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GREAT insights Magazine

Dominican Republic – CARICOM: Unfinished Business

October 2013

Ogando Lora, I. 2013. Dominican Republic - CARICOM: Unfinished business. GREAT Insights, Volume 2, Issue 7. October 2013. Maastricht: ECDPM.

During the last CARICOM Heads of Government meeting held in Trinidad & Tobago last July, President Danilo Medina of the Dominican Republic (DR) reiterated the request of his country to access to full membership of CARICOM.

It was not a new request, since it was originally made back in the late eighties, when the DR was seeking CARICOM’s support to join the Lome IV Convention. Since then, it has been officially reiterated at least twice, but no formal reply from the group has been made.

However that does not mean that the DR and CARICOM have not been working together. As a matter of fact, in the last twenty-five years, the relationship between these two has been a history of ups and downs, characterised by periods of both intense cooperation and plain indifference.

The accession of the DR to the Lome IV marked the beginning of a new chapter with CARICOM, which back then was composed only by Anglophone States. Thanks to the regional cooperation under Lome IV, the two parties had no choice but to cooperate and work together in order to coordinate the design and implementation of regional programs funded within the framework of the 7th EDF. As a result, intensive contacts and functional cooperation flourished between the two, starting with the creation of the Caribbean Forum of ACP States (CARIFORUM) Secretariat in 1992. The Caribbean Export Development Agency, which previously was a CARICOM program, was established as the first CARIFORUM institution by an intergovernmental agreement as a development agency of the Caribbean ACP States in order to promote exports and the intra and interregional trade. The closer cooperation as a result of several 7th EDF regional funded projects, also indirectly contributed to a better understanding and mutual recognition of the parties that led to the launching of the negotiation of a free trade agreement in 1996 and which was signed in 1998. This FTA represented the first reciprocal trade agreement signed by CARICOM and the second one for the DR. Also the DR agreed to work under the direction of the Caribbean Regional Negotiating Machinery (CRNM), which was a CARICOM organization, during the post-Lome IV negotiations. The DR also opened embassies in Kingston and Port of Spain in the late nineties and hosted the only CARIFORUM Heads of Government meeting so far, as part of a policy to seek closer cooperation with its Caribbean counterparts.

However, with the turn of the new century, what had been an intensive relationship became more distant since each party focused on other priorities. Despite the positive experience in coordinating negotiations under the CRNM umbrella, the DR pursued the negotiations of the Free Trade Area of the Americas (FTAA) on an individual basis, as well as the World Trade Organization negotiating round. Eventually, it also concentrated its negotiating efforts on finishing a free trade agreement with the US, which resulted in the signing of the DR-CAFTA in 2004. CARICOM in the meantime was dealing with the Revised Treaty of Chaguaramas (2001), the formal accession of Haiti to the group, and the implementation of the Caribbean Single Market and Economy (CSME). During this time, the regional cooperation under CARIFORUM also took the back seat, since the regional package had been cut from an average of €100 million under the 7th EDF (1990-1995) and 8th EDF (1995-2000), to only €57 million under the 9th EDF (2000-2006).

The wheel started moving again, when both parties ‘were forced’ to jointly negotiate an Economic Partnership Agreement with the European Union in 2004. As a result, trade officials started regular encounters in order to agree on common positions vis a vis the EU. Little by little, confidence was restored as part of the negotiations led by the CRNM. Paradoxically, in the context of the CARICOM-DR trade agreement, the negotiations and implementation of the agreement failed to move forward after a frustrating Joint Council meeting in 2005. Almost in parallel, within CARIFORUM Secretariat, difficult talks were taking place in order to review its institutional arrangements given the fact that the EU, which so far had been funding CARIFORUM’s operation, was pushing to merge it with the CARICOM Secretariat. This was not only aimed at forcing for a closer relationship but also to reduce its cost by having Caribbean countries contributing to the funding of CARIFORUM’s Programming Unit. After difficult negotiations, a political agreement between CARICOM and DR was reached and the CARIFORUM Secretariat was merged into the CARICOM Secretariat in 2006, creating the CARIFORUM Directorate and reserving the post of Assistant Secretary General for CARIFORUM to a national of the Dominican Republic for a period of five years, funded by the DR.

In the meantime, the EPA negotiations within CARIFORUM were not exempted from some tensions either, particularly when it came to the issue of the regional preference which was being pushed by the EU. The regional preference was another mechanism used by the EU to put pressure on the regional integration process to move forward. Originally the EU had emphasized the need for a custom union in order to guarantee a free movement of European goods among CARIFORUM countries. Since a Caribbean customs union was obviously not a realistic pre-condition for the EPA, it was dropped and towards the end of the negotiation process the regional preference was put on the table.

The regional preference basically stated that any trade preference given by CARIFORUM Member States to the EU in the EPA, should be also given to the rest of CARIFORUM Members. This was one of the main issues that really threatened the conclusion of the EPA negotiations since the DR was in favor but most of CARICOM countries were not quite convince about it. Many critics went as far as stating that regional preference would undermine the process of the CSME and that the DR was looking to enter into CARICOM via the “back door”.

