RNM UPDATE 0615

September 22, 2006

Prepared by the Communications Division of the Caribbean Regional Negotiating Machinery (CRNM), this
electronic newsletter focuses on the RNM, trade negotiation issues within its mandate and related activities.

- 17TH SPECIAL COTED CONVENED

- G-20 COUNTRIES MET IN BRAZIL TO REVIVE STALLED WTO TALKS

- RNM CONVENES 5TH TECHNICAL WORKING GROUP ON MARKET ACCESS

- U.S. TRADE REPRESENTATIVE RAISES DOUBT ABOUT CONCLUDING ALL OUTSTANDING FREE
TRADE AGREEMENTS

- UPCOMING EVENTS

17TH SPECIAL COTED CONVENED

The Seventeenth Special Meeting of the Caribbean Community (CARICOM) Council on Trade and
Economic Development (COTED) on External Negotiations was held on September 9 in Barbados.

Discussions at COTED delved into the suspended Doha round of negotiations; ongoing EPA
negotiations with the EC; and the pursuit of Bilateral agreements with the US, Canada and
Mercusor.

Doha

CARICOM continues to signal that it is prepared to participate in any discussions to move the Doha
negotiation process forward and is committed to flexibility once the process is restarted.
CARICOM sees agricultural subsidies and domestic support by the EC and US as stumbling blocks
to successful negotiations. The DG of the RNM, Ambassador Richard Bernal alludes to it as “a
vexed issue that needs to be resolved and if resolved would allow for movement in Doha
negotiations.” He also stated that “the political calendar of the US makes it difficult for them to
resume negotiations before the November Congressional elections.”

Bilaterals

COTED discussed Bilaterals in 2 categories: existing and new initiatives. The existing DR-Caricom
bilateral agreement was looked and its implications for the ongoing Economic Partnership
Agreement (EPA) negotiations.

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Under new initiatives, the pursuit of Free Trade Agreements (FTA) with the US, Canada and
Mercusor were discussed. The CRNM circulated a commissioned study for Member States at
COTED which examined whether Caricom should approach the US for a FTA to replace the
existing Caribbean Basin Economic Recovery Act (CBERA) which expires on September 30,
2008. Member States will convene at a later date to review the study.

EPA

The focus of the discussion was on how to infuse development in all aspects of the EPA and the
urgent need to synchronize development assistance and trade liberalization. The ongoing
negotiations have highlighted the differences between the EU and CARIFORUM regarding how the
EPA should promote development in the CARIFORUM region. Differences exist regarding what
development mechanisms can be utilised to assist the CARIFORUM region in becoming more
competitive in a global environment, whether it is more market access in the EU or the phased
reduction of tariffs.

G-20 COUNTRIES MET IN BRAZIL TO REVIVE STALLED WTO TALKS

Trade ministers of the G-20 developing countries including India, the U.S., EU and Japan met in
Rio de Janeiro, Brazil from 9-10 September in an attempt to restart the Doha round of
negotiations. The meeting was promoted as a stock-taking exercise meant to reaffirm the group's
stand on key issues at multilateral talks. US Trade Representative Susan Schwab, EU Trade
Commissioner Peter Mandelson and WTO Director General Pascal Lamy attended the meeting,
which gave them the opportunity to discuss the status of the Doha negotiations and a possible way
forward. Progress of the negotiations still hinges on the U.S. willingness to submit a revised offer
for reducing domestic farm subsidies.

This was the first meeting of the group since talks were suspended in July of this year after the
European Union and United States were deadlock on the level of agriculture tariff reduction to
undertake. The EU felt that the U.S. was demanding too many concessions while offering too little
as the U.S. was unwilling to undertake any significant cuts in its agricultural subsidies.

With U.S. congressional elections occurring in November, it is unlikely that the Doha negotiations
will be restarted before then. The G-20 meeting ended with an agreement by the WTO Ministers to
resume talks but no time table was set.

The current round of Doha negotiations was scheduled for completion by the end of this year.

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RNM CONVENES 5TH TECHNICAL WORKING GROUP ON MARKET ACCESS

The Fifth Meeting of the RNM Technical Working Group on Market Access is been held from 14-16
September in Santo Domingo, Dominican Republic.

The meeting will be discussing the status and issues arising in the EPA negotiations on Market
Access. The major cross-cutting issues of interest to CARIFORUM will be examined, specifically: i)
Trade Liberalisation (namely, CARIFORUM’s tariff offers with a goal to prepare a final
CARIFORUM offer); ii) Non-tariff Barriers (NTB’s); iii) Agriculture & Fisheries; iv) Sanitary and
Phytosanitary measures (SPS) & Technical Barriers to Trade (TBT); v) Customs and Trade
Facilitation; vi) Rules of Origin; vii) Trade Defense Measures.

