Caribbean Trade and Development Digest – June 10-16, 2018

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Welcome to the Caribbean Trade & Development Digest for the week of June 10-16, 2018! We are happy to bring the trade and development headlines from across the Caribbean Region and the world from last week:

REGIONAL

‘Tremendous Anxiety” over (Bahamas) WTO Accession

The Bahamas Tribune: The Chamber of Commerce’s chairman yesterday warned there was “tremendous anxiety” over the WTO accession amid the absence of analysis on its likely impact. Read more 

CSME necessary; Consultation raises concerns over architecture

CARICOM: Stakeholders at the just-concluded Stakeholder consultation on the CARICOM Single Market and Economy (CSME) agree that there is value in, and benefits to be derived from the CSME. Read more 

ECLAC chief calls for ‘new narrative’ on international cooperation for C’bean development

Jamaica Observer: The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, has called for a “new narrative” on international cooperation for the region’s development. Read more 

CARICOM, Cuba to strengthen cooperation

Jamaica Gleaner: The Caribbean Community (Caricom) and the Government of Cuba have both pledged to continue to strengthen relations in matters related to trade and the arts. Read more 

Jamaica, other CARICOM countries to benefit from new Mexico-FAO initiative

Jamaica Observer:  At least 14 Caribbean Community (CARICOM) countries will design multiple projects to mobilise resources from international sources allowing them to improve the resilience and adaptation of their agriculture, food systems and rural communities to change climate. Read more

Blame Governments, not CARICOM

Barbados Today: Blaming the Caribbean Community (CARICOM) Secretariat for the gaps in implementation of the CARICOM Single Market and Economy (CSME) is unfair, former Prime Minister of Jamaica Bruce Golding has argued. Read more 

Integrity Commissions of Guyana, other Caribbean countries want corruption on CARICOM agenda

Demerara Waves: Guyana’s Integrity Commission is among several other similar bodies in the Caribbean that have called on the 15-nation Caribbean Community (CARICOM) to put  graft and corruption on their agenda and craft Commissioner harmonised legislation to tackle the scourge. Read more 

CARICOM unhappy with single market and economy system

New Amsterdam News: Leaders, former leaders and top officials from across the Caribbean assembled in Guyana last week to review the state of play, progress and problems associated with the decades-old Caribbean Single Market and Economy system, and most said the slow pace of implementation was frustrating them terribly. Read more 

Minister Greene pleased with CARICOM meeting

Antigua Observer: Foreign Affairs, Immigration and Trade Minister Chet Greene is pleased with the outcome of a CARICOM Council meeting for Trade and Economic Development (COTED) in Guyana, which concluded yesterday. Read more

New fund launched to assist CARPHA deal with outbreaks and health emergencies

Jamaica Observer: A fund has been launched to provide financial support and assistance to the Trinidad-based Caribbean Public Health Agency (CARPHA) to manage outbreaks and emergencies with health and humanitarian consequences across the risk management cycles. Read more 

INTERNATIONAL

WTO chief warns of global downturn if trade dispute escalates 

The Economic Times: If the trade conflict between the United States and other countries intensifies, it could negatively impact the global economy and there are indications this is already happening, the head of the World Trade Organization warned in newspaper. Read more 

Opportunities beckon as Singapore and Rwanda ink agreements

The Straits Times: More business and investment opportunities are under way for Singapore and Rwanda, as both countries signed a bilateral investment treaty (BIT) and an air services agreement (ASA) on Thursday. Read more 

India moves ahead with tariffs on US goods

CNN Money: The country has proposed hiking tariffs on 30 US products in order to recoup trade penalties worth $241 million, according to a revised World Trade Organization filing. Read more 

USTR Issues Tariffs on Chinese Products in Response to Unfair Trade Practices

USTR: The Office of the United States Trade Representative (USTR) released a list of products imported from China that will be subject to additional tariffs as part of the U.S. response to China’s ‘unfair’ trade practices related to the forced transfer of American technology and intellectual property.  Read more 

 

EU-Mercosur Trade Talks Resume in Montevideo, Though 2018 Timeframe Remains Unclear

ICTSD Bridges: Trade negotiators for the EU and Mercosur resumed formal talks last week, with officials announcing “constructive progress” thereafter while stopping short of announcing a timeframe for concluding the long-awaited trade deal. Read more 

American businesses brace for pain from trade fight with China

CNN Money: President Donald Trump’s tariffs on Chinese goods are intended to help American companies that have been hurt by Beijing’s industrial policies. But in the short term, at least, many American businesses may be the ones feeling pain. Read more 

Japan enacts law to ratify Trans-Pacific trade deal

Nikkei Asian Review: The Japanese Diet on Wednesday enacted a law to ratify the 11-nation Trans-Pacific Partnership free trade deal, moving a step closer to completing domestic procedures. Read more 

Colombia has made request to join Pacific trade pact: Mexico

Reuters: Colombia has formally requested permission to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Mexico’s Economy Minister Ildefonso Guajardo said on Friday. Read more

Liberals (Canada) table legislation to ratify Trans-Pacific free trade deal

CBC: The Liberal government introduced legislation Thursday to ratify a free trade deal with 10 other Pacific nations that it says would see Canada get preferential access to some of the biggest and fastest-growing economies in the Asia-Pacific region. Read more 

Australia to start free trade agreement negotiations with the EU

Bloomberg: Australia will begin negotiations with the European Union on a free-trade agreement covering a market with 500 million people and worth $17.3 trillion, making it one of the country’s biggest potential deals. Read more 

Italy won’t ratify EU free-trade deal with Canada: farm minister

Reuters: Italy will not ratify the European Union’s free trade agreement with Canada, its new agriculture minister said on Thursday, ratcheting up an international trade spat and potentially scuppering the EU’s biggest accord in years. Read more

NAFTA talks to continue in tense atmosphere

CNBC: The U.S. and Canada agreed on Thursday to continue negotiating a new NAFTA deal, amid a tense trade environment that includes an announcement Friday of new U.S. tariffs on China. Read more 

EU and Mercosur complete latest talks

EU: The Parties achieved progress on several issues such as services and exchanges were constructive overall but there is still work to be done, notably on cars and car parts, geographical indications, maritime transport and dairy. Read more 

WTO members focus on subsidies for fishing in overexploited stocks at June meetings

WTO: WTO members in the Negotiating Group on Rules on 11-14 June held their second cluster of meetings on fisheries subsidies this year, where they exchanged views and information on subsidies for fishing in overexploited stocks.  Read more 

EIF symposium looks at how to make trade more inclusive for LDCs

WTO: Representatives from 42 least-developed countries (LDCs) met at the first Global Forum on Inclusive Trade for LDCs taking place at the WTO on 13-14 June 2018 to seek ways to further integrate the world’s poorest countries into the multilateral trading system. Read more 

Trade Policy Review: Colombia

WTO: The fifth review of the trade policies and practices of Colombia took place on 12 and 14 June 2018. Read more 

Merkel and leaders of six multilateral agencies call for enhanced global cooperation

WTO: German Chancellor Angela Merkel hosted a meeting with the heads of six multilateral agencies on 11 June in Berlin to discuss ways to foster international economic cooperation to address global challenges and improve the prospects for inclusive and sustainable growth. Read more 

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

FDI inflows to SIDS grow for second consecutive year: UNCTAD Report

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Alicia Nicholls

Foreign Direct Investment (FDI) inflows to Small Island Developing States (SIDS) rose to $4.1 billion in 2017, representing the second consecutive year of growth and buoyed by an 9% increase in inflows to the ten Caribbean SIDS which grew to $2.7 billion. This is according to the United Nations Conference on Trade and Development (UNCTAD) in the recently released 2018 edition of its World Investment Report.

Although the majority of countries in the region saw declines in FDI inflows, robust increases in Barbados (+25 per cent to $286 million), Saint Kitts and Nevis (+50 per cent to $127 million), and Trinidad and Tobago (from -$17 million in 2016 to $179 million in 2017) were responsible for the growth of 9%.

In total $5 billion in FDI flowed to the Caribbean subregion in 2017. The Dominican Republic was the main recipient of these flows ($3.6 billion) thanks to trade-related investments and its telecommunications and energy sectors, and to a lesser extent, a modest increase in free trade zone activity, UNCTAD Reports. Inflows to Haiti tripled to $375 million, which though still modest may be a sign of positive things to come as several infrastructure and other projects are in the pipeline.

UNCTAD cautioned, however, that FDI inflows to SIDS remain fragile and noted that several projects previously announced had not yet come to fruition. The intergovernmental body further noted that while policy developments to facilitate renewable energy projects were positive, the concentration of these might mean not all SIDS would reap the benefits.

Outflows

Four Caribbean countries also led SIDS globally with regard to FDI outflows, despite those countries each seeing declines in outflows. The Bahamas topped with outflows of $132.3 million, despite a 63.1% decline. In second place was Trinidad & Tobago which saw outflows of $84.2 (-143.6%). The Indian Ocean SIDS of Mauritius was third place ($61.5m, an increase of 1020%). In fourth and fifth place were Jamaica ($42.7m representing a 80% decline) and St. Lucia ($22.1m and a 208.1% decline).

Regional and global contexts

In the wider Latin America and Caribbean region, economic recovery buoyed an 8% increase in FDI inflows to $151 billion, reflecting the first increase in six years but still well below levels in 2011 during the commodities boom. Moreover, UNCTAD further tempered its prospects for FDI in Latin America and the Caribbean in 2018 due to macroeconomic and policy uncertainties.

The global scene is also much more subdued. Global FDI flows dropped 23% in 2017, a three-year low owing to a drop in cross-border mergers and acquisitions and despite growth in global trade and GDP. UNCTAD noted this negative outlook was of concern to policy makers, especially given the importance of FDI to many emerging economies’ sustainable industrial development.

FDI flows to developed economies were $712 billion, representing a fall of one third. FDI flows to developing economies, which accounted for 47% of global FDI inflows, up from 36% in 2016, remained steady rising to $671 billion in 2017.

The full report may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Caribbean Trade & Development Digest – June 3-9, 2018

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Welcome to the Caribbean Trade & Development Digest for the week of June 3-9, 2018! What a difference a week makes in the world of trade policy, it seems! From the CARICOM High Level Stakeholders’ Consultation on the implementation of the CARICOM Single Market to the tumultuous G7 Leaders’ Meeting, we are happy to bring the trade and development headlines from across the Caribbean Region and the world from last week:

REGIONAL

(Belize) Trade Minister Responds to CARICOM Sugar Call

Channel 5 Belize: On Tuesday, Briceño said G.O.B. should be doing more to export all Belizean sugar to CARICOM. According to Panton, Belize’s sugar has market access at duty free rates but what is lacking is market penetration. Read more

CSME implementation deficit not Secretariat’s fault – Golding

InewsGuyana: To blame the Caribbean Community (CARICOM) Secretariat for the gaps in implementation of the CARCIOM Single Market and Economy (CSME) was unfair, a former Prime Minister of Jamaica has said. Read more

St Vincent PM says T&T extracts most from CARICOM

Stabroek News: Stating that outstanding issues such as free movement of people and a co-ordinated foreign policy have to be resolved before CARICOM can move to a Single Economy, St Vincent and the Grenadines (SVG) Prime Minister Dr Ralph Gonsalves also cited Trinidad for drawing the most from the integration movement in an uneven relationship. Read more

Regional leaders have lost faith in CSME realisation

St. Lucia Times Online: CARICOM members have to become more practical in their approach to the concepts of the Caricom Single Market and Economy (CSME), St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves said Friday. Read more

Statement at the Conclusion of an IMF Staff Visit to Barbados

IMF: At the request of the newly elected Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm visited Bridgetown on June 5-7, to have discussions on economic policies and possible IMF financial support of the government’s economic plan. Read more

Price hike expected due to trade tariffs

The Reporter: The cost of living in Belize could be taking another hit, as the price of various imported goods are in danger of going up due to an ongoing trade war among the United States, Mexico and Canada. Read more

Barbados pledges to play greater role in regional integration

CMC (via Jamaica Observer): Barbados on Tuesday said it would seek to play a greater role in the revitalisation of the regional integration movement, as the new government of Prime Minister Mia Mottley outlined its priorities for the next 12 months.  Read more

INTERNATIONAL 

Malaysia’s Mahathir calls for review of Trans-Pacific trade pact

CNBC: Malaysian Prime Minister Mahathir Mohamad called for a review of the Trans-Pacific Partnership trade agreement, saying smaller economies like Malaysia were at a disadvantage under the current terms. Read more

Trump against Rwanda in trade war over used clothes

Deutsche Welle: When East African countries announced a ban on the import of secondhand clothes to help their own textile industries, this irked US President Donald Trump. All but Rwanda have now backtracked. What’s at stake? Read more

Trump Wants Bilateral Nafta Talks But He Won’t Quit Accord

Bloomberg: President Donald Trump is seriously considering separate trade negotiations with Canada and Mexico but he doesn’t plan to withdraw from the North American Free Trade Agreement, White House economic adviser Larry Kudlow said. Read more

EU trade defence: stronger and more effective rules enter into force

European Commission: The changes which came into force last week are aimed at modernising the EU’s trade defence toolbox. Read more

EU-US Trade: European Commission endorses rebalancing duties on US products

European Commission: The College of Commissioners endorsed today the decision to impose additional duties on the full list of US products notified to the World Trade Organisation (WTO), as part of the EU’s response to the US tariffs on steel and aluminium products. Read more

EU and Chile complete third round of negotiations

European Commission: Negotiators met in Brussels from 28 May to 1 June for the 3rd round of negotiations for a new, modernised trade agreement between the EU and Chile. Read more

Azevêdo highlights ‘significant progress’ on trade finance, outlines further actions

WTO: Speaking at a meeting of the WTO Working Group on Trade, Debt and Finance on 8 June, Director-General Roberto Azevêdo highlighted the significant progress made in improving access to trade finance, in response to the persistent gaps in provision which affect small businesses and poorer countries in particular. Read more

Mexico initiates WTO dispute complaint against US steel, aluminium duties

WTO: Mexico has requested WTO dispute consultations with the United States regarding US duties on certain imported steel and aluminium products. The request was circulated to WTO members on 7 June. Read more

EU, Canada initiate WTO dispute complaints against US steel, aluminium duties

WTO: The European Union and Canada have requested WTO dispute consultations with the United States regarding US duties on certain imported steel and aluminium products. The requests were circulated to WTO members on 6 June. Read more

European Union files WTO complaint against China’s protection of intellectual property rights

WTO: The European Union has requested WTO consultations with China concerning certain Chinese measures which the EU alleges are inconsistent with China’s obligations under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). The request was circulated to WTO members on 6 June. Read more

EU initiates new WTO compliance proceedings over Airbus subsidies

WTO: The European Union has requested WTO dispute consultations with the United States to address the EU’s claim that the EU and its member states have complied with the WTO ruling on subsidies to Airbus which was adopted by the Dispute Settlement Body on 28 May. The request was circulated to WTO members on 06 June. Read more

South Africa Looks to Deepen Trade Ties with Canada Following G7 Summit

Footprint to Africa: South Africa is looking to deepen its trade relations with Canada following discussions at the G7 Summit, an annual high profile event that brings together seven of the wealthiest nations in the world. Read more

Africa bids to unlock trade finance potential

Africa Business Magazine: Efforts to create a free trade grouping date back to the establishment of the African Economic Community under the Abuja treaty in 1991. In this context, therefore, the CFTA should be celebrated. Nonetheless, it remains more of a beginning than an end to overcoming intra-African trade barriers. Read more

UNCTAD launches World Investment Report 2018 

UNCTAD: Global flows of foreign direct investment fell by 23 per cent in 2017. Cross-border investment in developed and transition economies dropped sharply, while growth was near zero in developing economies and with only a very modest recovery predicted for 2018. Read more

COMESA, IOM sign cross border trade agreement

Africa Business Communities: COMESA and International Organization for Migration (IOM) have signed a co-delegation Agreement on the implementation of the small scale cross border trade initiative in five border posts within the region. Read more

BONUS – Trade Tensions Escalate 

The leaders of the Group of 7 (G-7) wealthiest countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) met in Charlevoix, Quebec, Canada on June 8-9 against a backdrop of escalating trade tensions between the US and major allies, Mexico, Canada and the EU over the former’s imposition of steel and aluminium tariffs and threats of retaliation by the latter.

The official communique was signed by six countries, the US excepted. Specifically, the six signatories to the communique expressed their support for free trade and the rules-based multilateral trading system and denounced protectionism as follows:

“We acknowledge that free, fair and mutually beneficial trade and investment, while creating reciprocal benefits, are key engines for growth and job creation. We recommit to the conclusions on trade of the Hamburg G20 Summit, in particular, we underline the crucial role of a rules-based international trading system and continue to fight protectionism. We note the importance of bilateral, regional and plurilateral agreements being open, transparent, inclusive and WTO-consistent, and commit to working to ensure they complement the multilateral trade agreements. We commit to modernize the WTO to make it more fair as soon as possible. We strive to reduce tariff barriers, non-tariff barriers and subsidies.”

The full text of the communique may be accessed here.

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

IMO Member Countries adopt pathway to reduce shipping carbon footprint

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Alicia Nicholls

Member countries of the United Nations specialised agency charged with regulating the shipping industry, the International Maritime Organisation (IMO), adopted the first greenhouse gas (GHG) emissions reduction framework for the shipping industry. This decision came at the 72nd session of the IMO’s Marine Environment Protection Committee (MEPC) held in London from April 9-13.

The Initial Strategy adopted by IMO member countries has set a target of halving greenhouse gas (GHG) emissions from ships by 2050 vis-a-vis emissions levels in 2008. This move brings the shipping industry closer in line with the goals of the Paris Climate Change Agreement signed by over 190 countries in 2015, but to which the shipping industry (like the aviation industry) is not bound.

Some 80% of the volume of global trade is carried by ships. The phenomenon of mega-ships has seen a doubling in container ship capacity, and improvements in engine efficiency have increased the ability to travel longer distances in shorter time. However, the industry is estimated to account for 2-3% of global GHG emissions, including carbon dioxide and sulphur. A study entitled “Greenhouse Gas Emissions from Global Shipping: 2013-2015” found that CO2 and other emissions from ships were increasing, despite increases in efficiency. Aside from the very real climate impact, emissions  from ships have public health risks for persons who live on or near the coast.

So what was decided?

Under the Initial Strategy, IMO States agreed:

  • To reduce total annual GHG emissions from international shipping by at least 50% compared to 2008
  • The peak and decline of GHG shipping emissions completely by the end of the century
  • To reduce the carbon intensity of ships through implementation of further phases of the energy efficiency design index for new ships
  • A working group will develop a program of follow-up actions to the Initial Strategy, and will consider ways to reduce shipping GHG emissions in order to advise the committee and will report at the next session of the MEPC in October 2018
  • The Initial Strategy is to be revised by 2023.

As noted by the IMO, achievement of these targets will require continued innovations in shipping design and technology to maximise energy efficiency and decarbonisation through use of alternative and renewable energy sources.

Agreement on the Initial Strategy did not come easy and reflects a compromise. Small Island Developing States, China and the European Union for example, had advocated for a more ambitious emissions reduction target of at least 70%, which scientists argue would put the sector more on track to meeting the Paris Agreement goal to limit global temperature increases to well-below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit increases to 1.5 degrees Celsius above pre-industrial levels.  Others like the US, Saudi Arabia and Brazil had argued for lower targets.

Some environmental groups have posited that the compromise target of 50% is not enough to bring shipping emissions in line with the target set out by the Paris Agreement.

Nonetheless, the Initial Strategy is an important milestone as, after years of delay, it represents the first pathway forward for reducing the shipping industry’s carbon footprint. In March this year, a  mandatory data collection system for fuel oil consumption of ships also came into force.

The full IMO press release may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

IMF: Trade tensions could derail global growth prematurely

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Alicia Nicholls

Currently strong global growth could be derailed by escalating trade tensions and retaliation. That is the word from the International Monetary Fund (IMF) in its latest World Economic Outlook (April 2018) entitled “Cyclical Upswing, Structural Change”. The lending agency has forecast global growth of 3.9% both for this year and the next, up from 3.8% in 2017, which was the most robust since 2011. Increased trade and investment has been a major propeller of this growth, according to IMF economists, which makes the current trade tensions between the United States and China a cause for concern.

GDP growth for Latin America and the Caribbean (LAC) is projected to be 2.0% in 2018 and 2.8% in 2019, up from 1.3% in 2017, but still below the projected global average. The IMF projects positive growth for all LAC countries (to varying degrees), with the exceptions of Dominica (-16.3%) which was ravaged by Hurricane Maria last year and Venezuela (-15%), which is currently in the throes of a deep economic crisis.

Longer-term prospects not as bright

However, it was not all positive news. While near-term global growth prospects remain positive, the IMF projects a slowing of growth in the medium-term. It was noted that ageing populations, lower rates of labor force participation and low productivity growth all made it unlikely that advanced economies would return to their pre-crisis per capita growth rates any time soon.

According to the IMF, some emerging and developing economies are likely to achieve longer-term growth rates comparable to their pre-crisis rates, but the outlook for commodities exporters was not as positive even though the outlook for commodities prices had improved somewhat. The IMF emphasised that economic resilience of these economies would be contingent on their diversification.

The IMF has also again sounded alarm about the rise in global private and public debt levels and the prospect of repayment difficulties due to monetary policy normalisation. This is an issue which is of particular relevance to the region, as some Caribbean countries are among the most indebted in the world.

Trade tensions could undermine current growth trajectory

During the press conference launching the report, IMF Economic Counsellor and Director of the Research Department, Mr. Maurice Obstfeld cautioned that while a slowing of growth is predicted in the longer term, “the prospect of trade restrictions and counter-restrictions threatened to undermine confidence and derail growth prematurely”.

Acknowledging the political imperatives driving the protectionist turn taken by some countries, namely public skepticism about the benefits of free trade and economic integration, Mr. Obstfeld noted that technology as opposed to trade was to blame. He further warned that fights over trade distracted from, rather than advanced the agenda of promoting growth whose benefits were more broad-based.

Multilateral system  in danger of being torn apart

In the report, the IMF warned that the multilateral system was in danger of being torn apart. Making the case against unilateral action, the IMF Economic Counsellor argued that inequitable trade practices were best coped with through “dependable and fair dispute resolution within a strong rules-based multilateral framework”.

He acknowledged that there was room to strengthen the current trading system and that plurilaleral agreements could be used as a “springboard” to more open trade. He also noted that multilateral cooperation was essential “to address a range of challenges in addition to the governance of world trade.”

The full press conference may be viewed here and the report may be downloaded here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Global Governance: Why isn’t it working and what can be done?

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Javier

Javier D. Spencer

By Javier D. Spencer, Guest Contributor

At an exponential rate, the world is convulsing into a single space, which heightens the interconnectivity and interdependence of countries. As a result, it is evident that issues such as climate change, security, human rights among others, instantaneously alter global relations. It can be scary when you think about it, especially since matters arising are becoming more and more complex.

Our human response to address the complex issues at a global level is to increase the robustness of global governance through multilateralism. We could say that for almost every global issue (sometimes overlapping), there may be at least two or three global institutions created to address that one issue. This, evidently, creates a new global society that is constructed to bring order, reliability, predictability and transparency.

The New Global society eliminates a central authority and places emphasis on collaboration among states which will seek to encourage common practices and goals. However, as there is growing interdependence for economies to integrate into the global economy, we observe that global governance has acquiesced to the limitations and challenges of multilateralism. It is designed to promote international peace, stability and co-operation; but unfortunately, it does not work, as it should. For this reason, there are challenges arising in the dynamic global economy that undermines the effective institutional outcomes of global governance, including democratic deficits and accountability; representation and power; and compliance.

Democratic Deficits & Accountability

Democratic deficits are prevalent in global governance when nothing holds the institutions and regimes accountable to a democratic electorate. There is a divergence between ‘what is’ and ‘what ought to be’ in respect of trust by the masses in the governance regimes and institutions. For example, we have seen a proliferation of trade agreements, like the now defunct negotiations on the Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU, and the Trans-Pacific Partnership (TPP) (which was replaced by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after the US withdrew from the TPP), that were being negotiated in secrecy. Secrecy violates the very basic concept of democracy. Citizens have the fundamental right to be aware and to be able to air their concerns on policies and legislation. The absence of this right results in the deficit as the perception of governance goes beyond the influence of the citizenry.

There is also a growing concern about lack of accountability at the global governance level.  Accountability includes transparency, consultation, evaluation, and correction. Transparency means that there is visibility present; eliminating decision-making done in secrecy. Additionally, consultation purports an explanation of intentions by one party, and flexibility to adjust plans that will negatively affect another party. Consultation then ushers in evaluation where there is an independent monitoring and assessment of activities; and in the final analysis, there is correction, which means that there are provisions for redress or reform.

Representation and Power

An overwhelming question on the issue of representation is, “whose interest do these organizations represent?”   Global Governance regimes were created by and for the most influential states that were too important to fail. Therefore, the goals and objectives are partially beneficial to the major actors in global system. For example, voting at the International Monetary Fund (IMF) remains weighted, which means that one state is does not equal to one vote. How is finance for economic development expected to be achieved? It automatically disenfranchises the global south in crucial development decisions.

Another case in point is the daunting process of ensuring that developing countries, more specifically Least Developed Countries, are able to participate in international trade at the multilateral level. Although the Nairobi Decision on Rules of Origin and Export competition enables greater LDC participation, facilitation remains elusive. Interestingly, the Nairobi round is a successor to the Doha Round. The Doha Round, which was coined a being ‘development’ oriented failed miserably after many years of negotiations. The main aim of the Doha Round was to further liberalize trade, invest more in development, and address complex global issues. However, the rounds’ failure illumes the shortcomings of global governance regimes, especially for developing and least developed countries.

There are, however, proposed problems of increased representation at the global governance level. There will be an increased inefficiency, as more participants in the decision-making process could hinder coming to a single decision, due to the diversity of interests and goals. However, inadequate representation results in skewed authority and power within the governance regime. Ultimate power is given to whom it favourably represents and vice versa, representation reflects to the economies with economic dominance and power. It becomes a case where “the strong will do what they can and the weak must accept what they must”.

Compliance

If all states are sovereign, who ensures that states comply with these rules to yield an ideal outcome in the governance of the international system?   The enforcement problem arises because that is no authoritative international government since states value their autonomy. For instance, the United States has iterated its right to ignore any rulings from the WTO’s Dispute Settlement Body. Therefore, to what extent are states willing to sacrifice their political autonomy for a well-functioning international economy? None.

