RNM UPDATE April 03, 2001

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. ************************************************************ - WTO DEVELOPMENTS - ACP JOINT MINISTERIAL TRADE COMMITTEE MEETING IN SOUTH AFRICA - RNM TRAINING WORKSHOP ON RULES OF ORIGIN - NEWS BRIEFS ************************************************************

WTO DEVELOPMENTS Trade in Services On 28 March 2001 the Special Session of the Council for Trade in Services adopted "Guidelines and Procedures for the Negotiation of Trade in Services" (S/L/93), thereby setting the framework for negotiation of further services liberalisation in keeping with Article XIX of the General Agreement on Trade in Services (GATS). After long debate and four document revisions, this agreement takes into account various proposals advanced by developing countries, including CARICOM, in specifying the agreed Objectives and Principles, Scope, and Modalities and Procedures for future negotiations on Services to advance rule formulation and expand specific commitments in the sector. The Objectives and Principles stipulate that negotiations shall be conducted on the basis of progressive liberalisation; they recognise the right of Members to regulate, and to introduce new regulations, on the supply of services. They specify moreover that negotiations shall aim to increase the participation of developing countries in trade in services and reaffirm that there shall be appropriate flexibility for developing countries. The process of liberalisation shall take place with due respect for national policy objectives, the level of development and the size of economies of individual Members, both overall and in individual sectors, with due consideration given to the needs of small and medium-sized service suppliers, particularly those of developing countries. With respect to Scope, while there shall be no a priori exclusion of any service sector or mode of supply, special attention shall be given to sectors and modes of

supply of export interest to developing countries. MFN exceptions shall be subject to negotiation but appropriate flexibility shall be accorded to individual developing country Members. Negotiations on Safeguards are to completed by 15 March 2002. Members shall also aim to complete negotiations on Articles VI.4 (Qualification Requirements and Procedures, Technical Standards and Licensing Requirements), XIII (Government Procurement) and XV (Subsidies), prior to the conclusion of negotiations on specific commitments. The Modalities and Procedures stipulate inter alia that the negotiations shall be conducted in Special sessions of the Council for Trade in Services and that liberalisation shall be advanced through bilateral, plurilateral or multilateral negotiations, the main method of negotiation being the request-offer approach. Individual developing country Members shall be accorded appropriate flexibility for opening fewer sectors, liberalising fewer types of transactions, progressively extending market access in line with their development situation and, when making access to their markets available to foreign service suppliers, attaching to such access conditions in keeping with Art. IV of GATS (which addresses Increasing Participation of Developing Countries). Based on mutually agreed criteria, account shall be taken and credit shall be given in the negotiations for autonomous liberalisation under by Members since previous negotiations. Moreover, the Council for Trade in Services in Special Sessions shall continue to carry out an assessment of trade in services in overall terms and on a sectoral basis with reference to the objectives of GATS and Art. IV in particular, and negotiations shall be adjusted in the light of the results of the assessment. Technical assistance shall be provided to developing country Members, on request, in order to carry out national/regional assessments. In implementing Art. IV consideration shall be given to the needs of small service suppliers of developing countries. Finally it is agreed that the proliferation of subsidiary bodies should be avoided to the maximum extent possible and meetings should be scheduled taking into account the needs of smaller delegations. Agreement on the Guidelines and Procedures coincides with the completion of the stocktaking exercise by the Special Session of the Services Council at its meeting of March 28-30, and marks the fulfilment of a key element in the Services negotiating mandate opening the way for governments to move forward with rule making and get into the market access negotiation phase. Negotiating sessions will be held in May, July and October, during which the Council, in addition to its standing agenda, will consider in detail the more than 70 negotiating proposals submitted. Further meetings would be held in December and March 2002, at which point the Council would review progress in the negotiations. The WTO Secretariat has produced a booklet on trade in services entitled 'GATS Fact and Fiction', which is available at http://www.wto.org/english/tratop_e/serv_e/gats_factfiction_e.htm

Qatar Ministerial Positions are already polarising as to whether the Fourth WTO Ministerial, to be held in Doha, Qatar, in November 2001, should be an occasion for launching a comprehensive new Round of multilateral trade negotiations, an issue which necessarily influences the preparatory process for the Ministerial. Developed countries are arguing in essence that a new Round is needed to prevent backsliding into protectionism. The European Union, the major proponent of a new Round, argues with support from Japan for a comprehensive agenda, on the ground that this offers the best possibilities for trade-offs and will facilitate concessions in the agricultural sector, which is heavily subsidised. Faced with demands from developing countries to make progress on implementation issues, which is their high priority concern, developed countries are attempting to tie progress in this area to the holding of a new Round. Examples of difficulties facing developing countries in implementation relate to the TRIPS, Sanitary and Phytosanitary (SPS) and textiles agreements. The WTO Director-General, Mike Moore, has also been actively promoting a new Round, which has raised questions as to whether it is correct and proper for him and any other part of the Secretariat to promote a subject over which there is as yet no consensus, and in fact there are serious differences among the membership, and it has been suggested that this compromises the neutrality of the WTO Secretariat. The position of most developing countries is that they cannot support a new Round unless implementation issues are resolved. Indeed, they generally do not regard a new Round as a priority. For them the multilateral trade agenda is already packed with mandated negotiations on Agriculture and Services underway, mandated reviews and confidence-building initiatives, even as Implementation issues related to Uruguay Round commitments continue to be a major concern. They consider that the Ministerial meeting should review and assess ongoing work deriving from the Singapore and Geneva Ministerial mandates and to issue new guidelines for further work. In this context Ambassador Ransford Smith of Jamaica has argued at a conference organised last month by the Third World Network that, "We don¹t need a new Round now because a major and significant plateau in multilateral trade liberalisation was attained five years ago and the commitments assumed in that Round are still being implemented by a large number of countries... we do not believe that a comprehensive negotiating Round with a slew of new issues will be a desirable development". Most developing countries, particularly the smaller ones, already consider the trade agenda overloaded and do not want to take on more commitments than they can digest. They will be facing pressures to include in such a negotiation investment, competition policy, government procurement (subjects currently discussed within Working Groups), as well as trade and labour standards, trade

and environment and other "trade-related" new issues. The trade-related prefix could eventually be attached to human rights, tax systems, cultural behaviour and other subjects. Developing countries have been arguing inter alia that they are still to realise the much-touted benefits of the Uruguay Round; that they gave away too much in that Round, especially in relation to intellectual property rights; that the system is not equitable; that issues related to capacity building have not been addressed sufficiently; and that the internal transparency of the WTO continues to require overhaul. The challenge in the coming months is for developing countries to act concertedly in protecting their interests.

ACP JOINT MINISTERIAL TRADE COMMITTEE MEETING IN SOUTH AFRICA At the invitation of the Government of South Africa 18 ACP Ministers, who are members of the Joint Trade Ministerial Committee under the ACP-EU Cotonou Agreement, will attend a meeting from from April 10 - 11 on the theme of 'Perspectives for the ACP on Negotiations with the European Union'. South Africa's intention is to share with ACP Ministers the experience of negotiating with the EU their bilateral free trade agreement on Trade, Development and Cooperation. Negotiations for this agreement were formally initiated in June 1995 and concluded at the Berlin Summit of March 1999 opening the way for bilateral trade to be entirely liberalised over 12 years. The last afternoon session of the second day is devoted to a 'Meeting of ACP Ministerial Trade Committee'. At this session Minister Anthony Hylton of Jamaica is expected to speak to the need for the development of an ACP negotiating strategy for the negotiations with the EU beginning in September 2002. CARICOM's Council for Trade and Economic Development (COTED) previously agreed the RNM's proposal for early dialogue with African and Pacific Ministers on this matter. With the benefit of the RNM's studies, Caribbean Ministers hope to develop an ACP process for formulating the negotiating strategy. Jamaica, St. Lucia and the Dominican Republic are the three Caribbean members of the Trade Ministerial Committee. The RNM's Chief Negotiator Sir Shridath Ramphal will also participate in the meeting.

RNM TRAINING WORKSHOP ON RULES OF ORIGIN Continuing its series of training workshops on trade negotiation subjects funded through the CRNM/IDB Project, a Training Workshop on Rules of Origin will be held in Barbados from May 3-5, 2001. The purpose of the Workshop is to:

-provide participants with an appreciation of the structure and content of Rules of Origin which are being administered in preferential schemes, particularly those in sub-regional groupings and bilateral arrangements in this Hemisphere; -provide an overview of the status of the work being undertaken in the WTO and the WCO (World Customs Organisation) on non-preferential Rules of Origin; -examine the implications for the region of the uthorized on of general Rules of Origin; -equip participants to contribute to the development of the CARICOM negotiating position on Rules of Origin in the FTAA.

This Workshop is of particular relevance to CARICOM, which has not been directly involved in the work being undertaken by the WTO and WCO on the uthorized on of non-preferential Rules of Origin, but which will need to know the implications of these measures. This Workshop is thus particularly relevant to the work of trade officials, Customs Administrations, Chambers of Commerce, and the private sector (with special emphasis on the productive sectors). For further information please contact mroberts@caribrnm.net

BRIEFS DR-Haiti Free Trade Talks The Minister of Industry and Commerce of the Dominican Republic Angel Lockward announced upon his return from Haiti on March 29 that talks will be held to work towards the signing of a free trade agreement with the neighbouring country. In Haiti, he had met with Prime Minister Jean Marie Cherestal and Minister of Industry and Commerce Stanley Theard on the subject. DR Free Zones The director of the Dominican Republic’s National Council of Export Free Zones, Janette Dominguez, said that the 481 businesses in operation in 2000 generated US$1,018 million, up 14.7% from US$887.3 million in 1999. Of the free zone operations, 52% are textile operations, 12% services, 6% tobacco plants and 4% footwear companies. In 2000, eight new free zone parks were approved, calling for a RD$331 million investment and the creation of 38,000 new jobs. Pro-Cuba Lobby Formed in U.S. The Cuba Policy Foundation, a new non-partisan, privately-funded U.S. lobby group led by former State Department officials in Republican Administrations, was announced on

March 28. The Foundation, to be located in Washington D.C.,is advocating an end to the U.S. ban on trade with Cuba and the complete uthorized on of relations. The Group’s president Ambassador Sally Grooms Cowal, a former Deputy Assistant Secretary of State for Inter-American Affairs Under President George Bush and Ambassador to Trinidad and Tobago under President Clinton, argues that there is a silent majority, including Cuban Americans, who are not in favour of the current policy and has vowed to counter the influence gained by Cuban American exiles in the Bush administration. Ambassador Cowal housed Elian Gonzales and his father last year while they lived in Washington, D.C. The Group hopes to build support at the grass-roots level by educating people to what the United States is really missing out on with a failed policy on Cuba. The board chairman of the foundation is William Rogers, who was Assistant Secretary of State for Inter-American Affairs under former President Gerald Ford.