Deliberations will also focus on import licensing regimes in the CARIFORUM States with a goal of
arriving at a CARIFORUM negotiating position on base rates.

U.S. TRADE REPRESENTATIVE RAISES DOUBT ABOUT CONCLUDING ALL OUTSTANDING

FREE TRADE AGREEMENTS

U.S. Trade Representative Susan Schwab went on record in a recent interview expressing her
doubts that all outstanding FTA negotiations may not be concluded before the expiration of
President George W. Bush's trade promotion authority “fast-track” powers in July 2007. Under
“fast-track” authority, Congress considers trade agreements on an up or down vote, without any
amendments. Current fast track procedures require that Congress be given a 90 day advance
notification before any trade agreements can come before them for ratification. This also means
that ongoing FTA negotiations must be concluded and the intent to sign submitted to Congress
before April of next year.

The U.S. Trade Representative did not specify any FTAs in particular that may not be concluded in
time to be considered under the present fast-track authority, but mentioned that the time frame for
concluding talks is tight.

The U.S. is currently negotiating FTAs with Korea, Malaysia, Panama, the United Arab Emirates
and Thailand. They have also recently completed FTAs with Peru and Columbia which must be
ratified by Congress.

Regarding the suspended Doha round of negotiations, Schwab said she no longer expected it
would be possible to complete it in time to use the current fast-track authority.

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NEWS BRIEFS

The Canada and U.S. Agree on Changes to Finalize Lumber Deal

The U.S. and Canada formally signed a bilateral softwood lumber agreement on Sept. 12, 2006.
The signing ends a long standing dispute over Canadian softwood Lumber with the U.S over U.S.
allegations that Canada's provinces unfairly subsidize their lumber producers.

EU, U.S. Try to Narrow Doha Differences in Advance of Mandelson Visit

The EU Trade Commissioner Peter Mandelson is set to visit Washington from Sept. 26-27 to meet
with U.S. Trade Representative Susan Schwab in an attempt to break the current deadlock in the
Doha negotiations. Efforts by senior U.S. and European Union officials working to narrow
differences in key areas of the stalled negotiations will be reviewed on Mandelson’s visit to
Washington. The review will cover agriculture and industrial market access as well as other items
in the negotiations.

OECS Secretariat releases new publication on International Trade

On September 12th the OECS Secretariat released a new publication called “Understanding
International Trade” produced by the OECS Trade Policy project for students, business people and
the public as a whole. The publication explains in lay-man terms the International Trading System
from an Eastern Caribbean prospective, it reviews in detail the Caricom Single Market and
Economy (CSME), The World Trade Organisation (WTO) and the Economic Partnership
Agreement (EPA) currently under negotiations with the EU.

Japan, Philippines Sign FTA with Provisions for Labour Movement

On the 9th of September in Helsinki, Finland, Japan and the Philippines agreed to a wide-ranging
free trade agreement (FTA) that contains provisions for Filipino workers especially nurses to
pursue employment and training in Japan.

The agreement took almost 2 years to complete because of disagreements over auto and steel
tariffs, foreign investment rules, and the number of Filipino temporary workers Japan was willing to
allow entry. Filipino workers abroad sent home USD 10.7 billion in remittances in 2005 which the
World Bank said recently make up 13.5% of the Philippines' GDP, a significant resource of revenue
for the country. It is the fifth largest recipient of remittances behind India, China, Mexico and
France.

Over the next 4 years the accord will eliminate tariffs on more than 90 percent of bilateral goods
traded but the Philippines will be able to retain some tariffs on Japanese automobiles.

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UPCOMING EVENTS

Sept. 19-22: Fifth Round of CARIFORUM-EU Technical Negotiating Groups, Santo Domingo

Sept. 23: Third Meeting of EPA College of Negotiators, Santo Domingo

Sept. 25-26: Sixth Meeting of CARIFORUM-EC Principal Negotiators, Santo Domingo

Sept. 22-01 Oct.: CARIFESTA IX, Trinidad and Tobago

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For More Information Contact:

Nand C. Bardouille
Caribbean Regional Negotiating Machinery
3rd Floor, The Mutual Building, Hastings Main Road, Hastings, Christ Church, Barbados
Tel: (246) 430-1678
FAX: (246) 228-9528