So, what’s next? Reform? How?

In order to align with the original mandate of international stability, peace, and cooperation, issues of democratic deficits and accountability; representation and power; and compliance must be addressed through speedy reform. The start of attaining reform is by identifying an effective global mechanism that provides strategic guidance. Global issues today are closely knitted into a web. Therefore, strategic guidance must view the international system as a whole.

At present, there are sufficient agencies created to tackle emanating issues. As such, there is no need to recreate the global governance regime. Instead, the existing structure needs to be appropriately matched to issues, in order to strengthen its efficacy.

This will certainly result in a change in the global agenda. An agenda that is inclusive, modern, flexible, agile, and resilient.  This envisioned modern-day agenda will mitigate the democratic deficit and increase accountability, linking leadership, vision and institution. An inclusive agenda fosters participation, which balances representation and power. Reform needs to happen faster.

Javier Spencer, B.Sc., M.Sc., is an International Business & Trade Professional with a B.Sc. in International Business and a M.Sc. in International Trade Policy. His professional interests include Regional Integration, International Business, Global Diplomacy and International Trade & Development. He may be contacted at javier.spencer at gmail.com.

WTO: Trade tensions could sabotage global trade growth momentum

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Alicia Nicholls

The World Trade Organisation (WTO) has predicted that global merchandise trade growth will remain strong in 2018 and 2019, but has cautioned that this momentum is contingent on the policy choices taken by governments.

This forecast was disclosed by WTO Director General, Roberto Azevedo, in a press conference held last week. According to Mr. Azevedo, global merchandise trade grew an estimated 4.7% in 2017 and is forecast by WTO economists to grow 4.4% in 2018 and by a more modest, 4.0% in 2019.

He noted that trade volume growth in 2017 was the most robust since 2011, with Asia being responsible for much of the recovery. He noted that South and Central America and the Caribbean made a positive contribution for the first time since 2013 due to Brazil’s economic recovery. The ratio of trade growth to GDP growth will be slightly lower in 2018 at 1.4 in 2018, down from 1.5 in 2017. Commercial services trade experienced strong growth in 2017 after two years of lacklustre growth.

The escalating global trade tensions, particularly between the US and China, cast a shadow over the forecast, as Director-General Azevedo strongly cautioned that continued positive trade growth could be “quickly undermined” if Governments turned to trade restrictive policies and engaged in retaliation. Mr. Azevedo pointedly stated that “a cycle of trade retaliation is the last thing the world economy needs”, noting that trade tensions may already be impacting business confidence and investment decisions. He further warned that missteps on trade and monetary policy “could undermine economic growth and confidence”.

In an appeal to WTO Member States to resort to the rules-based system as opposed to unilateral action, Mr. Azevedo added that “pressing trade problems confronting WTO Members is best tackled through collective action”.

The full WTO press release may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

Caribbean Trade & Development Digest – April 8-14 , 2018

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Welcome to the Caribbean Trade and Development Digest for the week of April 8-14, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Poultry producers complain to CARICOM over non-adoption of standards

Stabroek News: Regional poultry producers have expressed concern at the non-adoption of specifications for their meat and feeds which had been developed by the standards body, CROSQ and approved. Read more

Trinidad and Tobago judge rules homophobic laws unconstitutional
 
The Guardian (UK): The ruling, which declared sections of the Sexual Offences Act unconstitutional, may soon lead to decriminalising gay sex. Read more 

Canada’s PM, Justin Trudeau, meets with CARICOM States

Breaking Belize News: This afternoon, representatives from CARICOM met with Prime Minister of Canada  Justin Trudeau to discuss trade and the situation with Venezuela. Read more 

CARICOM Secretary General says CSME is a “work in progress”

Nation News: The Caribbean Community (CARICOM) Secretary General , Irwin La Rocque says while the CARICOM Single Market and Economy (CSME) continues to be a work in progress, it is sufficiently advanced to be used more effectively by the regional private sector. Read more 

CARICOM busy laying the groundwork for restructuring

Antigua Observer: CARICOM is pressing ahead with plans to ensure the restructuring of the governance of West Indies cricket, undeterred by the International Cricket Council’s request to have Cricket West Indies president, Dave Cameron, present at any meeting between the two bodies. Read more

Harmonised Cross Border Trade Needed for CARICOM Economic Integration

St Kitts & Nevis Observer: Harmonised approaches to conducting trade across borders in the Caribbean and effective customs valuation are among the steps that must be taken towards full economic integration within the Caribbean Community (CARICOM). Read more 

WTO

Strong trade growth in 2018 rests on policy choices

WTO: World merchandise trade growth is expected to remain strong in 2018 and 2019 after posting its largest increase in six years in 2017, but continued expansion depends on robust global economic growth and governments pursuing appropriate monetary, fiscal and especially trade policies, WTO economists said. Read more 

WTO members discuss ways of improving the transparency of regional trade agreements

WTO: WTO members discussed how to improve work on enhancing the transparency of regional trade agreements (RTAs) at a meeting of the Committee on RTAs on 9-10 April at the WTO. They reviewed five RTAs covering countries in Europe, Asia and Africa. The new chair of the committee, Ambassador Julian Braithwaite of the United Kingdom, presided at this first committee meeting of 2018. Read more

China initiates WTO dispute complaint against US tariffs on steel, aluminium products

WTO: China has requested WTO dispute consultations with the United States concerning certain US duties imposed on imports of steel and aluminium products. The request was circulated to WTO members on 9 April. Read more 

WTO establishes two panels to rule on US lumber duties

WTO: At the request of Canada, the WTO’s Dispute Settlement Body (DSB) agreed on 9 April to establish two panels to examine Canada’s complaints regarding anti-dumping and countervailing duties imposed by the United States on imports of Canadian softwood lumber. Read more 

Korea files appeal against WTO panel ruling regarding Japanese food import restrictions

WTO: Korea filed an appeal on 9 April against a WTO panel report in the case brought by Japan in “Korea — Import Bans, and Testing and Certification Requirements for Radionuclides” (DS495). The panel circulated its report on 22 February 2018. Read more 

WTO issues panel report regarding Korean duties on pneumatic valves from Japan

WTO: On 12 April the WTO circulated the panel report in the case brought by Japan in “Korea — Anti-Dumping Duties on Pneumatic Valves from Japan” (DS504). Read more

INTERNATIONAL

(New Zealand) PM looking to start EU trade negotiations

News ZB: Trade will be top of the agenda for the PM when she meets with French President Emmanuel Macron in Paris later today. Read more

The five biggest threats to the WTO

Bloomberg: The World Trade Organization is facing the greatest crisis of its 23-year existence. President Donald Trump doesn’t believe the WTO can handle the problems created by China’s rapid economic ascent and is fundamentally challenging the rules that govern international trade. Read more 

Mexico Pushes to Finish Trade Deal With EU This Month

Bloomberg Politics: Mexican trade negotiators are pushing to finish work on an updated free-trade agreement with the European Union ahead of a trip by President Enrique Pena Nieto to the region later this month, according to three people familiar with the plan. Read more 

IMF warns about trade war

CNN Money: Calling on countries to steer clear of protectionism, IMF Managing Director Christine Lagarde said in a speech that the “system of open trade based on rules and shared responsibility is now in danger of being torn apart”. Read more 

Kenya makes strong bid to host global trade chambers conference

The Standard (Kenya): Kenya has put up a strong bid to beat its fiercest competitors, including Dubai, in hosting the largest global commerce congress in 2021. Read more

Trump Proposes Rejoining Trans-Pacific Partnership

New York Times: President Trump, in a sharp reversal, told a gathering of farm-state lawmakers and governors on Thursday morning that the United States was looking into rejoining a multicountry trade agreement known as the Trans-Pacific Partnership, a deal he pulled out of days after assuming the presidency. Read more

Main-streaming blockchains in global trade

Hindu Business Line: Distributed Ledger Technology (DLT), a concept of recording and sharing data across multiple data stores, or ledgers as they are popularly called, is an idea whose time has come. The concept of DLT was introduced through block chains in the famous paper by the elusive author known only as Satoshi Nakamoto in 2008.Read more

More than half of the UK wants public vote on Brexit deal: survey

Euronews: The majority of people in the UK want a “people’s vote” on the final Brexit deal, according to a new survey in which some 52% of respondents expressed support for the idea. Read more 

Britain eyes former colonies to plug post-Brexit trade gap

NBCNews: With Britain less than a year away from leaving the European Union, but yet to secure any new trade deals, London is eyeing former colonies for help fill its post-Brexit trading hole. Read more 

U.S. Offers Compromise on Autos, Boosting Hopes for Nafta Deal

Wall Street Journal: The Trump administration is hammering out a compromise on auto-industry rules at the center of the North American Free Trade Agreement, increasing the chances that the U.S., Mexico and Canada can reach a deal this spring to revise the pact. Read more 

Brussels mulls offer of trade deal to Trump, if he drops tariff threat

Politico: The European Commission is developing a plan to offer Donald Trump the prospect of a trade deal with the EU in exchange for a permanent exemption from U.S. steel and aluminum tariffs, according to five EU officials and diplomats. Read more 

BONUS

WTO Press Conference on Trade Outlook

Audio available here.

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Plastic Waste Emergency in Caribbean Sea: What is the Region Doing About It?

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Alicia Nicholls

The 2.75 million square km Caribbean Sea’s ecological value is perhaps only outweighed by its economic value to the countries and territories, many of which are small island developing states, whose major industries and the livelihood of their populations depend on the health of the marine environment.

A 2016 World Bank Report entitled Toward a Blue Economy: A promise for Sustainable Growth in the Caribbean estimated the total gross revenues of the Caribbean ocean economy at US$407 billion based on 2012 data. Considering only the Caribbean small island States and territories, these gross revenues were estimated at US$53 billion, equivalent to over 18 percent of the total GDP for all Caribbean Island States and Territories in 2012″, according to this report.

Threats to the Caribbean Sea are numerous, but one of the biggest is the accumulation of plastic waste material.  The above-mentioned World Bank Report noted that the Caribbean Sea “is estimated to have relatively high levels of plastic concentrations compared with many other large marine ecosystems”.

Major culprits are plastic shopping bags, as well as Styrofoam containers and plastic cutlery which are commonly used by street food vendors, food establishments and at festivals and parties. These materials take hundreds of years to decompose, while in the meanwhile clogging drains and being blights on the beaches and other landscape. Plastic waste is often transported through waterways into the ocean via normal rainfall or flooding, and poses serious danger to marine life and coral reefs, with knock-on effects for fisheries, food security and tourism.

Legislative approaches

Several countries in the Caribbean have taken steps to tackle the plastics problem. Haiti was among the first, banning the importation, marketing and sale of plastic products in 2012 by presidential decree, with mixed results.

In 2016 Guyana banned the importation, sale and manufacture of expanded polystyrene products (styrofoam) and its regulations have served as a model for several other countries. Bans on the importation, sale and/or manufacture of various plastics have also been done in Antigua & Barbuda, Aruba, St. Vincent and the Grenadines, and the US Virgin Islands.

In Antigua & Barbuda, for instance, the External Trade (Shopping Plastic Bags Prohibition Order) of 2017 prohibited after June 30, 2016 the importation, distribution, sale and use of shopping bags, except for those set out in the schedule. Another order, the External Trade (Import Prohibition) Order of 2017 takes a phased approach to banning certain polystyrene items, such as food service containers, utensils and the like. However, airline carriers, private charters and passenger cruise vessels are exempted from these rules. According to news reports, while larger retailers have been generally adhering to the ban, achieving compliance by some small retailers has been more challenging.

Some other Caribbean countries are also contemplating similar measures. In 2017 the Government of Jamaica appointed a multi-stakeholder committee to make recommendations regarding plastic and Styrofoam. A petition has been launched by activists in Trinidad & Tobago for banning plastics.

Market-based approaches 

Market-based approaches have also been used to a limited extent, such as imposing point of sale charges for plastic bags as a disincentive to consumers. In Barbados, for example, a well-known environmental charity lobbied to have retailers charge consumers extra for plastic bags, and to encourage consumers to opt for reusable bags, with some limited success.

Lessons Learnt So far 

  1. Strong enforcement and monitoring are needed to ensure compliance with the regulations. Under the Guyana Regulations, for example, the Environmental Protection Agency is empowered to conduct inspections and investigations to ensure compliance with the ban.
  2. Fines should be high enough to serve as a deterrent to non-compliance. In the US Virgin Islands, businesses found to be in violation are liable to a civil fine of not less than US$500 nor more than US$1,000 for each day of violation.
  3. Fines collected should be allocated towards some kind of environmental fund, environmental or waste management improvement agencies or programmes. Under the US Virgin Islands’ legislation, the monies collected are to be allocated as follows: 75 percent to the Virgin Islands Waste Management Authority; and 25 percent to the General Fund of the Treasury of the Virgin Islands.
  4. The penalty for non-compliance is generally fines or a term of imprisonment. However, community service is another option which could be used.
  5. Resistance by consumers and some business owners has delayed the implementation of the bans in some cases. Retailers incur losses from unused stock, and some consumers see the measures as an inconvenience or just another  tax. A phased approach is, therefore, preferable to allow retailers, wholesalers and the like time to get rid of as much of the stock, and shift to more environmentally-friendly products, while also giving the relevant implementing agency and civil society time to educate the public about the importance of the measures to be introduced. A possible option is also the issue of incentives, such as tax waivers for the importation of environmentally-friendly substitutes.
  6. As such, legislative and/or market-based approaches have to be married with strong stakeholder engagement, public education and sensitisation campaigns to change ingrained cultural behaviours and attitudes towards the use and disposal of plastics, to educate the public about the environmental harm caused by marine waste, to encourage public buy-in and to show persons more environmentally-friendly alternatives. To this effect, the Guyana Regulations mandate the Environmental Protection Agency to “offer guidance on, promote and encourage the utilisation of recyclable, biodegradable and other environmentally friendly products as containers, or packaging for food products”. The St. Vincent & the Grenadines Regulations also provide for the same.
  7. On-going monitoring of the impact of these measures is crucial in order to determine their effectiveness and what adjustments are needed in ensure the desired results are being  obtained. This requires conducting an adequate baseline study before the measures are implemented and collecting data on a regular basis.
  8. Besides curbing plastic consumption, another problem is proper waste management. Latin America and the Caribbean accounted for 12% of waste generation by region per year, according to a World Bank publication. According to the publication, “the total amount of waste generated per year in this region is 160 million tonnes, with per capita values ranging from 0.1 to 14 kg/capita/ day, and an average of 1.1 kg/capita/day.” Within this grouping, the largest per capita solid waste generation rates are found in the islands of the Caribbean, the Report notes. As such, encouraging individuals, households and businesses to reduce their waste, recycle and to find more environmentally sustainable ways of managing waste is vital.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Caribbean Trade & Development Digest – March 18-24, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of March 18-24, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

CDB programme to support increased trade among CARICOM states

St. Kitts & Nevis Observer: The Board of Directors of the Caribbean Development Bank (CDB) has approved USD$750,000 in funding for a programme that will assist the Caribbean Community (CARICOM) with strengthening intra-regional trade. Read more 

Is Guyana ready for an oil boom?

Eurasia Review: Guyana’s story shares many similarities with the story of the ugly duckling. One of the poorest countries in South America, it has historically been entirely dependent on oil imports. Read more 

Catfish exports

Stabroek (Guyana): It is incomprehensible that the government here was given notification by the US government in November, 2015 of new regulations for Siluriformes (catfish) and failed to take all of the required steps to enable continued exports from Guyana. Read more 

North America continues to dominate imports into the TCI -Gov’t makes moves to improve trade with Caribbean neighbours

Turks & Caicos Weekly News: The North American Free Trade Agreement (NAFTA) continues to dominate imports into the Turks and Caicos Islands, accounting for $394.1 million or 91.1 percent of the total import bill for 2017. Read more 

What is the value of CARICOM to Curacao and Sint Maarten (and to ALL Caribbean nations)?

St. Lucia Star: Earlier in March news broke that the Caribbean Community (CARICOM) was officially assessing the application of Curacao and Sint Maarten for associate membership. These two islands are separated by 900 km of water but they share a cultural heritage, central bank, and a view that within CARICOM a brighter future awaits them. Read more 

Lessons from EPA must inform Post-Cotonou Agreement – Trade Expert

Business Ghana: Mr Tetteh Hormeku, Head of Programmes at the Third World Network, has advised governments in the African, Caribbean and Pacific (ACP) countries to use lessons from the Economic Partnership Agreement (EPA) for the post-Cotonou possible framework. Read more 

INTERNATIONAL

Forty-four countries sign historic African Union free trade agreement

Africa News: Forty-four African countries have signed up to a historic trade agreement aimed at paving the way for a liberalized market for goods and services across the continent. Read more

Fiji-PNG discuss trade relations with UK post-Brexit 

Fiji Times: The United Kingdom has begun the process of exiting the European Union (EU) and in this endeavour, it is working with the African, Caribbean, and Pacific (ACP) countries to avoid any trade disruptions, during and post-withdrawal. Read more 

Brexit: Government still planning for no deal scenario

The Independent: David Davis has said the Government will continue to plan for a no-deal scenario despite reaching an agreement with Brussels on the transition period last week.  Read more 

Mercosur “blocks” talks on auto exports and government procurement contracts, claims EU

Mercopress: European officials said this week that significant obstacles remain to a long-delayed trade deal between the European Union and Mercosur, even as South American officials expressed optimism a deal would be finalized soon. Read more

Heatwaves, hurricanes, floods: 2017 costliest year ever for extreme weather and climate events, says UN

Mercopress: Hurricanes, monsoon floods and continuing severe drought made 2017 the costliest year ever for severe weather and climate events, according to a new report by the United Nations weather agency launched on the eve of World Meteorological Day. Read more 

India Hosting Mini-Ministerial meet to break WTO impasse 

Economic Times: Taking a lead to break the impasse, India is hosting a two-day informal meeting of 50 WTO members here which would deliberate upon ways to create a positive atmosphere for carrying forward the mandate of the global trade organisation.  Read more

G20 pushes for free trade as U.S. vows to defend national interest

Reuters: World financial leaders pleaded for an endorsement of free trade on Monday amid worries about U.S. metals tariffs and looming trade sanctions on China, but Trump administration officials said they would not sacrifice U.S. national interests. Read more

 

China threatens to raise tariffs on about $3 billion of U.S. imports

Washington Post:  President Trump embarked Thursday on the sharpest trade confrontation with China in nearly a quarter-century, moving toward imposing tariffs on $60 billion in Chinese goods and limiting China’s freedom to invest in the U.S. technology industry. The Chinese government fired back hours later, threatening to hit $3 billion in U.S. goods with tariffs. Read more 

US and South Korea Reach Agreement on Trade, Steel Tariffs

Bloomberg: The U.S. and South Korea reached an agreement on revising the allies’s six-year-old bilateral trade deal and President Donald Trump’s plan to impose tariffs on imported steel, Treasury Secretary Steven Mnuchin said. Read more 

EU Commission welcomes adoption of negotiating directives for a multilateral investment court

EU: The Commission welcomes today’s adoption by the Council of the negotiating directives for a multilateral investment court, as well as the fact that for the first time the Council makes its negotiating mandate public right at the time it is adopted. Read more 

WTO members raise concerns over US tariffs on steel and aluminium at Goods Council

WTO: WTO members expressed concern over the United States’ imposition of higher tariffs on steel and aluminium imports and the impact they may have on the global trading system at a meeting of the Council on Trade in Goods on 23 March, the same day the new US measure came into effect. The US responded by saying that the tariffs are necessary to address the threat these imports pose to national security. Read more 

Appellate Body issues report regarding Russian duties on vehicle imports from Germany, Italy

WTO: On 22 March 2018, the WTO Appellate Body issued its report in the case “Russia — Anti-Dumping Duties on Light Commercial Vehicles from Germany and Italy” (DS479). Read more 

WTO issues compliance panel report regarding US countervailing duties on Chinese imports

WTO: On 21 March a WTO panel issued its compliance report in the dispute “United States — Countervailing Duty Measures on Certain Products from China — Recourse to Article 21.5 of the DSU by China” (DS437). Read more

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Brexit: Provisional Transition Deal Struck between EU and UK

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Alicia Nicholls

A provisional agreement has been struck between the European Union (EU) and the United Kingdom with regard to the terms of the latter’s withdrawal from the EU.

The 129-page provisional withdrawal agreement touches on a wide number of areas from  residence, employment rights and social security systems to public procurement and cooperation in criminal and civil matters. The Agreement provides for a transition period lasting from the date of entry into force of the Agreement until 31 December 2020.

Most of the provisions have been agreed to, with some remaining areas still subject to further negotiation. One of these unresolved areas is the Draft Protocol on Ireland/Northern Ireland.

A key concession is that the UK will be able to negotiate trade deals with third States during the transition period.

Some aspects of the provisional deal, however, have received some push back in the UK. A particular sore point is that UK fishing policy will continue to be Brussels-controlled during the transition period, although the agreement provides for the UK to be “consulted”.

More details to come

The text of the provisional agreement may be found here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Caribbean Trade & Development Digest – March 11-17, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of March 11-17, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Work to begin on new CARICOM Strategic Plan

Barbados Advocate: By year end the CARICOM Secretariat will be hard at work getting the framework in place for the new strategic plan for the Caribbean Community. Read more

CSME MER Framework Workshop 

Barbados Advocate: It is imperative that systems be put in place to more effectively monitor and evaluate the CARICOM integration journey. So says Dr. Richard Brown, Director, CARICOM Single Market and Sectoral Programmes. Read more 

CARICOM observer mission releases preliminary statement on Grenada elections

CARICOM: At the invitation of the Government of Grenada the CARICOM Secretariat constituted an eleven-member team to observe Grenada’s Parliamentary Election held March 13, 2018.The full statement may be read here.

Protecting consumers in the CSME

CARICOM: It is important to consider the protection of the consumer as many persons now engage suppliers in a different jurisdiction. This was posited by a senior official from the Caribbean Community (CARICOM) Secretariat during the Barbados Fair Trading Commission’s (FTC) annual lecture series held in Barbados. Read more 

INTERNATIONAL

EU Lists US Exports it could hit 

CNNMoney: The EU has published a list of hundreds of American products that it could target if President Donald Trump moves forward with new tariffs on imports of steel and aluminum. Read more 

EP wants to include gender equality in free-trade agreements

EURACTIV: The European Parliament has adopted a resolution to better account for gender equality in trade agreements. The commission could follow up on the resolution in its agreement with Chile, which would be the first to integrate such a chapter. Read more 

India-EU trade: India, EU to decide fate of trade agreement next month

Economic Times: New Delhi: India and the European Union will discuss next month resumption of the much-delayed Bilateral Trade and Investment Agreement (BTIA) that hasn’t progressed much over the past five years. Read more 

Vietnamese farmers expect higher profits with CPTPP

Vietnam Net: At least $40 billion worth of export turnover from farm produce in 2018 is within reach, some experts believe. Read more 

Trade deals a priority at ASEAN-Australia summit 

Australian Financial Review: Prime Minister Malcolm Turnbull is pushing for free trade deals with Indonesia and the wider region to be signed by the end of this year, as he insisted there were “no protectionists” around the table at the ASEAN-Australia summit in Sydney. Read more 

Buhari cancels Rwanda trip, reconsiders signing African trade agreement

Premium Times: President Muhammadu Buhari has cancelled his trip to Kigali, Rwanda scheduled for Monday. Mr. Buhari was expected to attend an Extraordinary Summit of the African Union (AU) on Tuesday, March 21, to sign the framework agreement for establishing the African Continental Free Trade Area. Read more 

Top five trade deals that changed history

World Finance: Today, the global trading network is well established, but it has taken multiple decades and various trade agreements to reach the current degree of complexity. Read more 

Jordan suspends free trade agreement with Turkey

Ahval: The Jordanian government suspended a free trade agreement with Turkey, citing unfair competition, the Jordan Times reported. Read more

Winners and Losers in an EU-UK agreement

Financial Times: Read the article here.

Indonesian President Widodo wants a free trade agreement with Australia

Sydney Morning Herald: Indonesian President Joko Widodo will push to sign off an Australia-Indonesia free trade agreement when he meets Prime Minister Malcolm Turnbull this weekend, declaring that only “technical” details were delaying the deal. Read more 

Why Canada must move quickly on the new Asian trade pact

The Globe and Mail: Now that International Trade Minister François-Philippe Champagne has put Canada’s signature on the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement, the doors to the Asia-Pacific are about to crack open for Canadian businesses. Read more 

Severing NAFTA ties harms much more than trade

The Hill: U.S. ties with Mexico and Canada touch the daily lives of more Americans than ties with any other two countries in the world. Trade, border connections, tourism, family ties and mutual security concerns link us closely, but we are endangering those links and our wellbeing by a contentious modernization of the North American Free Trade Agreement (NAFTA). Read more 

What impact will trade agreements have on global food markets?

Devex: The political uncertainty surrounding the Trans-Pacific Partnership Agreement and North American Free Trade Agreement, as well as the implications of Brexit, has left experts struggling to understand what their impacts will have on markets — particularly in developing countries. Read more 

BONUS

Trade War Bad for Region

My commentary in the Business Authority of March 18 (page 15) on the possible fall-out of any trade war between the US and other major trading powers on the Caribbean.

