WTO Trade Facilitation Agreement enters into force

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Alicia Nicholls

Today the World Trade Organisation (WTO) Trade Facilitation Agreement, the first multilateral trade agreement to be concluded since the WTO came into being over twenty years ago, has entered into force. The Trade Facilitation Agreement aims to expedite the process of the movement of goods across  national borders and was concluded as part of the Bali Package coming out of the WTO Ministerial in 2013.

For immediate entry into force the Agreement needed to be ratified by two-thirds of the WTO’s membership, that is, 110 member countries. That threshold was met today when Chad, Jordan, Oman and Rwanda submitted their instruments of ratification.

As the World Bank’s Annual Doing Business Reports show, countries’ customs procedures can vary from a few to a multiplicity of steps, which can significantly increase the amount of time goods take to clear borders, which increases costs to both suppliers and consumers. As supply chains become  increasingly globalised, so is the need for more expeditious trade flows and standardisation of customs procedures. The Trade Facilitation Agreement’s provisions provide standards which were inspired by international best practices.WTO economists in the World Trade Report 2015 estimated that the Agreement would lower members’ trade costs by an estimated 14.3% on average.

Developing countries and Least Developed Countries (LDCs) have the option to determine their pace of implementation by designating each of the provisions according to one of three categories: A,B,C, with A being the commitments each country can undertake as soon as the Agreement comes into force. The Agreement also includes provisions on customs cooperation. A Trade Facilitation Facility was also created at the request of developing countries to assist them and Least Developed Countries in implementing the Agreement.

So far besides St. Vincent & the Grenadines, the following countries of the Caribbean Community (CARICOM) have ratified the TFA: Trinidad & Tobago, Belize, Guyana,  Grenada, Jamaica, St. Kitts & Nevis, St. Lucia and Dominica. Reforms undertaken by CARICOM countries pursuant to Agreement could help to facilitate the movement of goods trade within the Community through more simplified customs procedures and lower border costs. Like other developing countries, CARICOM countries would also be able to access the Trade Facilitation Facility to assist in their implementation of the Agreement’s reforms.

For further information, please see the WTO’s press release.

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

De-Risking discussed at CARICOM 28th Inter-sessional Meeting

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Alicia Nicholls

The issue of de-risking by global banks, manifested most prominently by the restriction or withdrawal of correspondent banking relationships with mainly indigenous banks in the Region, was discussed at the Caribbean Community (CARICOM) Twenty-Eighth Inter-sessional Meeting of the Heads of Government of CARICOM which took place in Georgetown, Guyana February 16-17 last week.

CARICOM countries have been engaging in high-level advocacy to raise awareness of the implications of global banks’ de-risking, including the restriction and termination of correspondent banking services to mainly indigenous Caribbean banks. In the Communique released after the Inter-Sessional Meeting, it was noted that Heads of Government recognised the need for a continued regional approach and concerted action on this issue which has the potential to undermine the region’s financial systems and to cut off access to trade, investment and other financial flows, with both economic and poverty-reduction implications.

Heads of Government also  recognised the need for continued urgent action to strengthen the integrity of the financial system in CARICOM Member States and to address the perception of the Caribbean as a high-risk Region. They also commended the Prime Minister of Antigua and Barbuda, and the Committee of Ministers of Finance for spearheading the advocacy initiatives towards resolution of the issue.

Below are the main take-aways from the Communique in regards to Heads of Government’s current and further action on the de-risking issue:

  • Heads of Government considered the Strategy and Action Plan submitted by the Committee of Central Bank Governors, and requested the Committee of Ministers of Finance with responsibility for Correspondent Financing to assume the oversight of its roll-out.
  • The Heads of Government agreed that the Region must continue its robust and unrelenting advocacy on the issue of Correspondent Banking, noting the advocacy initiatives’ success in raising international awareness of the consequences of de-risking.
  • Heads of Government encouraged Member States to seize the opportunity of heightened awareness among International Development Partners (IDPs) to secure the resources and support required to strengthen the domestic and regional financial system.
  • Heads of Government welcomed the efforts of the Caribbean Development Bank (CDB) to assist Member States to strengthen their financial systems and partnering with multilateral financial institutions to determine solutions to the ongoing de-risking threat to the Community.
  • Heads of Government acknowledged the multi-dimensional nature of the several drivers behind the de-risking strategies being pursued by global banks, and called for a comprehensive stock-taking exercise to determine Member States’ status and ensure that national action plans are aligned with the timetable for compliance with global regulatory standards.
  • Heads of Government noted the need to strengthen Member States’ compliance with the global regulatory standards with regard to Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) and Tax Transparency Information Exchange.

More on the 28th Inter-sessional Meeting may be viewed here.

The full communique is available here.

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

 

CARICOM 28th Inter-Sessional Meeting; Economic Development and International Relations centre-stage

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Source: Pixabay

Alicia Nicholls

On February 16-17, Heads of Government of the 15-member Caribbean Community (CARICOM) converged in Georgetown, Guyana for the Twenty-Eighth Inter-Sessional Meeting of the Conference of Heads of Government.

The meeting, which was chaired by President of Guyana, His Excellency Brigadier (Retd’), David Granger, addressed a wide array of issues currently confronted by the Community. However, economic development and International Relations were among the three broad identified by CARICOM Secretary General, Ambassador Irwin LaRocque, in his opening remarks to the conference. The third was crime and security.

Ambassador LaRocque noted that the issue of economic development, including economic growth, was foremost, observing that the majority of CARICOM member States have been struggling with low growth, high debt and fiscal pressure. Further to this point, it should be noted that just last week the Caribbean Development Bank stated that although they project the Region to experience economic growth of approximately 1.7 percent in 2017, they also suggested that “this will not be enough to stimulate employment, particularly among youth, and reduce high regional debt levels”, and that a long term plan was needed to “facilitate the Region’s participation in global supply chains and drive sustainable economic growth”.

