St Lucia Times: Former government minister, Peter Josie, has warned of potential dire consequences from a decision by Scotiabank to exit nine Caribbean countries, including Saint Lucia. Read more
The Shridath Ramphal Centre for Trade Law, Policy & Services of the University of the West Indies, Cave Hill will be hosting a Lunch Time Chat entitled “Influencing the special and differential discussion at the WTO: What role for Small States?” on Thursday, April 18th from 12:00-2:30 pm.
The featured presenter will be Mr. Matthew Wilson, Chief of Staff and Chief Advisor to the Director of the International Trade Centre (ITC). The discussion will be moderated by the Deputy Director of the SRC, Dr. Jan Yves Remy.
Please see the below flyer for further details, including the Zoom link:
Welcome to the Caribbean Trade & Development Digest for the week of April 7-13, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
In this week’s highlights, the United States Trade Representative (USTR) released a list of Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies. In response, the EU has indicated it aims to put tariffs on $12 billion of US exports.
In Brexit news, the EU granted the Theresa May UK Government a six month extension to October 31, 2019. Read more here.
Trade was a major topic looming over the IMF/World Bank Spring Meetings held this week. The IMF released its April Outlook in which it noted a deceleration in global growth on the back of several factors, including rising trade tensions. Read the Outlook here. Also watch the panel discussion on “How Trade can promote growth for all” here.
The 12th Annual Update on WTO Dispute Settlement, which provided an overview and discussion on WTO dispute settlement cases and developments in 2018, was held this week. Watch the playback here!
Trade between GCC, Latin America and the Caribbean hit $16.3b in 2018
Gulf News: Trade flows between GCC countries and Latin America and the Caribbean (LAC) reached $16.3 billion (Dh59.86 billion) in 2018, while the UAE remained a top trading partner in the Gulf region for LAC countries, according to a new report conducted by Inter-American Development Bank (IDB) in cooperation with the Dubai Chamber of Commerce and Industry. Read more
Consumer and Business Confidence Up in Jamaica
Caribbean360: Consumer and business confidence in the economy have recorded increases for the first quarter of 2019. Read more
Jamaica deepens ties with China
Jamaica Observer: The Government yesterday signed a Memorandum of Understanding with the People’s Republic of China on that country’s Belt and Road Initiative (BRI), to deepen cooperation and partnership between the two nations for economic development. Read more
Guatemala’s Fishing Trade Spells Trouble for Belize
The Reporter: An investigation into Guatemala’s thriving shark fishing industry reveals serious concerns for our country and fisherfolk. In February 2019, a team of investigative journalists from The Reporter traveled to southern Belize, then to Guatemala to evaluate the number and scope of sharks, fish and other marine species poached from Belizean waters and exported to Guatemala. Their findings were startling and it was discovered that this issue has deep roots. Read more
The Dominican Republic opens plant species and variety registration office
Fresh Plaza: The Ministry of Agriculture opened the Plant Species and Varieties Registration Office (OREVADO), which seeks to guarantee the institutional framework for people who want to develop new varieties of vegetable crops, innovate in the transfer of technology or invest in production, i.e. breeders. Read more
Dominican Republic leads Caribbean economies
Global Finance: The economy of the Dominican Republic is set to surpass its regional neighbors this year, notching the highest growth in the Caribbean region. The DR has been gaining attention for its ability to maintain steady robust economic growth. In 2018, GDP rose by 7%, and the latest report by the country’s central bank says all industries are expanding—and that its free-trade zones in particular are drawing investment. Read more
Atlantic International Bank maintains innocence in US Federal Trade Commission accusations but faces international ramifications
LoveFM: Atlantic Bank International is currently unable to process wire transfers, in and out, for its overseas customers who are in need of Belize currency. The stoppage in this service is the direct result of the Bank of New York issuing a ban against Atlantic Bank International after the US Federal Trade Commission has roped in Atlantic Bank International as an ally in the Sanctuary Bay multi-million-dollar scheme that saw several US investors lose money in a project that never came to fruition. Read more
CDB Grant Stirs Up Fuss About Regional White Sugar
Jamaica Gleaner: The April 2 announcement of a more than US$97,000 gift from the Caribbean Development Bank, CDB, to Caricom for a study on plantation white sugar has Jamaican manufacturing representatives lining up on different sides of the hot-button issue. Read more
Govt to build nation’s quality standards system – Sutherland
Barbados Today: “Government considers this goal as urgent, and of very
high priority, in our efforts to enhance the national competitiveness of our local micro-small and medium size (MSMEs) businesses, industries and the promotion of fair trade,” he said. Read more
CARICOM vital to regional development: Grenada’s new envoy
Caribbean News Service: CARICOM has been an indispensable force, says new envoy. Read more
Call for Caribbean to speak out
Barbados Today: The Minister for tourism has issued a call for the Caribbean to take a defiant stand against the international community’s imposition of standards on small states – even as his own Government was racing to comply with new financial reporting rules set by a global watchdog. Read more
US report names several Caribbean nations as “major money laundering” centres
Caribbean News Now: In the latest US International Narcotics Control Strategy Report (INCSR), volume two dedicated to money laundering, the report lists all major Caribbean and Central American countries as “Major Money Laundering Jurisdictions” for the year 2018: Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Colombia, Costa Rica, Cuba, Curacao, Dominica, Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, St Kitts and Nevis, Saint Lucia, St Vincent and the Grenadines, St Maarten, Suriname, Trinidad and Tobago and Venezuela. Read more
Argentine Elections Could Narrow Brazil’s Mercosur Reform Path
Stratfor: Brazilian President Jair Bolsonaro’s push to reform the trade policy of the Common Market of the South (Mercosur) risks collapsing without the support of Argentina. Read more
Ambassadors pave the way for EU-US trade talks, despite French opposition
Euractiv: Europe is set to start trade talks with the US after ambassadors gave their green light on Thursday (11 April) to a proposed mandate for the European Commission to conduct the negotiations on behalf of the 28 EU member countries. Read more
EU27 is now free to hold summits without the UK
Euractiv: The EU27 will be free to hold official Council meetings and make decisions without the UK despite the country still being a member of the Union, in a move seen as a success for France’s President Macron, who led calls for the restrictions. Read more
Tokyo and Washington finally set to kick off trade talks as American farmers fume over poor Japan access
Japan Times: This week, negotiators from Japan and the United States will meet in Washington to address something that U.S. President Donald Trump considers to be long overdue: trade negotiations to open the Japanese market to more American goods. Read more
China-US trade deal could threaten Beijing’s other trading partners, IMF says
South China Morning Post: Any trade deal between China and the United States must comply with multilateral rules, as not doing so may create economic risks for the Asian nation’s other major trading partners, the International Monetary Fund said. Read more
South Korea WTO appeal succeeds in Japanese Fukushima food dispute
Reuters: South Korea won the bulk of its appeal on Thursday in a dispute at the World Trade Organization over import bans and testing requirements it had imposed on Japanese seafood in the wake of the 2011 Fukushima nuclear disaster. Read more
China has good reasons to join Pacific Trade pact, but obstacles remain
The Strait Times: If China joined a massive Pacific trade deal, it could create hundreds of billions of dollars in extra income and spur domestic reforms, say analysts, but signing up would be far easier said than done. Read more
China, US could win big on no-deal Brexit: UN
France24: If Britain leaves the EU without a deal, the bloc and Britain’s smaller trading partners stand to lose big, but Beijing and Washington could reap huge benefits, the UN said Tuesday. In a fresh report, the UN Conference on Trade and Development (UNCTAD) examined what repercussions it would have for Britain’s trading partners if the country crashes out of the European Union without a deal. Read more
Commission releases detailed information on requirements for EU goods exported to the UK in case of a hard Brexit
EU: The European Commission has included in its Market Access Database detailed information on the rules that the UK would apply on its imports from the EU in the event of a hard Brexit. It is based on information made publicly available by the United Kingdom authorities. Read more
EU foreign investment screening regulation enters into force
EU: The new EU framework for the screening of foreign direct investments has officially entered into force on 10 April 2019. The new framework is based on proposal tabled by the European Commission in September 2017 and will be instrumental in safeguarding Europe’s security and public order in relation to foreign direct investments into the Union. Read more
India reduces trade deficit with China by $10 billion in FY19
CNbcTV: India’s trade deficit with China fell by $10 billion to $53 billion in FY19 on the back of lower imports, officials told CNBC-TV18. The downtick in the merchandise trade gap was also aided by new market opportunities arising out of the US-China trade war in the neighbouring nation. Read more
India’s trade ministry says no legal basis to ban e-cigarette imports
Economic Times: India’s trade ministry says it cannot impose a ban on electronic cigarette imports as there is no legal basis for doing so, an internal government memo viewed by Reuters shows, in a boost for those looking to tap into the country’s growing vaping market. Read more
Africa’s new free trade area faces bumpy road to full implementation
Global Trade Review: The Gambia has become the 22nd nation to ratify the African Continental Free Trade Area (AfCFTA), the number required for the agreement to take effect. While this marks a significant step towards the continent’s ambition to create a single market, the free trade area will face a bumpy road to full implementation. Read more
Why no-deal Brexit could be a win for South Africa
Business Tech: A no-deal Brexit could damage smaller economies trading with the United Kingdom (UK) – but bring substantial gains for China and other trading partners such as South Africa. Read more
A US-EU trade war would be a political and economic mistake, says French finance minister
CNBC: With global growth already slowing down, starting a trade war now between the U.S. and the European Union would be both a political and economic mistake, French Finance Minister Bruno Le Maire said Thursday. Read more
Brexit: UK and EU agree delay to 31 October
BBC: European Union leaders have granted the UK a six-month extension to Brexit, after late-night talks in Brussels. The new deadline – 31 October – averts the prospect of the UK having to leave the EU without a deal on Friday, as MPs are still deadlocked over a deal. Read more
EU Commission split on fertiliser anti-dumping duties
Independent: A serious spat involving two arms of the EU Commission has erupted over attempts by the fertiliser industry to have anti-dumping duties imposed on liquid urea ammonium nitrate (UAN). Read more
EU-U.S. Trade War Escalates Over Disputed Aviation Subsidies
Bloomberg: The European Union is preparing retaliatory tariffs against the U.S. over subsidies to Boeing Co., significantly escalating transatlantic trade tensions hours after Washington vowed to hit the EU with duties over its support for Airbus SE. Read more
Report to Congress on China’s Engagement with Latin America and the Caribbean
The following is the April 11, 2019 Congressional Research Service Insight report, China’s Engagement with Latin America and the Caribbean. Read more
EU aid increases, bucking global trend
Euractiv: Development aid spending by EU members saw a slight increase to $87 billion in 2018 (€77 billion) compared to 2017, according to new data published by the Organisation for Economic Co-operation and Development (OECD). Read more
VACANCY: Young Professionals Programme – Apply by April 15, 2019
The WTO Young Professionals Programme was launched in 2016 as an opportunity for qualified young professionals from developing and least-developed countries that are members of the WTO to enhance their knowledge regarding WTO and international trade issues. Read more
WTO’s Trade Policy Review Mechanism turns 30
The WTO marked on 12 April the 30th anniversary of the Trade Policy Review Mechanism (TPRM), which over the last three decades has contributed to ensuring and facilitating the smooth functioning of the multilateral trading system by enhancing the transparency of WTO members’ trade policies. Read more
Registration opens for screening of second compliance panel meeting in “EC — Large Civil Aircraft”
At the request of the parties in the dispute “European Communities and Certain Member States — Measures Affecting Trade in Large Civil Aircraft: Recourse to Article 21.5 of the DSU by the European Union and Certain Member States” (DS316), the panel has decided to invite officials of WTO Members and Observers, and the general public, to view a recording of its substantive meeting with the parties and consenting third parties. The public viewing will take place at the WTO headquarters in Geneva on 13 May 2019. Read more
DG Azevêdo: rules-based trading system is “irreplaceable” but must be ready to evolve
At a speech delivered to the Peterson Institute in Washington DC on 11 April, Director-General Roberto Azevêdo underlined the critical importance of the WTO to the stability and predictability of the global trading system. At the same time “it is clear that the WTO has to be better, faster and more responsive” to the challenges facing the organization and the system as a whole. Read more
WTO hosts closing ceremony of Model WTO 2019
Over 70 students from around the world came to the WTO’s headquarters on 11 April for the conclusion of Model WTO 2019, a week-long simulation of WTO negotiations organized by a group of students from the University of St. Gallen with the support of the WTO. Read more
WTO establishes panel to review Turkish duties on Thai air conditioners
At a meeting of the Dispute Settlement Body (DSB) on 11 April, WTO members agreed to Thailand’s request for the establishment of a dispute panel to rule on duties levied by Turkey on imported Thai air conditioners. Members also considered Russia’s request for a panel regarding European Union anti-dumping duties on Russian steel products and formally adopted the compliance panel and Appellate reports in the EU’s complaint against US subsidies for Boeing. Read more
Appellate Body issues report regarding Korean restrictions on Japanese food imports
On 11 April the Appellate Body issued its report in the case brought by Japan in “Korea — Import Bans, and Testing and Certification Requirements for Radionuclides” (DS495). Read more
WTO, IMF and World Bank leaders stress vital role of trade in reducing poverty
Director-General Roberto Azevêdo joined with IMF Managing Director Christine Lagarde and World Bank CEO Kristalina Georgieva on 10 April to argue for renewed efforts to leverage trade as a force to reduce poverty. DG Azevêdo argued that the current trade tensions could undermine recent progress in tackling poverty. “We cannot afford to go down this path,” he said. The three leaders were speaking at a joint WTO-IMF-World Bank event in Washington DC titled “Beyond Uncertainty: Leveraging Trade to Reduce Poverty”, held alongside the World Bank-IMF Spring meetings. Read more
EU initiates WTO dispute complaint against Turkish measures affecting pharmaceuticals
The European Union has requested dispute consultations with Turkey regarding various requirements imposed by Turkey on the production, import and approval for reimbursement, pricing and licensing of pharmaceutical products. The request was circulated to WTO members on 10 April. Read more
Trade Policy Review: Samoa
The first review of the trade policies and practices of Samoa takes place on 10 and 12 April 2019. The basis for the review is a report by the WTO Secretariat and a report by the Government of Samoa. Read more
CTLD BLOG NEWS
Read my latest article with Dr. Jan Yves Remy, Deputy Director of the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy & Services exploring the issue of special and differential treatment in the World Trade Organization from a Caribbean perspective Special and Differential Treatment at the WTO: A Caribbean Perspective.
The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.
Welcome to the Caribbean Trade & Development Digest for the week of March 31- April 6, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
With the new Brexit deadline of April 12, 2019 fast approaching and no sign that British MPs are any closer to backing the Draft Withdrawal Agreement negotiated by the Theresa May Government with the EU, which they already rejected three times, the UK Government has asked for a further extension until June 30, 2019.
The WTO released its April outlook for global trade growth, revising downward its forecast for 2019 amidst rising trade tensions. Read more here: WTO: Trade tensions pose greatest risk to trade growth
Meanwhile regionally, the CARICOM Competition Commission (CCC) has warned that the sale of Scotia Bank could have anti-competitive effects in three countries. Read the statement from the CCC here.
The text of the CARIFORUM-UK Economic Partnership Agreement has been released. Read more here: UK-CARIFORUM Economic Partnership Agreement: What does it all mean?
Local manufacturers told to explore extra regional markets
LoopTT: Local manufacturers are being urged to seek out and penetrate new markets beyond CARICOM. Trade and Industry Minister Paula Gopee-Scoon made the comment while speaking at the Trinidad and Tobago Manufacturers’ Association’s (TTMA) 63rd Annual General Meeting on Tuesday. Read more
Towards a Transparent and Effective Management of Guyana’s Oil and Gas Sector
Modern Diplomacy: The World Bank’s Board of Executive Directors approved a US$20 million credit from the International Development Association (IDA) to strengthen institutions, laws and regulations to promote good governance and a prudent management of Guyana’s oil and gas sector. Read more
CARICOM body warns sale of Scotiabank could have anti-competitive effect
Nation News: The Suriname-based Caribbean Community (CARICOM) Competition Commission (CCC) says the intended sale of Scotiabank’s assets in nine Caribbean countries could have anti-competitive effects in at least three CARICOM member states. Read more
Imbert: US lobbyist seeking opportunities for Govt
Guardian (TT): The Group DC LLC, the US lobbyist firm, which undertook several trade and investment promotion initiatives for the T&T Government last year, identified opportunities and strategies to engage multinational corporations to potentially increase commercial shipping and drydock construction here. Read more
Take Trade Matters Seriously
Barbados Today: Former Barbados Government Minister, Ms. Lynette Eastmond wants to see a different approach by the Barbados private sector to the issue of the country negotiating trade agreements. Read more
CDB grant to help CARICOM investigate suitability of plantation white sugar for regional manufacturing
Caribbean News Now: A collaboration between the Caribbean Development Bank (CDB) and the Caribbean Community (CARICOM) aims to improve the availability of data to guide evidence-based decisions about the future of sugar in CARICOM. Read more
Guyana part of regional study on substituting refined sugar with “plantation white”
Demerara Waves: Guyana is among four sugar-producing Caribbean Community (CARICOM) member nations that will be the focus of a regional study on the prospects of substituting imported refined sugar with plantation white, the Caribbean Development Bank (CDB) said Tuesday. Read more
CSME: The principle, process and progress
Newsday (Trinidad): Gracia Whyte a Jamaican, made sure she had all her documents in order when she began the process of applying for a Caricom Single Market Economy (CSME) skills certificate. She even had her employer, Digicel, to help ease her through the transition during her application process. Bureaucracy, however, still held her back. Read more
Wto ‘No Silver Bullet’ For Gdp Growth Woes
Tribune242: Full World Trade Organisation (WTO) membership “is not a silver bullet” for solving The Bahamas’ economic growth woes, a Chamber of Commerce executive argued yesterday. Read more
Aruba Extends Airbnb Agreement
Travel Pulse: Aruba’s government has extended its 2016 agreement with home-stay provider Airbnb to “continue with the promotion of sustainable tourism in Aruba through home sharing,” said Aruba Tourism Authority (ATA) officials in a statement. Read more
Belize Imports up 6.8% in February 2019
Amandala: Latest statistics released by the Statistical Institute of Belize (SIB) say that Belize imported nearly $146 million worth of goods in February 2019, an increase of $9.2 million (6.8%) over the $136.8 million worth of goods we imported in February 2018. Read more
Brexit chaos leaves dismay in Asia-Pacific
Asia Times: Britain’s failure to acyhieve a withdrawal agreement with the EU has had a very negative impact on the UK’s relationships in Asia and it could deal a serious blow to its trade with the region. Read more
White House economic adviser Larry Kudlow says US-China trade deal ‘closer and closer’
South China Morning Post: US President Donald Trump’s top economic adviser says the US and China are “closer and closer” to a trade deal, and that top-tier officials would be talking again this week via “a lot of teleconferencing”. Read more
A swashbuckling global Britain free to do its own trade deals? It’s a mirage
The Guardian: Whatever happens in the Brexit negotiations, the question of the UK’s future trade relations with countries outside the European Union will become acute for businesses, investors, workers and citizens. Read more
Chile Lawmakers Delay Vote Again on Pacific Trade Deal
Bloomberg: Chilean lawmakers have once again delayed voting on a major Pacific trade deal, heightening concerns that they could reject the treaty. Read more
Major New UN Report Calls for Overhaul of Global Financial System
UNDP: Sixty-plus international organizations, led by the United Nations and including the International Monetary Fund, the World Bank Group and World Trade Organization, jointly sounded the alarm Thursday in a new report, warning that unless national and international financial systems are revamped, the world’s governments will fail to keep their promises on such critical issues as combatting climate change and eradicating poverty by 2030. Read more
Moving the ACP Group to Centre Stage of Multilateralism
IndepthNews: In today’s global situation that bears the features of turbulence, fragility and an increasingly precarious balance between peace and possible nuclear annihilation, the role and relevance of the United Nations Organisation has assumed unparalleled importance. Read more
Brexit extension veto by EU unlikely, says Leo Varadkar
BBC: It is unlikely an EU 27 country will veto a UK request for a delay to Brexit, the Irish prime minister has said. Read more
May asks for Brexit extension to 30 June as Tusk offers up to a year
The Guardian: Rather than the year-long flexible extension to article 50 recommended by the European council president, the prime minister suggested 30 June as the new departure date, but with an option to leave earlier if the necessary legislation has been passed. Read more
The African Continental Free Trade Area – More Hills To Climb
East African Business Week: The African Continental Free Trade Area (AFTA) has garnered the required 22 ratifications for it to enter into force, the latest ratification coming in on April 1, 2019, from The Gambia. Read more
Trade agreement bolsters South Africa exports into Brazil
African daily voice: According to South African Foreign Economic Representative in Brazil, Shanaaz Ebrahim, the preferential trade agreement between the Southern African Customs Unions (SACU) and the Southern Common Market (Mercosur) trade blocs has led to a steady increase of South African exports into Brazil. Read more
After China, the US will ratchet up trade tensions with the EU, OECD chief economist warns
CNBC: Once the U.S. and China have reached a trade deal, the world’s largest economy will amplify tensions with the European Union, according to the chief economist of the Organization for Economic Co-operation and Development (OECD). Read more
The Risk of E-Commerce Provisions in the RCEP
The Diplomat: The world of digital economies, innovation, and global value chains (GVCs) is changing rapidly. Every day there are stories about new technologies, services, and products that present unexpected possibilities and unforeseen challenges. Read more
RCEP trade pact likely to be concluded in November: ASEAN chief Lim Jock Hoi
Japan Times: An Asiawide free trade deal involving 16 countries will likely be concluded in November at a summit of the Association of Southeast Asian Nations to be held in Thailand, ASEAN Secretary-General Lim Jock Hoi has said. Read more
Pelosi: No vote on new NAFTA until Mexico changes labor laws
Politico: Speaker Nancy Pelosi indicated on Tuesday the House will not consider President Donald Trump’s new North American trade pact until after Mexico has passed and implemented its major labor law reforms. Read more
Canada says reopening USMCA trade pact could be a ‘Pandora’s box’
Reuters: Canadian Foreign Minister Chrystia Freeland on Thursday cautioned against the idea of reopening a new continental trade pact with the United States and Mexico, saying it could be a “Pandora’s box.” Read more
U.S., China to Keep Working on Trade Deal After Latest Talks
Bloomberg: China and the U.S. made progress toward a much-anticipated trade deal in their latest meetings and will keep talking on the remaining issues, the state-run Xinhua news agency reported. Read more
Why the Kenya-Uganda trade agreement over SGR is a raw deal for Kenya
CFM (Kenya): Last week President Uhuru Kenyatta and his Ugandan counterpart Yoweri Museveni struck a wide ranging trade agreement that basically removes existing trade barriers and commits Uganda to connect to Kenya its component of the SGR under the broader Chinese belt and road initiative (BRI). Read more
WTO issues panel report regarding Russian restrictions on traffic in transit
On 5 April the WTO circulated the panel report in the case brought by Ukraine in “Russia — Measures Concerning Traffic in Transit” (DS512). Read more
Australia ratifies WTO procurement pact
Australia has ratified the WTO’s Agreement on Government Procurement (GPA), submitting its instrument of accession to the WTO Secretariat on 5 April. Starting next month, the country will benefit from new market access opportunities and other provisions under the pact. Read more
Members advance work on new import licensing website and database
As part of overall efforts to improve transparency, WTO members advanced work to put into place a new import licensing website and database expected to be launched in late 2019 or early 2020. Read more
DG Azevêdo praises Mexico’s support for a strong and effective rules-based system
Director-General Roberto Azevêdo welcomed Mexican President Andrés Manuel López Obrador’s strong support for the WTO on 4 April, when they met in Mexico City. Their discussions included the importance of international trade and of a strong and effective rules-based system and the emerging debate on how to strengthen the WTO and global trade cooperation. Read more
Trade Policy Review: Bangladesh
The fifth review of the trade policies and practices of Bangladesh takes place on 3 and 5 April 2019. The basis for the review is a report by the WTO Secretariat and a report by the Government of Bangladesh. Read more
Egypt launches safeguard investigation on semi-finished products of iron or non-alloy steel and steel rebar for construction purposes
On 2 April 2019, Egypt notified the WTO’s Committee on Safeguards that it initiated on 31 March 2019 a safeguard investigation on semi-finished products of iron or non-alloy steel and steel rebar (bars, rods and coils) for construction purposes. Read more
Global trade growth loses momentum as trade tensions persist
World trade will continue to face strong headwinds in 2019 and 2020 after growing more slowly than expected in 2018 due to rising trade tensions and increased economic uncertainty. WTO economists expect merchandise trade volume growth to fall to 2.6% in 2019 — down from 3.0% in 2018. Trade growth could then rebound to 3.0% in 2020; however, this is dependent on an easing of trade tensions. Read more
CTLD BLOG NEWS
The Caribbean Trade Law & Development (CTLD) Blog has been rated number 10 on Feedspot‘s Top 30 Caribbean Blogs, News Websites & Newsletters To Follow in 2019.
The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.
On March 22, 2019, the United Kingdom of Great Britain and Northern Ireland (UK) and nine of the fifteen States comprising the Caribbean Forum (CARIFORUM), a subgroup of the African, Caribbean and Pacific (ACP) countries, signed the CARIFORUM-UK Economic Partnership Agreement (CARIFORUM-UK EPA) which seeks to ensure that the current trade preferences between the UK and CARIFORUM remain after the UK’s departure from the European Union (EU).
This makes CARIFORUM one of nine trading partners with which the UK has to date successfully concluded a trade continuity agreement. This development has been widely welcomed by businesses and private sector associations in the Caribbean. But why was the CARIFORUM-UK EPA necessary and what does it provide for?
The CARIFORUM-UK EPA is between the United Kingdom of Great Britain and Northern Ireland on the one hand, and the fifteen CARIFORUM States (Antigua & Barbuda, The Bahamas, Barbados, Belize, the Commonwealth of Dominica, The Dominican Republic, Grenada, The Republic of Guyana, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname and Trinidad & Tobago), on the other.
Nine of the CARIFORUM countries (Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts & Nevis, St. Lucia and St Vincent and the Grenadines) signed the Agreement on March 22, 2019 at a signing ceremony in Castries, St. Lucia. Two other CARIFORUM States, Trinidad & Tobago and the Dominican Republic, signed on April 1, 2019 and on April 4, 2019, respectively. The remaining CARIFORUM States have indicated they will sign shortly.
Why is the CARIFORUM-UK EPA necessary?
The UK is currently due to leave the EU on April 12, 2019, unless a further extension to June 30, 2019 requested this week by the UK government is granted by the EU-27. Until the UK officially leaves the EU, the UK’s trade relations with the fifteen CARIFORUM countries remain governed by the CARIFORUM-European Union Economic Partnership Agreement (CARIFORUM-EU EPA) which was signed and has been provisionally applied since 2008.
The CARIFORUM-EU EPA provides for the asymmetric liberalization of trade between the EU and CARIFORUM States. This includes duty-free and quota-free goods access, preferential access for services providers and investors, and protection for intellectual property. It also includes disciplines relating to government procurement and competition, for example, as well as extensive development cooperation provisions.
When the UK ceases to be an EU member, the CARIFORUM-EU EPA will continue to apply between CARIFORUM States and the remaining EU-27. However, the UK will no longer be party to any of the EU’s trade agreements with third parties, including the CARIFORUM-EU EPA. In the absence of a trade continuity agreement, trade between the UK and CARIFORUM would revert to World Trade Organization (WTO) Most Favoured Nation (MFN) rules. This would have implications for businesses, services providers and investors in the UK and CARIFORUM States dependent on the preferential market access provided for by the CARIFORUM-EU EPA.
A great summary of current CARIFORUM-UK economic relations may be found in the report prepared by the Secretary of State for International Trade for the UK Parliament. According to statistics from the UK Office of National Statistics (ONS) cited in that report, total goods and services trade between the UK and CARIFORUM States (excluding Haiti) accounted for 0.2% of total UK trade and was £2.5 billion in 2017.
Although there has been a steady decline in CARIFORUM-UK trade over time, the UK currently remains the main market for CARIFORUM exports to the EU. For example, it is a major market for Caribbean rum, banana and sugar exports. Additionally, the UK remains an important source market for tourists to the Caribbean and in the case of Barbados, remains that country’s largest source market for tourist arrivals and real estate foreign direct investment (FDI).
To avoid any disruption in trade and to create some modicum of certainty for UK and CARIFORUM businesses and consumers once the UK leaves the EU, the UK and CARIFORUM promptly commenced dialogue on the conclusion of a trade continuity agreement that would replicate the provisions of the CARIFORUM-EU EPA, to the extent possible.
What does the CARIFORUM-UK Agreement include?
The CARIFORUM-UK EPA, whose main text comprises seventy-six pages, replicates to the extent possible, the text of the CARIFORUM-EU EPA. The previously mentioned Parliamentary Report provides an excellent synopsis of the Agreement, including the necessary differences between the CARIFORUM-UK EPA and CARIFORUM-EU EPA.
Where necessary, the CARIFORUM-UK EPA has removed and replaced references to the EU in the text, provided for the continuation of time-bound periods, as well as limited the territorial scope of the Agreement to the CARIFORUM States and to the United Kingdom, its Crown Dependencies and Gibraltar.
The CARIFORUM-UK EPA will only take effect once the UK has left the EU. Similar to the CARIFORUM-EU EPA, the CARIFORUM-UK EPA provides for provisional application which allows it to be provisionally applied before all the parties have done the necessary domestic ratification steps to allow for the Agreement’s entry into force.
Additionally, the CARIFORUM-UK EPA provides a safeguard in the event of a ‘no-deal’ Brexit. A non-legally binding MoU between the UK and participating CARIFORUM countries aims to stop the gap between the date the CARIFORUM-EU EPA ceases to apply to the UK until the date when the CARIFORUM-UK EPA takes effect. Under this MoU, the parties will use their best endeavours to bring the CARIFORUM-UK EPA into effect as between them within three months of the MoU’s coming into effect, during which time the UK will apply the tariff schedule laid out under the CARIFORUM-UK EPA to those CARIFORUM States which have signed both the CARIFORUM-UK EPA and the MoU. So far, the UK has signed an MoU with the original nine CARIFORUM signatories and another MoU with Trinidad & Tobago.
Since the CARIFORUM-EU EPA’s signature in 2008, many developments have impacted on rule-making in trade agreements. Like the CARIFORUM-EU EPA, the CARIFORUM-UK Agreement includes mechanisms for monitoring the Agreement’s implementation, as well as a revision clause allowing for the parties to broaden or amend the Agreement, including the possibility of bringing the UK’s British Overseas Territories within the scope of the Agreement.
The institutions under the CARIFORUM-EU EPA have been replicated in the CARIFORUM-UK EPA. For example, it establishes a Joint CARIFORUM-UK Council responsible for the Agreement’s implementation and operation, as well as a CARIFORUM-UK Trade and Development Committee to assist the Joint Council. Two joint institutions (namely, the Special Committee on Agriculture and Fisheries and the Technical Sub-Committee on Development Cooperation), which had been established after the CARIFORUM-EU EPA’s signature, are directly included through dedicated articles in the CARIFORUM-UK EPA’s text.
What does it all mean?
As of the date of this article’s publication, the UK still remains an EU member. The original Brexit Day (March 29, 2019) has passed and the extension date of April 12, 2019 is fast approaching. In light of British MPs’ rejection of the Draft Withdrawal Agreement for the third time and no clear consensus among MPs on what they believe the future EU-UK relationship should be, the UK Government has asked for a further extension to June 30, 2019. As it stands, the threat of a ‘no-deal’ Brexit still remains a real possibility.
In light of the current Brexit chaos, CARIFORUM countries’ conclusion of a trade continuity agreement with the UK was a prudent move to preserve continuity and certainty for our businesses, consumers and investors. The CARIFORUM-UK EPA will only take effect once the UK leaves the EU and until such time, CARIFORUM-UK trade relations will remain covered by the CARIFORUM-EU EPA. Indeed, it could be regarded as an insurance policy of sorts – providing peace of mind and only used if and when needed.
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.
The text of the United Kingdom-CARIFORUM Economic Partnership Agreement (UK-CARIFORUM EPA) has finally been published online. Whether you are a trade policy nerd or simply a business person concerned about the continuity of trade preferences between the UK-CARIFORUM countries post-Brexit, you would be forgiven for anxiously awaiting the release of the text.
Brexit Day (which was to have been March 29, 2019) has passed and the UK remains an EU member and no closer to any certainty regarding its future trading relationship with the EU-27 post-Brexit. The UK government has requested a further extension to June 30, 2019 in hopes of getting British MPs to back the Draft Withdrawal Agreement which they rejected three times already.
Brexit chaos aside, on March 22, 2019, it was announced that the UK and CARIFORUM countries had signed a trade continuity agreement called the UK-CARIFORUM Economic Partnership Agreement which would preserve the preferences between the UK and CARIFORUM currently under the CARIFORUM-EU EPA. The CARIFORUM-EU EPA has been provisionally applied since 2008.
This means that CARIFORUM is one of the handful of trading partners with which the UK has managed to so far conclude trade continuity agreements. The UK is the most important trading partner in the EU for CARIFORUM countries and CARIFORUM leaders quickly recognised the need to ensure the continuity of trading conditions post-Brexit between the UK and CARIFORUM States.
The UK-CARIFORUM EPA was signed by the UK and nine CARIFORUM States (Barbados, Belize, The Commonwealth of Dominica, Grenada, The Republic of Guyana, Jamaica, St. Christopher & Nevis, St Lucia and St Vincent and the Grenadines) on March 22, 2019. Trinidad & Tobago signed on April 1, 2019, while the remaining CARIFORUM States have indicated they will sign shortly.
As it currently stands, UK-CARIFORUM trading relations remain governed by the CARIFORUM-EU EPA, and the UK-CARIFORUM EPA is only expected to take effect once the CARIFORUM-EU EPA no longer applies to the UK. For it to enter into force, ratification will be needed by each of the parties. The Agreement’s utility stems from the fact that it ensures the continuity of preferential trading relations between the UK and CARIFORUM States once the UK leaves the EU, particularly in the case of a no-deal Brexit.
The UK-CARIFORUM Economic Partnership Agreement replicates the provisions of the CARIFORUM-EU EPA to the extent possible, including its development cooperation provisions. It also establishes a Joint CARIFORUM-UK Council with responsibility for implementing the Agreement, as well as a CARIFORUM-UK Trade and Development Committee. For further information, please feel free to read my commentary on it here: UK-CARIFORUM Economic Partnership Agreement: What does it all mean?
The text of the UK-CARIFORUM Economic Partnership Agreement may now be found online 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.
Rising trade tensions and economic uncertainty account largely for the deceleration in global trade growth experienced in 2018 and will continue to pose the greatest risk to growth in 2019. This is according to the World Trade Organization (WTO) in its latest Trade Statistics and Outlook released on April 2, 2019.
As I had noted in my first blog post for the year, 2018 was without doubt a challenging year for global trade policy. Among the highlights (or low lights) were the tariff tit for tat between the US and China until a truce in December 2018 brought a halt to the planned imposition of more tariffs, and the imposition by the US of punitive tariffs on steel and aluminium imports, which led to retaliation by other major powers, most notably, the EU.
It is little surprise then that according to WTO economists, global trade under-performed in 2018 expanding by 3.0%, down from the 4.6% above-average growth recorded in 2017 and slower than the 3.9% which was projected for 2018 in their September 2018 forecast. The uncertainty has led to a dampening of investment and consumption. Weak import demand in Europe and Asia depressed global trade volume growth in 2018. Higher energy prices were partly responsible for the 10% increase in the value of merchandise trade in 2018.
In his brief remarks during a press conference on the latest forecast, the WTO’s Director General, Mr. Roberto Azevedo, noted that “the fact that we don’t have great news today should surprise no one who has been reading the papers over the last 12 months. Of course there are other elements at play, but rising trade tensions are the major factor”. The Director General further explained that the range of new and retaliatory measures tariffs introduced affected widely trade goods. Other factors which affected global trade growth in 2018 were the weaker global economic growth, volatility in financial markets and tighter monetary conditions in developed countries, among others.
World commercial services trade was much more positive with the value rising 8% in 2018 on the back of strong import growth in Asia.
Looking forward, WTO economists now forecast world merchandise trade growth to slow further to 2.6% in 2019, which is a downward revision from their forecast of 3.7% in September 2018. WTO economists estimate some pickup in trade growth to 3.0% in 2020, with stronger growth predicted for developing economies than developed ones.
They, however, caution that this forecast could be affected negatively if trade tensions continue to escalate, or positively if they ease. Director General Azevedo reiterated that “it is therefore increasingly urgent that we resolve tensions and focus on charting a positive path forward for global trade which responds to the real challenges in today’s economy”.
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.
BRIDGETOWN, April 2, 2019 – The Caribbean Trade Law & Development (CTLD) Blog has been rated number 10 on Feedspot‘s Top 30 Caribbean Blogs, News Websites & Newsletters To Follow in 2019.
It is the most comprehensive list of best Caribbean blogs on the internet. Out of thousands of Caribbean-focused blogs, news sites and newsletters online, Feedspot ranked the top 30 winners on the following four criteria: Google reputation and Google search ranking; influence and popularity on Facebook, twitter and other social media sites; quality and consistency of posts and Feedspot’s editorial team and expert review.
Founder of the CTLD Blog, Miss Alicia Nicholls, was happy and humbled by the Blog’s inclusion on this list. An international trade and development consultant, Miss Nicholls created the blog in 2011 to share trade and development information of specific interest to the Caribbean. The Blog’s signature weekly Caribbean Trade & Development Digest newsletter was created in 2016.
While the Blog’s content is primarily Caribbean focused, its readership has quickly grown to include academics, practitioners, students and other persons from across the world. Miss Nicholls expresses her gratitude to the Feedspot Editorial Team as well as the Blog’s readers for their support.
Congratulations to all winners! The full list of top 30 Caribbean blogs may be found here.
Welcome to the Caribbean Trade & Development Digest for the week of March 24-30, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
UK signs trade continuity agreement with Caribbean countries
UK Government: UK businesses and consumers will benefit from a trade continuity agreement maintaining current arrangements with countries in the Caribbean soon after Britain leaves the EU. Read more
Ring the alarm: Diversification of Caribbean Export must take priority
Barbados Today: According to International Trade Attorney Magda Theodate, there are four major economic storm clouds keeping the Caribbean sun from shining over the heads of CARICOM’s 15-member state governments, and their even more vulnerable neighbours. Swift action is needed to ensure better times ahead for the people of the region. Read more
Bahamas delegation to attend 4th WTO accession meeting
Eye Witness News: The Government of The Bahamas wishes to advise that a delegation is attending the 4th Meeting of the Working Party on the accession of The Bahamas to the World Trade Organization (WTO) on April 5, 2019 in Geneva, Switzerland. Read more
Poultry Producers In Push For Quotas
Tribune 242: A Bahamian poultry producer yesterday revealed it is “pushing” for chicken imports to be regulated by quotas rather than the current tariff system as The Bahamas’ march to WTO accession continues. Read more
Caribbean Countries urged to take more advantage of EPA
TV6 T&T: Former Barbados prime minister, Owen Arthur, says Caribbean Community regional countries have failed to take full advantage of the 10-year-old Economic partnership Agreement (EPA) signed between the Caribbean Forum (CARIFORUM) and the European Union. Read more
Belize’s bananas safe from Brexit fallout
Breaking Belize News: The newly signed EPA is good news for Belize’s banana industry because the UK is the major importer of Belize’s bananas, importing as much as 69 percent of Belizean bananas in 2017. Regional media outlets noted that producers of rum are also glad that trade will continue uninterrupted. Read more
No big deal
Barbados Today: Former Prime Minister Owen Arthur is warning Caribbean leaders not to expect a major trade deal with the UK when it leaves the European Union (EU). Read more
U.S. to push for comprehensive free trade agreement as it looks to open up Japan’s agriculture market
Japan Times: U.S. President Donald Trump said Tuesday his administration will push for a comprehensive free trade agreement with Japan and signaled his eagerness to seek a further opening of the country’s agriculture market. Read more
Solomon Islands eyes more trade with Indonesia
Radio New Zealand: It came after trade talks held between Indonesia and several Pacific Island nations last week in Jakarta. Colin Beck, a permanent secretary with the Solomon Islands Foreign Ministry, said his government wanted to open port-to-port trade in Indonesia. Read more
Australia to sign free trade deal with Hong Kong
The Sydney Morning Herald: Australia will sign a new agreement covering $18.8 billion in free trade with Hong Kong on Tuesday, as Labor prepares to officially back the Australia-Indonesia free trade deal if it wins government. Read more
Is Brexit an opportunity to revive the EU-India trade deal?
