GOVERNMENT OF BARBADOS ADDRESS BY THE RT. HON. OWEN ARTHUR PRIME MINISTER OF BARBADOS AT THE OPENING OF THE 12 TH ACP-EU JOINT PARLIAMENTARY ASSEMBLY SHERBOURNE CONFERENCE CENTRE NOVEMBER 20, 2006
2 Your Excellency Sir Clifford Husbands, Governor General Members of Cabinet Co-Presidents of the ACP-EU Joint Parliamentary Assembly President of the Council of the European Union European Union Commissioner for Development & Humanitarian Assistance Members of ACP Parliaments and Members of the European Parliament Without even the slightest tinge of apology to anyone I find it necessary to begin by declaring that Barbados is honoured that you have chosen our country to be the venue for the 12 th Session of your ACP-EU Joint Parliamentary Assembly. You will find our country to be in a more festive mood than normal as we prepare to celebrate our 40 th Anniversary of Independence. Senior Minister Miller would have, I believe, already indicated to you that one of the requirements of your participation in this convocation is that you must also participate to the full, and as appropriate, in Barbados coming of age celebrations. That, I too, now require and command of you. With no intention to be immodest, I must submit to you that it would be difficult for the ACP or the European Union to choose a place that is more qualified than Barbados in the precepts and practices of parliamentary governance and democracy as a location to hold a Parliamentary Assembly.
3 Barbados has the second oldest Parliament in the Commonwealth - a Parliament of some 367 years standing and continuous existence. And although it has not always been the people s Parliament in the best democratic sense, it has always asserted its claim to Parliamentary integrity in a manner that it would be difficult not to admire. A famous case occurred as early as 1651 when a proclamation constituting a Declaration of Independence was passed by the Council and Assembly - a mere 120 years before the USA Declaration- condemning the actions of the House of Commons of England as being against the freedom and safety of the island, and declaring furthermore that Barbados should not be bound by the measures of a Parliament to which it could send no representatives. The statement issued in support of the Declaration, though being the words of dissident colonial elites, could be used as the mantra of any Parliament: We will not alienate ourselves from our heroic virtues to prostitute our freedom and privileges to which we were born to the will and opinion of any one; neither do we think our number so contemptible nor our resolution so weak to be forced or persuaded to so ignoble a submission. That was the Barbados Parliament of 1651. You meet today as a Joint Assembly. Of more relevance to your immediate purposes must be the fact that the Barbadian Parliament of 2006 perhaps, brought a refreshingly new definition to the concept
4 of a Joint Assembly on the occasion that the Leader of the Opposition made our democracy even more splendid and unique by choosing to accept an appointment to my Cabinet. Barbados enjoys a long tradition of parliamentary democracy, born in our colonial past and in part reflecting the values and systems of that period. An independent Barbados continued to build on that parliamentary tradition, adapting it to the needs of a newly independent nation. The task, however is not complete. Perhaps the most critical task before us now is to make our system of governance and our institutions fully reflective of an independent nation with a strong parliamentary heritage. On that enterprise we are now engaged. We have learnt during the initial stages of development of this very young nation that independence does not signify isolation or unilateralism. Independence should signify the enjoyment of sovereignty best used in the pursuit of a destiny that is all bound with our interdependence with others. It is this yearning to promote interdependence that makes our relationship through the ACP-EU partnership so special. The evolution of the ACP-EU relationship over the past forty-three years is a remarkable achievement. It has progressed from a limited agreement covering some aspects of European-African relations to become the most comprehensive North-South cooperation partnership. Along the way, the partnership has been able to evolve by taking into account the expansion of the European Community
5 and the ACP Group, within the context of international developments, such as decolonisation, the end of the cold war, and the effects of globalisation. Our present arrangements are therefore the product of an imposing history. The signing of the first Lome Convention in 1975 represented a clear progression from the two Yaounde Conventions, the first of which was signed in 1963 and involved only eighteen Associated African States and Madagascar together with the original six members of the European Community. Lome not only extended Yaounde from being a purely African aid programme into a global economic cooperation agreement involving seventy African Caribbean and Pacific Member States and fifteen European countries, but it also brought a new dimension to North-South cooperation by introducing a more holistic approach, encompassing both trade and aid. Similarly, after four Lome Conventions, the Cotonou Agreement with its provisions for new trade arrangements, the Economic Partnership Agreements, represents a major transformation. The partnership agreement now links seventynine ACP and twenty-five - soon to be twenty-seven - EU countries. Furthermore, EPAs are intended to move the ACP-EU relationship from one based on a preferential one-way trade regime to one which would be reciprocal and WTO compatible. The Cotonou Agreement is noteworthy because it introduced a number of innovations to the ACP-EU partnership agreement. The political dimension of the