Ambassador LaRocque highlighted the importance of collective action to confront the problems facing the region, and reiterated the fact that the CARICOM Single Market & Economy (CSME) had been identified by member States as the “best vehicle” to promote our overall economic growth and development.

Indeed, a  major discussion point in the meeting was the status of the CSME. According to the official communique from the meeting, the Heads of Government received a review of the status of the CSME and noted the “the significant progress” in its implementation. They also agreed on priority areas to be addressed, including the challenges of payments for goods and services traded within the Region and the completion of the protocol on procedures relating to the facilitation of travel. They also supported the need for continually reviewing the impact of the CSME in both achieving the objectives of the Revised Treaty of Chaguaramas and on the lives of CARICOM peoples.

According to the communique, the Heads of Government also considered some impediments to furthering the CSME. Noting the importance of transportation to the movement of Community nationals, they called for a focused discussion on transportation in the context of the integration movement and also urged greater collaboration among the regional airlines.

Indeed, transportation issues also featured in the Heads of Government’s discussion on tourism,  which they reiterated was a vital sector for CARICOM member States. Inter alia, the Heads of Government called for “an urgent meeting of the Council for Trade and Development (COTED)-Transportation to address air transport issues in particular, including those related to the tourism sector”.

De-risking strategies of global banks, which include the restriction or withdrawal of correspondent banking services to banks in the region, was again an important agenda item. The Heads of Government endorsed the need for a continued regional approach to the challenge, including continued concerted action and advocacy. To this end, they considered the Strategy and Action Plan submitted by the Committee of Central Bank Governors and directed the Committee of Ministers of Finance with responsibility for Correspondent Financing to assume oversight of the roll-out.

Turning to the issue of international relations, the recently concluded negotiations by the CARICOM-Cuba Joint Commission on the Second Protocol to the Trade and Economic Cooperation Agreement was welcomed by the Heads of Government, who agreed that it would strengthen the economic relations and cooperation between CARICOM and Cuba.

US-CARICOM relations was another important agenda item. The Heads of Government welcomed the US-Caribbean Strategic Engagement Act of 2016. Emphasising the importance of the long-standing relationship between CARICOM and the US, the Heads of Government expressed their desire to continuing the “fruitful and mutually beneficial relationship with the new US Administration”.

CARICOM is part of the Caribbean sub-grouping of the Africa, Caribbean & Pacific (ACP) group. In light of the impending expiration of the Cotonou Agreement in 2020, Heads of Government noted the Cotonou Agreement’s importance as “a unique and valued instrument from which CARICOM has benefited with regard to trade, development co-operation and political dialogue with Europe” and suggested that the Agreement be renewed. Heads of Government also expressed their desire for the ACP to be strengthened, emphasising that membership in the ACP Group “remains a valuable construct which has facilitated relations with Africa and the Pacific”.

Besides these issues, the Heads of Government also discussed the on-going border disputes between Belize and Guatemala, and Guyana and Venezuela, relations with the Dominican Republic, an update on preparations for CARIFESTA, inter alia.

The full communique may be viewed here.

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

 

Caribbean Trade & Development Digest – February 12-18, 2017

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Source: Pixabay

Welcome to the Caribbean Trade and Development Digest for the week of February 12-18, 2017!  I am pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. 

For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

To receive these mailings directly to your inbox, please follow our blog.

REGIONAL

CARICOM to implement system to measure results of implementation

CARICOM Today: The reform process that is underway in the Caribbean Community (CARICOM) is working towards a Results Based Management (RBM) system that will measure the tangible results of regional integration mechanisms.Read more 

Government looking to strengthen relations with EU

JIS: The [Jamaican] Government is examining ways to more effectively utilise the CARIFORUM-European Union (EU) Economic Partnership Agreement (EPA) to strengthen Jamaica’s trade relations with the 27-member EU. Read more

Minister Rhuggenaath highlights Business Opportunities with Dominican Republic

Curacao Chronicle: The Dutch Chamber of Commerce of the Dominican Republic organized a meeting of partners and representatives of the public and private sector of the Dominican Republic with the Minister of Economic Development of Curaçao, Eugene Ruggenaath. Read more 

Guyana to sign agreement with the EU

Jamaica Observer:  Guyana says it will sign the Voluntary Partnership Agreement (VPA) under the European Union Forest Law Enforcement Governance and Trade (EU/FLEGT) initiative, which Georgetown adopted in 2003. Read more 

Guyana opens High Commission in Trinidad & Tobago

Stabroek: Guyana has opened its first ever diplomatic mission in Port-of-Spain, which is expected to enhance bilateral relations with Trinidad and Tobago. The new High Commission, headed by High Commissioner Bishwaishwar ‘Cammie’ Ramsaroop-Maraj, replaces Guyana’s Honorary Consulate in the sister Caricom state. Read more

CARICOM to hire lobbyists to avoid FATCA fallout

Daily Express: CARICOM countries will jointly contribute some US$240,000 to lobbyists to act on behalf of Carib­bean-based banks to avoid censure and loss of correspon­dent banking access in the face of the looming Foreign Account Tax Compliance Act (FATCA).Read more 

INTERNATIONAL

Asia eyeing bilateral trade pacts with the US after Trump ditches TPP

Singapore Business Times: EVERYTHING old is new again when it comes to trade deals. Read more [Requires subscription]

TPP members to decide its fate in May – Mustapa

New Strait Times: Eleven Trans-Pacific Partnership (TPP) members are expected to decide on the future of the pact in May this year during the Asia-Pacific Economic Cooperation (APEC) trade ministerial meeting in Vietnam. Read more 

