Economic Partnership agreement (EPA) and Services
By Clinton Urling

NOTE: This article, a first in a series presented by the Georgetown Chamber of Commerce and Industry (GCCI), will examine some aspects of the Economic Partnership Agreements (EPA) between the European Union (EU) and the CARIFORUM (CARICOM plus the Dominican Republic) nations.

Negotiated during an intensely dynamic period for the global economy, the EPAs that member nations of CARIFORUM signed in 2008 with the European Union (EU) were heralded in some quarters as a major breakthrough in trade relations. The agreements were constructed to facilitate open and reciprocal trade relations, in goods and services as well as development coordination, so that key leverage gained in one area or sector could be employed in others. While the EPAs replaced various aspects of the older Cotonoupreferential trade arrangement that existed among member nations of the African, Caribbean, and Pacific (ACP) group, the new agreements also sought to enhance many of the privileges that were part of the Cotonou protocol, particularly with regard to having a strong development objective.

The EPAs indicate that CARIFORUM nations have up to 25 years to implement arrangements that reduce tariffs and allow up to 86.9 percent of EU goods to enter the respective markets without added trade barriers – otherwise known as trade liberalization. Likewise, the EU is obligated to allow all products and services from CARIFORUM nations to enter its markets as agreement provisions are enacted fully.

The EPA is comprehensive for including not only trade-specific issues but also “all areas relevant to trade.” In order to gather a clear understanding of the issues surrounding trade liberalization and the implications involved with the EPA, each article in this series will focus on a single dimension. This week, EPA issues relating to the services sector comprise the focus.

Unquestionably the largest generator for revenue and employment, the services industry sector has emerged as principally essential to the economies of the CARIFORUM members. Guyana is no exception and the services sector represents the highest potential growth area for the immediate future. In 2010, according to governmental budget figures, the services sector recorded impressive annual growth across many industry sectors of the economy. The construction sector grew by 10.8 percent, followed closely by the financial and insurance services sector that registered a 9.3 percent expansion. Service-related economic activity expanded in the information and communication sector by 7 percent, transportation and storage sector by 6.4 percent, and the other services sector, which includes tourism, by 6 percent.

As the Caribbean also is the only ACP region that is a net exporter of services, agreements for that sector carry extra significance to member nations such as Guyana. The nation’s private sector, led by the sister organisation of the Guyana Manufacturing and Services Association (GMSA), has stepped up its efforts vigorously to enhance the profile and mandate of the Guyana Coalition of Services Providers (GCSP) to ensure that the sector is positioned at the forefront of economic development initiatives.

Likewise, the CARIFORUM-EU agreement contains carries far-reaching elements for the services sector. The EU has granted market access and temporary entry in 29 sectors (for example, allowing stays of up to six months per calendar year) for employees in firms categorised as Contractual Service Suppliers. These sector industries include accounting and bookkeeping; architectural; medical, dental and veterinary; computer and related services; advertising; fashion, and entertainment.

Additionally, the EU has opened up 11 sectors for temporary entry by Independent Professionals (IPs) or self-employed individuals. Service sector job functions would include translation and interpretation services; market research and opinion polling; engineering services, and computer and related services.

There are no limits on the numbers of service providers that can benefit from this arrangement. However, there are some qualifying conditions. Service suppliers and professionals applying to travel to the EU must satisfy requirements regarding their nationality and residency in the CARIFORUM area. Furthermore, qualified applicants will need to meet requirements for professional certification as well as an Economic Needs Test.

For Contractual Service Suppliers (CSS) to move forward a contract must have been signed within the past 12 months and the individual(s) identified by the local CSS must be employed for at least one year before the application is made. Qualified service vendors also must possess at least three years of professional experience. The prerequisites for IPs are similar to those of CSS participants except that the self-employed applicant must have at least six years of professional experience at the time of application.

While representatives of Guyana’s private sector are enthusiastic about EPA opportunities for the services industry sectors, many are still uncertain when EPA provisions will come into force and what will be the eventual procedural requirements. The process of establishing the institutional infrastructure for EPA provisions is ongoing. However, it would be in the best mutual interests for all parties if local and regional authorities, working in collaboration with the EU, would do more to publicise the progress of the work being carried out by the joint CARIFORUM-EC EPA Council.

Nonetheless, the provisions outlined in the EPA will be realised in the near future. Therefore, local private industry organisations representing the services sector should not delay in engaging the government to establish the necessary regulatory frameworks that will ensure Guyana’s firms and career professionals can take full advantage of the EPA opportunities.