Caribbean Trade Law and Development

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  • ECJ Brexit Ruling: What are the implications?

    ECJ Brexit Ruling: What are the implications?

    Renaldo Weekes ping pong

    Renaldo Weekes, Guest Contributor 

    The European Court of Justice (ECJ) ruled on Monday, December 10th, 2018, that a European Union (EU) member state has the ability to unilaterally revoke its notification of intent to leave under Article 50 of the EU’s Lisbon Treaty. This ruling comes at a time when anti-Brexit and pro-Brexit persons alike are showing great opposition to British Prime Minister Theresa May’s Brexit deal. Anti-Brexit persons, in particular, are feeling vindicated by this ruling because it allows them to double down on their stance and try to force Prime Minister May into submission.

    However, the British Government stood its ground despite the ECJ’s ruling, with British Environment Secretary, Michael Gove, arguing that the British people voted to leave the EU in 2016 and it will not reverse that decision. The Government even argued that point in the ECJ case, saying it does not plan to reverse its decision so the question of whether the United Kingdom (UK) can unilaterally revoke its Article 50 notification was merely hypothetical and of no consequence.

    May’s Brexit deal in more peril

    Can the British Government continue to take its tough stance in light of the ECJ’s ruling and all the controversy that shrouds Brexit? Some may find it admirable that the Government is not willing to waver, even in the face of fierce opposition. At some point, however, it must face facts. Anti-Brexit lawmakers will be less likely to back down. As part of its judgement, the ECJ said that the UK’s decision to revoke their Article 50 notification reflects a sovereign decision. This has essentially put absolute power into the hands of UK Members of Parliament (MPs) to change course as they do not have to yield to the EU. There is no doubt that MPs will exercise that power. To anti-Brexit lawmakers, there are no more excuses that Prime Minister May can use to prevent a second referendum or prevent Brexit. In light of this, lawmakers are more likely to vote down on the deal; though there was no doubt that they would have done otherwise.

    Responsibility and accountability

    The ECJ ruling also puts ultimate accountability on the Prime Minister and her team. The European Commission and the Council argued in the court case that article 50 could not be interpreted as allowing a member state to unilaterally revoke its notification; the member state would need the EU’s permission to revoke the notification. If this turned out to be true, and the EU refused to allow the UK to change its decision, Government would have been able to argue that the EU is at fault for restricting the UK’s sovereignty. That, however, is not the case now. Should the government refuse to reverse Brexit or, at the very least hold a second referendum, there is no other institution that holds responsibility for any ensuing consequences that should come from what is likely to be a hard or even no deal Brexit.

    Abuse of the process

    Another possible impact of the ECJ ruling was actually cited by the European Commission and the Council during their argument to the court. They noted that if member states can unilaterally revoke their notification to leave, they may abuse that process in order to retrigger the 2 year negotiation period should the original negotiations not go their way. On the face of it, this argument may not hold much weight as there is already a process through which a member state can request an extension of the negotiating period. However, should the member state not agree to the extension period proposed by the council, it may still seek to retrigger the mandated 2 year negotiating process which forces the council into a position where it must agree to the member state’s desired negotiation period. The member state may also opt to not apply for an extension and immediately retrigger the process.

    The effects that the ECJ’s ruling may or may not have on the UK and other member states notwithstanding, we must still wait to see if the British government will budge in any way as the March 2019 deadline approaches against the backdrop of MPs threatening to upend the deal and a shaky Government trying desperately to maintain its power.

    Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage.

  • Eight Key Outcomes from the St. Anns Declaration on CSME

    Alicia Nicholls

    Caribbean Community (CARICOM) Heads of Government met from December 3-4, 2018, in Port of Spain, Trinidad last week for the 18th Special Meeting of the Conference of Heads of Government of CARICOM which was a special meeting on the CARICOM Single Market and Economy (CSME).

    The CSME envisions deepened economic integration among participating CARICOM Member States by creating a single economic space for the free movement of Community goods, services, capital and labour, with the aim of promoting economic development and increased well-being of Community nationals. All independent CARICOM Member States, except the Bahamas, are part of the CSME, while Haiti is not yet a full participant.

    Progress towards implementation of the CSME has been painstakingly slow, a point noted in numerous reports commissioned to look at this issue, including the Jamaica-government commissioned Golding Commission Report released earlier this year which examined Jamaica’s relations within the CARICOM and CARIFORUM frameworks.