European Parliament gives green light to CETA

GTR: The European Parliament has voted in favour of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada and taken another defiant step toward greater free trade in the face of growing protectionism. Read more

Froman: Withdrawing from Trade Agreements not the Answer

PlanetPrinceton: Compelling economic and strategic arguments exist for keeping agreements like the Trans Pacific Partnership, former US Trade Representative Michael Froman said on Tuesday. Read more 

World Trade Outlook Indicator suggest moderate trade momentum in Q1 2017

WTO: The WTO’s latest World Trade Outlook Indicator (WTOI) suggests that global trade growth will continue to build moderately in the first quarter of 2017 after having strengthened in the final quarter of last year. Read more

Sri-Lanka Singapore free trade agreement

Hiru News: Singapore Prime Minister Lee Hsien Loong said in a Facebook post that the Sri Lanka-Singapore Free Trade Agreement will hopefully be completed this year. Read more

Indonesia files appeal against WTO panel ruling on agricultural import measures

WTO: Indonesia filed a notice of appeal on 17 February 2017 in the cases brought by New Zealand and the United States in “Indonesia – Importation of Horticultural Products, Animals and Animal Products” (DS477 and 478). Read more

Trump says NAFTA deal with Canada will only be “tweaked”

CTV: After his first face-to-face meeting with Prime Minister Justin Trudeau on Monday, U.S. President Donald Trump said he only plans to “tweak” the North American Free Trade Agreement with Canada, while his administration has a lot more work to do with Mexico. Read more 

EU preparing legal challenge against Donald Trump’s US Border Tax Plan

Telegraph: EU lawyers are preparing to mount a legal challenge against President Trump’s hugely controversial US border tax proposals in what could be the biggest case in World Trade Organisation history. Read more 

Bangladesh to sign free trade agreement with Sri Lanka soon

ColomboPage: A free trade agreement (FTA) between Bangladesh and Sri Lanka is currently being discussed to boost the bilateral trade and the governments will sign the agreement soon, Bangladesh Commerce Minister Tofail Ahmed has said. Read more 

Thailand to India: Speed Up Decision on free trade pact

Business Line: Thailand wants India to fast-track its decision on the proposed full-fledged free trade agreement (FTA) with the country to increase trade and investment flows. Read more

NEW ON CTLD BLOG

EU-Canada CETA Approved by European Parliament

“What’s Next for NAFTA?” FITT Trade Elite Chat Recap

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

EU-Canada CETA Approved by European Parliament

Alicia Nicholls

Members of the European Parliament (MEPs) have given their stamp of approval to the Comprehensive Economic and Trade Agreement (CETA) signed by the European Union (EU) and Canada on October 30, 2016. This is according to a press release by the European Parliament yesterday.

In the vote held on February 15, 2017, 408 MEPs out of the 751-member European parliament voted in favour, while 254 voted against it. There were 33 abstentions. The MEPs also approved the EU-Canada Strategic Partnership Agreement complementing the CETA, which will deepen EU-Canadian cooperation on a wide range of non-trade issues.

The 30-chapter CETA aims to strengthen trade and investment ties between EU countries and Canada. Negotiations were launched in May 2009 and took over 5 years of negotiations before being concluded in September 2014.

Among other things, the agreement will upon its entry into force eliminate tariffs on most goods trade between the EU and Canada. A few sensitive industrial and agricultural products will either face longer periods of protection or in a few limited cases, are excluded completely from tariff cuts. Canada has also historically agreed to open its federal and municipal procurement markets. An innovation in the agreement is the establishment of an Investment Court System instead of the much maligned investor-state dispute settlement system for the settlement of investment disputes.

As the CETA is classified as a “mixed agreement” by the European Commission, the next step will be ratification by national and regional parliaments in individual EU countries. According to the press release, MEPs expect that provisional application of the agreement could start by as early as April 1, 2017.

For further information, please see the European Parliament press release.

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

“What’s Next for NAFTA?” FITT Trade Elite Chat Recap

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Alicia Nicholls

Last Thursday I was a panellist for the Forum for International Trade Training’s (FITT) Trade Elite Twitter Chat on “What’s Next for NAFTA” – the North American Free Trade Agreement which comprises the United States (US), Canada and Mexico.

My fellow panellists were Horacio Lopez-Portillo, a Partner at Vazquez, Tercero and Zepeda in Mexico City,  John Boscariol, Partner and leader of the International Trade and Investment Law Group at McCarthy Tetrault LLP in Toronto, Joy Nott, the President and CEO of the Canadian Association of Importers and Exporters (I.E. Canada) in Toronto and  Paola Viviana Murillo, the Founder and Director of Latincouver. The moderator was Jon Yormick, Special Counsel for Phillips Lytle LLP.

The topic is timely in light of new US President Donald Trump’s sustained criticism of NAFTA and his call for a renegotiation of the over two-decades old agreement. The discussion focused on issues surrounding the strengths and weaknesses of NAFTA in its current dispensation, whether there was the need for a NAFTA 2.0, whether other more modern free trade agreements like the recently concluded EU-Canada Comprehensive Economic and Trade Agreement (CETA) could serve as useful models for a NAFTA 2.0,how  issues such as e-commerce, labour, services and the environment should be addressed, and how much blame should really be placed on NAFTA for job losses.

Please feel free to read FITT’s recap of the robust discussion on their website here. Further information on FITT’s past and upcoming Tradeelite Chats can also be found in the FITT website at the previous link.

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

Caribbean Trade and Development Digest – February 5-11, 2017

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Source: Pixabay

Welcome to the Caribbean Trade and Development Digest for the week of February 5-11, 2017!  I am pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. 

For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

To receive these mailings directly to your inbox, please follow our blog.

