No deal reached in EU-Caribbean trade talks

MONTEGO BAY, Jamaica, Oct 5 (Reuters) The European Union and countries in the Caribbean failed to agree on a new trade and investment deal in two days of talks that ended on Friday but managed to narrow the gaps between them, officials said.

The EU and 79 nations in Africa, the Caribbean and Pacific (ACP) have been holding talks to replace colonial-era preferential trade deals which the World Trade Organization says are illegal and must end by Dec. 31.

EU officials had expected the Caribbean to become the first of the ACP regions to agree to a new deal and European Trade Commissioner Peter Mandelson and European Development Commissioner Louis Michel began talks on Thursday with trade ministers from Caribbean countries in Montego Bay, Jamaica.

But the talks did not produce a definitive result, the EU commissioners and Caribbean officials said in a briefing.

''The top line is that we are going to make this work; there is detail that we are still to hammer out,'' Mandelson said.

''What we were hoping to achieve was common ground, a narrowing of the gaps, a convergence between us of key outstanding issues in these negotiations and that is precisely what we've done.'' The EU says the new agreements will help the ACP countries develop their economies, which are largely dependent on commodity exports, and will foster regional economies that will help attract foreign investment. The Caribbean is largely dependent on tourism while its commodity export industries, in particular sugar, have languished.

But some aid agencies, such as Oxfam, say the deals will expose farmers and businesses in developing countries to unfair competition from Europe.

The EU and countries from the Pacific region have effectively given up on reaching a firm deal before the preferential trade agreements expire in January.

Instead, they have agreed to seek an interim agreement to come into effect by Jan. 1 and bring them in line with WTO stipulations, avoiding litigation at the world trade body.

Jamaica's recently elected prime minister, Bruce Golding, said the talks with the EU had not been without difficulty.

''There are issues that we have to wrestle with, because while we are committed to substantially free trade, while we are committed to WTO compatibility, there are issues that we have had to discuss that have serious implications for our own economies within the region,'' he said.

REUTERS SBA AS0306