The Conversation: The European Union and India have been negotiating a free trade agreement (FTA) since 2007. Despite growing trade between the EU and India, talks stalled in 2013 after 16 rounds, only resuming in 2018. Read more
China Touts Progress With U.S. as Both Focus on a Final Deal
Bloomberg: Chinese and U.S. negotiators made “new progress” in trade negotiations as both sides discussed the wording of an agreement that’s designed to resolve a bilateral trade dispute, according to Beijing’s official news agency Xinhua. Read more
Bipartisan Support Seen for a US-Taiwan Free-trade Deal
VoA: Influential figures in Washington are calling for the establishment of a bilateral free-trade agreement with Taiwan, even as U.S. and Chinese officials move toward a resolution of their long-running trade dispute. Read more
USMCA is Not a Done Deal. It Must Still Clear Three Legislative Hurdles
Atlantic Council: On November 30, the leaders of the United States, Canada, and Mexico signed the US-Mexico-Canada Trade Agreement (USMCA), modernizing the 1994 North American Free Trade Agreement (NAFTA) and “rebalancing” trade relations between the three countries, according to the US administration. Before the new pact officially takes effect, however, the legislatures of all three countries need to approve the agreement. Read more
ECOWAS urges member states to sign AfCFTA
Journal du Cameroun: The Director of Trade, Economic Community of West African States (ECOWAS), Mr. Gbenga Obideyi, has called on member states to sign the African Continental Free Trade Agreement (AfCFTA) to ensure the preservation of the ECOWAS acquis.Obideyi made the call in Abuja on Thursday during a national validation workshop on the study conducted by the National Association of Nigerian Traders (NANTS) on Articulating Nigeria’s Agricultural Trade Strategies for the AfCFTA Negotiation. Read more
AfCFTA: One year down the road, there’s reason for celebration
The New Times: Stephen Karingi, ECA’s Director for Regional Integration and Trade spoke to The New Times’ James Karuhanga, shedding light on what is expected between now and the next African leaders’ summit in Niamey, Niger in July. Read more
Is AfCFTA Good for Africa? Experts Shared Their Views at the 2019 Oxford Business Forum Africa
African Exponent: Hosted by the School’s Oxford Africa Business Alliance, the event explored the implications of the African Continental Free Trade Agreement (AfCFTA) on the development and ease of doing business on the continent. Read more
UK exports to India grow at fastest rate among non-EU trading partners
Business Standard: UK’s exports to India increased at the fastest rate among the country’s top trading partners outside the European Union (EU), with a 19.3 per cent hike in goods and services trade in 2018, according to official figures. Read more
Report on EU Trade Defence
European Commission: The Juncker Commission has strengthened Europe’s trade defence toolbox through two major reforms. Since 2014, it has also applied 95 measures to ensure that European companies and workers can compete on fair terms. Two-thirds of all the 135 measures in place concern imports from China. Read more
ACP’s efforts post-Cotonou must be economically sustainable – Tweya
New Era Live: Namibia has reaffirmed its commitment to the African, Caribbean and Pacific (ACP) and European Union (EU) partnership and says it will do all it can to honour and work toward the commitments embodied in the Cotonou Agreement and post-Cotonou when it expires in 2020. This was the message by Minister of Industrialisation, Trade and SME Development, Tjekero Tweya, when he spoke on Wednesday at the 37TH session of ACP-EU Joint Parliamentary Assembly that took place in the Bucharest, Romania. Read more
Appellate Body issues report on US compliance in the Boeing dispute
On 28 March the WTO’s Appellate Body issued its report on US compliance in the dispute brought by the European Union in “United States — Measures Affecting Trade in Large Civil Aircraft — Second complaint” (DS353). Read more
Guatemala initiates WTO dispute complaint against Indian sugar subsidies
Guatemala has requested WTO dispute consultations with India regarding domestic support measures and alleged export subsidies provided by India to producers of sugarcane and sugar. The request was circulated to WTO members on 25 March. Read more
The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.
Welcome to the Caribbean Trade & Development Digest for the week of March 10-16, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HEADLINES
With just two weeks to go before Brexit Day (March 29, 2019), the UK House of Commons has for the second time rejected the Draft Withdrawal Agreement negotiated by Prime Minister Theresa May’s government with the European Union (EU), this time by a margin of 391 votes to 242 votes. A third vote is expected to be held this upcoming week. The Commons also voted against a no-deal Brexit in a non-binding vote, as well as in favour of an extension under Article 50.
The UK Government has also published details on a temporary tariff regime which it would implement in the case of a no-deal Brexit. The major proposal is to temporarily slash tariffs on 87% of imports into the UK in order to cushion the impact on businesses and consumers. Tariffs will remain for certain sensitive industries. Details have been published here.
Turning regionally, the French Overseas Territory of Guadeloupe has acceded to the Organisaton of Eastern Caribbean States (OECS) as an Associate Member, making it the second French Overseas Territory to join that organisation. A Special Meeting of the OECS Authority of Accession of Guadeloupe was held on March 14th and 15th 2019 in Guadeloupe. Read the communique here.
Barbados Today: Barbados’ expanding trade with Latin America has started to create some headaches for the Department of Commerce and Consumer Affairs, as that organisation is witnessing substantial breaches in standardization laws relating to labels in a foreign language. Read more
Belize among regional sugar producers disenfranchised on the CARICOM market
LoveFM: The movement of sugar in the CARICOM market continues to disenfranchise regional sugar producers. That is what a press release issued today by the Sugar Association of the Caribbean, SAC, is saying. Read more
GO-Invest facilitated $89.4B in investments last year – CEO
Stabroek: The Guyana Office for Investment (GO-Invest) facilitated approximately $89.4 billion in investments last year and Chief Executive Officer (CEO) Owen Verwey yesterday said there have been no negative indications from businesses and investors stemming from the recent political developments. Read more
GO-Invest developing plan to revamp operations
Stabroek: The Guyana Office for Investment (GO-Invest) will be developing a strategic plan to overhaul its operations and refine its investment promotion, according to Chief Executive Officer (CEO) Owen Verwey. Read more
Wto Tariff Cut Fears For ‘40,000 Bahamian Jobs’
Tribune 242: Local contractors have voiced mixed reactions to fears that a WTO-induced 50 percent tariff rate cut on pre-fabricated buildings “puts 40,000 Bahamian construction jobs at risk”. Read more
Puerto Rico Trade & Export Co. launches support program for women
Caribbean Business: The Puerto Rico government awarded six food trucks to women from various parts of the island, with which they will be able to run, expand and even export their services in the future. Read more
T&T paint company penetrates Cuban market
Loop T&T: Trinidad and Tobago paint manufacturers, ANSA Coatings Limited, on Wednesday loaded a container with over €500,000 worth of product bound for Cuba, the company’s newest export market. Read more
Energy Exports To Keep T&T’s Current Account In Surplus
Fitch Solutions: Fitch Solutions forecast that Trinidad and Tobago’s (T&T) current account surplus will widen in 2019 due to an expanded traded goods surplus. Read more
EU adds more Caribbean countries to money laundering blacklist
Caribbean News Now: Less than a month after the European Union (EU) blacklisted several jurisdictions worldwide including several Caribbean countries, the EU Commission has added more jurisdictions to its tax-haven and money laundering blacklist. Read more
Export Saint Lucia anticipates export of mangoes, golden apples to US market
St Lucia News Online: Export Saint Lucia is expressing confidence that some fruits from the island will soon hit the United States (US) market. Read more
Jamaica Customs On Track To Open Electronic Single Window For Trade In 2021
Jamaica Gleaner: The Jamaica Customs Agency said it is on track to roll out the electronic single-window system for trade in 2021. Read more
OECS welcomes Guadeloupe into fold in a changing regional environment
ST Lucia News Online: Guadeloupe on Wednesday night became the second French-speaking Caribbean country to be associated with the Organisation of Eastern Caribbean States (OECS) in an environment that St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves dubbed as “as a variable explanation of regional integration”. Read more
Barbados Today: Rock Hard Cement, owned by Barbadian construction magnate Mark Maloney, has won round one of a trade dispute with the Arawak Cement Company. Read more
CARICOM leaders committed to delivering competitive transportation industry
Caribbean News Now: Heads of government of the Caribbean Community (CARICOM) are committed to deliver a competitive transportation industry, and are looking for the right model that would be fiscally appropriate for the provision of air transportation services in the region. Read more
‘Open amnesty to Caricom nationals’
The Guardian (T&T): Centre for Justice chairman Harvey Borris is lending his support to the Minister of National Security, Stuart Young for his proposal of a one-year amnesty for Venezuelan refugees who are currently residing in T&T. However, he believes this opportunity should also be extended to other Caricom nationals facing a similar situation. Read more
How Chinese Investment in Latin America Is Changing
Americas Quarterly: Chinese financing in Latin America is changing. After becoming a major source of capital flows to Latin America and the Caribbean over the past 15 years, a more diverse range of investors has surfaced, interested in more than simply channeling resources towards infrastructure, governments and state companies. Read more
Trump’s trade war cost U.S. economy $7.8 billion in 2018: study
Hellenic Shipping: President Donald Trump’s trade battles cost the U.S. economy $7.8 billion in lost gross domestic product in 2018, a study by a team of economists at leading American universities published this week showed. Read more
What to expect from WTO’s 2019 Global Review of Aid for Trade
Devex: The world’s least developed countries have the smallest share of the global trade market, but highest reliance on a small number of commodities to support their economic growth — a key topic on the agenda at the World Trade Organization’s Global Review of Aid for Trade in July. Read more
U.S. considers sanctions on firms facilitating Venezuelan oil shipments to Cuba
Miami Herald: The Trump administration is considering imposing sanctions on companies from third countries that facilitate the shipment of Venezuelan oil to Cuba, a senior administration official told the Miami Herald. Read more
Canada open to seamless transition in trade with Britain after Brexit
iPolitics: Tuesday’s massive rejection by the British House of Commons of Prime Minister Theresa May’s eleventh-hour bid for Brexit on her terms leaves Britain’s future relations with the European Union up in the air. Read more
Gender and trade spotlighted at UN Commission on Status of Women
UNCTAD: Trade policies are not gender neutral and can affect men and women differently due to the distinct roles each plays in our economies and societies, UNCTAD Deputy Secretary-General Isabelle Durant said on 13 March at the United Nations headquarters in New York City. Read more
Trade wars are growing over the digital economy – and developing countries are shaping the agenda
The Conversation: At the heart of the current US trade war with China is tariffs on imports like steel, sorghum and silicon chips. But, with the growing role of data and digital technology in the world economy, a new arena of digital trade conflict is on the cards. Read more
Brazil Reportedly Weighing Import Quota for US Wheat
VoA: Brazil is considering granting an import quota of 750,000 metric tons of U.S. wheat per year without tariffs in exchange for other trade concessions, according to a Brazilian official with knowledge of the negotiations ahead of President Jair Bolsonaro’s visit to Washington. Read more
WTO: India pushes for simpler qualification, licensing norms for foreign workers
Hindu Business Line: India has pushed for more transparent and simpler qualification and licensing norms at the World Trade Organization for workers and professionals seeking to work in another country and has circulated a draft paper for consideration of other members. Read more
As US tightens sanctions, India cuts down oil imports from Venezuela blaming poor infrastructure
Financial Express: India’s import of oil from Venezuela is almost nil since the country’s infrastructure is not up to the mark, say sources. The bilateral trade between the two countries is at $ 6 billion and is in the favour of Venezuela due to oil imports by India. Read more
UK will cut most tariffs to zero in event of no-deal Brexit
The Guardian: Tariffs will be cut to zero on 87% of imports to the UK as part of a temporary no-deal plan, but prices of some imports including meat, shoes, underpants and cars will go up. Read more
Brexit: Does NI tariffs plan violate WTO law?
BBC: The UK government’s strategy for the Irish border if there’s a no deal Brexit will mean no tariffs on Irish goods going to Northern Ireland, but some Irish food products entering Great Britain will face high tariffs. Read more
US trade rep says WTO playbook is outdated, needs reforms
Reuters: The World Trade Organization is using an “out of date” playbook despite dramatic changes including the rise of China and the evolution of the internet, U.S. Trade Representative Robert Lighthizer said in testimony to Congress on Tuesday. Read more
Trump seeks to change free-trade agreements with Israel
Israel Hayom: U.S. trade negotiators will travel to Israel this week for advanced talks to rework the countries’ 1985 free-trade accord, upgrade their agricultural trade pact and reduce barriers for American farm exports to the Jewish state, Bloomberg reported. Read more
Malaysia threatens WTO challenge to EU’s move to drop palm biofuel
New Strait Times: Malaysia on Saturday threatened to bring a World Trade Organisation (WTO) challenge if the European Union goes ahead with recommendations to phase out palm oil from transport fuel used in the bloc. Read more
UN’s Asia-Pacific Trade And Investment Committee Convenes Amid Global Trade Uncertainty
Eurasia Review: Against the backdrop of uncertain trade relations between the United States and China, senior government officials from across Asia and the Pacific gathered in Bangkok this week to re-iterate their commitment to strengthening regional trade and investment. Read more
Malaysia is cautiously optimistic on conclusion of RCEP by year end
New Strait Times: Despite some details that need to be ironed out, the government is optimistic on the conclusion of Regional Comprehensive Economic Partnership (RCEP) by year end. Read more
Commentary: Concluding the high-stakes RCEP in 2019 will need a different approach
Channel News Asia: It’s useful to consider alternative approaches for facilitating the conclusion of the negotiations on the Regional Comprehensive Economic Partnership (RCEP), says ISEAS-Yusof Ishak’s Tham Siew Yean. Read more
EU tax blacklist could block Pacific trade – expert
Radio New Zealand: A Vanuatu-based business adviser is warning Pacific nations caught on a new EU tax blacklist could get locked out of trade in Europe. Read more
EU leaders seek clarity from UK before possible Brexit delay
Deutsche Welle: European Union leaders say if Theresa May’s Brexit deal is rejected again, a clearer plan must be put forward. The UK is seeking a three-month extension to the current March 29 deadline in order to come to an agreement. Read more
European parliament deals setback to EU-US trade talks
France24: The European Parliament on Thursday failed to back the launch of trade talks between the EU and the United States, dealing an unexpected blow to efforts to avert a transatlantic trade war. Read more
EU Foreign direct investment report: continuous rise of foreign ownership of European companies in key sectors
EU: The report is the first of its kind in terms of the detailed company level data used. It confirms a continuous rise in foreign company ownership in key sectors in the EU and an increase in investments from emerging economies, such as China. It illustrates the need for effective implementation of the freshly adopted EU investment screening framework. Read more
Commerce Sec Anup Wadhawan: India Looks For Better Deal For Exporters Under Free Trade Agreement
Techgraph: India is in discussions with its key trading partners to expand preferential duties under free trade agreements (FTAs) even as the government is streamlining procedures for exporters to avail benefits from such trade pacts, Commerce Secretary Anup Wadhawan has said. Read more
Taiwan-El Salvador FTA still effective: MOEA
Focus Taiwan: El Salvador has never asked to cancel a free trade agreement (FTA) with Taiwan so the deal remains in place, even though the Central American country switched diplomatic recognition to China last year, Taiwan’s Ministry of Economic Affairs (MOEA) said Thursday. Read more
Mnuchin: Lifting tariffs part of plan for USMCA passage
Politico: The Trump administration will work out a solution on steel and aluminum tariffs with Mexico and Canada as part of its efforts to get the new North American trade pact through Congress, Treasury Secretary Steven Mnuchin told lawmakers Thursday. Read more
African finance ministers set to examine fiscal policies key to AfCFTA implementation
The New Times: The 52nd session of the Economic Commission for Africa’s (ECA) Conference of African Ministers of Finance, Planning and Economic Development, will be held in Marrakech, Morocco, next week under the theme; Fiscal policy, trade and the private sector in the digital era: A strategy for Africa. Read more
Quality Research Needed to Help Implement the Afcfta
AllAfrica: With a few more ratifications needed for the African Continental Free Trade Area (AfCFTA) to become effective, scholars meeting for the Economic Research Conference in Kigali pledged to produce good high-quality research papers to inform policymakers and help move the agreement forward. Read more
AfCFTA – What Next After Ratifications?
All Africa: The African Continental Free Trade Area Agreement (AfCFTA) could soon gather the minimum required ratifications to put it into effect. Read more
US requests consultations with South Korea under the free trade pact
Business Standard: The Trump administration has requested consultations with South Korea under the two nations’ free trade pact to try to resolve US concerns about procedures in competition hearings held by a South Korean trade commission. Read more
UK signs post-Brexit trade deal with Fiji and Papua New Guinea
The Guardian: Ministers rush to do deals with countries UK trades with under EU free trade arrangements. Read more
China Upbeat on Trade Talks, Denies Huawei Spying Allegations
VoA: China used the closing of its annual top-level political meetings, or “Two Sessions,” to send positive signals about its commitment to resolve trade tensions with Washington and push forward economic reforms. Read more
China Aims to Placate U.S. With Law Banning Theft of Foreign Trade Secrets
Wall Street Journal: China made last-minute changes to a proposed foreign-investment law, trying to address U.S. complaints about forced technology transfer and bolster a compromise seen as crucial to striking a trade deal with Washington. Read more
WTO 2019 Public Forum theme to be ‘Trading Forward: Adapting to a Changing World’
The WTO’s 2019 Public Forum, to be held on 8-11 October, will consider how trade and the trading system can adapt to a changing world. Read more
The Philippines launches safeguard investigation on clear and tinted float glass
On 13 March 2019, the Philippines notified the WTO’s Committee on Safeguards that it initiated on 19 February 2019 a safeguard investigation on clear and tinted float glass. Read more
DDG Wolff: Eight reasons for optimism about the future of the multilateral trading system
Despite being tested “as never before” in its 80-year history, the multilateral trading system will endure, improve and survive, Deputy Director-General Alan Wolff predicted in a speech to the Harvard Law School on 12 March. DDG Wolff said there were eight “sound reasons for optimism” about the system’s future. Read more
Welcome to the Caribbean Trade & Development Digest for the week of March 3-9, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
Saint Vincent and the Grenadines increases export of livestock in 2019
OECS: SVG is known internationally for it’s beautiful chain of islands, but is also taking the Caricom region by storm, as the island witnesses significant increases in fish and livestock exports. Read more
Renewed Calls To Do More To Protect Conch
Tribune242: There are renewed calls for conch protection measures from environmentalists, including banning the exportation of conch meat and ramping up efforts to tackle the “scourge” of poaching. Read more
US to allow lawsuits against Cuban firms, foreign businesses excluded for now
CNN: US citizens and companies with claims to Cuban property will soon be allowed to sue Cuban entities, according to a senior State Department official. But foreign businesses operating on the island will be excluded from any lawsuits under the decision to partially suspend Title III of the Libertad Act. Read more
Guadeloupe to accede to associate membership of OECS at Opening Ceremony for Special Meeting of OECS Authority on March 14, 2019
OECS: The OECS Authority is scheduled to meet in special session in Guadeloupe on 14-15 March 2019 at which time Guadeloupe will be admitted as an associate member of the Organisation. Read more
National Puerto Rican Chamber of Commerce among entities pushing for passage of North American trade agreement.
Caribbean Business: The Pass USMCA Coalition, an alliance advocating for the passage of the United States-Mexico-Canada Agreement, welcomed the National Association of Manufacturers, Domino’s Pizza, Dow, and the National Puerto Rican Chamber of Commerce as its newest members. Read more
Export development workshop held today in Corozal
Breaking Belize News: The Ministry of Investment, Trade, and Commerce announced that as part of a major deliverable under this consultancy, it is hosting a Validation Workshop of a “Draft Regional Economic Development Master Plan for Corozal” that looks at two main components under the consultancy: I. Free Zone review and repurposing and II. The preparation of an Economic Development Master Plan for the Corozal Region. Read more
Barbados dismisses claims that island could suffer as a result of CSME requirement
TV6: Barbados has dismissed as “propaganda”, claims that the island could suffer a social fallout as a result of the implementation of the Protocol of Contingent Rights that allows for spouses, young children and dependent parents of skilled Caribbean Community (CARICOM) nationals to reside here. Read more
All CSME Member States Sign on to Contingent Rights Protocol
Caribbean360: Member States that are participating in the CARICOM Single Market and Economy (CSME) have all signed on to the Protocol on Contingent Rights and most of them are prepared to immediately begin provisional application of the Protocol. Read more
Caricom grants deferral to two member countries on freedom of movement
Jamaica Observer: Two Caribbean Community (Caricom) countries have been granted a five-year deferral on the freedom of movement of Caribbean nationals under the Caricom Single Market and Economy (CSME) that allows for the free movement of goods, skills, labour and services across the 15-member grouping, Trinidad and Tobago Prime Minister Dr Keith Rowley has said. Read more
PROCOMER Will Promote Export Competencies in Businessmen of the Caribbean Region
Costa Rica News: With the objective of developing export capacities for entrepreneurs in the agricultural, food, and logistics services sectors, the Office of the Costa Rican Foreign Trade Promotor (PROCOMER) in the Huetar Caribe region prepares the 5th edition of the Caribbean Business Meeting. It will take place on March 20th and 21st, 2019, starting at 8:00 am, at the EARTH University of Guácimo. Read more
Oil import bill on the increase
Barbados Advocate: AFTER declines in recent years, Barbados’ oil import bill is back up in the air.This increasingly high bill of more than $700 million last year was one of the challenges which continued to confront the Barbados economy in 2018. Read more
The Kiwi leading the fight to fix the WTO
Newsroom: With a critical component of the international trading system at risk of collapse, a New Zealander has been tasked with helping to avert crisis. Sam Sachdeva speaks to David Walker about the task ahead of him. Read more
Malaysia says EU palm oil curbs lack scientific proof, breach WTO rules
Reuters: A European Union proposal to limit the use of palm oil lacks comprehensive scientific evidence and breaches global trade rules, Malaysia’s marketing agency for the edible oil said on Friday. Read more
Kenya negotiating AGOA extension despite low exports
The Star: The government is negotiating for a post Africa Growth and Opportunity Act (AGOA) initiative to grow exports to US. AGOA was enacted in May 2000 and now has seven years to 2025 after its renewal, under which the country is to export duty-free products. Read more
Americans will need a visa to visit 22 countries in Europe starting in 2021
Insider: In two years, Americans will need to apply for something called ETIAS (European Travel Information and Authorization System) in order to enter the continent. The European Commission says the new visas will be enforced as an effort to upgrade international security, effective January 1, 2021. Read more
Liam Fox: I fear Brexit may never happen
BBC: A cabinet Brexiteer has voiced fears that Remain supporters in parliament will seek to overturn the referendum result over the next week. Liam Fox told BBC Newsnight that a large number of MPs want to keep the UK “locked in the EU”, adding there needs to be an end to the “self-induced pessimism” which is denying the opportunities offered by Brexit. Read more
UK and South Africa to co-lead initiative on digital trade, aiming to boost Commonwealth trade to $2tn
UK Government: The Commonwealth initiative will seek to increase prosperity in least developed and developing countries through digital trade. Read more
Malmström calls for renewed transatlantic cooperation on trade
EU: EU Trade Commissioner Cecilia Malmström appealed to the US not to stray from the international trade order and instead work with Europe to face the challenges of the modern global economy, including China. Updating the World Trade Organisation (WTO) should be at the heart of this rejuvenated reform effort, she argued. Read more
Trade agreement between the EU and the Republic of Korea shown to have increased EU exports by 76%
EU: A European Commission evaluation shows that the trade agreement between the EU and Korea has been effective in making trade and investment easier, simpler and less costly. This in turn increased trade in both goods and services between the two sides, contributing to jobs, growth and more consumer choice. Read more
Foreign Investment Screening: new European framework to enter into force in April 2019
EU: The Council of the EU today approved a new framework to screen foreign direct investments coming into the European Union, thus concluding the legislative process on this proposal. Read more
China’s foreign investment law to usher in new chapter of opening up
ECNS: With a new draft foreign investment law submitted to national lawmakers for a third reading, China is a big step closer to adopting a unified “fundamental law” that will better protect foreign investors and start a new chapter for its opening up. Read more
Mercosur hopes to become main food supplier of ASEAN
Saigon Online: The South American trade bloc Mercosur hopes to become a main food supplier of the Association of Southeast Asian Nations (ASEAN) in the next 50 years, according to President of the Mercosur-ASEAN Chamber of Commerce Rodolfo Caffaro. Read more
Trade barriers stall Asean integration, say experts
The Nation: ASEAN integration is “not going anywhere” if trade regulations between Asean countries are not reformed, a recent forum heard. Read more
In Blow to Trump, America’s Trade Deficit in Goods Hits Record $891 Billion
New York Times: America’s trade deficit in goods with the rest of the world rose to its highest level in history last year as the United States imported a record number of products, including from China, widening the deficit to $891.3 billion and delivering a setback to President Trump’s goal of narrowing that gap. Read more
Europe Trade Czar Warns of ‘Tariffs on Day 1’ After Hard Brexit
Bloomberg: The European Union’s top trade official warned that the U.K.’s impending exit from the bloc risks being “chaotic’’ with some of the EU’s other member states still not prepared for the practical realities of a no-deal Brexit that may be just three weeks away. Read more
Kenya bank to open office in China to facilitate Sino-Africa trade
Business Report: Kenya Commercial Bank (KCB), a regional financial institution, plans to open a representative office in China in order to lower cost of Sino-Africa trade, officials said Wednesday. Read more
Brexit: Will it affect the Kenyan flower trade?
BBC: As Britain prepares to leave the European Union, workers in Kenya’s flower industry are closely monitoring developments. Read more
EU trade chief says no support in Europe for US trade deal that includes agriculture
Independent (Ireland): The European Union will not support a comprehensive trade deal with the United States that includes agriculture, the EU’s top trade negotiator said on Thursday, so she is working toward a narrower deal focused on industrial goods and automobiles. Read more
A key measure of global trade just had its biggest tumble since 2015
Business Insider: Air freight has been weakening since mid-2018 due to “protectionist measures and trade tensions,” according to the International Air Transport Association director general and CEO. Read more
Venezuelan Diaspora May Number 8 Million by Next Year, Group Says
Bloomberg: More than 3.4 million Venezuelans have already fled in the most severe migration crisis in the world after Syria, the study found. This diaspora will swell to 5.4 million by the end of this year, and to 7.5 million to 8.2 million by the end of 2020, according to the OAS. Read more
Ports That Boomed on China May Never Be the Same as Trade Shifts
Bloomberg: An industry that saw dramatic growth in the decade before Donald Trump took office is now concerned his administration’s trade tussle with China, and the lack of a deal with Japan, will cut future growth short. Read more
Big Brexit vote: What do I need to know?
BBC: On Tuesday MPs will pass their verdict on Prime Minister Theresa May’s plan to take Britain out of the European Union on 29 March. Here is what you need to know about the vote. Read more
China Export Slump Adds to Concerns Over Weakening Global Growth
Bloomberg: China’s exports slumped in February as seasonal factory shutdowns and continued uncertainty from the trade war combined to drag on shipments, adding to concerns over a weakening global economy. Read more
US to Suspend India’s Preferential Tariff Status
Times of India: The US decision to withdraw GSP benefits from India will not have a significant impact on Indian exports to US, says top official. Read more
India, Australia locked in sugar trade dispute at WTO
Livemint: India has to enter into consultations and answer all the specific issues within 30 days after Australia told the World Trade Organization (WTO) that the minimum support prices (MSP) and export subsidies provided to sugarcane and sugar producers by the Narendra Modi government and several state governments violate global trade rules. Read more
US-Mexico-Canada trade deal is ‘crucial’ for future negotiations and needs to get approved: GOP congressman
CNBC: The trade deal between the United States, Canada and Mexico is crucial for future trade agreements and needs to be “put on the books,” Rep. Tom Reed, R-N.Y., told CNBC on Thursday. Read more
Peru Moves to Ratify Asia-Pacific Trade Agreement in March
Bloomberg Tax: Peru expects to ratify an 11-nation Asia-Pacific trade agreement in March, slightly more than a year after it was signed. Read more
Trade and gender training, new research and EIF initiative announced on Women’s Day at WTO
Director-General Roberto Azevêdo announced new efforts for women’s economic empowerment through trade, including a training module and new research on trade, gender and the environment, at an event at the WTO celebrating International Women’s Day on 8 March 2019. Read more
“Gender issues are central to who we are,” says DG Azevêdo on Women’s Day
At an event at the WTO celebrating International Women’s Day on 8 March 2019, Director-General Roberto Azevêdo reviewed the organization’s current work in trade and gender, and talked about future work and initiatives. “Gender issues are central to who we are as an organization,” he said in opening the event. Read more
Brazil, Australia initiate WTO dispute complaints against Indian sugar subsidies
Brazil and Australia have requested WTO dispute consultations with India regarding domestic support measures and alleged export subsidies provided by India to producers of sugarcane and sugar. The requests were circulated to WTO members on 5 and 7 March. Read more
Trade Policy Review: Ecuador
The third review of the trade policies and practices of Ecuador takes place on 5 and 7 March 2019. The basis for the review is a report by the WTO Secretariat and a report by the Government of Ecuador. Read more
South Africa launches safeguard investigation on threaded fasteners of iron or steel
On 4 March 2019, South Africa notified the WTO’s Committee on Safeguards that it initiated on 1 March 2019 a safeguard investigation on threaded fasteners of iron or steel. Read more
DG Azevêdo urges open and inclusive discussions on investment facilitation
Speaking at a meeting of the Structured Discussions On Investment Facilitation for Development on 4 March, WTO Director-General Roberto Azevêdo welcomed the progress made in the talks. He said participants have proceeded in an open and transparent manner and urged them to keep working to inform and interact with the full membership. Read more
NEW ON THE CTLD BLOG
In commemoration of International Women’s Day 2019, I co-authored an article with Dr. Jan Yves Remy, Deputy Director of the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy & Services, discussing the importance of accelerating gender mainstreaming in CARICOM trade policies in order to foster inclusive development. Have a read here: Accelerating Gender Mainstreaming in CARICOM Trade Policy
Also feel free to take a look at my other commentary this week: CARICOM Protocol on Contingent Rights: An important Step to CSME Consolidation
Dr. Jan Yves Remy and Alicia Nicholls
While we can all agree that trade offers the potential for inclusive and sustainable growth in small Caribbean states, deployment of a successful trade strategy requires recognition and ultimately monitoring of its differentiated impacts on women and men. Despite immense strides made in empowering women, they remain under-represented in global trade and are disproportionately affected by international competition and technological changes.
On the occasion of International Women’s Day 2019, we highlight the link between trade and gender and make the case that accelerating gender mainstreaming in trade policies of CARICOM Member States promotes not just gender equality, but inclusive growth as well.
Gender Equality and Development Nexus
Under the United Nations Sustainable Development Goal 5, the international community has committed to achieving gender equality and empowering all women and girls by 2030. Not only is enhancing women’s equality and economic empowerment a human right, but the removal of legal and other barriers to women’s economic inclusion has a multiplier effect in the economy due to women’s dual role as caregivers and economic actors. World Bank research has found that women invest up to 90% of their income in their families, with positive spill-overs for their communities and the economy. A recent Mckinsey Global Institute Report found that advancing women’s equality could add $12 trillion to global GDP by 2025.
Despite this compelling data, and although they account for half of the world’s working age population, women remain under-represented in international trade on account of their unequal access to factors of production and inbuilt gender biases. A recently released World Bank Report entitled “Women Business and the Law 2019” found that out of 187 countries globally, women had equal legal rights to men in only 6.
Gender and Trade Nexus
Trade policies are not necessarily gender neutral: they impact women and men differently at both the country and sectoral levels. Recognizing this, a policy of “gender mainstreaming” aims to promote gender equality by integrating gender considerations in the preparation, design, implementation and monitoring of policies.
Trade creates opportunities for women’s empowerment by creating both employment and business opportunities, but it can also alienate them. For example, while e-commerce can improve women’s access to foreign markets, increased competition through trade liberalisation can displace and marginalize women in agriculture. Because they are both caregivers and economic actors, women often have less time on average than men to engage in entrepreneurial and exporting activities. At the same time, their access to market information is often lower due to fewer networks and lower education levels. Knowing this, ex ante gender-based analysis can assist policymakers to avoid negative gender impacts of policies that they implement.
A number of international institutions have developed programmes to increase women’s inclusion in trade. For instance, the International Trade Centre (ITC) has created a She Trades electronic platform; and the World Trade Organization (WTO), at its Buenos Aires Ministerial Conference in 2017, adopted a Joint Declaration on Trade and Women’s Economic Empowerment. Regionally, the Caribbean Export Development Agency’s Women Empowered Through Export (We-Xport) initiative supports Caribbean businesswomen looking to export for the first time or to increase their goods and services exports.
But there is still lots to do in CARICOM. Despite the fact that CARICOM Member States are signatory to a plethora of international treaties aimed at the empowerment of women, their trade policies are to a large extent being enacted and maintained in the absence of evidence and data that is timely, comparable and sex-disaggregated. Mainstreaming gender into CARICOM countries’ trade and development policy-making would help to ensure that initiatives under the CARICOM Single Market and Economy (CSME) and CARICOM’s trade negotiations with third parties are gender-sensitive. It is, therefore, a welcome development that Belize’s recently launched National Trade Policy (2019-2030) incorporates gender equality as a cross-cutting issue. Another praiseworthy development is that in February 2019, it was announced that national consultations were underway on a draft CARICOM Regional Gender Equality Strategy to advance gender equality and equity and the empowerment of women and girls in each of the fifteen CARICOM Member States.
How can CARICOM Member States promote Gender Mainstreaming in Trade?
Based on the above, we recommend the following ways in which CARICOM’s trade policies may be more gender-sensitive:
International Aid for Trade programming is becoming increasingly gender-focused. With foreign donors increasingly making gender an important plank of their aid strategies, CARICOM governments seeking development assistance are increasingly under pressure to include gender considerations. However, gender mainstreaming is not just about ensuring CARICOM Member States meet their international treaty obligations or increase their access donor to funding. When properly implemented, gender-sensitive trade policies promote women’s empowerment, eradicate poverty and foster inclusive growth.
Dr. Jan Yves Remy is the Deputy Director of the University of the West Indies, Cave Hill’s Shridath Ramphal Centre for International Trade Law, Policy & Services. Alicia Nicholls is an international trade and development consultant and contributing author to the UWI SRC’s Trading Thoughts column.
The Government of Barbados has recently announced a Bill entitled the Caribbean Community (Amendment) Bill 2019, which, when passed, would amend the principal Act to give effect to the CARICOM Protocol on Contingent Rights, making it part of Barbadian law.
Barbados, along with six other CARICOM Member States, had signed the Protocol during the 39th Regular Meeting of the Conference of CARICOM Heads of Government in Montego Bay Jamaica in July 2018.
Following the recently held 30th Inter-sessional Meeting of the Conference of CARICOM Heads of Government in St. Kitts & Nevis, it has been reported that all CSME participating Member States have now signed the Protocol. But what is the Protocol about and why is it necessary for the consolidation of the CSME?
What is the Protocol on Contingent Rights and Why is it Necessary?
The Revised Treaty of Chaguaramas confers a number of rights to Community Nationals, including the right of establishment, the right to provide services, the free movement of capital and of skilled Community Nationals to seek employment in other CSME participating Member States. However, it was recognised by Member States that despite these rights (called ‘primary rights’) being conferred, additional enforceable rights (or ‘contingent rights’) were needed to ensure that Community Nationals could enjoy them effectively and without frustration.
For example, there was concern by CARICOM nationals who were working in other jurisdictions about their inability to access social services on the same basis of nationals of the host country, the inability of their spouses to also legally seek employment, and for their children to access primary education on the same basis as the children of nationals of the host country. These barriers frustrate the exercise of the rights conferred in the Revised Treaty.
The Protocol, which was a long time in the making, confers certain enforceable social and economic rights to Community Nationals and their immediate families who make use of the right of establishment, the right to provide services, the right to move capital and the free movement of skilled labour under the Revised Treaty of Chaguaramas. As such, the Protocol is not only a starting point for addressing some of the issues currently faced by Community Nationals seeking to exercise these rights effectively, but is, therefore, an important step towards the consolidation of the CSME.
Rights guaranteed under the Protocol
The framers of the Protocol define ‘contingent rights’ as “rights to which a national and his or her spouse and immediate dependents are entitled, contingent on the exercise by the principal beneficiary of the right of establishment, provision of services, movement of capital or free movement of skills”.
Subject to certain exceptions, the contingent rights currently guaranteed under the Protocol are:
These are a minimum standard and as such, Article IV of the Protocol specifically notes that Member States are not precluded from granting greater rights once not done in a discriminatory manner in contravention of the non-discrimination principle (Article 7) and more specifically, the Most Favoured Nation principle (Article 8) of the Revised Treaty respectively. It should be noted that consistent with a phased approach, the Barbados Bill adopts the Protocol as is and does not grant any greater rights.
Who may qualify for these rights?
The Protocol defines a ‘principal beneficiary’ as a national of a Member State exercising one or more primary rights, that is, rights pursuant to the Treaty in relation to the operation of the CSME and described in Articles 32, 34, 36, 40 and 46 of the Treaty, which deal with right of establishment, right to provide services, the movement of capital and free movement of skilled community nationals respectively.
For example, under the free movement of skilled nationals regime, ten categories of wage earners may move and work freely within CSME participating Member States without having to seek a work permit in the jurisdiction in which they seek to work and once they hold a CARICOM Skills Certificate (formally known as the CARICOM Certificate of Recognition of Skills Qualification).
The five original categories under the Revised Treaty of Chaguaramas were: University graduates, artistes, musicians, sportspersons, media workers. These were later expanded to include five additional categories: nurses, teachers, artisans with a Caribbean Vocational Qualification (CVQ), holders of Associates Degrees or comparable qualification and Household Domestics with a Caribbean Vocational Qualification (CVQ) or equivalent qualification. These eligible categories will soon include others, namely, agricultural workers, barbers, security guards and beauticians.
All other Community nationals need to apply for work permits in order to seek employment in another CSME jurisdiction.
Spouses and Dependents
With a nod to inclusiveness, the framers of the Protocol adopted a broad definition of ‘dependent’ to include any unmarried child of a principal beneficiary or of his or her spouse provided that such child is under the age of 18 years, under the age of 25 years attending school or university full time or over the age of 18 years who is disabled and dependent on the principal beneficiary. However, the definition of ‘spouse’ is still restricted to heterosexual relationships either via marriage, or via common-law unions to the extent that such unions are recognized by the laws of the host country.
Built-in agenda and monitoring
The issue of contingent rights has been a sensitive one as not all CARICOM Member States offer their own nationals the same level of social benefits. There are legitimate fears that there may be undue burdens placed on those States with more generous social welfare programmes, such as free education and free health care, as well as concerns about the potential for abuse of these programs.
One way the framers of the Protocol appear to seek to address this concern is by allowing for a phased approach through a built-in agenda (Article III). It enumerates a list of potential more extensive rights to be adopted by Member States on a phased approach subject to agreement. It also provides for monitoring and review. Additionally, temporary service providers are not entitled to contingent rights and safeguard measures in Article 47 apply to the Protocol mutatis mutandis.
Moving from paper to practice
CARICOM Member States are dualist States, that is, even after a treaty is signed by a Member State, it needs to be translated into domestic law in order for the treaty obligations to be binding on the State domestically. Therefore, the rights under the Protocol can only be enjoyed, and the State bound to provide these rights, once they have been translated into domestic law through an Act of Parliament.
The very timely Golding Commission Report, which had examined Jamaica’s relations within CARICOM and CARIFORUM, had spoken of the CSME implementation deficit and challenged regional leaders to chart a way forward. Having this Protocol enter into force would not only facilitate greater movement, but also be a much-needed injection of confidence to show the region’s populace that the CSME is not moribund. On this note, Barbados’ initiative to begin the ratification process is certainly a commendable one, and it is hoped that other CARICOM countries will swiftly follow suit.
Welcome to the Caribbean Trade & Development Digest for the week of February 24-March 2, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
Meanwhile, the US released its 2019 Trade Policy Agenda and 2018 Annual Report, in which it warned, inter alia, that “we will not allow the WTO Appellate Body and dispute settlement system to force the United States into a straitjacket of obligations to which we never agreed”.
CARICOM Heads of Government held their 30th Inter-sessional Meeting this week (February 26-27, 2019) in St. Kitts & Nevis. Agenda items included transportation, the CSME, security, blacklisting and the situation in Venezuela. The communique may be read here.
Two Caribbean representatives (one from Barbados and the other from Jamaica) are among the list of chairpersons for WTO bodies released by the World Trade Organisation (WTO) on February 28, 2019.
