Page 27 - Caribbean-Central America Profile 2018

REGIONAL

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

The agreement covers all goods except those In November 2016, the Council began discussing THE NORTH AMERICAN FREE
classified under the Harmonized System (HS) the nature and structure of future relations TRADE AGREEMENT (NAFTA)
50–65 (inclusive) range and some agricultural between the EU and the ACP countries after the The North American Free Trade Agreement, or
products that carry high tariff duties. For Cotonou Agreement expires in February 2020. NAFTA, is a three-country accord negotiated
commodities from Caribbean countries to obtain The basis for the discussions is a joint by the governments of Canada, Mexico, and
duty-free access into the Canadian market, the communication from the European Commission the United States that entered into force in
rules of origin require that no less than 60 percent January 1994. NAFTA’s terms, which were
and the High Representative, adopted on 22 implemented gradually through January 2008,
of the ex-factory price of a commodity must November 2016. The communication focuses provided for the elimination of most tariffs on
originate from the Commonwealth Caribbean (one on three main aspects of the future relations: products traded among the three countries.
or more countries) or Canada. As a nonreciprocal the structure, the nature of a possible new
arrangement, however, the CARIBCAN is not agreement and its geographical scope. Caribbean Liberalization of trade in agriculture, textiles,
consistent with the World Trade Organization’s Signatories to Cotonou: Antigua and Barbuda, and automobile manufacturing was a major
principles and commitments and requires a The Bahamas, Barbados, Belize, Dominica, focus. The Agreement also sought to protect
World Trade Organization Most Favoured the Dominican Republic, Grenada, Guyana, intellectual property, establish dispute-
Nation waiver. Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, resolution mechanisms, and, through side
St.Vincent and the Grenadines, Suriname, agreements, implement labor and environmental
Canada had initially indicated that it will not and Trinidad and Tobago. Note: The French safeguards.
seek to renew the CARIBCAN waiver after territories in the Caribbean participate as part of
2013, but to negotiate a free trade agreement France, and the British and Dutch dependencies A Free Trade Commission was established
(FTA) with the CARICOM in its place. It is as members of the Overseas Countries and to oversee the performance and evolution of
NAFTA. The Commission supervises dispute
against this backdrop that Canada and the Territories (OCT) Group. resolution and the work of the nearly 40
CARICOM explored the prospects of forming committees and working groups set up under
an FTA. However, after several rounds of THE ECONOMIC PARTNERSHIP the agreement. The trilateral trade relationship
AGREEMENT (EPA) BETWEEN THE
negotiations since 2007, CARICOM and EU AND CARIFORUM has stimulated trade and investment flows, and
Canada were unable to reach an agreement to The EPA is an instruments designed to facilitate has proven beneficial in helping Mexico become
replace the existing CARIBCAN. As a result, the sustainable development and structural less vulnerable to international financial crises.
and on Canada’s request, the World Trade transformation of Caribbean economies and to
Organization extended the CARIBCAN waiver strengthen the regional integration process with CENTRAL AMERICAN/DOMINICAN
until 2023. At this stage, it is unclear when or CARIFORUM. REPUBLIC FREE TRADE
whether both parties will return to negotiations AGREEMENT (CAFTA-DR)
The Dominican Republic-Central America-
under the extended CARIBCAN waiver. The EPA eliminates preferential treatment United States Free Trade Agreement (CAFTA-
for goods emanating from CARIFORUM
COTONOU AGREEMENT economies into the markets of the EU and allows DR) entered into force for the United States, El
Signed in June 2000, the Cotonou Agreement for access of EU goods into CARIFORUM Salvador, Guatemala, Honduras, and Nicaragua
replaces the Lomé Convention, which offered markets, on a phased basis over 25 years, with in 2006, for the Dominican Republic in 2007,
and for Costa Rica in 2009.
duty-free access to the 15 European Union some major industries to remain protected, e.g.
States for 70 ACP (African-Caribbean-Pacific) agriculture. The EPA also contains provision for As a result of the FTA, 100 percent of U.S.
countries, including 15 in the Caribbean. The services trade, the first in a major international consumer and industrial goods exports to the
Cotonou Agreement redefines the economic, agreement and contains major provisions for CAFTA-DR countries will no longer be subject
social and political relationship between the development co-operation. The EPA came into to tariffs. Tariffs on nearly all U.S. agricultural
ACP-EU. products will be phased out by 2020.
effect as of December 31st, 2008 and is being
The Agreement covers customs facilitation
The major feature of the Cotonou Agreement is implemented by the various CARIFORUM and provides benefits to small and medium-
that unlike Lomé, ACP countries will not have nations across the region. sized exporters. Provisions are also included
preferential access to the EU markets, but rather that address government transparency and
access must be reciprocal. In particular, ACP corruption, worker rights, protection of the
sub regional groupings must sign Economic environment, trade capacity building, and
Partnership Agreements (EPAs) with the EU. dispute settlement.

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