    At the end of the special CSME meeting last week, CARICOM leaders released their St. Ann’s Declaration on CSME in which they recommitted to the regional integration process and outlined several priority areas for immediate action, including setting timelines for some action areas.

    Based on the St. Ann’s Declaration on CSME, here are eight key outcomes from the CSME Special Meeting:

    1.Recommitment to national action to further CSME implementation

    CARICOM leaders recommitted to take action at the national level to advance the regional integration agenda. In their preamble to the Declaration, they reiterated that the CSME “continues to be the most viable platform for supporting growth and development” in CARICOM Member States, but acknowledged that progress on the CSME should have been further advanced by now. They welcomed Haiti’s commitment to full integration into the CSME by 2020.

    2.Greater voice for private sector and labour

    CARICOM leaders have agreed to establish a formalised and structured mechanism to facilitate dialogue between the Councils of the Community and the private sector and labour. They also agreed to amend the Revised Treaty of Chaguaramas to include representative bodies of the regional private sector and labour as Associate Institutions of the Community.

    3. Full Free Movement in 3 years (for willing Member States)

    CARICOM leaders have set a timeline of the next three years for those Member States which are willing to do so to move towards full free movement. The leaders have also agreed to reinforce the operation of their security mechanisms to ensure the integrity of the regime allowing the free movement of CARICOM nationals.

    4. Expansion of categories of skilled nationals entitled to move

    Agricultural Workers, Beauty Service Practitioners, Barbers and Security Guards will be added to the categories of skilled nationals who are entitled to move freely and seek employment within the Community.

    CARICOM leaders also reiterated that a skills certificate issued by one Member State would be recognised by all Member States. They also agreed to complete domestic legislative and other arrangements for all categories of free movement of skilled persons.

    5. Greater CARICOM-OECS collaboration

    They have mandated that steps be taken to deepen cooperation and collaboration between the Secretariats of CARICOM and the OECS “to avoid duplication and maximise the utility of scarce resources”.

    6. Single Domestic Space for passengers in the Region

    CARICOM leaders agreed to examine the re-introduction of the single domestic space for passengers in the Region and agreed to work towards having a single security check for direct transit passengers on multi-stop intra-Community flights. They also agreed to conduct a special session on Air and Maritime Transportation at the Intersessional meeting of the Conference to be held next February to focus on this matter.

    7. Public Procurement and Mutual Recognition of Member States’ incorporated companies

    CARICOM leaders set a timeline of 2019 for the finalization of the regime that permits citizens and companies of the Community to participate in Member States’ government procurement processes. They also agreed to take the necessary steps to allow for mutual recognition of companies incorporated in a CARICOM Member State.

    8. Restructured Commission on the Economy

    CARICOM leaders have restructured the Commission on the Economy to advise Member States on a growth agenda for the Community. Leading Barbadian-UK economist, Professor Avinash Persaud, has been appointed to lead this restructured commission, while its nine other members include distinguished regional and international persons.

    The text of the St Ann’s Declaration on CSME may be viewed here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • Caribbean Trade and Development Digest – December 2-8, 2018

    Caribbean Trade and Development Digest – December 2-8, 2018

    Welcome to the Caribbean Trade & Development Digest for the week of December 2-8, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

    THIS WEEK’S HIGHLIGHTS

    This week, CARICOM Heads of Government held a Special Session on the CARICOM Single Market and Economy (CSME) in Port of Spain, Trinidad. They issued the St. Ann’s Declaration on CSME in which they recommitted to the process of CSME implementation and outlined some key priority areas for implementation.

    The CARICOM Competition Commission (CCC) has indicated that it is closely monitoring the proposed sale of Scotia Bank’s operations in several Caribbean jurisdictions to the Trinidad-based Republic Financial Group Ltd. Read the CCC’s full statement here.

