Foreign Trade Minister Discounts Criticism of MFN Clause in EPA

Deputy Prime Minister and Minister of Foreign Affairs and Foreign Trade, Dr. Ken Baugh, has discounted criticism of the Most-Favoured Nation (MFN) clause, which is contained in the Economic Partnership Agreement (EPA) between the European Union (EU) and CARIFORUM countries.
He emphasized that the MFN clause only has implications for trade agreements with the larger developing countries, which he said by no means account for the majority of potential trading partners among developing countries.
“In addition, nothing prevents the larger developing countries from seeking parity with the EC, provided there are benefits for Jamaica and our CARIFORUM partners,” Dr. Baugh explained.
He was making his contribution to the 2008/09 Sectoral Debate in the House of Representatives, yesterday (June 25).
The Minister informed that the MFN clause requires the European Commission (EC) to grant CARIFORUM states any More-Favourable treatment that is applicable as a result of the EC becoming party to a free trade agreement with third parties. In turn CARIFORUM states will accord the EC any More-Favourable treatment applicable as a result of the CARIFORUM states becoming party to a free trade agreement with any major economy after the signing of the EPA.
A ‘major trading economy’ is defined in the Agreement as any developed country, or any country accounting for a share of world merchandise exports above one per cent or any group of countries accounting collectively for a share of world merchandise exports of 1.5 per cent.
“This would cover countries such as Brazil, China and India, and country groupings such as MERCOSUR and ASEAN. Let me stress that a similar MFN provision appears in the interim (goods only) EPAs concluded by the EC with the other ACP regions,” he outlined.
“The MFN clause which comes from the WTO (World Trade Organisation) simply is a facility to prevent discrimination between partners in the WTO. If we come to an agreement with one partner, then we have to offer similar agreements to other partners in the WTO,” Dr. Baugh told the House, noting that this is also established in the EPA.
Dr. Baugh said that inasmuch as the EPA is a comprehensive agreement, there are weaknesses and difficulties, but that there are provisions for dialogue between respective countries. “So over time, there will be a process of evolution. There is no doubt changes can be made, but what we have is an agreement, which if not the best, is certainly better than all the rest,” he said.
The fundamental principles and objectives of the EPA between the EU and CARIFORUM states are defined by the Cotonou Agreement and seek to create sustainable development of the states, their smooth and gradual integration in the world market, and eradication of poverty.