6 relationship has been strengthened and is now a key element of the agreement. As a consequence respect for human rights, democratic principles, the rule of law and good governance are all subjects for regular political dialogue between the two sides. The inclusion of civil society, the private sector and other non-state actors in areas which were previously the exclusive jurisdiction of governments is another new feature of Cotonou. In the area of financial cooperation, the programming system has been modified in an effort to increase the utilisation rate of EDF resources. However, the most far reaching innovation associated with the Cotonou Agreement is the provision for the negotiation of new WTO-compatible trading arrangements between ACP regional groupings and the European Unio. Twentyfive years of ACP-EU trade and economic cooperation, under successive Lome Conventions, were built on the principles of preferential market access and nonreciprocity for ACP products entering the EU market. They rested on the solidarity of the ACP as a group in search for or and support of a common development ambition. Indeed, the unity and solidarity of the ACP Group had been a major factor in the negotiation of these Conventions and of the Cotonou Agreements which began as scheduled, in September 2002, presents a daunting task to the ACP. I have noted from your programme that on Wednesday afternoon you will consider, as an urgent topic, The review of the Economic Partnership Agreements. This morning I will touch on two EPA related issues, which affect
7 all ACP regions and which will define the nature of the future relationship between ACP countries and the European Union. First, I will speak to the treatment of regional integration within the context of the EPA with some reference to the Caribbean s efforts, particularly in the economic sphere as it relates to the Caribbean Single Market and Economy for which I have lead responsibility within our regional arrangements. Secondly, I will address the development dimension of the EPAs, something which threatens to derail the entire negotiating process. In the Caribbean, we very much admire the process of regional integration that Europe has been able to undertake, and we acknowledge that it has many positive elements which can serve as very useful models in our own regional integration. Indeed, we are especially attracted to the elements aimed at ensuring social cohesion and the perspective that economic integration should be the tide which lifts all boats. Consequently, we have recognised the need for social and economic cohesion within our regional integration grouping, and have committed ourselves to pay urgent attention to addressing this need. The most tangible expression of this is the recent creation of a Regional Development Fund to enable our LDC s to offset any disadvantages from being part of a Single market and Economy. In addressing the Caribbean Business Forum in London in June 2005, I pointed out that the CSME will only succeed, if the programme of Special and Differential Treatment for our lesser developed members, as outlined in the Revised Treaty of Chaguaramas, is urgently implemented. I also said that we must be especially
8 sensitive to the fact that the distribution of costs and benefits, derived from the intensification of market integration, will not automatically become equitable and that specific steps would have to be taken to ensure some balance is achieved. We do not wish our integrated economy in the Caribbean to be a permanent coalition of unequals. We equally do not wish to engage in any arrangements with entities outside our region that constitute themselves as coalitions of unequals. While acknowledging that economic dislocation as a result of regional integration is a phenomenon which cannot entirely be prevented or avoided, we believe that it can and should be mitigated. In this regard, we have concluded that compensatory and corrective mechanisms should constitute a necessary and prominent feature of all discussions on the creation of a single economic space within our region. The Caribbean integration mechanisms have therefore been designed to reflect our commitment to the precepts and practices of special and differential treatment to those in need. This outlook could easily be replicated when we consider our position with respect to the European Union and the proposed EPA. It should therefore come as no surprise that this position is reflected in our stance in relation to the Economic Partnership Agreements. This does not mean that we will not seek to engage in the partnership, because we intend to remain engaged. However, the partnership must not result in underdevelopment, social and economic exclusion or regional fragmentation. It is a delicate relationship that must be handled with care.