Amnesty for Venezuelans in Trinidad & Tobago
St Lucia Online: Cabinet will meet on a policy position for illegal and legal Venezuelans in Trinidad and Tobago to be allowed an amnesty where they will be given ID cards and allowed to work in the country for one year. Read more
CARICOM food import bill set to reach US$8-10 billion by 2020
Stabroek: For all the talk in the Caribbean regarding the relatively food secure status of many of the territories, the real picture is not one that generates unbridled optimism according to an article headlined “Five Overlooked Facts About Caribbean Food Security” authored by the Barbadian writer, Daphne Ewing-Chow, and published on February 20th in Forbes magazine. Read more
White House to announce new sanctions on Cuba over Maduro support, source says
Fox News: The White House will soon impose major new sanctions against the Cuban government over its support for the regime of contested Venezuelan President Nicolas Maduro, a source familiar with President Trump’s national security team told Fox News. Read more
CARICOM Says EU’s Shifting Tax Compliance Requirements Encroaching on CARICOM’s Sovereignty
Caribbean360: Caribbean Community (CARICOM) Secretary-General Ambassador Irwin LaRocque has expressed strong disquiet that the constantly shifting parameters for good tax governance set out by the European Union (EU), are encroaching on the region’s sovereignty. Read more
CARICOM among four major markets targeted by Jamaica Ministry of Agriculture
Jamaica Observer: Industry, Commerce, Agriculture and Fisheries Minister, Audley Shaw, says CARICOM is among four major markets being targeted, under the Government’s thrust to attain higher levels of economic growth, through the linkage between agriculture and industry. Read more
USTDA Supports Port Cybersecurity in the Dominican Republic
BN Americas: Last week, the U.S. Trade and Development Agency awarded a technical assistance grant to Fundación Ramon E. Mella (FRM), a maritime and port organization in the Dominican Republic. The grant will support the development of a national cybersecurity risk assessment, reporting, and management capability platform for port facilities across the Dominican Republic. Read more
CARICOM Integration advances: All CSME Participating Member States now Signatories to Contingent Rights Protocol
CARICOM: Chairman of the Caribbean Community (CARICOM) and Prime Minister of St. Kitts and Nevis, Dr. the Honourable Timothy Harris, highlighted the gains made towards the regional integration movement, particularly through the signing of the Protocol of Contingent Rights by all CARICOM Member States, as one of the success stories coming out of the 30th Inter-Sessional Meeting of the Conference of Heads of Government, held at the St. Kitts Marriott Resort, Frigate Bay, from February 26-27. Read more
CARICOM Discussions Highlight Concerns about Single Market and Economy
The Bahamas Chronicle: Efforts to strengthen the advancement of the Caribbean Community (CARICOM) Single Market and Economy (CSME) will continue following recent developments that promote the free movement of people, goods, services and capital, and robust discussions slated for the (CARICOM) 30th Inter-Sessional Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM). Read more
CARICOM countries sign multilateral air services agreement
St Kitts & Nevis Observer: Several CARICOM Member States including Dominica, Grenada, Jamaica and Trinidad and Tobago, have signed the Multilateral Air Services Agreement (MASA), aimed at expanding the scope for airlines owned by CARICOM nations to provide air services throughout the Community. Read more
Belize’s exports second lowest in 15 years
Breaking Belize News: Belize’s export revenues for the year 2018 amounted to just under $399 million, making it the second lowest amount earned from exports since the $380 million in 2003 according to the Statistical Institute of Belize’s Annual Export Reports 2003 to 2018. Read more
Reforming the WTO: The Swiss View
Swissinfo.ch: The crisis-hit World Trade Organization (WTO) is going through difficult times. World leaders have committed to an overhaul of the Geneva-based institution, but it is unclear what the future holds. Swiss ambassador to the WTO Didier Chambovey link gives his view. Read more
Australia set to seal Indonesia free trade agreement
Australia Financial Review: A long-anticipated free trade agreement with Indonesia will be signed in Jakarta on Monday, ending more than eight years of negotiations and offering new economic opportunities for industries including the country’s citrus farmers. Read more
‘India should cut car tariffs for free trade agreement with EU’
MENA FM – Gulf Times: The proposed India-EU free trade agreement (FTA) cannot be finalised without an Indian commitment to lower import duties on cars and car parts since this is a politically sensitive issue in the European Union (EU), the EU Ambassador to India Tomasz Kozlowski said in New Delhi on Friday. Read more
Mexico pushing labour reform, won’t ratify new NAFTA with U.S. tariffs in place
CBC: Mexico’s Congress will be asked to approve a major labour reform bill this spring as a necessary step to ratifying the new North American free trade pact later this autumn, say Mexican officials. Read more
Trump said trade wars are ‘easy to win.’ A year later, here’s a timeline of what’s happened with China
CNBC: A year ago, President Donald Trump declared “trade wars are good and easy to win.” The White House has since moved toward its goal of revamping global trade deals, largely through a series of tariffs on — and talks with — China. Read more
U.S., China Are Close to Trade Deal That May End American Tariffs
Bloomberg: Most or all U.S. tariffs on China are likely to be lifted as part of a trade deal between the world’s two largest economies now in its final stages, said two people familiar with the discussions. Read more
International business engagement key to future of trade, ICC Sec Gen
ICC: Speaking at a conference on current challenges to global trade in Lisbon this week, International Chamber of Commerce (ICC) Secretary General John W.H. Denton AO said business could not afford to sit on the sidelines when it came to global challenges, including reform of the multilateral trade system. Read more
Thailand to apply to join trans-Pacific FTA this month: official
The Mainichi: Thailand will apply this month to join a trans-Pacific free trade agreement, aiming to ensure it is not left behind by its competitors in the vibrant region, according to a senior Thai government official. Read more
New Zealand’s Two-way trade with CPTPP countries nears $50 billion
Scoop New Zealand: New Zealand’s two-way trade with the combined Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries was $49.6 billion in the December 2018 year, Stats NZ said today. Read more
New push for Asia-Pacific mega deal
Nikkei Asian Review: Ministers from Asia’s leading economies met here to renew their pursuit of a sweeping regional trade deal as an easing of tensions between the U.S. and China gives momentum to multilateral negotiations. Read more
Michel Barnier casts doubt on whether UK will leave EU on March 29
ITV News: Michel Barnier has indicated he does not believe the UK will have enough time to approve Theresa May’s Withdrawal Agreement by March 29. Read more
WTO: India insists on flexibilities in negotiations on fisheries subsidies
Hindu Business Line: India has insisted that larger developing countries should also be extended flexibilities at the fisheries negotiations of the World Trade Organisation that would allow them to retain some subsidy programmes important for small-scale fishers. Read more
The Commission reinforces procedural rights of parties in EU trade defence investigations
EU: The Commission has today updated the terms of reference for the Hearing Officer for trade defence proceedings, the independent watchdog that guarantees fairness and impartiality of EU anti-dumping and anti-subsidy cases. Read more
EU and New Zealand complete third round of trade negotiations
EU: Trade negotiators from New Zealand were in Brussels from 18-22 February 2019 for the third round of negotiations for a trade agreement with the EU. Read more
U.S. says rejects WTO’s ‘straitjacket’ of trade obligations
Reuters: The Trump administration filed another salvo at the World Trade Organization on Friday, saying U.S. trade policy was not going to be dictated by the international body and defending its use of tariffs to pressure China and other trade partners. Read more
EU grants Ghana €40 million under Economic Partnership Agreement
Business Ghana: The government has signed a €40-million budget support agreement with the European Union (EU). The grant is to support the country’s national development framework, which focuses on jobs as a means to create prosperity and opportunity for all, thereby contributing to the achievement of the Sustainable Development Goals (SDGs). Read more
WTO issues panel report regarding Chinese agricultural subsidies
WTO: On 28 February the WTO circulated the panel report in the case brought by the United States in “China — Domestic Support for Agricultural Producers” (DS511). Read more
Summary of General Council meeting of 28 February 2019
WTO: Report by the Chairman of the Trade Negotiations Committee and Report by the Director-General. Read more
DDG Wolff: More institutional cooperation is needed to address shortages of trade finance
WTO: Speaking to the Expert Group on Trade Finance at the WTO on 28 February, Deputy Director-General Alan Wolff called on the trade finance community to build on the significant progress in recent years in reducing trade finance gaps in developing countries. Read more
DG Azevêdo: “The time is now to confront systemic challenges”
WTO: At a meeting of the full WTO membership today (27 February), Director-General Roberto Azevêdo commented on the emerging debate on ‘WTO reform’, acknowledging the variety of views held by members and arguing that the trading system must be able to evolve if it is to have a bright future. Read more
Tunisia initiates new WTO dispute complaint against Morocco book duties
WTO: Tunisia has requested WTO dispute consultations with Morocco concerning final anti-dumping duties imposed by Morocco on imports of school exercise books from Tunisia. The request was circulated to WTO members on 27 February. Read more Read more
UK set to become a party to the Government Procurement Agreement in its own right
WTO: Parties to the Government Procurement Agreement (GPA) gave their final approval to the United Kingdom’s accession to the pact, in its own right, once it leaves the European Union. At a meeting of the WTO’s Committee on Government Procurement on 27 February, the GPA parties also agreed to grant Paraguay observer status. Read more
EIF strategic plan seeks to help least developed countries gain more from trade
WTO: A new Strategic Plan launched by the Enhanced Integrated Framework (EIF) seeks to deepen efforts to assist least developed countries (LDCs) benefit from trade. The goals of the new plan are to improve the trade environment for LDCs so there is inclusive and sustainable growth, and to increase their exports and access to international markets. Read more
Members consider Thai request for panel to rule on Turkish air conditioner duties
WTO: At a meeting of the Dispute Settlement Body (DSB) on 25 February, WTO members considered Thailand’s request for the establishment of a dispute panel to rule on duties levied by Turkey on imported Thai air conditioners. Members also renewed their discussions on resolving their differences over the appointment of Appellate Body members and heard from several members regarding their efforts to implement WTO rulings. Read more
NEW ON THE CTLD BLOG
My latest commentary is on future CARICOM-US relations beyond the Caribbean Basin Initiative (CBI): Future CARICOM-US Trading Relations Beyond the Caribbean Basin Initiative.
A bipartisan bill (HR 991) was recently introduced in the United States (US) House of Representatives proposing to extend the Caribbean Basin Trade Partnership Act (CBTPA), one of the key pieces of legislation comprising the Caribbean Basin Initiative (CBI), to the year 2030. The benefits under the CBTPA are currently due to expire on September 30, 2020, unless extended by a subsequent Act of Congress.
The CBI has generally been regarded by successive US administrations as being mutually beneficial to both the US and CBI beneficiary countries. However, the current US administration’s greater insistence on reciprocity in its dealings with external trading partners and the on-going re-examination of its current trading arrangements mean that the extension of the CBTPA should not be taken for granted as a fait accompli.
While this article posits that CARICOM countries should indeed lobby for the CBTPA’s extension, it also proposes that, in the long-term, the region should think strategically beyond the CBI by considering a future CARICOM-US trading relationship which best enhances bilateral trade between the US and CARICOM to foster sustainable and inclusive development.
The Status Quo: The Caribbean Basin Initiative
Since 1983, preferential trade between CARICOM countries and the region’s largest trading partner, the US, has been governed largely by the CBI – a unilateral preference scheme of the US government which confers to eligible beneficiary countries non-reciprocal preferential access to the US market for a wide range of goods.
The CBI was first announced by then US President Ronald Reagan during an address before the Organisation of American States (OAS) on February 24, 1982, to facilitate the economic development and export diversification of Caribbean Basin countries, while also advancing US strategic economic and geopolitical interests in its “backyard”.
In 1983, the Caribbean Basin Economic Recovery Act (CBERA) was finally signed into law, coming into effect the following year. In 2000, after much lobbying by Caribbean countries, the CBTPA was passed and granted enhanced preferences for eligible textile and apparel from CBI countries on par with those enjoyed by Mexico under the North American Free Trade Agreement (NAFTA). While the CBERA was made permanent in 1990, the CBTPA is scheduled to expire on September 30, 2020.
Seventeen Caribbean countries and territories are currently CBERA beneficiaries, while seven are eligible for the enhanced CBTPA preferences. Haiti also receives additional benefits for its apparel and textiles under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act of 2006, the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE II) Act of 2008, and the Haiti Economic Lift Program (HELP) Act of 2010, which are scheduled to expire in September 2025.
Data in the United States Trade Representative’s Twelfth Report to Congress on the Operation of the Caribbean Basin Economic Recovery Act (December 2017) illustrated that for the years 2012-2016, on average about half of US total imports from CBI countries entered the US market otherwise duty-free. This was followed by imports under CBI tariff preferences which accounted on average for less than a quarter of US total imports from CBI countries. Trinidad & Tobago, Haiti and Jamaica were the top three sources of total US imports from CBI countries.
CBI: Possible Headwinds
The USTR report noted a 24% decrease in US consumption imports from beneficiary countries in 2016 compared to 2015, and down 58% from 2006. This decline was attributed to lower petroleum prices and an increase in US domestic petroleum production. US imports from CBI countries declined from 0.5% of total US imports from the world in 2012 to 0.2% of total US imports from the world in 2016. Energy products accounted for 39.3% of US imports under CBI in 2016 and textiles and apparel (primarily Haitian apparel) accounted for 34.9%.
In an article I wrote on this topic a couple of years ago, I outlined some of the structural deficiencies with the CBI as currently operated which I argued circumscribe its effectiveness at promoting economic development and diversification in beneficiary economies. One of those deficiencies is that the CBI preferences apply to goods only, which over time has arguably lessened its value given the increasing contribution of services trade to Caribbean economies.
Besides the structural issues inherent in the CBI, its continuation faces some possible political headwinds. The CBERA’s incompatibility with the World Trade Organisation (WTO) rules on non-discrimination and its ineligibility for the ‘enabling clause’ exception mean that the US must seek a waiver from the WTO which must be approved by WTO members. The US’ current WTO waiver for CBERA (inclusive of the CBPTA) is due to expire on December 31, 2019. Given this administration’s greater insistence on reciprocity with its trading partners, as articulated in the 2018 Trade Policy Agenda, it should not be taken for granted that the US will seek a new waiver for CBERA. Moreover, the strong opposition made by some developing WTO members the last time the US sought a waiver means that approval of yet another waiver by the WTO is also not a fait accompli.
Additionally, the current mercantilist tenor of US trade policy has occasioned a greater insistence on reciprocity and enhanced scrutiny of its trade agreements with countries with which the US has a trade deficit. It is this policy shift which hastened the renegotiation of NAFTA and its renaming to the USMCA. While reports do not indicate that the CBI is under the microscope, the programme’s unilateral nature means that preferences thereunder may be unilaterally varied or ended at any time. This adds some uncertainty for Caribbean exporters.
One element which might be keeping the CBI out of the current administration’s cross-hairs is that the CBI had immediately led to a spike in US domestic exports to CBI countries (then including other Caribbean Basin economies), peaking at $26 billion in 2005. Although US exports to CBI countries have declined since 2005, the US still enjoys a wide trade surplus with CBI countries – the total value of US exports to CBI countries in 2016 was $10.5 billion, while the total value of US imports to CBI countries in that same year was only $5.3 billion, leading to a US merchandise surplus with CBI countries of $5.1 billion in 2016.
Indeed, in the statement released by US Representative Terri Sewell (D-AL), one of HR 991’s co-sponsors (the other is Brad Wenstrup (R-OH)), the congresswoman noted, inter alia, that “Extending the U.S. Caribbean Basin Trade Partnership Act will expand the United States’ trade with Caribbean basin countries and increase our nation’s economic growth”.
CBI: Next Steps
Let me note that even if the CBTPA is not extended, this does not necessarily affect other components of the CBI programme which in the case of the CBERA is currently ‘permanent’ and with regard to the Haiti-specific preferences are due to expire in September 2025.
Nonetheless, this is not to diminish the importance of retaining the CBTPA tariff preferences, which still account for an important share of US imports from CBI countries. In 2016, the value of US imports under CBERA was $479 million and $252 million under the CBTPA. For this reason, the best immediate option is for CARICOM countries to step up their lobbying for an extension of the CBTPA. This lobbying effort should, of course, be done in collaboration with the regional private sector, the Caribbean diaspora and friends of the Caribbean in the US Congress. It is in this vein that the closure of the US-based Caribbean Central American Action (CCAA), which did excellent work on behalf of the region in the US, leaves a void which will need to be filled.
Another issue will be finding ways to increase the rate of utilization by CBI exporters of the CBERA/CBTPA preferences. This is a catch-22, of course, as the current wide US surplus with the region is perhaps the reason why CBI has been outside of the current administration’s crosshairs.
Nevertheless, US foreign policy has recognised that an economically prosperous Caribbean is in the US’ best interests. The Multi-Year US Strategy for Engagement in the Caribbean, pursuant to the US-Caribbean Strategic Engagement Act of 2016, recognizes this by outlining several broad proposals for improving the trade and investment climate between the US and Caribbean. The mechanism of the US-CARICOM Trade and Investment Council, as provided for under the Trade and Investment Framework, should be used as a forum to discuss the implementation of these proposals and ways to improve CBI beneficiaries’ utilization of the preferences with the view to enhancing their economic development.
Let me hasten to say, however, that underutilization of the CBI is not simply a product of the structural problems of the initiative, but is symptomatic of the chronic under-utilisation by regional firms of current trade agreements in place between CARICOM and its trade partners. This speaks to wider structural issues prohibiting regional exporters from converting market access into market penetration. For one, navigating the myriad of requirements for exporting to the US under the CBI and other trade preference programmes is not easy for businesses, especially MSMEs which lack scale and have limited resources to interpret and meet the legal and other requirements under these arrangements.
Beyond CBI: Options for Future CARICOM-US Trading Relations
Given the CBI’s inherent structural problems and the possible political headwinds which may face the CBTPA’s renewal, CARICOM should seriously consider options beyond the CBI for its future trading relations with its most important partner.
An appropriate policy response should be evidence-based, that is, backed by sound data, as well as broad-based stakeholder consultations on the way forward. However, at least four options are readily apparent.
This is not an attractive (or real) option for CARICOM countries as it would result in regional exporters paying WTO Most Favoured Nation (MFN) rates for goods currently benefiting from CBI tariff preferences, thereby reducing what little margin of competitiveness they currently enjoy in the US market.
The US GSP was created in 1974 and provides duty-free, non-reciprocal access to the US market for a number of goods from 131 designated beneficiary countries, including 44 Least Developed Countries (LDCs). In March 2018 President Trump signed legislation to renew it to March 2020. Similar to the CBI, the GSP’s unilateral nature still adds an element of uncertainty for traders. The rules of origin under the GSP are also stricter than those under the CBI.
While some US imports from CBI countries do enter the US market under the GSP, these are much less than those entering otherwise duty-free, under CBI and HOPE Act tariff preferences and under WTO Most Favoured Nation (MFN) terms. Additionally, not all CBI countries are GSP designated countries. For example, Antigua & Barbuda, Barbados and Trinidad & Tobago were graduated and are no longer eligible for preferences under the GSP.
Acceding to an existing US FTA, such as the CAFTA DR, may be another possible option. Under Article 22.6 (Accession) of the CAFTA-DR, any country or group of countries may accede to the Agreement “subject to such terms and conditions as may be agreed between such country or countries and the Commission and following approval in accordance with the applicable legal procedures of each Party and acceding country.”
Acceding to CAFTA-DR would create market access openings for CARICOM exporters not only to the US, but to the other CAFTA-DR parties: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, as well as enhanced market access to the Dominican Republic (with which CARICOM already has an FTA).
Conversely, there are considerations to be borne in mind. Are the commitments under the CAFTA-DR ones that CARICOM Member States are prepared to undertake and capable of implementing? What would be the possible impact of these market access openings on CARICOM’s most sensitive industries?
There are also political considerations. With the USMCA signed (but still awaiting ratification by all three governments), the current administration is said to be looking closely at the CAFTA-DR, which means that a possible renegotiation of that agreement at some point cannot be ruled out.
The fourth and perhaps best long-term scenario is the eventual conclusion of a CARICOM-US Free Trade Agreement. As noted in the latest USTR Report on CBERA, eight countries (including the Dominican Republic) are no longer CBERA beneficiaries due to being party to FTAs with the US. Indeed, the aim was for the US to conclude an FTA with CBERA beneficiaries as soon as possible.
There are possible positives to concluding a CARICOM-US FTA, including gaining preferential access to the US market for CARICOM services providers, and the prospect of negotiating a mutually beneficial and binding trading agreement which provides certainty for exporters from both sides.
However, there are also some potential downsides. An FTA is reciprocal and binding which means CARICOM Member States will be required to make market access concessions to the US as well. CARIFORUM countries are already struggling to implement commitments made under the CARIFORUM-EU Economic Partnership Agreement which has been provisionally applied since 2008. Some CARICOM governments may also worry about the further erosion of tariff revenue.
It is also doubtful whether the current US administration (or any future one) would agree to the generous level of special and differential treatment as CARIFORUM was able to negotiate with the European Union (EU) under the CARIFORUM-EU EPA. Negotiating a CARICOM-US FTA will also necessitate reconciling differing levels of ambition and competing interests among CARICOM Member States due to asymmetric development levels and capacity for undertaking commitments.
Nonetheless, of the four future scenarios presented, this is likely to be the most beneficial option for CARICOM. Any post-CBI CARICOM-US trading arrangement should at the very least be reciprocal (not unilateral), provide for special and differential treatment and development assistance, include gender and environmentally sensitive provisions, include an investment chapter which incorporates recent best practices in investment treaty rule-making which seek to ensure a proper balance between investor rights and States’ regulatory rights, and mandate on-going review and monitoring of the agreement to ensure that it is achieving its objectives. These could be best captured in an FTA.
In conclusion, the best immediate option for CARICOM at this moment should be lobbying for the CBTPA’s extension. However, given the flaws inherent in the CBI and the possible headwinds facing the programme’s future continuation, CARICOM policymakers would be advised to keep one eye on lobbying for an extension of CBTPA with the other on a longer term view of what its next steps should be regarding the region’s future trading partnership with its most important trading partner.
Welcome to the Caribbean Trade & Development Digest for the week of February 17-23, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
The World Trade Organisation (WTO) has warned that “trade weakness is likely to extend into the first quarter of 2019”. This is based on its trade indicator whose reading is currently the weakest since March 2010. Read more here.
UNCTAD has released an article taking stock of the current level of ratification, implementation notifications, and transparency obligations of the Trade Facilitation Agreement and may be viewed here.
Regionally, Secretary General of the United Nations Conference on Trade and Development (UNCTAD), Dr. Mukhisa Kituyi, presented a lecture in Barbados entitled “The Role of UNCTAD in Trade and Development in the Caribbean”. The lecture was a collaboration between the Shridath Ramphal Centre for International Trade Law, Policy and Services of the University of the West Indies’ Cave Hill Campus and the Ministry of Foreign Affairs and Foreign Trade of Barbados. The Secretary General touched, inter alia, on the current challenges facing the multilateral system, challenges facing small States and the current ACP-EU negotiations.
Bahamas Must Benefit In WTO Sector Openings
Tribune242: The Bahamas will only open up industries to foreign competitors under the WTO if doing so generates “real economic opportunities” for this nation, its chief negotiator asserted yesterday. Read more
Trade arrangements with EU to remain in place for now
Barbados Today: As the date for the United Kingdom’s withdrawal from the European Union (EU), commonly referred to as Brexit, draws nearer, Barbados and other Commonwealth countries have been reassured that current trading arrangements with the EU will remain in place for the foreseeable future. Read more
Bahamas Urged To Target Fatf Escape
Tribune 242: The Bahamas has been urged to “prioritise” escaping the Financial Action Task Force’s (FATF) monitoring list as all its recent woes “flow” from this. Read more
Regional Transportation, CSME among matters for CARICOM Heads’ attention
CARICOM Today: Enhancing regional air and maritime transportation and further advancing the CARICOM Single Market and Economy (CSME) are among matters for deliberation when CARICOM Heads of Government hold their 30th Inter-Sessional Meeting in Basseterre, St. Kitts and Nevis, 26-27 February. Read more
Trade License Reform Coming in 2020 in Belize
Breaking Belize News: Businesses countrywide can look forward to more predictability with regards to paying their trade licenses thanks to a new regime coming next year, according to Belize City Mayor Bernard Wagner. Read more
New AU trade observatory to support implementation of AfCFTA
The New Times: The African Union Commission (AUC), the European Commission (EU), and the International Trade Centre have set up the ‘African Union Trade Observatory’ expected to accelerate the implementation of one of the continent’s flagship projects – the African Continental Free Trade Area (AfCFTA). Read more
Eswatini bids to host AfCFTA secretariat
African Daily Voice: The Kingdom of Eswatini government has made a bid to host the upcoming Africa Continental Free Trade Area (AfCFTA) secretariat. Read more
Pacific Trade Agreement Triggers IP Overhaul in Vietnam
Bloomberg: The Pacific trade pact is expected to give Vietnam a complete intellectual property makeover, covering everything from fast-food chains to patented inventions, even those owned by U.S. firms. Read more
India, EMs make case for special treatment at WTO
Livemint: India, along with China, South Africa and Venezuela, has insisted on continuing with the special and differential (S&D) treatment for developing countries at the World Trade Organization (WTO), countering efforts of the US, which is seeking equal treatment for all members at the multilateral trade body. Read more
India refuses to join e-commerce talks at WTO, says rules to hurt country
Business Standard: The government believes the push for initiating negotiations on substantive obligations related to e-commerce will oblige India to permanently accept the current moratorium on imposing customs duties. Read more
Half of Canadian executives say old NAFTA better for our economy than USMCA
Financial Post: Half the executives surveyed for the inaugural FP500/Forum Research Business Barometer poll say they think the original North American Free Trade Agreement was better for the Canadian economy. Read more
UK and US agree post-Brexit derivatives trading deal
The Guardian: In a joint announcement heralded as a sign of the special relationship between the UK and the US, the two countries said they would take every step to ensure the continued trading of derivatives across the Atlantic under every Brexit eventuality. Read more
Brexit: UK-US agree to preserve trading arrangements
BBC: The UK has struck a deal with the US to preserve £12.8bn of trade after Brexit.The mutual recognition agreement replicates the current deal between the EU and US on technical standards for exported goods. Read more
WTO trade indicator points to slower trade growth into first quarter of 2019
WTO: Trade weakness is likely to extend into the first quarter of 2019, according to the WTO’s latest World Trade Outlook Indicator (WTOI) released on 19 February. The simultaneous decline of several trade-related indicators should put policy makers on guard for a sharper slowdown should the current trade tensions remain unresolved. Read more
Welcome to the Caribbean Trade & Development Digest for the week of February 10-16, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
Nine countries, including the US, Russia and the EU, approved an international agreement banning commercial vessels from fishing in the Arctic Sea for sixteen years in an effort to preserve the environment of the Arctic Sea.
The US-China trade talks continued this week. Meanwhile, US President Trump may possibly be considering an extension to the 90-day truce agreed by the two behemoths in December 2018, which is supposed to end March 1.
With Brexit only a month or so away, UK Prime Minister Theresa May suffered yet another defeat in parliament when MPs voted 303 to 258 against endorsing her government’s Brexit negotiating strategy. While not binding, it is a further sign of declining confidence in the May Government’s handling of Brexit.
Turning regionally, IMF Deputy Managing Director Tao Zhang gave a speech in Grenada entitled “Building Resilience to Natural Disasters and Climate Change in Grenada and the Caribbean”. Have a read here.
T&T Ministry working with USDA to stop inferior chicken imports
LoopTT: Government is now working with the US Department of Agriculture to stop the importation old, inferior chicken into Trinidad and Tobago, after reports that old, substandard chicken was being sold locally. Read more
Guyana: No foreign exchange shortage but fewer US notes in circulation
Demerara Waves: The Governor of the Bank of Guyana, Dr. Gobin Ganga, has assured that there is no shortage of foreign currency to transact international business such as wire transfers, but there are fewer United States (US) notes circulating at cambios and commercial banks partly because the increasing number of foreign workers are buying up the bills. Read more
Republic of China (Taiwan) donates to trade development in Belize
LoveFM: The Republic of China (Taiwan) is one of the country’s staunch allies that continues to contribute to Belize’s development. Their latest contribution comes in the form of sixty thousand US dollars earmarked for trade development. Read more
BNSI proposes introduction of front-of-pack labelling standard
Barbados Advocate: The Barbados National Standards Institution (BNSI) hosted a national consultation recently to get feedback from consumers on a new, compulsory standard they sought to introduce. Fabian Scott, Chief Technical Officer at the BNSI, explained that they were seeking to update the current requirements for the food labelling standard. Read more
Jamaica Government to Leverage New Opportunities in Partner Countries to Support Trade
JIS: The Government, through the Ministry of Foreign Affairs and Foreign Trade, will work assiduously to leverage new opportunities in both traditional and non-traditional partner countries to support trade, investment and technical cooperation pursuits. Read more
Caribbean tourism on the upswing
CTO: The Caribbean tourism sector is projected to record strong growth in 2019 on the heels of a stronger-than-expected performance last year. Read more
Major oil find excites southern Caribbean
Amsterdam News: U.S. supermajor ExxonMobil announced two major oil finds offshore Guyana in the past week, and the discovery has raised the hopes for similar massive oil discoveries in two of its neighbors that incidentally already produce oil and gas. Read more
Spotlight on Statistics Strategy – PM Mitchell to address High Level Forum in Grenada next week
CARICOM: A High Level Advocacy Forum on Statistics will be held next week as the Region continues to place more emphasis on the production and use of quality statistics. Read more
Youth Bridge Gap Between Climate Change, Climate Awareness in Guyana
CARICOM: A group of youngsters in the Caribbean who promote environmental protection in the region is on a drive to empower other youth to address some of the big issues facing their generation. Read more
Guyanese American Chamber of Commerce Recommends Extension of CBERA
South Florida Morning News: The Guyanese American Chamber of Commerce (GCAA) wishes to draw to the attention of the business community in the United States and Guyana the fact that the Caribbean Basin Economic Recovery Act (CBERA) will expire on September 30, 2020 and to urge the private sector at home and in the US, as well as the Government of Guyana in collaboration with its CARICOM partners to embark on efforts to ensure that this Act is extended by the US Congress for at least another 10 years. Read more
Guyana denies shipping ‘bad’ rice to Jamaica
TV6 T&T: Guyana says it has not shipped any rice to Jamaica under the “Cinderella” brand for the year after media reports in Kingston said that 70 metric tonnes of White Cinderella rice, had been confiscated by Jamaican authorities. Read more
Jamaica confiscates 70 tonnes of Guyanese rice
Demerara Waves: The Food Storage and Prevention of Infestation Division (FSPID), in the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF) says it has confiscated 70 metric tonnes (1,575 bags) of White Cinderella rice from Guyana due to high microbial content. Read more
US, Canada accuse India of underreporting support for lentils, chickpeas; approach WTO
Economic Times: The United States and Canada have moved the World Trade Organization (WTO) accusing India of underreporting its market price support for five pulses. Read more
Tariffs Take Toll On American Whisky Exports
Jamaica Gleaner: Retaliatory tariffs caused a sharp downturn in American whisky exports in the last half of 2018 as distillers started feeling the pain from global trade disputes, an industry trade group said Tuesday. Read more
German discounters’ banana tactics irk Ecuador
Deutsche Welle: Ecuador is the world’s largest exporter of bananas. The fruit plays just as big a role as oil for the country’s economy and its fight against poverty. Some German discounters seem to care little about that. Read more
Indian Commerce ministry to notify WTO regarding revoking MFN status to Pakistan
Economic Times: The commerce ministry would soon notify to the World Trade Organization (WTO) its decision to revoke the most-favoured nation (MFN) status to Pakistan on security grounds, an official said Friday. Read more
Record EU Trade Surplus With U.S. Could Put Trump Truce at Risk
Bloomberg: The European Union’s trade surplus with the the U.S. jumped 17 percent last year to the highest on record, potentially putting at risk ongoing negotiations just as President Donald Trump is gearing up to decide whether to hit the 28-nation bloc with a new set of tariffs. Read more
European Commission welcomes European Parliament’s support for investment screening framework
EU: Following today’s vote, the EU is one step closer to putting in place a Europe-wide framework for screening foreign direct investment. Read more
Commission puts in place duties on subsidised biodiesel from Argentina
EU: Today, the Commission imposed definitive anti-subsidy measures on imports of biodiesel from Argentina. In parallel, the Commission adopted a decision accepting sustainable price commitments (known as undertakings) from eight Argentine producers and the Argentinian Chamber of Biofuels (CARBIO) that will exempt the exporting producers from the duties within an agreed import limit. Read more
Israel, Iran to join Russian-led free trade agreement
JNS: However, the two nations will sign their own free-trade accord with the bloc, meaning the adversaries could not trade freely with one another. Read more
U.S. drafts WTO reform to halt handouts for big and rich states
Reuters: The United States proposed a reform of the World Trade Organization on Friday that would slash the number of countries that are eligible for “special and differential treatment”, a plan likely to be resisted by China, India and other countries. Read more
New treaty bans commercial fishing in the Arctic for 16 years
Euractiv: The European Union and nine other countries, including the US and Russia, approved an international agreement on Thursday (14 February) that will prohibit commercial vessels from fishing in the Arctic in order to preserve the region’s fragile ecosystem. Read more
The EU’s Dirty Money Blacklist: North Korea, Syria, and… Puerto Rico?
Foreign Policy: The U.S. Treasury Department scolded the European Union for including U.S. territories on a list of dirty money hotspots around the world, telling American banks to ignore EU directives in an unusual technocratic spat that highlights continued friction between Washington and Brussels. Read more
New Caledonia and Vanuatu sign free trade agreement
Radio New Zealand: The leaders of New Caledonia and Vanuatu have signed an agreement to free up trade for a range of products. It will apply to about 50 products, with Vanuatu being able to export agricultural products including coffee without duties or quantity restrictions. Read more
No-deal Brexit: UK exporters risk being locked out of world’s harbours
The Guardian: British exporters sending goods to far-flung destinations in the coming days risk being locked out of harbours around the world as a no-deal Brexit looms, business leaders have warned. Read more
US-China trade talks break up without a deal
BBC: Trade talks between the US and China have broken up without a deal, with the US warning that “very difficult issues” remain unresolved. The talks in China this week were aimed at securing a new deal before further US tariffs are imposed on 1 March. Read more
Australia-Indonesia free trade agreement to be signed before election
Australian Financial Review: The on again, off again free trade deal between Australia and Indonesia has been salvaged after both governments said it would be signed in March, before both nations hold their federal elections. Read more
EU-Singapore Free Trade Agreement Signed
ASEAN Briefing: On February 13, 2019, the European Parliament approved the EUSFTA by a majority vote. The stage is now set for the final ratification and entry into force of the trade pact between the two jurisdictions. Read more
USMCA Coalition Formed during 116th Congress
Global Trade Magazine: In an effort to support fastidious implementation of the United States-Mexico-Canada Agreement, a group consisting of trade associations, businesses, and other advocacy groups joined forces to create what is now known as the “Pass USMCA Coalition.” Read more
Canada won’t ratify new NAFTA until steel and aluminum tariffs lifted, warns key U.S. Senator
Financial Post: Canada and Mexico won’t consider ratifying the revised North American Free Trade Agreement unless the United States lifts its tariffs on steel and aluminum imports, U.S. Senator Chuck Grassley said Tuesday. Read more
WTO’s Potential Game-Changer: Global E-Commerce Rules? – Analysis
Eurasia Review: The recently launched WTO negotiations on e-commerce seeks to establish a new rulebook for e-commerce trade, and could be a potential game-changer for the global economy. Read more
Traditional Knowledge, Cheaper Drugs on India’s Agenda for the WTO
The Economic Times: India wants the World Trade Organization (WTO) to address issues related to exploitation of traditional knowledge, food security and access to affordable medicine going ahead. Read more
DG Azevêdo in Mozambique: the trading system must support LDCs
WTO: Director-General Roberto Azevêdo was in Maputo, Mozambique, today (14 February), where he met President Filipe Nyusi. They discussed how to strengthen global trade cooperation for the future, through the WTO, so it can keep supporting the integration of Mozambique and other least developed countries (LDCs) into the global economy. Read more
Members discuss progress and assistance on Trade Facilitation Agreement’s 2nd year
WTO: WTO members took stock of progress in implementing the Trade Facilitation Agreement (TFA) at the 12-13 February meeting of the Committee on Trade Facilitation a week before the second anniversary of the Agreement’s entry into force. Members called for the timely fulfilment of commitments and discussed efforts to help each other carry out the Agreement. Read more
CLTD BLOG NEWS
Have a read of my latest article with Dr. Jan Yves Remy, Deputy Director of the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy & Services entitled “Can CARICOM Countries Afford to Miss the WTO E-Commerce Train”? published here.
Dr. Jan Yves Remy and Alicia Nicholls
On the sidelines of this year’s World Economic Forum meeting in January at Davos, Switzerland, 76 Members of the World Trade Organization (WTO) expressed their intention to begin WTO negotiations on electronic commerce (e-commerce). Making up less than half of the WTO’s overall membership, these willing Members entreated other Members to join them in negotiating rules aimed at facilitating the use of e-commerce in trade.
All independent CARICOM Member States, with the exception of the Bahamas – which is presently acceding to the WTO – are WTO Members and therefore eligible to join these negotiations. However, so far none has done so. Given the potential of e-commerce for their development, should CARICOM Member States reconsider their cautionary stance?
Growing importance of e-commerce to global trade
E-commerce, also referred to as “digital trade”, has been defined as “the production, distribution, marketing, sale and delivery of goods and services through electronic and digital means”. In its World Trade Report 2018, the WTO noted that digital technologies – such as artificial intelligence, blockchain, the Internet of Things and 3-D printing – are reducing trade costs and revolutionizing the structure and patterns of global trade flows.[i] The United Nations Conference on Trade and Development (UNCTAD) estimated the global e-commerce market to be around US $22.1 trillion in 2015.[ii]
The WTO Report and numerous studies[iii] highlight the potential of e-commerce to catalyse economic transformation in developing countries by lowering trade costs, increasing market access opportunities for Micro, Small and Medium-Sized Enterprises and individual entrepreneurs, improving logistics, and widening consumer choice. Challenges, however, continue to plague the use of these technologies, including inadequate supportive policies, technology diffusion and regulation.
While more modern regional trade agreements – like the US-Mexico-Canada Agreement and even the CARIFORUM-EU Economic Partnership Agreement – include comprehensive digital trade chapters, the WTO, which was negotiated in 1995, still does not contain a multilateral agreement dealing holistically with e-commerce. Instead, separate disciplines affecting digital trade in goods and services can be found in the WTO’s General Agreement on Trade in Services, the General Agreement on Tariffs and Trade, the Agreement on Trade-Related Aspects of Intellectual Property Rights, and more recently, the Trade Facilitation Agreement.
The multilateral route: The WTO Declaration and Work Programme on E-Commerce
Multilateral discussions on e-commerce involving all WTO Members were launched in 1998 through the adoption of a Declaration on Global Electronic Commerce, and a Work Programme to examine trade-related issues related to global electronic commerce. The Work Programme has been continuously updated at most WTO Ministerial Conferences since 1998, the last one being the Buenos Aires Ministerial Conference in 2017. Under that Work Programme, the WTO’s main committees have been reviewing progress on discussions, with general oversight provided by the WTO’s General Council. Despite fits of activity, and some proposals by select countries, not much has yet been accomplished beyond a temporary moratorium on the application of customs duties on electronic transmissions and the formulation of a working definition of e-commerce.
Although the negotiation of a multilateral agreement or rules among all 164 WTO Members would be ideal, consensus among all Members has been difficult to achieve. This is in large part due to developing countries’ objections to what they consider to be ambitious proposals being pushed by developed countries. On the one hand, WTO developing countries, led by India and the African Group of countries, support completion of the more limited mandate under the 1998 Work Programme framework.[iv] On the other hand, developed countries, such as the US[v] and the European Union, advocate moving beyond mere discussions to actual negotiations to formulate rules aimed at increasing e-commerce opportunities in the twenty-first century. Where CARICOM stands is unclear as no CARICOM government has to date tabled a proposal on e-commerce at the WTO.
The plurilateral route: Joint Statements on Electronic Commerce at Buenos Aires and at Davos
Without an official WTO mandate to proceed with multilateral negotiations, some WTO Members have begun negotiations on a plurilateral basis, that is, without all WTO Members but among a subset of willing ones. The plurilateral discussions began when 71 Members signed a Joint Statement on E-Commerce in Buenos Aires in 2017, and was extended at Davos in January this year, when five more countries, including China, agreed to join the plurilaterals.
In their Joint Statement at Davos, the 76 signatories agreed, inter alia, to achieve “a high standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO members as possible”.[vi] The willing countries also agreed to “recognize and [to] take into account the unique opportunities and challenges faced by members, including developing countries and Least Developed Countries (LDCs), as well as by micro, small and medium sized enterprises, in relation to electronic commerce”.
Should CARICOM countries participate in plurilateral negotiations?