-----------------------------------------------------------------------------------Recipients of RNM UPDATE are uthorized 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

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RNM UPDATE April 12, 2001

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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. ************************************************************************ - FTAA MINISTERIAL DECLARATION - WTO: THE WAIVER ISSUE - EU AND USA REACH BANANA AGREEMENT - HISTORIC OECS TELECOMMUNICATIONS AGREEMENT - NEWS BRIEFS

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FTAA MINISTERIAL DECLARATION Trade Ministers from the 34 countries negotiating the Free Trade Area of the Americas agreement held their Sixth Meeting in Buenos Aires on April 7, 2001. The Ministerial Declaration issued at the end of the meeting guide upcoming negotiations, which will continue to follow the general principle that all delegations have the right to present any text proposals deemed relevant. The following are some key decisions emanating from the meeting, including those of particular concern to smaller economies: Date for conclusion of negotiations: Perhaps the major issue facing the meeting was a proposal championed by Canada, Chile and the USA to advance the deadline for concluding negotiations from "no later than 2005", as agreed at the December 1994 Miami Summit, to 2003. The Ministers will recommend to the Quebec Summit of Heads of Government (April 20-22) that FTAA negotiations be concluded no later than January 2005 and entry into force of the agreement should take place as soon as possible thereafter but no later than December 2005. This decision defeats the 2003 proposal. CARICOM had earlier expressed a lack of support for any advancement in the date. Opposition to advancing the deadline also came from the MERCOSUR delegation, in particular, Brazil. Negotiations Timetable: Considerable work will have to done by CARICOM within the next eleven months. The Ministers instructed the Negotiating Group on Market Access to submit to the Trade Negotiations Committee, in co-ordination with the Negotiating Group on Agriculture, recommendations on the methods and modalities for tariff negotiations by April 1, 2002 to be considered by the TNC at its first meeting following that date, in order to initiate negotiations no later than May 15, 2002. [The US had originally suggested that submissions be made by November 1, 2001 with negotiations starting in the second semester of 2002, which CARICOM indicated was not realistic or attainable]. May 15, 2002 is also stipulated as the deadline for the start of negotiations on other subjects (Investment, Subsidies, Government Procurement). Smaller Economies: Concerns of CARICOM and others regarding the smaller economies dimension of the process were unambiguously addressed. The Ministers not only reaffirmed their commitment to continue to take into account the differences in the levels of development and size of economies but also reiterated the importance of strengthening the productive capacity and competitiveness of the smaller economies, as well as providing technical assistance and special provisions to enable these economies to participate in and benefit from the process. Additionally the Trade Negotiations Committee is required to formulate by November 1, 2001, with the support of the Consultative Group on Smaller Economies and the Tripartite Committee, some guidelines or directives on ways of applying the treatment of the differences in the levels of development and size of economies. The November 1, 2001 deadline represents a

tremendous burden on the capacities of smaller economies, which are hereby called upon to table specific smaller economies-related proposals on all subjects, but it is a challenge that we must meet. Transparency and participation of Civil Society: The Ministers agreed to publicise the draft FTAA Agreement in the four official languages by making the draft texts available on the FTAA website at the end of the Quebec Summit. This is an important step aimed at establishing new standards of transparency in trade negotiations and at increasing the participation of civil society in the negotiating process. It comes in light of the new change of administration in Mexico, which had previously been hesitant to agree to such a move. The Ministers have also expressed a desire for the Committee of Government Representatives on the Participation of Civil Society to foster a process of increasing and sustaining communication with civil society, to ensure that civil society has a clear perception of the development of the FTAA negotiating process. To this end the Ministers instructed this Committee to develop a list of options for the consideration and decision of the Trade Negotiations Committee at its next meeting, which could include dissemination programs in smaller economies, which could be funded by the Tripartite Committee or other international sources of funding. Business Facilitation Measures: No new business facilitation measures have been approved. This decision is particularly important for CARICOM who have continually stated in the various TNC meetings that they were unable to agree to any new measures. The Ministers nevertheless encouraged countries to continue to work towards fully implementing the present measures and noted that the implementation needs would be supplemented by technical assistance and technical co-operation plans in order to fully expedite the process. The recent approval of the Technical Co-operation Project within the Multilateral Investment Fund of the IDB will provide support to those countries needing assistance for implementing Customs measures. Labour and the Environment: The question of the eventual inclusion of these subjects in the negotiations has been a major bone of contention. The Declaration states that, "Most Ministers recognize that the issues on environment and labour should not be utilised as conditionalities nor subject to disciplines, the non compliance of which can be subject to trade restrictions or sanctions." The Ministers pledged to secure, "in accordance with our respective laws and regulations, the observance and promotion of worker rights, renewing our commitment to the observance of internationally recognised core labour standards, and acknowledging that the International Labour Organization is the competent body to set and deal with those core labour standards." They reiterated that "one of our general objectives is to strive to make our trade liberalisation and environmental policies mutually supportive, taking into account work undertaken by the World Trade Organization and other international organisations." Some Other Aspects: (a) In accordance with agreed rotation arrangements, the FTAA Administrative Secretariat has already been moved from Miami, Florida, to Panama, where it will be located until February 2003; (b) Final decision was not reached regarding Chairs and Vice-Chairs of Negotiating Groups and Special Committees, and

consideration of the matter will take place at a meeting in Panama at the end of April. The full text of the Ministerial Declaration is available at www.ftaaalca.org/ministerials/BAMIN_e.asp

WTO: THE WAIVER ISSUE The Chairman of the Council for Trade in Goods (CTG), the Ambassador of Hungary, on April 10 initiated informal consultations with a group of ACP States on the continuing stalemate with respect to the consideration of the ACP-EC waiver request regarding the Cotonou Agreement. The Chair informed ACP States of his informal consultations with two groups of WTO developing country Members over the past few days: the first group - the Central American banana exporters; the second - Members with so-called 'systemic concerns'. The Chair observed that his consultations revealed a possible hardening of positions in opposition to the ACP-EC waiver request. He noted that the first group, the Central American banana exporters, maintained their long-standing opposition to consideration of the ACP-EC waiver request on the ground that there was insufficient documentation on the table. They asserted that they were unable to make any judgement on the extent of preferences to be conferred on ACP banana producers before the EC implementing regulations were adopted. This, according to the EC, should be in place by the middle of May. The second group of developing country Members expressed concerns with respect to the broad preferences conferred by the Cotonou Agreement. They asserted that they have 'systemic' concerns with the discriminatory nature of the Cotonou Agreement which places some developing countries at a disadvantage vis-à-vis others. They therefore are seeking compensation for potential losses in market share which are likely to result through implementation of the Cotonou Agreement. Although the Chair of the CTG did not list those WTO Members falling within the second group of countries, he did note that those developing countries within the so-called 'second group' had already gone on record in previous CTG meetings raising certain concerns with the discriminatory nature of preferences: most notably, Paraguay, Brazil and the Philippines. A significant clarification of the position of this second group of developing countries was provided by the Chairman of the CTG. He informed ACP States that this second group is of the view that their concerns are sufficiently fundamental, viz. 'systemic', that the CTG may not proceed with consideration of the ACP-EC waiver request. Indeed, Members of this second group have apparently proposed that a working group be established to deliberate on appropriate remedial measures to be taken to alleviate the negative impact of the Cotonou Agreement on non-ACP developing country Members. This second group is of the view that the said working group should be established before beginning examination of the ACP-EC waiver request a step which would be unprecedented in the WTO era.

The Chair noted that he had no illusions that progress could be made on the ACP-EC waiver request at the CTG meeting of 18th instant. His intention is merely to provide a factual report of his consultations and open the floor to Members who may wish to make statements. The Chair expressed sympathy with the view that the stalemate poses serious problems which could establish a dangerous precedent for the consideration of future waiver requests in the WTO. In response to queries, he informed ACP States that the USA also had concerns with the 'systemic' issues which are being raised by some developing countries to block consideration of the waiver request. The USA intends to submit its own waiver request for the Africa Growth Act and the enhanced Caribbean Basin Initiative. The hardening stance of some developing Members against conferring preferences on even the most vulnerable developing states suggests that the USA's waiver request is likely to face similar opposition from certain developing country Members, particularly those with an interest in textiles, notably, Pakistan. The EU-US Banana Agreement outlined below will have important implications for the waiver issue.

EU AND USA REACH BANANA AGREEMENT On April 11 the U.S. Government and the European Commission reached an agreement on a new regime for bananas allowing for a tariff-only system by 2006. During the transition, bananas will be imported into the European Union through import licenses distributed on the basis of past trade. The agreement puts an end to the banana dispute between both parties as a result of the EC's adoption of a Common Market Organisation for bananas in 1993. This regime consisted inter alia of a tariff quota for Latin American countries and nontraditional ACP bananas, as well as quantities allocated to traditional ACP suppliers at zero duty. This regime was found to be illegal by the WTO in 1997. A revised scheme implemented on 1 January 1999 was also found to be WTO-illegal. This resulted in the imposition of U.S. sanctions authorised by the WTO against the EU in April 1999. The main criticisms were the setting aside of a quantity reserved solely for ACP imports, and the system of allocation of licenses which did not completely eliminate discrimination against third country operators. The new system is scheduled to take effect on July 1, 2001. The United States will suspend the sanctions. The European Union will institute a system of licensing, based on historic reference periods from July 1, 2001. The European Commission will also initiate the necessary procedures to propose to the Council of Ministers an adjustment of the quantities in the various quotas, in order to expand access for Latin American bananas and to secure a market share for a specific quantity of bananas of ACP origin. The United States has pledged to work actively to secure acceptance of the EU's request for the necessary WTO authorisation. Once these steps have been completed, the sanctions will

be definitively lifted. The European Union will begin negotiations necessary under WTO rules in time to introduce the tariff-only system from January 1, 2006. The European Commission will now table the necessary proposals to the Council of Ministers and the European Parliament in order to fully implement the agreement as soon as possible. As further details are made available the RNM will make available an analysis of the implications of this accord for Caribbean bananas.

HISTORIC OECS TELECOMMUNICATIONS AGREEMENT On April 7 an historic Memorandum of Understanding (MOU) was concluded in Grenada between five OECS Contracting States (Grenada, Dominica, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines) and Cable and Wireless, smoothing transition to a liberalised and competitive telecommunications environment in the OECS. The need for this agreement derived from the contradiction between C&W's exclusive licence rights to own and operate telecommunications facilities and to provide telecommunications services in each of the OECS Contracting States, on the one hand, and the enactment by OECS States of harmonised Telecommunications Acts and the planned promulgation of harmonised Telecommunications Regulations to give effect to the new liberalised environment, on the other hand. The introduction of the new Telecommunications Acts requires that all telecom providers obtain new non-exclusive licenses to operate in the OECS Contracting States. This has resulted inter alia in the termination of C&W's licenses save in the case of St. Lucia, where C&W's domestic, international and cellular operating licenses expired on March 31, 2001. The MOU provides that liberalisation of the telecommunications sector in the OECS Contracting States shall be on a phased basis, commencing on the 1st of April 2001 (Phase 1), during which new licenses "shall only be issued to operators other than Cable & Wireless" for the provision of specified networks and services. The transition period to full competition and liberalisation of the telecommunications sector shall be a minimum period of 12 months commencing on the 1st of April 2001, up to a maximum period of 18 months therefrom (Phase 2). Phase 2 of the Transition Plan shall commence at the conclusion of Phase 1. At that time, all restrictions that apply to the issuance of licences during Phase 1 shall no longer apply. During Phase 1 the Contracting Parties agree to use their best endeavours to prevent and stop bypass of Cable & Wireless¹ network, through regulatory or other action permitted by law and through public education. The Contracting Parties agree in principle to rebalancing, based upon full disclosure of agreed supporting cost data and its derivation. The parties shall ensure that any necessary rebalancing between international and domestic tariffs is substantially achieved as soon as possible during Phase 1. C&W will

be granted upon application a new non-exclusive operating license or licenses to provide at least the same networks and services as are currently provided. The agreement provides that Marpin Telecoms and Broadcasting Company Limited in Dominica shall be licensed to provide international voice services in the Commonwealth of Dominica during Phase 1 and that Cable & Wireless shall be obliged to provide domestic interconnection to Marpin. Cable & Wireless shall "make itself available to meet with Global Network Providers Grenada Inc. to discuss possible commercial arrangements to accommodate the provision of telecommunications services in Grenada". Another provision of the MOU is that C&W has agreed to relinquish and waive all claims against each of the OECS Contracting States arising as a result of the introduction of the Telecommunications Acts and the OECS Contracting States have agreed to relinquish and waive all claims against C&W for any or all breaches of its exclusive operating licences in all cases with effect from the commencement of Phase 2 subject to certain agreed provisions.

