RNM UPDATE 0320

November 6, 2003

Prepared by the Communications Division of the Caribbean Regional

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

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- TOP OFFICIAL ADVOCATES ‘PERMANENT’ REGIONAL TRADE

NEGOTIATING BODY

- CARICOM HEADS TO MEET

- OECS HEADS MEETING SLATED

- GUYANA’S TRADE POLICY REVIEW: CALL FOR ‘POLICY SPACE’

- ARGENTINA PRESSED TO DISTANCE ITSELF FROM MERCOSUR

- TRADE IN FOCUS AT FINANCING FOR DEVELOPMENT MEET

- LONDON AND BRUSSELS DIVIDED, LAMY ON DEFENSIVE

- UK DTI AND COMSEC ‘EXCHANGE BLOWS’

- WTO BRIEFING

- NEWS BRIEFS

- UPCOMING EVENTS

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TOP OFFICIAL ADVOCATES ‘PERMANENT’ REGIONAL TRADE NEGOTIATING

BODY

(ALTOS FUNCIONARIOS ABOGAN POR UN CUERPO ‘PERMANENTE’ DE

NEGOCIACIONES COMERCIALES PARA LA REGIÓN)

Under-Secretary for Trade in the Ministry of Foreign Affairs and Foreign Trade, Jamaica,
Ambassador Gail Mathurin, underlined the need for a permanent central negotiating
institution to undertake trade negotiations on behalf of the region. She called for a new
CARICOM treaty provision, in the Treaty of Chaguaramas, to facilitate the appointment
of such a ‘single’ body. Ambassador Mathurin said that existing regional structures were
not adequate to meet the growing demands of the region’s external trade negotiating
commitments. She made these comments at a forum, marking CARICOM’s Thirtieth
Anniversary, in Jamaica, late October.

In reference to the Caribbean Regional Negotiating Machinery (RNM), and its remit in
the region’s external trade negotiations, the top Jamaican trade official affirmed that
CARICOM needs to ‘go further in its institutional arrangements and governance
structure’. Regarding empowering the appropriate regional institution, she maintained
CARICOM should “devolve formal negotiating authority, via treaty obligation”. “Treaty
obligation is necessary to ensure that this function is enshrined in national legislation”,
she concluded.

CARICOM HEADS TO MEET

(JEFES DE ESTADO DE CARICOM A REUNIRSE)

The Ninth Special Meeting of the Conference of Heads of Government of CARICOM is

scheduled for Castries, St. Lucia, November 13 to 14.

The Conference will consider recommendations emanating from the Third Special
Meeting of the Council for Trade and Economic Development (COTED) on External
Negotiations regarding, inter alia: World Trade Organization (WTO), Free Trade Area of
the Americas (FTAA), and Africa Caribbean Pacific (ACP)–European Union (EU)
Economic Partnership Agreement (EPA) negotiations. An update on the Special Summit
of the Americas, set for January 12 to13, 2004, will also be provided.

Matters pertaining to the governance of the Community will be considered by the Heads,
as will those regarding the establishment of the Caribbean Court of Justice (CCJ).
Additional issues will be reviewed, including key requirements for the implementation of
the CARICOM Single Market and Economy (CSM&E).

OECS HEADS MEETING SLATED

(REUNIÓN DE JEFES DE ESTADO DE LA OECS)

The Thirty-Eighth meeting of the Organization of Eastern Caribbean States (OECS)

Heads of Government will take place in Castries, St. Lucia, November 10 to 11. The
meeting will review the status of WTO, FTAA, and ACP–EU EPA negotiations. It has
been reported that the focus of the Heads meeting will be on proposals for ‘repositioning’
the Castries-based OECS Secretariat. Several cooperation initiatives will also go before
the Heads for their consideration.

There is expected to be strong emphasis on: i) economic development/sectoral issues; and

ii) OECS Economic Union. The meeting will receive an update on the implementation of
the OECS Economic Development Strategy, a roadmap for the development of the sub-
region which was created through wide-ranging consultations with public, private sector
and non-governmental organizations in OECS Member States. The Heads will consider a
paper on completing a Customs Union in the OECS. They will also review a draft OECS
Common Citizenship Act, and an update on plans for a common OECS Passport.

