Association agreements could be modeled on those signed with the former Republics of Macedonia and Croatia and with the region of the eastern and southern Mediterranean, the EuroMediterranean agreement of 1995. Free trade agreements could be based on those the EU is currently negotiating with other sub-regions in Latin America and the Caribbean.

Lobbying for this position was reportedly led by the Spanish Presidency of the EU with the support of Germany, Sweden, Portugal and Greece. Central American countries would also have preferred at least a free trade agreement, which would have placed their exports to the EU on a more equal footing with those from the African/Caribbean/Pacific (ACP) countries.

However, reports are that the European Commission (EC) and some other countries, including France, took the view that the two sub-regions should be encouraged to consolidate their internal integration before an association or free trade agreement could be considered. There was also the argument that free trade negotiations should await the outcome of the proposed Doha Round of trade negotiations within the World Trade Organisation.

In the end, the EC prevailed. The proposed Political Dialogue and Cooperation Agreements endorsed by the EU Foreign Ministers will have three objectives (i) political stability through democracy, human rights and good governance, (ii) continuing the process of regional integration and (iii) poverty reduction and economic growth. Free trade negotiations could be launched only after such agreements are in place. Meanwhile the Generalised System of Preferences (GSP) will continue to be the scheme used to facilitate trade expansion with the EU.

The decision confirms the marked differentiation in the EU approach towards Central America and the Andean Community vis-à-vis its approach to Mexico, MERCOSUR, Chile and the Caribbean members of the (ACP) group, in which free trade negotiations are a major agenda item.

It also shows how variegated is the trade negotiating agenda of the different sub-regional groups within the Association of Caribbean States (ACS). For instance, Central America is expecting to negotiate a free trade agreement with the U.S. but not with the EU; while the CARIFORUM countries will be in free trade negotiations with the EU but not with the US.

Both sub-regions are, however, in the FTAA and the WTO negotiations. So too are the Andean Community and Mexico, both of which have their own trade agreements with the U.S, with Mexico also having a framework agreement with the EU.

The task is to coordinate these different agendas into a common understanding on the treatment of smaller economies in the FTAA and on Special and Differential Treatment in the WTO. This is precisely the aim of a Brainstorming Session convened by the ACS in May in Port of Spain, immediately following the Madrid Summit. This column will continue to follow the development.

Professor Norman Girvan is Secretary General of the Association of Caribbean States. The views expressed are not necessarily the official views of the ACS. Feedback can be sent to mail@acs-aec.org.

(ends)

April 19, 2002