NEWS BRIEFS -The Government of Trinidad and Tobago with the Organization of American States, Georgetown University and The World Trade Organization is sponsoring a two-week training course for Government Officials entitled: "Multilateral and Regional Trade Issues for the Americas." The course will be conducted in Washington D.C. from June 18-28, 2001. The deadline for applications is April 20th. The application form is available at http://www.sice.oas.org/cidi/apfora_e.htm -Chinese President Jiang Zemin said on April 6 in Santiago, Chile, during the second day of a Latin American tour that an alliance should be formed to allow developing nations to strengthen their political and economic base in the new world order. Jiang called on the nations of Latin America to work together in several areas, including in the development of a new South-South co-operative model. The Chinese president also said China and Latin America should support each other in reforming the United Nations, on international security issues, the democratisation of international relations, and in "the defence of the legitimate interests of developing nations." -----------------------------------------------------------------------------------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

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RNM UPDATE May 10, 2001

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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. ************************************************************************ - WTO DEVELOPMENTS - U.S. ADMINISTRATION'S TRADE REQUEST - BANANAS - INTELLECTUAL PROPERTY - RNM TRAINING WORKSHOP ON DISPUTE SETTLEMENT - UPCOMING EVENTS ************************************************************************ WTO DEVELOPMENTS Doha Ministerial On May 3 the General Council held discussions on the Ministerial meeting due to take place in Doha, Qatar, in November. The Chair had circulated an initial checklist of issues likely to be discussed. Many interventions focussed on whether a new round of multilateral trade negotiations should be launched, with developed countries supporting this objective and developing countries underscoring the importance of implementation issues; for many consider that the difficulties of implementing the Uruguay Round commitments (for example, on sanitary and phytosanitary measures, technical standards, trade-related intellectual property rights, textiles and clothing, as well as concretising certain rules, including on special and differential treatment) must first be resolved before tackling new commitments. In this regard, Pakistan and India were in the vanguard, as usual. On the other hand, Bolivia, Costa Rica, and MERCOSUR expressed support for another Round. Most Latin American countries suggested that their support for a broader Round was conditioned by an enhanced mandate and accelerated progressive liberalisation in the on-

going agriculture negotiations. The near-totality of developing countries demonstrated an extremely cautious approach towards the so-called Singapore subjects (that is, the new issues indicated in the 1996 Singapore Ministerial) and other new issues for negotiation. Many developing countries, including the Dominican Republic and Cuba, gave clear indication that the Singapore issues were not yet ripe for negotiation. Overall, it emerged clearly that that there was little enthusiasm on the part of developing countries for climbing aboard the "broader round" bandwagon. Tanzania, speaking for the Least developed Countries (LDCs), also demonstrated a cautious approach, as did Mauritius speaking for the African group. Special Session on E-Commerce The governing council of the WTO agreed on May 8 to hold a special session as early as June to discuss internationally acceptable rules on electronic commerce. The special session is expected to submit a report to the WTO General Council in July. The decision is seen as an attempt to bypass the goods versus services controversy surrounding electronic commerce, and to tackle the subject instead from a "horizontal approach" in special session, which circumvents the question as to whether it should be treated within the Goods or Services Councils.

U.S. ADMINISTRATION'S TRADE REQUEST President George W. Bush is expected to present by the end of this week a request to Congress for Trade Promotion Authority (TPA), formerly referred to as "Fast Track Authority", and seek to break a seven-year deadlock on this issue. With TPA, any specified trade agreement(s) submitted for Congressional approval is voted on, without amendment, and approved integrally or not. TPA is considered essential for the FTAA negotiations. A tricky issue to be tackled in seeking such authorisation relates to the link between trade, on the one hand, and labour and environmental issues on the other. In September 1992, one month after NAFTA talks were successfully completed, then Governor Clinton indicated he would endorse the agreement provided that worker and environment protection were assured. U.S. labor groups had been complaining that trade agreements offer workers little protection against unfair foreign competition, while environmentalists had been seeking to ensure that environmental standards would not be lowered abroad in order to attract investment. This resulted in the negotiation of NAFTA supplemental agreements on these subjects and their signing in September 1993, thereby providing a precedent for the insertion of labour and environment on the international trade negotiations agenda. Republicans have, however, been generally opposed to the inclusion of these subjects in trade pacts, as indeed are nearly all developing countries in this Hemisphere, primarily because of concerns that they could become an instrument of trade protection and also result in the imposition of trade sanctions. Within the FTAA the issue was addressed at the Buenos Aires Ministerial on April 7. The Ministerial Declaration (summarised in RNM UPDATE April 12, 2001) reiterated that "one of our general objectives is to strive

to make our trade liberalization and environmental policies mutually supportive, taking into account work undertaken by the World Trade Organization and other international organizations, and to further secure, in accordance with our respective laws and regulations, the observance and promotion of worker rights, renewing our commitment to the observance of internationally recognized core labor standards, and acknowledging that the International Labour Organization is the competent body to set and deal those core labor standards". As part of his strategy in approaching Congress, President George W. Bush is expected to propose boosting the role of the International Labor Organization (ILO) in governing trade.

BANANAS EC Regulations Approved On May 2 the European Commission adopted a regulation to implement the banana import regime in line with the understanding arrived at with the US and later with Ecuador, as reported in previous issues of RNM UPDATE. The new rules, which are gazetted as Regulation 896, cover the management of import licence arrangements from 1 July 2001 as a transitional arrangement until 2006 when a tariff-only system comes into effect. The rules are complex and can give rise to interpretation and application issues by the various EU competent national authorities, known as Intervention Boards. The next step will be a Commission proposal to the Council to adjust the quantities in the various quotas, in order to expand access for Latin American bananas and to secure a market share for a specific quantity of bananas of ACP origin. According to an EC release, the new arrangements will continue to be largely managed on the basis of historical references, with 83% of the quantities of the quotas managed in this way. However, in order to meet the requirements of the international obligations of the EU, and to ensure that non-traditional operators can pursue trade in bananas, significant changes have been introduced. The major adjustment is the predominant use of a new definition of traditional operators that will now be based on primary importers, that is, importers who own or buy bananas in the country of origin and ship them to the EU. Seventeen percent of the quantities will be reserved for similar operators who do not have a suitable historic reference, a percentage very close to the requests of Ecuador. This quantity will be managed on a 'simultaneous examination'. This means that operators ask at the same time (within a limit) for a quantity. Their requests are (partially) met within the total quantity available, using a fair "pro rata" formula. This formula means that if requests total, for example, twice the quantity available then everyone gets half of the quantity that they requested. Some Implications An initial assessment of the likely impact of the new banana regime was made available to the RNM by the Jamaica Marketing Company (JAMCO) in London. JAMCO considers that the litmus test is the extent to which the regime delivers access for ACP

bananas to the EU market and also provides a remunerative return to suppliers of ACP bananas. Some of the conclusions drawn are summarised herein. -With respect to access, in Phase I all countries can access the 850,000 tonnes of Quota C. ACP exports enter duty-free while third countries' exports face a euro 300 per tonne duty, which might be lowered to facilitate "sufficient quantities" of Latin American bananas in that quota to prevent EC exposure to the risk of an Article XIII violation. Unofficially, EC representatives state the figure of 100,000 tonnes as meeting this criterion. This eventuality offers legitimate grounds to fear that not all ACP exports will enter Quota C if ACP exports to the EU are kept at the 775,000 tonnes per annum average for the period 1998 2000, since some ACP suppliers will experience difficulty in attaining access to the EU market. Furthermore, any reduction in the tariff levied on third countries' imports will be at the expense of the high cost ACP producers, viz. Jamaica and the Windward Islands. In Phase II, the available volume in Quota C falls by 100,000 tonnes to 750,000 tonnes and is hermetically sealed for the exclusive use of ACP bananas. Such a move would snuff out the competition between Latin American and ACP bananas while maintaining the real threat of not all ACP exportable bananas entering the EU. -With respect to remunerative return, the Commission's stipulation that 100,000 tonnes of Latin American bananas should enter via Quota C in Phase I and via Quota A/B in Phase II will trigger an over-supplied market thereby depressing prices. Secondly, the dismantling of country specific quotas compounds the problem of increased supplies. With the removal of this measure, Ecuador is no longer pegged to a market share of 26.1% of Quotas A and B. Although Ecuador raised its minimum export price from US$ 2.10 per 18.14-kg box to $2.90, even at this increased price, the competitiveness of Ecuadorian bananas is unrivalled. For example, Costa Rica's minimum export price is $5.60 per box. Thirdly, licences will now be concentrated in the hands of a small band of operators increasing their ability to exert pressure on producers to accept lower prices. The top five operators (Chiquita 35%, Fyffes 12%; Dole 11%; Del Monte 9% and Noboa 8%) would account for 75% of all available licences in the quotas reserved for Latin American imports. INTELLECTUAL PROPERTY On May 3 the World Intellectual Property Organisation (WIPO) concluded in Geneva the first Intergovernmental Committee on Questions of Intellectual Property in relation to Genetic Resources, Traditional Knowledge and Folklore. The 3-day meeting was intended to establish areas of consensus on these issues. On genetic resources, member countries were very much in favour of reflecting on contractual instruments and administrative and legal measures as means of securing access to and sharing of benefits. On traditional knowledge, countries wanted to see the work of the Committee concretely directed towards the establishment of a definition of traditional knowledge, the clarification of linkages between existing intellectual property rights and traditional knowledge, and on research for new standards. A majority of members overtly supported the idea of the creation of a regulatory framework in the field of traditional knowledge,

aimed at organising international action for the protection and sharing of benefits related to their exploitation. Regarding the search for solutions within multilateral systems, many delegates pointed to ongoing processes in this area already underway in the UN Food and Agriculture Organization (FAO) and the WTO's Council for Trade in Intellectual Property Rights (TRIPs). The next meeting is likely take place in October 2001. Further detail is obtainable at http://www.wipo.org/news/en/

RNM TRAINING WORKSHOP ON DISPUTE SETTLEMENT Continuing its series of training workshops on trade negotiation subjects funded through the CRNM/IDB Project, the RNM is organising this two-day Workshop at the Accra Beach Resort in Barbados on June 7-8. Dispute Settlement is interlinked with the substantive obligations that CARICOM member states assume in international trade agreements and is fundamental to the maintenance of negotiated rights. The target group is senior government officials and officials of regional Secretariats with relevant portfolios, private sector and NGO interests, as well as attorneys with a particular interest in trade law. The Workshop will: -promote a better understanding of the concept of dispute settlement among negotiators in the region; -enhance the ability of countries to fully participate in the negotiations both at the regional (FTAA) and multilateral levels (WTO) -increase the awareness of the importance of this issue to the governments and officials in the region and the prospects for ensuring an effective presence in future dispute settlement discussions -examine key aspects of the WTO DSU and its operation -examine possible critical concerns for CARICOM, in relation to regional and multilateral dispute settlement systems, such as availability of resources, and effective representation, intra-CARICOM consultation -examine the US Section 301 regime which led to the second banana panel to gain a greater understanding of the US internal processes -examine Protocol IX of the CARICOM Single Market and Economy which, among other things, establishes the Caribbean Court of Justice -explore the dispute settlement discussions at the FTAA level and increase the conceptual tools and practical knowledge of the negotiators to fully participate in this process. -explore other methods of dispute settlement such as arbitration, mediation consultation etc. For further information please contact mroberts@caribrnm.net

UPCOMING EVENTS FTAA Negotiations

The negotiations calendar for the remainder of May is as follows: Market Access (14-16); Government Procurement (17-18); Competition Policy (21-22); Subsidies, Anti-dumping and Countervailing Duties (23-24); Intellectual Property Rights (28-29); Agriculture (3031) ACP Meetings in Brussels May 11: The 26th Session of the ACP-EC Joint Council May 12: ACP ministerial consultations in view of the 3rd UN Conference on LDC's (May 14-20) May 13: 2nd Meeting of the ACP Ministerial Trade Committee May 14: 1st ACP-EU Trade Ministerial Committee

-----------------------------------------------------------------------------------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. -----------------------------------------------------------------------------------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 April 30, 2001

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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. ************************************************************************ - EU-ECUADOR BANANA AGREEMENT - G-24 TARGETS PROTECTIONISM IN DEVELOPED COUNTRIES - POST-URUGUAY ROUND MARKET ACCESS - NEWS BRIEFS - UPCOMING MEETINGS ************************************************************************

EU-ECUADOR BANANA AGREEMENT The EU and Ecuador announced today they have reached an Understanding to resolve their long-standing dispute over bananas in the WTO. This follows on the April 11 agreement between the European Commission and the United States, which Ecuador had rejected. Today's understanding is said to be fully compatible with the one reached between the EU and the US. It recognises Ecuador's rights as the principal supplier and sets out, in detail, the qualification and management provisions governing the "nontraditional operators" through a change in the proposed regulations. These initially stipulated (a) the need to be established in Europe; (b) to be involved in European banana trade, and (c) to have a minimum turnover in any one of the last three years of 400,000 Euros. This latter figure has now been raised to 1.2 million Euros, which accords with Ecuador's interests and also benefits ACP suppliers. Caribbean producers meeting last weekend in Miami with Ecuador had favoured an even higher level of 4 million Euros. The new regime abolishes the EU's import breakdown on a country quota basis, increases the import volumes from Latin America by 100,000 tons, and improves market access to traditional and non traditional importers from Ecuador. The EU will institute a system of licensing, based on historic reference reference periods from July 1, 2001, reserving "a very significant share" of the trade for non-traditional operators working within an open and competitive environment thus facilitating access for small and medium sized businesses. The transitional arrangement will last until January 1, 2001, when a tariffonly system is scheduled to take effect. The EC will now initiate the necessary procedures to propose to the Council of Ministers an adjustment in the quantities in the various quotas, in order to expand access for Latin American bananas and to secure a market share for a specific quantity of bananas of ACP origin. Ecuador has pledged to work actively to secure acceptance of the EU's request for the necessary WTO authorisation. The EU will begin negotiations with producing countries necessary under WTO rules in good time to introduce the eventual tariff-only system. The EC will now table the necessary proposals to the Council of Ministers and the European Parliament in order to fully implement the agreement as soon as possible. Caribbean producers need to evaluate the impact of this modification of the April 11 agreement with the USA.