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Caribbean Trade & Development Digest – March 4-11, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of March 4-11, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

CARICOM Institutions talk CSME Free Movement of Persons

CARICOM: The Caribbean Community (CARICOM) Secretariat this week engaged regional institutions based in Barbados on the processes for Free Movement of persons under the CARICOM Single Market and Economy (CSME). Read more 

Trade Stakeholders from the Public and Private Sectors in St. Kitts and Nevis to Explore Importance of Trade in Services

WINN FM: Trade stakeholders from the public and private sectors are currently participating in a three day Seminar on the General Agreement on Trade in Services (GATS) in St. Kitts and Nevis with the aim to better understand the importance of services sectors from an international trade perspective. Read more 

CARICOM Reviews Dutch Territories’ Applications For Membership

Curacao Chronicle: Even as the Caribbean Community (CARICOM) continues to examine the issue of an enlargement policy, heads of government have mandated the secretary-general to begin negotiations for associate membership by the Dutch territories of Curaçao and Sint Maarten. Read more 

CARICOM seeking to step-up implementation of building codes

St Kitts & Nevis Observer: Recognising that implementing building codes is still a significant challenge to the region’s efforts to build resilience, CARICOM heads of government have asked the Caribbean Disaster Emergency Management Agency (CDEMA) to provide recommendations to expedite implementation of the codes. Read more 

Regional Standards to be set for quality and safety of coconut water 

Barbados Advocate: Given concerns about food safety issues in relation to the quality of coconut water sold at retailers in Barbados and across the region, efforts are being made to establish regional coconut water quality standards and protocols, to better protect consumers. Read more 

Chastanet supports OECS oversight of Citizenship by Investment

St Lucia Times: Prime Minister, Allen Chastanet, has said that Saint Lucia supports the idea of the Citizenship by Investment Programme (CIP) being run out of the Organisation of Eastern Caribbean States (OECS). Read more 

Consumer Protection in Digital Era is CARICOM goal

St. Kitts & Nevis Observer: It is important to consider the protection of the consumer as many persons now engage suppliers in a different jurisdiction. This was posited by a senior official from the Caribbean Community (CARICOM) Secretariat during the Barbados Fair Trading Commission’s (FTC) annual lecture series held 8 March at the Accra Beach Hotel & Spa in Barbados. Read more 

Exports down in January

Breaking Belize News: Belize’s exports got off to a rough start in 2018, falling by more than 20 percent when compared to January 2017, according to the Statistical Institute of Belize (SIB). Read more 

New trade dispute brewing with Jamaica 

Trinidad Guardian: Jamaican manufacturers say they intend to approach the island’s Anti-Dumping and Subsidies Commission after accusing their T&T counterparts of dumping flour onto the local market. Read more 

Barbados No.1 with travellers

Nation News: Seventy thousand travellers across the world have chosen Barbados as their place to visit in the 2017 Destination Satisfaction Index (DSI). Read more

Concern that Caribbean women are still being marginalised

Barbados Today: The economic progress of women in Barbados and the Caribbean as a whole continues to be thwarted, despite gains made in some areas, a senior Jamaican trade official has said. Read more 

INTERNATIONAL

11 countries sign revamped TPP trade deal without US

The Star (Malaysia): Eleven nations signed a slimmed-down version of the Trans-Pacific Partnership (TPP) trade agreement, moving to lower tariffs just as US President Donald Trump seeks to raise them after withdrawing from the deal. Read more 

In full: Theresa May’s Speech on future UK-EU Relations

BBC: Here is the full text of Theresa May’s Mansion House speech setting out her vision for the UK’s relationship with the EU after Brexit. Read more 

Africa: Women-Friendly Trade – What Can Governments Do Better?

AllAfrica: Informal cross-border trade is one of the oldest forms of economic survival for women. Prevalent across Southern and Eastern Africa, the plight of women traders are well-documented, but policies still tend to overlook their specific needs.  Read more

2018 USTR Trade Agenda Highlights WTO Reform, FTA Talks

ICTSD Bridges: US Trade Representative (USTR) Robert Lighthizer released the latest version of the annual President’s Trade Policy Agenda last week, outlining the administration’s plans for the coming year. Read more 

Brexit: EU rejects Theresa May’s trade plan

The Independent (UK): The EU has rejected Theresa May’s vision for a post-Brexit trade relationship, laying out its own plans and warning that her choices will have “negative economic consequences” for Britain. Read more 

Report shows extent of endangered animal trade between Africa and Asia

CNN: The report says that almost 1,000 at risk but legally exportable species have been transported from dozens of African nations to countries in East and Southeast Asia between 2006 to 2015. Read more 

Theresa May’s Brexit plan to register millions of EU citizens risks descending into ‘chaos’

Business Insider: Theresa May’s plan to register 3 million EU nationals ahead of Brexit risks failure due to under investment and government fears of a backlash by the Daily Mail, a senior former Home Office official has told Business Insider. Read more 

Trump tariffs: China warns trade war would be ‘disaster’

The Guardian: Any trade war with the United States will only bring disaster to the world economy, the Chinese commerce minister Zhong Shan has said, as Beijing stepped up its criticism of metals tariffs introduced by the White House. Read more 

Canada, Mexico Stick to Nafta Plan After Trump’s Tariff Reprieve

Bloomberg: While Donald Trump ’s tariff gambit spared his NAFTA partners for now, Canada and Mexico are pledging it won’t make them budge at the bargaining table. Read more 

NAFTA termination could result in loss of 85k jobs in Canada: report

Global News: The Conference Board of Canada is predicting a 0.5 per cent decline in the country’s economy resulting in the loss of about 85,000 jobs within a year if the North American Free Trade Agreement (NAFTA) is terminated. Read more 

Donald Trump signs order for metals tariff plan, prompting fears of trade war

The Guardian (UK): Trump pushes forward with plan for 25% tariff on imports of steel and a 10% tariff on aluminum, but says exceptions will be made. Read more 

Trump threatens with tariffs on European cars as trade war looms

Deutsche Welle: US President Donald Trump has once more attacked the EU over trade barriers and threatened to slap a tax on imports of European cars. His comments come amid fears of a trade war over new US steel and aluminum tariffs. Read more 

Commission extends anti-dumping measures on Chinese steel products

EU: The Commission today prolonged the existing anti-dumping measures on Chinese imports of seamless pipes and tubes of stainless steel for another five years. Read more

EU halts trade barrier investigation after Turkey lifts restrictions on paper

EU: The EU officially halted its probe into trade barriers in Turkey after the country removed measures concerning imports of a particular variety of paper. Read more 

European Commission outlines EU plan to counter US trade restrictions on steel and aluminium

EU: The College of Commissioners discussed today the EU’s response to the possible US import restrictions for steel and aluminium announced on 1 March. Read more 

European Commission responds to the US restrictions on steel and aluminium affecting the EU

EU: The European Commission takes note of the announcement by the President of the United States of the imposition of restrictions in the form of an import surcharge on EU exports to the US of steel and aluminium. Read more 

Members adopt catalogue of instruments for managing food safety, animal, plant health issues

WTO: WTO members successfully concluded almost four years of discussion by adopting the “Catalogue of Instruments” available to WTO members for managing sanitary and phytosanitary (SPS) issues, at an SPS Committee meeting on 2 March. Read more

Azevêdo calls on members to avoid triggering an escalation in trade barriers

WTO: DG Azevêdo warned of the risks posed by such measures, calling on members to reflect and avoid escalation. Read more 

Least-developed countries urge WTO members to facilitate use of services waiver

WTO: At a meeting of the Council for Trade in Services on 2nd of March chaired by Ambassador Julian Braithwaite (UK), least-developed Countries (LDCs) called on WTO members to undertake capacity building measures that would enable their suppliers to take advantage of preferential treatment notified under the LDC Services Waiver. Read more

NEW ON CTLD BLOG

ECJ rules arbitration clauses in Intra-EU BITs contrary to EU Law

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ECJ rules arbitration clauses in Intra-EU BITs contrary to EU Law

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Alicia Nicholls

In a landmark and much-anticipated judgement delivered on Tuesday, March 6th, the European Court of Justice (ECJ) ruled that arbitration clauses in bilateral investment treaties (BITs) concluded between European Union Member States were incompatible with, and had ‘an adverse effect’ on EU law.

The background to the judgement involved a claim brought against the Slovak Republic by a Dutch private sickness insurance services subsidiary, Achmea, after the former had briefly prohibited the distribution of profits generated by private sickness insurance activities. This prohibition was later ruled unconstitutional by that country’s Constitutional Court, and Achmea subsequently brought a claim for damages under the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and Czechoslovakia (Netherlands- Slovak Republic BIT), to which the Slovak Republic had succeeded upon Czechoslovakia’s dissolution.

In 2012 an arbitral tribunal established in Frankfurt am Main, Germany, pursuant to Article 8(2) of the Netherlands-Slovak Republic BIT found in favour of Achmea and ordered the Slovak Republic to pay 22.1 million euros in damages. As German law applied (since Frankfurt am Main was the chosen place of arbitration), the Slovak Republic turned to the German courts to have the arbitral award set aside.

The Slovak Republic argued that the arbitration clause in Article 8 of the Netherlands-Slovak Republic BIT was compatible with Articles 18, 267 and 344 of the Treaty on the Functioning of the European Union. Given the importance of this question and its implications for the many remaining intra-EU BITs in force, the German Federal Court of Justice referred this question to the ECJ

In its judgment, the ECJ held that

Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the BIT, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.

The ECJ came to its decision based on the fact that arbitral tribunals established under such treaties may be called on to interpret and apply EU law, but could not be classified as a court or tribunal ‘of a Member State’ within the meaning of Article 267 of the TFEU. The tribunals had no power to refer matters to the ECJ and could stop disputes from “being resolved in a manner that ensures the full effectiveness of EU law even though they might concern the interpretation or application of that law”. The Court went further by stating that Article 8 of the BIT in question “has an adverse effect on the autonomy of EU law” and was not compatible with the principle of sincere cooperation.

Unlike state to state dispute settlement, ISDS allows an investor of a party who believes its rights have been violated to bring a claim directly against the host State before an arbitration tribunal. The rationale was that it precluded investors from having to convince their home State to bring a claim on their behalf, and was also borne out of distrust of the courts in host States (usually mainly developing countries).

ISDS has come under much fire, particularly due to inconsistent arbitral rulings (which are final under most BITs with these clauses), the lack of transparency in the process, and the concern about the system’s implications for States’ regulatory flexibility and authority in the public interest, particularly with regard to the protection of public health and the environment. Moreover, for small States, such as those in the Caribbean, the financial and reputational burdens of an adverse judgement are magnified.

In the EU context, intra-EU BITs have long been a controversial issue due to treaty shopping; investors have often favoured the ISDS provisions in intra-EU BITs over EU judicial channels for the settlement of disputes. This is costly for EU Member States having to defend themselves against claims and has implications for the uniform interpretation of EU law.

Newer investment agreements, including BITs,  have increasingly included express language regarding a party’s right to regulate in the public interest,  have considerably narrowed the scope of applicability of ISDS clauses, or have abandoned ISDS altogether. In light of the growing backlash against ISDS within the EU, the European Commission has already signalled that it is moving away from the ISDS model of dispute settlement in favour of an investment court as the Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada shows.

Implications for Caribbean BITs with EU countries  

The ECJ ruling is clear that the ISDS clauses in the nearly 200 BITs currently in force between EU member states inter se are incompatible with EU law. What is not so clear-cut is whether this also applies to BITs concluded between individual EU member countries and third States, such as those in the Caribbean. In such cases, the governing law in such disputes might not be EU law but the law of the third State.

While there is little evidence that the existence of a BIT is a major factor in a European investor’s decision to invest in the Caribbean, given that the BITs existing between European and Caribbean countries are generally of an older vintage and in need of modernisation, the time is ripe to have a relook at the regime for the protection and promotion of investment between the EU and CARIFORUM countries which is currently fragmented. Such a review is provided for under Article 74 of the Agreement.

At the time of the negotiation of the CARIFORUM-EC Economic Partnership Agreement, the European Commission only had competence to negotiate market access for investment, which explains why the investment chapter (Chapter 2: Commercial Presence) of the EPA is limited mainly to market access, national treatment, most favoured nation treatment, with some provisions on investor behaviour and a requirement that parties do not lower standards to attract FDI. More extensive investment protection provisions, such as the controversial fair and equitable treatment clauses, are covered in the BITs between individual EU and Caribbean States, many of which were signed before the EPA and also lack the more development friendly provisions of newer BITs.

Conclusion

The ECJ’s ruling is significant and may be considered another nail in the ISDS coffin. It is worth considering what, if any, impact this ruling may have for EU Member States’ BITs with third States, such as those in the Caribbean, and whether it is time to re-examine the regime for EU-CARIFORUM investment as provided for under Article 74 of the EPA.

The full judgement may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

CARICOM Heads to meet this week for 29th Intersessional HoG Meeting

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Alicia Nicholls

Heads of Government of the Caribbean Community (CARICOM) will meet this week, February 26 & 27, 2018, in Port au Prince, Haiti for their 29th Intersessional Meeting. The meeting will be chaired by current chairman of the Conference of the Heads of Government, Haitian President, His Excellency Jovenel Moise.

Chairmanship of the Conference of Heads of Government rotates every six months. Haiti, which became a full member of CARICOM in 2002, will hold chairmanship from January 1st to June 30th. Jamaica’s Prime Minister Andrew Holness will assume chairmanship on July 1st.

Major agenda items for the intersessional meeting include building climate resilience, crime and violence, the impact on CARICOM Member States of blacklisting actions and de-risking actions by global banks.

Additionally, according to the official press release, the meeting “will seek to advance plans to further strengthen key elements of the CARICOM Single Market and Economy (CSME)  including those related to travel and trade”.

CARICOM Secretary-General Ambassador Irwin LaRocque; the immediate-past CARICOM Chairman, Prime Minister Dr. Keith Mitchell of Grenada and current Chairman, President Moise of Haiti, will make remarks at the Opening Ceremony carded for February 26 and which will be live streamed on CARICOM’s website.

In anticipation of the meeting, Haiti’s Ministry of Trade held a Public Forum last Friday to discuss “Integration of Haiti in CARICOM: Challenges and Opportunities”.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

Caribbean Trade & Development Digest – February 18-24, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of February 18-24, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Building a climate-resilient Community among matters for CARICOM 29th Inter-Sessional Meeting

CARICOM: The Caribbean Community’s push to build a more climate-resilient Community following the devastating 2017 hurricane season is among matters for deliberation by CARICOM Heads of Government at their Twenty-ninth Inter-Sessional Meeting in Port-au-Prince, Haiti, 26 – 27 February 2018. Read more 

Ralph Gonsalves: Golding Report ‘Unworkable’

Jamaica Gleaner: This is an edited address delivered on February 22 at St Vincent and the Grenadines’ Ministry of Foreign Affairs building in Kingstown. Read more 

Growing trade deficits in the Caribbean Netherlands

Netherlands Central Statistics Bureau: In 2017, the trade deficits of Bonaire, St Eustatius and Saba were higher than in the previous year. In relative terms, St Eustatius saw the sharpest increase in annual deficit. Statistics Netherlands (CBS) reports this on the basis of new figures. Read more 

World Trade Center Arkansas to Lead Trade Mission to Caribbean

Arkansas Matters: The World Trade Center Arkansas is leading a trade mission for Arkansas companies interested in exporting to Caribbean countries. The mission will go to the Trade Americas – Business Opportunities in the Caribbean Region Conference in Miami, Florida, from May 6-7. Read more 

INTERNATIONAL 

South Korea launches WTO trade challenge against U.S. duties

Reuters: South Korea has launched a wide-ranging complaint at the World Trade Organization to challenge the U.S. use of anti-subsidy and anti-dumping duties, citing their use on steel and transformers, a WTO filing showed on Tuesday. Read more 

India, 37 others seek WTO dispute body’s aid to fill up Appellate Body vacancies

Business Line: A formal submission has been made by 38 World Trade Organisation members including India, the EU, China, Russia, Brazil, Russia, Turkey and Vietnam to the Dispute Settlement Body seeking a decision on launching of a selection process to fill the three vacancies in the seven-member Appellate Body pending for long. Read more 

United States tells WTO of concerns over China’s new web access rules

Reuters: The United States told the World Trade Organization on Friday that Chinese internet access rules coming into force next month appeared to create significant new restrictions for cross-border service suppliers and should be discussed at the WTO. Read more 

Canada To Open Free Trade Talks With Mercosur Group Of South American Countries

Huffpost Canada: The Canadian government plans to open free trade talks with the four-nation Mercosur trading bloc in South America, an official said on Friday, at a time when the future of NAFTA is facing increasing uncertainty. Read more 

India Calls for Changes in WTO to Transform World Economy

News18: India on Sunday called for bringing changes in Geneva-based World Trade Organisation (WTO) to transform the global economy. Read more 

Egypt passes 4th WTO Trade Policy Review

AllAfrica: Egypt managed to pass the World Trade Organization (WTO)’s fourth review of the trade policies and practices of Egypt that took place on February 20-22. Read more

Full text of CPTPP released

Newsroom New Zealand: The Government has released the full text of the controversial CPTPP trade deal, along with a national interest analysis touting its importance in fighting growing protectionism around the world. Read more

French farmers hold tractor protests in Mercosur warning to Macron

Independent (Ireland): French farmers drove tractors through town centres and blocked highways on Wednesday to oppose extra agricultural imports from South America, raising pressure on President Emmanuel Macron in the run-up to a politically sensitive Paris farm show. Read more 

New NAFTA talks aim to clear pathway to toughest issues

Reuters: Mexico and Canada aim to finish reworking less contentious chapters of the NAFTA trade deal with the United States in new talks beginning on Sunday, hoping to clear the path for a breakthrough on the toughest issues before upcoming elections. Read more 

NAFTA talks go into their seventh round. Canada isn’t optimistic

Washington Post: When Canadian Prime Minister Justin Trudeau visited the United States this month, he didn’t go to the White House. Instead, he visited the Ronald Reagan Presidential Library, where he was presented with pages of the original U.S.-Canada Free Trade Agreement, signed by President Ronald Reagan 30 years ago. Read more

KPMG executive says businesses not using free-trade benefits

The Australian: Australian businesses are not substantially increasing their use of the Asian free-trade agreements each year and the Coalition needs to overhaul its trade policies, a KPMG executive says. Read more 

Press release: CEPA EU – Indonesia trade agreement round

TNI: Today, over 20 representatives from civil society organisations from the Indonesia and the European union, had a long meeting with negotiators of the new trade agreement between the EU and Indonesia (CEPA – Comprehensive Economic Partnership Agreement).  Read more

Korea initiates WTO complaint against US anti-dumping, countervailing duties

WTO: Korea has requested WTO consultations with the United States concerning the use of “facts available” by US investigating authorities in anti-dumping and countervailing investigations. The request was circulated to WTO members on 20 February. Read more

WTO members agree on timetable to review use of Bali tariff quota mechanism

WTO: At a meeting of the Agriculture Committee on 20 February, WTO members agreed on a timeline to review the operation of the 2013 Bali Ministerial Decision on tariff rate quotas and discussed a review of the landmark Nairobi Decision to eliminate farm export subsidies. Norway, Israel and Canada reported they had submitted revised schedules, formalizing their promises to eliminate these subsidies. Read more

WTO issues panel report regarding Korean restrictions on Japanese food imports

WTO: On 22 February the WTO circulated the panel report in the case brought by Japan in “Korea — Import Bans, and Testing and Certification Requirements for Radionuclides” (DS495). Read more 

Trade Facilitation Agreement marks first anniversary since entry into force

WTO: The Trade Facilitation Agreement (TFA) marked its first anniversary since its entry into force on 22 February 2017 with WTO members making significant strides towards its implementation. WTO Director-General Roberto Azevêdo said members continue to work to fully implement the Agreement, which will benefit particularly developing and least developed countries. Read more

Move aside, NAFTA: New fear on the Canada-U.S. front involves steel tariffs

CTV News: A new concern about Canada’s relationship with the United States is emerging in the foreground, with threats of global steel and aluminum tariffs now competing with NAFTA uncertainty as a source of economic anxiety. Read more

Cabinet okays trade agreement with Canada

The Slovak Spectator: Slovakia’s government greenlighted the EU-Canada Comprehensive Economic and Trade Agreement (CETA) at its February 21 session. Read more 

NEW ON CTLD BLOG

US House of Representatives passes GSP Renewal Bill; on to Senate

Golding Commission concerned about Caribbean Citizenship by Investment Programmes

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Caribbean Trade & Development Digest – February 11-18, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of February 11-18, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Lack of financial transparency at CARICOM Secretariat – Golding Report

Antigua Observer: The lack of transparency surrounding the finances of the CARICOM Secretariat has found its way into the “Golding Report,” which examines relations between Jamaica and CARICOM and CARIFORUM, with a call for the revamping of the institution’s accountability procedures. Read more

(Caribbean) Region hits 30 million visitor mark

CTO:  The catastrophic hurricanes that devastated some Caribbean destination last September slowed down tourism’s progress but did not stop it, according to figures released by the Caribbean Tourism Organization (CTO), the authority on regional tourism statistics. Read more 

Gov’t explores new system to track and boost tourist spend

Barbados Today: Minister of Tourism Richard Sealy has disclosed that a new system was being developed to better capture and monitor tourist spend in Barbados as Government continued to seek ways to grow the sector. Read more

Government looks to boost CSME access for Jamaicans

JIS: The Government will be intensifying efforts for Jamaican skilled workers and businesses to have greater access to the CARICOM Single Market and Economy (CSME). Read more 

Barbados trade mission to Guyana

CBC (Barbados): Barbados is hoping to increase its trade relations with Guyana as a 10-member trade mission opens a two-day visit here Monday. Read more 

Holness to assume chairmanship of CARICOM

Jamaica Observer: Prime Minister Andrew Holness is to assume the Chairmanship of CARICOM from 1st July to 31st December 2018. Read more 

‘Deathly afraid’ for local ownership under WTO

Tribune242: Arawak Homes’ chairman is “deathly afraid” that WTO membership will undermine Bahamian economic ownership because many locally-owned firms cannot compete internationally. Read more 

SLCSI introduces new executive board

St. Lucia News Online: The Saint Lucia Coalition of Service Industries (SLCSI) is one of the twelve national service coalitions within the Caribbean Community (CARICOM) and the Dominican Republic (CARIFORUM collectively) and also the Caribbean Network of Service Coalitions (CNSC). Read more 

INTERNATIONAL

Azevêdo joins ACP brainstorming session: ‘we need to explore innovative ways forward’

WTO: Speaking at a meeting of the African, Caribbean and Pacific Group of States (ACP) at the WTO’s headquarters on 15 February, Director-General Roberto Azevêdo urged members to be ready to explore fresh perspectives and new pathways which may help move negotiations forward at the WTO. Read more 

Commentary: Temper expectations about RCEP free trade agreement

Channel Newsasia: It looks like India may be dragging its feet on some key issues within the Regional Comprehensive Economic Partnership but there’s good reason for all parties to manage their expectations, says one observer from the ISEAS-Yusof Ishak Institute. Read more 

After the WTO’s Ministerial Conference, Where Next for Africa?

ICTSD Bridges: In the aftermath of the December WTO Ministerial Conference in Buenos Aires, pessimism about the future of the institution has been reaching record levels and no clear plan has emerged yet on where to take the WTO next. In this rather bleak environment, what are the possible options for African countries to advance their trade and development priorities? Read more 

Mnuchin says Washington studying possible return to TPP through renegotiation

The Japan Times: President Donald Trump’s administration is actively discussing the possibility of rejoining the Trans-Pacific Partnership free trade deal on condition that the United States renegotiate it to secure better terms, Treasury Secretary Steven Mnuchin said Thursday. Read more 

(US) House passes GSP renewal legislation

American Shipper: The U.S. House of Representatives passed H.R. 4979 Tuesday under an expedited floor procedure, which would renew the Generalized System of Preferences program through 2020. Read more 

‘Big boys’ causing delays in conclusion of RCEP

Business Mirror: The Philippines is demanding its fellow negotiating-countries in the Regional Comprehensive Economic Partnership (RCEP) to seriously commit to a speedy conclusion of their trade deal, as the latest round of talks still failed to progress beyond trade in goods modalities. Read more 

Next Nafta Talks Scheduled to Start With Auto Content Rules

Bloomberg: Rules for automotive content, one of the most contentious issues in Nafta, will be among the first tackled at the upcoming seventh round of talks in Mexico City. Read more

Australia says yes to post-Brexit free trade agreement with the UK

BBC: Australia say they would like to be able to negotiate a free trade agreement with the UK after Brexit. Read more 

Trade growth to sustain momentum in first quarter of 2018, latest trade indicator suggests

WTO: The WTO’s latest World Trade Outlook Indicator (WTOI), released on 12 February, suggests that the trade recovery of 2017 should continue, with solid trade volume growth in the first quarter of 2018. Read more

BONUS

CTO State of the Industry Outlook

The Caribbean Tourism Organisation(CTO) held its State of the Industry 2017 and Outlook for 2018 last week. Please feel free to check out the report and other content here.

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

US House of Representatives passes GSP Renewal Bill; on to Senate

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Alicia Nicholls

The first hurdle in the renewal of the United States’ Generalised System of Preferences (GSP) was overcome last week Tuesday when the US House of Representatives passed  H.R.4979 – To extend the Generalized System of Preferences and to make technical changes to the competitive need limitations provision of the program. This is welcomed news for the 120 countries and territories which benefit under the GSP, but just the first step towards the programme’s renewal.

The US GSP lapsed on December 31, 2017. This Bill provides a three year extension through to December 31, 2020. H.R. 4979 requires there be an annual report on the enforcement of eligibility criteria to ensure that countries designated as beneficiary developing countries are meeting the eligibility criteria.

Exporters would also be refunded for the duties collected during the lapse period. This is not the first time the GSP has expired, a fact which has created some uncertainty for exporters from GSP beneficiary countries seeking to make use of the programme. Other sources of uncertainty are that the President may graduate any country, remove products from GSP eligibility and remove products for an individual country which has exceeded competitive need limitations (CNLs). There are also a number of criteria for GSP eligibility which reflect the geopolitical  and other objectives underpinning the programme, for example, the ineligibility of communist countries.

The US GSP was instituted by the Trade Act of 1974 and it is one of several US government trade preference programmes which allow designated goods from certain disadvantaged countries to enter the US market at preferential rates of duty. According to the Office of the United States Trade Representative (USTR) fact sheet on the GSP, some 5,057 8‐digit U.S. tariff lines are eligible for duty‐free entry under the GSP, of which 1,519 are eligible for Least Developed Countries (LDCs) only.

The fact sheet further notes that in 2016, total US imports under the GSP was $18.7 billion, with the top five GSP beneficiary countries being 1. India ($4.7 billion), 2. Thailand ($3.9 billion), 3. Brazil ($2.2 billion), 4. Indonesia ($1.8 billion) and 5. Philippines ($1.5 billion).

As of March 2017, the GSP-eligible countries in the Caribbean include: Belize, Dominica, Grenada, Guyana, Haiti, St. Lucia, St. Vincent and the Grenadines, while the following non-independent Caribbean territories are eligible: Anguilla, the British Virgin Islands (BVI) and Montserrat.