    Members of the European Parliament (MEPs) and parliamentarians from ACP countries held their  36th session of the Joint Parliamentary Assembly (JPA) in Cotonou, Benin. They adopted several resolutions, including their Declaration of the Co-Presidents on Post-Cotonou Negotiations on the occasion of the meeting of the 36th Joint Parliamentary Assembly

    Below we share the other major trade and development headlines from across the Caribbean region and the world for last week:

    REGIONAL

    CARICOM to open government procurement to regional companies

    LoopBarbados: A portal called CIMSuPro – the CARICOM Interactive Marketplace and Suspension Procedure – will be established as a managed market place for CARICOM companies to post their raw material, goods and services.  It would be made available to regional and global purchasers. Read more

    More Categories of Workers to Be Granted Free Movement Within CARICOM

    Caribbean360: More Caribbean Community (CARICOM) nationals are to be allowed to seek work in fellow member states, it has been revealed, as CARICOM leaders reaffirmed their commitment to the vision of free movement and a shared market space. Read more

    CCJ Issues Record Number of Judgments in 2018

    CARICOM: During 2018, the Caribbean Court of Justice (CCJ) issued 34 judgments and reasons for decision, its highest number of judgments delivered in a calendar year since it began its operations in 2005. Throughout that period, the CCJ also heard 28 new matters in both its Original and its Appellate Jurisdictions. Read more 

    CARICOM Committee of Ambassadors charting enhanced role

    CARICOM: CARICOM Secretary-General Ambassador Irwin LaRocque in welcome remarks, told the ambassadors their role, both individually as the link between the regional and the national, and as a constituent group within the governance structure of the Caribbean Community, assumes even greater significance in the renewed drive to implement the provisions of the CSME and other critical areas of the community’s work. Read more 

    No plans for Jexit 

    Jamaica Observer: Jamaica’s Prime Minister Andrew Holness yesterday reiterated that the decision to establish a commission to review his country’s relationship with the Caribbean Community (Caricom) was not intended to create an avenue for it to leave the 15-member regional integration movement. Read more

    Tackle CSME Issues Head On, Urges CARICOM Chairman

    Caribbean360: Caribbean Community (CARICOM) Chairman, Prime Minister Andrew Holness of Jamaica, has urged a “head on” approach to tackling of complex issues during the Special CARICOM Heads of Government Meeting on the CARICOM Single Market and Economy (CSME) underway in Trinidad and Tobago. Read more

    Guyana pushes trade and investment at OIC meeting in Turkey

    Caribbean News Now: Guyana attended the 34th meeting of the Standing Committee for Economic and Commercial Cooperation of the Organisation of Islamic Cooperation (COMCEC), which was held last week in Istanbul, Turkey. Representing Guyana at the meeting was its permanent ambassador to the United Nations, Michael Ten-Pow, who promoted the opportunities for trade and investment in his country. Read more

    Exxon Mobil could push Guyana past Mexico, Venezuela in oil output

    Houston Chronicle: The small South American nation of Guyana could become the continent’s second-largest oil producer thanks to the offshore discoveries made by Exxon Mobil, according to a new report. Read more 

    Sugar sales down, total exports down (Belize)

    The Reporter (Belize): Revenue earned from sugar exports, Belize’s largest export earner, were down in the month of October, contributing largely to an overall decrease in export revenues of 5.1 percent, according to the Statistical Institute of Belize. Read more

    Region’s Coconut Industry gets EDF boost

    CARICOM: The coconut industry in Barbados and the rest of the Caribbean should soon be receiving a further boost. That is because the 11th European Development Fund (EDF) will be financing a second coconut project in the region. Read more 

    Prensa Latina: The Caribbean Sugar Association (SAC) reported that its members met approximately 80 percent of Caricom”s raw sugar needs during 2017/18 harvest. Read more

    IMF thumbs up for Barbados

    Nation News (Barbados): The International Monetary Fund (IMF) likes the way the Barbados economy is being fixed, calling it an “excellent start”. Read more 

    INTERNATIONAL

    COP24 fails to adopt key scientific report

    BBC: Attempts to incorporate a key scientific study into global climate talks in Poland have failed. The IPCC report on the impacts of a temperature rise of 1.5C, had a significant impact when it was launched last October. Read more 

    Macron threatens to scupper EU-Mercosur trade deal over climate

    Euractiv: French President Emmanuel Macron has warned that he will oppose a trade deal between the EU and Mercosur if Brazil’s incoming far-right president pulls his country out of the Paris Agreement. Read more 

    Mercosur and EU trade negotiators meet in Brasilia

    The Rio Times: The foreign ministers of Mercosur and EU members are meeting in Brasilia on Thursday (December 6th) in an effort to advance the partnership agreement between the two economic blocs. This is the first time Mercosur and the UE are meeting after statements made by France’s Macron caused tension and doubt about the partnership. Read more 