G-24 TARGETS PROTECTIONISM IN DEVELOPED COUNTRIES Ministers of the Intergovernmental Group of Twenty-Four on International Monetary Affairs held their sixty-fifth meeting in Washington, D.C., on April 28, 2001. The communiqué issued by these developing country representatives addressed, among other subjects, Trade and Development. While noting that the share of developing countries in world trade has increased in the last three decades, they recognized, however, "that many developing countries, particularly low-income countries, have not benefited from this

trade expansion. This is due, in part, to protectionist mechanisms, such as anti-dumping and countervailing duties, as well as subsidies in advanced economies and the slow implementation of trade liberalization agreements, such as those in agriculture, which impose prohibitive costs on developing countries". "Barriers to developing country exports in industrialized markets continue to severely disadvantage developing countries. For example, industrialized countries spend more than $300 billion a year on agricultural subsidies, which is roughly equivalent to the total GNP of sub-Saharan Africa, and their tariffs on meat, fruit, and vegetables‹all primary exports from the developing world‹can exceed 100 percent. These have the effect of inhibiting developing country exports and competitiveness. It is conservatively estimated that costs in terms of foregone income to developing countries from trade restrictions on their exports exceed $100 billion a year. It is pertinent to note that aggregate aid flows to developing countries are less than $60 billion a year. Furthermore, FDI flows remain concentrated in a small number of developing countries, but many more are yet to receive FDI at the levels necessary to spur their development".

POST-URUGUAY ROUND MARKET ACCESS The WTO Secretariat has produced a new study evaluating post-Uruguay Round market access conditions after more than five years of the existence of the Agreement. The study, entitled Market Access: Unfinished Business, focuses on market access for industrial products, agriculture and services. The following are some findings of the study that : With respect to industrial products:-for numerous countries, tariffs are bound at levels that are significantly above the rates actually applied, which does not contribute to the stability of applied rates, since countries can, if they wish, raise their applied tariff up to the level of their binding. The differential is illustrated, for example, by the case of Costa Rica with a simple average bound tariff close to 45% while its average applied rate is just above 6%. -the simple average bound tariff for developed countries is 6.5% but these countries have numerous tariff peaks, mainly in the textiles and clothing and leather sectors. -most developed countries' tariffs increase with the level of processing. Such "tariff escalation" biases the production structure of developing countries towards less refined products and thus represents a major impediment to their industrialization -anti-dumping investigations have increasingly targeted developing countries; while in the late 1980s developing countries accounted for around 10% of all anti-dumping investigations, since 1995 they are responsible for approximately half the initiations. With respect to agriculture:- agricultural bindings are not always transparent. Transparency and comparability of tariffs is impaired by the use of specific or mixed tariff rates, that is, by non-ad valorem tariffs. - the share of tariff lines with duties above 100% is very high reaching 45% for India and Norway, and 69% for Bangladesh.

- only 30 WTO Members have commitments to reduce domestic support to agriculture, the so-called Aggregate Measurement of Support (AMS) reduction commitments. For only half (10) of the 21 committed Members for which sufficient information is available, has the current AMS decreased between 1995 and 1997. - between 1995 and 1998 the average use of export subsidy commitments has increased for 10 of the 25 countries with reduction commitments. With respect to services: - the current schedules of commitments reflect the status quo of market access rather than the result of liberalisation. Many countries have made minimal commitments and even the most comprehensive schedules contain a large number of restrictive limitations which will be a target for negotiating partners. - of the 160 possible service subsectors on which members can choose to schedule specific commitments, about one third of WTO Memebrs have made commitments on 20 subsectors or less, one third on between 21 and 60 subsectors and the remaining third by more than 61 subsectors. On average a "typical" Member has undertaken commitments on slightly more than 25 subsectors, thus covering about 15% of the total possible. -of the sectors attracting the highest number of bindings, tourism, financial and business services rank the highest, while health and education services are the elast commonly scheduled of the major sectors. - the bindings undertaken for mode 2 (consumption abroad) are significantly more liberal than those for the three other modes The study is available at http://www.wto.org/english/res_e/booksp_e/maccess_e.pdf

NEWS BRIEFS Canada-Costa Rica Free Trade Agreement signed The April 23 signing of a FTA by Trade Ministers of Canada and Costa Rica, the first between a "smaller economy" and a G-7 country, can be instructive for CanadaCARICOM trade talks which have only just begun (see RNM UPDATE March 17, 2001). Coverage of the agreement, which was signed by Trade Ministers in Ottawa the presence of Canadian Prime Minster Jean Chrétien and Costa Rican President Miguel Ángel Rodríguez, includes services, investment, government procurement, competition policy, customs procedures and trade facilitation, while taking into account economic differences between both countries. It allows free entry for 86% of Costa Rican products to the Canadian market immediately, 1% in four years and 15% over seven years, while Costa Rica will open its market to 67% of Canadian products immediately, 18.7% over 7 years and 14.7% over 14 years. The Costa Rican President indicated that the agreement allows sugar producers to export 20,000 tons of refined sugar immediately and that this quota would increase gradually until it is eliminated, at prices much higher than on the world market. It is noteworthy that Costa Rica maintains a large trade surplus with Canada, exporting mainly bananas

(around 33% of the total), pineapples (14%), coffee 11%), as well as semiconductors, melons, sugar, and other products. Costa Rica has already signed free trade agreements with Mexico, the Dominican Republic and Chile. Foundation Award for Caribbean Study The John D. and Catherine T. MacArthur Foundation has awarded a US$498,000 research grant to support a two-year policy study of governance, security, and globalisation in the Caribbean. The study focussing on four countries (Trinidad and Tobago, Jamaica, St. Lucia, and the Dominican Republic) will be co-directed by Prof. Anthony Bryan of the University of Miami's Dante B. Fascell North-South Center and Dr. Anthony Gonzales of the Institute of International Relations at the University of the West Indies in Trinidad, together with Dr. Stephen Flynn, Senior Fellow for National Security at the Council on Foreign Relations in New York. It recognises that greater openness is central to advancing economic development in the Caribbean but that nations must simultaneously safeguard their sovereign interests in the face of the rising incidence of international organised crime, illegal immigration, trade fraud, disease, narcotics and weapons smuggling, and money laundering. The study will develop policy recommendations for governments, regional organisations and the private sector on how Caribbean states might develop new practices and capabilities to deal with both imperatives. The project has commenced in Jamaica, where the survey exercise will take place during June to August. Major seminars with stakeholders and evaluation meetings will take place in Kingston and Miami during October and November. The survey exercises for Trinidad and Tobago, St. Lucia and the Dominican Republic will take place from November 2001-March 2002.

UPCOMING MEETINGS FTAA The Chairman of the Trade Negotiations Committee has released the Schedule of Meetings for the period May 2001 to September 2001. Following the Buenos Aires Trade Ministerial and the recently concluded Quebec Summit negotiating group meetings will resume with Services (May 7-9), which is now chaired by CARICOM, and Investment (May 10-11). ACP/Europe 8 May - ACP Ministerial consultations on Bananas and Sugar ACP Ministerial Committees on Development Cooperation Bureau of the ACP Council 9-10 May - ACP Council of Ministers

11 May -

ACP-EC Council of Ministers

13 May - 2nd Meeting of the ACP Ministerial Trade Committee 1st Meeting of the Joint ACP-EC Ministerial Trade Committee -----------------------------------------------------------------------------------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

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RNM UPDATE April 24, 2001

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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. ************************************************************************ - QUEBEC CITY SUMMIT - BANANA DEVELOPMENTS - ACP MINISTERIAL DECISIONS - NEWS BRIEF ************************************************************************

QUEBEC CITY SUMMIT The Third Summit of the Americas Meeting in Quebec City, Canada, on April 20-22 approved the Declaration of Quebec City and a Plan of Action "to strengthen democracy, create prosperity and realize human potential". The Plan covers commitments embracing Democracy, Human Rights and Fundamental Freedoms; Justice, Rule of Law and Security of the Individual; Hemispheric Security; Civil Society; Trade, Investment and Financial Stability; Infrastructure and Regulatory Environment; Disaster Management; Environmental Foundation for Sustainable Development; Agriculture Management and Rural Development; Labour and Employment; Growth with Equity; Education; Health; Gender Equality; Indigenous People; Cultural Diversity. The Declaration included a 'democratic clause' enshrining the rule of law and respect for the democratic system as both "a goal and shared commitment" and as "an essential condition of our presence at this and future Summits". The democratic clause stated further that any unconstitutional alteration or interruption of the democratic order in a state of the Hemisphere constitutes an "insurmountable obstacle" to the participating of that state's government in the Summit process. CARICOM's position, articulated by Prime Minister Owen Arthur of Barbados at the opening session, had been that their experience had led to "the strong belief that we can and we must fashion a hemispheric community from which no one is excluded, least of all, in the name of democracy. The time must certainly have come for engaging Cuba constructively in the creation of a comprehensive community of the Americas". Speaking during the second day's plenary the Prime Minister of St. Lucia, Dr. Kenny Anthony, had argued also that "merely engaged in regular electoral exercises was not enough and the strongest traditions of democracy will pale in the face of overwhelming poverty, social exclusion and economic marginalisation". He argued further that, "Until we can wipe out poverty from our hemisphere, we cannot claim to have built successful democracies". With respect to the FTAA, leaders confirmed the decisions of the April 7 Buenos Aires Ministerial (summarised in RNM UPDATE April 12, 2001), including the deadline for concluding negotiations "no later than January 2005" and to seek its entry into force as soon as possible thereafter but no later than December 2005. Caribbean Heads were pleased that the Summit Declaration endorses the need to "meet the challenges inherent in the differences in size and levels of social, economic and institutional development in our countries and our region". Related parts of the Plan of Action pledged to foster communication with civil society to ensure that it has a clear perception of the development of the FTAA negotiating process and to this end develop a list of options that could include dissemination programs in smaller economies. The Tripartite Committee institutions (IDB, OAS and ECLAC) are urged "to favourably consider requests for technical assistance related to FTAA issues from member countries, in particular from smaller economies, in order to facilitate their integration into the FTAA process as well as to develop a list of options that could include dissemination programs

in smaller economies". CARICOM will now chair the Negotiating Group on Services and vice-chair the NG on Subsidies, Anti-dumping and Countervailing Duties. It is to be noted that Bolivia and Nicaragua will be chair and vice-chair the Consultative Group on Smaller Economies. A new Technical Committee on Institutional Issues has been created and will be chaired by Brazil with Ecuador as Vice-Chair. A Declaration on Connecting the Americas launched a "Connectivity Agenda for the Americas" to facilitate the integration of the hemisphere into an increasingly knowledgebased society benefiting all citizens. Canada is lending support through the Institute for Connectivity in the Americas, to be guided by a hemispheric advisory board made up of representatives from governments, non-governmental organisations, business sectors and academic communities. It will provide a contribution of $20 million to the Institute in this fiscal year for support of specified programs that connect the hemisphere. Proposed projects must come from developing countries; must have partners in the government, NGO, business or academic communities; and must support existing local or regional strategies for connectivity. The Summit also provided an opportunity for CARICOM Heads to meet with President Bush on April 20, when Heads sought the President's aid in their fight against the OECD and its harmful tax competition scheme.

BANANA DEVELOPMENTS Sequel to EU-US Agreement The April 11 agreement on bananas (in RNM UPDATE of April 12) has elicited varied responses. CARICOM countries do have some concerns since the quota allocated to ACP producers has been cut from 850,000 tons by 100,000 tons, which other producers will be able to supply. However, their reaction is that the agreement is more acceptable than the previous "first-come first served"(FCFS) proposal, which CARICOM, the U.S. and Central American countries had all criticised. This arrangement would have offered licences to the first operators to deliver their fruit to EU ports by set target dates at specific prices. Caribbean producers immediately saw the handicap they would face since banana boats moved from island to island to pick up fruit. On the other hand, the FCFS proposal had been favoured by Ecuador, the world's leading banana exporting country. Ecuadorean authorities have reacted strongly to the announcement of the EU-US deal which was presented to it as a fait accompli and the government is requesting consultations with the EU on the matter. Ecuador has indicated that if a satisfactory solution is not found it will not have any other alternative than to request immediate consultations within the WTO. This position contrasts with the view expressed by the European Commission that Ecuador would be able to export more bananas to the EU than under the FCFS proposal.

