only other existing
reciprocal agreement, which was concluded with Colombia based on a
 limited "positive" product list. (This agreement is the Dominican
Republic's second full-fledged bilateral following its FTA signed on April
16, 1998 with five Central American countries, which has not yet entered
into force).

When implemented, the Caricom-DR FTA will allow CARICOM

exporters to enjoy unrestricted, preferential access to the market of the
Dominican Republic for nearly all items exported and CARICOM
consumers will be able to obtain products originating in the Dominican
Republic more cheaply. Exporters will access a market that is in fact
numerically larger than the entire CARICOM market (Haiti excluded) of
around eight million consumers; it is a market with a high demographic
growth rate. In addition rapid tourism growth in the Dominican Republic
has been been fuelling internal demand, including for imported products.
Tourism arrivals are expected to approach 2.5 million in 2000. The
Dominican economy has, moreover, been the fastest growing in this
Hemisphere for the past few years with average growth rates of 6-7 per
cent annually. In 1999 the Gross Domestic Product grew 8.3% compared
to 1998. The governor of the Central Bank, Hector Valdez Albizu, has
recently forecast that the Dominican Republic's economy will grow 6-
6.5% this year. Inflation has been kept low and is expected to remain
within the 4-4.5% range.

-----------------------------------------------------------------------------------------

Recipients of RNM UPDATE are authorised to forward this newsletter to other

addresses. We welcome suggestions for additions to our mailing list. If, on the other
hand, you wish to be removed from the list, kindly inform us.

------------------------------------------------------------------------------------------

Henry S. Gill
Communications Director/
Team Leader CARICOM Trade Project,
Caribbean Regional Negotiating Machinery (RNM)
"Windmark", First Avenue, Harts Gap,
Hastings, Christ Church, Barbados
Tel: (246) 430-1673
Fax: (246) 228-5264
http://www.caribrnm.net