REGIONAL

Curacao wants to import Dominican products due to Venezuelan crisis

Curacao Chronicle: This week the government of Curaçao said that it is interested in importing agricultural products from the Dominican Republic after the collapse of relations in that field between the island and Venezuela. Read more 

Caribbean Integration in times of Trump

Prensa Latina: Caribbean leaders analyze with worry here this week, the political and economic impact and the regional scenario after the assumption, last January 20, of Donald Trump as President of the United States. Read more 

OECS collaborates with ICAO

St. Lucia Times: Border control officers across the OECS are now better equipped to facilitate regional travel, in conformance with international standards. Read more 

Caricom Review Commission to publish report soon

Jamaican Observer: The report of the Caribbean Community (Caricom) Review Commission is expected to be completed and submitted to Cabinet shortly. Read more 

CTO signs MOU with Airbnb

CTO: The Caribbean Tourism Organization (CTO), the region’s tourism development agency, and Airbnb, whose community marketplace provides access to millions of unique accommodations, today signed a landmark agreement to develop a set of policy principles and recommendations on the sharing economy for Caribbean governments and other stakeholders.Read more

CTO enters Partnership with OAG to provide market insights

CTO: The Caribbean Tourism Organization (CTO), the Caribbean’s tourism development agency, has entered into a marketing partnership with leading air travel data provider OAG to provide members with accurate, timely and actionable insight and analysis to aid decision-making and to spot opportunities in essential markets. Read more

Caribbean Tourism Arrivals at All-Time High

CTO: Caribbean tourism broke new ground in 2016, surpassing 29 million arrivals for the first time ever, and once again growing faster than the global average. Read more

INTERNATIONAL

RCEP nations set for meeting to finalise trade modalities

Nation Multimedia: Officials from 16 countries, including Asean and its six trading partners, will try to conclude the modalities for liberalisation in the trade of goods by the middle of this year. Read more 

Merkel and Uruguay’s Vazquez push to deepen EU-Mercosur ties

Deutsche Welle:  Angela Merkel intends to push trade talks between the EU and Mercosur nations. The chancellor has met with Uruguay’s president to forge new bonds in the wake of Donald Trump’s inauguration in the United States. Read more 

Macri and Temer agree to open Mercosur and to closer ties to Mexico

Mercopress: The leaders of Brazil and Argentina said on Tuesday they would pursue closer ties with Mexico and other Latin American nations alarmed by U.S. President Donald Trump’s promises to tear apart trade deals and build a wall in the Mexican border to protect American jobs. Read more 

Pre-clearance bill would give US border agents in Canada new powers

CBCNews: U.S. border guards would get new powers to question, search and even detain Canadian citizens on Canadian soil under a bill proposed by the Liberal government. Read more 

Reps urge Trump Administration to fix Cyber Trade Agreement

The Hill: A bipartisan slate of representatives with cybersecurity chops is pressuring President Trump’s top national security adviser, Michael Flynn, to change an export agreement many believe weakens international cybersecurity.  Read more 

Trade Agreement to boost MSG Ties

Fiji Times: MINISTER for Industry, Trade and Tourism Faiyaz Koya believes the Melanesian Free Trade Agreement will usher a deeper and stronger trade and economic relations amongst the MSG countries. Read more 

Commission publishes negotiating proposals for EU-Indonesia trade deal

European Commission: European Commission has published nine initial European proposals for the trade agreement under negotiation with Indonesia. Read more 

While Trump and Abe eye bilateral pact, Australia keeps TPP alive

The Diplomat: Japan and the United States have agreed to start new talks on trade and investment, adding to speculation over a bilateral trade deal between the two security allies. However, all is not lost for the Trans-Pacific Partnership (TPP), with Australia’s trade minister vowing to salvage the deal at March talks.Read more 

Brazil files WTO complaint against Canada over alleged subsidies to Bombardier

WTO: On 8 February, Brazil notified the WTO Secretariat that it had requested WTO dispute consultations with Canada regarding alleged subsidies provided to Canadian aircraft manufacturer Bombardier. Read more 

Indonesia files notice of appeal in EU Fatty Alcohols Anti-dumping case

WTO: Indonesia filed a notice of appeal on 10 February 2017 in the case “European Union – Anti Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia” (DS442). Read more 

Germany’s global trade surplus hits a record in 2016

WSJ: Germany’s exports exceeded its imports by the widest yearly margin on record last year. Read more 

BONUS – Caribbean Tourism Breaks New Ground (from Hugh Riley Blog)

This week the Caribbean Tourism Organisation (CTO) released a detailed report on the Caribbean’s tourism performance for 2016, showing the region surpassed a record 29 million stay-over arrivals in 2015. Please see CTO’s Secretary-General, Hugh Riley‘s very informative and detailed breakdown of the market performance on his blog here.

NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT

US Federal Appeals Court Upholds Suspension of Trump Travel Ban

CARICOM and Cuba reach agreement to expand market access preferences

Caribbean Tourism Organisation (CTO) and Airbnb sign partnership agreement

IMF Staff Recommend St Lucia CIP Revenues be used Primarily to Reduce Debt

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

US Federal Appeals Court Upholds Suspension of Trump Travel Ban

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Photo credit: Pixabay

Alicia Nicholls

Less than a month after taking office, the Trump Administration received another judicial blow yesterday to one of its major policy actions. The United States’  Court of Appeals for the Ninth Circuit in its decision in State of Washington v Trump dismissed the Government’s motion for a stay pending appeal of an order of the US District Court for the Western District of Washington which had temporarily suspended the travel ban nationwide.