As with the multilateral e-commerce negotiations, CARICOM countries’ have remained silent on whether they have an appetite for joining the plurilateral e-commerce negotiations. A number of factors could account for their apparent hesitation.
Firstly, CARICOM countries may be concerned about their capacity to engage in negotiations on an area of trade which is still relatively new and evolving, and their subsequent ability to implement in a timely manner any obligations undertaken. To allay such fears, it might be worth considering the approach to special and differential treatment taken in the Trade Facilitation Agreement, another WTO plurilateral agreement, where implementation is tied to a country’s capacity and the degree of technical assistance provided.
Secondly, some CARICOM countries may fear that participation in these negotiations will restrict their policy space, particularly their ability to regulate online traffic and cross border data flows, and attendant issues like data privacy and cybersecurity. They might also be wary of the revenue implications of agreeing to the proposed permanent moratorium on the imposition of customs duties on electronic transmissions.
A third possible red flag for CARICOM may be the reluctance of other developing countries in joining the negotiations. While China joined at the last minute, others like India and the African Group countries have adamantly declined, preferring to focus attention on the multilateral discussions.[vii] These countries argue that e-commerce is monopolised by multinational corporations and that gains from e-commerce will not be realized for developing countries if they are required to cede their regulatory and policy space.
Without a critical mass of developing countries involved in the negotiations, CARICOM countries’ ability to form coalitions with perceived “like-minded” countries may be circumscribed. That said, e-commerce is an area in which CARICOM countries have offensive interests given the predominance of services in their economies. It may well be that new coalitions will have to be built on the basis of a new alignment of interests.
Issues for Consideration
Given the importance of digital technology in global commerce, missing the e-commerce train at the WTO may not be in CARICOM’s best development interests. But CARICOM countries would be ill-advised to pursue a strategy to negotiations that ignores the following considerations.
Firstly, a negotiating strategy must be predicated on a sound digital trade policy that is informed by: data analysis of current patterns, scope and scale of e-commerce in the region; a clear-sighted appreciation of how e-commerce can promote the region’s overall economic transformation; and solid regulatory frameworks and infrastructure. Some studies, including one commissioned by UNCTAD on e-commerce legislation in Caribbean countries[viii], already exist.
Secondly, both the digital trade policy and the subsequent negotiating strategy will require the input and feedback of key stakeholders, including the private sector and regulators which will be tasked with administering any rules, and consumer bodies. Canada, which is one of the Joint Statement signatories, has already launched stakeholder consultations.[ix]
Thirdly, CARICOM countries must be tactical. They should consider reaching out to other similar-minded developing countries to join the ongoing plurilaterals negotiations, and increase the visibility of issues that are unique to smaller developing countries.
As CARICOM ponders its next move, negotiations on the plurilateral front are ramping up. There is no agreement yet among those engaged in the plurilateral as to the legal structure any eventual agreement will take, nor as to its scope. But there is a willingness to move beyond the “exploratory” phase to actual negotiations. In fact, the first meeting of the plurilateral e-commerce negotiations is slated to take place on March 6.
That means that there is still an opportunity for all WTO Members to participate in these negotiations, and thereby influence their shape. The 70 plus signatories include the world’s largest trading economies which account for 90% of global trade.[x] As the rules negotiated will likely serve as the baseline for any future multilateral e-commerce deal, non-participation by developing countries would relegate them, once again, to the status of rule-takers. This is not an area in which CARICOM countries should leave their destinies in the hands of others.
Dr Jan Yves Remy is the Deputy Director of the University of the West Indies, Cave Hill’s Shridath Ramphal Centre for International Trade Law, Policy & Services. Alicia Nicholls is an international trade and development consultant and a contributing author to the UWI SRC’s Trading Thoughts column. This article was also published in Barbados Today.
[iii] See for example Commonwealth (2017) https://books.thecommonwealth.org/e-commerce-and-digital-trade-paperback; WTO (2013) https://www.wto.org/english/res_e/booksp_e/ecom_brochure_e.pdf ; E. Humphrey et. al (2003) https://eprints.lse.ac.uk/3710/1/The_reality_of_e-commerce_with_developing_countries.pdf.
[iv] See link for a synthesis of some of the positions: https://www.wto.org/english/news_e/news16_e/good_17nov16_e.htm. For the Indian Government’s views see https://www.ictsd.org/bridges-news/bridges-africa/news/african-group-submits-proposal-on-e-commerce-ahead-of-wto and also for the African Group’s position: https://www.ictsd.org/bridges-news/bridges-africa/news/african-group-submits-proposal-on-e-commerce-ahead-of-wto
[v] See this link for a greater discussion on the diverging views of WTO members on the way forward: https://www.reuters.com/article/us-trade-wto-digital/some-wto-members-to-push-for-e-commerce-rules-as-broader-deal-fails-idUSKBN1E72YV
[vi] The link to the text of the Joint Statement on E-commerce of January 25, 2019 text is available on this webpage: https://www.wto.org/english/news_e/news19_e/dgra_25jan19_e.htm
[vii] See https://www.thehindubusinessline.com/info-tech/india-keeps-off-75-member-wto-e-comm-agreement-talks/article26093230.ece and https://www.livemint.com/politics/news/india-south-africa-others-skip-wto-negotiations-on-e-commerce-at-davos-meet-1548435856765.html
Welcome to the Caribbean Trade & Development Digest for the week of February 3-9, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week. We apologise for the delay in the publication of this edition.
THIS WEEK’S HIGHLIGHTS
A bi-partisan bill has been introduced in the US House of Representatives to reauthorize the US Caribbean Basin Trade Partnership Act (CBTPA) until 2030.
Trade was one of themes touched on by US President Donald J. Trump in his State of the Union Address. See write up here.
UNCTAD identified the winners and losers from the US-China trade tensions in a recently released report entitled The Trade Wars: The Pain and the Gain which may be viewed here.
Bipartisan Caribbean Trade Bill introduced in US congress
CaribbeanNewsNow: US Reps. Terri Sewell (D-AL) and Brad Wenstrup (R-OH) have introduced legislation to reauthorize the US Caribbean Basin Trade Partnership Act (CBTPA) until 2030. Since 2000, CBTPA has allowed for the duty- and quota-free import of goods made with US yarns, fabrics and threads from Caribbean countries. Read more
Efforts take shape to reduce OECS food import bill
St. Lucia News Online: Spurring domestic agricultural production to meet local and international demand while reducing the region’s food import bill is the focus of a powerful new data tool recently presented to agricultural decision-makers at the OECS Commission. Read more
Commercial Court ‘could boost’ Barbados economy
Barbados Today: The minister responsible for business is counting on the planned commercial law court to transform the way business is done and boost the flagging economy. Read more
Trinidad: PM wants technology to play greater role in energy sector; offers help to Caribbean countries
St Lucia News Online: The Trinidad and Tobago government Monday said it is prepared to assist its fellow Caribbean Community (CARICOM) countries develop their hydrocarbon sector as it placed much emphasis on the importance of technology in developing its own industry. Read more
Marshall and Brown launches Jamaican gourmet line in UK
Jamaica Observer: A new premium Jamaican product line, Marshall & Brown, has been launched in the United Kingdom (UK) to fill a gap in the market for authentic Jamaican food and cooking ingredients. Read more
High demand for Jamaican black castor oil in United States
Jamaica Observer: A new study on the local castor oil industry is showing significant potential for Jamaican black castor oil in the United States. The Complete Caribbean study indicates that the US market for the product stands at about US$28 million. Read more
CDB President calls for resilience, transformation to drive Regional economic growth
CARICOM Today: Although grappling with challenges related to climate change; wide fiscal deficits and high public debt; as well as high unemployment, the Caribbean Development Bank (CDB) today projected that the Region’s economy is expected to grow by 2% in 2019. Read more
Trinidadians seeking business opportunities in Jamaica
CARICOM Today:A business delegation from Trinidad and Tobago is in the island for a four-day trade mission from February 5 to 8. The team, being hosted by the Jamaica Chamber of Commerce, represents 10 companies involved in various sectors. These are construction, architectural services, food and beverage, agro-chemical, consumer and household products, software development, marketing and advertising. Read more
Consultations on CARICOM Gender Policy
CARICOM Today: The first of 15 national consultations on a draft Regional Gender Equality Strategy for CARICOM opened on Thursday, in St. John’s, Antigua and Barbuda. Read more
Japan seeking big concessions from Britain in trade talks
The Guardian: Japan is seeking tougher concessions from Britain in trade talks than it secured from the EU, while negotiations between London and Tokyo are also being slowed by the looming risk of no-deal. Read more
US-China trade war could slash almost 1 million jobs from the US economy, new study says
South China Morning Post: Research from the Washington-based consultancy Trade Partnership Worldwide, paid for by the pro-free trade lobbying group Tariffs Hurt the Heartlands, ominously predicts that more than 2 million American jobs could be on the line should US President Donald Trump push ahead with his threat of a 25 per cent tariff on all Chinese exports. Read more
WTO awards South Korea $85 million against U.S. over washing machine tariffs
Reuters: South Korea can impose annual trade sanctions of $84.81 million on the United States after challenging U.S. anti-dumping and anti-subsidy tariffs on washing machines, a World Trade Organization arbitration panel ruled on Friday. Read more
India, Peru to hold next round of free-trade agreement talks in March in Lima
ET Now: India and Peru will hold the next round of negotiations for a proposed free-trade agreement (FTA) in the South American nation next month, a move aimed at boosting two-way commerce between the countries, an official said. Read more
Uruguay Betting On Exports Of Medical Marijuana
Jamaica Gleaner: The country got a head start on competitors in December 2013 when it became the first in the world to regulate the cannabis market from growing to purchase, a move that has brought a wave of investment. Read more
No-deal Brexit: What does the WTO rules option actually mean and how would it work?
iNews: If the UK leaves the EU without a deal, which is still the default option if one cannot be agreed, it would automatically fall back to World Trade Organization (WTO) rules. But what would this actually mean? Read more
Brexit: May says she can get deal through with binding changes
BBC: Theresa May has told EU leaders she can get the Brexit deal through Parliament if they give her legally-binding changes to it. Read more
African Free Trade Zone deal may come into force in 2 months: Egypt’s FM
Egypt Today: The agreement of the African Continental Free trade Area (AfCFTA) for 55 member states of the African Union may come into force within six months, said Egyptian Foreign Minister Sameh Shoukry on the sidelines of the 32nd session of the African Union that will kick off on Sunday in Addis Ababa. Read more
Turkey, US ‘will reach $75 bln trade target with free trade agreement’
Hurriyet: Trade volume between Turkey and the United States may reach $75 billion through a free trade agreement and the removal of regulations and tariffs, the chairman of the American-Turkish Council has said, stressing that the bilateral potential has never been realized. Read more
A modernized WTO is far better than no WTO at all
The Hill: Last month, on the sidelines of the World Economic Forum in Davos, leading members of the World Trade Organization (WTO) met to discuss how to improve the organization. At the same time, more than 70 governments agreed to commence WTO negotiations on trade-related aspects of electronic commerce. Read more
China says US report on its WTO compliance lacks factual basis
CNBC: China opposes a report by the U.S. Trade Representative’s office on its World Trade Organization (WTO) compliance, the commerce ministry said, saying it is inconsistent with the facts. Read more
Arbitrator issues decision in dispute between Korea and US on large residential washers
WTO: On 8 February 2019, a WTO arbitrator issued a decision on the level of trade suspension Korea may request in its dispute with the United States regarding US anti-dumping and countervailing duty measures on large residential washers from Korea (DS464). Read more
Photo source: Pixabay
Last night (February 5, 2019), United States (US) President, Donald J. Trump, delivered his second State of the Union (SOTU) address before a joint session of the US Congress. The President highlighted his administration’s progress on his campaign promises, including on immigration, trade, tax policy, infrastructure and national security. This article takes a brief look at the trade takeaways from the SOTU.
President Trump came to office with the promise, inter alia, of effecting a seismic shift in US trade policy. America, Trump argued, was being taken advantage of by other countries, while “unfair” trade deals were leading to the outsourcing of American jobs to the detriment of American workers and the American economy.
An underlying theme of President Trump’s SOTU address last night was that of “promises made, promises kept”. The President reminded viewers of his campaign promise “to defend American jobs and demand fair trade for American workers”, while highlighting the achievements made thus far.
Much of President Trump’s trade policy actions have been done through executive actions utilising legislation like the Trade Act which empower the President to take certain trade-related action, such as raising tariffs. Indeed, in just two years, the Trump presidency has heralded a decidedly mercantilist turn in US trade policy, marked by increased unilateral action (even against traditional US allies, such as Canada and the EU), the US’ withdrawal from the Trans-Pacific Partnership Agreement, the renegotiation of the tripartite North American Free Trade Agreement (NAFTA), more aggressive action against China, coupled with threats of withdrawal from the WTO and blockage of appointments/re-appointments of WTO Appellate Body members.
Main Trade Takeaways from SOTU
However, in his address, President Trump focused exclusively on trade policy achievements regarding increased enforcement of US trade laws and the renegotiation of NAFTA. Below are the takeaways:
US-China Trading Relations
China has been the principal target of President Trump’s trade policy actions, leading to an escalation in trade tensions between Washington and Beijing which, according to the major multilateral institutions, are already negatively impacting global trade flows and dampening the outlook for the global economy.
In 2018, the Trump administration imposed tariffs on $250 billion worth of Chinese goods, to which Beijing retaliated with tariffs on $110 billion worth of US goods. Although those parties threatened to impose further tariffs, they made a truce on the sidelines of the G20 Summit in December 2018 not to impose any further tariffs for a 90-day period while trade talks resumed between them. Since the start of the truce, two sets of face-to-face trade talks have been held between the two economic behemoths.
While President Trump proudly boasted that America is “now making it clear to China that after years of targeting our industries, and stealing our intellectual property, the theft of American jobs and wealth has come to an end”, he further noted that he and Chinese President Xi were working on a new trade deal. The President, however, reiterated that any US-China trade deal “must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs”.
From NAFTA to USMCA
In his SOTU address, President Trump noted that “to build on our incredible economic success, one priority is paramount – reversing decades of calamitous trade policies”. To this effect, one of the President’s major trade policy campaign promises was the renegotiation of NAFTA, an agreement which he derided as a “historic blunder” in his SOTU address.
This renegotiation was accomplished last year with the signing of a replacement agreement called the US-Mexico-Canada (USMCA) Agreement. Some of the major changes include the requirement that 75 percent (up from 62.5 percent under NAFTA) of an automobile’s contents needs to be made in North America for it to qualify for duty-free treatment, greater access to the Canadian dairy market for US farmers, an extension of the terms of copyright protection, stronger labour provisions, a sunset clause and provision for review of the Agreement every six years.
The USMCA was signed in November 2018, but is awaiting ratification by the three parties. However, some Democrats have raised issues with the Agreement. President Trump encouraged Congress to ratify the USMCA, in order to “bring back our manufacturing jobs in even greater numbers, expand American agriculture, protect intellectual property, and ensure that more cars are proudly stamped with our four beautiful words: “Made in the USA.”
United States Reciprocal Trade Bill
President Trump also made a strong appeal to Congress to pass the United States Reciprocal Trade Bill (HR 764), “so that if another country places an unfair tariff on an American product, we can charge them the exact same tariff on the same product that they sell to us”.
The US Reciprocal Trade Bill, was introduced in the House on January 24, 2019, by Republican representative from Wisconsin’s 7th District, Sean Duffy (R-WI), who is currently the ranking Member of the Financial Services Subcommittee on Housing & Insurance.
Inter alia, the Bill provides that if the President determines that the rate of duty or non-tariff barriers imposed by a foreign country on a particular US good is “significantly higher ” than the rate of duty or non-tariff barriers imposed by the US on that same good imported from that country, the President is empowered to take several actions, including imposing a rate of duty on imports of that good that is equal to that imposed by that country.
The Bill currently has 19 co-sponsors. According to Representative Duffy’s press release, the proposed legislation would give the President “more flexibility in responding to foreign tariffs on U.S. products” and “the tools necessary to pressure other nations to lower their tariffs and stop taking advantage of America”.
If passed, the Bill will, however, likely be challenged by affected countries through the WTO’s dispute settlement system. However, it should be noted that its successful passage by Congress is not guaranteed. Firstly, the Democrats are the majority in the House of Representatives since January 2019, some of whom have openly criticised Trump’s protectionist trade policies. Secondly, and more importantly, some members of Congress, including some Republicans, are already proposing bi-partisan legislation to limit the President’s authority to unilaterally impose trade restrictions for national security purposes.
In the House, for example, Representative Mike Gallagher (R-Wi-8) introduced H.R.940 to amend the Trade Expansion Act of 1962 to impose limitations on the authority of the President to adjust imports that are determined to threaten to impair national security, and for other purposes. Meanwhile, in the Senate, for example, Senator Mike Lee (R-UT) introduced the Global Trade Accountability Act (S 177), which would amend the Trade Act of 1974 to require congressional approval of unilateral trade action. The House version (HR 723) was introduced by Representative Warren Davidson (R-OH-8).
However, the passage of any of these proposed bills limiting the President’s trade policy powers are not a sure bet either. Even if passed by both Congressional chambers, the bill would almost certainly be vetoed by the President, and would require a two-thirds majority in each house to override a presidential veto, which is not an easy feat.
The big takeaway
The big takeaway is that President Trump is convinced that his mercantilist trade policy is delivering for the American people, a fact he evidences by the increase in jobs and economic growth. Indeed, a fact sheet was released by the White House on the same day highlighting the President’s trade policy achievements.
However, his trade policies have come at the cost of increased trade tensions, alienating traditional US allies and creating an impending crisis in the WTO’s Appellate Body whose membership is now down to three – the minimum number of members required to hear an appeal.
However, barring some Congressional limit on Presidential trade policy powers, the current trade policy approach is likely to continue for the remainder of the Trump Presidency.
The full transcript of the President’s SOTU Address may be viewed here.
It has been generally recognized by most Caribbean Community (CARICOM) countries, at least in principle, that a coordinated voice on foreign policy issues endows our small countries with bargaining power beyond our size constraints. Indeed, foreign policy coordination is one of the four pillars of CARICOM, with economic integration, human and social development, and security being the other three. However, given the current and increasing discord among CARICOM countries on key international developments, is CARICOM foreign policy coordination still a priority, or is it merely a pipe dream?
An exercise of foreign policy is an exercise of a State’s sovereignty. In general terms, a State’s foreign policy is its strategy in interacting with other States, and is influenced by what that State determines to be its strategic national interests, values, goals and priorities. The key words here are “national interests”, and they may be underpinned by ideology, pragmatism or a combination of the two. A State’s foreign policy is not static, and may change depending on the ideology of the Government in power (for example, whether right-wing, left-wing or centrist) and changing national interests, values, goals and priorities.
As a State’s foreign policy is determined by its national interests, this means that a regional coordinated foreign policy inevitably necessitates the strategic alignment of the national interests of the countries concerned.
Rationale behind the goal of a coordinated CARICOM foreign policy
From as early as the days of CARIFTA (the Caribbean Free Trade Area), the predecessor of CARICOM, the founding architects of the Caribbean regional integration project viewed a coordinated foreign policy as a life raft for assisting our small, then newly independent Caribbean States, to navigate often hostile international Cold War waters in which powerful big country sharks would prey on us little small state ‘sprats’.
Our founding fathers, and later the drafters of the Revised Treaty of Chaguaramas which established the CARICOM Single Market and Economy (CSME), saw a unified foreign policy position as an insurance policy against bullying tactics and the politics of ‘divide and conquer’ – the practice by major powers of playing off CARICOM States against each other, or picking them off one by one through inducements such as aid and other financial support in order to secure votes on hemispheric and international issues. It recognises the old adage of “strength in numbers”. For example, Article 6(h) of the Revised Treaty of Chaguaramas states as one of the Community’s objectives “enhanced co-ordination of Member States’ foreign and [foreign] economic policies”.
Indeed, there have been several instances where Caribbean countries have successfully leveraged their collective voice and numeric strength to their own benefit. Comprising nearly half of the membership of the Organisation of American States (OAS), CARICOM countries are a crucial voting bloc which powerful countries deem necessary to court for voting support on critical hemispheric issues. In the United Nations (UN), CARICOM countries are a smaller but still critical voting bloc.
But do CARICOM member States’ national interests really align to such an extent that a coordinated foreign policy on all issues is still (or was ever) achievable? CARICOM comprises fourteen independent countries and one British Overseas Territory (Montserrat). This necessitates balancing national interests, values, goals and priorities which do not always necessarily align. Indeed, CARICOM countries, while all small States, have their differences, whether in terms of language, geography, economic structure, population, resource endowment or size. All of these factors impact on each State’s perceived national interests, values, goals and priorities.
Foreign policy coordination has been successful in areas like climate change where Caribbean countries see their national interests as inextricably linked. But even on this important issue, there is some policy incongruence. On the one hand, CARICOM countries have demanded more urgent global action to fight climate change, while on the other, some CARICOM member States are still pursuing hydrocarbon exploration and exploitation, as part of their economic development strategy.
There have also been increasing (and frankly, embarrassing) instances of CARICOM foreign policy disunity, from as far back as the infamous US Ship Rider issue in the 1990s, the inability to unite around a single candidate for Commonwealth Secretary General in 2015, to as recently as the UN vote on the US’ controversial motion to recognize Jerusalem as the capital of Israel (instead of Tel Aviv). There is also the still unresolved issue of the region’s position on the One China Policy – some States recognize the People’s Republic of China, while a few still recognize the Republic of China (Taiwan).
The Venezuela Humanitarian Crisis
The latest example of foreign policy disunity relates to the devolving political, economic and humanitarian crisis in the Bolivarian Republic of Venezuela – a country which, despite some differences, has been an important friend to the region in terms of aid and other support. I highlight the Venezuela crisis not just because it is one of the biggest hemispheric crises affecting the region, but it is a nuanced issue which clearly shows the divide in CARICOM countries’ national interests, and hence their diverging positions on the perceived solution.
The suffering of the Venezuelan people wrought by the incompetence of the Maduro regime, and made no better by western countries’ economic sanctions, have caused spill-over security, health, economic and other risks for neighbouring countries. According to the UN, over three million Venezuelans have fled that South American country since the start of the crisis. Many have migrated (illegally in many cases) to neighbouring countries, including Trinidad & Tobago. It is, therefore, in CARICOM countries’ interest for the humanitarian crisis to be solved. However, CARICOM countries differ on what they believe the solution should be.
On January 10, 2019, the OAS Permanent Council approved a resolution not to recognize the legitimacy of the second term of current Venezuelan President, Nicolas Maduro Moros. CARICOM’s disunity on this issue was again on full display for the world to see. The Bahamas, Guyana, Haiti, Jamaica and Saint Lucia were among the 19 OAS member states which voted to approve the resolution. Dominica, St. Vincent and the Grenadines and Suriname were among the 6 (including of course, Venezuela) which voted against the resolution. St. Kitts and Nevis, Trinidad and Tobago, Antigua and Barbuda, Barbados and Belize abstained, while Grenada was the only OAS member State which was absent for the vote.
What explains this disunity? To my mind, mainly national interests, exacerbated by the fact that CARICOM remains an inter-governmental organisation. For instance, Guyana is currently embroiled in a long-standing border dispute with Venezuela, which has been inflamed under the current Maduro regime. This may explain Guyana’s vote in favour of the resolution. Ditto could be said for Jamaica which had recently decided to reacquire Venezuela-owned shares in Petrojam. On the other hand, some other CARICOM Member States are members of the Bolivarian Alternative for the Americas (ALBA) and recipients of assistance from Venezuela through, inter alia, the PetroCaribe Initiative. This may explain why they voted against the resolution. National interests not only dictate a country’s position on an issue, but are what determine whether a CARICOM member State will change its vote based on the promise of aid or support.
Moreover, while the majority of CARICOM member States appear to have adopted a position of non-intervention, some member States (the Bahamas and Haiti) have decided to follow major Western powers in recognizing Opposition leader, Juan Guaido, as interim president of Venezuela.
Given the region’s friendship with Venezuela and the implications of the ongoing crisis for many CARICOM countries, it is commendable that some CARICOM governments have assumed a leadership role on this issue. Some CARICOM governments have vociferously challenged the pronouncements of the OAS Secretary General His Excellency Luis Almagro as not speaking for all OAS member states. A CARICOM delegation led by current CARICOM chairman Dr. the Honourable Timothy Harris, Prime Minister of St. Kitts & Nevis, recently initiated a visit to the UN to discuss the crisis. It should be noted, however, that not all CARICOM governments took part in this meeting, which shows that even on this very important issue, the region still cannot sing from the same hymn sheet.
Is a coordinated CARICOM foreign policy merely a pipe dream?
There appears, at least in rhetoric, a renewed interest by CARICOM leaders in advancing the regional integration process, of which foreign policy coordination has traditionally been a major pillar. This has been aided no doubt by the initiative taken by Jamaica in the commissioning and publication of the Report of the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks, more popularly referred to as the ‘Golding Report’, and the reinvigorated leadership displayed by Barbados under its new Prime Minister (lead for the CSME in CARICOM’s quasi-cabinet).
The Golding Report identified the glaring failures in foreign policy coordination as one of several challenges currently confronting the regional integration process. The report rightly cites several of the issues which account for this policy disunity, including offers of aid in exchange for votes, lack of political will, inability of diplomats to get clear policy instructions from their capitals, and of course, national interests. As such, recommendation 26 of the Report is to “review the procedures for foreign policy consultation and coordination in order to avoid as far as possible, the types of conflicts and embarrassing positions that have emerged from time to time among CARICOM members depriving it of the collective force it is capable of exerting”.
However, I would go further. In this time of increased introspection by our leaders on the regional integration process, I think there needs to be reconsideration of whether a coordinated foreign policy is really an achievable goal for the region or are we merely chasing a lofty pipe dream which our diverging national interests, values, goals and priorities may be unable to bridge. Indeed, can we really say that the region is any closer to a unified position on the One China policy? Moreover, given the current ideological divide in the region on the issue of citizenship by investment programmes (CIPs), can we really mount an effective and unified CARICOM approach against the EU’s targeting of CIPs in the region?
Let me clarify that I staunchly support our founding fathers’ conviction that there is strength in unified foreign policy positions. Indeed, the enormity of the global challenges confronting the region, whether from Brexit, the possibility of another global downturn, Venezuela, rising populist and nationalist sentiments internationally, blacklisting etc, means that a unified CARICOM front, to the extent possible, should be the desired default position for helping us navigate these challenges.
On the flipside, I also recognise that we must be honest with ourselves. We must face the reality that the goal of a coordinated foreign policy on all issues may be too ambitious given divergent national interests which have accounted for the increasing track record of foreign policy disunity. Indeed, these all too public displays of foreign policy disunity only serve to undermine the Caribbean public’s faith in the sincerity of our leaders’ commitment to the regional integration process, and to empower CARICOM-skeptics. We, perhaps, are setting ourselves up for failure.
An alternative and more achievable approach, therefore, could be for CARICOM member states to clearly identify specific foreign policy priority areas on which they would strive to present a unified policy position. The European Union (EU), for instance, has sought to harmonise its foreign policy (Common Foreign and Security Policy) primarily around security and human rights issues. For CARICOM, priority areas for foreign policy coordination could be more straightforward “low-hanging fruits” such as foreign trade, security, the loss of correspondent banking relationships due to de-risking by global banks, tax issues, and climate change. These are areas in which a unified CARICOM foreign policy position is perhaps most achievable and most effective.
I appreciate that my view may be unpopular and differs from traditional orthodoxy, but in these times of increased economic and geopolitical uncertainty, the continued desirability of pursuing a coordinated foreign policy is an issue which CARICOM will need to resolve and do so quickly, even if we decide we will only coordinate on certain foreign policy issues.
Welcome to the Caribbean Trade & Development Digest for the week of January 27 – February 2, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
On the Brexit front, UK Prime Minister Theresa May won support from British MPs for a renegotiation of the Draft Withdrawal Agreement, in particular the removal of the ‘Irish Backstop’, the controversial ‘insurance policy’ to avoid a hard border between the Northern Ireland and Republic of Ireland in the event that the UK and EU are unable to reach a trade deal within the transition period.
However, the EU, including the Republic of Ireland, remains adamant that the current draft Withdrawal Agreement is not up for renegotiation and that the backstop cannot be removed. The UK is due to leave the EU on March 29, 2019.
Another major trade policy development is that the EU-Japan Economic Partnership Agreement has come into force. Additionally, the latest round of trade talks between the US and China have been hailed as a success.
Regionally, some CARICOM leaders initiated a visit to the United Nations (UN) on the situation in Venezuela.
$10m Investor: We Can Defeat WTO ‘Concerns’
The Bahamas Tribune: A $10m poultry farming investor yesterday expressed confidence that The Bahamas could follow Jamaica’s self-sufficiency lead despite its “concerns” over WTO’s potential impact. Read more
JMEA head cites one-sided trading conditions affecting Jamaica
LoopJamaica: President of the Jamaica Manufacturers and Exporters’ A’ssociation (JMEA), Metry Seaga, has described the favourable trade conditions that Jamaica extends to its overseas trading partners as being one-sided, saying that too often the same treatment is not returned to the country’s manufacturers and exporters. Read more
Port Operator KFTL Boasts Record Container Moves In A Day
Jamaica Gleaner: Kingston Freeport Terminal Limited, KFTL, a subsidiary of the French-based shipping company CMA CGM, said that on January 24 it recorded the best performance ever in the history of the port of Kingston in terms of container moves. Read more
Statistical Institute of Belize: Belizeans paid an average of 30 cents more for goods and services in 2018
Breaking Belize News: For the year 2018, Belizeans paid an average of 30 cents more for goods and services, while for the month of December specifically, consumer prices were about 10 cents less when compared to the year before. Read more
Statement on second day of visit to the UN by Delegation of CARICOM Member States
CARICOM: On Tuesday, 30 January 2019, the delegation of the Caribbean Community (CARICOM) comprising Dr the Hon. Timothy Harris, Prime Minister of S.Kitts and Nevis (Chairman of CARICOM) and Dr the Hon. Keith Rowley, Prime Minister of Trinidad and Tobago, the Hon. Peter David, Foreign Minister of Grenada, H.E. Irwin LaRocque, CARICOM Secretary-General, as well as the Permanent Representatives of these countries continued its engagements at the United Nations and at the Trinidad and Tobago Permanent Mission in New York on the situation in the Bolivarian Republic of Venezuela and its implications for the Community. Read more
Belize exports first shipment of crude soybean oil to Jamaica
LoveFM: Belize has made its first shipment of crude soybean oil to Jamaica. The five containers were exported last week and were supplied by Bel-Car Exports and Imports located in Spanish Lookout, Cayo District and Northern Grains Cooperative located in Blue Creek, Orange Walk District. Read more
CARICOM Leaders To Meet With UN Secretary General On Venezuela
Jamaica Gleaner: Caribbean Community (CARICOM) leaders are to meet with the United Nations Secretary General Antonio Guterres on Monday to discuss the ongoing political situation in Venezuela where the government of President Nicolas Maduro is under international pressure to step down. Read more
Barbados hosting EU funded meetings
TV6: Barbados is hosting a two-day consultation aimed at continuing the development of a framework for an effective platform for structured and continuous dialogue between the Caribbean Forum (CARIFORUM) and French Caribbean Outermost Regions (FCORs) and British and Dutch Overseas Countries and Territories (OCTs). Read moreRead more
WTO lacks clout on dispute rulings
Bahamas Tribune: The failure to enforce its rulings on trade disputes is among the “biggest criticisms” that can be levelled against the World Trade Organisation (WTO), a Bahamian arbitrator has charged. Read more
1-in-3 UK firms have relocation plans due to Brexit
Euractiv: Brexit has prompted almost a third of British companies to move some operations abroad or at least consider it, a survey from an employers group showed on Friday (1 February). Read more
UAE initiates WTO proceedings against Qatar
Gulf News: The UAE Government announced on Tuesday that it has initiated World Trade Organisation, WTO, dispute-settlement proceedings against Qatar following its ban of the sale of UAE products in Qatari markets. Read more
China, U.S. make important progress in trade talks, paving way for further consultations
Xinhua: Negotiators from China and the United States have made important progress in the latest round of high-level talks to resolve their economic and trade frictions, laying foundation for further consultations, according to the visiting Chinese delegation. Read more
Is WTO Article 24 the antidote to a No Deal Brexit? Euronews Answers
Euronews: Nigel Farage, one of the UK’s leading proponents of a ‘hard Brexit’ told Euronews yesterday that the negative impacts of Britain leaving the EU without a deal could be eliminated by the use of “Article 24 of the World Trade Organisation (WTO)”. Read more
Trump sends Congress list of planned USMCA trade policy changes
Washington Examiner: The Trump administration formally gave Congress a list of its proposed changes to trade policy, requests that will put the U.S.-Mexico-Canada Agreement on trade into effect. Read more
WTO chief is in denial over climate impact of trade
Climate Change News: When the head of the World Trade Organisation (WTO) says trade does not impact the environment, we should all be worried. Read more
US, China may cross swords on e-commerce at WTO
VoA: China has given up its long-held resistance to the World Trade Organization’s push for global standards for the $27 trillion e-commerce market. Some analysts say this is a direct result of the trade war with the United States, which is forcing China to seek wider cooperation with trading countries. Read more
Sturgeon to visit US and Canada for talks on trade links
BBC: First Minister Nicola Sturgeon is to visit the US and Canada next week. The trip is planned in a bid to build stronger trade links between Scotland and North America. Read more
Japan-EU free trade deal takes effect
NHK: A comprehensive free trade deal between Japan and the European Union has come into force. The pact will eventually remove tariffs on more than 90 percent of imports from both sides and liberalize rules in a broad spectrum of fields. Read more
Brexit: MPs back May’s bid to change deal
BBC: MPs have backed seeking “alternative arrangements” to replace the Irish backstop in Theresa May’s Brexit plan. Read more
Safeguards in free trade agreements: Council adopts horizontal framework for bilateral measures
EU: The EU will soon have in place an overall framework for ensuring consistency of safeguard measures included in free trade agreements. The Council today adopted a regulation streamlining the inclusion of safeguard measures in trade agreements so that they are applied effectively and consistently across the board. Read more
Iraq, Jordan sign free trade agreement
Middle East Monitor: Jordan has reached a new agreement on free trade with Iraq, the country’s Deputy Prime Minister, Rajai Muasher, said yesterday. Read more
UK cannot simply trade on WTO terms after no-deal Brexit, say experts
The Guardian: The UK will be unable to have frictionless, tariff-free trade under World Trade Organization rules for up to seven years in the event of a no-deal Brexit, according to two leading European Union law specialists. Read more
WTO Launches Investigation Into Trump’s China Tariffs, Official Says
Bloomberg: The World Trade Organization launched an investigation into President Donald Trump’s tariffs on $250 billion of Chinese goods, ratcheting up tensions as the two nations are set to begin a new round of trade talks, according to an official with knowledge of the probe. Read more
EU to fight US tariffs on Spanish olives at WTO
Deutsche Welle: The European Comission will back Spain’s fight to defend its olive exporters, who were hit by Donald Trump’s tariffs in June 2018. Madrid considers the punitive measure to be “an evident prejudice” on olive producers. Read more
China accuses US of a ‘blatant breach’ of trade policy in WTO meeting
CNBC: Chinese representatives met with the World Trade Organization on Monday to begin the process of legally challenging United States tariffs on China’s exports, Reuters reported, citing a transcript of the meeting’s discussion. Read more
United Arab Emirates requests consultations with Qatar on goods restrictions
WTO: The United Arab Emirates has requested WTO dispute consultations with Qatar regarding certain measures restricting the import, distribution and sale of goods in Qatar from the UAE (DS576). The request was circulated to WTO members on 31 January. Read more
European Union initiates WTO dispute proceedings against US olive duties
WTO: The European Union has requested WTO dispute consultations with the United States concerning US anti-dumping and countervailing duties imposed on imported ripe olives from Spain. The request was circulated to WTO members on 31 January. Read more
Panels established to rule on US, Turkish tariff measures
WTO: At a meeting of the Dispute Settlement Body (DSB) on 28 January, WTO members agreed to establish a dispute panel to rule on additional duties imposed by the United States on certain imports from China. Members also agreed to establish a panel to rule on additional duties levied by Turkey on certain imports from the United States. Read more
Welcome to the Caribbean Trade & Development Digest for the week of January 20-26, 2019! We do apologise for the delay in this week’s issue. We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
The big trade news this week is that on the sidelines of the World Economic Forum (WEF) meeting in Davos, Switzerland, some seventy-six World Trade Organisation (WTO) members agreed to launch negotiations on an e-commerce agreement.
Below are the other major trade and development headlines from across the Caribbean region and the world for last week:
Tariff Flaws Crippling CARICOM Exports, Says Trade Expert
Jamaica Gleaner: Trade expert Karl Hyatt has called for meaningful amendments to the Common External Tariff (CET) now under review to address some of the entrenched flexibility that has been abused by some CARICOM states. Read more
Dominica blasts international financial community over unilateral demands, calls for CARICOM unity
St Lucia News Online: The Dominica government Monday blasted the international community over its unilateral demands for tightening measures within the international financial services sector and again called for a united Caribbean Community (CARICOM) approach to the situation. Read more
Jagdeo meets CARICOM Chairman on no-confidence motion
Stabroek: The Leader of the Opposition, Dr. Bharrat Jagdeo, today met with the Chairman of CARICOM, Dr. Timothy Harris, Prime Minister of St. Kitts and Nevis and a team, including CARICOM-Secretary-General, Ambassador Irwin LaRocque , at the Office of the Leader of the Opposition on Church Street. The meeting discussed the no-confidence motion against the current APNU+AFC coalition government, a statement from Jagdeo’s office said. Read more
Private Sector and Labour Leaders to Participate in Caricom Heads Meetings
JIS News: The revised Treaty of Chaguaramas is to be amended to allow representatives of the private sector and the Caribbean Congress of Labour to participate in CARICOM Heads of Government meetings, says Barbadian Prime Minister, Hon. Mia Mottley. Read more
Statement by Heads of Government of CARICOM on Venezuela
CARICOM: The following Heads of Government of the Caribbean Community (CARICOM) – Antigua and Barbuda, Barbados, Belize, Dominica, Jamaica, Montserrat, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Trinidad and Tobago; Foreign Ministers of Grenada and Suriname;, meeting by video-conference on 24 January 2019, issued the following statement. Read more
High level CARICOM talks held in Guyana
St. Kitts & Nevis Observer: The Prime Minister of St. Kitts and Nevis and current Chairman of the Caribbean Community (CARICOM), Dr. the Honourable Timothy Harris, is currently in the Cooperative Republic of Guyana where he is holding several rounds of discussions with top level CARICOM officials, including Secretary-General, Ambassador Irwin LaRocque. Read more
CARICOM Development Fund clinches US$1m pact with India
Stabroek: India and the CARICOM Development Fund (CDF) signed a Contribution Agreement on January 19th, 2019, in Paramaribo Suriname which provides for a grant allocation of US$1m to the CDF’s capital fund. Read more
DAVOS-Nearly half WTO members agree to talks on new e-commerce rules
Reuters: Impatient with the lack of World Trade Organization rules to cover the explosive growth of e-commerce, 76 countries and regions agreed on Friday to start negotiating this year on a set of open and predictable regulations. Read more
Uruguay diverges from Mercosur, aligns with Mexico on Venezuela crisis
Buenos Aires Times: Uruguay and Mexico call for peaceful resolution in a joint statement released Wednesday, after opposition leader Juan Guaido declares himself interim president. Read more
Brexit trade deal agreed by British and Israeli ministers, in principle
Jewish News: British and Israeli ministers have announced that they have agreed a post-Brexit trade agreement in principle. Read more
Brexit: New Zealand’s Jacinda Ardern says trade deal ‘a priority’
BBC: New Zealand’s prime minister has said she is “ready and willing” to sign a post-Brexit trade deal with the UK. Jacinda Ardern said negotiating a free trade agreement would be a “real priority” once the UK had left the EU. Read more
Japan-U.S. talks on bilateral trade deal likely to face delay
Japan Times: Japan and the United States are unlikely to open negotiations on a proposed bilateral trade pact before the end of this month, due chiefly to the prolonged partial U.S. government shutdown, sources have said. Read more
Commerce Secretary Wilbur Ross: The US is still ‘miles and miles’ from a trade deal with China
CNBC: Commerce Secretary Wilbur Ross said Thursday the U.S. is still “miles and miles” from a trade deal with China. Read more
No Sweeping Free Trade Deal, Brussels Tells Washington
Foreign Policy: Six months after U.S. President Donald Trump proclaimed he’d already reached a trade deal with the European Union, Brussels has only now laid out its preliminary conditions for talks. Read more
Expert urges caution over speedy trade deal with EU
Radio New Zealand: A trade expert is advising negotiators not to rush a free trade agreement with the European Union, New Zealand’s third largest export market. Read more
Brexit: Liam Fox yet to seal no-deal trade agreements
BBC: The UK has yet to finalise agreements to replace existing free trade deals the EU has with 40 big economies if there is a no-deal Brexit. International Trade Secretary Liam Fox said he “hoped” they would but it depended on whether other countries were “willing to put the work in”. Read more
United States appeals panel report regarding US duties on Turkish pipe and tube products
WTO: The United States filed an appeal on 25 January concerning the WTO panel report in the case brought by Turkey in “United States — Countervailing Measures on Certain Pipe and Tube Products” (DS523). The panel report was circulated to WTO members on 18 December 2018. Read more
DG Azevêdo meets ministers in Davos: discussions focus on reform; progress on e-commerce
WTO: Participating in a series of ministerial discussions during the World Economic Forum Annual Meeting in Davos this week, Director-General Roberto Azevêdo reviewed the challenges and opportunities facing global trade today, and stressed that the trading system must evolve if it is to remain relevant. Read more
DDG Yi stresses importance of WTO-APEC cooperation in crucial period for global trade
WTO: Deputy Director-General Yi Xiaozhun has stressed the importance of exploiting the synergies between the WTO and the Asia-Pacific Economic Cooperation (APEC) in a crucial period for global trade. Read more
Registration opens for public hearing in “US — Countervailing Measures on Softwood Lumber from Canada”
WTO: At the request of the parties in the dispute “US — Countervailing Measures on Softwood Lumber from Canada” (DS533), the panel has decided to open its first substantive meeting to public observation on 26, 27, and 28 February 2019. The live screening will take place at the WTO’s headquarters in Geneva. Read more
After suffering a historic and crushing rejection of her Draft Withdrawal deal in the House of Commons and barely surviving a no confidence vote brought by the Leader of the Opposition last week, United Kingdom (UK) Prime Minister Theresa May today outlined her ‘Brexit Plan B’ in the House of Commons.