The Heads of Government meeting, referred to as the OECS Authority, is the highest
decision-making body for the nine member grouping. OECS Member States include:
Anguilla, Antigua and Barbuda, British Virgin Islands, Commonwealth of Dominica,
Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.

GUYANA’S TRADE POLICY REVIEW: CALL FOR ‘POLICY SPACE’

(REVISIÓN DE LA POLÍTICA COMERCIAL DE GUYANA: LLAMADO A

‘ESPACIO POLÍTICO’)

A WTO Trade Policy Review (TPR) of Guyana was conducted by the TPR Body of the
WTO, October 29 to 31. It marked the first such exercise of its kind for Guyana.

According to a report by the Government on the trade policies and practices of Guyana,
the review process took place “at a time when crucial political steps are being taken to
improve Guyana’s integration in the global economy”. The report also underscores that,
as a small developing economy “exceptionally dependent on international trade as an
engine of economic growth”, Guyana is largely dependent on the production and export
of a narrow range of commodities; mainly, sugar (and sugar-based products), rice, gold
and bauxite. While the mining sector is important, agriculture plays a central role in
Guyana’s economy; much of the activity, in this regard, is in the production of rice and
sugar. The fisheries and forestry sectors are both also gaining increasing importance.

A report by the WTO Secretariat acknowledges that over the past fifteen years Guyana
has taken “important steps to liberalize its trade and investment regimes”. Its integration
into the global economy has been attributed to this. However, the report cautions that it
is incumbent Guyana undergo further steps to increase its competitiveness, in tandem
with diversifying its production and export base. It contends this approach has assumed
greater importance in a climate where trade preferences are being eroded. For its part, a
Guyana Government report - on the occasion of the TPR - argued for the preservation of
‘adequate policy space’ to support its development needs and safeguard its revenue base.
Allied to this was a call for differential and flexible treatment, to enable small developing
economies like Guyana to face adjustment and implementation costs that come with
liberalization.

ARGENTINA PRESSED TO DISTANCE ITSELF FROM MERCOSUR

(ARGENTINA PRESIONADA A DISTANCIARSE DEL MERCOSUR)

Argentina’s close relations with Brazil, especially in the area of external trade, have been
challenged. A former senior World Bank official, speaking at a recent forum in Buenos
Aires, called on Mercosur to be a ‘flexible’ and ‘pragmatic association’. He called on
Argentina to clearly define its interests that “are certainly not the same as those of
Brazil”. He also criticized “The Buenos Aires Consensus” that emerged following an
official two-day visit to Argentina, the week of October 13, by Brazilian President Luiz
Inácio Lula da Silva, who met with his Argentine counterpart, Néstor Kirchner.

The two leaders signed “The Buenos Aires Consensus” which constitutes a series of
twenty-two statements of principle centred on common economic, trade and development
visions. It serves to further solidify political and economic/trade ties between the two
countries.

TRADE IN FOCUS AT FINANCING FOR DEVELOPMENT MEET

(COMERCIO ES EL FOCO DURANTE REUNIÓN DE FINANCIAMIENTO AL

DESARROLLO)

A United Nations hosted High-level Dialogue on Financing for Development was

convened in New York, October 29 to 30. The Dialogue marks the first United Nations’
General Assembly follow-up to the International Conference on Financing for
Development. It is also the first global intergovernmental meeting since the convening of
the Fifth WTO Ministerial Conference in Cancún, Mexico, and the Bretton Woods
meeting, in Dubai, to consider trade policies in their financial and development context,
and issues of coordination and coherence therein. The Dialogue represents an important
element of a mandated intergovernmental process aimed at monitoring implementation of
the United Nations International Conference on Financing for Development and
deliberation of policies for financing development.