Some concerns of Caribbean banana exporters are that while the retention of a tariff-rate quota (TRQ) system secured ACP access to the EU market, remunerative return is severely jeopardised in two ways. Firstly, siphoning off 100,000 tonnes from the Quota C (ACP fruit) and augmenting Quota B (non-ACP) increases the volume of dollar fruit imported, thereby depressing prices. Secondly, the system of allocating licences to "nontraditional importers" offers no restitution to disenfranchised operators. If traditional commercial partners effectively have no access to dollar bananas, the commercial basis for their payment of high f.o.t. (free on truck) prices is removed. The EU has granted the two US operators increased market share - a development that might lead to reduced producers' prices. WTO Waiver discussions The joint EU-ACP request within the WTO for a waiver of their Partnership Agreement continues to face obstacles subsequent to the EU-US banana agreement. The Council for Trade in Goods (CTG), meeting in formal session on April 18 under the chairmanship of Hungary's Ambassador, addressed an agenda of which the main discussion item turned out to be the waiver issue (Item VI). The session became bogged down after Ecuador sought to block discussion of the item on the ground that it was not an appropriate agenda item, a position strongly supported by Paraguay. The EC Representative argued that consideration of the item should proceed, and this in light of the banana agreement which had been made public. The EC argued moreover that it was incumbent on the CTG to see that the EU's proposed legislation on a banana regime complied with the details and conditions laid down for approval of a WTO waiver. Paraguay supported Ecuador's position complaining that only a small number of developing countries were excluded from the Partnership Agreement (PA) and that they would be disadvantaged, so the PA should be extended to other developing countries. Paraguay then formally proposed the establishment of a working party to examine the implications of the PA vis-à-vis other developing countries before proceeding to give consideration to the ACP-EC waiver request. Gabon¹s Ambassador, Madame Bike, speaking on behalf of the ACP, noted that patience had been exercised thus far and they would wish to move forward on an issue which had been on the table for the past 14 months. Other countries supported the objective though some alluded to the insufficiency of documentation. Latin American banana producers (Costa Rica, Honduras, Guatemala) indicated willingness to consider the EC-ACP waiver request, as did the US, Canada and the Czech Republic. Support also came from Mauritius, Senegal, Ivory Coast and Madagascar. St. Lucia intervened following the OECS line of support for the waiver. Discussion of the issue will continue at a later date. Windward Islands Banana Marketing Banana restructuring has been taking place at different levels, not the least of which is in its marketing. An industry shift has taken place whereby the Windward Islands Banana

Development & Exporting Company (WIBDECO) U.K. is now controlling all bananas entering the British market from the four Windward producers. This increases the company's leverage with supermarkets regarding banana prices, in a context in which about 70 to 75 percent of Windwards fruit are sold to the supermarkets. It also facilitates marketing of the Windward Islands brand so that consumers know precisely where fruit comes from. Previously these bananas were sold as Geest and Fyffes bananas which could have come from anywhere. Geographically-identified branding enables the marketing claim that Windward Islands bananas originate from the most ethical source for bananas shipped to Europe. WIBDECO has also moved its offices from London to Southampton to carry out marketing, technical support and quality assessment.

ACP MINISTERIAL DECISIONS The first meeting of the ACP Ministerial Trade Committee took place in Johannesburg on 10 and 11 April. The Committee is composed of 18 members from the 6 ACP subregions (Southern African, Eastern Africa, Central Africa, West Africa, the Pacific and the Caribbean). Consideration of negotiations with the European Union led to agreement that while countries and regions were entitled to adopt national or regional approaches to the upcoming negotiations, it was essential to ensure that there was sufficient coordination within the ACP Group to prevent any weakening of solidarity among its members. The Committee agreed that preparations for the negotiation of new trading arrangements with the EU, scheduled to begin in September 2002, should be accelerated in view of the short time remaining. In particular, Ministers mandated the ACP Committee of Ambassadors and the Secretariat to prepare draft guidelines. The Committee agreed to recommend to the next ACP Council of Ministers (Brussels, 8-10 May 2001) the draft Plan of Action for preparing the negotiations which sets out the types of activities to be undertaken (regional seminars, impact studies, etc.) and the deadlines to be respected. The Committee also adopted the agenda of the 1st meeting of the ACP-EU Ministerial Trade Committee, scheduled to take place in Brussels on May 14, 2001. This joint committee includes ministerial representatives from all 15 EU member states and has a specific mandate to oversee preparations for the upcoming negotiations, as well as to supervise the implementation of the trade provisions of the Cotonou Agreement, in particular issues of market access. The ACP Ministerial Trade Committee appointed the Hon. Anthony Hylton, Minister of Foreign Trade of Jamaica, as Chair for a period of six months. The Ministers of Trade from Kenya and Samoa will take over the chairmanship in October 2001 and April 2002, respectively. During the South Africa-ACP consultations, Ministers held an exchange of views on the

following issues: economic governance, including issues of government procurement ; trade-related issues, including rules of origin, sanitary and phytosanitary regulations, environment and fisheries ; adding value to key sectors and commodities ; strategic options in trade policy ; the experience of ACP countries with regard to the African Growth and Opportunity Act, the Caribbean Basin Initiative, the Free Trade Areas of the Americas, and the lessons to draw from the negotiations of the Lome and Cotonou Agreements. NEWS BRIEF On April 27, the WTO General Council will convene a Special Session on Implementation of Uruguay Round commitments. The Chairman of the General Council and the Director-General will report on ongoing consultations with WTO Members. -----------------------------------------------------------------------------------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

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RNM UPDATE May 24, 2001

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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. ************************************************************************ - ACP-EU MINISTERIAL - WORLD TRADE REPORT - UN THIRD LDC CONFERENCE - BRIEFS - UPCOMING EVENTS ************************************************************************

ACP-EU MINISTERIAL The ACP-EU Council of Ministers held its 26th meeting in Brussels on May 11. The agenda included: delegation of powers to the ACP-EU Committee of Ambassadors, trade, sugar, development finance cooperation, enlargement of the European Union, political dialogue and other issues. ACP positions, as well as decisions, on some of these issues are summarised here. The Ministers delegated to the Committee of Ambassadors important powers including the adoption of the Procedures for the award of contracts financed from the resources of the European Development Fund, General Conditions applicable to contracts financed by the Fund and procedural rules on the arbitration of disputes over contracts financed by the Fund. On this matter, the ACP Group expressed the wish for a more equitable distribution of these contracts between the ACP and the EU sides. The ACP-EU Committee of Ambassadors was also allowed to decide the use of unallocated resources from the 8th European Development Fund. In regard to preparation for the negotiations on the Economic Partnership Agreements (EPAs), the ACP co-President announced that the ACP Group had designed a comprehensive package of preparatory activities in anticipation of the operationalisation of the EDF 20 million Euro programme earmarked for support and capacity building. However, the Chairman of the ACP Ministerial Trade Committee, Hon. Anthony Hylton, Minister of Foreign Trade of Jamaica, pointed out that the failure of the European Commission to deliver on the promise of financial support to ACP preparatory activities made this preparation difficult. He said "Unless the Commission can do better on implementation, we may need to look again at the September 2002 target for the commencement of the negotiations. That is not a prospect from which we take any comfort". On preparation for the Qatar Ministerial, Minister Hylton clarified ACP concerns that many issues that contributed to the failure of the Seattle Ministerial Conference, including those related to the implementation of the Uruguay Round Agreements, Decisions and the inherent imbalances therein, remain unresolved. Despite receiving many proposals from developing countries for reviewing several WTO rules, it had not been possible to reach consensus on these demands. He complained that there had been very little progress, if any, in making the WTO rules and procedures more appropriate to the needs and interests of developing countries. The ACP Group also reiterated that issues such as labour and environmental standards should not be incorporated into the multilateral trade negotiations at the risk of these being used for protectionist purposes were great. However, the Group reaffirmed its commitment to implementing labour and environmental standards as defined by the relevant international conventions. The ACP position on Bananas was expressed by the Hon. Julian Hunte, St. Lucia's

Minister of Foreign Affairs & International Trade. Welcoming the Agreement which the EC reached with the United States and Ecuador, he expressed ACP concerns about the proposed reduction of quota "C" by 100,000 tonnes, for the smaller quota will certainly prove inadequate, with the inclusion of the non-traditional suppliers. The ACP are also concerned that a period of transition to a single tariff ending as early as 31 December 2005 will leave the ACP too little time to complete the massive restructuring necessary. The ACP urged the EU to provide financial support for ACP suppliers to help them retain their competitiveness and provide compensation to those who suffer a loss of earnings due to the modification of the regime. Finally, they are concerned that they have not been consulted in the negotiations resulting in the EU-USA agreements and would expect full consultation in formulating the text of the request for the GATT Article XIII waiver which the Agreements with US and Ecuador envisage. The ACP Ministerial Spokesman on Sugar, Hon. Pravind Jugnath, Minister of Agriculture, Food Technology & Natural Resources of Mauritius, pointed to the fact that the EU had not yet agreed on the terms and conditions of the future Regime and on the Commission's mandate for the renewal of the Special Preferential Sugar Agreement as a matter of major concern to the ACP. The ACP shared the view of the European Parliament that a six-year regime would provide a stable and predictable framework for the orderly management of the sugar sector. They requested that in the implementation of the 'Everything but Arms' (EBA) Initiative, the LDC sugar quota be in addition to the current SPS quantities. Political dialogue, which is enshrined in the Cotonou Partnership Agreement, was a major issue for the ACP Group. The ACP official statement was delivered by Hon. Billie Miller, Deputy Prime Minister of Barbados. She strongly criticised the lack of political dialogue and the level of European representation in the joint meetings pointing out that ACP ministers had not been talking with their ministerial counterparts, given that Europe was represented by EC Commissioners. Minister Miller also criticised the exclusion of the ACP from the definition of ACP-EU cooperation programmes and the lack of consultations on the implementation of cooperation. The Minister also pointed out that though the EU is dedicated to the concept of "regional partnership agreement", by the same token, the ACP are dedicated to maintaining the ACP Group. She added that before Cotonou's ratification by the EU and before the WTO waiver had been obtained, "it did not sit well with us that the EBA was announced and without reference to us in the ACP", which, she said, would undermine Cotonou. Minister Miller emphasised, "We are glad of the benefits which will accrue to the LDCs but at the same time, we are not disposed to permit the EBA to foment division among the ACP - the LDCs and the non-LDCs... But at least some impact on Cotonou and the existing commodity protocols ought to have been considered from the onset... Amidst all the rhetoric about poverty alleviation and poverty eradication, it needs to be understood that many of us are the recently poor and some are still among the ranks of the poor - there is nothing to be gained and everything to lose by actions which are designed to have the effect of returning the recently poor to poverty...". Additional information is available through the ACP Secretariat at

http://www.acpsec.org/gb/press/146b056e.html

WORLD TRADE REPORT The WTO Secretariat has released its 151-page Annual Report 2001, which includes an overview of the developments in the international trading environment and a summary of WTO activities. Among the findings of the preliminary review of world trade developments in 2000 are: --Exports and imports of developing countries expanded by more than 20%, lifting their share in world merchandise trade to the highest level in the last 50 years. Various factors contributed to this outcome, including the economic recovery in Latin America and East Asia, the sharp rise of oil prices and stronger import demand in developed countries. --The value of world merchandise trade rose by 12.5% in 2000 - twice the average for the last decade - to reach nearly 6.2 trillion dollars. World commercial services trade is estimated to have expanded by 5% (to 1.4 trillion dollars) in 2000, the fastest annual growth since 1997. For the second year in a row, the value of commercial services trade expanded less rapidly than merchandise trade, but for the 1990-2000 period its 6% annual growth matched that of merchandise trade. --The year 2000 witnessed not only outstandingly high global trade and output growth of 12% and 4%, respectively, but also an exceptionally large excess of trade growth over output growth. --In 2001, the world economy is retreating from the high growth path seen last year, dimming the prospects for world trade in 2001. The volume of world merchandise trade is expected to grow by 7%, a marked reduction from the estimated 12% in 2000. The complete report is available at http://www.wto.org/english/res_e/anrep_e/wto_anrep01_e.pdf