Prime Minister May is in the unenviable position of having to formulate an alternative Brexit Plan which secures the support of MPs of diverging views on the way forward for Brexit, and which would be palatable to the EU. All the while the clock continues to tick on the UK’s scheduled departure from the EU on March 29, 2019, now less than seventy days away. In an effort to break the Brexit impasse, Mrs. May has been holding talks with leaders of the major parties in Parliament.
Prime Minister May noted that in light of Parliament’s overwhelming rejection of the current withdrawal agreement, it was clear that the Government’s approach had to change. But has it?
Here are the key points from Prime Minister May’s address:
In substance, there was little difference between Prime Minister May’s Plan A and the Plan B outlined. Members of Parliament will vote on the Plan B on January 29, 2019, which would pretty much be the same as the Plan A which they so soundly rejected by 230 votes last week.
The next phase will be continued discussions between Mrs. May and MPs and other stakeholders, which would (or should) inform Mrs. May’s re-engagement with the EU on the way forward. The uncertainty continues, but it appears that a ‘no deal Brexit’ is increasingly more likely. This also comes against the backdrop of the International Monetary Fund’s downward revision of its global growth forecast, warning today (and not for the first time) that a ‘no deal Brexit’ was a major risk for the global economy.
The text of Prime Minister May’s speech may be read here.
Welcome to the Caribbean Trade & Development Digest for the week of January 13-19, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
Brexit turbulence has dominated the headlines for yet another week. British MPs, as expected, voted against the current Withdrawal Agreement negotiated by Prime Minister Theresa May’s government with the EU. With 432 votes against, versus just 202 in favour of the deal, it was the biggest legislative loss for a British Government in modern British history. Coupled with narrowly surviving a no confidence motion brought by the Leader of the main opposition, Labour Leader Jeremy Corbyn, Prime Minister May now has three days (until Monday) to bring a ‘Brexit Plan B’ to Parliament.
On January 19, 2018, the eleven parties to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) held their first ministerial meeting since its entry into force on December 30, 2018, in Japan this week.
Below are the other major trade and development headlines from across the Caribbean region and the world for last week:
Trump weighs dramatic tightening of embargo on Cuba
Associated Press: The Trump administration is weighing what could become the most serious tightening of the U.S. trade embargo on Cuba in more than two decades — a move that could unleash a flurry of lawsuits against foreign companies that have invested on the island. Read more
Shaw wants more aggressive approach to trade facilitation programme
Jamaica Observer: Minister of Industry, Commerce, Agriculture and Fisheries Audley Shaw has called on Government agencies and departments to move with a greater sense of urgency to facilitate trade and the private sector’s need for a more responsive Government. Read more
Cuba, Iran to improve trade relations
Prensa Latina: The 17th Session of the Cuba-Iran Intergovernmental Commission, whose main goal is to expand collaboration on various economic and social areas, has concluded on Wednesday in Havana. Read more
Antigua & Barbuda hit visitor arrival record
Caribbean360: Antigua and Barbuda welcomed over one million visitors to the destination in 2018, topping 2017 figures and leading Antigua and Barbuda Minister of Tourism Charles Fernandez to call 2018, “a record-setting year” for the twin-island nation. Read more
Correspondent banking still an issue for CARICOM
Love FM (Belize): Plaguing Belize and other Caribbean countries is the issue of correspondent banking, CARICOM along with groups have been lobbying for restored relations. Read more
Jamaica says buy-back of Petrojam shares not a CARICOM issue
Jamaica Observer: Minister of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith has dismissed Opposition criticisms that the Government has not involved the Caribbean Community (Caricom) in its negotiation of a buy-back of the 49 per cent shares in Petrojam from Venezuela. Read more
Gopee-Scoon: TT preparing for Brexit
Newsday: Trade and Industry Minister Paula Gopee-Scoon on Wednesday said TT was doing what it could to deal with the outcome of the Brexit process in the UK. Read more
PM: OAS vote on Venezuela was in Trinidad’s interest
Newsday: The Prime Minister says the decision to abstain on a vote by the Organisation of American States to not recognise the legitimacy of the presidency of Venezuelan President Nicolas Maduro was done in the country’s interest. Read more
Trinidad & Tobago Rice production plummets 97%
Newsday: LOCAL rice production has plummeted about 97 per cent in the past 26 years and 95 per cent of what is currently produced is used as input for animal feed. Read more
Jamaica exports grew 17.6% in Q1 2018
Jamaica Gleaner: Exports of Jamaica increased 17.6 per cent year-on-year in the first quarter of 2018, according to an Inter-American Development Bank (IDB) report which said that sales from Latin America and the Caribbean to overseas markets were the highest in six years. Read more
Arley Gill to be Grenada’s new ambassador to CARICOM
Now Grenada: Arley Gill is nominated to be Grenada’s new ambassador to CARICOM. Read more
IDB: Latin America, Caribbean register highest exports in six years
Jamaica Gleaner: The Inter-American Development Bank (IDB) says exports from Latin America and the Caribbean, including Jamaica, hit their highest level in six years as a result of a 9.9 per cent increase in 2018, albeit amid growing downside risks in the future. Read more
These are the biggest risks to the global economy in 2019
World Economic Forum: Major risks include a growth recession in China, a rise in global long-term real interest rates, and a crescendo of populist economic policies that undermine the credibility of central bank independence, resulting in higher interest rates on safe, advanced-country government bonds. Read more
Expansion of Pacific trade deal discussed at ministerial meeting in Tokyo
Japan Times: The 11 members of a trans-Pacific free trade agreement on Saturday held their first ministerial meeting since the pact entered into force, discussing its future expansion as well as how to counter the rise of protectionism. Read more
China Offers a Path to Eliminate U.S. Trade Imbalance, Sources Say
Bloomberg: China has offered to go on a six-year buying spree to ramp up imports from the U.S., in a move that would reconfigure the relationship between the world’s two largest economies, according to officials familiar with the negotiations. Read more
Malaysia hopes for RCEP to finalise by end-2019
New Strait Times: Malaysia hopes to conclude talks with other Regional Comprehensive Economic Partnership (RCEP) member countries by the end of this year. Read more
CPTPP members signal intent to expand the agreement
Strait Times: Members of a landmark 11-nation Pacific Rim trade deal have signalled their openness to expand the agreement by taking in new members to form a stronger united front against the rise of protectionism. Read more
Climate change clouds Australia’s Pacific charm offensive
ABS-CBN: Australian Prime Minister Scott Morrison’s Pacific charm offensive went off course on Friday when he was forced to defend Fiji’s accusations of inaction over climate change. Read more
India keen on closer trade ties with neighbours
Daily Star: India is keenly promoting the trade potential of its northeastern states because it would not only give an economic boost to the region but also enable closer engagement with Bangladesh, Myanmar and Bhutan. Read more
Can ASEAN cope with the trade war?
Strait Times: Asean is facing a prolonged period of heightened United States-China competition and, hence, of greater uncertainty. The most obvious manifestation of this new phase in relations between the two nations is the so-called “trade war”. Read more
Trudeau’s U.S. Envoy Confident on USMCA Passage, Tariff Relief
Bloomberg: Canada’s ambassador to Washington is confident that the U.S. will both pass the revised North American trade deal and lift tariffs on steel and aluminum. Read more
New trade agreements secure Australian exports to Britain post-Brexit
Sydney Morning Herald: Australia and Britain have signed a new bilateral Wine Agreement and Mutual Recognition Agreement overnight in London, which will help ensure the continued flow of trade post-Brexit. Read more
Lifting trade barriers key to Africa’s economic emergence, DP World chairman says
The National: DP World’s chairman urged African leaders to lift barriers on trade after the global ports operator last year pushed to expand its footprint in the continent where it faces some opposition to its operations. Read more
AfCFTA seeks to increase intra-Africa trade
KBC (Kenya): African states are nearing the threshold of 22 countries to help operationalise the African Continental Free Trade Agreement (AfCFTA). Read more
Vietnam-Africa trade reaches US$6.6 million in 2018
Nhan Dan Online: Bilateral trade between Vietnam and African nations hit US$6.6 billion in 2018, with Vietnam’s exports worth US$3 billion, up 10% from the previous year. Read more
Voters would back remaining in EU over May’s Brexit deal
The Guardian: Opinium poll for the Observer finds only 35% of voters would back Theresa May’s deal if remain was an option. Read more
Brexit; Theresa May’s deal is voted down in historic defeat
BBC: Prime Minister Theresa May’s Brexit deal has been rejected by 230 votes – the largest defeat for a sitting government in history. MPs voted by 432 votes to 202 to reject the deal, which sets out the terms of Britain’s exit from the EU on 29 March. Read more
Theresa May survives vote, Britain remains in Brexit deadlock
The Guardian: Theresa May has survived as prime minister after weathering a dramatic no-confidence vote in her government, but was left scrambling to strike a Brexit compromise that could secure the backing of parliament. Read more
May scrambles to agree plan B for Brexit ahead of deadline
Sky News: The PM will meet with cabinet ministers at her Chequers retreat but has until Monday to come up with a new plan for Brexit. Read more
Amazon warns UK sellers to prepare for no-deal Brexit disruption to deliveries
Independent: Amazon has warned UK businesses trading through its online marketplace to prepare for a no-deal Brexit or risk not being able to sell to customers in the EU. Read more
Brexit: Liam Fox yet to seal no-deal trade agreements
BBC: The UK has yet to finalise agreements to replace existing free trade deals the EU has with 40 big economies if there is a no-deal Brexit. Read more
The EU moves forward efforts at UN on multilateral reform of ISDS
EU: Today, the EU and its Member States submitted two papers to the UN Working Group under the United Nations Commission on International Trade Law (UNCITRAL). The Working Group has been tasked with examining reform of investor-state dispute settlement (ISDS). Read more
EU-US Trade Talks: European Commission presents draft negotiating mandates
EU: The European Commission has today adopted proposals for negotiating directives for its trade talks with the United States: one on conformity assessment, and one on the elimination of tariffs for industrial goods. Read more
EU imposes safeguard measures on rice from Cambodia and Myanmar
EU: An investigation has confirmed a significant increase of imports of Indica rice from Cambodia and Myanmar into the European Union that has caused economic damage to European producers. The European Commission has therefore decided today to re-introduce import duties that will be steadily reduced over a period of three years. Read more
EU Chief Negotiator updates civil society on the state of play of negotiations with Mercosur
EU: On Tuesday 15 January the European Commission held a meeting with civil society representatives on the state of play of trade negotiations between the EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay). Read more
EU requests bilateral dispute settlement consultations with Ukraine over wood export ban
EU: The EU has formally requested consultations with Ukraine under the EU-Ukraine Association Agreement on Ukraine’s export ban on unprocessed wood. Read more
European Commission set to adopt definitive safeguard measures on imports of steel
EU: The European Commission welcomes the support received yesterday from Member States to its plan to impose definitive safeguard measures on imports of steel. Read more
General Council Chair appoints facilitator to address disagreement on Appellate Body
WTO: General Council Chair Junichi Ihara of Japan has appointed Amb. David Walker of New Zealand to assist him in working with WTO members to resolve differences on the urgent matter of the functioning of the organization’s Appellate Body. Read more
Venezuela initiates WTO dispute case against Colombia regarding liquid fuel restrictions
WTO: Venezuela has requested WTO dispute consultations with Colombia regarding certain Colombian measures affecting the distribution of liquid fuels. Venezuela’s request was circulated to WTO members on 14 January. Read more
Members review US request for panel on Turkish duties, adopt rulings on Brazil tax, US tuna
WTO: At a meeting of the Dispute Settlement Body (DSB) on 11 January, WTO members considered a request from the United States for the establishment of a panel to rule on additional duties levied by Turkey on certain US imports. WTO members also formally adopted panel and Appellate Body rulings concerning tax measures in Brazil used to promote domestic production of automotive and high-tech goods as well as revised US “dolphin-safe” tuna labelling requirements. Read more
With just over seventy days to go before the United Kingdom’s (UK) impending withdrawal from the European Union (EU) on March 29, 2019, British Members of Parliament (MPs) in the House of Commons voted overwhelmingly against the current Draft Withdrawal Agreement negotiated by Prime Minister Theresa May’s government. With only 202 MPs voting in favour and 432 voting against the deal, the 230 margin of defeat represents the worst legislative defeat inflicted on a British Government in modern history.
The vote, termed the ‘meaningful vote’, was highly anticipated. Originally scheduled for last December, Prime Minister May had postponed the vote at the last minute in the face of overwhelming opposition to the current deal, particularly the fall-back provisions on the Northern Ireland/Ireland Border – the so-called ‘backstop’. In the interim, Mrs. May unsuccessfully sought to obtain greater concessions from the EU in order to assuage skeptics, including those in her own party. However, the EU had been adamant that the 500-page Draft Withdrawal Agreement was not open for renegotiation.
Indeed, the reaction by the EU to the outcome has been swift. In a statement released immediately thereafter, President of the EU Commission, Jean Claude Juncker, lamented that “the risk of a disorderly withdrawal of the United Kingdom has increased with this evening’s vote.” President Juncker further reiterated that “the Withdrawal Agreement is a fair compromise and the best possible deal. It reduces the damage caused by Brexit for citizens and businesses across Europe. It is the only way to ensure an orderly withdrawal of the United Kingdom from the European Union.”
In her remarks after the outcome, Mrs. May lamented that the vote gave no indication of what the Parliament does support. She promised to continue her pursuit of Brexit as instructed by the British people in their referendum result of 2016. She has again ruled out a second referendum. However, her future appears to be in the balance. Labour leader, Jeremy Corbyn, who has called for a general election, has immediately tabled a motion of no confidence which will be debated tomorrow. In December, Mrs. May survived a no confidence motion within her own party.
Happy New Year! Welcome to the first Caribbean Trade & Development Digest for 2019! We do hope you all had an enjoyable holiday season! In this first edition for 2019, we are happy to bring you the latest trade and development news and analysis for January 1-12, 2019!
THIS WEEK’S HIGHLIGHTS
US and Chinese negotiators met in Beijing from January 7-9 for their first round of US-China trade talks since their declaration of a 90-day tariff truce in December last year. The US-China talks have been hailed as positive by both sides, but the two economic behemoths are still a long ways off from resolving their long-simmering trade differences. The USTR statement released following the conclusion of the talks may be read here, while a translated version of the statement released by China is available here.
While welcomed, the truce may be “too little, too late”. In its Global Economic Prospects – January 2019 report, ominously titled ‘Darkening Skies’, the World Bank has warned of a darkening outlook for the global economy in 2019 in the face of still elevated trade tensions and softening global trade and investment.
The Brexit chaos continues…The British House of Commons MPs last week voted to require the Prime Minister to present to Parliament a ‘Plan B’ within three-days if MPs reject the current Draft Withdrawal Agreement in their upcoming vote this Tuesday (January 15th). Labour Leader Jeremy Corbyn is calling for a general election to break the Brexit ‘deadlock’.
Regionally, Prime Minister of St. Kitts & Nevis, Dr. The Hon. Timothy Harris, has assumed chairmanship of CARICOM (January – June 2019) under the grouping’s rotating chairmanship. Dr. Harris’ New Year’s message as incoming chairman may be viewed here.
The CARICOM divide on the question of Venezuela has widened as some CARICOM Member States voted in favour of, and some against, an OAS Permanent Council resolution to not recognise the second term of Venezuelan President, Nicolas Maduro. Some CARICOM Member States abstained.
Several Caribbean offshore financial centres, including some British Overseas Territories, have been included in a blacklist by the Government of the Netherlands. The backlash by the countries unfairly named has been swift.
Below are the other major trade and development headlines from across the Caribbean region and the world for last week:
Jamaica takes action to safeguard energy security
JIS News: In an effort to safeguard Jamaica’s energy security, the Government will take legislative action to retake ownership of the 49 per cent shares in Petrojam, which is held by the Venezuelan state-owned oil and natural gas company, PDV Caribe. Read more
Joining WTO no ‘snap election’ decision
Tribune242: Jeffrey Beckles, the newly-appointed Chamber of Commerce chief executive, told Tribune Business that deciding whether or not it was in The Bahamas’ best interests to become a full World Trade Organisation (WTO) member was a decision that will impact all citizens “for the rest of our lives”. Read more
‘Buy Bahamian’ best defence under WTO
Tribune242: Zhivargo Laing, pictured, speaking as he unveiled The Bahamas’ initial goods and services offers that kickstarted the process of accession to full WTO membership, conceded that Bahamian manufacturers and other vulnerable industries would face intense pricing and other competitive pressures if they lost their existing tariff protection as a result. Read more
Dutch blacklist unjustified diversion tactic
Caribbean News Now: The Cayman Islands government has accused The Netherlands of including the British territory on its separate blacklist as a way of diverting criticisms of its own tax practices by attacking legitimate tax regimes. Read more
Regional trade with the US
Trinidad Guardian: T&T exporters to the US could lose up to US$400 million in special tariff benefits next year if the Caribbean Basin Trade Partnership Act (CBTPA) fails to be renewed when it crosses US President Donald Trump’s desk this year, senior trade consultants calculated last week. Read more
Cuba to expand facilities for foreign trade
Caribbean News Now: Cuba will develop an integrated digital platform this year in order to facilitate foreign trade operations, which will be linked to the simplification of procedures for the export and import of goods. Read more
Jamaica’s trade deficit with CARICOM widens
Jamaica Gleaner: Jamaica’s trade deficit with the Caribbean Community, (CARICOM), increased to US$351.2 million during the period January to October last year, according to the figures released by the Statistical Institute of Jamaica (STATIN). Read more
EU provides millions in budgetary support to Montserrat
Caribbean360: The European Union has disbursed EC$17.55 million (US$6.5 million) to the Government of Montserrat as the first fixed tranche under the Multi Sector Sustainable Economic Development Budget Support Programme. Read more
CARICOM remains divided on Venezuela
TV6: The Bahamas, Jamaica, Guyana, Haiti and St. Lucia supported an Organization of American States (OAS) resolution not recognising the legitimacy of Maduro’s second term as president of Venezuela, while Dominica, St. Vincent and the Grenadines and Suriname voted against the measure. Read more
Venezuela plans to remap its offshore oil territory
Yahoo Finance: Venezuela will remap its Caribbean oil and gas prospects in a move that could further stoke a century-long border dispute with Guyana and collide with Exxon Mobil Corp.’s venture in the region, people with knowledge of the plan said. Read more
PM Skerrit wants a united approach to investment programme
Jamaica Gleaner: Prime Minister Roosevelt Skerrit has criticised the Organisation for Economic Cooperation and Development (OECD) for labelling several Caribbean countries as tax havens and called for a unified regional approach to deal with the Citizenship by Investment Programme (CBI). Read more
Ross University Opens in Barbados and Officials Say the Spin-offs Will Benefit Local Education
Caribbean360: The opening of the Ross University School of Medicine’s main campus in Barbados is expected to bring with it a number of benefits to local health care and education. Read more
Global coconut profile opening huge opportunity for Caribbean economies. But will they seize it?
Stabroek: What is being regarded globally as a breakthrough period for the coconut industry linked to skyrocketing demand for coconut water, oil and other products is being regarded as an opportunity for the region which it cannot afford to pass up. Read more
Gonsalves reiterates call for unity
Jamaica Gleaner: Prime Minister Dr Ralph Gonsalves yesterday reiterated a call for the Caribbean Community (Caricom) to adopt a united position regarding the European Union’s request that regional countries pass legislation to deal with what Europe has termed ‘economic substance”. Read more
Sir Dennis praises Caribbean Court of Justice’s achievements
St Kitts & Nevis Observer: Former President of the Caribbean Court of Justice (CCJ), the Right Honourable Sir Dennis Byron, a native of St. Kitts and Nevis, has praised the accomplishments of the Trinidad-based court, which was established in 2005 to replace the London-based Judicial Committee of the Privy Council as the region’s final court and to function as an international tribunal interpreting the Revised Treaty of Chaguaramas that governs the regional integration movement. Read more
Juncker hints at helping out Theresa May over Brexit deal
The Guardian: has signalled that he will offer a last-minute helping hand to Theresa May in her bid to get her Brexit deal passed by MPs – but hinted at deep scepticism in Brussels at her chances of success. Read more
Macron vows to exclude UK creative industries from future EU deal
Sunday Express: French President Emmanuel Macron has pledged to restrict market access to the European Union’s markets for Britain’s creative industry in order to protect “cultural diversity” in France. Read more
US Recession Risks Hit Six-Year High Amidst Trade War and Shutdown
Bloomberg: Economists put the risk of a U.S. recession at the highest in more than six years amid mounting dangers from financial markets, a trade war with China and the federal-government shutdown. Read more
Air freight demand flat in November
IATA: The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), was flat (0%) in November 2018, compared to the same period the year before. This was the slowest rate of growth recorded since March 2016, following 31 consecutive months of year-on-year increases. Read more
Beijing says latest US-China trade talks were extensive, made progress on forced tech transfers
CNBC: In a Thursday morning statement, China’s Commerce Ministry said the just-concluded round of trade talks with the U.S. were extensive and established a foundation for the resolution of each others’ concerns. Read more
What is stopping India from joining RCEP trade deal?
Economic Times: If you have been paying attention to developments in global trade, you would already know that the contours of what is poised to become the world’s largest trading bloc is taking shape. India and 15 other nations in Asia and Asia-Pacific regions have been working to sew up contentious remaining areas, forge an agreement and put in place a deal by the end of 2019. Read more
Design of single African Union passport for all to be unveiled this year
Euronews: The African Union (AU) is set to reveal the design of a passport for all countries, bringing the continent one step closer to completely free movement. Read more
US and China wrap up trade talks in Beijing. What happens next?
CNN: US and Chinese negotiators wrapped up three days of trade talks in Beijing on Wednesday as they seek a way out of the damaging trade war between the world’s two biggest economies. Read more
New database of all subsidies investigated by EU
EU: The European Commission has made a new database of all its anti-subsidy investigations available on the DG Trade website. Read more
Storm Clouds are brewing for the global economy
World Bank: Growth in emerging market and developing economies is expected to remain flat in 2019. The pickup in economies that rely heavily on commodity exports is likely to be much slower than hoped for. Growth in many other economies is anticipated to decelerate. Read more
WTO seeks to ban government raids on corporate data
Nikkei Asian Review: As countries such as China tighten control over information flowing across their borders, a group of World Trade Organization members led by the U.S., the European Union, Japan, Singapore and Australia will propose rules that prohibit excessive interference by governments into business-related data. Read more
Carr to rejoin ‘like-minded’ for next talks on WTO reform at Davos
CBC (Canada): International Trade Diversification Minister Jim Carr’s office has confirmed he’s attending the next gathering of 13 members of the World Trade Organization looking to reform the institution in the face of ongoing threats to the rules-based multilateral trading system. Read more
Europe ready to help with WTO reform
The Atlantic: A multilateral effort needs to be made to save the World Trade Organization (WTO), the European Union’s Commissioner for Trade Cecilia Malmström said at the Atlantic Council in Washington on January 10, noting that the twenty-four-year-old intergovernmental body to regulate international trade is “under increasing pressure.” Read more
Brexit: Jeremy Corbyn demands election to ‘break deadlock’
BBC: Labour leader Jeremy Corbyn has stepped up calls for a general election “at the earliest opportunity” to “break the deadlock” over Brexit. Read more
Philippines launches safeguard investigation on ceramic floor and wall tiles
WTO: On 11 January 2019, the Philippines notified the WTO’s Committee on Safeguards that it had decided to initiate on 20 December 2018 a safeguard investigation on ceramic floor and wall tiles. Read more
Venezuela initiates WTO dispute complaint against US measures on goods and services
WTO: Venezuela has requested WTO dispute consultations with the United States regarding US measures affecting goods and services of Venezuelan origin. Venezuela’s request was circulated to WTO members on 8 January. Read more
Turkey launches safeguard investigation on yarn of nylon or other polyamides
WTO: On 3 January 2019, Turkey notified the WTO’s Committee on Safeguards that it initiated on 30 December 2018 a safeguard investigation on yarn of nylon or other polyamides. Read more
Madagascar launches safeguard investigation on detergent powder
WTO: On 7 January 2019, Madagascar notified the WTO’s Committee on Safeguards that it had decided to initiate on 31 December 2018 a safeguard investigation on detergent powder. Read more
NEW ON THE CTLD BLOG
In Has Canada become Collateral Damage in the US-China Trade War?, our frequent blog contributor, Renaldo Weekes, explores the case involving the arrest of Huawei’s CFO and whether Canada is an unwitting casualty of the US-China trade war.
Have a read of my first blog for the year, Global Trade Policy in 2019: What to Watch?taking a look at the major trade policy news from 2018 and what we’ll be keeping an eye on for 2019!
Renaldo Weekes, Guest Contributor
The trade tensions between the United States (US) and China have subsided for a while as each side has promised not to introduce new tariffs during a 90 day period starting from December 1, 2018, when US President Donald Trump and Chinese President Xi Jinping had a dinner at the G-20 summit in Argentina. Negotiations resume on January 7, 2019 and, so far, it seems that not much has changed as both have committed to their previous stances on the matter. However, the overall context of the negotiations has changed. Canada has arrested Huawei Technologies Co., Ltd’s Chief Financial Officer Meng Wanzhou at the US’ request. Shortly thereafter, China arrested two Canadian citizens, Michael Kovrig and Michael Spavor. Many see China’s actions as a tit-for-tat response to Meng’s arrest and wonder if Canada will now become collateral damage in a trade war between the US and China.
Why were Meng and the Canadian duo arrested?
Meng has been accused by the US of allegedly violating its sanctions on Iran by defrauding multiple US banks. On a layover in Canada, she was arrested by Canadian authorities on request from the US. She has since posted bail and is required to wear an ankle monitor and stay in her residence from 11 p.m. until 6 a.m. Kovrig and Spavor were arrested on suspicion of engaging in activities that were considered as breaching national security. The pair reportedly is subjected to three interrogations a day, must sleep with the lights, does not have access to legal representation and can only have consular visits once a month. Both Canada and China have denied that the arrests of the Canadian pair are related in any way to the arrest of Meng Wanzhou but Canada has said that the arrests were unfounded.
Did Meng’s arrest influence Kovrig and Spavor’s arrests?
Some may see it as a coincidence that Kovrig and Spavor, both Canadians, were arrested in China shortly after Meng, a Chinese heavy-weight, was arrested in Canada. As mentioned earlier, both countries have denied that the arrests are related. However, some persons, including former diplomats, are quite sure that the opposite is true. Reportedly, Chinese officials are concerned about Meng’s arrest. A Canadian parliamentary delegation, currently in China, has engaged in talks with Chinese officials about the pair of Canadians they arrested. The officials demanded to know why Canada arrested Meng. It is public knowledge that Canada has detained Meng for bank fraud on the US’ request but it seems as though the Chinese believe there is more to the arrest than meets the eye. Fearing the worst, they may have retaliated by detaining two Canadians in order to keep Canada in check. It seems probable that Meng’s arrest had an impact China’s decision to arrest the Canadians.
Do the arrests have an effect on the trade war?
The trade war between the US and China has been quite contentious as each side continually laid tariffs on the other party’s goods until recently. When dealing with any high stakes negotiation such as this one, persons may wonder if external issues would impact the talks. This is especially the case in the current situation as the US has pointed out many problems it wants China to fix such as alleged forced transfer of intellectual property from foreign companies and restricted market access. There is also the issue of the disputed South China Sea where, as recently as today (Monday, January 7, 2018), China claimed that the US violated its domestic and international law by performing acts interpreted as provocation near the sea.
As it relates to the arrests, China’s actions may be ostensibly seen as its modus operandi whenever one of its citizens is arrested overseas, and not related to the trade war. In a previous tit-for-tat situation in 2014, Canadian aid workers Kevin and Julia Garratt were detained for the same national security reasons as the pair of Michaels shortly after Canada arrested Su Bin, a Chinese man wanted for industrial espionage in the US. Mrs. Garratt was released on bail while Mr. Garratt remained detained for more than two years until his eventual deportation, which occurred after Su Bin was extradited to the US and sentenced.
However, as mentioned earlier, Chinese officials seem to believe that Meng’s arrest was political. One may infer that the Chinese may not want the US to receive Meng as this may give additional leverage to the US in the trade talks. China’s paranoia may have been bolstered by comments President Trump made which insinuated that Meng’s arrest may assist in securing the “the largest trade deal ever made.” China may, therefore, seek to create its own leverage by punishing Canada, a US ally, in whatever way it can. China may refrain from committing any additional acts that directly affect the US but still continue current acts with which the US is concerned.
Canada is in a sticky situation. China will continue to punish Canada until it secures Meng’s release. Though it is a US ally, Canada’s citizens are the ones being used as pawns in China’s game so it will have to navigate this situation mostly on its own merit. This situation can be, theoretically, immediately remedied by Canada releasing Meng, rejecting the US’ extradition request. China may likely release the Canadians in return and refocus its attention solely on the US. However, this decision cannot be made lightly. Should Canada disregard all credible evidence of Meng’s crimes in order to appease China or will it repeat its 2014 decision of extradition? When weighing this decision against the well-being of your own citizens, it is not an easy decision to make. Canada must keep in mind that this is not a simple tit-for-tat situation for China as is usually the case but a piece on the battlefield. China cannot allow the US to gain what it sees as additional leverage. This ostensibly personal spat is being fought against the backdrop of the US-China trade war.
If Canada arrested Meng outside of the context of a trade war between the US and China, the situation probably would have been the same. The US would have still made the request to Canada as Meng’s arrest was predicated on her committing bank fraud with the intent of violating the US’ sanctions on Iran. China would have still arrested the two Canadians in retaliation since this is its established modus operandi. The weighing of Meng’s crimes versus its citizens’ well-being would still be an issue. As mentioned earlier, the US has a number of issues with China’s actions. Therefore, if not the trade war, Canada may have been collateral damage in some other dispute. It is safe to conclude that Canada is indeed collateral damage in the US-China trade war. However, the trade war is just the biggest of many disputes that have the potential to create more collateral damage.
Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage.
This article has been updated.
Happy New Year to all! 2018 was without doubt a nail-biting year for global trade policy developments. In our first blog for the year, we take a look back at some of the key trade policy developments in 2018 and five developments to watch for 2019!
Starting with the scary; 2018 saw an escalation in global trade tensions among major trading powers. Without doubt, the election of President Donald Trump in the US in 2016 has led to a more nationalistic, protectionist and unilateral turn in US trade and foreign policy. Under his ‘America First’ ideology, President Trump issued proclamations hiking tariffs on imported steel and aluminum under the guise of national security, with only a small handful of countries being spared.
Tensions between the US and its other key trading partners, such as Canada and the EU, were inflamed, but China was the main target of US trade action. According to the BBC, the US has imposed tariffs on over $250 billion dollars of Chinese goods and had threatened an additional $260 billion, while China has imposed tariffs on $50 billion dollars of US goods and threatened tariffs on an additional $60 billion. Both countries agreed to a truce in December to suspend any further tariff impositions for a 90-day period while talks resume.
Trade talks held between the US and China this week have been hailed as positive by both sides, but the two economic behemoths are still a long way from resolving long-simmering tensions. US President Donald Trump appears confident that China will acquiesce to the US’ demands given the current slowdown in the Chinese economy. However, the US has not escaped the trade tensions unharmed as, for example, soybean farmers have been affected by the reduced Chinese demand for their produce.
The WTO has warned that the uncertainty around the escalating trade tensions was beginning to adversely impact business and investment confidence, with potential implications for continued global trade growth. Moreover, in its Global Economic Prospects – January 2019 report, ominously titled ‘Darkening Skies’, the World Bank has warned of darkening clouds over the global economy and softening global trade and investment flows.
2. WTO Reform
On the multilateral scene, the crisis in the WTO’s Appellate Body due to the US’ blockage of appointments appears to have given new political will and urgency to the need to reform the WTO, which is facing its greatest existential crisis since its founding in 1995.
The US’ continued blockage of appointments/re-appointments to the organisation’s seven-member Appellate Body has now resulted in only three sitting Appellate Body members – the minimum for the Body to function.
Several WTO members have tabled proposals for reforms on discrete issues, such as transparency/notification, while the European Union (EU) and Canada have both placed more comprehensive reform proposals on the table, including reform of the dispute settlement system.
However, WTO members are still a long way from deciding on how deep and wide-ranging the reform agenda should be. The US, which has for a long time expressed grave reservations about the Appellate Body, has so far not been convinced by any of the proposals tabled.
This year will be critical for deciding on the way forward for WTO reform, especially since the loss of yet another Appellate Body member will result in the Appellate Body being unable to operate, with grave implications for the prompt settlement of disputes and the rules-based multilateral trading system, on a whole.
3. Regional Trade Agreements – AfCTA, USMCA, CPTPP, EU-Japan
On the regional trade agreement scene, there were several positive and major developments in 2018. One of the most exciting was in March, 2018 when forty-four African states signed the Africa Continental Free Trade Agreement (AfCTA) in Kigali, Rwanda. Since then, five other States have signed the agreement. Thirteen African States have ratified the agreement thus far and further ratifications will be needed before it comes into effect.
President Donald Trump made good on one of his major trade policy promises – the renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico to make it ‘fit for purpose’ for the 21st century. In November 2018, the three countries announced they had agreed an agreement under a new name – the United States, Mexico and Canada (USMCA) Agreement. Some of the major changes include more stringent rules of origin (RoO), extension of terms of copyright protection, a sunset clause and provision for a 6-year review. The Agreement is awaiting ratification in the three countries.
After the US’ withdrawal from the Trans-Pacific Partnership (TPP) under President Trump, the remaining eleven TPP parties signed a successor agreement termed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. The Agreement came into effect on December 30, 2018, and its parties account for an estimated 14% of global GDP.
Five years after negotiations began in 2013, the EU and Japan signed the Economic Partnership Agreement and the EU-Japan Strategic Partnership Agreement. The Agreement, which is on track to come in effect in February 2019, is the first free trade agreement to make explicit reference to the Paris Climate Change Agreement which was signed in 2015.
4. Bolsonaro’s Brazil
South America’s largest country, Brazil, elected Jair Bolsonaro who took office as president at the beginning of 2019. Riding the wave of right-wing populism, Mr. Bolsonaro has expressed support for the unilateral foreign policy espoused by his US counterpart and has expressed apathy about Mercosur. Brazil is one of the most influential emerging economies, both hemispherically and internationally. The implications of the South American nation’s shifting foreign and trade policy will, therefore, be key to watch.
5. Brexit Uncertainty
Of course, one of the biggest trade policy developments to watch in 2019 will be the UK’s impending withdrawal from the EU – Brexit – which, as it stands, is to take place on March 29, 2019.
After nearly two years of intense negotiations, the EU-27 and the UK finally arrived at a Draft Agreement on the UK’s Withdrawal from the EU and a Political Declaration Setting out the Framework for the Future Relationship between the EU and the UK in November 2018. The EU-27 leaders endorsed the two texts at a special emergency meeting of the European Council.
However, in the face of strong opposition to the deal, particularly the ‘backstop’ provisions regarding the Northern Ireland/Ireland Border, UK Prime Minister Theresa May cancelled a crucial House of Commons vote on the deal which she likely would have lost. Mrs. May has sought to obtain further binding concessions from the EU, but without success thus far.
This week, the British House of Commons MPs voted in favour of an amendment requiring the Prime Minister to present to Parliament a Brexit Plan B within three days, in the event that MPs reject the current Draft Withdrawal Agreement in their vote rescheduled for next week Tuesday. Meanwhile, Labour Leader Jeremy Corbyn is calling for a general election to break the Brexit deadlock.
The Brexit deadline looms, but the May Government has ruled out requesting an extension under Article 50. With the timeline for the UK’s withdrawal ticking and the real threat of a potentially economically disastrous ‘no-deal’ exit, this will be one of the major trade policy issues to watch in 2019.
Dear Valued Readers,
The Caribbean Trade Law & Development Blog will be on Christmas hiatus from today until the New Year. At this time, I would personally like to thank you all for your readership and kind support throughout the year.
Here’s wishing you and your loved ones Merry Christmas and Happy Holidays, and a wonderful 2019!
With best wishes,
Caribbean Trade Law & Development
The countdown is on. With 100 days to go before the United Kingdom’s (UK) scheduled withdrawal from the European Union (EU), and the ratification of the Draft Withdrawal Agreement less likely, both sides have this week announced contingency plans for a ‘No-Deal Brexit’. What do these recent developments mean for CARIFORUM-UK trade, not just at the policy level, but at the firm level as well?
It has been a busy week in Brexit news. After delaying the House of Commons vote on the Draft Withdrawal Agreement which was scheduled for December 11th, UK Prime Minister Theresa May this week announced that the promised vote will be held the week of January 14, 2019. In the interim, Mrs. May will be seeking to obtain additional legal assurances from the EU-27 that the deal’s ‘backstop’ provision would not keep the UK in a customs union with the EU indefinitely.
UK and EU Brexit Contingency Plans Underway
However, in recognition of an increasingly likely ‘no deal’ scenario, the May Government also announced plans to, inter alia, put 3,500 troops on standby, allocate monies from a contingency fund to key government departments, and outlined a post-Brexit immigration plan.
The EU, for its part, has sought to safeguard the interests of its own EU-27 citizens and businesses by implementing a contingency plan comprising 14 legislative measures and targeting key Brexit-vulnerable sectors. Specifically on trade, the EU noted, inter alia, that “all relevant EU legislation on the importation and exportation of goods will apply to goods moving between the EU and the UK”. In a clear signal to the May Government, the EU was quick to point out that its contingency plan is meant to safeguard EU citizens foremost, that the measures do not replicate the benefits of EU membership, and that these will not mitigate all the risks of a ‘no deal Brexit’.
Why is a ‘no deal’ more likely now?
In an article I recently co-authored with Dr. Jan Yves Remy last week, we highlighted at least four scenarios for future UK-EU relations and analysed what each scenario may mean in turn for CARIFORUM-UK relations. Brexit represents the most epochal and seismic shift in UK trade and political policy in recent history. Brexit developments remain quite fluid, but recent developments evince the increasing likelihood of the ‘no deal’ scenario.
EU leaders have repeatedly ruled out a return to the negotiating table. A renegotiated withdrawal agreement, therefore, now appears highly unlikely. Despite calls for a second referendum, including from former British Prime Minister, Tony Blair, this option has been fervently dismissed by the May Administration, which remains committed to her slogan of ‘Brexit means Brexit’, although she had been part of the ‘remain’ camp before the referendum.
Labour leader, Jeremy Corbyn, has tabled a no confidence motion against Prime Minister May which, if successful, could change the current Brexit trajectory. However, despite her current unpopularity, there is no guarantee Mrs. May would be defeated or that her successor would abandon the Brexit plans. As alluring as it sounds, a ‘No Brexit at all’, scenario, therefore, at this stage still appears unlikely.
