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September 13, 2013

Release of Report: EPA Provisions on Investment

06-Mar-2012_lg

The CARIFORUM-EU Economic Partnership Agreement (EPA) provides a comprehensive framework to improve the flow of investments between CARIFORUM and EU countries. The commitments comprising of this framework are stated in Title II – Investment, Trade in Services and E-Commerce and Annex VI – List of Commitments of Investment and Trade in Services. In accordance to Article 74, ‘The Parties shall review the investment legal framework, the investment environment, and the flow of investment between them consistent with their commitments in international agreements‘ with the view of progressive liberalization of investments.

To this end, the CARICOM Secretariat contracted Kisseurp International Trade Roots Europe to produce a report entitled “Review of the Legal Framework in CARIFORUM States with respect to Investment and the flow of investment between CARIFORUM States and the European Union (EU) for consistency with their commitments in International Agreements’ to fulfill this commitment, including identifying areas of cooperation for effective implementation and an instrument to monitor the investment flow between CARIFORUM and the EU.

The report was based on regional and national stakeholders through field research and CARIFORUM wide online structured survey. According to the findings of the report, the following, among other pertinent points, were highlighted that:-

- the majority of CARIFORUM countries have great expectations for the EPA as a contributing factor to the strengthening of industrial and services capabilities of their respective countries. However, it was noted that the lack of knowledge and recognition of the provisions of EPA and Foreign Direct Investment (FDI) advantages by the CARIFORUM private sector and EU investors has hindered development thus far;

- Member States of CARIFORUM see each other as competition rather than counterparts for cooperation to assist with a common foreign investment policy and harmonized legal framework;

- It was noted that the CARIFORUM-EU EPA lacks substantive provisions addressing this issue of the protection of investment it to Bilateral Investment Treaties (BIT) and/or jurisdiction of national legislation;

- there is no specialized instrument or body within CARIFORUM for the monitoring of investment flows and there is little focus placed on the outward FDI flows;

- in comparison to EU negotiations on Investment with other third countries, such as India and Canada, there are deficient in several areas, such as MFN treatment, the definition of investment and protection of investment.

Based on these and other findings, the report recommended that

- Greater coordinated awareness building of the EPA and its commitments and opportunities, including sharing of Best Practices, using indigenous examples as showcases for successful FDI models;

Implementation of a common CARIFORUM policy of promotion of investment from countries of the EU;

- Provision of coordinated technical assistance to national EPA Units, and organisations aimed to assist and inform foreign and local investors on how to access CARIFORUM and European markets because it seems to be working in isolation and duplication of many FDI, promotion and trade publications;

- Establish an area responsible at CARICOM regional level for collecting and processing FDI information received from CARIFORUM countries as well as a Coordinated Direct Investment Survey (CDIS) as the methodology for collating of statistical information.

- Correct the deficiencies in the EPA text using both CARICOM Caribbean Investment Code or harmonized policy and the EU’s new Investment mandates.

Commenting on the report, the Trade in Services and Investment Specialist in EPA Unit of CARIFORUM Directorate stated that ‘the findings are enlightening and form a good basis to better focus our minds on the task at hand, which is improving the investment climate and the follow of investment between the EU and CARIFORUM.‘ The Press Statement from the EPA Unit of the CARIFORUM Directorate on the release of the Report stated that ‘advancing the recommendations is a top priority.

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