9 I have no doubt that the Caribbean regional integration represents the most effective means by which the individual economies of our region can be successfully integrated into the evolving global economic system. The real challenge is to undertake that integration on terms that will enable us to minimize the associated costs and dislocation, while maximizing the potential benefits. In this regard, the increasing demands threatening to overwhelm our already overburdened institutions and the unavailability of sufficient financial and personnel resources represent serious obstacles. When these factors are combined with the need to recognise political realities, they send a clear message that in CARIFORUM, as in other ACP regions, the European Commission must allow the regions to pursue their regional integration processes in a manner which is politically, economially and socially sustainable. Although, in the ACP, we do not expect that our European Union partners will forever sit patiently in our waiting rooms if we continually fail to make progress in sorting out our internal affairs, we do expect that the European Commission will allow us the time and space to build our regional integration according to our priorities and needs. In this context, I have noted that, with respect to CARIFORUM-EC negotiations, although both sides concur that one of the key objectives of an EPA is to strengthen the regional integration process, there continues to be significant differences as to how and at what speed this should be done. The issue is not the centrality of the regional integration per se, but rather the impact of its timing and pace on CARIFORUM regional commitments.
10 Whether we are speaking of the Caribbean, Southern Africa or Eastern Africa, I would expect the European Union to respect the political sovereignty of ACP member states to determine the composition of their regional grouping, the breadth of their integration process, and the pace at which member states can proceed in deepening their regional integration. We must ensure that ACP regions are not pressured to undertake commitments that could undermine the same development objectives which the EPAs are meant to achieve. Turning to one of the most critical areas in the EPAs, I will briefly address some of the ACP s development concerns or what has frequently been called the development dimension. I will begin by recalling that in 1996 when the European Commission first proposed the negotiation of Economic Partnership Agreements with ACP regional groupings, both sides emphasised, from the beginning, that these new arrangements should give an impetus to the sustainable development of ACP countries. This view has subsequently been endorsed by the Council of EU, by ACP Heads of State and Government and by your Joint Parliamentary Assembly. I have mentioned these facts to underline the primacy of Development from the earliest days of the EPA discussion. Therefore, it should not be a surprise to you when I say that, for us in CARIFORUM and for the other ACP regions, an EPA which focuses on the opening of markets, rather than development enhancing initiatives, would be totally unacceptable.
11 I am keenly aware that although both sides share a common objective, namely, that the EPA should be a tool for development, there is a significant divergence of views on how to bring about development in the ACP countries. The European Commission s approach to development, which seems to be based on a process that is driven by strengthened regional integration and trade liberalisation, coupled with more stringent trade and investment rules, is much too limited, Indeed, such a restricted approach ignores the various structural deficiencies and supply-side rigidities that are the real obstacles to development in ACP countries. In my view, development should infuse all facets of an EPA. Therefore, it would include flexibility in applying trade rules, more effective access to EU markets for ACP goods and services, the provision of special and differential treatment commensurate with a country s level of development and intrinsic vulnerability, well-designed and executed trade capacity building measures, and binding commitments on EAU development support aimed at responding expeditiously and fully to legitimate ACP needs. Inadequate and costly transportation is a common characteristic of many ACP regions, whether they comprise a number of small countries separated from each other by hundreds of miles of ocean, such as is the case in the Caribbean and the Pacific, or must accommodate several landlocked countries, as is common in Africa. This reality complicates the regional integration process, limits the benefits associated with economies of scale, inhibits competitive production and
12 adds to the costs of doing business. The vulnerability to natural disasters also plays a major role in many ACP countries, which are unable to maintain their competitiveness gains over time because of these events. Countries often suffer from catastrophic occurrences such as hurricanes or cyclones in the Caribbean, Pacific and Indian oceans; locusts and similar plagues in some African regions; and severe droughts in other regions which devastate their productive assets. Our countries therefore face substantial limitations in physical infrastructure, human capital and institutional capabilities. These factors constitute major obstacles in overcoming supply-side and other competitiveness constraints, unless governments are able to implement proactive policies, supported by major investment in both the public and private sectors. This resource