Addressing the General Assembly’s High-level Dialogue on Financing for Development,

October 30, United Nation’s Secretary-General, Kofi Annan, acknowledged a “mixed
report card” on development financing over the past 18 months. He was critical of
substantial net resource transfers from the developing world, in the face of modest gains
in official development assistance. The “overall result defies common sense”, said the
Secretary-General.
Speakers on the occasion of the High Level Dialogue acknowledged that the breakdown
of the Fifth WTO Ministerial Conference, along with “lagging development assistance
and abiding inequities in the international trade system” reflected the need for more
cooperation, dialogue and action. At a ‘Panel Discussion on Trade’, October 31, at a
meeting of the Fifty-eighth General Assembly, there was consensus that “trade was the
best tool for enabling nations to achieve the ‘Millennium’ anti-poverty targets” and
implement the ‘Monterrey Consensus’. Brazil’s Under-Secretary-General for Economic
and Technological Affairs, Ministry of External Relations, argued that agricultural trade
alone “would produce benefits of $400 billion by 2015, much more than those promised
by official development assistance and private resource transfers”. Fair policies were
also encouraged in the cotton trade; and their role in aiding cotton exporting developing
countries, particularly in Africa, highlighted. EU Trade Commissioner, Pascal Lamy,
who participated in the panel discussion suggested the Doha Round is “frozen”.

The United Nations International Conference on Financing for Development, that took
place in Monterrey, Mexico, March 2002, focused on key financial and development
issues. Trade represented one of the six central areas under consideration at the
Monterrey Conference. The Conference adopted the ‘Monterrey Consensus’.

LONDON AND BRUSSELS DIVIDED, LAMY ON DEFENSIVE

(LONDRES Y BRUSELAS DIVIDIDOS, LAMY A LA DEFENSIVA)

Following the break down of the WTO’s mid-term review of the Doha Round of
multilateral trade negotiations, this past September, EU Trade Commissioner, Pascal
Lamy, has come under fire from within the EU.

A confidential report, prepared by the United Kingdom’s Department of Trade and

Industry, which undertook a review of the reasons behind the collapse of the Fifth WTO
Ministerial Conference, blames Commissioner Lamy and his negotiating “brinkmanship”,
on behalf of the EU. The report also cites a less than satisfactory system of exchange of
information and dialogue between the European Commission and EU member states, at
Cancún. The strategy of the EU’s top trade negotiator has also come under scrutiny. The
report charges the trade chief made a “tactical misjudgement” in brokering certain
concessions at the ‘eleventh hour’ in Cancún.

Commissioner Lamy has dismissed the indictment. He rebutted, contending

communications in the EU system at Cancún had not failed. He argued further, the EU
had made significant concessions relative to other countries. Lamy asserted “we fed the
beast meat in Doha, meat in Cancún and meat in between. It didn’t work. We have not
seen much coming from other people’s pockets”.

However, reports of divisions between London and Brussels continue. UK Secretary of

State for Trade and Industry, Patricia Hewitt, has remained opposed to placing two
Singapore Issues – Investment and Competition policy – back on the agenda of global
trade talks. Commissioner Lamy has insisted, however, that the compromise he made –
on behalf of the EU - at the Fifth WTO Ministerial to ‘unbundle’ elements of the
Singapore Issues was done with a view to moving negotiations forward. Given the
outcome of the Ministerial, he has since “withdrawn the offer”. These divergent
positions in approach have called into question the degree of convergence amongst the
European Commission and EU member states on how to approach restarting negotiations.

UK DTI AND COMSEC ‘EXCHANGE BLOWS’

(INTERCAMBIO DE GOLPES ENTRE DTI Y EL COMSEC)

Reports reveal that the UK Department of Trade and Industry and the London-based
Commonwealth Secretariat are involved in a feud. The allegations are that Department
of Trade and Industry officials attempted to undermine the advisory role of
Commonwealth Secretariat staff, to Commonwealth developing countries, at the recently
concluded Fifth WTO Ministerial Conference. In a strongly worded letter to the UK
Secretary of State for Trade and Industry, the Commonwealth Secretariat Secretary-
General – Mr. Don McKinnon – charged the Secretary’s Department of having a “neo-
colonial mentality”; he sharply reproved the Department’s conduct, suggesting “we don’t
take instructions from Whitehall”.

WTO BRIEFING

(INFORME DE LA OMC)

At the start of the Fifth WTO Ministerial Conference’s final phase, Mexican Foreign
Minister and Chair of the Ministerial Conference, Luis Ernesto Derbez, released a revised
Draft Declaration, compiled from texts provided by various “facilitators”, at a brief
meeting of heads of delegations, September 13. It would prove to be a Text unrelentingly
criticized by WTO members.