Background

The genesis to the legal dispute was an executive order entitled “Protecting the Nation from Foreign Terrorist Entry into the United States” signed by President Trump on January 27, 2017. Inter alia, the order sought to ban for 90 days entry into the US of all nationals of seven predominantly Muslim countries, namely Iraq, Iran, Sudan, Yemen, Libya, Syria and Somalia, and indefinitely suspended entry of all Syrian refugees into the US. It also sought to suspend the US Refugee Admissions programme for 120 days, with further direction that on recommencement of the programme, the Secretary of State should prioritise refugees of a minority faith in their country (in this case it would be Christians) with claims of religious persecution.

Upon its signature, the executive order’s impact was quick and brutal. Not only were thousands of visas cancelled but US greencard holders were among those who were either stranded at airports, separated from their families or being deported pursuant to the order. Protests erupted across the US and in several other countries. Several legal challenges were filed, including rulings by federal judges in New York and Massachusetts against the ban. Among the chaos, President Trump swiftly fired Acting Attorney General Sally Yates after she refused to defend the constitutionality of the order.

The decisive blow to the travel ban came after the February 3rd ruling of Judge James Robart, federal judge in the United States District Court for the Western District of Washington. In State of Washington v Trump et. al , a challenge brought by the State of Washington, Judge Robart  held that certain actions of the executive order were ultra vires the constitution, enjoining the government from implementing those provisions and granting a temporary nation-wide restraining order. Thereupon, the Department of Homeland Security suspended implementation of the executive order, whilst the Government prepared its appeal.

Issue 

In the instant case, the Court was asked to consider the Government’s request for an emergency stay of the temporary nation-wide restraining order issued by Judge Robart. The Government requested the stay pending appeal of the order.

Arguments

The Government argued that the federal district court lacked authority to enjoin enforcement of the order because the President has “unreviewable authority to suspend the admission of any class of alien” and that his/her decisions on immigration policy and national security are unreviewable even where they contravene constitutionally-enshrined rights and protections. They further submitted that any challenge to such presidential authority by the judicial branch would be a violation of the principle of separation of powers.

Counsel for the Government also argued that the States of Washington and Minnesota had no locus standi in this matter. However, the Court found that by showing the harm caused to their universities’ research and teaching because of the impact of the travel ban on those faculty members and students who are nationals of those countries, the states met the test for standing of “concrete and particularised injury” as was elaborated in Lujan v Defenders of Wildlife.

In their arguments before the lower court, the states had argued that the executive order violated the procedural rights of aliens, including denying entry to greencard holders and non-immigrant visa holders without sufficient notice and without giving them an opportunity to respond. The states had also argued that the damage to their state economies and public universities were in violation of the First and Fifth Amendments to the US constitution and that they violated a wide range of Acts, including the Religious Freedom Restoration Act. Counsel for the states also reminded the court of President Trump’s words during the campaign as support for their argument that it was intended to be a “Muslim ban” and not an act to protect against terrorist attacks by foreign nationals.

In the instant case before the federal appeals court, one of the things the Government had had  to show that it was likely to prevail against the due process claims made by the States.

Judgment

The learned judges, William C. Canby, Richard R. Clifton, and Michelle T. Friedland, considered four main questions in arriving at their decision: likelihood of the Government’s success on the merits of its appeal, whether the applicant would be irreparably injured absent a stay, whether issuance of the stay will substantially injure the other parties interested in the proceedings, and where the public interest lies.

In an unanimous ruling (3-0), the Court denied the Government’s emergency motion for a stay, finding that the Government has neither shown a likelihood of success on the merits of its appeal nor has it shown that failure to enter a stay would cause irreparable injury.

Moreover, in dismissing the Government’s central claim about the unreviewability of the president’s decisions on immigration policy, the court argued that there was no precedent to support this claim and that it is a claim which “runs contrary to the fundamental structure of our constitutional democracy”. The court rightly argued that it was merely exercising its role of interpreting the law. Relying on decided cases, the court held that while courts owe a deference to the executive branch in matters of immigration and national security, this does not mean that the courts lack authority to review compliance of executive branch actions with the constitution.

So what next?

True to form, President Trump used Twitter as his medium of choice to express his displeasure with the verdict. It is likely that the next step for the administration will be to appeal to the US Supreme Court.

The full text of the Court’s judgment may be obtained here.

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

CARICOM and Cuba reach agreement to expand market access preferences

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Alicia Nicholls

It has been a while in coming but today the Caribbean Community (CARICOM) Secretariat announced in a press release that CARICOM and Cuba have finally agreed to expand the level of preferential access to each other’s markets as part of efforts to update the Cuba-CARICOM Trade and Economic Cooperation Agreement.

According to the Press Release, CARICOM and Cuba reached agreement at the end of the Tenth Meeting of the CARICOM-Cuba Joint Commission established pursuant to the trade and economic cooperation agreement. This meeting took place between January 30-31, 2017 at the CARICOM Secretariat in Georgetown, Guyana.

The Press release notes the following outcomes agreed to:

  • Duty-free entry for a number of CARICOM agricultural products and manufactured goods, such as beer and fish into the Cuban market
  • Duty-free access for Cuban goods, including pharmaceuticals, into the markets of CARICOM member states
  • More Developed Countries (MDCs) of CARICOM (Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago) will also determine the level of preference they will grant to Cuba on a number of other items.

The release also notes that exploratory discussions were held on trade in services and there has been agreement to continue the exchange of information and cooperation on services trade, particularly tourism.

The Cuba-CARICOM Trade and Economic Cooperation Agreement is a reciprocal trade agreement between Cuba and thirteen member states of CARICOM. Bahamas and Haiti were not part of the negotiations. The agreement was signed in Canouan,  St. Vincent & the Grenadines. According to a Jamaican Gleaner article from July 2016, negotiations on updating the Cuba-CARICOM Agreement began in 2006 but have been protracted.