requirement is exacerbated by the fact that in most ACP countries import tariffs constitute an important part of government revenue and are used to fund a range of social programmes, including health care and education. Therefore any sudden loss of this revenue because of the application of trade liberalisation policies will create considerable hardship and will have a serious impact, particularly on the poor. If these development challenges are to be addressed in the context of EPAs, our European partners should be encouraged to contribute to covering the costs of overcoming supply-side constraints, institutional adjustment, technical assistance and capacity building. Countries in the developed world have enjoyed 50 years within which to prepare their economies and societies to accommodate today s liberalisation. Too much adjustment compressed into too short a period can be as fatal as no adjustment at
all. 13 ACP countries must also be allowed appropriate Policy Space to pursue the policies and implement the programmes necessary to overcome the abovementioned constraints, improve competitiveness, and stimulate development. It has not been lost on us in the Caribbean that developed countries in Europe and elsewhere have benefitted from and continue to make full use of this type of policy space to foster the growth and development of their economies. Having this policy space is an important aspect of the development dimension of an EPA, and losing it would severely limit the capacity of ACP countries to overcome supplyside constraints, attain productive sector competitiveness, and promote domestic capacities for exporting high value-added goods and services. We are very concerned that despite thirty years of ACP-EU cooperation, centred around preferential access to the EU market, ACP countries have had limited success in improving their capacity to compete in global markets. The EU I advocating a strategy of trade liberalisation coupled with ACP regional integration as the means of promoting development in ACP regions. I can assure you that without addressing the critical supply-side constraints and other structural problems which are the real impediments to competitiveness and development in CARIFORUM and other ACP regions, these assumptions will not hold. The importance of addressing supply-side issues has been recognised by the Aid-for-Trade task force, which was constituted within the framework of the WTO Doha Development agenda, following the decision of the WTO Ministerial in
14 Hong Kong. Interestingly, the General Affairs and Economic Relations Council of the EU, meeting in Luxembourg on the 17 th of October last, not only reaffirmed the essential role of the EPAs as instruments for development, but also recognised that increased and more effective aid is needed to support the ACP countries in their efforts to use trade more effectively for reaching their development objectives. The mantra that trade liberalisation promotes development may be applicable in the European Union or in some economic theory developed specially to address the situation of comparable countries with an abundance of unexploited natural resources. In the ACP, particularly in the Caribbean, the lessons learnt over the last 30 years do not support this view. Competitiveness improvements, balanced growth and poverty reduction are not automatic outcomes from trade liberalisation in developing countries; rather these objectives must be pursued through proactive development policies. The economies of most ACP countries are relatively small, so that there is a definite limit on the capacity of trade liberalisation, coupled with good governance, to bring about spontaneous improvements in competitiveness among economic operators. This implies that a meaningful EPA process needs clear policies and strategies aimed at bringing about competitiveness in ACP economies and fairness in ACP- EU trade. This proactive approach is not compatible with the idea of trying to tackle the wide variety of development circumstances in ACP countries through a
15 one-size-fits all strategy, but rather calls for carefully designed and calibrated programmes. The need for a purposeful policy approach is particularly true for ACP countries at as timer when they are also facing the challenges of forging effective regional integration arrangements. This Joint Parliamentary Assembly which starts its 12 th session here today has an historic mission to ensure that the values of multilateralism, human rights, respect for the rule of law, and national sovereignty are, among the things, reflected in our partnership. This Assembly, established within the framework of the successive cooperation agreements between the African, Caribbean and Pacific states on the one hand and the European Union on the other, is the key guardian, not only of the common values mentioned above, but also of the future of ACP countries as they strive to build a new relationship with the European Union based on genuine development and trade equity. The importance of the Joint Assembly is reflected by the fact that its members have direct political linkages with, and have been elected to serve, the citizens of 106 ACP and EU Member States, more than half of the countries in the world. This should be a sobering thought. Half of the countries of the world is represented here. The other half is listening. With such a constituency of interest this Assembly dare not fail. I wish you well in your deliberations during the coming days and formally declare open this 12 th Joint Parliamentary Assembly. -------------------0o0-------------------------