Caribbean countries do not feature among top US GSP countries and there is a good reason for this. Most Caribbean countries are beneficiaries of the Caribbean Basin Initiative (CBI), while Haiti is a beneficiary of the HOPE Acts. As such, according to the 2015 Report on the Operation of the Caribbean Basin Economic Recovery Act (CBERA), in 2014, US imports under the GSP from CBI beneficiaries were just 0.02% of the total imports from those countries. As such, CBI countries’ exports under the GSP are quite small, though some countries like Belize, Jamaica and Dominica make more use of the GSP than others.

The GSP renewal Bill received bipartisan support in the House and is now before the Senate. For HR 4979 to become law, the identical bill would have to be passed in the US Senate. Failing this, there must be reconciliation of the bills passed in both houses before being signed into law by President Trump.

The text of the House Bill may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

 

Golding Commission concerned about Caribbean Citizenship by Investment Programmes

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Alicia Nicholls

The CARICOM Review Commission, whose report was tabled in the Jamaica Parliament last week, has expressed concern about the administration of Citizenship by Investment programmes (CIPs) currently operated by five CARICOM Member States, and has called for the establishment of a CARICOM framework agreement on their operation.

CIPs were among the many diverse issues examined by the Commission whose mandate was to review Jamaica’s relations within CARICOM and CARIFORUM. CIPs are currently operated by five CARICOM Member States: namely, Antigua & Barbuda,  Dominica, Grenada, St. Kitts & Nevis and St. Lucia, and have been the subject of much scrutiny regionally and internationally.

Though recognising the economic importance of CIPs to these countries, the Commission, chaired by former Jamaica Prime Minister Bruce Golding, raised several issues with their current administration:

  • The programmes are driven more by short-term revenue benefits than long term investment gains
  • The lack of a minimum period of residency
  • The lack of a regional agreement on the operation of such programmes, especially given the national security and other implications for non-CIP operating CARICOM territories
  • While referrals to the CARICOM Implementing Agency for Crime and Security (IMPACS) are made, the State is not obligated to accept the advice of IMPACS
  • Concerns raised by third States (namely the US and Canada) about Caribbean CIPs and the fact that two CIP-operating Member States (St. Kitts & Nevis and Antigua & Barbuda) have already lost visa-free access to Canada due to these concerns
  • Cases of persons granted citizenship under these programmes who were later found to be less than savoury characters
  • The risks to the Community in light of ever more sophisticated trans-national crime
  • The alleged issuance of diplomatic passports to some new citizens
  • Varying due diligence procedures used by CIP-operating Member States

As such, one of the thirty-three recommendations made by the Commission in its Report is for the establishment of “an agreed framework with appropriate protocols and safeguards regarding the terms, conditions, qualifications and restrictions in relation to the operation of Citizenship by Investment programmes including prior consultations or sharing of information with other Member States”.

The full report of the Golding Commission may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

Caribbean Trade & Development Digest – February 4-10, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of February 4-10, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

CDB reports Regional development gains in 2017 despite catastrophic Atlantic Hurricane Season

CDB: Despite major setbacks caused by a destructive 2017 Atlantic Hurricane Season, the Caribbean Development Bank (CDB) is reporting a year of several developmental gains for the Region. Read more 

Positive economic growth expected for Caribbean Region in 2018, but resilience-building measures needed

CDB: The Caribbean Development Bank (CDB) is projecting regional economic growth of 2% in 2018. This follows a return to positive figures last year, during which the Region experienced overall growth of 0.6%–despite the devastation caused by the Atlantic Hurricane Season. Read more 

Barbados ratifies Trade Facilitation Agreement

BGIS: Barbados has ratified the World Trade Organization’s (WTO) on Trade Facilitation Agreement (TFA). Read more 

Jamaica Prime Minister Tables Report on CARICOM

JIS: Prime Minister, the Most Hon. Andrew Holness, tabled a copy of the Report of the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks in the House of Representatives,  yesterday (February 6). Read more

CDB President announces up to US$800M for disaster recovery, amid strong Bank performance in 2017

CARICOM: President of the Caribbean Development Bank (CDB), Dr. Wm. Warren Smith, today announced that the institution is making USD700 to 800 million (mn) available to help Borrowing Member Countries (BMCs) recover from the impact of the 2017 Atlantic Hurricane Season. Read more 

INTERNATIONAL

Brazil Circulates Proposal for WTO Investment Facilitation Deal

ICTSD Bridges: Brazil submitted an extensive draft proposal for a potential agreement on investment facilitation to the WTO’s General Council last week, in a bid to jumpstart more “structured discussions” on the subject. Read more 

EU-Chile trade talks: Commission releases its proposals and reports about progress

EU: The Commission also published a report of the second round of talks that took place in Santiago (Chile) from 15 to 19 January 2018. These were the first substantive discussions on trade following the launch of talks in November last year. Read more 

Commission imposes definitive anti-dumping duties on Chinese corrosion resistant steel

EU: The investigation confirmed that Chinese producers were dumping the product on the EU market, a finding that already led to imposition of provisional duties in August 2017. The measures that will be in place for the next 5 years range from 17.2% to 27.9%. Read more 

African Leaders Prep for Summit on Continental Trade Deal

ICTSD Bridges: African national leaders concluded the 30th Ordinary Session of the Assembly of the African Union last week, with the summit adopting a series of decisions on issues related to continental economic integration – including on the next steps for the Continental Free Trade Area (CFTA), as well as the free movement of people and air travel. Read more 

No blanket EU trade ban, says Mustapa

The Star: As Malaysia is an open economy, the government cannot impose a blanket ban on trade with the European Union (EU), but it can collaborate with government-linked companies to determine where to buy and sell goods amid the economic bloc’s threat to palm oil, said International Trade and Industry Minister, Datuk Seri Mustapa Mohamed.
Read more 

Mozambique joins the Economic Partnership Agreement between the EU and Southern African States

EU: Mozambique was the last piece of the SADC-EPA jigsaw to fall into place. The other five countries – Botswana, Lesotho, Namibia, South-Africa, and Swaziland – have been implementing the agreement since October 2016.  Read more

Ministers admit almost 65 existing trade deals with non-EU countries are ‘at risk because of Brexit

The Independent: Ministers have admitted for the first time that about 65 existing trade deals with non-EU countries are at risk because of Brexit, it has been claimed. Read more 

This doesn’t help the little guy! Trader reveals why Germans are furious at EU trade deal

The Express: The European Union has not learned lessons from its trade deal with Canada and the public will slowly start to resent Brussels bureaucrats and turn against the bloc, an expert has warned. Read more 

How can East Asia defend the WTO?

East Asia Forum: A confident, rules-based environment for international trade has made possible the remarkable improvements in East Asian living standards over the past 50 years. This environment — created by the General Agreement on Tariffs and Trade (GATT) and its successor in the World Trade Organization (WTO) — remains essential for the future. But its survival cannot be taken for granted. Read more 

BiH near membership in the WTO

IBNA: Bosnia and Herzegovina can reach full membership in the World Trade Organisation till summer this year, and is on the right path to finish negotiations. Read more 

Bosnia and Herzegovina’s WTO accession negotiations advance towards conclusion

WTO: At the 13th meeting of the Working Party on the Accession of Bosnia and Herzegovina held on 7 February, WTO members supported the swift conclusion of the negotiations and welcomed the strong commitment and desire by Sarajevo to finalize this process in the coming months. Read more 

US blocks India’s request for WTO compliance panel on solar dispute

Hindu Business Line: Moving on expected lines, the US, on Friday, blocked India’s first-time request for the establishment of a panel to settle a dispute on whether the country complied with a World Trade Organisation (WTO) ruling against domestic sourcing of solar cells and modules mandated in its national solar power generation programme. Read more 

FM: Belarus has no plans to slow down WTO accession talks

BELTA: In 2017 Belarus considerably intensified the talks on joining the World Trade Organization (WTO) and is intended to keep the pace, Belarus’ Minister of Foreign Affairs Vladimir Makei said in an interview to the Russian newspaper Izvestia, BelTA has learned. Read more 

Italy eyes stronger ties with ASEAN countries

Indian Express: “Italy wants to strengthen relations with ASEAN and will organise the 2nd High Level Dialogue ASEAN-Italy Economic Relations in Singapore in April,” said Foreign Minister Angelino Alfano. Read more 

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Barbados ratifies WTO Trade Facilitation Agreement

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Alicia Nicholls

On January 31, 2018, Barbados became the 130th World Trade Organisation (WTO) member to ratify the WTO’s Trade Facilitation Agreement.

According to the press release from the Barbados Government Information Service (GIS), “the instrument of ratification was formally handed over by Ambassador to the United Nations and Other International Organisations, Bentley Gibbs, to Secretary General of  the WTO, Robert Azevedo, in Geneva, Switzerland”.

The Trade Facilitation Agreement came out of the WTO’s Bali Ministerial in 2013 and entered into force in February 22, 2017 after two-thirds of the WTO’s membership ratified the Agreement. It aims to expedite the movement, release and clearance of goods across borders by reducing red tape, improving transparency and facilitating cooperation among customs authorities.

The benefits of these provisions, once implemented, include reducing trade costs for businesses, increasing participation in global value chains and improving trade flows. Ratification of the Agreement is, therefore, an important signal to investors of a country’s commitment to improving its business environment for trade.

In keeping with the principle of Special and Differential Treatment, there are implementation flexibilities in Section II for developing and least developed countries, recognising they may need more time to implement the provisions of the Agreement. Like other developing and least developed countries, Barbados has access to the Trade Facilitation Agreement Facility which provides assistance for notification, capacity-building support and grants.

The following other Member States of the Caribbean Community (CARICOM) have already ratified the Trade Facilitation Agreement: Trinidad & Tobago, Belize, Guyana, Grenada  and St. Lucia (2015), Jamaica and St. Kitts & Nevis  (2016), St. Vincent and the Grenadines, the Dominican Republic and Antigua & Barbuda (2017).

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Golding Report on CARICOM-Jamaica Relations Tabled in Jamaican Parliament

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Alicia Nicholls

The long-awaited report of the CARICOM Review Commission chaired by former Jamaican Prime Minister, Bruce Golding, has been tabled in the Jamaica Parliament by Prime Minister, the Most Excellent Andrew Holness, O.N. The CARICOM Review Commission, which was commissioned by Mr. Holness in July 2016 to review Jamaica’s relations within the Caribbean Community (CARICOM) and CARIFORUM (CARICOM plus the Dominican Republic) frameworks,  submitted its report in April 2017.

For those who may have feared that the Review was intended to pave the way towards a Jamxit (Jamaica exit from CARICOM), these have been allayed to some extent. In giving its support for regional integration, the Golding Commission noted that “the value of regional integration…is as relevant and useful and perhaps, even more urgent today than it was at [CARICOM’s] inception”. However, it lamented the limited progress on many of the commitments signed on to by CARICOM Member States.

In this vein, the Commission made thirty-three timely, pertinent and wide-ranging proposals aimed at addressing the structural and organisational deficiencies in CARICOM. Many of the Commission’s recommendations include things which most CARICOM Member States have already committed to under the CARICOM Single Market and Economy but have yet to be fully realised, while others are reminiscent of those made by the Ramphal Commission in its A Time For Action Report in 1992.  Other recommendations were more novel and include instituting sanctions for wilful non-compliance with commitments made, as well as the establishment of a Central Dispute Settlement Body similar to that of the World Trade Organisation (WTO) which would offer non-judicial options for settlement of disputes.

The Commission also recommended that Jamaica establish closer ties with Northern Caribbean countries, namely the Dominican Republic and Cuba, including in the negotiation of trade agreements with third States.

To address CARICOM’s implementation deficit, the Golding Commission has called for time-bound commitments and public progress reports on  Member States’ advancement towards meeting the various commitments. It also called for greater engagement of the private sector and the people of CARICOM.

Failing commitment by Member States to make the commitments outlined in the report, the Commission recommended that Jamaica should withdraw from the CSME, but remain a member of CARICOM.

The full report may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

 

Caribbean Trade & Development Digest – January 28 – February 3, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of January 28- February 3, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Caribbean Integration Too Slow, Too Weak – High-Ranking EU Diplomat Cautions Region Against Segmented Trade Market

Jamaica Gleaner: The region’s attempt at integrating into a single market is taking too long and the progress is moving too slowly, Director-General of the European Commission’s Directorate General for International Cooperation and Development Stefano Manservisi has charged. Read more 

Some CARICOM Countries To Benefit From PAHO Agreement

Jamaica Gleaner: Seven Caribbean Community (CARICOM) countries are to benefit from a new multi-country strategy for technical cooperation in health through 2024. Read more 

INTERNATIONAL

23 African nations sign major aviation trade agreement

ENCA: Africans have for years paid sky-high airfares when travelling within the continent but a major aviation trade agreement launched Monday by the African Union aims to change that. Read more 

Trump stance on Korea-US free trade agreement softening

Asia Times: Observers are optimistic the Trump administration will take a pragmatic approach to renegotiating KORUS, partly due to national security considerations. Read more 

WTO members discuss how to organize work on fisheries subsidies negotiations after MC11

WTO: WTO members meeting as the Negotiating Group on Rules on 30 January discussed how to organize work on fisheries subsidies to fulfil the 11th Ministerial Conference (MC11) decision to continue negotiations with a view to adopting an agreement by the next Ministerial Conference in 2019.  Read more 

Russia initiates WTO compliance proceedings over pig products import restrictions

WTO: The Russian Federation has requested WTO consultations with the European Union to address Russia’s claim that it has complied with a WTO ruling regarding its import restrictions on live pigs, pork and other pig products from the European Union. The request was circulated to WTO members on 30 January. Read more 

UAE initiates WTO complaint against Pakistan over film duties

WTO: The United Arab Emirates (UAE) has requested WTO consultations with Pakistan concerning certain anti-dumping measures on imports of biaxially oriented polypropylene (“BOPP”) film from the UAE. The request was circulated to WTO members on 29 January. Read more 

European Commission’s new expert group on EU trade agreements holds first meeting

EU: The European Commission’s new expert group on EU trade agreements held its first meeting today in Brussels. Read more 

European Commission imposes measures on cast iron products from China

EU: The Commission has today imposed definitive anti-dumping duties on iron castings from China. The measures range from 15.5% to 38.1%. Read more 

Joint communique from Ghana-EU Interim EPA Committee 

EU: The first meeting of the EPA Committee under the Interim Economic Partnership
Agreement (IEPA) between Ghana and the EU was held in Accra, Ghana on 24 January
2018. Read more 

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Caribbean Trade & Development Digest – January 21-27, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of January 21-27, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

China looks forward to deepening trade with CARICOM

St. Lucia News Online: Caribbean Community (CARICOM) countries have indicated a willingness to work with China regarding the socio-economic development of the 15-member grouping. Read more

IMF predicts improvements in economic prospects for Caribbean/Latin America in 2018

Jamaica Observer: The International Monetary Fund (IMF) says economic prospects for the region are generally improving and modest growth is expected in 2018 and 2019. Read more

Bees are All the Buzz in Guyana

St. Kitts & Nevis Observer: There’s a new buzz in Guyana, known in the agricultural sector for its sugar and rice. The Government of Guyana, with support from the Caribbean Development Bank (CDB), is aiming to add honey to the list, and in the process, provide a sustainable pathway out of poverty for Guyanese. Read more

Sugar production up but concerns linger over changes in EU market regime

The Reporter (Belize): Sugar production at the Belize Sugar Industries (BSI) at Tower Hill in Orange Walk is up by roughly 10%, with cane quality also better than the same time last year. Read more

CARICOM signals interest in One Belt, One Road

Stabroek: The Caribbean Community (Caricom) has signalled its interest in working with China to ascertain how its goals and priorities can be best linked with existing, new and emerging development initiatives from the East Asian country. Read more

Barbados amongst eight jurisdictions removed from EU Tax list

Barbados Advocate: Barbados has been named amongst eight jurisdictions that have been removed from the EU’s list of non-cooperative jurisdictions for tax purposes. This follows commitments made at a high political level, to remedy EU concerns. Read more

Barbados International Business Ministry comments on blacklist removal

Nation News: The Ministry of Industry, International Business, Commerce and Small Business Development says Barbados’ removal from the European Union’s “blacklist” of non-cooperative tax jurisdictions augurs well for the island. Read more

INTERNATIONAL

AU, UN-ECA underscore continental free trade area for Africa’s development

The New York Times: The African Union (AU) and the United Nations Economic Commission for Africa (UN-ECA) on Thursday stressed the need to keep the momentum going in the realisation of the Continental Free Trade Area (CFTA) for Africa’s development. Read more

Trans-Pacific trade deal to go ahead without the US

Financial Times: Pacific Rim nations aim to sign a new deal in March, without the US. Read more

Australia unveils plans to become one of the world’s top 10 arms exporters
The Guardian: Australia is set to become one of the world’s largest arms exporters under a controversial Turnbull government plan. Read more
Singapore and Sri Lanka sign free trade agreement
Channel NewsAsia: The Sri Lanka-Singapore Free Trade Agreement will see Singapore companies enjoying potential tariff savings of up to S$10 million each year, among other benefits. Read more

Former New Zealand MP says Canada’s new trans-Pacific trade deal may leave Indigenous Peoples defenceless

CBC Canada: On the cusp of Canada’s signing of the resurrected Trans-Pacific Partnership, a former Maori parliamentarian from New Zealand is warning First Nation peoples that the deal could leave nation-to-nation treaties vulnerable to foreign interests. Read more

West Africa should learn better trade and integration from its great ancient empires

Quartz Africa: The dream of the founding fathers of the Economic Community of West African States (ECOWAS) was, among others, to foster trade and development among member states. But the integration dream will only be realized if institutional barriers to trade are addressed. Read more

Crunch time for NAFTA as negotiators open round of talks in Montreal

CNBC: U.S., Canadian and Mexican negotiators opened a key week-long round of talks to modernize NAFTA on Tuesday amid persistent concerns the Trump administration is preparing to walk away from the trade deal, a move that could roil financial markets. Read more

Uruguay to push for free trade agreement with China in Mercosur

Xinhua: Uruguay plans to push for a free trade agreement (FTA) between China and the Southern Common Market (Mercosur), the largest South American trade bloc, a top Uruguayan official said Wednesday. Read more

Africa: free trade zones to boost trade

Al Jazeera: Trade across Africa is about to get an overhaul with measures aimed at cutting the cost of doing business. It is hoped that a digital free trade zone will make connecting online easier for export and import companies. Read more

What’s the deal with global trade? The view from Davos 2018

WEF: World leaders came to the defence of free trade and global cooperation at the World Economic Forum’s Annual Meeting in Davos this week. Speeches by Narendra Modi, Theresa May, Emmanuel Macron, Angela Merkel and Justin Trudeau declared their countries “open for business.”Read more

US, Korea continue modification and amendment negotiations on KORUS FTA

USTR: United States Trade Representative Robert Lighthizer announced today negotiations on amendments and modifications of the United States-Korea Free Trade Agreement (KORUS FTA) will be held in Seoul, Korea on January 31 and February 1, 2018. Read more

Commission reports on progress in EU-Mexico trade negotiations

EU: The Commission today published the report from the latest round of talks for a new, modernised EU-Mexico trade agreement that took place in Brussels from 12 to 22 December 2017. Read more

UN Environment and WTO launch dialogue on healthier environments through trade

WTO: UN Environment Executive Director Erik Solheim and World Trade Organization Director-General Roberto Azevêdo announced today that their organizations would join forces to launch a new dialogue on promoting innovative ways of using trade to generate greater opportunities to strengthen our economies and our environments at the same time. Read more

WTO issues panel report regarding EU duties on biodiesel from Indonesia

WTO: On 25 January the WTO circulated the panel report in the case brought by Indonesia in “European Union — Anti-Dumping Measures on Biodiesel from Indonesia” (DS480). Read more

Argentina ratifies the Trade Facilitation Agreement

WTO: Argentina, host of the 11th Ministerial Conference recently held in Buenos Aires, has completed its ratification process for the Trade Facilitation Agreement (TFA). Read more

Trilateral symposium to examine how innovative technologies can promote health-related SDGs

WTO: The WTO, the World Intellectual Property Organization (WIPO) and the World Health Organization (WHO) will convene a symposium on 26 February 2018 to discuss challenges and opportunities to ensure that innovative technologies are developed in order to realize the right to health and the health-related UN Sustainable Development Goals (SDGs). Read more

Korean request for retaliation against US in washers dispute referred to arbitration

WTO: A Korean request for retaliation against the United States in a dispute over US anti-dumping and countervailing duties on large residential washers from Korea was referred to WTO arbitration. The matter was discussed at a 22 January meeting of the WTO’s Dispute Settlement Body (DSB). Read more

BONUS

CARICOM States and the WTO Dispute Settlement System: the case for greater engagement

Paper by distinguished University of the West Indies law lecturer and trade attorney, Mrs. Nicole Foster published in the Commonwealth Law Bulletin. This paper “examines the participation of member states of the Caribbean Community (CARICOM) in the World Trade Organisation (WTO)’s dispute settlement system and its associated negotiations”. Read more

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Caribbean Trade and Development Digest – January 14-21, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of January 14-21, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

LaRocque: EU assistance crucial to sustainable development

St. Kitts & Nevis Observer: CARICOM and CARIFORUM Secretary-General Ambassador Irwin LaRocque said in his remarks at the launch of the 10th EDF CARIFORUM Crime and Security Programme Jan. 17 in Barbados that the “strength of cooperation” between the European Union (EU) and the Caribbean” is critical. Read more

United effort needed to fight crime

Barbados Advocate: Now more than ever, CARICOM countries need to remain united in their efforts to fight crime in all its dimensions. Secretary General of the Caribbean Community (CARICOM) and CARIFORUM, Ambassador Irwin LaRocque, shared the above sentiments as he delivered remarks at the launch of the 10th European Development Fund (EDF) CARIFORUM Crime and Security Cooperation Programme. Read more

Spotlight: CELAC eyes enormous benefits from China-proposed Belt and Road Initiative

Xinhua: With the China-proposed Belt and Road Initiative grabbing headlines around the world over the past years, Latin America and the Caribbean is giving special attention to how the Initiative could be extended to the region. Read more

Commercial activity seen as main boost for CAL-Cuba route

LoopNews: Commercial activity is being seen as one of the motivating factors to fill Caribbean Airlines seats from Cuba. Read more

St. Vincent & the Grenadines to launch medical cannabis industry

LoopNews: St Vincent and the Grenadines is joining the emerging global market of medical cannabis with plans to amend legislation to allow for the export of the drug. Read more

CARICOM should ‘free up’ the herb

Antigua Observer: Given the global push to decriminalise marijuana, the prime minister of Antigua and Barbuda, Gaston Browne, is saying that CARICOM countries should consider doing the same, looking at the laws of developed countries to customise them to suit the Caribbean environment. Read more

INTERNATIONAL

Malaysia trade ministry to approach WTO on EU move to limit palm oil use

Reuters: Malaysia, the world’s second-largest palm producer, said on Monday it would work with other producing countries to voice “strong concerns” to the World Trade Organization, following the European Union’s move to back a ban on using palm oil to make biofuels. Read more

Rona Ambrose: Trump nixing NAFTA is just a matter of ‘when’

CTVNews: Canada’s trade insiders say they are preparing for the worst when it comes to the fate of NAFTA, with one top adviser saying it’s only a matter of time before U.S. President Donald Trump pulls out of the North American Free Trade Agreement. Read more

Australia and Japan committed to signing Asia Pacific trade pact by March, Turnbull says

Todayonline: Australia and Japan are committed to signing an Asia Pacific trade deal by March with countries in the region ready to forge a pact to replace the derailed Trans Pacific Partnership (TPP), Australian Prime Minister Malcolm Turnbull said on Thursday (Jan 18). Read more

USTR Releases Annual Reports on China’s and Russia’s WTO Compliance

USTR: The reports, delivered to Congress, are required by law and assess China’s and Russia’s implementation of their respective WTO commitments. Read more

Report: EU trade schemes promote economic development and human rights

EU News: The report published today jointly by the European Commission and the European External Action Service shows the positive impact of the European Union’s duty-rebate schemes on developing economies. Read more

WTO Arbitrator determines “reasonable period of time” in US-China anti-dumping dispute

WTO: On 19 January an Arbitrator issued his award regarding the “reasonable period of time” for implementing the recommendations and rulings of the Dispute Settlement Body (DSB) in the dispute “United States – Certain Methodologies and Their Application to Anti-Dumping Proceedings Involving China” (WT/DS471).  Read more

Trump says terminating NAFTA would yield the ‘best deal’

CNBC: Trump’s comments come less than a week before trade negotiators from the United States, Canada and Mexico meet in Montreal for the sixth of seven scheduled rounds of negotiations to update NAFTA. Read more

France would have voted to leave EU too if in UK’s situation, French leader Macron says

CNBC: France would likely have followed the U.K. and also voted to leave the European Union if the opportunity had presented itself, French President Emmanuel Macron said in an interview Sunday. Read more

WTO compliance panel issues ruling regarding Chinese duties on US

WTO: On 18 January a WTO panel issued its compliance report in the dispute “China – Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States — Recourse to Article 21.5 Of The DSU by the United States” (DS427). Read more

WTO: Australia has requested WTO consultations with Canada regarding measures maintained by the Canadian government and the Canadian provinces of British Columbia, Ontario, Quebec and Nova Scotia concerning the sale of wine. The request was circulated to WTO members on 16 January. Read more

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Trump’s obscene remark confirms administration’s orientation on US-Caribbean/African Relations

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Alicia Nicholls

Much of the international news coverage this weekend has surrounded a reported obscene remark made by United States President Donald Trump about Haiti, El Salvador and the fifty-four internationally recognised countries of the African continent (countries with majority non-white populations) during a bi-partisan meeting last week on immigration. He was further reported as stating, on the contrary, that immigrants from countries like Norway (majority white population) would be preferred.

The vulgar phrase attributed to the US President has been widely reported ad nauseum and there is, therefore, no need for me to repeat it here. Both the African Union and the Caribbean Community (CARICOM) have released statements strongly condemning the President’s reported choice of words. President Trump eventually denied using the obscenity, though conceding he had used ‘strong language’ in the meeting. However, the incident was confirmed by several persons who had been present at the meeting, including one Republican senator.

The underlying assumption that immigrants from the Caribbean, Latin America and Africa have nothing to offer the US is erroneous and unfortunate for several reasons.

