In trade ne­go­ti­a­tions lin­go, the term par­tial scope agree­ment (PSA) has be­come more com­mon­place of late. In March T&T signed such an agree­ment with the Cen­tral Amer­i­can coun­try, Pana­ma. In April, this coun­try be­gan ne­go­ti­a­tions with Guatemala on a PSA. These moves are all part of an ag­gres­sive and sus­tained cam­paign to en­sure Latin Amer­i­ca is seen as the new fron­tier for south/south trade op­por­tu­ni­ties. The ques­tion is: what is a par­tial scope agree­ment? What about its terms and con­di­tions dif­fer­en­ti­ates it from, say a bi­la­te­r­i­al agree­ment? Apart from the PSAs signed with Pana­ma and Guatemala, Brazil has signed with St Kitts/Nevis, Guyana with Brazil, Cari­com with Cu­ba, Cari­com with Venezuela and Be­lize with Guatemala. Ac­cord­ing to the Of­fice of Trade Ne­go­ti­a­tions, Cari­com sec­re­tari­at, "Cari­com al­so has a bi­lat­er­al trade agree­ment with Venezuela. se­cured in Oc­to­ber 1992. The Cari­com-Venezuela Trade and In­vest­ment Agree­ment was signed in Oc­to­ber 1992 and be­came ef­fec­tive on Jan­u­ary 1, 1993." Now, what's ne­go­ti­at­ed around a ta­ble doesn't al­ways trans­late to the re­al world. For in­stance:

Be­lize/Guatemala par­tial scope agree­ment

The Be­lize-Guatemala PSA is the first trade agree­ment that Be­lize has signed with an­oth­er coun­try bi-lat­er­al­ly. Ne­go­ti­a­tions were launched on No­vem­ber 22, 2004. Be­lize had signed the Agree­ment on June 26, 2006, and the Con­gress of the Fed­er­al Gov­ern­ment of Guatemala had ap­proved the PSA in Oc­to­ber 2009. The Guatemalan Pres­i­dent is­sued a de­cree to give ef­fect to the agree­ment on April 4, 2010.

Ex­ist­ing trade with Guatemala

Be­lize has a neg­a­tive trade bal­ance with Guatemala. This means that Be­lize im­ports more Guatemalan prod­ucts that it ex­ports to Guatemala. There are great ex­port op­por­tu­ni­ties to be gained from the PSA with Guatemala.

Po­ten­tial for trade ex­pan­sion

Based on the da­ta pro­vid­ed by the Di­rec­torate for For­eign Trade, Guatemala im­ports prod­ucts that Be­lize can eas­i­ly sup­ply on a pre­dictable and con­sis­tent ba­sis. These prod­ucts are or­ange juice, spir­it­ed, whether or not sug­ared, sweet­ened or frozen, kid­ney beans, fresh fish, liv­ers and roes, frozen shrimps and prawns, in shell or not, fish, crus­taceans, mol­luscs, aquat­ic in­ver­te­brates, meat and ed­i­ble meat of­fal, live poul­try, live swine, bovine an­i­mals, and corn.

Mar­ket ac­cess

The agree­ment is on­ly par­tial in scope, mean­ing it al­lows for rec­i­p­ro­cal (two-way) trade be­tween Be­lize and Guatemala on a small num­ber of goods. The agree­ment cov­ers 150 spec­i­fied trade­able prod­ucts. The PSA spec­i­fies for the im­me­di­ate elim­i­na­tion of tar­iffs by 50 per cent and 100 per cent; these goods are grouped in Cat­e­go­ry A. Un­der Cat­e­go­ry A prod­ucts, Be­lize will be able to sell at pref­er­en­tial tar­iff mar­gins to Guatemala prod­ucts such as: tilapia, yel­low maize (up to 20,000 met­ric tonnes at ze­ro per cent du­ty), black beans (up to 875 met­ric tonnes at ze­ro per cent du­ty), rice, toi­let pa­per, doors, win­dows, wood­en and wick­er fur­ni­ture, match­es, most cit­rus fruits and con­cen­trate, man­gos, guavas, wa­ter­mel­ons, pineap­ples, plan­tains, among oth­ers. The goods marked with Cat­e­go­ry 'A' on Guatemala's list are those prod­ucts in which Guatemala has grant­ed Be­lize pref­er­en­tial (du­ty-free, in many in­stances) ac­cess to their mar­ket. The agree­ment al­so pro­vides for Be­lize to grad­u­al­ly elim­i­nate its tar­iffs it charges on Guatemalan im­ports by 50 and 100 per cent over three years for those prod­ucts cat­e­gorised as 'B'. Like­wise, a grad­ual elim­i­na­tion of Be­lize's tar­iffs on Guatemalan im­ports by 50 per cent and then 100 per cent over a five-year pe­ri­od is con­tained in cat­e­go­ry 'C'. The PSA al­so de­fines what would be con­sid­ered as in­suf­fi­cient work­ing or pro­cess­ing in which a cer­tifi­cate of ori­gin will not be is­sued.

In­vest­ment

The PSA pro­vides for the pro­mo­tion of in­vest­ment be­tween both coun­tries. Par­tic­u­lar­ly, the agree­ment speaks of joint ven­tur­ing and the fa­cil­i­ta­tion by both par­ties with re­spect to the is­suance of nec­es­sary per­mits, li­cens­es, and con­tracts for tech­ni­cal, com­mer­cial or ad­min­is­tra­tive as­sis­tance with re­la­tion to in­vest­ments.

The PSA al­so pro­vides for a favourable in­vest­ment cli­mate to at­tract in­vest­ment in both coun­tries. Em­pha­sis on the dis­cour­age­ment of an­ti-com­pet­i­tive busi­ness prac­tices was en­shrined in the chap­ter on in­vest­ments. The agree­ment al­so pro­vides that in­vest­ments of in­vestors of ei­ther par­ty shall not be na­tion­alised, ex­pro­pri­at­ed or sub­ject­ed to mea­sures that would nul­li­fy their val­ue, or have ef­fects equiv­a­lent to na­tion­al­i­sa­tion or ex­pro­pri­a­tion.

The chap­ter on in­vest­ments al­so con­tains its own pro­vi­sions for the set­tle­ment of dis­putes be­tween an in­vestor and the coun­try to which the in­vest­ment is made con­cern­ing any breach of oblig­a­tions un­der the agree­ment. (Wikipedia)