The Business Year

Karel De Gucht


Go for the Win

Trade Commissioner, the European Union


Karel De Gucht has been the European Commissioner for Trade since February 2010. He is a lawyer by training and a Belgian liberal (Open-VLD). He has held numerous political offices at both the national and European level. He was first elected as an MEP at the age of 26 and has more recently been both Belgium’s Deputy Prime Minister and Minister of Foreign Affairs (2004-2009) before first joining the European Commission as Commissioner for Development and Humanitarian Aid (2009-2010).

"As EU Trade Commissioner, I want to support our Caribbean partners in their integration into the world economy."

What will be the impact of the EPA, and what unique advantages does it offer in the current global economic context?

The EPA will help the Cariforum region grow and develop economically and sustainably. It will improve conditions for business to flourish and to create even more highly skilled jobs. It will help the Caribbean move up the value chain and rely less on traditional exports, such as bananas and sugar, by creating new trading opportunities in the goods and services sectors, such as business and financial, or tourism including health-related and cultural services industries. The agreement helps consolidate the regional market and establish a transparent and predictable economic framework. This will make the region more competitive and in the end more attractive for investment.

How has the EPA developed the EU’s relationship with the Latin American & Caribbean region?

The EPA is a pioneer trade-for-development partnership between the EU and its 15 Cariforum partners, which include the Caribbean Community and the Dominican Republic. This comprehensive agreement will consolidate and expand our long-standing relations with the region. At the same time, the EPA will support the Caribbean’s own regional integration efforts, which are critical to its development. The EPA replaces the previous trading regime that was based on unilateral trade preferences for goods. All in all, the EPA establishes a true partnership combining the full range of trade instruments to promote sustainable economic growth and investment in the Cariforum region.

“As EU Trade Commissioner, I want to support our Caribbean partners in their integration into the world economy.”

Specifically, what benefits are there for European companies to invest in the emerging Latin American and Caribbean market?

The Caribbean region is strategically located between North, Central, and Latin America, and it should be able to develop into a springboard to these neighboring markets. The Caribbean Community has embarked on an ambitious regional integration project, aiming to create a single market and economy by 2015. The Dominican Republic enjoys advantageous conditions of trade with the US and other partners in Central America through bilateral trade agreements. The EPA should consolidate relations between the Dominican Republic and its CARICOM partners. Cariforum countries offer a sound business environment, reliable investment protection, and good level of skills and creativity. The EPA opens the goods and services markets, addresses non-tariff barriers, and deals with other trade-related issues, such as competition policy or intellectual property rights. It also reflects the two regions’ stages of development, as it requires the EU to take more commitments than its Caribbean partners. For example, the EU offers Caribbean states 100% duty- and quota-free access for all goods, while the Caribbean has up to 25 years to open around 83% of its market.

What measures does the EU propose for countries such as the Dominican Republic who face a possible moderate growth in external demand and relatively high imported commodity prices in years to come?

As EU Trade Commissioner, I want to support our Caribbean partners in their integration into the world economy through the trading opportunities offered through the EPA. While we cannot make decisions more appropriately taken care of by Cariforum governments, we support their work to establish a sound business environment, stable and transparent investment conditions, and an operational judicial system. We stand ready to co-operate on policies that will enhance the competitiveness of the region and bring benefits to all operators—exporters and importers alike.

Which sectors or industries do you feel represent the most potential for EU-Dominican Republic trade relations?

In my view, there are many areas that have great potential for trade between the EU and the Dominican Republic. Again, it is not appropriate for me to “pick winners.” Tourism has been a major area of activity, which is no surprise given the beautiful beaches, marvelous waters of the Caribbean Sea, fantastic nature, and great cultural sights that this country offers. Certainly, this sector can be further developed. The Dominican Republic has a well-known strong capacity to grow tropical fruit and vegetables, for which it has promoted good outlets through fair trade schemes. But given the geographic position, the specific features of the country, the level of skills, and its other assets, it would seem to me that other sub-sectors are highly promising as well: music or cultural industries could be developed, so could the education or health-based services. On the other hand, there may also be opportunities to produce goods and services for neighboring markets on the American continent. You can also develop to your advantage the region’s linguistic assets. You speak languages common to so many countries that are accessible via the EPA.

What do you say to European companies that are cautious of protectionism by governments in the region?

The EPA establishes a comprehensive partnership between the EU and the Cariforum region. This includes a free trade area, which removes tariffs on all trade over a period of 15 years. The agreement also deals with non-tariff barriers or trade-related issues, such as investment and competition policy. As a matter of principle, EU investors in Cariforum countries benefit from national treatment, which means they enjoy the same conditions as local companies. The implementation of the agreement will be closely monitored by both parties, including through joint institutions, in which any possible issues can be discussed and resolved. In my view, these provisions render protectionist measures much less likely.

Europeans are flocking to the region to relocate. How is this beneficial to the European, Latin American, and Caribbean economies?

I am not sure that “Europeans are flocking to the region,” but European individuals and companies alike certainly take considerable interest in the region. The EPA will help to put the Caribbean more firmly on the map for EU investors. And the region needs to attract more investment to fuel growth and development. That is what the EPA sets out to do: creating better conditions for investors in the Caribbean, be they local or of foreign origin, in order to promote the region’s economic development. Today’s globalized economies rely on an international division of labor and businesses seek to source parts or tasks from the most competitive location. Inward investment therefore has the potential to be beneficial to both the Caribbean region and the EU. Such investment will create jobs, it enables the transfer of skills and technology, and it will drive economic growth and development in the region. Of course, these investments intend to make the parent company more competitive and profitable. As a result, the company will also be able to create more jobs and wealth both in Europe and in the region long term. Provided the economic activity generated is responsible and sustainable, we should look at this as a “win-win” situation.

© The Business Year – January 2013



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