    Why Qatar left OPEC

    Al Jazeera: Explaining the motivation behind the decision, Saad Sherida al-Kaabi, Qatar’s minister of state for energy affairs and president and CEO of Qatar Petroleum, said that Qatar’s exit from OPEC “is not political, it was purely a business decision for Qatar’s future strategy towards the energy sector.” Read more 

    RCEP: Experts to evaluate pact to strengthen India’s position

    Hindu Business Line: To sharpen India’s bargaining position in the Regional Comprehensive Economic Partnership (RCEP), which is being negotiated among 16 countries, the Commerce Ministry has roped in experts from academic institutions and think-tanks to carry out a detailed study of the pact and give their recommendations. Read more 

    #ACPEU – MEPS agree on a partnership tailored to international context

    EU Reporter: During the 36th session of the Joint Parliamentary Assembly (JPA), which took place from 3 to 5 December in Cotonou (Benin), Members of the European Parliament and their counterparts from 78 African, Caribbean and Pacific (ACP) countries debated and adopted several resolutions. Read more 

    Japan-EU trade pact clears hurdle on road to Feb. 1 start

    Nikkei Asian Review: Japan’s parliament approved an economic partnership agreement with the European Union early Saturday, keeping one of the world’s biggest free trade zones on course to take effect Feb. 1. Read more 

    EU agrees post-Brexit import quotas for other WTO members

    Reuters: The European Union endorsed on Friday new tariff rate quotas (TRQs) that the bloc will apply mainly for agricultural products coming from other World Trade Organization members after Brexit. Read more 

    Britons scramble to get E.U. passports before Brexit

    NBC: With the U.K. due to leave the European Union in March, the demand among Britons for citizenship and passports from the other 27 countries in the bloc has skyrocketed. Read more

    DG Azevêdo in US: This is a “once-in-a-generation opportunity” to renew trading system

    WTO: Speaking in Washington DC on 5 December, Director-General Roberto Azevêdo said that WTO members have “a once-in-a-generation opportunity to renew the trading system”. He argued that in responding to the range of challenges in the global trading system today, momentum was building towards strengthening and improving the work of the WTO. The Director-General was speaking at the National Foreign Trade Council’s annual World Trade Dinner. Read more 

    Argentina initiates WTO dispute complaint against Peruvian measures on biodiesel imports

    WTO: Argentina has requested WTO dispute consultations with Peru concerning anti-dumping and countervailing measures imposed by Peru on biodiesel imports from Argentina. Argentina’s request was circulated to WTO members on 5 December. Read more 

    Panels established to review India, Swiss complaints against US tariffs

    WTO: At its meeting on 4 December, the WTO’s Dispute Settlement Body (DSB) agreed to requests from India and Switzerland for the establishment of panels to examine tariffs imposed by the United States on steel and aluminium imports. Read more 

    United Kingdom submits draft post-Brexit services commitments to WTO

    WTO: WTO members received today, 3 December 2018, the United Kingdom’s draft schedule outlining its WTO commitments for services once the UK leaves the European Union. Members now have 45 days to review the schedule before certification. Read more 

    China confirms its working on independent WTO reform

    Asia Times: China is planning to put forward an independent proposal to promote WTO reform, Yicai.com reported, citing a government official and several sources. Read more

    The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.

  • The Draft Brexit Withdrawal Agreement: What implications for future CARIFORUM-UK Trading Relations?

    The Draft Brexit Withdrawal Agreement: What implications for future CARIFORUM-UK Trading Relations?

    Alicia Nicholls

    After nearly two years of negotiations between the European Union (EU-27) and the United Kingdom (UK), European leaders endorsed the “The Draft Agreement on the Withdrawal of the United Kingdom from the European Union and the European Atomic Energy Community”and the “Political Declaration Setting out the Framework for the Future Relationship between the European Union and the United Kingdom” at a special meeting of the European Council on November 25, 2018.

    This process is taking place pursuant to Article 50 of the Treaty on European Union (TEU), which sets out the terms and timelines for the withdrawal of any Member State from the EU. The text of the UK’s draft Withdrawal agreement, which was released on November 14, 2018, delineates the terms of the UK’s withdrawal from the EU, while the Political Declaration outlines broad aspirations for the constitutive elements of the two parties’ future trading relationship.

    This article takes a brief look at what possible implications the draft Brexit Withdrawal Agreement may have for future CARIFORUM-UK trading relations, which are currently under negotiation and are reportedly close to being finalised.