  • It ignores the fact that the US is a land of immigrants and that the majority of immigrants to the US are law-abiding citizens who make sterling contributions to their adopted land. From colonial days to present, one can cite countless examples of Caribbean, Latin American and African immigrants who have made sterling contributions to US society, in fields from the arts, medicine, engineering, law, academia, the Armed Forces, and the list goes on.
  • The assumption that immigrants from these countries are overwhelmingly low-skilled is also not borne out in the data. For instance, data from the 2015 American Community Survey show that some 13.5% of the estimated 4.165 million Caribbean born US immigrants had a Bachelor’s degree and 6.7% had a graduate degree
  • Turning to Haiti in particular, President Trump’s comment shows a fundamental ignorance of the critical role Haiti played in the American colonies’ struggle for their own independence. A favour which was not returned when Haiti attained theirs given the fear that a successful black independent republic would inspire other slaves, including in the US, to follow suit.
  • The statement forgets that migration is not a one-way street. Americans too have migrated to, and made their home, in some of these same countries.

The second fundamental flaw with the statement is that it is grossly incorrect and ignores the fact that all countries have their challenges. War, conflict, Mother Nature and other factors could change a country’s fortunes at any time. The prosperous countries of today all underwent periods of time when they too could have been described in such a manner as President Trump used to describe the countries concerned. The Germany which President’s Trump grandfather fled in order to migrate to the US is not the prosperous Germany of today.

It also ignores the role external political actors have played in shaping the fate of many of these countries. For all the development aid given to countries in the Caribbean, Latin America and Africa, history is replete with examples of western powers’ interference in the domestic politics of these countries, from supporting corrupt governments to overthrowing democratically-elected left-leaning governments. These foreign interventions have undoubtedly contributed to many of the problems faced by some of these countries, including corruption, poverty and inequality.

Haiti, no doubt, is perhaps one of the more tragic examples. It is a country which is rich in culture, beauty, spirit and natural resources, and occupies a unique position in history as the world’s first majority black republic.  The colony of Saint Domingue  was the crown-jewel of the French West Indian Empire, but was almost condemned to poverty from the beginning of its post-independence life after being forced to pay France reparations for decades. And if that were not bad enough, how can one overlook US government support for the brutal Haitian dictator Francois Duvalier (Papa Doc) and his son Jean Claude Duvalier (Baby Doc) or more recently, the foreign-orchestrated removal of democratically elected leader Jean Bertrand Aristide in 2004? Moreover, the island has had more than its fair share of natural tragedy, from hurricanes to earthquakes.

The racially-charged slur attributed to the President of the United States should shock no one given his suspect history on race relations, and his ethnonationalist worldview.  It has revealed yet again the ideology underlying an increasingly more isolationist US foreign policy and immigration policy which has seen travel bans, increased deportations and the threat of ending once and for all the Deferred Action for Childhood Arrivals (DACA) programme.

The biggest take-away, however, is that the inflammatory rhetoric used by the President to describe these countries is further evidence that US-Caribbean relations and US-Africa relations will not be a priority for this administration, outside of narrow US national security concerns.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Caribbean Trade and Development Digest – January 7-13, 2018

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Welcome to the Caribbean Trade and Development Digest for the week of January 7-13, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Venezuela Extends Suspension of Air and Sea Travel, Trade with ABC Islands in Continued Fight Against Smuggling

Telesur: Venezuelan Vice President Tareck El Aissami has announced that President Nicolas Maduro has extended the suspension of air and sea traffic as well as trade with the Caribbean countries of Aruba, Bonaire and Curaçao. Read more

CARICOM condemns Trump’s reported statements on Haiti

Barbados Today: The 15-nation Caribbean Community (CARICOM) says it is deeply disturbed by reports about the use of “derogatory and repulsive language” by the president of the United States with respect to its member state, Haiti, and other developing countries. Read more

 

Belize votes to indefinitely end all oil exploration in its waters

Inhabitat: Belize has decided to indefinitely end all new oil exploration in its waters. Belize only produces 3,000 barrels of oil a day, in contrast to the 1.5 million barrels that the United States produces each day in the Gulf of Mexico. Read more

Trade attorney warns of the need for compliance with new EU data rules

Barbados Today: Local businesses are being told to prepare themselves for new data protection regulations that will affect trade with the European Union (EU). Read more

EU to target UK ‘tax haven’ territories as trade negotiations begin

The Independent: Demands to open up Britain’s shady network of overseas tax havens are set to be used by the EU as leverage to force concessions during Brexit trade talks, The Independent understands. Read more

CAL makes triumphant first trip to Cuba

LoopTT: Caribbean Airlines landed at the Jose Marti airport in Cuba ten minutes ahead of schedule on Saturday morning as it made its first flight to the Spanish island. Read more

INTERNATIONAL

Viet Nam files WTO complaint over US anti-dumping duties on fish

WTO: Viet Nam has requested WTO consultations with the United States concerning certain US anti-dumping laws, regulations, administrative procedures, practices and methodologies, as well as certain anti-dumping determinations in administrative reviews on fish fillets from Viet Nam. The request was circulated to WTO members on 12 January. Read more

Canada takes US to WTO in wide-ranging trade complaint

CBC (Canada): Canada has launched a wide-ranging trade dispute against the United States, challenging Washington’s use of anti-dumping and anti-subsidy duties, according to a World Trade Organization filing dated Dec. 20 and published Wednesday. Read more

Trump’s ‘Shithole’ Countries Are Worth $46.6 Billion in Trade to America

Newsweek: During a bipartisan meeting on immigration reform Thursday President Donald Trump fumed about the U.S. accepting immigrants from “shithole” countries. Yet the countries—and indeed continents—that angered him are worth billions in trade to America. Read more

Canadian officials believe that Trump is going to yank the US out of NAFTA

Business Insider: Canada is increasingly convinced that US President Donald Trump will soon announce that the United States intends to pull out of the North American Free Trade Agreement (NAFTA), two government sources said on Wednesday. Read more

Brexit shock: No deal will cost EU £500billion

Sunday Express: Pressure was last night mounting on the EU to sign a free-trade agreement with Britain after a report revealed that a “no deal” scenario could cost the bloc more than £500billion. Read more

Preparations, but no NAFTA plan B yet, says trade minister

CTVNews: With the next round of NAFTA talks approaching, and uncertainty about where the U.S. stands from one day to the next, Canada’s International Trade Minister said there’s no clear “plan B” if the trilateral deal gets torn up. Read more

US looking at free trade agreement with India

Hindu Business Line: The US government is planning a comprehensive Free Trade Agreement (FTA) with India in an effort to boost two-way trade that currently stands at $115 billion. Read more

Philip Hammond: Brexit trade deal without services not ‘realistic’ for UK

Politico: It is not a “realistic proposition” for the U.K. to accept a post-Brexit trade deal that does not include services and the EU would be “crazy” to cut itself off from London’s financial center, the British chancellor Philip Hammond said Saturday. Read more

Commerce submits steel imports report to Trump

Global Trade Mag: The United States Department of Commerce announced that it had submitted its report on the Section 232 investigation of steel imports to President Donald Trump. Read more

South Korea, Vietnam seek redress from US through WTO

CBC (Canada): South Korea has asked the World Trade Organization for authorisation to impose annual trade sanctions worth at least $711 million on the United States, a filing published by the World Trade Organization showed on Friday. Read more

Booming Global Trade helped China Exports Surge Last Year

Bloomberg: China’s exports rose in December, capping a year of stronger trade growth buoyed by a robust global economy. Read more

China eyes new stage of cooperation with Africa

Xinhua: With a key cooperation forum and the Belt and Road Initiative, China hopes to raise its cooperation with Africa to a new stage, Chinese Foreign Minister Wang Yi has said. Read more

US says Vietnam should have notified eight state firms to WTO

Reuters: The United States has notified the World Trade Organization of eight Vietnamese firms it says should have been registered as state trading enterprises under the global trading rules, a U.S. filing published by the WTO showed on Thursday. Read more

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Caribbean Trade and Development Digest – January 1-6, 2018

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Happy New Year! Welcome to the Caribbean Trade and Development Digest for the week of January 1-6, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Cuba’s Raul Castro Meets Top EU Diplomat to tighten relations

TeleSur: Cuban President Raul Castro met with the European Union’s top diplomat, Federica Mogherini, at the end of her two-day visit to the country, seeking to construct and reinforce ties between EU member countries and Cuba. Read more

Exxon Mobil reports Oil Discovery off Guyana

Fox Business: Exxon Mobil Corp. (XOM) on Friday said it made another positive oil discovery off the coast of Guyana.  Read more

2017 gold declarations below target

Stabroek News: The Guyana Gold Board has recorded total gold declarations of 652,000 ounces for 2017, which is below the target of 720,000 ounces. Read more

Hurricane-hit Caribbean countries slash cost of Citizenship by Investment programs, says report

Nation News: Caribbean nations ravaged by recent hurricanes are selling citizenship at dramatically discounted prices in an effort to raise emergency funds, sparking concerns that the programmes may be vulnerable to abuse, according to reports here. Read more

Arrivals of US tourists to Cuba tripled in 2017

Caribbean News Digital: U.S. tourism to Cuba grew nearly threefold in 2017 over the previous year, mainly due to relaxation of travel ban, a Cuban official said Saturday. Read more

CARICOM moving to create first climate-resilient region

Jamaica Observer: Incoming chairman of the Caribbean Community (Caricom), Haiti’s President Jovenel Moïse, says the regional grouping is moving towards creating the world’s first climate-resilient region this year. Read more

INTERNATIONAL

Will intra-African trade flourish in 2018?

The Herald: Overcoming the barriers for intra-African trade to double in a decade can feel like a Sisyphean task – impossible to complete. But that is the objective of the Boosting Intra-African Trade (BIAT) action plan, which targets to double flows between January 2012 and January 2022. Read more

Rwanda: AU Summit to discuss Continental Free Trade Area

AllAfrica: The upcoming 30th Ordinary Session of the African Union (AU) Assembly of Heads of State and Government is expected to receive a progress report on the status of negotiations of the African Continental Free Trade Area (CFTA), an official has told Sunday Times. Read more

US Trade deficit hits $50.5 billion, biggest since 2012

ABCNews: The U.S. trade deficit rose to $50.5 billion in November, the largest imbalance in nearly six years, as imports and exports both hit records. Read more

Canada’s NAFTA charm offensive kicks into high gear

CBCNews: The new year begins with Canada relying on an old strategy for saving the North American Free Trade Agreement. Read more

UK seek free trade agreement covering goods and services in Phase Two

RTE: British Prime Minister Theresa May has said the UK will be looking for a free trade agreement with the EU that will cover goods and services in Phase Two of the Brexit negotiations this year. Read more

Tariffs to be slashed as China-Chile free trade agreement kicks in

China.org.cn: Nearly 98 percent of products traded between China and Chile will have zero tariffs attached when the new China-Chile free trade agreement is implemented in 2018, according to the Guangdong Entry-Exit Inspection and Quarantine Bureau, reports Chinanews.com. Read more

Will 2018 be the year of protectionism? Trump alone will decide

New York Times: The Trump administration will soon face several major trade decisions that will determine whether the White House adopts the type of protectionist barriers that President Trump campaigned on but that were largely absent during his first year in office. Read more

Will global trade survive 2018?

Foreign Policy (Blog): The future of the global trade system faces more risk and uncertainty than at any time since it was created after World War II. Read more

Macron pursues ambitious agenda on first official China visit

RFI: French president, Emmanuel Macron’s heads to China Sunday hoping to forge closer ties with President Xi Jinping. During the three-day trip which begins Monday, Macron plans to seek a “strategic partnership” with Beijing, notably on terrorism and climate change, an official in the president’s office said. Read more

Why Britain should be allowed to join the TPP

The Strait Times: Analysis by James Crabtree Read more

US-Korea trade talks pit pickup trucks against nuclear threat

Reuters: The United States and South Korea on Friday completed the first round of review talks on a bilateral trade deal with Washington saying there was “much work to do” to reach a new pact.  Read more

Will there be a Pacific trade war in 2018?

Nikkei Asian Review: Analysis by Glen Fukushima Read more

New Chinese consul general talks tough on trade

Business in Vancouver: China is eager to conclude a free-trade agreement with Canada, but not at the expense of a set of “baseline” political principles seen as untouchable by Beijing, said the new top Chinese diplomat in the Western Canada region. Read more

How Nepal’s trade costs could be minimised

The Himalayan Times: A recent report jointly prepared by the Asian Development Bank (ADB) and United Nations Economic and Social Commission for Asia and Pacific (UNESCAP) titled ‘Trade and Transport Facilitation Monitoring Mechanism (TTFMM) in Nepal’ has suggested the government to set up the TTFMM institutional mechanism to monitor processes in certification, customs, transit and cargo transportation to bring down the cost of trade. Read more

Brexit: UK Government considers joining TPP trade agreement to help bolster economy after leaving EU

The Independent: Britain is exploring the possibility of joining a trans-Pacific trade bloc after Brexit in a bid to find alternative markets for exports that currently go to Europe, it has emerged. Read more

Brexit: May urged to stay in the single market by 20 British MEPs

The Guardian: Theresa May is being urged to change course and seek full membership of the European single market and customs union by 20 British MEPs, including three Tories and the majority of Labour politicians based in Brussels. Read more

Pressure grows for UK to bring ban on ivory trade

The Guardian: Consultation by the government shows huge public support for ending all sales. Read more

More than 2,300 EU academics resign amid warning over UK university ‘Brexodus’

The Independent: New figures show a 19 per cent increase in departures of European staff from universities last year compared to before the EU referendum, and a 10 per cent rise from some 2130 resignations in 2015-16. Read more

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How can Caribbean CIPs survive increased global and regional competition and scrutiny?

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Alicia Nicholls

Citizenship by investment programmes (CIPs) operated by five Caribbean small island developing States have been receiving increased international competition and scrutiny, with some arguing that a veritable “race to the bottom” has begun. Indeed, these programmes face increased competition not just inter se, but globally as more countries worldwide are turning to citizenship or residency programmes for attracting much needed investment.

The CIP-operating countries in the Caribbean are currently St. Kitts & Nevis (the world’s longest running), Dominica, Grenada, Antigua & Barbuda and most recently, St. Lucia. As all five of these countries are part of the CARICOM Single Market and Economy (CSME), investors who obtain citizenship under one of these countries’ CIPs are also entitled to the freedom of movement privileges under the CSME, which has caused legitimate national security concern in some non-CIP operating CARICOM countries.

  1. Eliminate price as a factor

Although Caribbean CIPs are already the most affordable in the world, there are irrefutable signs of increased price competition among Caribbean CIPs.  In January of this year, St. Lucia amended its regulations to, inter alia, reduce the minimum qualifying investment to US$ 100,000 to the National Economic Fund. In the wake of the passage of Hurricane Irma, St. Kitts & Nevis added a lower cost option (US$150,000 plus applicable fees) in the form of the temporary hurricane relief investment option (until March 2018), whereby the invested funds would be earmarked for assisting hurricane-affected areas. This latter change was sharply criticised. Even more recently, Antigua & Barbuda cut the investment threshold for the National Development Fund by 50%.

Any semblance of price competition among Caribbean CIPs is problematic for several reasons.  Although the majority of persons seeking alternative citizenship do so for the ease of business and travel a good quality passport brings, lowering the minimum investment threshold makes Caribbean CIPs more accessible to those persons who may seek alternative citizenship for nefarious purposes. Even if the due diligence processes remain unchanged, a perceived price war could cause third States to either reimpose visa restrictions or apply more scrutiny to passport holders of those States  (or of other Caribbean States!), which diminishes the value and attractiveness of those CIP-countries’ passports. It lessens the perceived value of the citizenship offered by those countries which may actually be a turn-off to some High Net Worth Individuals who may be more attracted to exclusivity.

What this speaks to is the need for CIP-operating Caribbean countries to eliminate price as a factor of competition by harmonising their minimum investment threshold, a point I made in a paper I delivered on this topic earlier this year.

2. Increase due diligence cooperation

Cooperation among CIP-operating Caribbean countries should also extend to cooperation on issues of due diligence to ensure that an applicant who fails one country’s due diligence requirements is not accepted under another’s. Based on my research, it appears that there is some due diligence cooperation already occurring, but more can be done. Additional options could be to harmonise due diligence requirements and to formulate a harmonised list of excluded countries instead of national lists as currently obtains in some CIP-operating Caribbean countries.  This would also address some of the national security concerns of non-CIP operating Caribbean countries, and third States.

3. Improve transparency

Lack of transparency remains a major problem plaguing the perception of Caribbean CIPs. Antigua & Barbuda’s legislation makes it mandatory for a 6-month report to be published and this information is found online. However, generally speaking, there is little information made available about Caribbean CIPs’ operation, except for the economic data found in the IMF’s Article IV consultation reports. With few exceptions, officials are often very reluctant to share data on these programmes’ operation, whether out of fear of competition or negative publicity.

Failure to share information only adds to the shroud of secrecy plaguing the programmes and it also makes it difficult to analyse the socio-economic impacts of these programmes.

It would be useful if CIP-operating Member States would use the framework for information sharing as mentioned in the Strategic Plan for the Caribbean Community Plan 2015-2019 to share data on the operation of their programmes for transparency purposes, including their approval and disapproval rates.

4. Compete on quality

Competition among Caribbean CIPs should be on quality of service and product without compromising standards. Caribbean countries already have inherent natural advantages which are pull factors for HWNIs, such as their natural beauty, pleasant climates, stable democratic societies and quality of life. But these alone are not enough. What the latest World Bank Doing Business Report 2018 shows is that there are several indicators on which Caribbean countries, including CIP-operating countries, can improve their attractiveness as investment destinations by improving the ease of doing business. Jamaica, which does not offer a CIP, is a good example of a Caribbean country which has been making sound reforms in the quest for  ‘best in class’ status as an investment destination.

5. Good governance

Good governance is key to the long-term sustainability of Caribbean CIPs. This includes ensuring that due diligence standards are robust, as well as that transparency and efficiency remain paramount to the programmes’ administration. It also entails keeping the programmes free of political interference.

6. Residency Criterion?

Currently, all five Caribbean CIPs are direct citizenship programmes which means that there is no requirement on the investor to reside in the jurisdiction for a fixed period of time before citizenship is granted. The lack of a residence requirement is one of the unique selling points of Caribbean programmes, but it is also one of the reasons why some third States are increasingly critical of these programmes.

The addition of  a short residency requirement, similar to Malta’s 12-month requirement, could be a possible option for Caribbean CIPs as it would remove some of the transactional nature to the process.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

COP23: Five Negotiation Priorities for Small Island Developing States (SIDS)

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Alicia Nicholls

In about a week’s time, delegates from over 190 countries will convene in Bonn, Germany for the 23rd Conference of the Parties (COP23) to the United Nations Framework Convention on Climate Change (UNFCCC). During this round of climate negotiations, which will last from November 6-17th, the parties will continue work on implementation guidelines for the Paris Climate Change Agreement signed at COP21 in December 2015.

Despite United States’ President Donald Trump’s statement in June that the United States would be withdrawing from the Paris Agreement, there is some cause for optimism that this year’s COP negotiations will bear fruit. For the first time, a small island developing state (SIDS), the Republic of Fiji, has assumed the presidency of COP and brings to this task first-hand experience from the front lines of the climate change battle.

Secondly, recent natural disasters worldwide have brought increased international attention to the devastating effects of climate change and the need for urgent action on reducing global greenhouse gas emissions. This point was well-made by President of Fiji, Mr. Frank Bainimarama, who stated at a Pre-COP Ministerial Meeting held on October 17 in Fiji that:

“We can no longer ignore this crisis. Whether it is fires in California, Portugal and Spain. Flooding in Nigeria, India and Bangladesh. The dramatic Arctic melt. Ice breaking off the continent of Antarctica. The recent hurricanes that devastated the Caribbean and the southern United States. Or the hurricane that has just struck Ireland and Scotland – the tenth hurricane of the Atlantic season this year. It’s hard to find any part of the world that is unaffected by these events.”

Thirdly, except for the US, political will among the world’s most powerful nations has coalesced on the side of climate action. The 19 other G20 countries reaffirmed their “strong commitment” to the Paris Agreement, calling it “irreversible” in their Summit Declaration following the Hamburg meeting in July.

Below are five key likely priorities for SIDS as they go into the negotiations:

  1. Scaling up Climate Finance to SIDS

At COP15 in 2009, developed countries committed to jointly mobilise USD 100 billion annually by 2020 to meet the mitigation and adaptation needs of developing countries. According to an OECD study, climate-related concessional finance has increased in both absolute terms and as a percentage of total concessional development finance, however annual commitments for 2014 were still 20% of the USD100 billion goal.

SIDS often find it difficult to attract private financial inflows for development purposes due to their small size and economies, and current financing levels do not meet their current needs. Moreover, current graduation criteria have made some middle and upper income SIDS, like those in the Caribbean, ineligible for certain types of concessional financing.

Pledged contributions, whether to the Green Climate Fund or otherwise, also do not necessarily always lead to timely disbursement, and there is the need for guidelines and protocols for incorporating the Adaptation Fund established at COP7 into the Paris Agreement’s framework.

Finding innovative and effective ways to attract and increase financial flows, including from both public and private and bilateral and multilateral sources, will be key. For example, Fiji became the first developing country to issue a sovereign green bond, with technical support from the World Bank, to support the country’s mitigation and adaptation efforts.

  1. Loss and damage

Loss and damage was one of the most contentious topics in the negotiations leading up to the Paris Agreement and was strongly lobbied for by SIDS and LDCs as they are the least culpable but most vulnerable to the harshest impacts of climate change. The concept recognises that there is some irreversible damage which cannot be avoided through mitigation and adaptation strategies.

The Paris Agreement has recognised the concept of ‘loss and damage’ as a distinct concept of climate action and has made the Warsaw International Mechanism for Loss and Damage permanent. It, however, does not deal with liability or compensation, something which developed countries were adamant they did not wish to be included. The softer language used in Article 8, which, inter alia, itemises areas for cooperation and facilitation, is reflective of these developed country concerns.

The costliness of this year’s Atlantic hurricane season is an important background against which SIDS should call for greater discussion on concretely addressing loss and damage, including the successful launch of the Clearing House for Risk Transfer which is slated to take place at COP23.

  1. Adaptation and Mitigation

Developed countries’ continued and increased support will be necessary to assist SIDS in implementing national climate action plans, policies and projects in order to build climate resilience. This support for adaptation and mitigation includes not just financial support, but technology transfer and capacity building and technical assistance.

Certain groups within societies are particularly vulnerable to climate change, including women and children, the disabled and indigenous and rural communities. As such, the COP23 negotiations will involve operationalizing the Gender Action Plan and the Local Communities and Indigenous Peoples Platforms.

  1. More ambitious NDCs

Some 163 parties have already submitted their Nationally Determined Contributions which outline their emission reduction targets toward meeting the goal set out in Article 2 of the Paris Agreement of keeping average global temperature increase to no more than 2 degrees Celsius above pre-industrial levels and as close as possible to 1.5 degrees Celsius. These NDCs may be found at the interim NDC registry.

However, the May 2016 synthesis report on the aggregate effect of INDCs showed that a higher level of ambition will be needed in order to reach the goal in Article 2.

SIDS will want all parties to communicate to more ambitious NDCs after 2018 in order to meet the temperature goals in the Agreement and in keeping with the Article 4(3) commitment of communicating successively progressive NDCs.

  1. Preparations for Facilitative Dialogue 2018

The Facilitative Dialogue which will take place in 2018 will be the first initial opportunity under the Paris Agreement to take stock of parties’ collective progress in a transparent manner towards meeting the Agreement’s long-term goal and inform the preparation of NDCs. It will be a precursor to the Global Stock Take, the first of which will take place in 2023 and will occur every five years thereafter.

The Facilitative Dialogue 2018 will be launched at COP23 and parties will need to organise and decide on the procedures, events and expected outcomes in time for its convening. The President of Fiji, who must be commended on his country’s excellent work on preparations for COP23 to date, has indicated that these talks will approached on the principle of ‘talanoa’, a Pacific concept which values inclusive, participatory and transparent dialogue.

A copy of the negotiating agenda for COP23 (current as at this date) may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

Caribbean Trade and Development Digest – October 22-28, 2017

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Welcome to the Caribbean Trade and Development Digest for the week of October 22-28, 2017! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Rowley talks trade with Mexico at CARICOM Summit

Trinidad Express: According to a statement from the Office of the Prime Minister, Rowley has asked Mexican President Enrique Pena Nieto to immediately consider the development and implementation of a partial scope trade agreement which will allow Trinidad and Tobago manufactured goods access to the Mexican market. Read more

Get cracking: EU wants region to get to work on CSME; EPA

Barbados Today: Barbados and its Caribbean Community (CARICOM) neighbours have been told to get cracking on the Caribbean Community (CARICOM) Single Market and Economy (CSME) and the Economic Partnership Agreement (EPA) with Europe. Read more

South Africa set to boost trade with Cuba

allAfrica: The upcoming Havana International Fair will further advance relations between South Africa and Cuba, says Trade and Industry Deputy Minister Bulelani Mangwanishe. Read more

Haiti-DR. Towards a border resident card to facilitate trade?