Eventually, after long and intensive negotiations, the regional preference was included as article 238 in the CARIFORUM-EU EPA signed in October 2008, but not without leaving some bitter taste among the parties.

The signing of the EPA and the coordination of its implementation at the regional level also raised concerns on the side of the DR regarding the management and coordination of the regional cooperation assigned under the 10th EDF to assist the region with the implementation. The DR felt that not being a full Member of CARICOM, would undermine its possibilities to have access to the cooperation as well as effectively participate in the EPA Institutions. Furthermore, questions were raised as to the continued role of the CARICOM Secretary-General serving as Secretary-General to CARIFORUM.

Within this context, concerns over the existing CARIFORUM governance structure were highlighted and opened the door for new negotiations at the 18th CARIFORUM Ministerial Meeting held in Belize in April 2010. As a result, the compromise was to appoint a national of the Dominican Republic as Director General of CARIFORUM for a period of two years who would report directly to the Secretary-General. The compromise also covered a new CARIFORUM Directorate structure which would provide for both the EPA Regional Implementation Unit (which was part of the CARICOM Secretariat) and the traditional programming and development cooperation unit. The CARIFORUM Directorate maintained its role as the regional interlocutor with the EU for policy dialogue.

Throughout the years, the CARICOM-DR relationship has had its ups and downs but one significant characteristic is that the EU was always part of the background. Unfortunately, more often than not, the main incentive for the CARICOM-DR relation is linked to dealing with the EU as a single group. The fact that CARICOM-DR have been unable to work together vis a vis interlocutors other than the EU speaks for itself. In this regard, the trade negotiations with Canada come to mind, in which both parties are negotiating separately with the Canadians. Furthermore the cooperation beyond EDF regional resources has been quite limited. As a result, CARIFORUM’s recognition as a Caribbean regional body its mainly limited to the European Commission. Even most of the individual European member states channel their financial cooperation to the region through the CARICOM Secretariat or directly to the Dominican Government separately. 

For some people, after almost twelve years of DR absence at the CARICOM Heads meetings, the renewal of the request for CARICOM Membership made by the Dominican president to his counterparts and the enthusiastic support of some CARICOM countries like Trinidad & Tobago, may indicate a positive change in the bilateral dynamic. However, while this may be a positive thing, there is a lot of room for skepticism and the DR accession to the group is far from being a done deal given the fact that the process is quite long and not all CARICOM Members are convinced of the feasibility of a Dominican Membership in the short, middle or even long term. It seems like the perception that the DR’s goods could flood CARICOM’s market is still quite strong and more efforts should be done to identify and exploit the potential complementarities that enhance the productivity of the region. 

Furthermore, it does not make sense to invest time and political resources planning an accession when significant commitments between both parties remain pending implementation. For example, the implementation of Art. 238 of the EPA remains a thorny issue and advancing on the implementation and coverage of the bilateral Trade Agreement has proven quite difficult and frustrating. It is obvious that if they cannot agree in the implementation of these things it would be far more difficult to agree on the commitments that a full membership imply.

Also the DR recently joined the Central American Integration System (Spanish: SICA) as a full member and there may be concerns about the compatibility of commitments in both integration schemes. 

In view of the above, it is expected that the CARICOM-DR relationship will continue to be seen mostly through CARIFORUM and the EDF regional cooperation in the short and mid term. Particularly now that, as a result of the new approach implemented by the EU to deliver the development cooperation, the EU puts significant emphasis on regional cooperation. In this regard, while most National Indicative Envelopes for individual Caribbean ACP States have been significantly reduced under the 11th EDF, the regional envelope has gone from €165 million under the 10th EDF to an expected sum of over €300 million. 

This means that the competition for accessing regional resources will be more intense than in previous programming of EDF resources. This will require significant efforts, both technical and diplomatic, from both parties, as well as from the EU, to guarantee a certain political balance.

In this regard it is imperative to move forward with the initiatives that had been put in place to reinforce the institutional arrangement of the CARIFORUM Directorate. Among these initiatives are the updating of its rules of procedure and defining the institutional relationship between the Directorate and the CARICOM Secretariat, as well as its funding aside from EDF support. 

In conclusion, while the European regional development cooperation has played, plays and will play for the next few years, a key role in bringing CARICOM and DR together, today it is unlikely that CARIFORUM would survive without EDF support. A DR Membership in CARICOM is not eminent and, political rhetoric aside, it seems that both parties have not yet fully realised that they need to go beyond EU cooperation and learn to rely on their own efforts and initiatives to guarantee a sustainable and mutual beneficial relationship among themselves.

Ivan Ogando Lora is the former Secretary General CARIFORUM.

– See more at: http://www.ecdpm.org/Web_ECDPM/Web/Content/Content.nsf/0/6DE77976DD1AA76BC1257C010041BEFF?OpenDocument#sthash.b1JLlPUI.dpuf

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Economic Transformation and TradeRegional IntegrationTrade Policy and Economic Partnership AgreementsCaribbean Community (CARICOM)Economic Partnership Agreements (EPAs)European Union (EU)CaribbeanDominican Republic

External authors

Ivan Ogando Lora