It is a partial scope agreement as it mainly covers goods trade. However, the agreement contemplates expansion towards to a full free trade agreement and has a built-in work plan which includes working towards the adoption of double taxation agreements between CARICOM member states and Cuba, to commence services  trade negotiations, to adopt an agreement on intellectual property rights, to negotiate an agreement for the protection and promotion of investment, among other things. On the latter point, Cuba already has individual bilateral investment treaties (BITs) with several CARICOM states, including Barbados, Belize, Jamaica, Suriname and Trinidad & Tobago.

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

 

Caribbean Tourism Organisation (CTO) and Airbnb sign partnership agreement

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Photo credit: Pixabay

Alicia Nicholls

The Caribbean Tourism Organisation (CTO) has today signed a partnership agreement with one of the most visible faces of the global sharing economy, Airbnb. This is according to a Press Release on CTO’s website posted today February 7, 2017. According to the release, the agreement, which establishes a basis for mutual cooperation, is “to develop a set of policy principles and recommendations on the sharing economy for Caribbean governments and other stakeholders.”

The Agreement was signed by CTO’s Secretary General and Chief Executive Officer Hugh Riley and Airbnb’s Shawn Sullivan, public policy director for Central America, the Caribbean at the CTO’s Headquarters in Barbados.

Airbnb is a peer-to-peer online accommodation platform which was founded in 2008 in San Francisco, California, USA and has over 2,000,000 short-term rental listings in over 191 countries worldwide. A cursory search on Airbnb reveals thousands of listings from across the Caribbean, ranging from modest studio apartments to luxurious villas. Airbnb is just one of several virtual spaces where persons list for rent, or rent, vacation accommodation. Some other similar platforms are Homeaway, VRBO and Owner Direct.

Based on the information outlined in the CTO press release, the prospects for mutual cooperation covered by the CTO-Airbnb partnership agreement appear quite promising and include:

  • Sharing of data and studies with policy makers
  • Identifying ways to make the sharing economy more inclusive
  • Broadening the benefits of tourism to non-traditional actors
  • Attracting new stakeholders and focus on providing amazing and unique travel and cultural experiences to visitors
  • Providing to the CTO an economic analysis of Airbnb’s positive impact on local economies.
  • Based on this, briefing key stakeholders on the value of a peer-to-peer review mechanisms

Why is this timely?

This formalised mechanism for mutual cooperation  between Airbnb and the Caribbean’s regional tourism development agency is an important development and is timely for several reasons. Firstly, peer-to-peer platforms like Airbnb have become important players in the global accommodation sector. As millennials comprise an increasing share of global travel demand, there has been a shift towards a more authentic tourism experience, with a preference for self-catering accommodation (such as villas, apartments and condominiums) being part of that shift.

Secondly, it can be argued that peer-to-peer accommodation platforms allow for a more inclusive tourism model as they allow anyone from a retired person who has an extra room to rent to an expat with a vacation home to rent it for only a very minimal cost.

Thirdly, this demand shift toward self-catering accommodation has not gone unnoticed by the traditional hospitality sector (hotels) which have blamed the shift for weaker revenues and occupancy figures. These concerns are not unique to the Caribbean. A 2013 study (last updated in November 2016), which sought to estimate the impact of Airbnb on the Texas hotel industry found, inter alia, that the impact on hotel revenue was non-uniform, with lower priced hotels and non-business traveller catering hotels being the most affected. As far as I am aware, no similar study has yet been done for the Caribbean. The data sharing pursuant to the MOU could make such a study a possibility.

Fourthly,  traditional accommodation players complain that online market places are competing on an unequal footing. For instance, whereas a hotel has to comply with regulations and pay taxes, depending on the country a person who lists a villa or guest house on Airbnb for rent is not yet captured under the tax net and there may not be regulations for those types of accommodation.

Fifthly, as villas and some other non-hotel accommodation remain unregulated, there are concerns about potential reputational risk to a tourism destination should a guest have a bad experience in a villa or apartment rented through Airbnb or through any other means for that matter.

Given the above, this cooperation agreement is a welcomed and forward-thinking step as it will lay the framework for greater data-sharing to allow policy makers to estimate the size and contribution of the tourism sharing economy and to use this data to make evidence-based policy decisions for supporting and regulating the non-traditional accommodation sector. It will also set the framework for joint collaboration for promoting the Caribbean, bearing in mind shifting consumer tastes towards a more authentic tourism experience, and ensuring that the region’s tourism industry is inclusive and redounds to the benefit of all stakeholders.

For further information, please see the CTO’s official press release.

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

IMF Staff Recommend St Lucia CIP Revenues be used Primarily to Reduce Debt

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Alicia Nicholls

In the  Concluding Statement of their 2017 Article IV Mission to St. Lucia released February 6, 2017, International Monetary Fund (IMF) Staff recommended that revenues from the island’s Citizenship by Investment Programme (CIP)  be used primarily to reduce the island’s high public debt and that limits  be placed on the amount of CIP revenues used to finance high-priority expenditure. The recommendations were based on a country mission undertaken by IMF Staff during January 16-27, 2017 pursuant to Article IV of the IMF’s Articles of Agreement. The IMF’s Concluding Statement outlines the preliminary findings made by IMF Staff during their mission.

In their commentary on St. Lucia’s macroeconomic performance, IMF Staff noted that although tourism activity was weak,  unemployment continued to fall. The Staff highlighted the economic reforms programme currently in the process of being rolled out by the Government. The Staff expect positive but moderate short-term growth. However, they cautioned that the island’s high public debt, which currently stands at 82% of GDP, and its “delicate fiscal situation”, require prompt attention. They also made suggestions on how the fiscal package  announced could better achieve its targets.