What proved unacceptable at the Cancún summit is now being presented as the basis for
talks. At a recently concluded Asia Pacific Economic Cooperation (APEC) forum, in
Bangkok, Thailand, last month, Trade Ministers from twenty-one APEC countries - in
their summit declaration, October 18 – called on the Derbez Text of September 13 to be
the basis to ‘build’ upon post-Cancún discussions. At the Ministerial Conference several
developing country members of APEC, including: China, Chile, Indonesia, Mexico,
Thailand and the Philippines, as members of the G-22 (refer to RNM UPDATE 0317,
September 18) went along with the Groups’ position opposing elements of the Text.
There is a seeming inconsistency in the position certain G-22 countries have toward
support for the Text now, as a basis for the resumption of talks, in contrast to their
opposition to it at the Cancún summit. While this point is being underscored in certain
quarters, support for the Text does not necessarily mean consensus exists over it.

A number of countries remain opposed to the approach of using the September 13 Text as
the basis for talks. Amongst them are certain members of the G-22, such as India, that
argue there is not enough ‘common ground’ on the Text. Indian Commerce and Industry
Minister, Arun Jaitley, said in reference to the Derbez Text “the Cancún draft can’t be the
starting point for any discussion, it completely failed to gauge the mood at Cancún and
was contrary to the mood prevalent there”. The EU Trade Commissioner, in response to
APEC’s endorsement of the use of the Derbez Text as the basis for deliberations, has said
“I am left to wonder, rather, what magic dust has been shaken over a text so roundly
rejected in September, to find it so roundly endorsed in October. Lauding the Derbez
Text as a “pathway to move forward”, United States Trade Representative, Ambassador
Robert Zoellick, has urged the EU to support the use of the Text.

WTO members appear to be at odds regarding utilizing the September 13 Text, not just
because of different views as to whether it can ‘re-energize’ global trade talks. Given the
outcome of the Cancún summit, lingering doubts remain regarding the status of that Text.

NEWS BRIEFS

(NOTICIAS)

WTO DG: Doha Round Timeframe to Remain Unchanged

With the breakdown of the Fifth WTO Ministerial Conference and the resultant paralysis in
the Geneva-based process, in its wake, expectations for what the Doha Round can achieve,
have now been significantly diminished. Slippage in the schedule of global trade talks,
likely to emerge from the Cancún debacle, have been linked to derailing the January 2005
deadline, set for the conclusion of the Doha Round. Speaking at a forum in Spain in
October, WTO Director-General, Supachai Panitchpakdi, insisted that January 2005 would
remain as the deadline for completing the Doha Round.

Brazilian Trade Chief Presses G-22/US/EU Meet

Brazilian Foreign Minister Celso Amorim recently called on the G-22, the United States, and
the EU to meet. He noted such a meeting would be aimed at re-starting Doha Round talks,
after the collapse of a key WTO Ministerial two months ago. The focus of such a meeting
would be the contentious issue of farm trade.

EU to Renew Trade Preferences

In a statement, released October 29, the European Commission – citing its continued
commitment to special treatment for developing countries - has pledged to renew a system of
trade preferences, the Generalised System of Preferences (GSP), for developing countries,
set to expire December 31, 2004. The extension would cover the period January 1, 2005, to
the end of 2005. According to a statement issued by the European Commission, the overhaul
of a central feature of the GSP, ‘graduation’, “by which preferences for individual
products can be taken out of the programme, would only take place for the larger
beneficiaries whereas smaller developing countries would maintain intact their
preferences”.

UPCOMING EVENTS
(CALENDARIO)

OECS Authority Meeting

The Thirty-Eighth meeting of the OECS Heads of Government is slated for Castries, St.
Lucia, November 10 to 11.

CARICOM Heads Meeting

A Special Meeting of the Conference of Heads of Government of CARICOM is

scheduled for Castries, St. Lucia, November 13 to 14.

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For More Information Contact:

Nand C. Bardouille
Tel: (246) 430-1678
email: nand.bardouille@crnm.org

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Previous issues of RNM UPDATE are archived on and can be downloaded from the RNM
website: http://www.crnm.org

The ‘RNM DRAFT CALENDAR 2003’, that provides an account of hemispheric and multilateral
trade meetings, is available on the RNM website.