Haiti Libre: Director of the National Institute of Migration (INM) of the Dominican Republic encourages the Directorate General of Migration (DGM) to create a border resident card, which would facilitate the movement of people who depend on binational trade in areas border with Haiti. Read more

India eyes trade deals with Central American, Caribbean Countries

Times of India: India is looking to expand its trade footprint in America with initial discussions initiated in the government for a possible free trade agreement (FTA) with Caribbean and Central American countries and a logistics hub in Panama to help shipment of goods. Read more

China, Cuba sign agreements to expand economic, trade ties

China Daily: China and Cuba on Wednesday signed five cooperation and legal agreements, which reaffirm the willingness of both nations to strengthen and expand their economic and trade relations. Read more

Mexican President and CARICOM meet in Belize

Amandala: Oct. 26, 2017–Belize hosted a historic meeting between heads of government of CARICOM and the president of Mexico, Enrique Peña Nieto at the Best Western Belize Biltmore Plaza on Wednesday, October 25, 2017. Read more

Mexico gives USD$14 million to CCRIF

The Reporter: The Government of Mexico will contribute $14 Million to the CARICOM Catastrophe Risk Insurance Fund (CCRIF), Mexico’s President, Enrique Peña Nieto confirmed at the IV CARICOM-Mexico Summit. Read more

CARICOM should seek to deepen ties with BRICS

Stabroek: An opinion piece by a staff writer at Stabroek. Read more

Barbados and Italy Double Taxation Agreement enters into force

Nation News: The Double Taxation Agreement (DTA) between the Government of Barbados and the Italian Republic has entered into force in accordance with Article 30 of the Agreement. Read more

INTERNATIONAL

UK, EU send proposal to rest of WTO

Reuters: Britain and the European Commission formally told other members of the World Trade Organization on Wednesday how they plan to split up the European Union’s WTO-agreed tariff quotas and farm subsidies after Brexit. Read more

Turkey, Pakistan finalise free trade agreement talks

Xinhua: Turkey and Pakistan have finalized negotiations on free trade agreement (FTA), and wished to sign the deal as soon as possible, Turkish Customs and Trade Minister Bulent Tufenkci said on Friday. Read more

NAFTA Uncertainty already hurting growth, Bank of Canada says

Bloomberg: Uncertainty about U.S. trade policy will reduce investment growth by 0.7 percentage points and export growth by 0.2 percentage points in both 2017 and 2018, according to projections in the Bank of Canada’s quarterly Monetary Policy Report, released Tuesday in Ottawa. Read more

Infrastructure deficit remains major challenge to intra-Africa trade: ECA

Xinhua: The Economic Commission for Africa (ECA) has reiterated that infrastructure deficit in Africa remains a major challenge to trade facilitation, intra-regional trade as well as economic development and transformation on the continent. Read more

Trudeau dismisses concerns free trade with China will hurt Canada-US relationship

CBC: Prime Minister Justin Trudeau said strengthening trade ties with China does not put the Canada-U.S. relationship at risk, shrugging off concerns raised Thursday by a member of his NAFTA advisory council. Read more

PM Lee urges the US to uphold free trade and sustain economic ties with Asia

Today Online: The United States’ relations with Asia has not “been turned upside down” despite the different approach taken by the Trump administration on some issues, said Prime Minister Lee Hsien Loong in urging Washington to uphold free trade and sustain economic engagement with the region. Read more

RCEP deal unlikely this year, says South Korea official

Nikkei Asian Review: An agreement to create a free trade zone among 16 countries in the Asia-Pacific region, including China, Japan, India and South Korea, is not expected before the end of the year, said a South Korean representative in charge of the negotiations on Friday. Read more

WTO issues compliance panel reports on revised US “dolphin-safe” tuna labelling measure

WTO: On 26 October the WTO issued the panel reports in the cases brought by the United States and Mexico in “United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products – Recourse to Article 21.5 of the DSU by the United States” and “United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products – Second Recourse to Article 21.5 of the DSU by Mexico” (DS381). Read more

Canada in bid to limit Brazil aircraft subsidy probe at WTO

Reuters: Canada has urged the World Trade Organisation to block attempts by Brazil to trigger a detailed investigation of its aerospace industry to buttress its case that subsidies to Bombardier caused “serious prejudice” to Brazil’s Embraer. Read more

Move to introduce ‘gender inclusivity’ in the WTO

The Hindu Business Line: Waking up to the need to enable more women to participate in international trade, the World Trade Organisation (WTO) and a group of member countries are making efforts to get a joint declaration on gender and trade to be adopted at the Buenos Aires Ministerial meet in December. Read more

Colombia looks to expand free trade deals with Pacific region countries

The City Paper (Bogota): Colombia wants its share of the Asia Pacific trade pie as it joins the three other member nations of the Pacific Alliance (Chile, Peru and Mexico) in free trade talks with Australia, New Zealand and Singapore. Read more

Germany, UK will gain the most from an India-EU free trade deal

The Hindu Business Line: Germany and the UK will witness the highest absolute gains if the proposed Free Trade Agreement (FTA) between India and the European Union (EU) is concluded, states a study conducted by the Bertelsmann Stiftung of Germany. Read more

Former WTO boss warns Brexit trade agreement could take seven years

The Express: A FORMER World Trade Organisation (WTO) Director-General warned that Britain’s worst option post-Brexit would be to trade under WTO rules, amid claims that Britain is preparing for Brexit talks to fail. Read more

‘Decision on fishing subsidies certain in WTO’s Dec meet’

The Hindu: An agreement on elimination of ‘harmful’ fisheries subsidies is likely to be the only major outcome at the forthcoming meeting of the World Trade Organisation’s (WTO) highest decision-making body called the ‘Ministerial Conference’. Read more

European Parliament votes for trade deal with New Zealand

Radio New Zealand: The European Parliament has voted to press ahead with plans to do a trade deal with New Zealand. Read more

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Mexico and CARICOM agree new areas for technical cooperation

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Alicia Nicholls

Caribbean Community (CARICOM) countries and the Government of Mexico have approved the seventh Mexico-CARICOM Technical Cooperation Programme (2017-2019). This was one of the main outcomes of the Fourth CARICOM-Mexico Summit held this week on October 25, in Belize City, Belize. Hailed as “a new paradigm” in cooperation between CARICOM and the Government of Mexico, the new programme will include both existing and new priority areas for development cooperation which align with those identified in the CARICOM Strategic Plan 2015-2019 and the global development agenda.

Mexico and CARICOM have enjoyed four decades of diplomatic cooperation and friendship.  At the Third Mexico-CARICOM Summit in 2014 President of Mexico, His Excellency Enrique Pena Nieto had pledged his Government’s desire to build on and deepen those ties.

The discussions at  Wednesday’s summit touched on several areas of cooperation, including trade and investment, public health, education, cultural cooperation, technical assistance, and cooperation on the global development agenda. A member country of the Organisation for Economic Co-operation and Development (OECD), Mexico has the world’s eleventh largest economy according to International Monetary Fund (IMF) forecast data for 2017. This makes Mexico a potentially powerful voice and ally on international issues of interest to the Caribbean, including climate action,  de-risking and the need for multilateral financial institutions to revisit graduation criteria for official development assistance.

Disaster risk management was a major focus of the talks, as CARICOM countries and Mexico have both suffered significantly at the hands of natural disasters this year. Powerful hurricanes Irma and Maria caused major loss of life and damage in several Caribbean Islands, most tragically in Barbuda and Dominica. In September as well, Mexico was struck by Hurricane Katia around the same time that it was reeling from two devastatingly strong earthquakes within a two week span which claimed over 200 lives.

In addition to pledging their continued support for the Paris Climate Change Agreement, the CARICOM and Mexico heads of government/State agreed to a Mexico-CARICOM Strategy for Comprehensive Disaster Risk Management which, according to the summit’s official declaration, will comprise the following three main lines of work:

  1. strengthening initiatives already in place
  2. developing a complementary cooperation agenda, such as early warning, awareness raising, emergency response, among others
  3. joint action in multilateral fora and international mobilization to further strengthen and support Caribbean institutional capabilities for disaster risk management

The Mexican Government also made a US14 million grant to the Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC), a regional catastrophe fund formed in 2007 and which has had to pay out about US$50.7 million since the start of the 2017 Atlantic hurricane season alone!

They have also agreed to support the establishment of a hydrometeorological monitoring centre for the Caribbean region and to collaborate to ensure  the success of the CARICOM-hosted International Donor Conference planned for November 21, 2017 at the UN Headquarters, New York. This conference will seek to mobilise assistance for those hurricane-struck Caribbean islands.

The Government of Mexico has also offered 150 scholarships for training Caribbean teachers of Spanish as a second language. This would assist in reducing the language barrier which would be one of the impediments for CARICOM exporters seeking to enter the Mexican market. According to data quoted in the CARICOM press release before the meeting, “between 2012 and 2016, imports from Mexico to CARICOM exceeded exports from CARICOM to Mexico, with Jamaica, Trinidad and Tobago, Belize, Barbados and Guyana being the main importing countries, accounting for 95 % of imports from Mexico between 2014 and 2016”.

The Joint Declaration of the CARICOM-Mexico Summit may be accessed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

ACP Trade Ministers demand ‘concrete outcomes’ at upcoming WTO MC11

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Alicia Nicholls

Trade ministers and other representatives from the 79-member Africa, Caribbean and Pacific (ACP) countries added their voices to demands for ‘concrete outcomes’ at the upcoming World Trade Organisation’s Eleventh Ministerial Conference (WTO MC11). Preparations for the upcoming WTO MC11 was one of several topics discussed by ACP trade representatives at their 20th ACP Ministerial Trade Committee meeting held in Brussels on 18-19 October last week.

According to the press release from the meeting, the ACP representatives  reiterated the need for a development-friendly and robust MC11 work programme which recognized differences between developed, developing and least developed countries and whose outcomes were aligned with the Sustainable Development Goals (SDGs).

Reaffirming their commitment to the multilateral trading system, they also called for “inclusiveness, consensus and transparency in all WTO decision-making processes, as well as careful framing of any reform evaluation of the WTO to ensure that the interests of all countries are protected”. Guyana was chosen to be the spokesperson for the ACP Group at the Ministerial which will take place in Buenos Aires December 10-13, 2017.

In a speech delivered at the ACP meeting, the WTO’s Director General, Roberto Azevedo, acknowledged the important role ACP countries have played in shaping the WTO’s work.

Mr. Azevedo gave a brief status report on the WTO’s preparatory work for the upcoming Ministerial Conference, lauding the ACP countries for being at the “forefront” of these discussions. He noted that although there were some positive signs, the many gaps to bridge meant that there was still much work ahead with respect to the negotiations.  He further reiterated that in order to achieve concrete results in Buenos Aires, “more focused engagement and negotiation will be required to quickly identify areas of convergence”.

In the meeting which was chaired by the Hon. Carl Greenidge, Vice President and Minister of Foreign Affairs of the Cooperative Republic of Guyana, ACP trade representatives also focused on several  other topics of importance to ACP countries’ trade, including enhancing trade among ACP countries and trade issues with the European Union (EU).

The ACP press release also notes that ACP representatives have committed to “increased integration, unity and solidarity” among ACP countries, including taking more “joint ACP approaches to trade and development”.

The press release from the ACP can be read here.

The WTO Director-General’s full speech can be read here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Caribbean Trade and Development Digest – October 15-21, 2017

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Welcome to the Caribbean Trade and Development Digest for the week of October 15-21, 2017! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Cuba, T&T trade ties growing, says Cuba ambassador

Trinidad Guardian: Despite the American economic embargo against Cuba, T&T businesses continue to show interest in commercial ties with the island said Cuban Ambassador Guillermo Vázquez Moreno. Read more

(Jamaica) Senate passes law to speed up exports

Jamaica Gleaner: The Senate yesterday passed legislation amending the Processed Food Act and the Processed Food (General) Regulations, 1959, removing the requirement for export certificates to facilitate the implementation of the Automated System for Customs Data (ASYCUDA). Read more

COTED green-lights Agriculture Regional Emergency Response Team

ST Kitts & Nevis Observer: The Council for Trade and Economic Development (COTED) has approved the Regional Agriculture Emergency Response Sub-Committee to provide prompt action to help the agriculture sector in Caribbean Community (CARICOM) member states to rebound after natural disasters. Read more

CARDI ready to take action to rebuild agriculture in Barbuda, Dominica

Caribbean News Now: The Caribbean Agricultural Research and Development Institute (CARDI) has already begun taking action to restore the battered agriculture sectors in Barbuda and Dominica. Read more

UWI launches Centre for Reparations Research

Jamaica Observer: The University of the West Indies (UWI), Mona, this week officially launched Centre for Reparation Research at the campus. Read more

Meat safety training for Caribbean countries

Jamaica Observer: A two-day regional training workshop covering hygiene provisions for raw meat, meat preparations and manufactured meat from the time of live animal production up to the point of retail sale, gets underway here on Tuesday. Read more

INTERNATIONAL

ACP trade ministers reaffirm commitment to multilateral trade system

Caribbean News Now: Ministers and senior officials responsible for trade from 79 African, Caribbean and Pacific (ACP) countries reaffirmed their strong and resounding commitment to the multilateral trading system, at the conclusion of the 20th ACP Ministerial Trade Committee meeting held in Brussels on 18-19 October. Read more

Ukraine files WTO Complaint over Russia, import, transit restrictions

WTO: Ukraine has requested WTO consultations with Russia regarding Russian measures affecting trade in certain products such as juice, alcoholic beverages, confectionery and wallpaper from Ukraine. The request was circulated to WTO members on 19 October. Read more

Dubai set to host Africa trade summit

The Standard: Dubai will this November host African heads of State and business leaders at a forum to discuss the continent’s economic outlook and investment opportunities for countries in the United Arab Emirates (UAE). Read more

Canada ‘extremely worried’ about NAFTA: Ambrose

CTV: Behind the scenes Canadian officials are “extremely worried” about where the North American Free Trade Agreement negotiations are headed, and it’s time to be worried, says Rona Ambrose, a member of Canada’s NAFTA Advisory Council. Read more

UK Trade Secretary Dismisses ‘Nightmare’ of No-deal Brexit

Bloomberg: U.K. International Trade Secretary Liam Fox said leaving the European Union without a deal for future business isn’t a “nightmare scenario” for Britain. Read more

US will not interfere in EU trade with Iran, says Tillerson

Reuters: The United States does not aim to impede European trade and business transactions with Iran despite President Donald Trump’s decision last week to decertify the 2015 nuclear agreement, Secretary of State Rex Tillerson told the Wall Street Journal. Read more

‘We need trade deals’: Swedish PM opposes Macron’s call to slow down

The Local: Swedish Prime Minister Stefan Löfven has said he opposes moves by French President Emmanuel Macron to slam the brakes on free trade deals. Read more

New Zealand’s Ardern wants to balance trade pact with housing pledge

Bloomberg: Incoming leader Jacinda Ardern says New Zealand will still seek membership in the proposed Trans Pacific Partnership even as she strives to honor her election campaign pledge to clamp down on foreign property speculators. Read more

Details of a massive trade deal among 11 heavyweight economies may be announced next month

CNBC: Ten months after President Donald Trump abandoned what was pegged as the world’s biggest trade deal, its surviving participants may be close to a new agreement. Read more

US pushes ‘fair trade’ as economic talks with Japan advance

Bloomberg: The Trump administration is advocating for a more balanced trade relationship with Japan as high-level economic talks with the Asian nation advance this week in Washington, according to Vice President Mike Pence. Read more

WTO: On 17 October the WTO issued the panel report in the case brought by Brazil in “Indonesia – Measures Concerning the Importation of Chicken Meat And Chicken Products” (WT/DS484). Read more

Azevedo underlines growing importance of services trade

WTO: Speaking at the Global Services Summit in Washington D.C. on 17 October 2017, Director-General Roberto Azevêdo highlighted that trade in services accounts for almost 50 per cent of world trade today. Read more

Afghanistan and Brazil welcomed as observers to WTO Government Procurement Agreement

WTO: The WTO Committee on Government Procurement agreed on 18 October to grant observer status to Afghanistan and Brazil. Members welcomed Afghanistan’s commitment to seek eventual accession to the Government Procurement Agreement (GPA). Some also expressed hopes that Brazil might, in the future, consider acceding to the Agreement. Read more

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

 

Caribbean Trade and Development Digest – October 8-14, 2017

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Welcome to the Caribbean Trade and Development Digest for the week of October 8-14, 2017! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

COTED approves of poultry plants to sell products within CARICOM

Jamaica Observer: Nine poultry processing plants in the region have been approved to trade among member states as the Caribbean Community (CARICOM) continues to move steadily towards increasing intra-regional and food security, the Guyana-based CARICOM Secretariat has announced. Read more

Column:Brexit’s Impact on British Overseas Territories

Bernews: An opinion column written by Paul Hare. Read more

CARICOM to push for concessionary funding during meetings with US next week

Jamaica Observer: Caribbean Community (CARICOM) countries will use “important meetings” in the United States next week to push the international community to re-think its policies regarding regional countries that are no longer eligible for concessionary loans and other forms of preferential treatment, St Lucia’s Prime Minister Allan Chastanet said on Friday. Read more

INTERNATIONAL

We’ve got the A-Team of talks, says Liam Fox

Express UK: International Trade Secretary Liam Fox has hit back at claims his negotiators don’t have enough experience to strike deals with the US and other countries post-Brexit, describing them as the “A-Team”. Read more

South Africa committed to enhancing Intra-African trade

allAfrica: President Jacob Zuma says South Africa remains committed to boosting intra-African trade, which will be equitably beneficial for all participating countries. Read more

Mexico, Canada pledge trade unity as NAFTA negotiations continue

The Hill: Mexico and Canada are vowing to continue work on the North American Free Trade Agreement (NAFTA) after an unproductive fourth round of negotiations in Washington. Read more

Japan exasperated by Trump’s trade policies

Politico: Japanese officials are expressing growing frustration with the Trump administration’s economic policies, vowing to continue striking trade deals with other countries that undercut U.S. agricultural exports rather than seek a new trade agreement with the United States. Read more

Turkey, Indonesia agree to trade talks

Anadolu Agency: Indonesian and Turkish governments on Thursday agreed to start negotiations on the Comprehensive Economic Partnership Agreement (CEPA) in November in an attempt to further strengthen economic cooperation between the two countries. Read more

Pacific Trade Advances without the US

Wall Street Journal: The Trans-Pacific Partnership trade pact is regaining momentum despite the Trump Administration’s January decision to withdraw. Representatives of the remaining 11 TPP members met last month in Japan to push for ratification as early as November in the hope that Washington will rejoin. Read more

UK and EU formally inform of post-Brexit tariff quota plan

The Guardian: Britain and the EU have formally informed members of the World Trade Organisation how they plan to split up the EU’s tariff quotas and farm subsidies after Brexit in a plan already rejected by the White House. Read more

WTO DG Azevedo tells ministers more commitment is needed to deliver success at MC11

WTO: At an informal ministerial gathering in Marrakesh on 9-10 October, hosted by Morocco and Argentina, Director-General Roberto Azevêdo told ministers that there were some promising issues on the table, but in all areas there remains a long way to go in order to deliver a successful outcome at the 11th Ministerial Conference in Buenos Aires in December. Read more

Qatar escalates UAE trade dispute

Reuters: Qatar has asked the World Trade Organization to set up a dispute panel to adjudicate on its row with the United Arab Emirates, Qatar said in a document published by the WTO on Thursday, escalating a trade complaint it lodged with the WTO in July. Read more

India and EU to look at ways to restart trade pact talks

The Economic Times: India and the European Union plan to take stock of the proposed free trade agreement negotiations next month and explore ways to put in place a framework to resume the stalled talks. Read more

Economist sees merit in Pacific trade deal (PACER Plus)

Radio New Zealand: An economist says the PACER Plus trade agreement still has benefits for smaller Pacific states, despite two of the region’s bigger economies not signing up to the deal. Read more

Pangolin trade forces Ghana to look at new wildlife laws

Sunday Times: Ghana is facing calls to update its laws on wildlife crime after fears the country has become a transit route for the illegal trade in pangolin scales. Read more

Asia-Pacific Services Trade needs more harmonised regulation

Asia Times: Preliminary research has found that it is in the best interest of Asia-Pacific services trade partners in emerging sectors to access the largest possible legal framework, and from within that framework raise the standards of membership in terms of domestic regulation harmonization. Read more

Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Caribbean leaders place spotlight on climate change at UNGA

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“To deny climate change is to deny a truth we have just lived” – The Honourable Roosevelt Skerrit, Prime Minister of the Commonwealth of Dominica

Alicia Nicholls

These powerful words uttered by Prime Minister of Dominica, The Honourable Roosevelt Skerrit were perhaps the most memorable from the United Nations’ General Assembly (UNGA) seventy-second session. It was against the tragic backdrop of the devastation inflicted by Hurricanes Irma and Maria on several Caribbean islands that successive Caribbean leaders made their addresses during the UNGA general debate, highlighting the urgency of the need to address climate change in a meaningful way.

There were many moving addresses, but the most impactful  was the address by Mr Skerrit, whose country was severely battered by the Category 5 power of Hurricane Maria just days before. Reiterating that he was “coming from the front line of the war on climate change”, Mr. Skerrit reminded participants of the horror which Tropical Storm Erika had inflicted on the island back in 2015 and the tragedy currently unfolding due to Hurricane Maria where the confirmed death toll is 27 and several other persons remain missing.

In the space of a couple of hours, Dominica’s iconic mountains, once resplendent in coats of green and through which flowed clear rivers, had turned brown with mud and rubble. Some 95% of homes have reportedly lost their roofs in some places. Every one of the Nature Isle’s 70,000 inhabitants has been affected in some way.

Proclaiming that “Eden is broken”, he declared that Dominica was faced with “an international humanitarian emergency”. A fortnight before Maria hit Dominica, Barbuda, the smaller of the two main islands of the country of Antigua & Barbuda, was hit by Category 5 Hurricane Irma, leading to a complete evacuation of the entire island after the crisis. Hurricane Irma also did not spare Cuba or the island of St. Martin, split between the Kingdom of the Netherlands and the Republic of France.

But besides the human and infrastructural losses, the economic toll will be equally enduring for those countries affected. A recent report estimates that Hurricane Irma caused $45 billion in damage in the Caribbean, with at least $30 billion in Puerto Rico.   With Maria, this toll will be expected to rise. A rapid damage and assessment had found that Tropical Storm Erika in 2015 had inflicted loss and damage on Dominica of US$483 million, equivalent to 90% of the island’s GDP. Hurricane Maria was much worse.

While climate change is not the cause of hurricanes, warmer waters in the Atlantic is believed by scientists to be the cause of stronger, more powerful hurricanes during this hurricane season. Hurricane Irma and Maria both rapidly developed into Category 5 hurricanes and the back to back pummeling of several Caribbean islands by two Category 5 hurricanes in such a short space of time is certainly not an everyday occurence, but one which may become a more frequent reality as global temperatures increase.

It is these realities which led Caribbean countries and other Small Island Developing States (SIDS) to be at the forefront of climate change negotiations which eventually led to the historic Paris Agreement being signed in December, 2015. It is why the decision by US President Donald Trump to declare that the US, the world’s largest polluter, would be pulling out of the Paris Agreement was extremely unfortunate.

As Hurricane Harvey and Irma potently showed in the US states of Texas and Florida, wealthy nations like the US are not immune to the more deadly effects of climate change. However, Caribbean countries, like all SIDS, are poorly equipped, both geographically and economically, to confront these disasters. Their fragile economies are dependent on industries which are among the first economic victims of storm devastation, tourism being the clearest example.

Moreover, their generally high  GDP per capita and “middle income” designation makes most concessionary loans and certain types of development aid beyond their reach due to outdated notions that GDP per capita is a good measure of wealth for countries. This point was raised in the address by Minister of Foreign Affairs and Foreign Trade of Barbados, Senator the Honourable Maxine McClean. Barbados was spared the devastation of both Hurricanes Irma and Maria and has been among the forefront of relief efforts in Dominica.

As was eloquently put in a recent World Bank blog, hurricanes can seriously turn back the developmental clock. This is certainly the case with Dominica which was still in many ways recovering from Tropical Storm Erika and will face a much longer recovery following Hurricane Maria. It is also the case with the US territories of Puerto Rico and the US Virgin Islands which are also facing tremendous human suffering after being pounded by both Irma and Maria. Puerto Rico’s economy was already fragile due to the huge debt crisis being faced and is now faced with many places without drinking water or electricity.

Platitudes and best endeavour promises do little to allay the reality that there is little time left to reverse the damage which has been done and reverse course towards more severe temperature increases. The Paris Agreement was an important step but there needs to be stronger commitment, ambition and meaningful action by all nations, especially those which are the most responsible for atmospheric pollution, to take steps to meet and go beyond the greenhouse gas emission reduction targets they set for themselves.

There also needs to be greater support for SIDS which bear a disproportionate brunt of the consequences. The issue of climate finance was raised by Prime Minister Gaston Browne of Antigua & Barbuda, who mentioned debt swaps as a possible option, and the need for greater finance for building resilience, as well as reminded participants of the economic vulnerability of countries which were faced with high debt, large trade deficits and small, undeveloped financial markets.

As Prime Minister of Dominica, Mr. Skerrit rightly stated, “we need action and we need it now”.

Mr. Skerrit’s full speech may be viewed here.

The CTLD Blog extends our heartfelt sympathy to all our Caribbean brothers and sisters affected by the devastation caused by Hurricane Irma and Maria.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

Caribbean Trade and Development Digest – September 24-October 1, 2017

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Source: Pixabay

We’re back! Welcome to the Caribbean Trade and Development Digest for the week of September 24-October 1, 2017! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL NEWS

Online plaforms launched to promote regional trade, business

St Kitts & Nevis Observer: The Caribbean community’s development of a single market and economy has been given a boost with the launch of four new online platforms aimed at promoting trade and improving the ease of doing business. Read more

Services an untapped growth sector

Jamaica Information Service: Head of the Trade Agreements Implementation Unit in the Ministry of Foreign Affairs and Foreign Trade, Symone Betton-Nayo, says the services sector remains an untapped area that offers tremendous opportunity for Jamaica’s economic growth and development. Read more

INTERNATIONAL NEWS

WTO Chief Warns of Risks to Trade Peace

Financial Times: The head of the World Trade Organization has warned that the Trump administration’s blocking of the appointment of new judges to hear international disputes risks undermining a system that has kept trade wars at bay for more than two decades. Read more

Interview: Pacific Alliance tackles non-tariff trade barriers

Xinhua: Latin America’s Pacific Alliance is looking to do away with non-tariff obstacles to trade between its members Chile, Colombia, Mexico and Peru, according to a top Peruvian businessman. Read more

Cross-border rail links: the spark to ignite intra-African trade?