UN THIRD LDC CONFERENCE The Third United Nations Conference on the Least Developed Countries (LDCs) was held in Brussels from 14-20 May, 2001. The Declaration issued by participating governments recognised that the goals of the Second UN Conference had not been met, that LDCs continued to be marginalised in the world economy and that they continue to suffer extreme poverty. LDCs are 49 in number with a total population surpassing 600 million. Participating governments adopted a Programme of Action for the LDCs for the decade 2001-2010 covering a wide range of subjects, including trade, foreign direct investment (FDI), official development assistance (ODA) and external debt, aimed at the eradication

of poverty and the improvement of the quality of lives of people in LDCs. This is to be achieved through strengthening the LDCs' abilities to build a better future for themselves and develop their countries. It was recognised that the primary responsibility for development in LDCs rested with LDCs themselves, but that their efforts needed to be given concrete and substantial international support from Governments and international organisations in a spirit of shared responsibility through genuine partnerships, including with the civil society and private sector. With respect to trade, governments expressed the belief that increased trade was essential for the growth and development of LDCs; that a transparent, non-discriminatory and rules-based multilateral trading system was essential for LDCs to reap the potential benefits of globalisation; that the accession of LDCs to the WTO should be encouraged and facilitated. Governments committed themselves to seizing the opportunity of the fourth WTO Ministerial meeting in Doha in November 2001, to advance the development dimension of trade, in particular for the development of LDCs. They stated their aim to improve preferential market access for LDCs by working towards the objective of dutyfree and quota-free market access for all LDCs´ products in the markets of developed countries, as well as to take measures to address problems caused by supply-side constraints. They emphasised that the crucial importance of trade and economic growth must be reflected in poverty reduction strategies. Regarding official development assistance (ODA), governments pledged not to spare any effort to reverse the declining trends of ODA and to meet, expeditiously, the targets of 0.15% or 0.20% of GDP as ODA to LDCs. On external debt they pledged to make expeditious progress towards full cancellation of outstanding official bilateral debt within the context of the enhanced HIPC Initiative (Debt Initiative for Heavily Indebted Poor Countries), as well as to provide debt relief to post conflict countries within the flexibility provided under the HIPC framework. The full Declaration can be obtained at http://www.un.org/events/ldc3/conference/declaration.htm BRIEFS ACS Meeting The RNM participated in the Second Meeting on Inter-Secretariat Co-operation in the Greater Caribbean, which was convened at the Secretariat of the Association of Caribbean States (ACS) in Port-of-Spain, on May 17-18, 2001. The meeting was attended by the Secretaries General of CARICOM, SIECA (Central American Economic Integration Secretariat), and SICA (Central American Integration System), as well as the Permanent Secretary of the Latin American Economic System (SELA). The OECS Secretariat, Caribbean Tourism Organisation (CTO) and Caribbean Export also participated. The meeting provided a useful opportunity to review trade, tourism, information systems and other developments, as well as the functioning of work programs of the participating entities, including studies and training programmes being undertaken. EU-Candidate Ministerial

The European Union and Candidate Countries held a Ministerial Conference at Ljubljana on 11-12 May 2001 on WTO and Trade Issues. The Ministers agreed on the importance of launching, at the Fourth WTO Ministerial meeting in Qatar in November 2001, a new comprehensive round of multilateral trade negotiations and agreed to continue to work together towards this shared objective.

UPCOMING EVENTS --The WTO will hold its Trade Policy Review of OECS countries on 5-7 June. Such reviews are mandated by the Uruguay Round agreement and are intended to facilitate the smooth functioning of the international trading system by enhancing the transparency of Members' trade policies. Reviews have been carried out of only two CARICOM Members - Jamaica and Trinidad and Tobago. --The Caribbean Association of Industry and Commerce (CAIC) will hold its Thirteenth Annual Private Sector Conference 2001 in Kingston, Jamaica, on June 25th. The theme of the Conference is "Locating the Caribbean's Competitive Advantages: Preparing the Regional Private Sector for Globalisation". --The WTO will be the venue on 6-7 July 2001 for a symposium on critical issues confronting the world trading system. Representatives from governments, nongovernmental organisations, the media and members of the academic community are invited to participate. Work sessions deal with: (first day) Agriculture, TRIPS - Access to Essential Medicines, Trade and Environment, Services, WTO & Civil Society; and (second day) Food Safety and the SPS Agreement, TRIPS - Bio-technology/ Biodiversity, Trade and Development, Services, and WTO & Civil Society.

-----------------------------------------------------------------------------------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. -----------------------------------------------------------------------------------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 June 19, 2001

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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. ************************************************************************ - EUROPE'S NEW GSP REGULATIONS - CHINA-USA AGREEMENT ON WTO ACCESSION - ACTIVE USA TRADE AGENDA - IDB SUPPORT TO THE RNM - BRIEFS ************************************************************************

EUROPE'S NEW GSP REGULATIONS The European Commission adopted on June 12 a proposal to revise the Generalised System of Tariff Preferences (GSP) for the years 2002 to 2004, the implications of which need to be examined carefully by Caribbean countries and the ACP as a whole, since this could lead to increased competition in European markets for certain ACP exports. The GSP is an initiative deriving from discussions in the 1960s whereby industrialised countries granted non-reciprocal trade preferences to all developing countries, with current eligibility extended to 142 countries. The EU was the first to implement its own GSP in 1971, and for 90 developing countries and economies in transition, notably in Asia, the GSP provides the only preferential access to the EU's market. Yet access under the GSP is less beneficial than certain other non-reciprocal preferences (for example, Lomé Covention/Cotonou, CBI/now CBTPA and CARIBCAN), mainly because its product coverage is narrower, product eligibility can be modified, preference margins are smaller, market access is not necessarily on a duty-free basis (although the U.S. GSP is duty-fee) and individual countries are subject to "graduation" for particular products when they achieve specific market penetration levels. Under the European GSP, rules of origin are also less favourable than under Lomé/Cotonou. On the other hand, the GSP is WTO-compatible under the Enabling Clause (adopted for an indefinite period) whereas the above-mentioned arrangements require a WTO waiver. The existing EU Regulation entered into force on 1 July 1999 and covers the period until the end of 2001. It is the first one to cover all products and all arrangements (such agricultural, industrial, textiles GSP and so on). The EU's GSP is implemented over a tenyear cycle, with the present cycle spanning 1995-2004. The proposed regulation is

intended to be more user friendly through simplified rules and harmonised procedures on the different arrangements available under the GSP. The new Regulation, which fully incorporates the recent "Everything But Arms" (EBA) initiative in favour of 49 Least Developed Countries, is also intended to improve the effectiveness of special incentives to promote core labour and environmental standards. The proposal maintains duty-free access for all non-sensitive products, while all other products will be classified in one category of sensitive products, replacing the previous three categories (very sensitive, sensitive and semi-sensitive). In order to address the erosion of preferences, the key element is a proposed flat rate reduction of the MFN tariff for GSP beneficiaries by 3.5 percentage points. The proposed regulation is also designed to target preferences to benefit those countries, which need them most, rather than countries and sectors which are in a position to face international competition without preferential treatment. Previously, the eligibility of countries and particular sectors was decided only at the entry into force of a new regulation. This will now be done on an annual basis. However, in order to enhance predictability, eligibility of both countries and sectors will only be decided where countries meet the criteria during three consecutive years. The results of this permanent screening will be made public, so as to provide beneficiary countries with some early warning. Special incentive arrangements contained in the Regulation link additional benefits to respect for core labour and environmental standards. The additional trade preferences would simply double those benefits provided under the general arrangements. On labour, the special incentive arrangements will mean beneficiaries must apply effectively all ILO Conventions containing related to core labour standards in order to be eligible. On the other hand, beneficiary countries committing "serious and systematic" violations of those standards would run the risk of loosing their GSP status.

CHINA-USA AGREEMENT ON WTO ACCESSION After 15 years of negotiations with the United States of America, China has moved much closer to WTO accession by reaching agreement on major outstanding issues during June 4-8 bilateral talks in Shanghai, China, according to a June 14 release from the Office of the United States Trade Representative (USTR). Both countries had previously signed a bilateral agreement in November 1999 that contained China's commitments to provide greater market access for U.S. goods and services. The present agreement gives specificity to the earlier undertaking. China has now completed its negotiations on similar bilateral agreements with all members requesting market access agreements except for Mexico, but several important steps remain ahead in China¹s WTO accession process. An important subject of the June agreement was China's trade-distorting domestic support for Agriculture. The WTO Agreement on Agriculture (AoA) requires members to cap and reduce trade-distorting government support, both overall and for each specific product. The sum of support provided under these two categories is technically called a member's "Aggregate Measurement of Support," or AMS. In calculating their AMS,

members are permitted to exempt support that falls below a certain minimum amount, i.e.,"de minimis" exemption, which, is normally for developing countries 10% of the value of agricultural production. Because China's current level of support is less than 2% it has agreed to bind its AMS at zero and a de minimis exemption of 8.5%. It has also agreed to forgo recourse to a separate exemption under Article 6.2 of the AoA, which permits developing countries an unlimited exemption for support for programs intended to encourage agricultural and rural development for resource-poor farmers, in particular investment subsidies programs, input subsidies programs, and programs for diversification from narcotic crops. China also foregoes all export subsidies. With respect to Services, market access commitments in distribution and insurance services under the 1999 agreement were clarified. Similarly trading rights (the right to import and export goods) were clarified in respect of both "foreign-invested companies" located in China and foreign companies that export goods to China without forming a company in China. For the former, China will phase-in trading rights over a three-year period. In the case of the latter, the agreed text limits the types of requirements that China can impose as a condition for obtaining trading rights and provides that trading rights will be granted in a non-discriminatory and non-discretionary way. Further information is available at http://www.ustr.gov/releases/2001/06/01-38.pdf

ACTIVE US TRADE AGENDA On June 13, Republican U.S. Congressman Phil Crane, Chairman of the House Ways and Means Subcommittee on Trade, introduced a bill known as The Trade Promotion Authority Act of 2001 that would give the Executive Branch the authority it needs from Congress to negotiate key trade agreements, as set forth in the President George W. Bush's '2001 International Trade Legislative Agenda'. Enactment of the TPA is at the top of the President's Agenda, which aims to pursue (a) a new round of global trade negotiations under the auspices of the WTO; (b) A Free Trade Area of the Americas agreement; and (c) other regional and bilateral trade negotiations. The latter includes concluding free trade agreements with Chile and Singapore, implementation of the U.S.-Jordan FTA, the Vietnam Bilateral Trade Agreement and the Laos Bilateral Trade Agreement; renewal of the Andean Trade Preference Act; reauthorization of the General System of Preferences Program; and enactment of the Southeast Europe Trade Preference Act. The latter aims inter alia to "promote stability and economic development in Southeast Europe through increased access to the U.S. market and the facilitation of regional investment and to encourage a broader opening of markets in Europe and elsewhere to goods from within the region". It aims as well to support the promotion of core labor standards by adopting criteria that conform to those in existing preferential trade programs and to encourage governments in the region to eliminate trade in persons. The Agenda contains also a Labor and Environment "Toolbox" of actions that could be taken in combination with trade negotiations in order to promote the protection of

children, adherence to core labor standards, and mutually supportive trade and environmental protection policies. The President seeks to improve the country's trade adjustment assistance programs for workers by emphasising improvements in skills training. Further details are available from http://www.ustr.gov/agenda.pdf

IDB SUPPORT TO THE RNM Our previous issue (RNM UPDATE June 12, 2001) reported on activities under two projects supported by external donors. This issue summarises activities supported by the Inter-American Development Bank through the CRNM/IDB Project, over its two-year life cycle, which commenced in July 1999. The general objective of this Project is to enhance the skills and improve the technical data available to CARICOM countries in their preparation for regional, bilateral and multilateral trade negotiations. The Programme consists of two components: strengthening the technical capabilities of the RNM through a programme of Technical Policy Studies and strengthening the negotiating capabilities of CARICOM Member States through a programme of training. The Project has provided support for eight major Policy Studies in accordance with the Project Agreement. The Project has underwritten the cost of holding three regional consultations, which examined the draft final reports of some of these studies, along with others conducted within the RNM. The most recent CRNM/IDB activity of this type was the two-day Consultation on Technical Studies, held in Barbados on June 8-9, 2001. These consultations serve to disseminate findings and recommendations and to receive feedback for the preparation of final reports. Training programmes have been provided at two levels. Three workshops over 4-5 days have been held on trade negotiating skills and techniques. These are designed to improve the negotiating skills of technical officials involved in international trade negotiations. In addition ad-hoc training courses in specific areas have been held. Seven courses ranging from 2-4 days have covered the following subjects separately: Government Procurement, Intellectual Property, Market Access and Rules of Origin, Services, Competition Law and Policy, Rules of Origin and Dispute Settlement. These courses have benefited approximately 276 participants, who are, in the main, senior trade policy officials from government ministries and agencies and from regional institutions, as well as representatives from private sector bodies. Participants' feedback has been highly positive.