    Essential Elements of the Withdrawal Agreement

    The UK ceases to be an EU Member State on March 29, 2019. During the transition period (March 29, 2019 to December 31, 2020), and subject to certain limited exceptions, EU law and the EU institutions and agencies will continue to be applicable to the UK, although it will no longer be an EU Member State. The UK will, however, be ineligible to be represented on, or participate in the decision-making processes of these institutions. This arrangement was deemed necessary to ensure a ‘smooth’ transition and provide for some certainty for traders while the parties hammer out the details of their future trading relationship. The Joint Committee may extend the transition period only once and this must be exercised before July 1, 2020.

    The Protocol on Ireland and Northern Ireland includes the controversial “backstop” option, whereby in the event that the EU and UK fail to negotiate an agreement which prevents a ‘hard border’ between Northern Ireland (a country of the UK) and the Republic of Ireland (an EU Member State) within the transition period, the UK will be part of a single UK-EU customs territory until such an agreement is made. However, both the EU and UK have expressly stated their intention to conclude such an agreement by July 1, 2020.

    Both the EU and UK Government have openly stated that they consider the negotiations on the two agreements closed, and have argued that the deal was the best that could be achieved in the circumstances. Although EU leaders endorsed both agreements, approval and ratification by the UK parliament is also needed under the EU (Withdrawal) Act 2018. UK House of Commons support appears questionable at this stage given the fervent opposition by both Remain and Leave MPs to the current Withdrawal Agreement. The House of Commons will debate the deal on December 11, 2018.

    Implications for CARIFORUM-UK Trading Relations

    Traders from CARIFORUM currently have preferential access to the UK market under the CARIFORUM-EU Economic Partnership Agreement (CARIFORUM-EU EPA). While CARIFORUM-EU trading relations will remain unchanged once the UK leaves the EU, the same cannot be said for CARIFORUM-UK relations.

    For most Anglophone CARIFORUM countries, the UK is their main trading partner within the EU, as well as a major source market for tourism and investment. It has been reported that UK-CARIFORUM bilateral trade totaled £2.1 billion in 2016.

    Under the Withdrawal Agreement, the UK remains bound to all EU international agreements, including trade agreements such as the CARIFORUM-EU EPA, to which it is party by virtue of being an EU Member State. However, during the transition period, the UK must not engage in actions deemed “likely prejudicial to EU interests” and its representatives will be barred from participating in the work of any bodies established pursuant to such agreements, unless it does so in its own right or upon invitation by the EU. This would include any bodies, such as the Joint CARIFORUM-EU Council, established pursuant to the CARIFORUM-EU EPA.

    The Withdrawal Agreement does not preclude the UK from negotiating, signing and ratifying its own trade agreements with third States or groupings, such as CARIFORUM, during the transition period. But the entry into force and application of said agreements during the transition period would be subject to EU authorization. With respect to CARIFORUM, the grouping is currently negotiating a roll-over of the EPA concessions with the UK to minimize any disruption to CARIFORUM-UK trade. Such a CARIFORUM-UK trade agreement, therefore, would be subject to EU authorization if it is to enter into force during the transition period. In any case, as noted above, the UK will remain a party to the EPA and bound to apply EPA concessions to CARIFORUM traders during the transition period.

    But what about the UK’s future trading relations with the EU? A ‘no deal Brexit’ is still a possibility as the draft Withdrawal Agreement needs ratification by each of the EU 27 countries. There is also still that pesky question of the negotiation of the future UK-EU trading relationship. The Political Declaration envisions a UK-EU free trade agreement, the terms of which remain to be negotiated.

    A ‘no deal Brexit’ would make it difficult for CARIFORUM firms looking to use the UK as a stepping stone to EU markets, which means a climate of uncertainty will continue to prevail for Caribbean firms seeking to use the UK as a conduit for accessing the EU market until the full details of future UK-EU terms of trade are agreed.  It was recently reported that the agreement between the UK and CARIFORUM was close to being reached and has taken into account the possibility of a ‘no deal Brexit’.

    The climate of uncertainty may also impact CARIFORUM-UK trade and investment from the UK side. Although some UK businesses have by now conducted risk assessments and built in Brexit contingency plans, the continued political and economic uncertainty and volatility of sterling will continue to weigh on their export, hiring and investment decisions.

    The Withdrawal Agreement takes us one step closer to some idea of what the future UK-EU relations will be, but a climate of political and economic uncertainty will remain for some time, which may have an impact on CARIFORUM-UK trading relations.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.