International Railway Journal: Trade between African nations is considered one of the continent’s great untapped economic opportunities, but poor cross-border connectivity continues to hinder growth. Keith Barrow reports from Cape Town on the potential role for rail in unleashing intra-African trade. Read more

Philippines revives plan to join Trans-Pacific Partnership

Philstar Global: The Philippines is reviving its plan to join the Trans-Pacific Partnership (TPP) even as the mega-trade deal pushes through without the US, the Department of Trade and Industry said. Read more

Britain caught in cross fire of trade spat between Boeing and Bombadier

The Globe and Mail: Britain, caught in the crossfire of a damaging trade dispute between airplane makers Boeing Co. and Bombardier Inc., said on Sunday it would fight to protect thousands of jobs put at risk in Northern Ireland. Read more

Ciobo chases Mexico free-trade deal

The Australian: Trade Minister Steven Ciobo will lead a business delegation to ­Mexico to open new opportunities for Australian companies as free-trade talks progress for a new Latin American free-trading bloc.  Read more

The US made the global trade rules it claims are unfair

The South China Morning Post: If trade conflict erupts between China and the United States in the coming year, it will certainly not be for want of both sides trying to keep the peace. Read more

Ireland hopes to boost exports under Japan-EU Agreement

Japan Times: Ireland hopes to boost exports to Japan under an economic partnership pact the European Union and Japan reached a broad agreement on in July, Irish Deputy Prime Minister Frances Fitzgerald said in a recent interview. Read more

Zambia Commerce Minister saddened by low intra-African trade

Lusaka Times: MINISTER of Commerce, Industry and Trade Margaret Mwanakatwe has called for concerted efforts in boosting intra-Africa trade. Read more

Liked this issue? Read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Linking Puerto Rico’s Debt Crisis to the US and the WTO

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Namit Bafna & Shamy Ravishankar (Guest Contributors)

Puerto Rico, an island the US acquired in 1898 after the Spanish-American War, has lived in legal ambiguity with respect to its relationship with America and its statehood. It was recently declared bankrupt and has demanded that the US bail it out. This article explores if such a demand is well–founded, both in logic and in law.

A general reading of Puerto Rico’s history makes such a demand appear to be a prudent call. However, would this be desirable from the WTO law making perspective? Are bailouts allowed under WTO rules? We explore Puerto Rico’s dilemma through international relations and WTO law.

Understanding Puerto Rico’s Debt

Puerto Rico’s debt is a complex one with multiple types of debts; making it harder to negotiate agreements with various investors. Michael Williams, the Attorney who was handling Puerto Rico’s case states that its $123 billion debt is a consequence of years of economic stagnation and bad policy according to writers like Thomas Heath of the Washington Post. There is a serious need for debt restructuring, with investments needed for upgrading the island’s infrastructure (water works, waste management, and electric supply) as well as in boosting the economy.

Investors bought bonds from one of the eighteen authorised Governmental Agencies under the belief that the mainland Government would do everything necessary to prevent such an awful bailout situation from happening. However, the authorised agencies missed payments to the investors. Its cumulative bond debt is $74 billion. Even with an Oversight Board and PROMESA (Puerto Rico Oversight & Economic Sustainability Act of 2015-2016), it remains unclear how a wholescale economic turnaround can be initiated, with not only settling claims with investors (who will undoubtedly require fees for the Government’s defaulting on payments), but also improving the economy. Puerto Rico also requires funding for its pension commitments ($40 billion debt) and for MEDICAID, so that its social security obligations can also be carried out.

The Island has had a terrible recession since 2006, which has only been worsened by questionable policies of its previous Governments by borrowing more and thereby putting the island into greater debt. In addition to this, the current Government’s negotiation attempts with the aforementioned investors have not helped the situation by producing any concessions in the repayment of money owed to these creditors.

At this juncture, it is unfortunate to note that Puerto Rico has been knocking on Washington’s doors for over two years now, requesting more involvement from the mainland. It has been involved in Congressional Committee hearings and submissions before the United States Supreme Court. This invites the question: If any, what is the extent of Washington’s obligations to Puerto Rico, and in particular to this debt crisis? To ascertain this, we must go back in time and establish the exact nature of their relationship.

The US & Puerto Rico’s Relationship

The United States of America (US) has several categories of land holdings that it acquired over time, none of which are considered “Federal States”. These categories include territories (Guam, American Samoa, and US Virgin Islands), Possessions (which includes Baker, Howland, Midway, Wake, Palmyra, Kingman Reef, Jarvis and Johnston, that are all islands), and finally land holdings that are a Commonwealth (Northern Mariana Islands and Puerto Rico). It is to be noted that the Commonwealth category of land holdings are “insular political communities” that have affiliations with the mainland Government of the US. They are above territories in prestige and status but below the level of states. The Possessions and Territories have low levels of political and legal power on account of their fluctuating populations and not desiring self-determination. An another interesting nuance is the fact that the Commonwealth category of nations works with the US Congress and has an established political system that works for both the Congress and the Commonwealth land holding. However where the territories are concerned, the US Congress as more power to impose measures and in effect rule over the populations on the given territory. Citizens of the territories also cannot vote for the members of the Congress.

Over time the offshore territory policy of the US has varied and has even come before the US Supreme Court. In one case (Puerto Rico v. Sanchez) which went into the question of whether or not double jeopardy was applicable to Puerto Rico, the Judges of the Supreme Court had some interesting ideas of what Puerto Rico really was. If it was considered a Federal State then double jeopardy would not apply because federal proceedings could not disallow a state government to try a person for the same crime. If it wasn’t a Federal State then double jeopardy would disallow the person from being tried twice for the same crime (once by the US and once by Puerto Rico). This is because double jeopardy in the US does not apply where the person is being tried by “separate sovereigns” which in this case would be the State Court and the Federal Court. The counsellor for Puerto Rico suggested that it be given “Semi-sovereign status” so as to avoid the political implications of calling it a sovereign and thereby the 51st Federal State of the US, while also ensuring that Puerto Rico would also be able to prosecute Sanchez. Justice Kennedy then sought clarification on whether this would be an “interim sovereignty”? In the end, however, the Supreme Court held that the sources of power for itself and for the Court in Puerto Rico were the US Constitution because Puerto Rico was not a State and therefore the double jeopardy principle did not apply. This meant that the Court in Puerto Rico could not also prosecute Sanchez.

This reasoning is the strongest for the US Congress to allow the bailing out of Puerto Rico. It has had many occasions to either grant freedom to Puerto Rico or to make it the 51st federal state, as the US Constitution empowers the Congress to deal with matters of allowing a new state to be a part of the federation [Article IV. Section 3. Clause 1]. Given the fact that the US has both promised the United Nations to respect Puerto Rico’s sovereignty in 1953 (after allowing Puerto Rico’s Constitution to come into force in 1952), but also never fully allowed it to be a free independent nation, it would suggest that the US wants continued association with Puerto Rico. The fact that on several occasions, the US Government has rejected even the commonwealth status of Puerto Rico, deeming it as merely a territory, also points towards the same conclusion. The US wants these “land holdings” because it clearly benefits from the culture, natural resources and of course the population, who have served in the US military forces. That being said, the US Government does not want to give it full power that a State has. Regarding the bankruptcy bailout, the current US Administration has said it would not extend a helping hand, to what is undoubtedly (based on facts and legal precedent), a US problem.

The US policy on its offshore holdings seems to be one of granting those populations a “second class citizenship” status. It must be noted that when the US conceived the idea of a commonwealth, it was used to mean that the path to self-determination was automatic. This, however, has not taken place for Puerto Rico. Could this be a new twist to an already floundering and ever changing US policy on its offshore land holdings? Could this be the impetus necessary for the Puerto Ricans to demand freedom over their own affairs and formation of a new country that is divorced from the US?

The WTO perspective!

May be yes! But an underlying problem with bailouts would be that it may not be allowed under the WTO norms. Though bailouts are not anything new and the 2008 financial crisis triggered a few bailouts, every forthcoming bankruptcy should push for a clearer stance of the WTO on whether such bailouts would be considered as a subsidy and thus prohibited under SCM? Is it trade distortive under GATS? Is it time to introduce special WTO rules to deal with economic crises; making state actions non-vulnerable from WTO consequences?

The WTO has a well drafted subsidy discipline under the SCM Agreement. Any financial contribution which provides some benefits to an enterprise or an industry would result in a subsidy. Bailouts being sponsored from public money may attract provisions of GATS as they may provide benefit to the bank and its dependent (read “whole economy” of a major bank). As financing of banks would ultimately assist manufacturers, exporters and other players; they may affect other trading partners by creating artificial competitive processes.

However, as banks provide services, a bigger case forms under the GATS; for affecting competition in banking & financial services and making market competitive artificially. This may violate GATS’ obligation of National Treatment, Most Favoured Nation and Anti–Competitive provisions.

Despite its widespread use as a tool for economic reconstruction, no member state of the WTO has challenged bailouts at the WTO. But even if one appears in future, would it be desirable? As financial crises are unavoidable and it is practically impossible to pin down fault to any one entity, group of entities or even a state – bailouts are inevitable. They are required not just to save the bank but the whole economy. Thus, desirability of an “economic crisis exception” in the SCM and/or GATS should be put on table for member states and WTO expert committees before we witness another Puerto Rico-like situation in some other part of the world.

Conclusion

It is unfortunate that today, much after colonialism and colonialist tendencies have lost international relevance, that Puerto Rico’s relationship with the US is still not well-defined in law. However, for the purpose of alleviating this crisis, this article firmly backs considering Puerto Rico to be an integral part of the US; although it may not be necessary to use the terminology of “federal state”. Puerto Rico must be treated for all intents and purposes as a federal state, that entitles them to federal support and involvement, as was granted when Detroit required an $18 million debt restructuring in 2013. This is because, the US still claims Puerto Rico as a land holding, and the US Congress is still empowered under the US Constitution to manage the same. It may have given Puerto Rico some degree of sovereignty but the fact is that the US still has not granted it independence. By the very fact of this lack of independence from US policies and control, Puerto Rico has a right to seek and get aid from the Federal government.

Even if Bankruptcy is declared and the Federal Government pumps money into the Commonwealth, the question of its legality from WTO perspective still remains unresolved. Nevertheless, the bigger question is would bailouts even be challenged at the WTO? As bailouts are used by every member state to safeguard its economy from financial crisis, it is unlikely that it they will be challenged at the WTO, much like the fossil fuel subsidies.

Namit Bafna is a Corporate Lawyer working in Bangalore. His area of interest includes derivatives & trade law. 

Shamy Ravishankar is a 2015 Felix Scholar, now working as a Human Rights Lawyer. Her areas of interest include environmental law, public international law and of course Human Rights Law. Follow her on twitter: @shamy27 or on her blog: https://theworldweknowsite.wordpress.com/

References:

  1. Mark Joseph Stern, Second-Class Sovereignty, Slate (14 Jan., 2016), available at: http://www.slate.com/articles/news_and_politics/supreme_court_dispatches/2016/01/the_supreme_court_considers_puerto_rico_s_sovereignty_in_sanchez_valle.html
  2. Puerto Rico v. Sanchez, https://www.oyez.org/cases/2015/15-108
  3. Puerto Rico Report, The Relationship Between Puerto Rico and the U.S. (27 Feb 2016), available at: http://www.puertoricoreport.com/relationship-puerto-rico-u-s/#.WSAl_uuGPcd
  4. Thomas Heath & Tory Newmyer, Puerto Rico, with $73 billion in debt, forced toward bankruptcy, The Washington Post (3 May 2017), available at: https://www.washingtonpost.com/business/economy/puerto-rico-with-73-billion-in-debt-forced-toward-bankruptcy/2017/05/03/92e39d76-3020-11e7-9534
  5. Jaemin Lee, Beneath the Tip of the Iceberg – Global Financial Crisis, Bank Bailouts and the SCM Agreement, 10 Asian Journal of WTO & International Health Law and Policy (2015)

Belize undergoes third WTO Trade Policy Review

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Photo credit: Alicia Nicholls 2016

Alicia Nicholls

Belize underwent its third World Trade Organisation (WTO) mandated Trade Policy Review over the period April 24th and 26th, 2017. Trade Policy Reviews are a mandatory exercise under the WTO’s Trade Policy Review Mechanism. Each WTO member country’s national trade and other trade-related policies are peer-reviewed by the Trade Policy Review Body (the WTO General Council acting under special rules and procedures).

The frequency of the reviews depends on the country’s share of world trade. The purpose of the trade policy reviews is to help to ensure transparency of member countries’ trade policies. Belize has previously undergone reviews in 2010 and 2004.

Some key findings from Belize’s 2017 review

These findings were taken from the WTO Secretariat Report and the Chairman’s concluding remarks.

The Report noted that several issues had affected Belize’s economy during the review period, including the decline in oil prices, disease outbreaks affecting its agriculture sector and the impact from the loss of correspondent banking relationships due to the de-risking practices of major global banks.

Areas of praise

Members praised Belize for the following:

 

  • Its diversification into tourism which is now the major driver of the country’s economy, and the adoption of the country’s first National Trade Policy Framework.
  • Belize’s participation in the WTO. Some members also suggested that the country establish a permanent mission in Geneva.
  • Belize was commended  for being among the first Members to ratify the Trade Facilitation Agreement and for having notified its Category A commitments.  Belize also recently established a National Committee on Trade Facilitation
  • Members commended Belize’s efforts to modernize its trade regime and customs procedures.
  • Reduction by half of the number of products subject to import licensing, but some members noted that this was followed by tariffication, resulting in some applied MFN tariffs exceeding their bound rates.
  • Noting Belize’s membership of the Caribbean Community (CARICOM), Members encouraged Belize to continue engagement in regional integration and trade liberalization schemes.
  • Belize was commended for its acceptance of the Protocol amending the TRIPS Agreement; while some Members encouraged Belize to join the WIPO treaties.
  • The establishment of Belize’s first Internet Exchange Point to reduce the costs of local internet traffic.
  • Members acknowledged the recent reforms to Belize’s financial services regulatory framework.
  • Some Members welcomed Belize’s efforts to improve its air transport infrastructure and air links, and encouraged Belize to replicate such efforts to enhance land and maritime transport.

Areas of concern

  • Members, however, were concerned that Belize had not submitted notifications in a number of areas, and urged for compliance with the WTO requirements.
  • Several Members highlighted Belize’s three incentive programmes granting export subsidies which should have been eliminated by 31 December 2015. However, they acknowledged Belize’s ongoing efforts to amend the relevant legislation.

As noted by the Chairman, Belize was commended for providing prompt and helpful answers to all written questions submitted in advance by members, as well as to all that came after the deadline.

Belize is the fourth WTO member country to undergo review so far for the year, following Sierra Leone, Japan and Mexico. The other CARICOM member state to be reviewed this year is Jamaica which will undergo its review on September 13 & 15.

The documents from Belize’s review, including the full WTO Secretariat Report and the Chairman’s Concluding Statement, may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Caribbean Trade & Development Digest – April 23-29, 2017

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Welcome to the Caribbean Trade and Development Digest for the week of April 23-29, 2017! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World.

We do apologise for the lack of a Digest for the past two weeks due to my travelling. It has been an interesting two weeks in world trade, with the US imposing tariffs on Canadian softwood lumber imports and the EU releasing its Guidelines for the Brexit Negotiations with the UK pursuant to Article 50. On the home front, Belize has concluded its third World Trade Organisation (WTO) Trade Policy Review. And that’s just the tip of the iceberg! We hope you enjoy this edition.

REGIONAL NEWS

Belize has concluded its third WTO trade policy review

WTO: The third review of the trade policies and practices of Belize takes place on 24 and 26 April 2017. The basis for the review is a report by the WTO Secretariat and a report by the Government of Belize. Read more

US and region deepen security ties

Nation News: The United States has pledged its commitment to deepening its cooperation with the Caribbean region to combat all threats. Read more

Barbados Hotel occupancies drop during the first quarter

BarbadosToday: Against the backdrop of a fall in hotel occupancies and weak returns on hotel room rates during the first quarter of this year, Chairman of the Barbados Hotel and Tourism Association (BHTA) Roseanne Myers Wednesday disclosed that travel agents from source markets were reporting that some repeat visitors were opting not to travel in winter because they were waiting for “when the rates are a little better”. Read more

Hopes for Caribbean Trade Boost

Business Authority: Local exporters, and their Caribbean counterparts, stand to benefit now that a major international trade agreement has come into force.  Read more

Barbados records significant rum trade with Europe

Jamaica Observer: Barbados has exported BDS$89.9 million (US$44.95 million) in rum products to the European Union over a four year period, Commerce Minister Donville Inniss has said. Read more

Barbadian Rum producers fear results of French election

BarbadosToday: Barbadian rum producers are keeping a close eye on the French presidential run-off election scheduled for May 7, fearing the results could hurt the local industry. Read more

Gopee-Scoon talks trade with local high commissioner and ambassador

Loop Trinidad: Trade and Industry Minister Paula Gopee-Scoon met with the High Commissioner-designate to the United Kingdom Orville London and Ambassador-designate to Costa Rica Tracey Davidson –Celestine on Wednesday. Read more

Sector leader sees improved trade relations with Trinidad & Tobago

Jamaica Gleaner: President of the Jamaica Manufacturers’ Association (JMA) Metry Seaga says his organisation has received fewer complaints from local manufacturers about unfair trade practices by their Trinidadian counterparts. Read more

We will do everything to keep GuySuCo alive – says Granger

Stabroek: President David Granger said today that his government will do everything possible to keep the sugar industry alive. Read more

Guyana considers Suriname’s gold export model

Demerara Waves: Guyana’s recent foreign currency shortage appears to have caused government to consider adopting Suriname’s model to ensure that more earnings from gold sales goes directly to the national treasury. Read more

Granger names three sugar estates to be retained

Demerara Waves: President David Granger has named at least three sugar estates that will be retained as part of a restructured Guyana Sugar Corporation. Read more

INTERNATIONAL NEWS

European Council Releases (Article 50) Guidelines

EU: The European Council has released its guidelines for the upcoming Article 50 Brexit negotiations with the UK. Read more

Africa and China trade is booming

BusinessReport: China remained Africa’s biggest trading partner as bilateral economic relations boomed, said Jiang Zengwei, head of the China Council for the Promotion of International Trade. Read more

US imposing 20 percent tariff on Canadian softwood lumber

CNBC: U.S. Commerce Secretary Wilbur Ross said on Monday his agency will impose new anti-subsidy tariffs averaging 20 percent on Canadian softwood lumber imports, a move that escalates a long-running trade dispute between the two countries. Read more

US lumber tariffs hit B.C. manufacturers hard

CBC Canada: New softwood lumber tariffs being imposed by the U.S. are already cutting deep into B.C. businesses. Read more

DG Azevedo: Global trade challenges are best tackled through the multilateral system

WTO: The WTO should seek to bolster global economic cooperation in order to leave a strong and well-functioning trading system for future generations, said Director-General Roberto Azevêdo. Read more

Downgrades depress South African exports and trade

BusinessReport: Recent credit downgrades by Standard and Poor’s (S&P) and Fitch have put more pressure on South African exports and international trade. Read more

WTO issues panel report on Chinese cellulose pulp duties

WTO: On 25 April 2017 the WTO issued the panel report in the case brought by Canada in “China – Anti-Dumping Measures on Imports of Cellulose Pulp from Canada” (DS483). Read more

Arbitrator issues decision in Mexico-US tuna dispute

WTO: On 25 April, a WTO arbitrator issued a decision on the level of retaliation that Mexico can request in its dispute with the United States over US “dolphin safe” labelling requirements for tuna products (DS381). Read more

ACP: One billion people to speak to Europe with one voice

The Southern Times: Seventy-nine countries from Africa, the Caribbean and the Pacific, which are home to around one billion people, will speak with one voice as they prepare to negotiate a major partnership agreement with the European Union (500 million inhabitants) in May. Read more

EU tells May: Give our citizens their rights or no trade talks

The Guardian: The EU has called on Theresa May to provide immediate “serious and real” guarantees to its citizens living in Britain. Read more

Some important clarifications on the EPA

The Guardian: All of the ECOWAS countries, apart from Nigeria and the Gambia, have to date signed the EU-West Africa Economic Partnership Agreement (EPA). The EPA may enter into force only if all ECOWAS member states sign and if at least two thirds ratify the agreement. Read more

Examining Trump’s record on trade

NPR: When the president speaks the world listens. Adam Behsudi of Politico talks with NPR’s Scott Simon about how Donald Trump’s outspoken commentary is affecting international trade with the U.S. Read more

Trump on trade: Scrutinise NAFTA, other deals for abuses

Politico: President Donald Trump’s latest executive order on trade calls for review of all U.S. free trade agreements — including NAFTA and the World Trade Organization pact — and possible renegotiation of any deal to eliminate “violations and abuses,” Commerce Secretary Wilbur Ross said Friday. Read more

Difficult trade-offs necessary for RCEP to be worthwhile: PM Lee Hsien Loong

Strait Times: Asean is keen to conclude a region-wide trade agreement with its key partners, but the pact must have substance to be worthwhile, said Prime Minister Lee Hsien Loong on Saturday (April 29). Read more

Southeast Asia prioritises trade pact including China

Channel News Asia: Southeast Asian countries will prioritise creating an Asia-focused trade pact this year that includes China, India and Japan, while trade issues with the United States will be put on the back burner, the Philippine trade minister said. Read more

Mwagiru: Durban forum expected to focus on intra-Africa trade

Daily Nation: Wary of the perils of depending on reluctant donors for its survival, Africa is on a quiet quest for self-reliance and intra-regional cooperation. These are among the themes that will feature at the three-day World Economic Forum that opens in Durban, South Africa, on Wednesday. Read more

CTLD NEWS

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Alicia Nicholls presenting her paper at the SALISES Conference, Trinidad.

Alicia Nicholls presented a paper at the 18th Annual SALISES Conference 2017, a major academic conference organised annually by the University of the West Indies (UWI). The Conference was hosted this year by the Trinidad (St. Augustine Campus) at the Hyatt-Regency Hotel in Port of Spain, Trinidad & Tobago.

Alicia’s paper is a work in progress and is entitled “Economic Citizenship and Freedom of Movement of the Caribbean Community National: An Irreconcilable Tension?”.

The theme of this year’s conference was “Small Nations, Dislocations, Transformations: Sustainable Development in SIDS” and was held over the period April 26-28, 2017.

For more CTLD News see News & Announcements

NEW ON CTLD BLOG

French Election 2017: What’s at stake for the world and the Caribbean?

The Trump Presidency – Implications and Opportunities for Caribbean IFCs

PM May calls snap election: Pros and Cons

Liked this issue? Read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Why the proposed US fee on remittance outflows to LAC makes no sense

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Alicia Nicholls

The cost of sending remittances from the US to some Latin American and Caribbean countries and dependencies will increase should HR 1813 introduced in the United States (US) House of Representatives on March 30, 2017, be passed. The proposed Bill entitled the “Border Wall Funding Act of 2017”, would amend the Electronic Fund Transfer Act by imposing a two percent fee on the US dollar value of remittances (before any remittance transfer fees) on the countries listed. The bill is sponsored by Representative Mike Rogers, a Republican from Alabama’s third district.

One of President Donald Trump’s most controversial campaign promises was to build a wall along the US’ southern border, which he claimed would be paid for by the Government of Mexico, to deter illegal immigration. The Government of Mexico has consistently and strongly denied that its taxpayers would be paying for the wall. As a result Republican lawmakers have been seeking ways to fund the wall without relying on the US taxpayer. Instead, should this bill become law, it will raise money for the wall on the backs of hardworking Caribbean and Latin American immigrants living in the US, some of which are actually US citizens.

Here are some few reasons why I, respectfully, believe the proposed fee makes no sense:

  1. The wall will still be paid for by some US taxpayers

The two percent fee is to be imposed on the sender of any remittances sent to recipients in the countries identified. Ironically, it would still be funded by some US taxpayers as some remittance senders are either US-born or have acquired US citizenship or have greencard status. Data from the 2015 American Community Survey show that there are an estimated 4 million Caribbean-born immigrants living in the US. Some 58.4% of those became naturalised US citizens, while 41.6% are not yet US citizens according to US Census Bureau 2016 data.

2. The list of ‘foreign countries’ excludes some of the largest sources of illegal immigrants to the US

The affected  countries would be: Mexico, Guatemala, Belize, Cuba, the Cayman Islands, Haiti, the Dominican Republic, the Bahamas, Turks and Caicos, Jamaica, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Aruba, Curacao, the British Virgin Islands, Anguilla, Antigua and Barbuda, Saint Kitts and Nevis, Montserrat, Guadeloupe, Dominica, Martinique, Saint Lucia, Saint Vincent and the Grenadines, Barbados, Grenada, Guyana, Suriname, French Guiana, Ecuador, Peru, Brazil, Bolivia, Chile, Paraguay, Uruguay, and Argentina.

This arbitrarily drawn up list raises two main questions. (1) Why were Caribbean countries included in this list? The Caribbean sub-region as a whole only accounts for 2% of the illegal immigrant population in the US, according to Migration Policy Institute analyses. (2) Why were only countries from the Americas targeted when several Asian countries, like China for example, rank among the top sources of illegal immigrants to the US?

3. It is unlikely to raise enough money to pay for the border wall

It is unlikely that the two percent fee will raise enough money to pay for a wall which is estimated by a leaked memo from the US Department of Homeland Security to cost some 21.6 billion dollars, particularly if the monies will be raised mainly on the back of remittances sent to small Central American and Caribbean countries. Moreover, despite the threat of penalties, people will inevitably find ways to evade the fee by increasing their use of informal channels for sending remittances.

4. It could destabilise the US’ backyard which is contrary to US strategic homeland security interests.

With many of the region’s economies already threatened by de-risking, elevated debt levels and high unemployment, this proposed Bill is another worrying development. Although I do not believe the fee will stop the US-based Caribbean diaspora from remitting money to their loved ones, it may make it more difficult for them to do so as frequently as they normally do, which could have social and economic implications for the most remittance-dependent economies.

The Caribbean diaspora community in the US is an important source of remittance flows to the Region. According to a World Bank Migration and Development Brief released this month, stronger US job growth and a stronger US dollar were major reasons why the LAC Region was the only region to register an increase (6.9 percent) in remittance flows, with a total of $73 billion inflows in 2016. This is in contrast to the global landscape where remittances to developing countries in 2016 declined for the second consecutive year in a row.

Haiti and Honduras are the two most remittance dependent countries in the LAC Region and rank among the most remittance-dependent economies in the world, among countries for which data are available. Data provided in the previously mentioned World Bank Report show that in 2016 remittance inflows were equivalent to 27.8% of GDP for Haiti, 18.4% of GDP for Honduras, 17.6% of GDP for Jamaica, 17.2% of GDP for El Salvador,  and 8.6% of GDP for Guyana. For Belize it was 5% and Dominica, 4.6% of GDP.