BRIEFS Caribbean rum industry concerns Proposals from beneficiary countries for the renewal of the ten-year old US Andean Trade Preference Act (ATPA), which expires on December 3, 2001, include the addition of new products for duty free treatment, including rum, a product in which Colombia is

already making limited inroads into the US market even though its products are subject to duty. Rum was initially excluded from ATPA in recognition of its importance to Caribbean economies, including Puerto Rico and the US Virgin Islands. Since Colombia is already a large producer of sugar cane based beverages with announced plans for further expansion, the West Indies Rum and Sugar Producers Association (WIRSPA), along with Caribbean ambassadors in Washington, has been active in making the Caribbean case to protect their access benefits gained under the CBI, prior to which Caribbean rum exports were subject to duties two to three times higher than Scotch whisky and other imported spirits. This was done primarily to protect the US domestic rum industry. Another concern derives from the fact that the Philippines has signalled its intention to ask for duty-free treatment for its rum under the US GSP. This is potentially the biggest threat for, apart from the fact that the Philippines is a huge producer, if such a request were granted, the USA would have to extend GSP treatment to the about 120 other countries (not counting CBI countries). The Philippines has on two previous occasions sought GSP treatment for rum in the U.S. market but this was denied on both occasions. The Philippines has until the end of June to submit its application. Intellectual Property Initiative for LDCs Haiti will benefit from a new initiative launched jointly by the World Intellectual Property Organization (WIPO) and the WTO, on 14 June 2001, to help least-developed countries (LDCs) maximise the benefits of intellectual property protection. Leastdeveloped countries have until 1 January 2006 to comply with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), six years later than other developing countries. LDCs have to bring their laws on copyright, patents, trademarks and other areas of intellectual property into line with the TRIPS Agreement. They also have to provide ways of enforcing the laws effectively, in order to deal with piracy, counterfeiting and other forms of IP infringement. Dr. Kamil Idris, Director General of WIPO, stressed that to give these countries national ownership of intellectual property protection was crucial in assisting them and he emphasized that intellectual property was a tool for technological advancement, economic growth and wealth creation for all nations, especially for LDCs. The initiative offers varied forms of technical assistance, including co-operation with preparing legislation, training, institution-building, modernising intellectual property systems and enforcement. Of the 49 countries defined by the UN as LDCs, 30 are members of the WTO (another six are negotiating WTO membership) and 41 are members of WIPO. Chile-U.S. Free Trade Negotiations These bilateral negotiations offer some insight into the duration and scope of bilateral trade negotiations nowadays. The negotiations were launched in December 2000 and the fifth round of talks has just been concluded (June 15). The parties have agreed to meet again from July 23-27 to be followed by monthly meetings from September to the end of

the year. Seventeen negotiating groups have been established, as well as a negotiating group "to discuss the larger institutional issues which will define the agreement". The parties aim to conclude a state of the art free trade agreement, setting high standards for such agreements in the Western Hemisphere and throughout the world.

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

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RNM UPDATE June 12, 2001 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. ************************************************************************ - RNM-RELATED REGIONAL MEETINGS UNDERWAY - RNM CONSULTATION CONCLUDED - RNM DONOR SUPPORT - OECS TRADE POLICY REVIEW COMPLETED - DOHA MINISTERIAL - UPCOMING EVENTS ************************************************************************

RNM-RELATED REGIONAL MEETINGS UNDERWAY A series of very important meetings on the subjects of CARICOM's external economic relations and the RNM are taking place this week in Kingston, Jamaica, culminating with the Fifteenth Meeting of the Prime Ministerial Sub-Committee on External Negotiations on 15-16 June. The week began with a meeting of officials comprising the Review Group on the Strategic Plan for the RNM, which continued discussions started last month in Guyana on an RNM organisational review, networking and co-ordinating in terms of external negotiating structures and in relation to the bodies of the Community, as well as payments and budgetary matters. Starting today Ministers attending a two-day Special Meeting of CARICOM's Council for Trade and Economic Development (COTED) will deliberate on the Region's external agenda, which covers Hemispheric Issues, including a plan for preparation of the Region's position on Smaller Economies in October 2001; ACP-EU Relations, in respect of preparations for negotiations on New Trading Arrangements (2002); WTO Matters; and Bilateral Relations, in respect of Canada, Colombia, Cuba, the Dominican Republic and Venezuela. The conclusions and recommendations of these meetings will be considered by the Prime Ministerial Sub-Committee, which is expected to submit its proposals for the Region's position on the various external issues discussed and for the future of the RNM to the full meeting of Heads of Government of the Caribbean Community, which will take place in Nassau, The Bahamas, on 3-6 July.

RNM CONSULTATION CONCLUDED The RNM held a two-day Consultation on Technical Studies, in Barbados on June 8-9, 2001, with the participation of government officials and regional organisations (the Caribbean Community Secretariat, OECS Secretariat and IICA), in addition to representatives from private sector and producer bodies, including the Sugar Association of the Caribbean, the Caribbean Poultry Association, Caribbean Export, and the Barbados Agricultural Society. The Consultation addressed issues arising from the following studies: -"CARICOM Agriculture and the FTAA: Priorities and Interests," by Prof. Timothy Taylor of the University of Florida; -two studies on the implications for the Caribbean of the European Union's 'Everything But Arms' Initiative, one of which dealt specifically with the sugar and rice industries, by Dr. Christopher Stephens of Sussex University; as well as -a study on "Implications of European Enlargement for CARICOM Countries", jointly presented by Professors David Greenaway and Prof. Chris Milner of Nottingham

University. The Consultation also brought together agriculture officials from the Region to consider an RNM draft negotiating proposal for the the WTO negotiations on Agriculture, in respect of Domestic Support and Export Competition. Discussions resulted in a consensus document, which will be submitted for the consideration of COTED and for eventual endorsement of the Conference of Heads of Government. CARICOM previously approved a proposal on Agriculture in respect of Market Access, which was presented at the Fifth Special Session (February 5-7, 2001) of the WTO Committee on Agriculture.

RNM DONOR SUPPORT First Phase of DFID Support Completed The two-year CARICOM Trade Project (CTP), financed by the UK Department for International Development (DFID) in support of RNM capacity-building, concluded on May 31. The CTP, which was project managed by the UK-based Emerging Market Economics (eme) Ltd., has blazed the trail for external donors, not merely by the range of activities enabled, but also through the originality of certain components. The Project has enabled the formulation of the RNM's Communications Partnership Strategy (CPS), an innovation aimed at involving its stakeholders in government, the private sector and civil society at large, in a two-way communications interaction with the RNM. CPS objectives have been to inform, educate and sensitise stakeholders about the international trade policy and negotiations environment, attendant challenges and opportunities for the Caribbean Region, as well as the RNM's mission and functioning, with the ultimate objective of eliciting stakeholder feedback. This is accomplished through inter alia lectures, addresses, papers and other presentations at workshops, seminars, symposiums and conferences; through briefing sessions, both routine and ad hoc; informal discussions; through the use of the RNM website and computer-generated information exchange and dissemination, including the RNM UPDATE series. Another innovation has been the Professional Trainees Programme, a fellowship scheme which enables candidates selected on merit to undergo a ten-month apprenticeship in order to deepen knowledge of trade negotiation subjects and develop negotiation skills, thereby cultivating a younger generation of Caribbean trade negotiators. Trainees are assigned to an RNM or affiliate office where they undertake supervised research, attend trade policy/negotiation courses in different locations, participate in actual international trade negotiations and undergo an attachment at some other international institution actively involved in trade negotiations. Under the CTP six Trainees have completed this programme and two are undergoing training. The programme is considered to be highly successful, arousing interest from potential trainees and the donor community. Support for technical studies has been a critically important element of the CTP, as indeed of other RNM projects funded by the CDB, IDB and CIDA. Ten major studies

have been undertaken under this facility. The CTP has in addition included a complementary facility whereby "call-down" experts can be mobilised at short notice for a variety of purposes, including Reflection Group Meetings, seminars and workshops; drafting text of the Region's proposals on certain negotiating subjects; short studies, technical papers, and peer reviews of larger technical studies; as well as expert attendance at negotiations and other activities. In addition the CTP included a small information technology-related component. With completion of the CTP, DFID has pledged to continue its support to the RNM over the long term, using as a basis the RNM's Strategic Plan being developed. It has decided to provide support directly as an indication of confidence and in order to forge a closer relationship, starting immediately with a six-month interim program. During this period DFID aims to support increased emphasis on communications activities and continuance of the trainee programme, as well as to support the inclusion of two technical staff members and provide assistance for strengthening the RNM's financial management system. Canada-supported trainee activity underway Four RNM Professional Trainees funded under the RNM/CIDA Trade Support Project, which is being implemented since January 2, commenced their fellowships in June. The trainees were chosen in April from over 220 applicants by a selection committee chaired by Prof. Kenneth Hall, Pro-Vice Chancellor of the Mona campus of the University of the West Indies, and comprising UWI and RNM personnel. Together with two trainees funded under the RNM/DFID program, the CIDA-supported trainees will participate in the Advanced Training Course on "Multilateral and Regional Trade Issues For The Americas", which will take place at Georgetown University in Washington D.C., from June 18-29. The course is being sponsored by the OAS and the WTO.

OECS TRADE POLICY REVIEW COMPLETED In what is regarded as an important exercise in transparency, on the 5th and 7th of June 2001 the Trade Policy Review Body of the WTO conducted the first review of the full range of trade policies and practices of the six OECS-WTO Members (Antigua and Barbuda, the Commonwealth of Dominica, Grenada, St Kitts and Nevis, St Lucia and St Vincent and the Grenadines). All six Members were represented at Ministerial level: Hon. Hilroy Humphreys; Hon. Osborne Riviere; Hon. Elvin Nimrod; Hon. Sam Condor; Hon. Julian R. Hunte; and Hon. Conrad Sayers. Delegations also included Permanent Secretaries and other senior officials. The OECS Secretariat was also represented. Dr. Kathy-Ann Brown of the RNM and Dr. Grynberg of the Commonwealth Secretariat served as Technical Advisors. The review was based on two documents: the WTO Secretariat report (WT/TPR/S/85

dated 7 May 2001), and the Report by the Governments (WT/TPR/G/85 of the same date). The Secretariat report covers the development of all aspects of the six OECS-WTO Members' trade policies, including domestic laws and regulations, the institutional framework, trade policies by measure and by sector. In keeping with WTO practice there was a Discussant, Ambassador Michèle Pranchere-Tomassini of Luxembourg. The meeting was chaired by the Ambassador of Finland. OECS Ministers told WTO Members and Observers that "the rules and procedures of the multilateral trading system must take into account the circumstances of all Members in particular the smallest and most vulnerable. We must not be made to feel that the system excludes us at critical moments. This exclusion will occur where there is no real and effective recognition of the unique circumstances we face as small island developing states and the need for special and different treatment. It is these circumstances which preclude our countries from taking advantage of the new trading opportunities." The Chairperson's concluding remarks included the following points: -All WTO Members would have gained a better appreciation of, and would no doubt pay greater attention to, the problems and difficulties of these economies; -WTO Members encouraged these countries to continue in their path to diversify their economies, particularly with a view to reducing their vulnerability. Some WTO Members considered that continued emphasis on developing the service sector offered the best growth opportunities, while other Members considered that agriculture would, and should, remain a key sector of the economies; -Members recognized the efforts made by OECS-WTO Members to further liberalize their economies, particularly through tariff reductions in the framework of their participation in CARICOM, but concerns were expressed with respect to the persistence of quantitative restrictions, wide-spread import licensing requirements, and the use of safeguard measures. Although reduced, tariffs remained relatively high, but Members took the point that this was mainly for revenue purposes; some suggested that a more simplified tariff structure might be more appropriate. Some Members also suggested alternative revenue sources, with a Member proposing the adoption of a Value-Added Tax, the feasibility of which OECS countries are already studying; -Several Members also encouraged the countries under review to improve their commitments in the WTO with respect to services, putting them at a level comparable with their current, relatively liberal practices; -The Review has made clear the extent to which complying with WTO rules is constrained by limited human resources. In this regard, although means might be found to make more efficient use of those resources, including through ongoing initiatives for greater regional cooperation, the inescapable conclusion is that at this juncture the countries under review need the support of the international community to participate more effectively in the multilateral trading system; and