Possible Implications of ‘no deal’ for CARIFORUM-UK trade
Due to former colonial ties, the UK is currently most CARIFORUM (CARICOM plus the Dominican Republic) countries’ main trading partner within the EU and is also one of the main source markets for tourist arrivals and foreign direct investment to CARIFORUM countries. Given these historic and economic ties, CARIFORUM and the UK are currently in the advance stages of negotiating a roll-over of the concessions under the CARIFORUM-EU Economic Partnership Agreement which currently define CARIFORUM-UK trading relations until the UK leaves the EU. While details about the roll-over negotiations have been sparse, this agreement has reportedly taken into account the possibility of a ‘no deal’ Brexit. It is in the ‘no deal’ scenario that this roll-over arrangement has its most utility as it at least assures CARIFORUM traders of continued preferential market access to the UK if the latter leaves the EU without a transition deal in place.
However, while the EPA ‘roll-over’ preserves the market access status quo, it does not mitigate all the risks of a ‘no deal Brexit’. Without a transition agreement in place, UK goods (and imported goods entering through UK ports of entry) will immediately after March 29, 2019 no longer have free circulation within the EU single market and will revert to World Trade Organisation Most Favoured Nation (MFN) levels – that is, they will be subject to EU import duties and non-preferential rules of origin. This, therefore, takes away the incentive for CARIFORUM firms which, due to a shared language and customs, would have used the UK as a ‘springboard’ for entering the wider EU market by establishing a commercial presence in the UK.
Moreover, because many CARIFORUM countries’ air and sea links to continental Europe are still mainly through the UK, CARIFORUM firms will have to consider what impact these new ‘no deal’ arrangements (such as reimposed customs duties and customs checks) may have on their trade with both UK and EU partners and on their supply chains. New arrangements for aviation and haulage between the EU and UK will also add delays and increased freighting costs. These higher costs will have to be borne in mind in business planning, pricing and other decisions.
One of the biggest threats of a ‘no deal’ Brexit is the volatility of sterling which has seen large drops in value whenever unfavourable news hits the market. If not already done, currency risks will have to be taken into account by CARIFORUM firms when negotiating commercial terms with UK trading partners and in their own risk assessments.
With regard to tourism, the reduced spending power of UK visitors to the region, or any downturn in the UK economy due to fall-out from a ‘no deal’ Brexit’, would adversely impact those CARIFORUM countries where UK tourists account for a sizable market share or where UK purchasers account for sizable real estate purchases. Changes in UK-EU aviation arrangements may also make the cost of travel to the region more expensive for those continental European travellers which have to transit through the UK to reach the Caribbean (those which do not have the benefit of direct flights). As such, it would be beneficial for CARIFORUM countries to expand their direct air and sea links with continental Europe.
In spite of the above, it is not all doom and gloom. There is the opportunity for CARIFORUM to redefine CARIFORUM-UK trading relations by going beyond the mere EPA roll-over and negotiating a new free trade agreement in the future with the new ‘Global Britain’ the May Administration seeks to advocate. It also gives CARIFORUM countries an additional nudge to expand their trading relations with the EU-27 themselves by making better use of the EPA, which is currently underutilised. This is also an opportune time as CARIFORUM, as part of the African, Caribbean and Pacific (ACP) grouping, is in the process of renegotiating a post-Cotonou arrangement with the EU.
The takeaway is that the uncertainty continues! With all the news about Brexit, it is not surprising that some firms or persons may experience ‘Brexit fatigue’. It is, however, incumbent on regional firms which currently do business with, or are seeking to conduct business with those in the UK to keep abreast of these developments and to make the necessary contingency plans to ensure minimal disruption to their trading.
On December 15th, 2018, nearly 200 countries signed off on the rules required for translating the Paris Agreement from mere aspirational words on paper to an operable agreement. Agreement on the Paris Agreement ‘rule book’ came late on Saturday night, one day after the Twenty-Fourth Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24) talks were scheduled to conclude.
While there is understandable international relief and jubilation that an agreement for operationalising the Paris Agreement has been reached after two weeks of at times tension-filled negotiations, climate-vulnerable countries like Small Island Developing States (SIDS) would be justified in opining that the global political response to the climate change crisis still remains well below what is needed to stop irreversible global warming which threatens their very existence, and the future of the planet.
Over 20,000 delegates from 196 nations converged in the small Polish town of Katowice from December 3-14, 2018 with one primary objective in mind – formulating the guidelines and institutional mechanisms for giving life to the landmark Paris Agreement adopted at COP21 in 2015 in Paris, France.
While far from perfect, the Paris Agreement represents a commitment by the parties to hold the global average temperature increase to levels below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit it to 1.5 degrees Celsius, to increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience, to make available finance flows for climate change mitigation and adaptation, and to reach global peaking of greenhouse gas emissions as soon as possible.
The Paris Agreement rule book includes the modalities, procedures and guidelines for making this happen. A deadline of December 2018 was set for the rule book’s completion, which meant that negotiators were in a double race against time.
Given the need to balance the national interests of almost 200 countries, the many technical issues to be negotiated, the threat to multilateral diplomacy posed by growing nationalism and populism, and the current climate-skeptic rhetoric by the world’s second largest anthropogenic carbon dioxide (CO2) emitter (the US), the success of the talks was hoped for, but not assured. Negotiators were walking a thin rope and the negotiated outcome reflects many areas of compromise, including on areas where climate-vulnerable countries, like SIDS, would have wished more robust language to reflect the urgency of the political action needed.
What was agreed?
The majority of the rule book has been completed. The parties have decided on the rules for reporting on their mitigation, adaptation and financing efforts in a universal and transparent manner.
As opposed to a bifurcated system (separate rules for poor and rich countries), the rule book establishes a single set of rules for transparent reporting. This was one of the lines drawn in the sand by the US and the European Union (EU) to ensure, in particular, that large developing countries like China abide by the same transparency rules as they.
The rules for the enhanced transparency framework provide flexibility for “developing country parties that need it in the light of their capacities” in the implementation of the transparency provisions of the Paris Agreement. This will be on the basis of self-determination, and developing countries seeking to avail themselves of these flexibilities must clearly indicate the provision to which flexibility is applied, concisely clarify capacity constraints, and provide self-determined estimated time frames for improvements in relation to those capacity constraints.
A further flexibility comes with respect to reporting support. The rule book uses the legally binding language of “shall” for developed country parties with respect to providing information on support given, while for other parties, it uses less forceful language in the form of “should”.
Under the Paris Agreement, each party committed to progressively ambitious Nationally Determined Contributions (NDCs) which reflect their pledges to climate action and are to reflect their highest possible ambition. Of note is that the interim public registry developed by the UNFCCC Secretariat will serve as the public registry for parties’ NDCs. The registry will be accessible for use by the parties, stakeholders and the public. From 2031 onward, parties are to apply common time frames to their NDCs. The exact time frame is to be determined later.
One of the issues at COP24 was scaling up parties’ ambitions by 2020 because when calculated, the current ambition level in countries’ existing NDCs puts global average temperature increases on track for more than 3 degrees Celsius above pre-industrial levels. This was noted in a Special Report on Global Warming at 1.5 Degrees Celsius released by the Intergovernmental Panel on Climate Change (IPCC). This temperature increase would be well-above the Paris Agreement goal and towards levels that would lead to even more irreversible global warming, and would put some low-lying SIDS under water, literally.
The IPCC further warned that restricting temperature increases to 1.5 degrees Celsius above pre-industrial levels would limit some of the more severe climate change impacts, than at 2 degrees, confirming what SIDS were arguing under their “1.5 to stay alive” campaign in the lead up to COP21 when the Paris Agreement was signed.
How these scientific findings in the IPCC report were to be treated was a major sticking point in the COP24 negotiations. In a blow to climate activists and SIDS, fervent objection by the US and the major oil-exporting nations of Russia, Saudi Arabia and Kuwait led to a weak statement which merely welcomes the “timely completion” of the Report, but is silent on its dire findings.
Financing for developing countries’ mitigation and adaptation efforts is critically important, especially for SIDS whose climate vulnerability far exceeds their ability to self-finance their mitigation and adaptation efforts. It was agreed that the Adaptation Fund, which was established under the Kyoto Protocol, will serve the Paris Agreement. Some countries have also made additional pledges to the Green Climate Fund, another multilateral fund. Another nugget of good news is that parties have agreed to increase the collective climate finance goal post 2020 beyond the current goal of 100 billion USD per year. However, it is not yet decided by how much.
While the parties recognise the importance of capacity-building, they put off adoption of a decision on the initial institutional arrangements for capacity building to COP25.
Loss and damage due to climate change’s irreversible and adverse impacts remains a sensitive issue for developed countries, but one on which climate-vulnerable countries, such as SIDS, are particularly concerned. Indeed, climate change impacts have cost some SIDS like Dominica after Hurricane Maria in 2017 the equivalent of 226% of GDP, at a time when that country was still recovering from the devastation of Tropical Storm Erika in 2015.
SIDS fought hard for the inclusion of loss and damage in the Paris Agreement, and although ‘loss and damage’ is also included throughout the rule book, the language is less robust than desired. The transparency rules provide that countries “may, as appropriate” report on loss and damage, and the global stocktake rules “may take into account, as appropriate..efforts to avert, minimise and address loss and damage”.
Another example of compromise is in the weak compliance mechanism provided for. Under the Paris Agreement, this mechanism is “to facilitate implementation of and promote compliance with the provisions of the Agreement”. The rule book makes clear that the committee is to “neither function as an enforcement or dispute settlement mechanism, nor impose penalties or sanctions, and shall respect national sovereignty”. This mechanism, therefore, will have to rely on moral suasion for ensuring compliance.
The compliance mechanism will consist of an elected 12-member committee which is to function in a manner that is “transparent, non-adversarial and non-punitive”. In a nod to developing countries, the committee membership is to have “2 members each from the five regional groups of the United Nations and 1 member each from the small island developing States and the least developed countries, taking into account the goal of gender balance”. It “shall pay particular attention to the respective national capabilities and circumstances of Parties.”
A critical area which remains incomplete is that of voluntary market mechanisms. Agreement on this was held up as Brazil objected strongly to rules preventing double counting. This issue has been deferred to COP25 which will be held in Chile.
The rule book is a welcomed achievement given the swirling headwinds it had to face leading up to its negotiation. But the reality of balancing varying political interests meant that the text features many areas of compromise, with the net result that the political response and ambition do not adequately reflect the urgency needed to confront the magnitude of the climate crisis.
The Global Carbon Project released a report noting that global carbon emissions are to reach an all-time high in 2018. While SIDS are undoubtedly at the frontlines of the climate change battle, natural disasters, such as the impact of Hurricane Harvey (2017) and Hurricane Katrina (2005) in the US, show that large countries are by no means immune to climate change’s most disastrous effects. Climate action is, therefore, in all countries’ interests.
Political headwinds, however, still threaten the global climate response as powerful fossil fuel interests now have climate deniers in the highest positions of political power. Brazil has withdrawn its offer to host next year’s COP25. Its incoming President Jair Bolsonaro, a climate change denier, has already signalled his support for increased agricultural production in the Amazon – the world’s largest green lung. The Trump Administration has re-emphasised a commitment to so-called ‘clean’ coal, rolled back many Obama-era emissions-cutting initiatives and has indicated earlier this year that the US is withdrawing from the Paris Agreement. Under the Agreement, the US cannot withdraw until 2020 and its delegation played an active role in the COP24 negotiations, especially on the issue of transparency. However, should President Trump be re-elected in 2020 and the US make good on its threat to withdraw, this will have implications for the Agreement and on global climate action more widely.
The next few years will be critical for climate action. At COP25 in Chile next year, the parties will seek to finalise the final details of the rule book. However, before this, a special climate summit will be convened in September 2019 to mobilise ambition. The deadline for current emissions commitments is 2020 and new targets will have to be set. Failure to scale up ambitions puts SIDS and future generations at risk of climate disaster. More ambitious political action will be needed to ensure a transition to a low carbon and climate resilient world which ensures that the most deleterious climate change impacts are averted.
The informal text may be found here.
By Renaldo Weekes, Guest Contributor
The United Kingdom’s (UK) Prime Minister, Theresa May, has had her hands full ever since she took the job and began leading the Brexit negotiations. She has had to suffer through several resignations as various Secretaries and Ministers opposed her Brexit deal. More recently, she has been ensued in a serious battle with the House of Commons and, more specifically, Members of Parliament (MPs) from her own party. With the high tension squabbles that surround the Brexit deal in the UK, European Union (EU) leaders are finding it increasingly difficult to maintain confidence in May and are not willing to change any part of the current deal, much to the Prime Minister’s detriment.
No Confidence Vote
Tensions surrounding the Brexit have culminated when Prime Minister May decided to delay Monday’s Brexit vote until January. Feeling as though they have tolerated enough, her own MPs launched a no-confidence vote against her. She survived that vote and we now continue on the same path as before. Theresa May’s options remain the same, those being: succeeding with her current deal or an amended deal, holding a second referendum, unilaterally reversing Brexit, a no-deal Brexit and a relatively new option of restarting the process that inadvertently arose out of the European Court of Justice’s ruling on Monday, December 10. The no-confidence vote was merely a bump in the road for the most part and Tory MPs cannot challenge her leadership for at least another year.
Funnily enough, if the rebellious MPs won the vote, things would not have been any better. The same options would be open to the new PM and his or her team. The likelihood of each option happening would change, however, and it seems a no-deal Brexit would be even more likely. May’s current deal would be scrapped as MPs have made it clear that they do not like the deal in its current form. Holding a second referendum or reversing Brexit are not likely to happen because the MPs who challenged May are not willing to even open the possibility of slowing down Brexit. There seems to be no intent to revoke their article 50 notification because doing this may be interpreted as retreating from the battle.
Appeasing the Tories
On Thursday, fresh off the heels of her victory against the no-confidence vote, Theresa May headed to Brussels to squeeze more concessions out of the EU. Her elation from winning the vote did not last long as the EU made it clear that it will not be budging. The EU is not being stubborn for the sake of it, however. According to reports, EU leaders are not sure they can trust Prime Minister May anymore. Not because she is being underhanded but rather, she does not know what she is doing. She has offered what has been described as either vague or impossible changes that relate to the backstop on the Irish border.
One of her suggestions was to have a sunset clause on the backstop whether or not a deal is reached. This is rather dangerous because the point of the backstop is to prevent a hard border between Northern Ireland and Ireland. If the backstop deal comes to an end with no replacement, the border they were trying to prevent will be realized. Some fear that this will resume conflicts that were put to a halt 20 years ago with the signing of the Belfast or Good Friday Agreement. The fact that Tories are willing to let this happen because they want to be completely severed from the EU shows their irresponsibility. They have not suggested ways to deal with the backstop, they simply want a Brexit and they want it now. How can May really appease persons who are not suggesting a fix to the main problem? Understandably, she would try to tweak a deal that, in its current state, will not pass the House of Commons but she and the Tories must face facts. If this squabble of theirs continues, there will be a no-deal scenario.
The Wishful Immovable Object and the Ostensibly Unstoppable Force
Prime Minister May has maintained her stubbornness throughout this entire ordeal until the crucial December 11 vote came and she postponed it until January. We finally saw the ostensibly immovable object shake under pressure. This continued on when the no-confidence vote hit and she essentially begged the EU to make more concessions but they rebuffed her. May is still standing, however, and continues to dismiss the idea of a second referendum as folly even though some of her Cabinet members are reportedly flirting with the idea.
Though the Prime Minister wants to maintain the image of being an immovable object, she has been clearly rattled. There is also the impending, ostensibly unstoppable force that is a no-deal Brexit. A no-deal Brexit is not as unstoppable as it may appear. Its status as ‘unstoppable’ depends on how immovable Theresa May wants to be. If May is willing to change her position and, at the very least, holds a second referendum, it is more probable that she prevents the UK’s disastrous crash out of the EU. If she revokes the Article 50 notification, she prevents Brexit almost immediately and can even restart the negotiation process to craft a better deal.
It is sad to see the state of affairs that the UK finds itself in because of the unrealistic and irresponsible demands of some Tory MPs and a Prime Minister who is trying to mollify these MPs but, at the same time, wants to remain unnecessarily obdurate in the face of legitimate concerns about where the country is headed as the March 2019 deadline approaches. Only time will tell if things will change, whether for better or worse.
Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage.
Welcome to the final Caribbean Trade & Development Digest for 2018! We are happy to bring you the latest trade and development news and analysis for the week of December 9-16, 2018!
As this will be our last edition for 2018, we take this opportunity to thank you for your readership over the past year and to wish you and yours the very best for the season!
THIS WEEK’S HIGHLIGHTS
At COP24, nearly 200 countries have reached an agreement on the implementing guidelines – the ‘Rulebook’ – for the operationalization of the Paris Agreement (2015). This agreement came on Saturday night, a day after the two week UN Climate Talks were scheduled to end.
The Brexit saga continued. UK Prime Minister Theresa May postponed a scheduled vote on her draft Withdrawal Agreement with the EU in the face of fervent political opposition, survived a confidence vote and has been thus far unable to win additional concessions from the EU to placate MPs’ fears about the Withdrawal Agreement.
See my article with Dr. Jan Yves Remy, Deputy Director of the University of the West Indies’ Shridath Ramphal Centre, analysing what these latest Brexit political headwinds mean for CARIFORUM-UK trading relations!
Antigua-Barbuda calls on WTO to reform dispute settlement body
Caribbean News Now: Antigua and Barbuda has officially intervened in the ongoing discussions concerning the reform of the Dispute Settlement Understanding of the World Trade Organisation (WTO). Read more
Barbados Ambassador to Geneva sounds warning
CBC (Barbados): Ambassador Blackman was addressing the WTO’s General Council Meeting. He told the body Barbados continues to believe in the WTO’s rules based trading system, but the country remains concerned about the impasse in the selection process for Appellate Body members. Read more
St Vincent becomes first OECS island to decriminalise marijuana
LoopT&T: Saint Vincent and the Grenadines (SVG) has made history as the first OECS Member State to decriminalise marijuana for medical purposes and scientific research. Read more
CARICOM to review intra-regional transportation
LoopBarbados: Come next year, the Caribbean region will see a host of new measures, including improved intra-regional transportation. Read more
Antigua Asks For Delay In Further Free Movement, Says It Already Has Large Numbers Of CARICOM Nationals
Antigua News Room: The Government of Antigua and Barbuda says it has asked to be excluded, for now from implementing measures under Caricom which would see free movement of more classes of people. Read more
CARICOM Secretary General holds talks with Aruba on associate membership
TV6 (Trinidad): The Secretary-General of the Caribbean Community (CARICOM), Ambassador Irwin LaRocque on Wednesday met with Prime Minister of Aruba Hon Evelyn Wever-Croes on Associate Membership in the 15 member regional grouping – the Caribbean Community (CARICOM) for the Dutch Territory. Read more
Regional Statement on the IPCC Special Report
CARICOM Today: CARICOM ministers with responsibility for addressing climate change released a statement on the IPCC’s Special Report. Read more
Belize accepts chairmanship of AOSIS
CARICOM: Belize’s acceptance of the chairmanship of AOSIS from the Maldives in January 2019. Belize will hold the chairmanship for two years to be followed by Antigua and Barbuda in 2021. Read more
UK and Switzerland agree to transition trade agreement after Brexit
UK Government: The UK Government and the Swiss Federal Council have approved the transition of a trade agreement, allowing businesses to continue trading freely after the UK leaves the European Union. Read more
Commission reports on trade negotiations with Australia, New Zealand and Indonesia
EU: As part of its commitment to transparency, the European Commission published today a report from the latest round of negotiations between the EU and Australia, as well as the EU’s six initial text proposals tabled during this round. Read more
U.S. Rejects the EU’s Trade Reform Proposal, Putting WTO at Risk
Bloomberg: The U.S. rejected the European Union’s proposal to reform the World Trade Organization, dealing a blow to international efforts to bolster the Geneva-based body, which has come under attack from President Donald Trump’s administration. Read more
EU-Japan trade agreement on track to enter into force in February 2019
EU: The European Commission welcomes today’s approval in the European Parliament of the EU-Japan Economic Partnership Agreement and the EU-Japan Strategic Partnership Agreement. Read more
China buys US soybeans for first time since trade war
BBC: China has bought US soybeans for the first time since the trade war between the two countries started in July. The country’s finance ministry also confirmed it would temporarily reduce tariffs on US car imports from 40% to 15%, beginning on 1 January. Read more
Shipping costs from China to the US have more than doubled as trade war sparks a ‘bonanza’
CNBC: The price of shipping a container from China to the United States has risen dramatically in the last year due to uncertainty surrounding trade tensions between Washington and Beijing. Read more
AEC pushes for an inclusive African Continental Free-Trade Agreement
African Review: A successful implementation of the African Continental Free Trade Area (AfCFTA) agreement cannot be achieved without the “people dimension,” ensuring that the integration process does not lead to widening inequalities or exclusion, the AEC Forum observed. Read more
Appellate Body issues report on revised US “dolphin-safe” tuna labelling measure
WTO: On 14 December the Appellate Body issued its report in the cases brought by Mexico and the United States in “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
India appeals panel ruling in dispute with Japan over safeguard duties on steel products
WTO: India filed an appeal on 14 December concerning the WTO panel report in the case brought by Japan in “India — Certain Measures on Imports of Iron and Steel Products” (DS518). The panel report was circulated to WTO members on 6 November. Read more
Appellate Body issues report regarding Brazil tax measures
WTO: On 13 December the Appellate Body issued its report in the cases by the European Union and Japan in “Brazil — Certain Measures Concerning Taxation and Charges” (DS472 and DS497). Read more
Trade Policy Review Body: Overview of developments in the international trading environment
WTO: Speech by WTO Director General Roberto Azevedo. Read more.
WTO-World Bank joint publication highlights need for policies to maximize trade gains for extreme poor
WTO: Trade has made a significant contribution to poverty reduction but further integration of developing countries into international markets and policies to share the gains from trade more widely will be essential for further reducing poverty and ensuring that no one is left behind, according to a joint publication by the World Bank Group and the World Trade Organization launched today (11 December). Read more
Report shows sharp rise in the coverage of trade-restrictive measures from WTO members
WTO: The Director-General’s annual overview on trade-related developments presented to members on 11 December at a meeting of the Trade Policy Review Body (TPRB) shows a significant increase in trade coverage of trade restrictive measures by WTO members from mid-October 2017 to mid-October 2018. Read more
EU parliament approves huge free trade deal with Japan
Japan Today: The European Parliament on Wednesday approved an accord with Japan that has been dubbed the world’s biggest trade deal, covering economies that represent a third of the world’s GDP. Read more
Renaldo Weekes, Guest Contributor
The European Court of Justice (ECJ) ruled on Monday, December 10th, 2018, that a European Union (EU) member state has the ability to unilaterally revoke its notification of intent to leave under Article 50 of the EU’s Lisbon Treaty. This ruling comes at a time when anti-Brexit and pro-Brexit persons alike are showing great opposition to British Prime Minister Theresa May’s Brexit deal. Anti-Brexit persons, in particular, are feeling vindicated by this ruling because it allows them to double down on their stance and try to force Prime Minister May into submission.
However, the British Government stood its ground despite the ECJ’s ruling, with British Environment Secretary, Michael Gove, arguing that the British people voted to leave the EU in 2016 and it will not reverse that decision. The Government even argued that point in the ECJ case, saying it does not plan to reverse its decision so the question of whether the United Kingdom (UK) can unilaterally revoke its Article 50 notification was merely hypothetical and of no consequence.
May’s Brexit deal in more peril
Can the British Government continue to take its tough stance in light of the ECJ’s ruling and all the controversy that shrouds Brexit? Some may find it admirable that the Government is not willing to waver, even in the face of fierce opposition. At some point, however, it must face facts. Anti-Brexit lawmakers will be less likely to back down. As part of its judgement, the ECJ said that the UK’s decision to revoke their Article 50 notification reflects a sovereign decision. This has essentially put absolute power into the hands of UK Members of Parliament (MPs) to change course as they do not have to yield to the EU. There is no doubt that MPs will exercise that power. To anti-Brexit lawmakers, there are no more excuses that Prime Minister May can use to prevent a second referendum or prevent Brexit. In light of this, lawmakers are more likely to vote down on the deal; though there was no doubt that they would have done otherwise.
Responsibility and accountability
The ECJ ruling also puts ultimate accountability on the Prime Minister and her team. The European Commission and the Council argued in the court case that article 50 could not be interpreted as allowing a member state to unilaterally revoke its notification; the member state would need the EU’s permission to revoke the notification. If this turned out to be true, and the EU refused to allow the UK to change its decision, Government would have been able to argue that the EU is at fault for restricting the UK’s sovereignty. That, however, is not the case now. Should the government refuse to reverse Brexit or, at the very least hold a second referendum, there is no other institution that holds responsibility for any ensuing consequences that should come from what is likely to be a hard or even no deal Brexit.
Abuse of the process
Another possible impact of the ECJ ruling was actually cited by the European Commission and the Council during their argument to the court. They noted that if member states can unilaterally revoke their notification to leave, they may abuse that process in order to retrigger the 2 year negotiation period should the original negotiations not go their way. On the face of it, this argument may not hold much weight as there is already a process through which a member state can request an extension of the negotiating period. However, should the member state not agree to the extension period proposed by the council, it may still seek to retrigger the mandated 2 year negotiating process which forces the council into a position where it must agree to the member state’s desired negotiation period. The member state may also opt to not apply for an extension and immediately retrigger the process.
The effects that the ECJ’s ruling may or may not have on the UK and other member states notwithstanding, we must still wait to see if the British government will budge in any way as the March 2019 deadline approaches against the backdrop of MPs threatening to upend the deal and a shaky Government trying desperately to maintain its power.
Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage.
Caribbean Community (CARICOM) Heads of Government met from December 3-4, 2018, in Port of Spain, Trinidad last week for the 18th Special Meeting of the Conference of Heads of Government of CARICOM which was a special meeting on the CARICOM Single Market and Economy (CSME).
The CSME envisions deepened economic integration among participating CARICOM Member States by creating a single economic space for the free movement of Community goods, services, capital and labour, with the aim of promoting economic development and increased well-being of Community nationals. All independent CARICOM Member States, except the Bahamas, are part of the CSME, while Haiti is not yet a full participant.
Progress towards implementation of the CSME has been painstakingly slow, a point noted in numerous reports commissioned to look at this issue, including the Jamaica-government commissioned Golding Commission Report released earlier this year which examined Jamaica’s relations within the CARICOM and CARIFORUM frameworks.
At the end of the special CSME meeting last week, CARICOM leaders released their St. Ann’s Declaration on CSME in which they recommitted to the regional integration process and outlined several priority areas for immediate action, including setting timelines for some action areas.
Based on the St. Ann’s Declaration on CSME, here are eight key outcomes from the CSME Special Meeting:
1.Recommitment to national action to further CSME implementation
CARICOM leaders recommitted to take action at the national level to advance the regional integration agenda. In their preamble to the Declaration, they reiterated that the CSME “continues to be the most viable platform for supporting growth and development” in CARICOM Member States, but acknowledged that progress on the CSME should have been further advanced by now. They welcomed Haiti’s commitment to full integration into the CSME by 2020.
2.Greater voice for private sector and labour
CARICOM leaders have agreed to establish a formalised and structured mechanism to facilitate dialogue between the Councils of the Community and the private sector and labour. They also agreed to amend the Revised Treaty of Chaguaramas to include representative bodies of the regional private sector and labour as Associate Institutions of the Community.
3. Full Free Movement in 3 years (for willing Member States)
CARICOM leaders have set a timeline of the next three years for those Member States which are willing to do so to move towards full free movement. The leaders have also agreed to reinforce the operation of their security mechanisms to ensure the integrity of the regime allowing the free movement of CARICOM nationals.
4. Expansion of categories of skilled nationals entitled to move
Agricultural Workers, Beauty Service Practitioners, Barbers and Security Guards will be added to the categories of skilled nationals who are entitled to move freely and seek employment within the Community.
CARICOM leaders also reiterated that a skills certificate issued by one Member State would be recognised by all Member States. They also agreed to complete domestic legislative and other arrangements for all categories of free movement of skilled persons.
5. Greater CARICOM-OECS collaboration
They have mandated that steps be taken to deepen cooperation and collaboration between the Secretariats of CARICOM and the OECS “to avoid duplication and maximise the utility of scarce resources”.
6. Single Domestic Space for passengers in the Region
CARICOM leaders agreed to examine the re-introduction of the single domestic space for passengers in the Region and agreed to work towards having a single security check for direct transit passengers on multi-stop intra-Community flights. They also agreed to conduct a special session on Air and Maritime Transportation at the Intersessional meeting of the Conference to be held next February to focus on this matter.
7. Public Procurement and Mutual Recognition of Member States’ incorporated companies
CARICOM leaders set a timeline of 2019 for the finalization of the regime that permits citizens and companies of the Community to participate in Member States’ government procurement processes. They also agreed to take the necessary steps to allow for mutual recognition of companies incorporated in a CARICOM Member State.
8. Restructured Commission on the Economy
CARICOM leaders have restructured the Commission on the Economy to advise Member States on a growth agenda for the Community. Leading Barbadian-UK economist, Professor Avinash Persaud, has been appointed to lead this restructured commission, while its nine other members include distinguished regional and international persons.
The text of the St Ann’s Declaration on CSME may be viewed here.
Welcome to the Caribbean Trade & Development Digest for the week of December 2-8, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
This week, CARICOM Heads of Government held a Special Session on the CARICOM Single Market and Economy (CSME) in Port of Spain, Trinidad. They issued the St. Ann’s Declaration on CSME in which they recommitted to the process of CSME implementation and outlined some key priority areas for implementation.
The CARICOM Competition Commission (CCC) has indicated that it is closely monitoring the proposed sale of Scotia Bank’s operations in several Caribbean jurisdictions to the Trinidad-based Republic Financial Group Ltd. Read the CCC’s full statement here.
Members of the European Parliament (MEPs) and parliamentarians from ACP countries held their 36th session of the Joint Parliamentary Assembly (JPA) in Cotonou, Benin. They adopted several resolutions, including their Declaration of the Co-Presidents on Post-Cotonou Negotiations on the occasion of the meeting of the 36th Joint Parliamentary Assembly
Below we share the other major trade and development headlines from across the Caribbean region and the world for last week:
CARICOM to open government procurement to regional companies
LoopBarbados: A portal called CIMSuPro – the CARICOM Interactive Marketplace and Suspension Procedure – will be established as a managed market place for CARICOM companies to post their raw material, goods and services. It would be made available to regional and global purchasers. Read more
More Categories of Workers to Be Granted Free Movement Within CARICOM
Caribbean360: More Caribbean Community (CARICOM) nationals are to be allowed to seek work in fellow member states, it has been revealed, as CARICOM leaders reaffirmed their commitment to the vision of free movement and a shared market space. Read more
CCJ Issues Record Number of Judgments in 2018
CARICOM: During 2018, the Caribbean Court of Justice (CCJ) issued 34 judgments and reasons for decision, its highest number of judgments delivered in a calendar year since it began its operations in 2005. Throughout that period, the CCJ also heard 28 new matters in both its Original and its Appellate Jurisdictions. Read more
CARICOM Committee of Ambassadors charting enhanced role
CARICOM: CARICOM Secretary-General Ambassador Irwin LaRocque in welcome remarks, told the ambassadors their role, both individually as the link between the regional and the national, and as a constituent group within the governance structure of the Caribbean Community, assumes even greater significance in the renewed drive to implement the provisions of the CSME and other critical areas of the community’s work. Read more
No plans for Jexit
Jamaica Observer: Jamaica’s Prime Minister Andrew Holness yesterday reiterated that the decision to establish a commission to review his country’s relationship with the Caribbean Community (Caricom) was not intended to create an avenue for it to leave the 15-member regional integration movement. Read more
Tackle CSME Issues Head On, Urges CARICOM Chairman
Caribbean360: Caribbean Community (CARICOM) Chairman, Prime Minister Andrew Holness of Jamaica, has urged a “head on” approach to tackling of complex issues during the Special CARICOM Heads of Government Meeting on the CARICOM Single Market and Economy (CSME) underway in Trinidad and Tobago. Read more
Guyana pushes trade and investment at OIC meeting in Turkey
Caribbean News Now: Guyana attended the 34th meeting of the Standing Committee for Economic and Commercial Cooperation of the Organisation of Islamic Cooperation (COMCEC), which was held last week in Istanbul, Turkey. Representing Guyana at the meeting was its permanent ambassador to the United Nations, Michael Ten-Pow, who promoted the opportunities for trade and investment in his country. Read more
Exxon Mobil could push Guyana past Mexico, Venezuela in oil output
Houston Chronicle: The small South American nation of Guyana could become the continent’s second-largest oil producer thanks to the offshore discoveries made by Exxon Mobil, according to a new report. Read more
Sugar sales down, total exports down (Belize)
The Reporter (Belize): Revenue earned from sugar exports, Belize’s largest export earner, were down in the month of October, contributing largely to an overall decrease in export revenues of 5.1 percent, according to the Statistical Institute of Belize. Read more
Region’s Coconut Industry gets EDF boost
CARICOM: The coconut industry in Barbados and the rest of the Caribbean should soon be receiving a further boost. That is because the 11th European Development Fund (EDF) will be financing a second coconut project in the region. Read more
Prensa Latina: The Caribbean Sugar Association (SAC) reported that its members met approximately 80 percent of Caricom”s raw sugar needs during 2017/18 harvest. Read more
IMF thumbs up for Barbados
Nation News (Barbados): The International Monetary Fund (IMF) likes the way the Barbados economy is being fixed, calling it an “excellent start”. Read more
COP24 fails to adopt key scientific report
BBC: Attempts to incorporate a key scientific study into global climate talks in Poland have failed. The IPCC report on the impacts of a temperature rise of 1.5C, had a significant impact when it was launched last October. Read more
Macron threatens to scupper EU-Mercosur trade deal over climate
Euractiv: French President Emmanuel Macron has warned that he will oppose a trade deal between the EU and Mercosur if Brazil’s incoming far-right president pulls his country out of the Paris Agreement. Read more
Mercosur and EU trade negotiators meet in Brasilia
The Rio Times: The foreign ministers of Mercosur and EU members are meeting in Brasilia on Thursday (December 6th) in an effort to advance the partnership agreement between the two economic blocs. This is the first time Mercosur and the UE are meeting after statements made by France’s Macron caused tension and doubt about the partnership. Read more
Why Qatar left OPEC
Al Jazeera: Explaining the motivation behind the decision, Saad Sherida al-Kaabi, Qatar’s minister of state for energy affairs and president and CEO of Qatar Petroleum, said that Qatar’s exit from OPEC “is not political, it was purely a business decision for Qatar’s future strategy towards the energy sector.” Read more
RCEP: Experts to evaluate pact to strengthen India’s position
Hindu Business Line: To sharpen India’s bargaining position in the Regional Comprehensive Economic Partnership (RCEP), which is being negotiated among 16 countries, the Commerce Ministry has roped in experts from academic institutions and think-tanks to carry out a detailed study of the pact and give their recommendations. Read more
#ACPEU – MEPS agree on a partnership tailored to international context
EU Reporter: During the 36th session of the Joint Parliamentary Assembly (JPA), which took place from 3 to 5 December in Cotonou (Benin), Members of the European Parliament and their counterparts from 78 African, Caribbean and Pacific (ACP) countries debated and adopted several resolutions. Read more
Japan-EU trade pact clears hurdle on road to Feb. 1 start
Nikkei Asian Review: Japan’s parliament approved an economic partnership agreement with the European Union early Saturday, keeping one of the world’s biggest free trade zones on course to take effect Feb. 1. Read more
EU agrees post-Brexit import quotas for other WTO members
Reuters: The European Union endorsed on Friday new tariff rate quotas (TRQs) that the bloc will apply mainly for agricultural products coming from other World Trade Organization members after Brexit. Read more
Britons scramble to get E.U. passports before Brexit
NBC: With the U.K. due to leave the European Union in March, the demand among Britons for citizenship and passports from the other 27 countries in the bloc has skyrocketed. Read more
DG Azevêdo in US: This is a “once-in-a-generation opportunity” to renew trading system
WTO: Speaking in Washington DC on 5 December, Director-General Roberto Azevêdo said that WTO members have “a once-in-a-generation opportunity to renew the trading system”. He argued that in responding to the range of challenges in the global trading system today, momentum was building towards strengthening and improving the work of the WTO. The Director-General was speaking at the National Foreign Trade Council’s annual World Trade Dinner. Read more
Argentina initiates WTO dispute complaint against Peruvian measures on biodiesel imports
WTO: Argentina has requested WTO dispute consultations with Peru concerning anti-dumping and countervailing measures imposed by Peru on biodiesel imports from Argentina. Argentina’s request was circulated to WTO members on 5 December. Read more
Panels established to review India, Swiss complaints against US tariffs
WTO: At its meeting on 4 December, the WTO’s Dispute Settlement Body (DSB) agreed to requests from India and Switzerland for the establishment of panels to examine tariffs imposed by the United States on steel and aluminium imports. Read more
United Kingdom submits draft post-Brexit services commitments to WTO
WTO: WTO members received today, 3 December 2018, the United Kingdom’s draft schedule outlining its WTO commitments for services once the UK leaves the European Union. Members now have 45 days to review the schedule before certification. Read more
China confirms its working on independent WTO reform
Asia Times: China is planning to put forward an independent proposal to promote WTO reform, Yicai.com reported, citing a government official and several sources. Read more
After nearly two years of negotiations between the European Union (EU-27) and the United Kingdom (UK), European leaders endorsed the “The Draft Agreement on the Withdrawal of the United Kingdom from the European Union and the European Atomic Energy Community”and the “Political Declaration Setting out the Framework for the Future Relationship between the European Union and the United Kingdom” at a special meeting of the European Council on November 25, 2018.
This process is taking place pursuant to Article 50 of the Treaty on European Union (TEU), which sets out the terms and timelines for the withdrawal of any Member State from the EU. The text of the UK’s draft Withdrawal agreement, which was released on November 14, 2018, delineates the terms of the UK’s withdrawal from the EU, while the Political Declaration outlines broad aspirations for the constitutive elements of the two parties’ future trading relationship.
This article takes a brief look at what possible implications the draft Brexit Withdrawal Agreement may have for future CARIFORUM-UK trading relations, which are currently under negotiation and are reportedly close to being finalised.
Essential Elements of the Withdrawal Agreement
The UK ceases to be an EU Member State on March 29, 2019. During the transition period (March 29, 2019 to December 31, 2020), and subject to certain limited exceptions, EU law and the EU institutions and agencies will continue to be applicable to the UK, although it will no longer be an EU Member State. The UK will, however, be ineligible to be represented on, or participate in the decision-making processes of these institutions. This arrangement was deemed necessary to ensure a ‘smooth’ transition and provide for some certainty for traders while the parties hammer out the details of their future trading relationship. The Joint Committee may extend the transition period only once and this must be exercised before July 1, 2020.
The Protocol on Ireland and Northern Ireland includes the controversial “backstop” option, whereby in the event that the EU and UK fail to negotiate an agreement which prevents a ‘hard border’ between Northern Ireland (a country of the UK) and the Republic of Ireland (an EU Member State) within the transition period, the UK will be part of a single UK-EU customs territory until such an agreement is made. However, both the EU and UK have expressly stated their intention to conclude such an agreement by July 1, 2020.
Both the EU and UK Government have openly stated that they consider the negotiations on the two agreements closed, and have argued that the deal was the best that could be achieved in the circumstances. Although EU leaders endorsed both agreements, approval and ratification by the UK parliament is also needed under the EU (Withdrawal) Act 2018. UK House of Commons support appears questionable at this stage given the fervent opposition by both Remain and Leave MPs to the current Withdrawal Agreement. The House of Commons will debate the deal on December 11, 2018.
Implications for CARIFORUM-UK Trading Relations
Traders from CARIFORUM currently have preferential access to the UK market under the CARIFORUM-EU Economic Partnership Agreement (CARIFORUM-EU EPA). While CARIFORUM-EU trading relations will remain unchanged once the UK leaves the EU, the same cannot be said for CARIFORUM-UK relations.
For most Anglophone CARIFORUM countries, the UK is their main trading partner within the EU, as well as a major source market for tourism and investment. It has been reported that UK-CARIFORUM bilateral trade totaled £2.1 billion in 2016.
Under the Withdrawal Agreement, the UK remains bound to all EU international agreements, including trade agreements such as the CARIFORUM-EU EPA, to which it is party by virtue of being an EU Member State. However, during the transition period, the UK must not engage in actions deemed “likely prejudicial to EU interests” and its representatives will be barred from participating in the work of any bodies established pursuant to such agreements, unless it does so in its own right or upon invitation by the EU. This would include any bodies, such as the Joint CARIFORUM-EU Council, established pursuant to the CARIFORUM-EU EPA.