A 2010 Report released by the Bank of Jamaica entitled “Remittances to Jamaica: Findings from a National Survey of Remittance Recipients” revealed that “more than half of the remittances sent back to Jamaica come from the US” and found that “remittances are an essential source of financing to many Jamaican recipients, which is used to supplement household income for necessities such as food, utilities and education”.

Successive US administrations have generally recognised that an economically and socially stable Caribbean region was in the US’ strategic homeland security interests. This is why the US government through its various economic and military aid programmes has poured millions of dollars into assisting Caribbean countries on issues such as crime, border security, among other things.

Besides the hardship that could be caused at the micro-level, a reduction in remittance inflows due to higher costs could have poverty alleviation and crime reduction implications and could have a destabilising effect on those economies and societies which are the most dependent on them. The same Bank of Jamaica report noted that “remittances to Jamaica have become an important source of foreign exchange and balance of payments support”.

Due to the paucity of official remittance data for many Caribbean countries, the importance of remittances to LAC economies is still underestimated and its micro and macro-economic importance to Caribbean economies is likely higher than currently measured.

How should we respond?

The bill has been referred to the House Subcommittee on Crime, Terrorism, Homeland Security and Investigations on April 21, 2017 and will need to be debated and passed by both chambers of Congress before being sent to the President for signature into law.

Latin American and Caribbean governments, along with their diplomatic representatives and the diaspora, should lobby against the passage of this bill by engaging in discussions with Congressional and other officials on the serious economic and social impact any potentially significant decline in remittance inflows could have on remittance-dependent countries in the Region, and the spin-off negative effect this could have on the US homeland.

To view the text of the proposed Bill, please see here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

French Election 2017: What’s at stake for the world and the Caribbean?

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Alicia Nicholls

The results of the first round of voting in the two-round French presidential elections are in! Pro-EU businessman Emmanuel Macron and far-right candidate Marine Le Pen are the two candidates who will face off in the second/final round of voting within a fortnight.

French presidential elections do not normally attract this much fanfare internationally, but the results of the first round of the 2017 race are interesting for two main reasons. The first is that there is a 50% chance that there could be a Le Pen presidency which would add to a growing string of political upsets globally. The second is that neither candidate is from the mainstream political parties in France, a firm rejection by the French people of the entrenched political establishment, not unlike what occurred in the US with the election of Donald Trump.

France has a two-ballot presidential election system which means that in the event of no one candidate winning over 50% of the votes in the first ballot, the two front-runners  have to face off against each other in a second ballot. As of the time of this article’s writing, Emmanuel Macron is estimated to have won this first run-off with  23.9% of the vote, while Ms. Le Pen came second with 21.4%, beating the other candidates.

France at the moment is facing lacklustre GDP growth, high unemployment, high debt and an increase in high-profile and deadly terrorist attacks, which means the anti-establishment, anti-business as usual mood comes as no surprise. Incumbent President, Francois Hollande, currently faces low approval ratings and has decided not to seek a second term.

The Two Candidates

While Macron and Le Pen are ‘outsiders’ from the political mainstream, the two candidates represent two diammetrically opposed worldviews. Emmanuel Macron is a former investment banker who has never held elected office, but had worked for Mr. Francois Hollande during the 2012 Presidential Election campaign. He also subsequently served as Minister of Economy, Industry and Digital Affairs under then Prime Minister Manuel Valls in 2014 until August 2016. Mr. Macron founded his own party En Marche!  in April 2016 which currently has 253,907 members, according to the Party’s official website. The centrist Mr. Macron is pro- Europe, socially liberal and believes that France’s prosperity can be ensured through pursuing pro-trade and outward-looking policies and through continued membership in the EU.

Marine Le Pen is a lawyer, a Member of the European Parliament since 2009 and the leader of the populist Front National, a far-right party which had been on the dark fringes of French politics until recently.  She is the daughter of Front National co-founder, Jean Marie Le Pen, a far-right ethno-nationalist.  She sought to distance herself from some of her father’s most extreme views as she sought to broaden the Party’s appeal, and succeeded in having him ousted from the party. Ms. Le Pen, however, has strongly anti-immigrant, anti-EU views and has expressed enthusiastic support of both Brexit in the UK and the election of Donald Trump in the US.

The polarity in the views of the two candidates means that the election of either will have completely opposite global implications.

What’s at stake with the French presidential election?

Although polls are showing a Macron victory, Le Pen still has a chance of winning the final run-off on May 7. A Le Pen victory on May 7th would be the continuation of a nationalist, inward-looking turn in advanced western economies, with both economic and geopolitical implications. Domestically, she has indicated her intention to pursue protectionist economic policies and champion anti-immigration reforms. She is anti-globalisation and anti-free trade. She has vowed that she would pull France from the EU and the eurozone, and the North Atlantic Treaty Organisation (NATO). She has voiced her intention to strengthen relations with Russia and had forcefully condemned the EU decision to extend its sanctions on Russia until mid-2017.

In their forecasts for the global economy and world trade respectively, both the International Monetary Fund (IMF) and the World Trade Organisation (WTO) have forecast higher growth rates but noted the vulnerability of the forecast growth to trade, monetary and other policies pursued by governments. IMF Managing Director, Christine Legarde (who is a former French Minister of Finance) has been reported as stating that a Le Pen presidency could lead to political and economic upheaval.

First, France is the 6th largest economy in the world. A founding member of the EU, it is also the eurozone’s second largest economy. A more isolationist France would impact on the global economy and have implications for western approaches to current global threats and a reshaping of global alliances. Moreover, a French withdrawal from the EU (termed ‘Frexit’), coming on the heels of the UK’s withdrawal from same, could plunge the EU into an existential crisis more so than Brexit would.

Any implications of the French election for the Caribbean?

Will there be any implications of a possible Le Pen presidency for the Caribbean? The specifics of Ms. Le Pen’s policies are still not fleshed out. However, a French withdrawal from the EU would reduce the amount of EU development assistance which the region currently receives under the European Development Fund (EDF).

But what about trade? Thanks to the Economic Partnership Agreement (EPA) signed between the EU and CARIFORUM in 2008, the countries which make up CARIFORUM (CARICOM plus the Dominican Republic) currently enjoy preferential market access for their goods and services to the EU market, including to the French market (and to French Caribbean Outermost Regions, by extension).

However, should France leave the EU, it would no longer be a party to the EPA. On its own, the lack of preferential access to the French market would be unlikely to have any significant economic impact on the anglophone Caribbean trade-wise as the volume of trade between English-speaking Caribbean countries and metropolitan France is limited.

There are, however, small but growing trade links between some CARICOM countries) and the FCORs, which are Martinique, Guadeloupe and French Guiana. Martinique, for example, is one of the most important source markets for tourists to St. Lucia. While there are issues which have inhibited greater CARIFORUM trade with FCORs including the language barrier and the ‘octroi de mer’ (dock dues) charged on all imports into FCORs (despite the EPA), the FCORs are also seen as stepping stones for exporting to continental Europe using the EPA. A French withdrawal from the EU if Ms. Le Pen wins means the latter will not be possible.

It is the democratic right of the French populace to choose which of the two candidates is in their country’s best interests. However, given France’s economic and geopolitical importance globally, and the political upsets of late, the results of the final round on May 7 will reverberate far beyond its borders.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

The Trump Presidency – Implications and Opportunities for Caribbean IFCs

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Alicia Nicholls

On March 31, 2017 I was a panellist representing FRANHENDY ATTORNEYS at the Barbados International Business Association (BIBA) Barbados International Business Forum 2017 entitled “Is the Barbados International Business Sector Under Attack?” held at the Lloyd Erskine Sandiford Centre in Barbados.

I was on the second panel which discussed the topic “The Trump Presidency – Implications and Opportunities for IFCs“. My esteemed fellow panellists were Jeremy Stephen, Economist and UWI Lecturer, Lisa Cummins, Executive Director of UWIConsulting and Cadian Dummond, Attorney at Law. The discussion was expertly moderated by Melanie Jones, Partner at Lex Caribbean Attorneys-At-Law.

I spoke to the possible implications of the Trump Presidency in regards to de-risking, FATCA and visa restrictions.

For those who missed the panel discussion and have expressed interest in my remarks, please find a copy of same in powerpoint form here. Enjoy!

For more on past presentations I have done, please see news and announcements.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

 

PM May calls snap election: Pros and Cons

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Alicia Nicholls

United Kingdom (UK) Prime Minister, Theresa May, has today ‘reluctantly’ announced that Britons could be going to the polls in a general election on June 8, 2017, three years shy of the due date of May 2020.

The UK has a parliamentary system of government. Since 2011, parliamentary elections are fixed for every five years pursuant to the Fixed-Term Parliaments Act. However, early general parliamentary elections may be called before the five year period, inter alia, where two-thirds of the House of Commons (including vacant seats) vote in favour of same. In the UK parliamentary system (also known as the ‘Westminster System’) and in most British-inherited parliamentary systems like those in the Caribbean, the Prime Minister is not directly elected. In practice, though, it is the person who leads the party which wins the majority of seats in the House of Commons who becomes the Prime Minister.

The announcement of an early poll is surprising for two main reasons (1) it comes after months of denials by Mrs. May that she would be calling an early election, and (2) it also comes less than a month after the May Government made the UK’s notification under Article 50 of the Treaty on European Union (Lisbon Treaty) of its intention to withdraw from the EU.

Pros

So what are the upsides? Firstly, it is likely that in light of the disarray of the Jeremy Corbyn-led Labour Party, the Prime Minister is anticipating a stronger Conservative working majority in Parliament, reducing the likelihood of the final Brexit deal being voted against.

The Tories currently have a 17-seat working government majority in the House of Commons following the 2015 poll, which is a slim majority when one considers that there is a total of 650 seats in the House of Commons. After all, what Prime Minister would not want a more comfortable majority at home when facing difficult negotiations with the EU for the next (at least) two years? Prime Minister May said as much in her statement when she noted that “Division in Westminster will risk our ability to make a success of Brexit and it will cause damaging uncertainty and instability to the country”, and warned that “If we do not hold a general election now, [Opposition Party] political game-playing will continue.”

Polls already show a Tory sweep, but let us also remember polls had predicted a “No” win in the Brexit referendum.

Secondly, it should be recalled that Mrs. May became Prime Minister in July 2016 not through leading the party in a general election, but after then Prime Minister David Cameron resigned following his Brexit defeat.  If Mrs May leads the Conservative Party to victory in the June 8, 2017 poll, she would have:

(i) won a ‘direct mandate’ from the British people to pursue her own domestic agenda, which frees her from pursuing some of the policies promised by the then Cameron-led government.

(ii) This mandate, she would hope, would help quell the dissenting factions in her own party who disagree with her handling of Brexit thus far.

(ii) She would not be legally required to call another general election until June 2022, by which time the messiness of Brexit would be largely past (hopefully). Recall that Brexit negotiations could be extended up to 4 years, at which time the May Government would not wish to negotiating a final deal with the EU-27 while having to worry about an election at home which could be lost due to an unpopular final deal.

A third pro is likely economic. Although predictions of a British recession following the Brexit vote have not come to past, there is no telling what would happen to the British economy once the Brexit negotiations are underway. It makes more sense for Mrs. May to seek an election now than wait until things take a turn for the negative.

Cons

Firstly, on the flipside, calling a snap election after having made the Brexit notification and ahead of the negotiations with the Europeans risks adding even more uncertainty to an already uncertain political climate.

Secondly, although polls favour a Tory win, what happens if the polls are wrong and the Tories lose to an anti-Brexit Labour?  Or what if Labour and the Liberal Democrats expand their number of seats, further reducing the already slim Tory majority?

Thirdly, she risks dealing with ‘voter fatigue’.

Calling the election at this time is a risky move but one, which like all high risks, could have big rewards if the May-led Tories win and expand their mandate. In anticipation of a Tory win, markets took the news of the snap election quite enthusiastically. Sterling appreciated  against the US dollar to 1.26. However, it is also potentially a big gamble and the decision to hold the poll after triggering Article 50 is curious. It will be up to British voters to decide whether to reward or reject the gamble.

What is next?

When the House of Commons meets, they will need to deliberate and vote (as required under the Fixed-Term Parliaments Act) on whether they are in favour of an early election. A two-thirds majority will be needed. For his part, Labour leader Mr. Corbyn has supported the decision to go to the polls in his statement released on his official Facebook page following the Prime Minister’s announcement.

For Prime Minister May’s full statement, please see here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

IMF raises global GDP growth forecast but protectionist policies a threat

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Alicia Nicholls

“The sharp downtown in global trade in recent years is both a symptom of and a contributor to low growth“. – Making Trade an Engine of Growth for All (IMF, WTO, World Bank Report of April 2017)

Protectionism leading to trade warfare is a ‘salient threat’ to global economic growth, warned the International Monetary Fund (IMF) economists, not for the first time, in their recently released World Economic Outlook for April 2017.

The good news is that the Fund’s April outlook was much more upbeat than its January 2017 outlook. According to the Fund, the global economy is projected to expand by 3.5 percent in 2017, a modest increase from its 3.4 percent projection in its January 2017 outlook but greater than the 3.1 percent growth in 2016. The Fund has maintained its outlook for 2018 at 3.6 percent.

The not so good news, as already noted, is that the tenuous economic recovery remains vulnerable to several downside risks, including protectionism. Bear in mind as well that the global economy expanded on average 4.2 percent between 1999-2008, so the projected rate of growth is still below the pre-crisis rates of growth.

The Fund’s most recent WEO report comes on the heels of the release by the World Trade Organisation (WTO) of its trade growth forecast which projected some recovery in global trade growth to 2.4 percent in 2017. Most readers would remember that 2016 saw the slowest rate of global trade growth since the global economic and financial crisis which coincided with the slowest rate of global economic growth in 2016 since 2009.

As noted by the WTO in its press release, “the volume of world merchandise trade has tended to grow about 1.5 times faster than world output, although in the 1990s it grew more than twice as fast.” However, dampened trade volumes have been linked to a subdued global economy and global trade grew less than global economic growth in 2016. Although, the WTO’s projected rate of growth for 2017 signals a cautious recovery, the rate of merchandise trade growth is still much lower than pre-crisis merchandise trade growth and the forecast risk is higher due to both economic and policy uncertainty.

The IMF’s most recent WEO also follows a joint report released by that institution, the WTO and the World Bank entitled “Making Trade an Engine of Growth for All: The Case for Trade and for Policies to Facilitate Adjustment” in which it was stated, inter alia, that the role of trade in the global economy is ‘at a critical juncture’, and arguing that further trade integration was important for stimulating global growth.

At the same time, the IMF warned that protectionism could lead to trade warfare, citing several factors in mainly advanced economies which have seen greater political support for nationalist and protectionist policies. There is good reason for this concern, stemming from protectionist turns and mercantilist rhetoric emanating from political quarters in advanced economies, namely the US and Europe. Moreover, the communique from the March 2017 G-20 Finance Ministers’ Meeting in Germany  saw, for the first time, the exclusion of the pledge to “resist protectionism”. On the multilateral front, although the WTO’s Trade Facilitation Agreement has come into effect, there has been little progress otherwise on multilateral trade negotiations.

Trade is an important driver of global growth, and helped to propel global growth in the latter half of the 20th century. Trade has also played an important role in boosting competition, productivity and improving living standards and productivity. However, there has been dislocation as a result of free trade. In the case of developing countries, there has been the negative impact of competition from cheaper subsidised (particularly agricultural) imports from advanced countries on domestic industries which have higher production costs due to lack of economies of scale and lower technology use. An Oxfam report noted the  negative impact on Mexico’s corn industry following the introduction of the North American Free Trade Agreement (NAFTA).

While the cheaper imports benefit consumers through lower prices, they, however, can negatively impact domestic industries and jobs, and with implications for countries’ balance of trade, and in the case of the agricultural sector, food security. This is an issue which has been noted by developing countries and development economists for years but only seemed to gain mainstream discussion once the effects became more palpable in advanced economies, such as the US and Europe.

However, this is not to suggest that trade is undesirable or that the negatives outweigh the positives. Trade, as the IMF has rightly noted, is an important driver of the global economy. It does, suggest, however, that there needs to be greater consideration of the “social impact” of trade policies and of the need to make trade policies much more inclusive by ensuring that the most vulnerable to the negative fall-outs of trade, such as women and the poor, are protected through supporting policies and mechanisms. As such, domestic policies to assist with, and mitigate, these trade-related adjustments are important, a point made in the joint report by the IMF, WTO and World Bank.

Besides protectionism, the IMF also noted faster than expected interest rate hikes in the US, aggressive financial deregulation, financial tightening in emerging market economies, geopolitical tensions, inter alia, as among the inter-connected downside risks to global growth. Furthermore, the IMF emphasised the importance that countries’ policy choices will have on the global economic outlook and on reducing risks to this outlook.

To read the full IMF WEO April 2017 report, please visit here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

WTO Trade Forecast 2017: Cautiously Optimistic about trade growth recovery

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Alicia Nicholls

After decelerating considerably in 2016, world merchandise trade growth is expected to recover to 2.4% in 2017. This is according to the cautiously optimistic trade forecast released today by the World Trade Organisation (WTO).

According to the WTO, although global merchandise trade volumes have historically on average grown 1.5 times faster than global GDP, this ratio has slowed to 1:1 since the crisis of 2008. Last year’s merchandise trade growth of 1.3% was the slowest pace of trade growth since the world economic crisis of 2008 and was linked primarily to a weak global economy.

In his press conference remarks, Director-General of the WTO, Roberto Azevedo, explained that early indicators, such as the record increases in global container shipping throughput, the high levels of global export orders, and the expected recovery in world economic output, point to a recovery in global trade in 2017.

However, the WTO Chief also cautioned that this forecast assumes that governments pursue the right policy mix and that forecasts of an expected recovery in global GDP are accurate. The report noted that trade growth could be negatively affected by governments’ trade, monetary and fiscal policies.

Indeed, the Director-General’s remarks to this point perfectly sum this up as follows:

Overall, I think that while there are some reasons for cautious optimism, trade growth remains fragile and there are considerable risks to the downside. Much of the uncertainty around the outlook is of course political — and not only geopolitical. Part of this is driven by people’s concerns about the impact that trade can have.

Given the high levels of uncertainty which have increased the forecast risk factor, WTO economists have also given a growth range of between 1.8 and 3.6% for 2017.

Observing that trade does cause some dislocation, the WTO Director General cautioned governments against protectionism and highlighted that innovation, automation and new technologies, and not trade, were responsible for eighty percent of the loss of manufacturing jobs.

The WTO’s forecasts for 2018 are much more optimistic, with a growth forecast of between 2.1 and 4.0%

For further information, please see the WTO Director-General’s press conference remarks here and the WTO’s press release here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Caribbean Trade & Development Digest – April 2-8, 2017

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Source: Pixabay

Welcome to the Caribbean Trade and Development Digest for the week of April 2-8, 2017!  I am pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. 

 

REGIONAL NEWS

EPA Plan to be reset

Nation News: Barbados is resetting its implementation strategy of the Economic Partnership Agreement (EPA) with the European Union as Britain prepares to exit the EU. Read more

Trinidad pushes for shift to cleaner fuel

Caribbean360: The Trinidad and Tobago government has invested about $74 million in the first phase of a $295-million project to encourage more drivers to use Compressed Natural Gas (CNG), described by experts here as a preliminary step in the country’s transition to using more sustainable forms of energy. Read more

T&T Recession slows rum sales

Sunday Express: The ongoing recession is affecting local rum sales, the country’s largest legal rum manufacturer said in its results released yesterday on the Trinidad and Tobago Stock Exchange (TTSE). Read more

Trinidad & Tobago trade mission to Guyana

T&T Newsday: Come June 12 and 13 of this year, the Trinidad and Tobago Chamber of Industry and Commerce, in collaboration with the Georgetown Chamber of Commerce and Industry (GCCI) will embark upon a Trade Mission to Guyana, one of the most significant emerging economies in the region. Read more

CARICOM considers how to keep market access in tact after Brexit

Caribbean360: CARICOM has reportedly narrowed down the options it intends to pursue to prevent a break in market access in the United Kingdom due to the UK’s planned exit from the European Union (EU). Read more

Bahamas Trade Information Service Portal Launched
Eleutheran: The initiative is the first of its kind in The Bahamas and one of only a few Trade Information Portals in the Caribbean Region. Read more

Dominican Republic signs trade agreement with Cuba

Jamaica Observer: The Dominican Republic has signed a Partial Scope agreement with Cuba in an effort to boost economic, trade and cooperation between both countries. Read more

OECS needs a unified approach to development, says economist

Antigua Observer: The biggest impediment to growth of the economies of the Organisation of Eastern Caribbean States (OECS) is their small size and scale of production, and the lack of a unified regional approach to development. That’s the view of Dr Vanus James, economist, statistician and regional academic. Read more

Trump reinforces bond between Jamaica and the US

Jamaica Gleaner: United States President Donald Trump says he looks forward to working with the Jamaican Government on bilateral and regional issues. Read more

Jamaica saves $30 billion on oil imports

Jamaica Gleaner: Jamaica reduced its oil import bill by US$242 million ($30 billion) last year, which helped to slash the trade deficit by nearly nine per cent, according to new data from Statin. Read more

PM Launches 7th Biennial Diaspora Conference

JIS: The ‘Jamaica 55 Diaspora Conference’, which is organised by the Ministry of Foreign Affairs and Foreign Trade, will be held at the Jamaica Conference Centre, downtown Kingston, under the theme ‘Partnering for Growth’. Read more

INTERNATIONAL NEWS

WTO creates panel to decide on China, EU flap

The Star: The World Trade Organisation (WTO) set up on Monday a panel to examine the so-called “surrogate country” approach used by the European Union to calculate anti-dumping measures applied to Chinese exports, following a request from Beijing.
Read more
Rwanda: AfDB unveils US $450 million fund to promote export trade
AllAfrica: The African Development Bank (AfDB) has approved $450 million about (Rwf372 billion) trade finance facility for the African Export-Import Bank (Afreximbank). Read more

NAFTA Trade Growth Continues in January

American Shipper: Total cross-border trade between the US, Mexico and Canada jumped 6.7 percent in January 2017, the third straight month of year-over-year increases, according to the Department of Transportation’s Bureau of Transportation Statistics. Read more

Malaysian PM Najib Razak pushes for conclusion of free trade deal

Livemint: Malaysian Prime Minister Najib Razak on Monday called for the speedy conclusion of a free trade pact between the Association of Southeast Asian Nations (Asean) and six other countries including India, saying the regional partnership becomes all the more relevant after the US pulled out of the Trans-Pacific Partnership (TPP). Read more

European Parliament backs red lines resolution for Brexit negotiations

TheGuardian: The European parliament has overwhelmingly voted in favour of a tough negotiating stance towards the British government in the Brexit negotiations. Read more

Pacific looks to improve links with Asian economies

RNZ: Pacific economic ministers meeting in Suva have been looking at how the region can better engage with the growing Asian economies. Read more

South African Court allows domestic rhino horn trade

Environment News Service: South Africa’s Constitutional Court has overturned the current ban on domestic trade in rhino horn. As a result, the sale of rhino horn will be allowed to resume within the country’s borders, but not internationally. Read more

Trump’s NAFTA plans are more than a tweak, Mulroney says

TheGlobeandMail: Brian Mulroney says U.S. plans to renegotiate the North American free-trade agreement are shaping up to be more than a tweak.The former Progressive Conservative prime minister made the comments after briefing the Liberal cabinet committee on Canada-U.S. relations on Parliament Hill. Read more

Canadian Free Trade Agreement Finalised

CNW: Ministers representing the federal, provincial and territorial governments have concluded negotiations on a new Canadian Free Trade Agreement (CFTA) that will help to expand Canadian businesses and increase economic growth across the country.  Read more

US Labor chief wants mores drastic changes to NAFTA from Trump

Reuters: Top U.S. labor leader Richard Trumka on Tuesday blasted the Trump administration’s initial plan to revamp the North American Free Trade Agreement (NAFTA), calling it “very timid.” Read more

Australia moves closer to free trade talks with EU

ABC (Australia): The Federal Government hopes to begin negotiations for a free trade agreement (FTA) with the European Union in the second half of this year, after finalising a key step needed to begin talks. Read more

Brussels mulls excluding UK from trade talks updates

Politico: The EU is considering shutting the U.K. out of sensitive briefings on its trade policy, following warnings that Britain will become a competitor for striking trade deals post-Brexit.  Read more

At US-China Summit, Trump pressed Xi on trade

President Donald Trump pressed Chinese President Xi Jinping to do more to curb North Korea’s nuclear program and help reduce the gaping U.S. trade deficit with Beijing in talks on Friday, even as he toned down the strident anti-China rhetoric of his election campaign. Read more

WTO members discuss trade facilitation provisions in RTAs

WTO: WTO members discussed the relationship between trade facilitation provisions in regional trade agreements (RTAs) and the WTO’s Trade Facilitation Agreement (TFA) at the 3-4 April meeting of the Committee on Regional Trade Agreements. Read more

UK eyes trade agreement with Asean after it leaves European Union

Business Insider: Trade and Industry Secretary Ramon M. Lopez said that the United Kingdom (UK) has expressed interest to pursue a regional trade agreement with the Association of Southeast Asian Nations (Asean), weeks after the European Union (EU) expressed intent to do the same. Read more

Panels established to review EU dumping methodologies, Indian steel safeguard

WTO: At its special meeting on 3 April, the Dispute Settlement Body (DSB) agreed to the establishment of two new dispute panels: one to review a complaint filed by China against the European Union’s measures related to price comparison methodologies in anti-dumping investigations; and the second to review a complaint from Japan regarding India’s safeguard measure on imports of iron and steel products. Read more

Trade Policy Review: Mexico

WTO: The sixth review of the trade policies and practices of Mexico took place on 5 and 7 April 2017. The basis for the review was a report by the WTO Secretariat and a report by the Government of Mexico. Read more

BONUS – Bloomberg Interview with Mexico Economy Minister

In an interview with Bloomberg’s Erik Schatzker, Mexico Economy Minister Ildefonso Guajardo discusses President Donald Trump’s stance on NAFTA, among other things. Have a watch here.

CTLD NEWS

One of my Brexit articles was republished in the leading business magazine in Barbados, the Barbados Business Authority. Have a read here: Seize the Brexit Moment.

For more CTLD News see News & Announcements

NEW ON CTLD BLOG

Will US Financial Deregulation help mitigate the de-risking phenomenon?

Trump’s Trade Executive Orders target deficit and uncollected AD/CV Duties

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