-Several Members were understanding of the request by the OECS-WTO Members for special consideration for them, anchored in the principle of special and differential treatment granted in the WTO to developing countries. While noting the problem posed to OECS-WTO Members by the erosion of preferential margins, some Members expressed support for an early granting of the waiver from WTO rules for the Cotonou Agreement. Related documentation is available at http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm#oecs2001

DOHA MINISTERIAL Following the WTO Ascension break, the Chairman of the General Council, Ambassador Stuart Harbinson of Hong Kong, convened open-ended informal consultations on the Fourth WTO Ministerial to be held in Doha, Qatar and other issues. Some recent pronouncements by government representatives of CARICOM countries regarding the Ministerial provide insights into the Region's concerns and interests, in view of proposals by some countries that Doha should be an occasion for launching a new round of multilateral trade negotiations. A Communiqué issued by the the OECS-WTO Members on June 7 stated that they are "keenly aware that efforts are being made to launch a new round of multilateral trade negotiations. They feel that they cannot justify their unequivocal support to this initiative unless the problems of implementation of the Uruguay Round Agreements and Decisions raised by developing countries, including the special circumstances of small island developing states, are satisfactorily addressed and resolved." Ambassador Ransford Smith of Jamaica, in comments to the ACP Trade Ministerial Committee last month, explained that the most aggressive proponents want an 'inclusive' new Round, which would mean negotiations after Doha on investment, competition policy, transparency in government procurement, trade facilitation, environment, and possibly e-commerce. In addition some means of dealing with the labour issue would also be expected. These are the so called 'trade-plus' issues and are in addition to services and agriculture, which are already part of the negotiating agenda; possibly industrial tariffs; and aspects of rules, such as anti-dumping and subsidies. Among the issues posed, he argued, are the sheer human resource and technical demands; in an area such as competition policy, as many as eighty or more developing countries presently have no national competition policy legislation or the associated experience in administering such legislation, yet might be called upon to negotiate this issue at the multilateral level. In policy terms, this could result in the existing policy space available to developing countries being further eroded, as we have seen to be the case when new issues such as Trade Related Intellectual Property Rights (TRIPS) and Trade Related Investment Measures (TRIMS) were brought into the WTO at the time of the Uruguay Round.

Jamaica's ambassador has argued further that while there is a requirement that WTO Ministers meet every two years, there is no requirement for a Round to be launched. Moreover, the occasion would be timely to have a full review and assessment of the WTO's ongoing work of the Organization, including and especially on the impact of the Agreements already entered into. There is presently quite a full agenda in the WTO. There are already negotiations on Services and Agriculture; there are mandated reviews, monitoring of existing Agreements, and there is the critical need to strengthen technical assistance and give support to capacity building.

UPCOMING EVENTS The schedule of FTAA meetings for the next four weeks covers the following subjects: Antidumping and Countervailing Duties (June 11-13); Technical Committee On Institutional Matters (14-15); Government Procurement (18-19); Services (19-22); Investment (25-27); Intellectual Property (27-28); Civil Society (28-29); Market Access (July 2-6); Subsidies, Antidumping and Countervailing Duties (9-11); and Competition Policy (11-13). -----------------------------------------------------------------------------------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. -----------------------------------------------------------------------------------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 June 29, 2001

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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. ************************************************************************

- WTO DEVELOPMENTS - CARICOM-CUBA PROTOCOLS SIGNED - FTAA DISCUSSIONS - FATF MONEY LAUNDERING REPORT - BRIEFS - UPCOMING EVENT ************************************************************************ WTO DEVELOPMENTS The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) met in the week of 18-22 June 2001. Among the scheduled reviews were those of Antigua & Barbuda, Dominica, Grenada, Guyana, Jamaica, St Kitts & Nevis and Suriname with follow-up questions for St Lucia. The review process requires the notification of legislation, and submission of responses to questions. For such reviews it is standard for Members to make an introductory statement providing an overview of existing legislation and attempts at further implementation of TRIPs obligations. Dominica, Jamaica and Suriname were reviewed. Most had submitted responses to questions posed but some responses were outstanding. St Lucia had submitted responses to all outstanding questions, but received one more follow-up question from Switzerland seeking clarification of its position with respect to geographical indications - a growing subject of controversy in the TRIPs Council. Suriname is faced with particular challenges in adopting TRIPs-compliant legislation. With regard to the reviews that were taken up for the first time at the most recent meeting of the TRIPs Council, including Antigua and Barbuda, Dominica, Jamaica and St Kitts and Nevis, the Council agreed that: outstanding responses to initial questions posed in the newly initiated reviews should be submitted to the country concerned and the Secretariat by 13 July 2001. any further follow-up questions that countries may have in connection with these reviews should be submitted to the country concerned and the Secretariat by 3 August 2001. The Council also set a target date of 17 August 2001 for the submission of responses to follow-up questions which have already been posed, fine-tuned versions of responses to questions to which preliminary replies have been given and, to the extent possible, responses to any further follow-up questions that may be submitted before 3 August 2001. The repeated deferral of some Caricom Member States' reviews suggests that some sort of technical assistance is required. The Dominican Republic, which was also up for a review, received overall commendation for the comprehensive nature of their introductory statement and the detailed responses provided to questions. Reviews of

Antigua & Barbuda, Grenada, Guyana, and St Kitts & Nevis will be taken up in September 2001.

CARICOM-CUBA TRADE AND ECONOMIC COOPERATION AGREEMENT Trade and economic relations between CARICOM and the Republic of Cuba received another boost with the recent signing of two Protocols amending the Trade and Economic Co-operation Agreement between them, signed almost one year ago on July 5, 2000, at Canouan, St. Vincent and the Grenadines. The two Protocols, signed in Kingston last week on the fringes of the 15th Meeting of the Prime Ministerial Sub-Committee on External Relations, made amendments to the Product Lists contained in Annexes I to V of the Agreement, and introduced two new Agreements on the Reciprocal Promotion and Protection of Investments and on the Protection of Intellectual Property Rights. CARICOM Secretary General Edwin Carrington signed on behalf of the Community. The Hon. Ricardo Cabrisas, Senior Government Minister signed on behalf of the Government of the Republic of Cuba. Sir Shiridath Ramphal, Chief Negotiator of the Caribbean Regional Negotiation Machinery was also present, as well as several Ministers of the CARICOM countries. The Protocols require both Parties to notify each other when their internal legal procedures have been completed, in order to facilitate entry into force of the Agreement on or before 1 July 2001. It is envisaged that the Joint Commission established under the Agreement will convene its first meeting very soon after entry into force, to deal with a number of outstanding issues for both Parties. Among other things, the first meeting of the Joint Commission is expected to approve the revised Product Lists, which shall have legal effect as the list of products in Article V of the Agreement. That meeting is also expected to consider the treatment of Salt under the Agreement, as well as deal with the concerns raised by Jamaica and Barbados in relation to the Investment Agreement and the peak periods for certain agricultural products, respectively.

FTAA DISCUSSIONS The Present Phase The second tranche of FTAA negotiations began on May 7, 2001 with the meeting of the Group on Services. FTAA meetings have been taking place in Panama where the Secretariat is currently based. All nine (9) Negotiating Groups along with the four (4) Special Committees have held first meetings and are deciding on work programs for this tranche. The Groups will base their work plans on the instructions received from the

Ministerial Meeting, held in Buenos Aires, in early April 2001. The Ministerial Declaration of April 7 was summarised in RNM UPDATE April 12, 2001 and is available at HTTP://www.ftaa-alca.org/ministerials/BAmin_e.asp Delegations will aim, in this new tranche, to eliminate as many brackets as possible from the draft text, in order to reach agreement and move one step closer toward the proposed deadline of January 2005 for the completion of the FTAA agreement. Square brackets enclose the areas of disagreement and a significant portion of the text submitted by delegations still remains in brackets, signifying a lack of consensus on a wide number of issues. Plans are currently underway to make the draft texts available on the FTAA website for public access and RNM UPDATE readers will be informed as soon as this comes to pass. New Committee Meets The First Meeting of the Technical Committee on Institutional Issues (TCI) was held in Panama on June 14, 2001. The TCI is the fourth special committee established within the FTAA process, along with the Consultative Group on Smaller Economies, the Joint Government-Private Sector Committee on Electronic Commerce and the Committee of Government Representatives on Civil Society. The TCI discussed the drafting of a Work Program, to be submitted for the consideration of the Vice-Ministerial Trade Negotiations Committee (TNC) before its meeting in Managua, Nicaragua, on September 26-28, 2001; the number of meetings the Committee would hold; and the possibility that delegations might add, at any time other, topics and/or agenda items in respect of the overall architecture of the agreement. For the next meeting scheduled for August 2-3, the Committee will undertake a general debate on the overall architecture of the FTAA agreement, examining, as appropriate, the experiences of bilateral and subregional agreements in the Hemisphere. The Committee agreed that delegations who wish to do so may submit by July 12, 2001 written contributions to stimulate the debate regarding general provisions, other procedural or substantive issues and the relationship between the TCI and other FTAA entities.

FATF MONEY LAUNDERING REPORT The Financial Action Task Force on Money Laundering published its twelfth annual report on 22 June, 2001, outlining its main achievements in 2000-2001, including the significant progress in work on non-cooperative countries and territories (NCCTs). The FATF has decided to remove the Bahamas, the Cayman Islands, Liechtenstein and Panama from the list, but will monitor closely future developments in those countries. The updated list of 17 NCCTs includes three Caribbean countries: Dominica, St. Kitts

and Nevis, and St. Vincent and the Grenadines. The FATF will review the situation of each country on the list as a matter of priority at each Plenary meeting. The Report indicates that co-operation with the international organisations concerned with combating money laundering was marked by reinforced collaboration between the FATF and the International Financial Institutions, namely the IMF and the World Bank, which generally recognised the Forty Recommendations of the FATF as the international antimoney laundering standards. The FATF is an independent international body comprising twenty nine member countries and governments. Two international bodies are also members of the FATF: the European Commission and the Gulf Co-operation Council. Its Secretariat is housed at the OECD. The FATF calls on its members to request their financial institutions to give special attention to businesses and transactions with persons, including companies and financial institutions, in these countries or territories. The report can be obtained at http://www.oecd.org/fatf/pdf/PR-20010622_en.pdf

BRIEFS Intra-CARICOM Movement of Skills On June 26, the Trinidad and Tobago Parliament passed the Immigration (Caribbean Community Skilled Nationals) Act 1996. The bill had initially been presented in 1996 but it required amendments since its previous format presaged immigration problems. The passing of this piece of legislation provides impetus to the implementation of the goal of implementing the free movement of university graduates within the Caribbean Community. India urges Developing Countries India said on June 19 that it would oppose any move to link labour and environmental issues with trade at the fourth WTO Ministerial Conference to be held in Doha, Qatar, from November 9 to 13 and urged developing nations to develop a common stand. Commerce and Industry Minister Murasoli Maran said in a letter to the Group of 77 that attempts were often made to link labour conditions to trade as "an excuse to distort competition, undermine comparative advantage and provide Trojan horses of protectionism". As to the launching of a new Round of multilateral trade negotiations, Maran said that WTO work should concentrate on the full implementation of the Uruguay Round results. UPCOMING EVENTS The Twenty-Second meeting of the Conference of Heads of Government of the Caribbean Community will take place in Nassau, The Bahamas, on 3-6 July 2001. The wide-ranging agenda of the Conference includes the Report from the Prime Ministerial Sub-Committee on External Economic Relations, which addresses the various trade

negotiations in which the Region is involved and matters relating to the structure and functioning of the RNM, as well as to its budget. Among other items on the agenda of the Conference are the Report from the Eighth Meeting of the Community Council of Ministers; progress reports on the CARICOM Single Market and Economy and the Establishment of the Caribbean Court of Justice; Regional Security Issues; Preparations for Upcoming Summits; Developments in Haiti; Border Issues; and HIV/AIDS. The First ACP Civil Society Forum will take place In Brussels on 4-5 July. This conclave will be followed on 6-7 July by the First ACP-EU Civil Society Forum, which will take place at the Egmont Palace, on the Participation of Civil Society in the implementation of the Cotonou Agreement. About 140 representatives of civil society organisations from the ACP and 20 representatives of EU civil society organisations, along with government representatives, are expected to participate in the conference. -----------------------------------------------------------------------------------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

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