The Withdrawal Agreement does not preclude the UK from negotiating, signing and ratifying its own trade agreements with third States or groupings, such as CARIFORUM, during the transition period. But the entry into force and application of said agreements during the transition period would be subject to EU authorization. With respect to CARIFORUM, the grouping is currently negotiating a roll-over of the EPA concessions with the UK to minimize any disruption to CARIFORUM-UK trade. Such a CARIFORUM-UK trade agreement, therefore, would be subject to EU authorization if it is to enter into force during the transition period. In any case, as noted above, the UK will remain a party to the EPA and bound to apply EPA concessions to CARIFORUM traders during the transition period.
But what about the UK’s future trading relations with the EU? A ‘no deal Brexit’ is still a possibility as the draft Withdrawal Agreement needs ratification by each of the EU 27 countries. There is also still that pesky question of the negotiation of the future UK-EU trading relationship. The Political Declaration envisions a UK-EU free trade agreement, the terms of which remain to be negotiated.
A ‘no deal Brexit’ would make it difficult for CARIFORUM firms looking to use the UK as a stepping stone to EU markets, which means a climate of uncertainty will continue to prevail for Caribbean firms seeking to use the UK as a conduit for accessing the EU market until the full details of future UK-EU terms of trade are agreed. It was recently reported that the agreement between the UK and CARIFORUM was close to being reached and has taken into account the possibility of a ‘no deal Brexit’.
The climate of uncertainty may also impact CARIFORUM-UK trade and investment from the UK side. Although some UK businesses have by now conducted risk assessments and built in Brexit contingency plans, the continued political and economic uncertainty and volatility of sterling will continue to weigh on their export, hiring and investment decisions.
The Withdrawal Agreement takes us one step closer to some idea of what the future UK-EU relations will be, but a climate of political and economic uncertainty will remain for some time, which may have an impact on CARIFORUM-UK trading relations.
Welcome to the Caribbean Trade & Development Digest for the week of November 25-December 1, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
This week, leaders of the EU-27 at their summit in Brussels approved the draft Brexit deal struck between the UK and EU. Ahead of the UK parliamentary vote later this month, Prime Minister Theresa May has been trying to sell the deal to UK parliamentarians and the UK public alike, including in a public letter to the nation.
G20 leaders met in Buenos Aires from November 30-December 2 for the group’s thirteenth summit and its first held in a South American country. Specifically, the leaders noted the following at paragraph 27 of their declaration:
International trade and investment are important engines of growth, productivity, innovation, job creation and development. We recognize the contribution that the multilateral trading system has made to that end. The system is currently falling short of its objectives and there is room for improvement. We therefore support the necessary reform of the WTO to improve its functioning. We will review progress at our next Summit.
On the sidelines of the G20 Summit, the leaders of the US, Mexico and Canada signed the US-Mexico-Canada Agreement (USMCA), meant to replace NAFTA. The deal now needs domestic ratification.
In regional news, The Bank of Nova Scotia (Scotia Bank), announced its withdrawal from nine Caribbean countries. Its operations are being sold to the Trinidad-based financial services group, Republic Financial Holdings. This move has raised concern in several of the affected countries.
Some sad news is that the Geneva-based International Centre for Trade and Sustainable Development (ICTSD) closed its doors this week. Through its publications, the ICTSD was a reliable source for free, timely, high quality and cutting-edge trade reporting and analysis relied on by trade and development academics, practitioners and policymakers alike. Their presence will indeed be missed.
Please see below some of the other major headlines:
T&T to host special CSME meeting in December
LoopTT: Trinidad and Tobago will host a Special Meeting of the Heads of Government of the Caribbean Community (CARICOM) from December 3 to 4 which will focus on the CARICOM Single Market and Economy (CSME). Read more
Takeover of Scotiabank likely to be raised in caucus at special CARICOM meeting
Stabroek: Republic Bank’s planned acquisition of Scotiabank’s operations in Guyana and eight Caribbean countries is not on the agenda of the upcoming special meeting of the Caribbean Community Heads of Government on the CARICOM Single Market and Economy (CSME) but Foreign Affairs Minister Carl Greenidge expects that it will be raised in caucus. Read more
Republic Financial Holdings to acquire Scotiabank in nine Caribbean countries
Nation News: Republic Financial Holdings Limited (RFHL) announced today, that it has entered into an agreement to acquire Scotiabank’s banking operations in Guyana, St Maarten and the Eastern Caribbean territories, including Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines. Read more
St Lucia Times: Former government minister, Peter Josie, has warned of potential dire consequences from a decision by Scotiabank to exit nine Caribbean countries, including Saint Lucia. Read more
CARICOM Sugar Industries prepared to supply total regional demand
RJR News: The Sugar Association of the Caribbean has stated that for the 2017/18 crop, its members met 80 per cent of the brown sugar needs of Caribbean Community (CARICOM). Read more
T&T can lose CARICOM market for fuel
Trinidad Guardian: T&T faces the possibility of losing Caricom markets for the export of fuel as the price of fuel coming out of T&T is likely to increase. Read more
Cuba’s most valuable exports: its doctors
TRT World: Cuba over the last 50 years has honed in on its medical expertise to be able to punch above its weight in the international arena and garner soft power. Cuba has begun to withdraw more than 8,300 Cuban doctors from Brazil, potentially leaving millions of Brazilians, particularly its indigenous communities, without access to basic healthcare. Read more
CARICOM Leaders claim T&T has unfair advantage in manufacturing sector
Power 102 FM: Prime Minister, Dr Keith Rowley, says CARICOM leaders believe this country has an unfair advantage in the manufacturing sector because it benefits from lower electricity rates. Read more
CARICOM calls for seat on ICAO council
Stabroek: CARICOM is calling for a seat on the Council of the International Civil Aviation Organization (ICAO) as a means of having its concerns properly represented. Read more
CARICOM highlights work against gender violence in the region
Prensa Latina: The Secretary General of the Caribbean Community (Caricom), Irwin LaRocque, highlighted on Sunday the important work being done in the region against gender violence. Read more
CARICOM Secretary General describes new management system
CARICOM: A detailed update on the new Results-Based Management (RBM) System being pursued by the Caribbean Community (CARICOM) Secretariat was described by Deputy Secretary-General, Ambassador Dr. Manorma Soeknandan during a courtesy visit with Prime Minister Dr. the Honourable Timothy Harris. Read more
US Government makes US$1 million computer equipment to CARICOM IMPACS
Bajan Reporter: U.S. Embassy Bridgetown, through its Office of International Narcotics and Law Enforcement Affairs (INL), participated in an official handover ceremony to commemorate the Government of the United States of America’s U.S. $1 million computer equipment donation to the CARICOM IMPACS/Joint Regional Communication Centre (JRCC). Read more
G20 agreement backs ‘rules-based’ order but bows to Trump on trade reforms
The Guardian: World leaders have signed off on an agreement which reaffirms a basic commitment by the world’s biggest economies to multilateral trade and a “rules-based international order”, but bows to US demands for urgent reform of the World Trade Organisation (WTO). Read more
G20: US and China agree to suspend new trade tariffs
BBC: US President Donald Trump and his Chinese counterpart Xi Jinping have agreed to halt new trade tariffs for 90 days to allow for talks, the US says. Read more
WTO reform: EU proposes way forward on the functioning of the Appellate Body
EU: The EU together with other members of the World Trade Organisation (WTO) – Australia, Canada, China, Iceland, India, Korea, Mexico, New Zealand, Norway, Singapore and Switzerland – unveiled a proposal for concrete changes to overcome the current deadlock in the WTO Appellate Body. The proposal will be presented at the meeting of the WTO General Council on 12 December. Read more
USTR Statement on China’s Auto Tariffs
USTR: U.S. Trade Representative Robert Lighthizer released a statement regarding China’s tariffs on U.S.-produced automobiles. Read more
Brexit: Trump says May’s Brexit plan could hurt UK-US trade deal
BBC: Donald Trump has suggested Theresa May’s Brexit agreement could threaten a US-UK trade deal. The US president told reporters the withdrawal agreement “sounds like a great deal for the EU” and meant the UK might not be able to trade with the US. Read more
Argentina, India agree to increase trade flows
Prensa Latina: Argentine President Mauricio Macri and India”s Prime Minister Narendra Modi pledged on Saturday to increase trade flow on several fronts and delved into the possibility that Argentina exports lithium to India. Read more
EU leaders agree UK’s Brexit deal at Brussels summit
BBC: EU leaders have approved an agreement on the UK’s withdrawal and future relations – insisting it is the “best and only deal possible”. Read more
U.S., Mexico and Canada ink new trade agreement, but final ratification remains big hurdle
USA Today: President Donald Trump and the leaders of Mexico and Canada signed a revised trade pact Friday that changes many of the rules governing the free flow of commercial goods across North America. Read more
After signing new North American trade pact at G-20, Trump turns sights to China
Washington Post: President Trump suggested his Saturday showdown with Chinese President Xi Jinping could produce a cease-fire in the tariff war, capping a day that saw the American leader reach a milestone in his populist economic crusade by signing a regional trade deal with Mexico and Canada. Read more
Parties to government procurement pact approve UK’s terms of participation post-Brexit
WTO: At a meeting of the WTO’s Committee on Government Procurement on 27 November 2018, parties to the Government Procurement Agreement (GPA) approved in principle the United Kingdom’s final market access offer to take part in the GPA, in its own right, following its departure from the European Union. Read more
New WTO publication analyses potential impact of Blockchain on international trade
WTO: Amid growing interest and debate on Blockchain, the WTO launched a new publication today (27 November) that seeks to demystify the technology and analyse its capacity to transform world trade. The publication entitled “Can Blockchain revolutionize international trade?” explores how the technology could enhance areas related to WTO work and examines challenges that will have to be tackled to unlock the technology’s potential. Read more
World Trade Outlook Indicator signals further loss of momentum in trade growth into Q4
WTO: Trade growth is likely to slow further into the fourth quarter of 2018 according to the WTO’s latest World Trade Outlook Indicator (WTOI) released on 26 November. The most recent WTO reading of 98.6 is the lowest since October 2016 and reflects declines in all component indices. It is below the previous value of 100.3 and falls under the baseline value of 100 for the index, signalling that trade growth in the coming months is expected to be below-trend. Read more
Unlocking Africa’s trade potential
Forbes Africa: The African Export-Import Bank (Afreximbank) has identified intra-African trade as a critical factor for unlocking Africa’s trade potential. Read more
Study: Trade supports over 36 million jobs across the EU
EU: Two new studies published today by the European Commission highlight the increasing importance of EU exports for job opportunities in Europe and beyond. Read more
Caribbean Citizenship by Investment (CBI) programmes, and to a lesser but growing extent, residence by investment (RBI) programmes, are facing a rough ride. The latest blow came when the Paris-based Organisation for Economic Cooperation and Development (OECD) deemed CBI/RBI programmes operated by 21 jurisdictions, including those in the Caribbean, as “high risk to the integrity of the Common Reporting Standard”. While the OECD has clarified that this was not a blacklist, the list puts another glaring spotlight on Caribbean CBI/RBI programmes which are already battling to justify their existence to an increasing choir of skeptics. In October, the European Union (EU) released a report analysing the state of play, issues and impacts of its own members’ programmes. With the mounting scrutiny being placed on Caribbean countries’ CBI/RBI programmes and stiffened competition from other investment migration programmes globally, have Caribbean countries’ CBI programmes run their course?
What are CBI Programmes?
CBI programmes are one of the two main types of investment migration programme – programmes which offer high net worth (HNW) investors accelerated citizenship or residence of the host country in exchange for a pecuniary contribution. Unlike RBI programmes which only confer accelerated permanent residence status, CBI programmes grant a qualifying investor, upon making a specified economic contribution to the host country (usually in real estate, investment in a business or in a specified government fund), accelerated citizenship for himself/herself and his/her qualifying spouse and/or dependents, once all relevant fees are paid and due diligence requirements are met. It means that a person can acquire citizenship or residence of another country in just a few months, compared to several years under regular naturalisation procedures.
Five Caribbean countries currently operate CBI programmes: St. Kitts & Nevis (the world’s oldest CBI programme), Dominica, Grenada, Antigua & Barbuda and St. Lucia. International examples include the EU member states of Austria, Cyprus and Malta, and the Pacific island nation of Vanuatu.
Second citizenship is a booming international industry reportedly worth US $3 billion, according to Citizenship by Investment.ch. There are now over one hundred CBI/RBI programmes worldwide, which seek to lure an expanding and highly mobile class of global High Net Worth Individuals (HNWIs) seeking the advantages a more favourable second passport could bring for themselves and their families. These advantages include greater mobility and security, tax planning advantages, and business opportunities.
The British Overseas Territory of Anguilla is the most recent Caribbean jurisdiction to commence a RBI programme, but versions of these programmes are also operated in the Bahamas, Barbados, Montserrat and Turks & Caicos, for example. Examples of RBI programmes in developed countries include the United States’ EB-5 programme and the United Kingdom’s Tier 1 Visa.
Challenges to Caribbean CBI/RBI programmes
Those Caribbean countries which operate them view these programmes as a pathway for economic diversification and development, bringing greatly needed foreign exchange and foreign direct investment (FDI) inflows, infrastructure development, and employment opportunities. In its Article IV Report on Dominica, which had been badly affected by category five Hurricane Maria in September 2017, the International Monetary Fund (IMF) noted that “fiscal performance deteriorated sharply due to the fall in tax revenue after the hurricane, but was partially offset by a surge in grants and buoyant Citizenship-by-Investment (CBI) sales revenues.”
Despite their economic benefits, CBI programmes have always been controversial due to some governments’ philosophical aversion to what many have called the “commodification of citizenship” or “selling of passports”. Indeed, CARICOM Member States remain philosophically divided on the desirability of CBI programmes.
There have also been, in some cases, legitimate concerns about the efficacy of the due diligence procedures, the perceived absence of a ‘genuine link’ between recipients of citizenship under CBI programmes and the host country, and reports of alleged instances of misuse of passports obtained under CBI programmes, which have brought increased international scrutiny of Caribbean countries’ CBI programmes.
One of the pull factors of Caribbean countries’ CBI programmes is the visa free access. For example, on the Henley & Partners Passport Index published by the world’s leading investment migration firm, Henley & Partners, St. Kitts and Nevis ranked the highest among Caribbean CBI countries in the strength of its passport, providing visa-free access to 151 countries. Unfortunately, this advantage may be undermined if third countries, as is their right, decide to revoke visa-free access to citizens originating from countries offering CBI programmes, due to national security concerns. For example, Canada imposed visa requirements for citizens from St. Kitts & Nevis in 2014 and from Antigua & Barbuda in 2017 over similar concerns. Both countries have subsequently made changes to their programmes, but their citizens have not yet regained visa-free access to Canada.
The US Government has also repeatedly flagged Caribbean CBI programmes as possibly being used for financial crime, including in its International Narcotics Control Strategy Report 2017. With the current US administration taking an even tougher stance on national security, US scrutiny of Caribbean CBI programmes is likely to continue or even intensify.
The European Commission has already sounded the alarm about the potential security risks that golden passport programmes operated by its own members could pose to the bloc. It reiterated this in its recently released report on those programmes operated in the EU. But this scrutiny is not limited to EU CBI/RBI programmes. In a recently released report, global NGOs, Transparency International and Global Witness, also recently called on the EU to review its visa waiver schemes with those Caribbean countries operating CBI programmes.
In light of this scrutiny, other CARICOM Member States which do not operate programmes have feared that they themselves may suffer reputational and security risks due to the CBI programmes of other Member States. The CARICOM Secretariat has been examining the issue of CBI programmes operated by member states, but there appears to be no public information on what have been the outcomes of this examination thus far.
The other risk comes from increased global competition. The list of countries offering some kind of CBI or RBI programme has grown exponentially in the years since the global economic and financial crisis. For instance, this year Moldova started its own CBI. Moreover, while St. Vincent & the Grenadines is currently the only independent member of the Organisation of Eastern Caribbean States (OECS) to not offer a CBI programme due to the current government’s philosophical opposition to these programmes, the leader of St. Vincent & the Grenadines’ opposition party recently reaffirmed his support for launching a CBI programme there. What this shows is that countries around the world still see the economic potential of these programmes and it also means that competition is increasing.
Caribbean countries’ CBI programmes have ranked high on the Professional Wealth Management (PWM) Index. Regrettably, the increased competition between Caribbean CBI programmes both inter se and with other CBI programmes internationally has led to an apparent ‘race to the bottom’ among Caribbean CBI programmes in the form of price competition.
The OECD Challenge to CBI/RBI programmes
In early 2018, the OECD announced that it was examining CBI/RBI programmes as part of its Common Reporting Standard (CRS) loophole strategy and requested public input into the misuse of these programmes and effective ways of preventing abuse. The CRS is an information standard approved by the OECD Council in 2014 for the automatic exchange of tax information among tax authorities of countries which are signatories. CRS jurisdictions are required to obtain certain financial account information of their tax residents from their financial institutions and automatically share this information with other CRS jurisdictions on an annual basis. Most Caribbean IFCs are early adopters of the CRS.
While noting that CBI/RBI programmes may have legitimate uses, the OECD stated that CBI/RBI programmes are a risk to the CRS because they can be misused by persons to hide their assets offshore and because the documentation (such as ID cards) obtained through these programmes could be used to misrepresent an individual’s jurisdiction of tax residence. This, the OECD noted, could occur when persons fail to report all the jurisdictions in which they are resident for tax purposes.
In April 2018, the OECD published a compilation of the responses it had received, which also included responses by countries in the Caribbean offering CBI programmes. In its list of ‘high risk CBI/RBI” programmes to the integrity of the CRS” published in October 2018, the OECD focused on those CBI/RBI programmes which gave access to a lower personal income tax rate on offshore financial assets and those which did not require an individual to spend a significant amount of time in the host jurisdiction.
It should be noted that reporting for CRS purposes is based on tax residence and that just because an investor has obtained citizenship of a country under a CBI programme, does not mean that he or she is automatically deemed to be a tax resident of the country. For example, a person may obtain St Lucian citizenship under St. Lucia’s CBI programme pursuant to the Citizenship by Investment Act and regulations, but under the St. Lucia Income Tax Act, he or she is only deemed to be resident for income tax purposes in St. Lucia for a given income year if he/she has been physically present there for not less than 183 days in that income year.
While the OECD has clarified that the list of ‘high risk CBI/RBI programmes’ was not a blacklist, there is concern about what reputational impact this list may have on the countries whose programmes were named. Financial institutions have been told by the OECD to bear in mind its analysis of high-risk CBI/RBI schemes when performing their CRS due diligence, which potentially brings increased scrutiny for Caribbean countries, which are already suffering the loss of correspondent banking relationships due to de-risking practices by risk-averse global banks.
Have CBI programmes run their course?
Given the growing array of challenges outlined, have CBI programmes run their course? While I do not think Caribbean CBI programmes have run their course, I think that there needs to be strong consideration by each of the countries concerned, and their citizens, of whether the economic benefits justify the increasing reputational and security risks, and to consider what further changes could be made to make their programmes more sustainable.
Caribbean countries are well aware that it is not in their interest for their CBI/RBI programmes to be perceived as loopholes for tax evasion or other criminal activity. It is, therefore, in their interest to work with the OECD to address the concerns raised about the potential for misuse of their CBI programmes.
According to the communique released at the 66th Meeting of the Organisation of Eastern Caribbean States (OECS) Authority, that organisation’s highest body, it was noted as follows:
“The Heads engaged in extensive discussions on the matter, noting the unreasonableness of the OECD position, and resolved to undertake comprehensive reviews of the respective CBI and RBI Programmes to ensure that areas where they may be limitations are identified and strengthened.”
This is a promising development and it is hoped that these reviews will be conducted in a timely manner, that the results will be made public in the spirit of transparency and that the recommendations made will be implemented.
To their credit, there already exists cooperation among the Citizenship by Investment Units or equivalents of the Caribbean CIP countries through the Association of the Citizenship By Investment (CIPA). They have also been receiving the assistance of the Joint Regional Control Centre arm of the CARICOM Implementation Agency for Crime and Security (IMPACS).
There is the real risk that countries may become overly dependent on CBI programme revenues for their fiscal and macroeconomic stability during boom times, leaving them vulnerable during periods of leaner revenue inflows. Since 2010, revenues from its programme have buoyed St. Kitts & Nevis’ economy, but the IMF in its Article IV Report of 2017 warned that “ the recent slowdown in CBI-related inflows and the ending of the five-year holding period for CBI properties call for close monitoring of the implications for the financial sector through the real estate market and banks’ exposure to real-estate-related activities.”
On a broader note, a comprehensive study of the economic contribution these CBI programmes have made and are making to the economies and societies of these Caribbean countries is recommended. This would provide empirical evidence of whether the macroeconomic benefits outweigh the reputational and national security risks. In this regard, the recent EU study on its own programmes could provide a good model for CARICOM or the OECS in terms of analysing the state of play and the impacts of Caribbean countries’ CBI/RBI programmes and making recommendations for mitigating the risks identified.
Such a study will require sound data. This brings me to another problem with these programmes – the transparency deficit, which was also highlighted by Transparency International and Global Witness in their report. Obtaining data on these programmes remains regrettably difficult due to the unfortunate reluctance by some authorities to share data publicly, even with researchers. Though some data on the macroeconomic contribution of these programmes may be obtained from those countries’ IMF Article IV reports, other data, such as employment generated by these programmes, are not.
Making data on these programmes publicly available will not only negate the perceived opacity of these programmes’ operation, but facilitate evidence-based planning, monitoring and evaluation of these programmes.
Welcome to the Caribbean Trade & Development Digest for the week of November 18-24, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
This was another busy week in trade news! The WTO published its report on G20 trade measures showing that trade restrictive measures have increased significantly. The EU Summit saw the approval by EU leaders of the UK-EU Brexit Withdrawal Agreement but the agreement still has several other hurdles to overcome, including approval by the UK parliament where it remains deeply unpopular.
Please see below some of the other major headlines:
Barbados overhauls corporate tax regime, slashes tax rate on local companies more than 20 per cent
Caribbean360: Barbados will harmonise its domestic and international corporation tax regimes by December 31, 2018, slashing the tax burden for some local companies by up to 29 per cent. Read more
Guyana and the EU reach an agreement to promote trade in legal timber products and improve forest governance
Antigua Observer: Guyana and the European Union (EU) have concluded a six-year process of negotiations towards a Voluntary Partnership Agreement (VPA), which aims to improve the application of forest laws, strengthen forest governance and promote trade in legal wood products. Read more
Glasgow University To Pay Reparations For £200m Extracted From Region
Jamaica Gleaner: Vice Chancellor of The University of the West Indies (UWI) Sir Hilary Beckles has reported that The University of Glasgow in the United Kingdom (UK) has agreed to pay reparations for £200 million (approximately J$34 billion) taken from the Caribbean. Read more
Bahamas’ WTO membership is no “fait accompli”
Tribune 242: The Government’s chief World Trade Organisation (WTO) negotiator yesterday said The Bahamas’ accession was no “fait accompli”, telling accountants: “I’m not tied to any outcome.” Read more
Bahamas Chamber hires consultant for WTO Impact analysis
Tribune 242: The Bahamas Chamber of Commerce has hired Oxford Economics to study the likely economic impact of this nation’s accession to full World Trade Organisation (WTO) membership. Read more
EU leaders agree UK’s Brexit deal
BBC: EU leaders have approved an agreement on the UK’s withdrawal and future relations – insisting it is the “best and only deal possible”. Read more
China is paying for Most of Trump’sTrade War, Research says
Bloomberg: President Donald Trump is succeeding in making China pay most of the cost of his trade war.That’s the conclusion of a new paper from EconPol Europe, a network of researchers in the European Union. Read more
Africa-China trade hits $230bn
Business Report: Over the past decade China’s trade with Africa increased from $100 billion (R1.4 trillion) in 2007 to $230bn by the end of 2017. Read more
Africa: Trade Misinvoicing Costs South Africa U.S.$7.4 Billion in Tax a Year
All Africa: While SARS is scrambling to meet collection targets, a new report estimates the country lost $37-billion in revenue to trade misinvoicing in five years. Trade misinvoicing is thought to be the largest component of illicit financial flows, draining developing countries of much-needed finances. Read more
Trudeau meets key trade partners to talk about future of Pacific trade deal
Toronto City News: Prime Minister Justin Trudeau is spending his last day at a major economic summit meeting with two key trading allies across the Pacific in the shadow of an ongoing trade war between the world’s two biggest economies. Read more
Investors hope for trade war ceasefire at G20 summit
The Guardian: There are hopes, however limited, that the meeting between the two leaders in Buenos Aires will result in a calming of tensions which have so far resulted in huge share price drops, most notably in US tech stocks. Read more
India seeks binding commitments to simplify services trade in RCEP
Economic Times: India has asked 15 Asia-Pacific countries to make “binding and commercially meaningful” commitments to simplify trade in information technology and business services aimed at easing movement of skilled professionals in the proposed Regional Comprehensive Economic Partnership (RCEP) agreement being negotiated. Read more
Panels established to review US steel and aluminium tariffs, countermeasures on US imports
WTO: At its meeting on 21 November, the WTO’s Dispute Settlement Body (DSB) agreed to requests from seven members for the establishment of panels to examine tariffs imposed by the United States on steel and aluminium imports. Read more
WTO report shows sharp rise in trade-restrictive measures from G20 economies
WTO: The WTO’s 20th monitoring report on Group of 20 (G20) trade measures issued on 22 November shows that the amount of trade covered by new import-restrictive measures hit a new high during the current reporting period. Read more
WTO, UNCTAD, ITC sign MoU to provide businesses with better access to trade data
WTO: The WTO, the United Nations Conference on Trade and Development (UNCTAD) and the International Trade Centre (ITC) signed today (23 November) a Memorandum of Understanding to advance the development of an online platform — the Global Trade Helpdesk — aimed at providing businesses, and particularly small businesses, with faster and easier access to trade data and information on potential export markets. Read more
Items proposed for consideration at the next meeting of the Dispute Settlement Body
WTO: The WTO Secretariat has circulated a meeting notice and list of items proposed for the next meeting, on 4 December 2018, of the Dispute Settlement Body, which consists of all WTO members and oversees legal disputes among them. Read more
Morocco files appeal against panel ruling in dispute with Turkey over steel duties
WTO: Morocco filed an appeal on 20 November concerning the WTO panel report in the case brought by Turkey in “Morocco — Anti-dumping Measures on Certain Hot-Rolled Steel from Turkey” (DS513). The panel report was circulated to WTO members on 31 October. Read more
Panama files appeal against compliance panel ruling in dispute with Colombia over import measures
WTO: Panama filed an appeal on 20 November concerning the WTO compliance panel report in the case “Colombia — Measures Relating to the Importation of Textiles, Apparel and Footwear (Recourse to Article 21.5 of the DSU by Colombia and Panama)” (DS461). The compliance panel report was circulated to WTO members on 5 October. Read more
WTO members review regional trade agreements covering EU, Ghana and EAEU
WTO: WTO members reviewed the interim Economic Partnership Agreement between the European Union and Ghana at the 19 November meeting of the Committee on Regional Trade Agreements. Members also considered the Eurasian Economic Union (EAEU) treaty and EAEU accessions of Armenia and the Kyrgyz Republic. Read more
The world’s twenty most economically powerful countries, the Group of 20 (G20), imposed a record number of trade restrictive measures between mid-May to mid-October 2018. This is according to the World Trade Organisation’s just released Report on G-20 Trade Measures, which revealed that G20 countries’ trade-restrictive measures, estimated at US$481 billion, covered six times more trade than in the previous reporting period and were the biggest since this measure was first calculated in 2012.
According to the WTO’s report which was released on November 22nd, G20 economies applied a total of 40 trade-restrictive measures during the review period (May 16 to October 15, 2018) or about eight such measures per month, on average. These measures included tariff increases, import bans and export duties. According to the WTO, “about 79% of the current import-restrictive coverage is associated with bilateral measures between U.S. and China”.
G20 countries also implemented a higher number of trade remedy investigations than they terminated, but the gap between initiations and terminations has narrowed. Initiations of anti-dumping investigations accounted for three-fourths of all initiations during the review period. The WTO noted that iron and steel and products of iron and steel, furniture, bedding, mattresses and electrical machinery and parts thereof were the main sectors affected by trade remedy initiations.
On the flip side, G20 countries applied a total of 33 trade-facilitative measures, or seven trade-facilitative measures per month. These included eliminating or reducing import tariffs and export duties. The trade coverage of import-facilitating measures was US$ 216 billion. One silver lining is the WTO’s Information Technology Agreement which liberalized an additional US$541 billion of trade and has been an important trade liberalization measure.
Another nugget of good news is that despite the current crisis facing the WTO’s Appellate Body, the report noted that WTO members’ use of the WTO’s dispute settlement system remained high, which shows that WTO members still value the dispute settlement system.
The report presents the first concrete evidence of trade restrictive measures implemented during the current period of escalating trade tensions among the world’s major trading powers, most notably the US and China. It also comes on the heels of the just released report by the Organisation for Economic Cooperation and Development (OECD) which warned that global economic growth had peaked on the back of the slowdown in global trade and investment flows and appealing to the global policymakers to increase cooperation on matters of trade and the multilateral trading system.
In his statement on the report, WTO Director General Roberto Azevedo warned that “the report’s findings should be of serious concern for G20 governments and the whole international community.” He further warned that “further escalation remains a real threat” and that “if we continue along the current course, the economic risks will increase, with potential effects for growth, jobs and consumer prices around the world.” As a result, he noted that while the WTO was doing all it could to support efforts to de-escalate the situation, he called on political will and leadership from the G20 to find solutions.
The full WTO Report on G20 Trade Measures (mid-May 2018 to mid-October 2018) may be accessed here.
At the conclusion of its 47th Meeting this week, the Caribbean Community (CARICOM) Council for Trade and Economic Development (COTED) released a statement in support of the multilateral trading system and its guardian, the World Trade Organisation (WTO), which are currently under threat. All independent CARICOM member States, with the exception of the Bahamas which is currently in the process of accession, are WTO members and have a rich history of engagement in the WTO. WTO reform is more than a moot point for the Caribbean, but a question of economic and sustainable development importance for the region.
What is the Multilateral Trading System and the WTO?
The multilateral trading system was formed at the end of the Second World War with the creation of the General Agreement on Tariffs and Trade (GATT), the progenitor to the WTO, in 1947. This rules-based system has provided for the predictable and peaceful conduct of global trade for more than a half century to the benefit of the global economy.
Since its inception in 1995, the WTO has been the guardian of the multilateral trading system. Its 164 members account for over 97% of global trade, with 22 other countries currently in the accession process. Despite its flaws, some of which I will come to shortly, the WTO has been an important building block in the global economic governance structure. Among its functions, the organisation serves not just as a permanent forum for negotiation of global trading rules among its members, but its dispute settlement system provides to WTO members an exclusive and compulsory system for the timely and orderly settlement of trade disputes.
Why the need for reform?
The core functions of the WTO have become increasingly under strain. Calls for reform are not new, but have intensified in recent years. Without doubt, the United States’ threat of withdrawal unless its own demands are met, has invigorated political will for reform of the WTO.
Firstly, the negotiation function of the WTO is in a paralytic state given the inability of member states to conclude the Doha Development Agenda – the latest round of trade negotiations which were launched at the Doha Ministerial in 2001 and whose only major agreement so far is the Trade Facilitation Agreement. The paralysis has been due largely to current decision-making procedures and the increased number of members which has made multilateral rule-making on ever more complex trade issues difficult. Secondly, the US has been blocking the appointment of judges to the WTO’s Appellate Body, which means there are currently only three judges, the minimum needed to hear a dispute. The once vaunted system will grind to a halt by December 2019 when two other judges’ terms are up for renewal. Thirdly, there are concerns with the lack of compliance by some States with notification and transparency requirements which impacts on the WTO’s monitoring function.
In response, many countries have not just pivoted their attention away from the multilateral table towards the regional arena, but there is growing protectionism and resort to unilateral measures. In its latest economic outlook released November 21st , the Organisation for Economic Cooperation and Development (OECD) warned that global GDP growth has peaked on the back of a slowdown in global trade and investment flows owing to current trade tensions. The OECD has, therefore, called for renewed international cooperation and dialogue to tackle global trade issues and reform of the global trading system. Similar warnings have been made by other multilateral institutions and bring into sharp focus the importance of the stability of the multilateral trading system for the global economy in general, and for Caribbean small states, in particular, whose small open economies are susceptible to global economic shocks.
These systemic risks suggest that the WTO requires more than superficial tinkering, but comprehensive, inclusive and transparent reform. The challenge is making the WTO, an institution born in a different era and different economic landscape, “fit for purpose” for twenty-first century global trading realities, and in a way that caters to the unique needs of its smallest and most vulnerable members.
Why does WTO reform matter to Caribbean small States?
Caribbean small states, and small States in general, comprise only a tiny fraction of world trade, but their equitable integration into the global economy is essential for their economic survival. These States comprise primarily small island States, but also some small continental States. Compromised by limited bargaining power and inherent economic and other vulnerabilities, they depend on the certainty and predictability of the rules-based multilateral trading system not just to ensure that their traders face fair trading conditions in external markets, but that they could hold (at least in theory) larger states to account through the WTO’s dispute settlement body when they do not play by the rules.
It is of importance to Caribbean small States that updated trade rules for the twenty-first century not be made in negotiation theatres to which they are often not party (such as in Regional Trade Agreements and Mega-Regional Trade Agreements), but in the multilateral system where they have an equal seat at the table.
What proposals are on the table?
Thankfully, the silver lining to this story is that most WTO members have thus far expressed continued support for the multilateral trading system and have exhibited interest in WTO reform. The EU and Canada have both publicly shared their initial reform proposals and Canada held a meeting with thirteen other ‘like-minded’ governments in Ottawa to discuss WTO reform. The proposals have touched, for example, on decision and rule-making, improving the dispute settlement function and improving transparency and notification requirements.
In November 2018, the US, EU, Japan, Argentina and Costa Rica laid a proposal for tightening transparency and notification requirements under the WTO agreements. Among the recommendations were changes to the current Trade Policy Review mechanism, special consideration for developing countries and penalties for non-compliance by members.
Many of the proposals currently on the table have direct implications for Caribbean small States. For example, the EU and Canadian proposals evince growing appetite by the more advanced economies to change the current model of decision-making, that is, the consensus-based approach which requires absence of any formal objection to the decision. This approach has made the WTO one of the most democratic of the multilateral economic institutions. It allows small States to have bargaining power they otherwise would not have had and by mere numbers has led to a shift in the balance of bargaining power in favour of developing countries in the WTO. Though this approach has accounted for some of the stalemate, the wholesale move to a less democratic form of decision making would be disadvantageous to small States beset by limited negotiation might.
There are also calls for reforming the application of special and differential treatment (SDT) since currently any WTO member can self-designate as a developing country, entitling it to the flexibilities under the Agreements. This concern is due to the inclusion of large emerging economies such as China, India and Brazil in particular as developing countries. While not specifically supporting the creation of special categories, the EU concept paper notes the lack of nuance in the concept of a ‘developing country’. This is a good reason why small States should redouble their advocacy efforts for the translation of the Small Vulnerable Economy (SVE) informal group into a formal sub-category of developing countries.
What should we do?
The current crisis in the multilateral trading system has implications for Caribbean small states which rely on the certainty of the multilateral trading system and on the health of the global economy. It, however, also opens the door for our States to advocate for reforms as well. CARICOM countries have always played an active role in WTO negotiations, including pushing for the SVE grouping. For this reason, the COTED statement supporting the multilateral trading system and the WTO, and demanding a space for small States in the negotiations, was a good initial step.
The next step should entail formulating our own carefully considered responses to the proposals already on the table and advancing our own concrete proposals where we deem necessary. For instance, as noted before, given the dissatisfaction by advanced economies with the current carte blanche approach to SDT, this may be the opportune time to raise the reconsideration of making the SVE category a formal category. Additionally, as the on-going US-Antigua Gambling dispute shows, even though a small State may win a dispute, obtaining compliance is another matter. For this reason, dispute settlement reform is another area on which Caribbean small States should take particular interest.
Indeed, CARICOM governments will not have to depend solely on the vast knowledge and experience of their technocrats, but there are an increasing number of regional scholars and academic institutions, such as the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy & Services, which are pro-actively considering these issues, and whose technical expertise and research capacity could be drawn upon. There is also no need to reinvent the wheel given the growing corpus of literature, developed by the Commonwealth Secretariat for example, which has analysed the drawbacks of the WTO for small States and making proposals for reform. This work can be drawn upon in the formulation of our own proposals.
The Caribbean has a strong history of multilateral engagement within the WTO. The current situation gives us an appropriate moment to contribute to the comprehensive reform of the guardian of the multilateral trading system to ensure it remains fit for purpose for 21st century trading realities and for the global economy, and that it better serves its smallest and most vulnerable members. Caribbean small States can ill-afford to be perceived as backseat participants, but must be fully engaged and mobilized in this critical moment.
Welcome to the Caribbean Trade & Development Digest for the week of November 13-17, 2018! We do apologise for the delay in this week’s Caribbean Trade and Development Digest, but are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
Last week was quite a busy week in trade policy news on the regional and international fronts! There was the announcement and release of the draft Brexit withdrawal agreement between the UK and EU. The Asia Pacific Economic Cooperation (APEC) Summit in Port Moresby, Papua New Guinea, ended with no joint statement amidst disagreement between the US and China. On the regional front, the CARICOM Council for Trade and Economic Development (COTED) held its 47th meeting and released a statement in support of the WTO.
COTED Statement on WTO
CARICOM: CARICOM Trade Ministers, meeting in Georgetown, Guyana, on 15 and 16 November 2018, at the Forty-Seventh Meeting of the Council for Trade and Economic Development (COTED), re-iterated the Caribbean Community’s support for the rules-based, multilateral trading system embodied in the World Trade Organisation (WTO). Read more
Dubai-Caribbean non-oil trade hits $273 million in 2017
Khaleej Times: The value of non-oil trade between Dubai and Caribbean countries totalled $273 million in 2017, according to new data released by the Dubai Chamber of Commerce and Industry ahead of the first UAE-Caribbean Cooperation Forum in Dubai. Read more
St Lucia set to launch import substitution programme
St Lucia Times: The Ministry of Agriculture, with the support of the government of Taiwan, will next year begin implementing an import substitution programme for a range of crops in an effort to reduce Saint Lucia’s food import bill. Read more
Guyana, EU to sign pact on forest governance
Stabroek: After around six years of engagements, Guyana and the European Union (EU) are to sign an agreement that will bolster forest governance and address issues such as illegal logging. Read more
China eyes US$10 trillion in imports from Latin America, Caribbean
Stabroek: The Government of the People’s Republic of China is looking to import some US$10 trillion in goods and services from Latin America and the Caribbean over the next five years, China’s Ambassador to Jamaica Tian Qi has disclosed. Read more
Advancing Single Market and Economy pivotal to CARICOM’s future – LaRocque
Stabroek: If CARICOM is to safeguard the region’s interests in the global arena and achieve the objective of improving the lives of its citizens, its most important immediate task is to advance the implementation of the Single Market and Economy (CSME), Secretary General Ambassador Irwin LaRocque says. Read more
APEC summit wraps with no joint statement amid US-China discord
CNN: For the first time in its 25-year history, the Asia-Pacific Economic Cooperation summit ended Sunday with its leaders failing to agree on a formal joint statement.