St. Lucia’s CIP

In January 2016, St. Lucia became the fifth Caribbean country to offer a CIP as an alternative tool for attracting foreign direct investment (FDI), joining fellow Caribbean CIP countries: Antigua & Barbuda, Dominica, Grenada and St. Kitts & Nevis. St. Lucia’s CIP offers four investment options: a monetary contribution to the National Economic Fund (NEF), a real estate investment, a Government bond investment or an Enterprise Project Investment, with qualifying investment amounts set for each type of investment. In an effort to add exclusivity to the programme, the number of applications which could be approved by the Board had been capped at 500.

This was the IMF Staff’s first Article IV country mission to St. Lucia since the CIP’s first full year in operation. In their 2017 Concluding Statement, the IMF staff noted that the island received “relatively few applications in 2016” and that “the [St Lucian] authorities expect that the recent easing in the requirements and lowering of the costs to qualify for this program will encourage an increase in revenues.”

Changes to St. Lucia’s CIP Regulations – 2017 

Effective January 1, 2017, an Amendment to the Citizenship by Investment Regulations No. 89 of 2015  introduced several sweeping changes to St. Lucia’s CIP in an effort to boost its competitiveness. This includes, inter alia, a reduction in the qualifying contributions required, making it the most affordable programme in the Caribbean and the removal of the 500-application cap. A summary of the regulatory changes may be found on CIP St. Lucia’s website here.

However, while the Government’s desire to make its CIP more competitive is understandable, some have legitimately argued that these changes may undermine the programme’s exclusivity and may lead to a “race to the bottom” in terms of competition on price and ease of accessibility among Caribbean CIPs. Indeed, with the number of CIPs in the Caribbean now at five and several other countries around the world also offering CIPs or some form of immigrant investor programme, Caribbean CIPs face stiff competition both inter se and abroad.

As such, as I have argued before, increased cooperation among Caribbean CIP countries will be needed to ensure that high standards are maintained and that countries do not undercut each other in terms of price and robustness of their programmes. There seems to be some support for the need for greater cooperation, as St. Lucia’s Prime Minister, Allen Chastanet, earlier this year called for a joint OECS approach to CIPs.

Moreover, while I strongly believe that CIPs can be legitimate tools for development once managed well through raising revenue, encouraging FDI, infrastructural development, job creation and attracting  High Net Worth Individuals (HNWIs), they should be used as an adjunct and not the main propeller for economic growth and development.

IMF Recommendations

In the Concluding Statement, the IMF Staff made several recommendations aimed at minimising St. Lucia’s risk of fiscal dependence on its CIP revenues, which can be volatile, and to reduce the impact of the global rise in interest rates. These recommendations included:

  • Using CIP revenues primarily to reduce the high debt.
  • Using a capped amount of CIP revenue for investment projects of primary importance
  • The importance of “transparency, appropriate governance, and careful due diligence” to reduce risks of sudden stops in CIP revenue inflows.

More detailed information will be known when the full Staff Report is produced and released at a later date.

The full IMF Staff Concluding Statement may be viewed here.

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

Caribbean Trade and Development Digest – January 30-February 4, 2017

Source: Pixabay

Welcome to the Caribbean Trade and Development Digest for the week of January 30-February 4, 2017!  I am pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. 

For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

To receive these mailings directly to your inbox, please follow our blog.

REGIONAL

Turkey, Dominican Republic agree to boost trade ties 

Hurriyet Daily News: Turkey and the Dominican Republic have agreed to boost cooperation on tourism, Turkish Foreign Minister Mevlüt Çavuşoğlu said during a visit to the Caribbean state on Feb. 2. Read more 

Donald Trump ‘reviewing’ Cuba Policy, says White House

Independent: Donald Trump is to conduct a “full review” of America’s foreign policy towards Cuba, White House press secretary Sean Spicer has announced. Read more 

Governor Scott puts provision in proposed budget to block trade with Cuba

Miami Herald: Following on the heels of last’s week threatened retaliation against Florida ports that sign agreements with Cuba, Gov. Rick Scott has tucked another anti-Cuba provision into his proposed state budget that is even more far-reaching. Read more

CBI Bank Accounts under Scrutiny in Dominica 

WinnFM: There is no official word either from foreign banks in Dominica or the Skerrit administration, that government Citizenship by Investment accounts have been closed.  Read more 

Dominican Republic could become logistics hub

Dominican Today: The Dominican Republic could become a Regional Logistics Centre or Hub for maritime trade in the Caribbean, according to government representatives and national shipping and maritime business owners. Read more 

Dominican Republic to establish a diplomatic presence in Antigua 

Antigua Observer: President of the Dominican Republic, Danilo Medina has agreed to establish diplomatic presence in Antigua and Barbuda. Read more

Falkland lawmaker visiting Caribbean to promote trade links

Mercopress: Falkland Islands lawmaker MLA Ian Hansen is on a Caribbean mission to improve trade and industry links with the region, and seeking political support for the Islands. The tour includes Barbados, Dominica and Guyana, according to Barbados TODAY news agency. Read more 

St. Kitts and Nevis Ranks Number One in Trading Across Borders 

SKN Observer: St. Kitts and Nevis has ranked number one in the CARICOM in trading across borders according to the “2016 Doing Business Report”, says Kennedy DeSilva, Deputy Comptroller of Customs in the Office of the Comptroller, appearing on today’s radio-television show “Working for You” on January 25. Read more 

CARICOM and Switzerland deepen relations

Jamaica Observer: The 15-member Caribbean Community (CARICOM) says it is looking forward to a concrete programme of cooperation with Switzerland after the European country’s diplomat presented his credentials to CARICOM Secretary General Irwin La Rocque on Thursday. Read more 

