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Thank you from CaPRI Caribbean.
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European Union

The Impact of the EPA on Caribbean Economies

Trade between the Caribbean and Europe had been conducted for three decades under the institutional umbrella of a series of preferential arrangements starting with the first Lomé Convention in 1976. It and subsequent iterations of that framework allowed the collection of ACP (African, Caribbean, and Pacific) countries to enjoy preferential access to the European market.

The Economic Partnership Agreement (EPA) recently concluded by the European Union and CARIFORUM (the countries of CARICOM plus the Dominical Republic) replaces the Lomé arrangements and will govern trade between the two regions going forward.
The CARIFORUM-EU Economic Partnership Agreement establishes a free trade area encompassing the European Union and the Caribbean. The feature of the EPA that sets it apart from the preceding arrangements is its WTO-compatibility, in that it eliminates non-reciprocal market access between trading Partners.

The Economic Partnership Agreement: Towards a new Era for Caribbean Trade

The Economic Partnership Agreement (EPA) signed in 2008 signalled a new era of trade relations between the European Union (EU) and the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM). Caribbean exporters previously had greater duty-free access to the EU market than European exporters enjoyed in the Caribbean, along with quotas that enabled them to avoid price competition with rivals from outside the Lomé ACP (Africa, Caribbean and Pacific) bloc.

With the advent of the World Trade Organization (WTO) in 1995, the EU and the Caribbean were forced to negotiate new terms of engagement. The EPA represented a shift towards a more liberal trading regime in which greater reciprocity is the norm.

Critics of the EPA believe the new trade regime will inhibit the development of new (particularly manufacturing) industries in the region and worsen the fiscal accounts of Caribbean countries. This paper, however, concludes that the aggregate negative impact of the EPA on Caribbean states will be modest, although it will likely produce challenges for smaller Caribbean governments. In particular, this paper emphasizes that the EPA will not be effective without the successful implementation and operation of the Caribbean Single Market Economy (CSME), which requires Caribbean governments to plan and coordinate economic activities together. The EPA provides the opportunity for the region to build the framework that will allow it to compete in a liberalized global economy, where a competitive environment is necessary for survival.
 

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