Britain’s Caribbean Overseas Territories could suffer significantly if it votes to leave the European Union in the June 23 referendum, according to a report released in London.
The report commissioned by the United Kingdom Overseas Territories Association (UKOTA) on the benefits of the European Union (EU) to the United Kingdom Overseas Territories (UKOTs) notes that the UKOTs have benefitted “in several important ways from their relationship with the EU, and many of these will be placed at serious risk if the UK decides to leave the EU”.
The UKOTA said that the overall aim of the report is not to force the UKOTs onto the campaign agenda but to demonstrate the value of the EU to the UKOTs and the prospects for their future relationship with the EU pending the referendum outcome.
There are 14 UKOTs spread across the globe, of which nine are directly associated with the European Union (EU) via the Overseas Association Decision (OAD) adopted by the EU in 2013. These are Anguilla, Bermuda, British Virgin Islands (BVI), Cayman Islands, Falkland Islands, Montserrat, Pitcairn, St Helena and Turks and Caicos Islands. Ascension and Tristan da Cunha fall under St Helena in the OAD.
The report notes that the UKOTs benefit currently from economic and environmental cooperation with the EU, as well as development assistance and policy dialogue.
Practical aspects of cooperation are welcomed by the UKOTs. For example, Bermuda’s financial services industry with its focus on insurance is aided by its close links with the EU, both in terms of it being a large market, but also as the EU recognizes Bermuda’s regulatory system as equivalent to its own.
The report, titled “The United Kingdom Overseas Territories and the European Union: Benefits and Prospects,” notes that the EU market is a major one particularly for Bermuda, with its focus on insurance. Service sector imports from Bermuda to the EU amounted to Euro21.7 billion (One Euro =US$1.29 cents) in 2014 according to the European Commission.
“In addition, Bermuda benefits from the EU’s recognition that the standard of the island’s insurance regulation is equivalent to its own. Second, within the institutional structures highlighted previously the OCTs (Overseas Caribbean Territories) are able to discuss financial services and tax issues and initiatives with the EU before they are implemented. “
The report also noted that the British Virgin Islands (BVI) is the Co-Chair of the OCT/EU Financial Services Partnership Working Party (PWP), which brings together technical experts from the OCTs and EU to discuss issues of mutual concern.
“This platform is important for mutual understanding and to make sure that the interests of the OCTs are taken into account by the EU in its decision making.”
The report said that a number of the UKOTs are highly dependent on a small number of industries, and this increases their vulnerability.
“Thus several are investigating ways in which they can diversify their economies. For instance, BVI is exploring the commercial expansion of its fisheries industry, with the EU as a potential export market,” the report added.
It said that funding from the EU is also having a positive impact on the UKOTs, amounting to at least Euro 80 million between 2014-2020.
The report notes that recent and ongoing projects are focusing on supporting their economies, and helping the territories to address environmental challenges such as climate change, disaster preparedness and the conservation of their biodiversity.
“Beyond the policy benefits, the deepening institutional links between the UKOTs and the EU, particularly via the European Commission, have been supported by the Territories, providing as they do more direct access to EU policy makers.
“In addition, the growing cooperation between the UKOTs and Dutch, French and Danish territories in the Overseas Countries and Territories Association (OCTA) has brought real gains, including greater political visibility of the territories in Brussels and a higher international profile,” the report added. (Jamaica Observer).