Japan initiates WTO dispute complaint against Korean support for shipbuilders
WTO: Japan has requested WTO dispute consultations with Korea concerning alleged subsidies provided by the Korean government to its shipbuilding industry. Japan’s request was circulated to WTO members on 13 November. Read more
WTO Members Prepare to Shift Gears in Fisheries Negotiations
ICTSD: WTO members negotiating a proposed agreement to tackle harmful fisheries subsidies held a second cluster of meetings last week as part of their September-December work programme, hearing reports about brainstorming sessions in “incubator groups” the week before and completing the streamlining of a document consolidating all existing proposals. Read more
Kenya Eyes High Table Seat At Inaugural Intra-Africa Trade Talks
AllAfrica: Kenya is keen to play a lead role in steering intra-Africa trade as the continent meet for the Inaugural Intra-Africa Trade Fair (IATF) in Cairo, Egypt, next month. Read more
May sticks to Brexit deal as opponents seek formal challenge
Reuters: British Prime Minister Theresa May vowed on Monday to stick to her draft European Union divorce deal as dissenting lawmakers in her own party tried to trigger a leadership challenge. Read more
Reuters: U.S. Vice President Mike Pence, keeping up pressure on Japan to cut its trade surplus with the United States, said on Tuesday American goods and services too often faced barriers in Japan and a bilateral trade agreement offered the best way forward. Read more
ChannelNewsAsia: China and Singapore have signed a slew of agreements, including the upgrade of a bilateral free trade pact, which will allow greater market access for Singapore companies. Read more
China, Spain, Latin America: A New Growth Axis in Global Trade
World Crunch: Spain, an industralized EU member with close ties to Latin America, could profit from easing the entry of Chinese firms keen to invest in and export to the Americas. Read more
How news media can boost China-Latin America relations
Xinhua: There’s no doubt of the news media’s impact across borders and in fostering relations between countries and entire regions. Nowhere is this more true than in the relationship between China and Latin American and the Caribbean (LAC). Read more
WTO working more closely with UK on Brexit
RTE: A senior World Trade Organization (WTO) representative has said the body is watching Brexit negotiations between the European Union and the UK “very closely”. Read more
Trump’s protectionism might just save the WTO
The Washington Post: President Trump is right that the World Trade Organization badly needs reform.Keeping the United States within the WTO should obviously be Plan A. But it would be prudent for other members to start thinking about devising a new international trade organization minus the United States in order to avoid the “my way or the highway” blackmail that has become the American president’s signature negotiating style. Read more
WTO members adopt roadmap for reducing technical barriers to trade
WTO: WTO members achieved a breakthrough at a 14-15 November meeting of the Committee on Technical Barriers to Trade (TBT) by agreeing on a list of recommendations that aim at reducing obstacles to trade and improving implementation of the WTO’s TBT Agreement. Read more
Launch of WTO Data Portal
WTO: The WTO launched on Friday 16th November its new online database. The WTO Data portal brings together a wide range of statistical indicators on international trade and other WTO-related information. Read more
US-China Discord Dominates APEC Summit
Jakarta Globe: The United States and China swapped barbs over trade, investment and regional security at an Asia Pacific Economic Cooperation, or Apec, summit on Saturday, as growing fault lines among members suggested little prospect of consensus at the weekend meeting. Read more
India to adopt new approach toward free trade agreements
Japan Times: India is planning to adopt a new strategy toward negotiating free trade agreements even as the country is engaged in talks with members of the Regional Comprehensive Economic Partnership, the proposed ASEAN-focused regional free trade area. Read more
Egypt, Eurasian Union to start negotiating free trade agreement
Egypt Today: Egypt and the Eurasian Economic Union (EAEU) signed a framework document for negotiations on the free trade agreement between the two sides, as they both decided to hold the first tournament of negotiations in mid- January in Cairo. Read more
India, Mauritius likely to sign free trade pact in January
Hindu Business Line: The proposed India-Mauritius free trade agreement,being given the final touches by negotiators this week, is likely to be signed in January during Mauritius PM Pravind Kumar Jugnauth’s India visit, a government official has said. Read more
Welcome to the Caribbean Trade & Development Digest for the week of November 4-12, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
CARICOM finalising trade arrangements post- Brexit
RJR News: Minister of Foreign Affairs and Foreign Trade, Senator Kamina Johnson Smith, says the technical work for the rollover of the Economic Partnership Agreement (EPA) into a new CARIFORUM-United Kingdom trade arrangement post-Brexit is close to being finalised. Read more
CARICOM trade ministers meet next week; officials begin preparatory work
Caribbean News Now: Caribbean Community (CARICOM) trade officials on Wednesday began preparations for the 47th meeting of the Council for Trade and Economic Development (COTED), which will be held in Georgetown, Guyana, November 15-16. The two-day preparatory meeting is being held at the CARICOM Secretariat. Read more
Trump’s trade war could dent China’s domestic consumption, dragging down the rest of Asia
CNBC: Asian countries’ exports are potentially vulnerable to the U.S.-China trade war on two fronts: changes to global supply chains and slowing Chinese domestic demand. Read more
Don’t expect quick end to U.S.-China trade war, top White House official warns
Washington Post: Trump trade adviser Peter Navarro said Friday that “trust issues” with China are responsible for the lack of progress in trade negotiations, tamping down hope for progress in resolving the trade war when President Trump and Chinese President Xi Jinping meet later this month at the G-20 summit in Argentina. Read more
Trump’s trade war may have helped the Democrats win the House
Washington Post: Minnesota’s 8th Congressional District, which runs along the U.S.-Canada border, has one of the highest concentrations of iron miners in the country. Republicans took it from Democrats in Tuesday’s midterm election amid a surge in the industry propelled in part by President Trump’s tariffs on China. Read more
Commission reports on latest negotiating rounds with Indonesia and New Zealand
EU: The Commission today published two reports summarising the progress made during the latest negotiating rounds for the EU-Indonesia and EU-New Zealand trade agreements. Read more
Aid for Trade monitoring exercise to review economic diversification and empowerment
WTO: The Aid for Trade monitoring and evaluation exercise was launched at a meeting of the WTO Committee on Trade and Development on 6 November 2018. WTO members and Aid for Trade partners may submit self-assessment questionnaires up to 31 December 2018 to assist preparations for the 2019 Aid for Trade Global Review. Read more
DG Azevêdo and Premier Li Keqiang discuss how to safeguard the WTO
WTO: Director-General Roberto Azevêdo visited Beijing, China, on 6 November to participate in the “1+6” roundtable meeting hosted by Chinese Premier Li Keqiang, together with five other heads of major international economic organizations and financial institutions (the IMF, World Bank, ILO, OECD and the Financial Stability Board). Read more
WTO issues panel report on Indian safeguard duties on steel products
WTO: On 6 November the WTO circulated the panel report in the case brought by Japan in “India — Certain Measures on Imports of Iron and Steel Products” (DS518). Read more
Registration opens for screening of “US — Softwood Lumber Pricing Methodology” second hearing
WTO: At the request of the parties in the dispute “US — Anti-Dumping Measures Applying Differential Pricing Methodology to Softwood Lumber from Canada” (DS534), the panel has decided to open its second substantive meeting to public observation on 4 December 2018 (and on 5 December, if necessary). The live screening will take place at the WTO’s headquarters in Geneva. Read more
IP seminar addresses how technological changes have transformed trade and knowledge flows
WTO: Government officials from 29 developing and least developed countries and 13 Geneva-based delegates from around the world took part in the Seminar on Intellectual Property and Knowledge Flows in a Digital Era, which took place at the WTO on 5-6 November 2018. Read more
Welcome to the Caribbean Trade & Development Digest for the week of October 28-November 3, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
Caribbean trade officials and experts met in Guyana this week to discuss emerging trade issues, while Barbados hosted Africa, Caribbean, Pacific (ACP) private sector consultations. On the Brexit front, business leaders in the UK are calling for a new EU referendum. The EU is reportedly revising its WTO reform proposals released in September in order to gain US support.
Please have a read of the week’s other headlines below:
What’s at stake as EU, Africa, Caribbean, Pacific, negotiate new accord
Devex: After years of preparation and posturing, negotiations on the new relationship between the European Union and 79 African, Caribbean, and Pacific states are finally underway. Read more
OECD support on economic citizenship programmes unreasonable, says OECS
Caribbean News Now: The Organisation of Eastern Caribbean States (OECS) Authority, the highest decision-making body of the nine-member sub-regional bloc, has responded to the recent Organization for Economic Cooperation and Development (OECD) report that listed five of its members for tax evasion concerns with regard their citizenship by investment (CBI) programmes. Read more
OECS to establish a diplomatic presence in Africa
Searchlight: Eastern Caribbean States will soon have a strong diplomatic presence on the world’s second largest continent, Africa. This decision was made on Tuesday, during the 66th meeting of the OECS Authority, which took place in St Vincent and the Grenadines at Beachcombers Hotel. Read more
OECS to hold Blue Economy Seminars in Member States
St Lucia Online: Transitioning to a Blue Economy is critical to ensuring continued economic growth in the Organisation of Eastern Caribbean States (OECS), given that the marine space of small island states is significantly larger than their land mass and clearly a substantial asset. Read more
TCI needs UK letter of approval to start APIS with CARICOM
Magnetic Media: The United Kingdom has to give the Turks and Caicos permission to continue on its path to having APIS or the Advanced Passenger Information System with its country partners in CARICOM. Read more
Caribbean countries discuss global trade challenges
Commonwealth: Caribbean countries of the Commonwealth met in Georgetown, Guyana this week to deliberate on how to respond to major shifts in the global trade landscape. Read more
Guyana trade mission jets into Aberdeen
Energy Voice: A trade mission from Guyana will visit Aberdeen later this month to foster business links with north-east oil and gas companies. Read more
Guyana/China MOU signals “unfettered” partnership in every possible area
Kaieteur News: Finally, the APNU+AFC Government has released the Memorandum of Understanding (MOU) that Minister of Foreign Affairs, Carl Greenidge, signed with China to facilitate the infamous Belt and Road Initiative. The MOU was signed on July 27, last. Read more
CARICOM countries join call for US to lift embargo against Cuba
RJR: Two days after the House of Representatives in Jamaica approved a resolution calling for the lifting of the economic, commercial and financial blockade imposed on Cuba by the US, other CARICOM countries have taken a similar stance. Read more
Vietnam is winning the US-China trade war
Foreign Policy: The facts on the ground are clear; Vietnam, once dependent on garments and other cheap exports, has begun to rival China’s tech sector. And with Asian businesspeople increasingly resigned to a protracted trade war between Washington and Beijing, firms are more eager than ever to escape tariffs by relocating to China’s smaller southern neighbor. Read more
Pacific-Rim trade deal to kick in December
CBC (Canada): U.S. President Donald Trump tried to kill it, but the Trans-Pacific Partnership wouldn’t stay dead. Less than two years after the U.S. withdrew from the landmark Pacific Rim trade deal it once saw as key to an Asian trade strategy, six of the remaining countries have ratified it. Read more
Future economy minister says Mercosur is not a priority for Bolsonaro
Mercopress: Mercosur is not a priority, and Argentina is not a priority for the new government of Brazil, the priority is to trade with all the world. The strong statement came from Paulo Guedes, signaled as the next Finance minister of president elect Jair Bolsonaro’s cabinet and a crucial player in that team since the newly elected leader has admitted a limited knowledge of economics. Read more
US attacks UK plan for digital services tax on tech giants
BBC: The US has hit back against a UK plan to impose a new tax on sales by technology giants. Read more
US, China ‘not on the cusp of’ trade deal: White House advisor
Reuters: The United States and China are not close to a deal to resolve their trade differences, the White House’s top economic adviser said on Friday, adding that he was less optimistic than previously that such an agreement would come together. Read more
USTR to hold hearing in December over trade talks with Japan
Japan Times: The Office of the U.S. Trade Representative will hold a hearing on Dec. 10 regarding bilateral trade negotiations with Japan that Washington plans to launch in mid-January, according to the Federal Register. Read more
Trump vows close ties with Brazil’s Bolsonaro on trade, military
Reuters: The United States will work closely with Brazil on trade and military issues following Jair Bolsonaro’s presidential election victory, U.S. President Donald Trump said on Monday. Read more
Alibaba launched Africa’s first electronic trade platform
Africa News: Chinese e-commerce giant Alibaba on Wednesday launched Africa’s first Electronic World Trade Platform (eWTP) at a special ceremony in Kigali, Rwanda. Read more
Critics of EU-Mercosur deal name conditions for support
Swissinfo.ch: A coalition of Swiss farming organisations, consumers and NGOs says it is in favour of a free trade agreement between Switzerland and the four Mercosur countries: Argentina, Brazil, Uruguay and Paraguay. But it is demanding binding criteria concerning sustainability. Read more
Continental free trade agreement bodes well for future of trade policy across Africa
Business Day: On March 21 2018, 44 African countries signed the African Union’s continental free trade agreement (Acfta). The AU aims to use the agreement as a conduit for the creation of a single market and customs union on the continent, akin to the trade blocs established by the EU. Read more
EU-Africa trade will only blossom when all are treated as equals
The East African: China’s use of trade and investment links to expand its influence in Africa is fuelling growing concern in some European capitals. But, instead of complaining about China’s activities, the European Union should be deepening its own engagement with the continent. Read more
Nigeria is set to host Africa Trade Forum 2018
African Review: The Africa Trade Forum 2018, set to take place on 2-3 November 2018 in Lagos, will discuss the process for realising the African Continental Free Trade Area (AfCFTA). Read more
Dairy farmers ‘very disappointed’ with USMCA
South Western Ontario: Very disappointing was how Dairy Farmers of Ontario spokesperson Ralph Dietrich described the pending United States-Mexico-Canada trade agreement. Read more
Commonwealth concerned at technological gap in trade
St. Lucia Online: A senior official of the London-based Commonwealth Secretariat says efforts are being made to bridge the technological gap in trade. Read more
RP-US bilateral trade agreement
Manila Standard: As the Philippines is about to renew its bilateral trade agreement with the US, President Duterte has expressed concern that concluding a free trade agreement with the US might jeopardize our bilateral relations with China and with the Asean where we currently enjoy robust trade relations. Read more
India, China to undertake joint research on WTO reforms
Economic Times: India and China Thursday agreed to undertake joint research in the areas of WTO reforms, urbanisation and frontier technologies with a view to enhancing economic cooperation between the countries, an official statement said. Read more
Report: EU trade agreements deliver on growth and jobs, support sustainable development
EU: According to the second annual report about the implementation of trade agreements issued today, these agreements – covering nearly 70 markets all over the world – are proving effective in removing barriers to trade and promoting high standards of labour and environment protection. Read more
Brexit: Relations ‘fraying’ between Britain and Ireland
BBC: The Irish prime minister says Brexit is fraying relations between Ireland and Britain. Taoiseach Leo Varadkar said it had also “undermined” the Good Friday Agreement (GFA). Read more
Brexit: Business leaders call for new EU referendum
BBC: More than 70 business leaders have signed a letter to the Sunday Times calling for a public vote on the UK’s Brexit deal. Read more
Minister Pato signs ACP administrative cooperative agreement
ACP Secretariat: Papua New Guinea has taken steps to strengthen and deepen its Economic Partnership Agreement (EPA) with the EU and other ACP states that have similar trading arrangements. Read more
EU Revises Plan to Fix WTO in Bid to Get U.S. on Board
Bloomberg: The European Union is revamping its plan to reform the World Trade Organization in an effort to win support from the U.S., according to two people briefed on the process. Read more
Women-supporting trade policies need better data, experts say
UNCTAD: The idea that governments around the world must support women as traders, workers and entrepreneurs to drive international commerce has been recognized in several multilateral agendas in recent years, but experts say that a data gap needs to be filled before the most effective policies can be designed. Read more
WTO members discuss implementation of the Information Technology Agreement
WTO: Implementation issues concerning India and China were flagged once more at the Committee meeting. WTO members raised concerns about the import duties that India has introduced on mobile phones and their parts, which members consider to be covered by the ITA. Read more
Panels established to examine Pakistani duties on film, Korean duties on steel
WTO: At a meeting of the WTO’s Dispute Settlement Body (DSB) on 29 October, WTO members agreed to a request from the United Arab Emirates for the establishment of a panel to examine anti-dumping duties imposed by Pakistan on biaxially oriented polypropylene from the UAE as well as a request from Japan for a panel to examine anti-dumping duties imposed on stainless steel bar from Japan. Read more
White House officials are pushing back on the idea that a trade deal with China is imminent
CNBC: For a brief moment Friday, there was optimism in the market that the Trump administration was getting closer to a trade deal with China. But administration officials are telling CNBC that there is no indication of an imminent agreement. Read more
RCEP nations unlikely to reach agreement this year
Japan Times: The 16 mostly Asian countries negotiating what will be the world’s largest free trade area might not be able to achieve their target of a substantive deal by the year’s end, an official source familiar with the talks has said. Read more
Philippines, Japan eye inclusion of e-commerce
Business Inquirer: Japan might include e-commerce under its free trade deal with the Philippines as both sides review the merits of the nearly decade-old agreement. Read more
NEW ON CTLD BLOG
Jamaica has maintained its spot as the easiest place to do business in the Caribbean Community (CARICOM) in the just released World Bank Doing Business Report 2019. This is the 16th edition of this flagship World Bank publication which objectively ranks 190 economies globally on their ease of doing business based on a number of indicators. The theme of this year’s report is Training for Reform.
Jamaica has an overall ranking of 75 out of the 190 economies ranked. Of note is that overall, Jamaica also ranked as the 6th easiest place to start a business and 12th in the ease of getting credit. With respect to significant business reforms, the World Bank highlighted Jamaica’s improved access to credit information by distributing data from utility companies.
No Caribbean country has made the top 50. The rankings of the other Caricom countries are as follows: St. Lucia (93), Dominica (103), Trinidad & Tobago (105), Antigua and Barbuda (112), The Bahamas (118), Belize (125), Barbados (129), St Vincent and the Grenadines (130), Guyana (134), St Kitts and Nevis (140), Grenada (147), Suriname (165) and Haiti (182).
The Dominican Republic, which is not a CARICOM country but is part of CARIFORUM, has a ranking of 102. Puerto Rico, a Commonwealth of the US, is the Caribbean region’s easiest place to do business, with a ranking of 64.
Globally, New Zealand was ranked the easiest place to do business (1), while Somalia was ranked as the least (190). Turning to small States, Singapore was ranked second, while Mauritius continued its upward climb, with a current rank of 20th.
The World Bank reported a record 314 regulatory reforms between June 2, 2017 and May 1, 2018. Some 128 economies introduced ‘substantial regulatory improvements’ which made doing business easier in all areas measured. The following economies internationally were singled out as having made the most improvement: Afghanistan, Djibouti, China, Azerbaijan, India, Togo, Kenya, Cote D’Ivoire, Turkey and Rwanda.
The full World Bank Doing Business Report 2019 may be accessed here.
Welcome to the Caribbean Trade & Development Digest for the week of October 21-27, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
The main headline this week was the Ottawa Ministerial Meeting on World Trade Organisation (WTO) reform held in Ottawa, Canada, from October 24-25 and chaired by Canada’s Minister of Trade International Trade Diversification, the Honourable Jim Carr. Ministers and Heads of Delegation from thirteen other ‘likeminded’ countries joined with Canada to discuss proposals on the way forward for strengthening and modernising the world’s multilateral trade body. The WTO’s Director General Roberto Azevedo also attended the meeting at the invitation of the organisers. The joint communique from this meeting may be found here. Canada has also released a discussion paper with its ideas for WTO reform, which may be found here.
Please have a read of the week’s other headlines below:
Phillips Says Global Anti-Immigration Policies A Threat To Caribbean Progress
Jamaica Gleaner: Opposition Leader and People’s National Party (PNP) President Dr Peter Phillips today warned that Caribbean progress was under threat from a rise in anti-immigration policies in rich countries. Read more
The Dominican Republic helps mango producers double exports
FreshPlaza: The Dominican Government through the Ministry of Agriculture and the Special Fund for Agricultural Development (FEDA) contributed more than 130 million pesos for the construction and equipping of a modern hydrothermal treatment plant to the Banileja Association of Mango Producers (ABAPROMANGO) with the objective of doubling fruit exports next year. Read more
CARICOM Secretariat releases biodiversity management score card
Caribbean News Now: The Caribbean Community (CARICOM) has recorded a significant milestone with the release of a report on the state of biodiversity management in the region. Read more
Why British trade with Africa, Caribbean and Pacific nations can boom after Brexit
Gov.UK: UK Trade Policy Minister, George Hollingbery, spoke in Brussels to representatives from the African, Caribbean and Pacific group of states on why British trade with ACP nations can boom after Brexit. Read here.
RI takes first jab at Indonesia-Caribbean relations
The Jakarta Post: Following President Joko “Jokowi” Widodo’s orders to explore non-traditional trade markets, the government has moved to facilitate business-to-business talks between Indonesia and 15 countries joined in Caribbean Community (CARICOM). Read more
Taiwanese business delegation visits St Lucia for investment and trade opportunities
Caribbean News Now: A business delegation from Taiwan arrived in Saint Lucia on October 24, 2018, to explore investment opportunities and engage potential business partners in Saint Lucia. Read more
CTO Secretary General says complacency puts Caribbean people and economies at risk
Caribbean360: Secretary General of the Caribbean Tourism Organization (CTO) Hugh Riley has called on Caribbean states to take tsunami preparedness seriously, stating to do otherwise would put the people and regional economies at risk. Read more
IMF says recovery in Latin America and the Caribbean has lost momentum
Caribbean360: The International Monetary Fund’s Regional Economic Outlook for the Western Hemisphere has marked down its growth forecasts for Latin America and the Caribbean to 1.2 per cent in 2018 and 2.2 per cent in 2019, from the May 2018 forecasts of 2.0 per cent and 2.8 per cent, respectively. Read more
Vanuatu Trade Policy Review
WTO: The Pacific island nation of Vanuatu had its first review of its trade policies and practices which took place October 23 and 25. Read more
Asia-Europe Meetings Close With Calls for Supporting WTO, Multilateralism
ICTSD Bridges: The 12th Asia-Europe Meeting (ASEM) came to a close last week in Brussels, Belgium, where leaders from 51 countries examined options for greater cooperation on supporting the multilateral trading system, improving climate action, and otherwise backing multilateralism and shared policy objectives. Read more
EU, US Officials Consider Approaches, Objectives for Trade Negotiating Outcomes
ICTSD Bridges: Three months after US and EU leaders agreed to launch an “Executive Working Group” to tackle a series of trade issues, questions over how future talks will proceed and what those efforts will cover substantively remain, with trade officials offering differing public assessments in recent weeks. Read more
Russia seeks to capitalise on Brexit after blocking Liam Fox’s WTO plan
The Guardian: Russia is among 20 countries that are looking to squeeze a commercial advantage from Brexit after blocking an attempt by the international trade secretary, Liam Fox, to fast-track a World Trade Organization deal on the UK’s terms of trade with the world. Read more
UK signals failure of bid for quick Brexit transition at WTO
Reuters: Britain signalled on Thursday that its attempt to seal terms for its post-Brexit membership of the World Trade Organization by a fast-track procedure had failed, and it must now enter negotiations which are likely to be lengthy. Read more
DDG Wolff: “It is essential that the WTO adapts to future changes in world trade”
WTO: In a lecture delivered to the Academy of Economic Studies in Chișinău, Moldova, on 24 October 2018, Deputy Director-General Alan Wolff said that much in the world of trade will change going forward, largely due to the emergence of new technologies. Read more
Subsidies Committee members express concerns on lack of notifications
WTO: Members of the WTO’s Committee on Subsidies and Countervailing Measures expressed concerns at their special meeting on 23 October about the failure of many members to notify the Committee of subsidy programmes. Read more
Canada ratifies Pacific rim deal
CTV: A bill to enact a new trade pact with Pacific Rim countries has passed the legislative finish line, making Canada one of the first countries to ratify the 11-country deal. Read more
Chilean Senate approves deepening of free trade agreement with China
Santiago Times: This week the Chilean Senate approved the protocol of deepening the Free Trade Agreement with China, a fact that the Minister of Foreign Affairs, Roberto Ampuero, described as “very good news.” Read more
Will Trump push for an ‘America first’ trade agreement in Asia modelled on his new Nafta deal?
South China Morning Post: US President Donald Trump seeks to redefine all major free-trade agreements on the basis of US economic and geopolitical leverage. In these efforts, the United States-Mexico-Canada Agreement (USMCA) is likely to serve as a blueprint. Read more
EU and Indonesia complete sixth round of negotiations for a trade agreement
EU: The sixth round of negotiations for an EU-Indonesia free trade agreement took place from 15 to 19 October in Palembang, Indonesia. Read more
What do Mauritius, Malaysia, and Singapore have in common? Besides being examples of highly competitive emerging economies, these countries have multilingual populations which they proudly count as part of their country’s competitive advantage.
Prime Minister of Jamaica, the Most Honourable Andrew Holness, recently announced his government’s hope to adopt Spanish as a second language given the longstanding and growing importance of foreign direct investment (FDI) from Spain to Jamaica’s economy. Spanish chains are a growing presence in Jamaica’s tourism, wellness and construction sectors and have injected US$1.7 billion in Jamaica’s tourist industry, according to the Prime Minister in his speech.
Similar statements on the need for improving our populations’ language competencies have also been made by current and previous Commonwealth Caribbean governments. Could the promotion of bilingualism give our hitherto monolingual Commonwealth Caribbean countries a trade and investment edge in an increasingly interconnected global marketplace?
‘Everyone speaks English!” Or do they?
I am not aware of any data on the rates of bilingualism (that is, proficiency in two or more languages) in the Commonwealth Caribbean. However, anecdotal evidence suggests that aside from local dialects, anglophone Caribbean countries have mostly monolingual (one language) populations.
It is not uncommon to hear some persons strongly proclaim “everyone speaks English, so why must I learn another language?”. Though English is currently the most learnt second language internationally, this chart from the World Economic Forum shows that English is actually the third most spoken mother tongue in the world, with 372 million first-language speakers in 2017. The second most spoken language was Spanish, with 437 million speakers. But the most spoken was Chinese (Mandarin) with 1,284 million speakers, which is not surprising given the population of China.
While the English language has been the global lingua franca since the 20th century, it has not always been, and it may not always be either given China’s growing economic dominance and promotion of its culture and language. In recognition of this fact, China Daily has reported that there is growing interest in western countries for learning Mandarin. In Russia, for example, the number of Chinese language learners has reportedly increased from 17,000 in 2007 to 56,000 in 2017 and Mandarin is now an elective language in that country’s national college entrance examination.
That aside, the Commonwealth Caribbean is surrounded not only by its Spanish, French and Dutch speaking Caribbean island neighbors, but also Spanish-speaking Latin American countries and Portuguese-speaking Brazil, which present still largely undertapped export and tourist markets.
Bilingualism enhances labour force quality
There is a corpus of research highlighting the cognitive, psychological and social advantages to human beings learning a second language. These include sharpened memory, improved decision-making skills, multi-tasking capability, problem-solving and mental dexterity. Knowledge of another language also increases a person’s employability, cultural sensitivity, earning potential and labour market opportunities. As a multilingual person, I can personally attest to the doors which knowledge of other languages have opened for me professionally.
Internationally, employers’ demand for bilingual persons has increased not only as trade with other countries has increased, but because of the recognition by firms of the benefits to their export strategies of employing bilingual persons. A report of March 2017 by New American Economy found that demand for bilingual workers in the US is growing at both the higher and lower ends of the employment spectrum. This is further supported by a report by the Economic Intelligence Unit, which surveyed 572 executives globally and found that organisations with international ambitions were increasingly expecting prospective employees to be fluent in key foreign languages.
Taken as a whole, improving a population’s language competency makes for a more attractive labour force to international investors. This advantage has not gone unrecognized by some countries. Mauritius, whose population speaks French, English and French Creole, proudly touts its bilingual population as one of its unique selling points as a place for international business. In Switzerland, which has four national languages, a report from 2008 estimated that country’s linguistic advantage as equivalent to about 9% of its GDP.
In an increasingly interconnected world, I believe monolingualism will put our human resource, which is our greatest resource, at a distinct disadvantage in attracting international investment and tourism.
Bilingualism/Biculturalism as Business Advantages in Cross-Border Transactions
Effective communication is essential to the success of cross-border deals, which means that linguistic and cultural differences are frequent barriers to cross-border trade and investment. The previously mentioned report by the Economic Intelligence Unit found that “misunderstandings rooted in cultural differences present the greatest obstacle to productive cross-border collaboration”. For instance, a handshake or kiss on the cheek may be perfectly acceptable in one culture, but may cause offense in another.
A UK-based report also found that “over time the trade cost to the UK resulting from language barriers has varied in magnitude, but has been consistently large.” While I am unaware of similar research conducted in the Commonwealth Caribbean, anecdotal evidence shows that this may also be the case here as well.
It is not uncommon for some businesses seeking to export to feel that it is not necessary to invest in developing a multilingual strategy or capacity given the increasing availability and accuracy, for example, of online translation services. However, online translation services miss subtle cultural nuances, which may be fatal when engaging in cross-border business negotiations, especially with enterprises from ‘high context cultures’. ‘High context’ is the term used in international business to describe those cultures which place greater emphasis on context, non-verbal cues and on interpersonal relations when conducting business. Examples would be most African, Middle Eastern and Asian countries. ‘Low context’ cultures usually rely mainly on verbal cues, and interpersonal relationships have less importance in the business context. These cultures include many Western European countries, the US and Canada.
In the Commonwealth Caribbean most of our international trade is currently with low context cultures with which we share cultural, linguistic and historical ties. But, as our firms seek to diversify, and as China (a high context culture) expands its economic footprint in the region, there will be need for greater understanding of the Chinese language and culture.
Prior knowledge of the language and cultural norms of a target export market is also invaluable when conducting market research into the business, legal and regulatory environment of that potential export market.
Bilingualism can foster wider Caribbean integration
Promoting bilingualism can foster closer Caribbean integration. By accident of geography, the Caribbean Region is divided by water. By accident of history, these divisions are furthered by language. However, greater linguistic and cultural awareness among our islands can bridge these divisions.
As an example, the French-speaking island of Martinique is one of the top tourist source markets for St. Lucia, its neighbor just 40 miles to the south. Its tourist and business ties with Martinique are facilitated not just by geography and reliable transportation links, but also the mutual intelligibility of the Martinican and St. Lucian creoles and some shared cultural similarities. St. Lucia, nicknamed Helen of the West, changed colonial hands fourteen times between France and England, giving the island a unique culture and patois which is a mélange of its French and English colonial roots.
A new programme called the Trade Enhancement for the Eastern Caribbean (TEECA) programme seeks to promote trade and investment between Member States of the Organisation of Eastern Caribbean States (OECS) and Martinique, which became an OECS associate member in 2015. The success of this programme will undoubtedly hinge on OECS firms seeking to create or expand business with those in Martinique having an understanding of the Martinican cultural, business and legal context and knowledge of the French language.
Building a Bilingual Advantage
Promoting greater language competency among our populations could bring trade and investment advantages to Caribbean countries which rely disproportionately on their human resource. While not a panacea, it can provide for a more employable and attractive labour force, facilitate our export market diversification efforts, strengthen integration with the non-anglophone Caribbean and improve trade and investment ties with the wider LAC region
Of course, creating a bilingual society cannot happen overnight. First of all, we need to determine what language competencies our Governments will seek to promote. Spanish and French are increasingly being taught in Commonwealth Caribbean secondary schools, but should Mandarin also be included on the curriculum?
Moreover, expanding language instruction at the primary school level would be key, as well as promoting greater cultural exchanges. Languages should not be seen solely as subjects for study, but as a door to further business opportunities, creating an edge for our people in an increasingly interconnected and competitive global environment.
As it is firms which trade and not countries, it is incumbent on regional firms to increase their in-house language capacity by employing persons with the linguistic skills and cultural knowledge of their export target markets, and also, where appropriate, invest in developing the language proficiency of their existing staff.
Welcome to the Caribbean Trade & Development Digest for the week of October 14-20, 2018! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.
THIS WEEK’S HIGHLIGHTS
In its latest Investment Trends Monitor, UNCTAD has reported that global FDI fell by 41% in the first half of 2018 due primarily to the large repatriations by US parent companies of accumulated foreign earnings from their foreign affiliates due to US government tax reforms. The full report may be found here.
The OECD has published a list of citizenship and residence by investment programmes which it deems “high risk” to the Common Reporting Standard, and names several programmes operated by Caribbean countries.
Nearly 700,000 protesters in London participated in the People’s March calling for a referendum on the UK’s final Brexit deal with the EU. Closer to home, in Haiti, President Moise has agreed to protesters’ calls for an investigation into the alleged misuse of funds received by Haiti under the PetroCaribe Agreement with Venezuela. Venezuela has announced it will replace the US dollar for the euro for use in international payments.
Please see further headlines below:
Jamaica Prime Minister wants Spanish to be second language
Magnetic Media: Prime Minister, the Most Hon. Andrew Holness, says it is of strategic importance that the appropriate programmes be put in place, making Spanish a second language in Jamaica. Read more
Support grows for marijuana decriminalisation across the region
Jamaica Observer: The chairperson of the Caricom Regional Commission on Marijuana Professor Rose-Marie Belle Antoine says there’s much support across the region for the decriminalisation of marijuana. Read more
Haiti’s President Launches Petrocaribe probe
VoA: Responding to protester demands to “tell us where the PetroCaribe money is” Moise tweeted Thursday that his administration would investigate the allegations of misuse of funds and would hold all those responsible accountable. Read more
Haiti protests over politicians’ misuse of Petrocaribe funds
Al Jazeera: Protests in Haiti have turned violent as anger grows over billions of dollars of missing funds that were meant to provide social care and improve public services. Read more
IMF Outlook for Latin America and the Caribbean
IMF: Amid escalating trade tensions, tighter financial conditions, and volatile commodity markets, economic recovery in Latin America and the Caribbean (LAC) has both moderated and become more uneven. However, activity is recovering in the Caribbean, reflecting the uptick in tourism owing to robust US and global growth. Read more
Is the Caribbean becoming a junkyard for Japanese excesses? (Commentary)
St Lucia News Now: Statistics from the islands show that thousands of cars are imported into the Caribbean from Japan annually. Eight of every ten cars imported have or are nearing the age of serviceability. Many of these vehicles will retire after a few years of use with the stark reality being that they will need to be disposed of. Read more
Caribbean countries set to reduce trade hurdles
UNCTAD: Senior trade officials from the Organisation of Eastern Caribbean States (OECS) have met with UNCTAD experts to discuss a new drive to help them improve the efficiency of their cross-border trade. Read more
Will Mexico’s free zones affect Belize?
LoveFM: Tracy Taeger-Panton, the Minister of State Responsible for Investment, Trade and Commerce says it is still unclear what Mexico’s plans are but the Government is looking at ways to develop the economy of the northern districts. Read more
Bahamas elected to UN Human Rights Council
Magnetic Media: The Bahamas was elected by the United Nations General Assembly (UNGA), on 12 October 2018 to serve on the Human Rights Council (HRC). The HRC was created by the UNGA in 2006, replacing the former UN Human Rights Commission, and is the UN organ responsible for promoting and protecting human rights worldwide. Read more
WHO removes Caribbean from Zika classification
Jamaica Observer: The World Health Organisation (WHO) has removed its Zika virus country classification scheme from countries in the region. The scheme had categorised most of the Caribbean territories as having active Zika virus transmission. Read more
Overseas investment failing, developing countries largely unscathed: UNCTAD
UN: Foreign direct investment (FDI) has dropped 40 per cent year-on-year so far, the UN Conference on Trade and Development (UNCTAD) said on Monday, but the $470 million decline is happening mainly in wealthy, industrialized nations, especially in North America and Western Europe. Read more
Venezuela ditching US dollar for euros in international trade
Caribbean360: Venezuela will drop the US dollar from its exchange market in favour of the Euro, in reaction to crippling sanctions imposed by the United States. Read more
Canada launches safeguard investigation on certain steel products
WTO: On 12 October 2018, Canada notified the WTO’s Committee on Safeguards that it initiated on 11 October 2018 a safeguard investigation on certain steel products. Read more
WTO members review use, application of preferential rules of origin for LDCs
WTO: At a meeting of the Committee on Rules of Origin on 15-16 October, WTO members further reviewed the use and application of preferential rules of origin programmes for least developed countries (LDCs) in line with commitments made at the WTO’s 2013 Bali and 2015 Nairobi ministerial conferences. Read more
DG Azevêdo: Debate on WTO reform should reflect all perspectives
WTO: At a meeting of the full WTO membership today (16 October), Director-General Roberto Azevêdo noted the emerging debate on ‘WTO reform’ and highlighted the importance that this discussion is inclusive. Read more
Australia accepted as new party to government procurement pact
WTO: On 17 October 2018, parties to the WTO plurilateral Government Procurement Agreement (GPA) unanimously approved a decision to welcome Australia as the 48th WTO member to be covered by the Agreement. Read more
WTO members fix dates for Astana Ministerial Conference
WTO: WTO members have agreed that the organization’s next Ministerial Conference will take place from 8 to 11 June 2020 in Astana, Kazakhstan. The dates were endorsed at an 18 October meeting of the WTO’s General Council. Read more
670,000 march to demand final say on Brexit
The Independent: Masses overflowed through the streets of London for more than a mile, from Hyde Park Corner to Parliament Square, as an estimated 670,000 protesters took their demand for a fresh Brexit referendum right to Theresa May’s doorstep. Read more
Singapore, EU ink landmark free trade agreement
ChannelNewsAsia: Singapore and the European Union (EU) on Friday (Oct 19) inked a landmark trade deal that will eliminate tariffs and give businesses across various sectors, especially small- and medium-sized enterprises (SMEs), better market access.
Trump embarks on bilateral trade talks to pressure China
New York Times: Fresh off securing trade agreements with South Korea, Canada and Mexico, President Trump is embarking on a new plan: refashioning the Trans-Pacific Partnership to his liking through a flurry of bilateral trade deals. Read more
Australia insists trade agreement with Indonesia on track despite Israel comments
Channel News Asia: Australian Prime Minister Scott Morrison said on Wednesday a billion-dollar free trade agreement with Indonesia will be signed this year despite a furious reaction to Canberra’s potential move to recognise Jerusalem as Israel’s capital.
2018 Update of the EU Control List of Dual-Use Items
EU: On 10 October 2018, the Commission adopted the annual Delegated Regulation that updates the EU dual-use export control list in Annex I to Regulation (EC) No 428/2009 and brings it in line with the decisions taken within the framework of the international non-proliferation regimes and export control arrangements in 2017. Read more
EU completes second round of negotiations with New Zealand
EU: EU negotiators were in Wellington, New Zealand from 8 to 12 October 2018 for the second round of negotiations for a trade agreement. Read more
NEW ON CTLD BLOG
UPDATED: The OECD has indicated that the list is not a blacklist.
A new threat to Caribbean countries’ citizenship and residency by investment programmes (CBI/RBI programmes) has emerged. Today the Paris-based think tank, the Organisation for Economic Cooperation and Development (OECD) published a ‘black list’ of sorts of CBI and RBI programmes that “potentially pose a high-risk to the integrity of the Common Reporting Standard”.
What are CBI/RBI programmes?
Citizenship by investment programmes and residence by investment programmes provide citizenship (in the case of the former) or residency (in the case of the latter) to an investor (and often his or her dependents) in exchange for that investor making a significant investment in the host country, subject to that jurisdiction’s eligibility criteria.
St. Kitts & Nevis operates the oldest CBI programme in the world. As part of their efforts to diversify and attract much needed foreign direct investment, four other Caribbean countries (Antigua & Barbuda, Dominica Grenada and St. Lucia) have since adopted their own programmes. The British Overseas Territory of Anguilla has also recently established an RBI programme. Outside of the Caribbean, there is now an ever-growing list of CBI or RBI programmes operated across the world.
OECD’s examination of CBI/RBI programmes
Earlier this year, the OECD announced that it would be examining the prevention of abuse of these programmes to circumvent the Common Reporting Standard (CRS).
Nicknamed Global FATCA because it was inspired by the US’ Foreign Account Tax Compliance Act (FATCA), the CRS is an information standard approved by the OECD Council in 2014 for the automatic exchange of information among tax authorities. CRS jurisdictions are required to obtain certain financial account information from their financial institutions and automatically share this information with other CRS jurisdictions on an annual basis.
The OECD has argued that CBI/RBI programmes are a risk to the CRS because they can be misused by persons to hide their assets offshore and because the documentation (such as ID cards) obtained through these programmes could be used to misrepresent an individual’s jurisdiction of tax residence.
The OECD used two vague criteria to determine whether a CBI/RBI programme was high risk to the CRS: (1) it gives access to a lower personal income tax rate on offshore financial assets and (2) it does not require an individual to spend a significant amount of time in the host jurisdiction.
Out of the 100 CBI/RBI programmes the OECD analysed, programmes from the following twenty-one jurisdictions were identified as high risk: Antigua & Barbuda, The Bahamas, Bahrain, Barbados, Colombia, Cyprus, Dominica, Grenada, Malaysia, Malta, Mauritius, Monaco, Montserrat, Panama, Qatar, Saint Kitts & Nevis, St. Lucia, Seychelles, Turks and Caicos, United Arab Emirates and Vanautu.
Caribbean Programmes Identified as ‘High Risk’
The following Caribbean CBI and RBI programmes were identified:
As a result, the OECD requires that financial institutions “take the outcome of the OECD’s analysis of high-risk CBI/RBI schemes into account when performing their CRS due diligence obligations”.
Why is this development of concern to the Caribbean?
This development is of concern to Caribbean countries which operate these programmes for several reasons. Firstly, it adds to the reputational backlash which Caribbean CBI programmes have been facing, with implications for these programmes’ attractiveness to investors. Caribbean CBI programmes are already facing competition not only inter se, but with other programmes around the world, including those in Europe which offer the prospect of free movement within the EU.
Secondly, this seeming blacklist, which is based on vague criteria, casts an unfair shadow on those countries which operate these programmes and may affect their attractiveness as jurisdictions for international business. Moreover, those countries which operate only RBI programmes , which have much less reputational risk, have also been painted with the same brush.
Thirdly, a reduction in CIP revenues would have an adverse economic impact on those countries which have come to depend on these revenues for their macroeconomic stability.
The results of the OECD’s analysis may be found here.