Free Trade Area of the Americas - FTAA

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Trade Negotiations

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May 3, 2002

Original: English



Name (s)  Amsale Maryam, Shantal Munro-Knight
Organization (s) Association of Development Agencies and the Caribbean Reference Group on External Relations
Country Jamaica


The Association of Development Agencies (ADA) is a grouping of non-governmental development agencies working in Jamaica. Legally established in 1985 and operating a full-time Secretariat since 1986. The Association has fifteen members (thirteen organizations and two individuals).

“ADA exists to promote sustainable development and social change, creating a framework for debate, policy, advocacy, analysis and systematic study of global and macro issues which builds the capacity of the collective to undertake development education and research.”

ADA has membership in regional organizations such as Caribbean Policy Development Centre (CPDC), Barbados and Caribbean Network for Integrated Rural Development (CNIRD), Trinidad. ADA collaborates with government ministries (e.g. Office of the Prime Minister, Education, Finance and Planning, Foreign Affairs and the Planning Institute of Jamaica) and with other member organizations.

ADA collaborates with several International NGOs, UN Agencies and Intergovernmental organizations (eg. Commonwealth Foundation). Also International AID Agencies such as the UK Department for International Development.



For the small and vulnerable economies of the Caribbean the services sector is one of the fastest growing industries in the region, making up in excess of 50% of the GDP of most of these countries. The sector’s critical and growing importance is propelled by the impending elimination of traditional preferential and non -reciprocal arrangements, for most of the region’s chief agricultural products and restricted market access for most of its textiles and clothing due to tariff and non-tariff instruments of developed countries.

In this context, these smaller economies are now highly dependent on the success of this sector to contribute to national development objectives.

Clearly then, the current negotiations on this issue are of crucial importance to the continued economic stability of these economies. While it is fair to say that many of the texts in the negotiations on this area are bracketed and therefore not agreed, the general tenure of the proposals contained in the current draft suggest the potential for serious negative implications for the region. Many of these proposals if accepted would serve to negate any benefits, which Caribbean countries might derive from the liberalisation of the services sector.

In particular, the Association of Development Agencies (ADA) is concerned about the comprehensive nature of proposals being put forward. Article 1 point 1.1 on the Scope of {Application} states that, {This chapter shall apply to all measures adopted by the Parties that affect trade in services, in all sectors and in all different modes of supply, including those stemming from the delivery of commercial services by the public sector, at the national, federal, regional or local levels, as well as those stemming from bodies in the exercise of powers delegated by the national federal, regional or local government.} This definition suggests a wide purview for the agreement, which has the potential to limit government authority and nullify the effect of domestic legislative regulation. The intent of many proposals within the draft text and some of the agreed text seem bent on ensuring that firms and trans- nationals can gain maximum leverage from the Agreement through wide provision of facilitation for investment in Most Favoured Nation treatment (MFN), and National Treatment (NT) clauses. This is especially worrisome for small and vulnerable economies who, because of weak domestic commercial sectors and national legislative regulatory systems in such areas as information technology and financial services, could face serious problems protecting the “public interest” in their national jurisdictions.

Additionally, ADA is also concerned about the proposals relating to national treatment. Indications suggest that the proposed services agreement will move away significantly from the GATS, where national treatment is limited to a specific service sector and to a specific commitment that an individual Party negotiates. The proposals in seem to suggest that national treatment should be institutionalised within the draft Services Agreement as a ‘general obligation’ applicable to all parties and to all sub-sectors and service providers. If this is agreed foreign investors and trans-national would be provided with the best of all possible worlds in this FTAA agreement, gaining MFN, NT and Market Access as ‘general obligations’ applicable across the board. Such a scenario would have disastrous implications for the small and vulnerable economies in the region, which are now in the process of trying to develop and secure “foot holds” in the services sector within their countries. This would allow foreign firms to dominate the market at the expense of the now fledging domestic operators.

The Agreement makes some attempt at including provisions for smaller economies and developing countries; this text is also however still bracketed. ADA is calling for the full adoption of the text within the draft Agreement on Special and Differential treatment and further that this be strengthened by clearly defining within the Agreement the special market access conditions to be afforded to these countries and that such definition should also be included in the Market Access Agreement.

ADA is not convinced that the exemption proposed for ‘those services supplied in the exercise of governmental authority, provided on a non-commercial basis, nor in competition with one or more service providers or supplier as defined in Article 8, will provide any protection for Caribbean Societies.

In all of the countries within the Caribbean, there are many social services that are supplied in a mixed fashion, involving the government and the private sector, such as education, health and housing. Due to the of level of development and the need to ensure that such services can still be affordable and accessible to all, governments still have to play a leading role in regulating these areas.

The IMF led structural adjustment programs which launched the first phase of aggressive liberalism in the Caribbean, encouraged Caribbean governments to move out of the social sector, with devastating consequences, including increases in poverty. This FTAA process seems set to unleash the same onslaught on the vulnerable populations on the region, with the same devastating consequences.

In this light, ADA is calling for the following:

  • The guiding principles governing any negotiations on trade in services should be based predominantly on those established in Article XIX of the GATS which prescribe:

i. The process of liberalisation shall take place with a view to promoting the interests of all participants on a mutually advantageous basis and to secure and overall balance of rights and obligations.

ii. The process of liberalisation shall take place with due respect for national policy objectives and the level of development of individual members both overall and in individual sectors.

iii. There should be appropriate flexibility for individual (“smaller economies”) for opening fewer sectors and liberalising fewer types of transactions.

iv. Progressively extending market access in line with national development objectives and situation and through a process of ongoing negotiation.

  • That in respect of increasing the capacity of smaller economies and Less developing economies in trade in services within the FTAA

The Negotiating Group should without reservation adopt of all proposals under the Section Special and Differential Treatment as stated within the Draft Agreement on Services. This adoption should also include any proposals to further enhance the provisions in favour of smaller economies.

The provisions within this section should also be furthered strengthened by clearer definition of the proposed provisions for market access for these countries and such definition should also be included in the Agreement on Market Access.

The application of a non-reciprocal formula approach, in favour of smaller economies and developing countries with respect to Mode 4 the movement of natural persons. The application of the formula should guarantee a level of commitments, by all developed countries, providing for enhanced and effective market access conditions for services providers from smaller economies and Less Developed Countries (LDCs), including removal of non-tariff restrictions such as visa requirements and work permits.

The Draft agreement should state explicitly that smaller economies would be allowed an exemption for service activities forming part of the social services system, as well as activities in the protection of national interest.

The proposal under Article 6 National Treatment which states that {Exceptions to this principle shall be allowed, in the case of smaller economies in the pursuit of sustainable national development objectives and to enable fuller participation in the overall FTAA process} should be fully adopted.

Further we believe that:

The ongoing negations would be best served by the adoption of a Positive Lit -Bottom up Approach to the negotiations

All modes of delivery as defined under GATS should be included within the FTAA Agreement on Services, special attention should be given to enhancing provisions for Mode 4 movement of Natural persons to ensure effective market access conditions for smaller economies and LDC’s.

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