Jamaican Tourism Interests Optimistic Following Trade Talks with Tour Operators

Jamaica Gleaner: Jamaican tourism stakeholders are expressing optimism after a series of successful meetings with tour operators at the Caribbean Hotel and Tourism Association’s Caribbean Travel Marketplace now under way at the Atlantis, Paradise Island, in The Bahamas. Read more 

Puerto Rico Launches new Push for Statehood

TelesurTV: Puerto Rico Friday approved a measure to hold another referendum to vote on becoming a state, set for June 11. It comes as the U.S. territory continues to struggle with the ongoing effects of colonialism and a major debt crisis. Read more 

Caribbean Tourism Requires Stronger Partnerships

Caribbean360: The Caribbean region’s tourism growth potential in 2017 and beyond is enormous, but not without continued collaborative partnerships between the region’s public and private sectors. Read more 

OECS Supports Geothermal Energy Production

St Lucia Times: Financing and government policy have been identified as the major challenges to the development of geothermal energy in the Eastern Caribbean. Read more 

INTERNATIONAL

Mexico pushes for trade deal with New Zealand

New Zealand Herald: Trade Minister Todd McClay will request that talks on a Mexican free trade deal be placed on the agenda when he meets his counterpart in Mexico in 10 days time. Read more

Brexit Plan Published in Government White Paper

BBC: The government has published an official policy document setting out its Brexit plans. Read more

Homeland Security Suspends Travel Ban

CNN: President Donald Trump’s government moved swiftly Saturday to comply with a federal judge’s order halting his travel ban — even as Trump himself denounced the judge — but readied its legal defense of the controversial executive action. Read more

Trump, Abe to discuss Potential Bilateral Deal and TPP at Washington Summit

ICTSD Bridges: US President Donald Trump has announced plans to meet with Japanese Prime Minister Shinzo Abe in Washington to discuss trade and security matters in what will be the first face-to-face talks between the leaders since Trump took office last month. Read more

US Tax Plan would break tax rules, lawyers say

CNBC: A proposed U.S. corporate tax reform would almost certainly contravene international trade rules if implemented, lawyers told Reuters, risking the biggest dispute in the history of the World Trade Organization. Read more 

Least developed countries propose caps on trade distorting farm subsidies at WTO

ICTSD Bridges: WTO members must agree to cuts and new ceilings for trade-distorting farm subsidies, says a proposal from a group of dozens of the world’s poorest countries at the global trade body. Read more

 

African Union wants its members to pull out of ICC

Daily Nation (Kenya): The African Union (AU) wants its member states to pull out of the International Criminal Court (ICC). Read more 

UK plans to adopt EU’s agreements with third countries

Reuters UK: Britain expects to be able to adopt the European Union’s free trade agreements (FTA) with around 40 countries after it leaves the bloc rather than negotiate new deals, trade minister Liam Fox said on Wednesday. Read more 

Mexico, Turkey to speed up talks to sign trade deal 

Reuters: Mexico and Turkey will speed up negotiations to sign a bilateral trade agreement, Mexican Foreign Minister Luis Videgaray said on Friday at an event in Mexico City with his Turkish counterpart. Read more

India to host key RCEP Meeting at Hyderabad in July

Economic Times (India): India will hold RCEP negotiations meeting this coming July in Hyderabad. Read more 

Nebraska farmers, ranchers wary of Trump ending NAFTA

Omaha World Herald: Like a lot of Midlands farmers, Randy Uhrmacher gets a little nervous when he hears in the news about President Donald Trump looking to shake up free trade agreements. Read more 

Mexican government initiates NAFTA review with private sector

Yucatan Times: The federal government will begin a process of consultation with the private sector, prior to the negotiation of the North American Free Trade Agreement with the US, which will continue on a permanent basis. Read more

Brexit: MPs overwhelmingly back Brexit bill

BBC: MPs have voted by a majority of 384 to allow Prime Minister Theresa May to get Brexit negotiations under way. They backed the government’s European Union Bill, supported by the Labour leadership, by 498 votes to 114. Read more

US Ranchers Look for some action on Country of Origin Labelling

FSN:  Two states known for their cowboys, Wyoming and South Dakota, have seen early introduction of COOL bills in their legislatures, respectively, in Cheyenne and Pierre. Cattlemen headquartered in neighboring Montana have not given up on a national bill. Read more 

US withdrawal from TPPA will hasten negotiations on RCEP

The Star (Malaysia): The withdrawal of the United States from the Trans-Pacific Partnership Agreement (TPPA) will help hasten the process of concluding negotiations on the Regional Comprehensive Economic Partnership (RCEP). Read more 

Brexit: Angela Merkel warns UK PM Theresa May over slashing taxes

Independent (UK): Angela Merkel has hit back at Theresa May’s threat to slash taxes to undercut the EU if it blocks a Brexit deal, warning taxes are the price paid for a just society. Read more 

Trade Ministers on TPP Rescue Mission

RNZ:  (New Zealand’s) Trade Minister Todd McClay will meet his Australian counterpart in Sydney today in a bid to salvage the Trans-Pacific Partnership trade deal. Read more

Canadian Ambassador reassures Mexico on NAFTA

Toronto Star: In an interview with Mexican newspaper Reforma, Pierre Alarie sought to quell fears that Canada would abandon its trading partner during negotiations. Read more 

BONUS

WTO Video on TRIPS Amendment by Mexico’s Perez Motta

In this video statement on the WTO’s Youtube Channel, Mexico’s Eduardo Pérez Motta, a former TRIPS Council chair, says that the impact of the TRIPS amendment should be judged by the prices and supply of critical medicines.

Watch here (English)

Watch here (Spanish)

OECD Releases new brochure “Towards Better Trade Policies” 

The OECD’s new brochure “Towards Better Trade Policies” provides an executive overview of OECD work on trade, and contains comprehensive lists of references to all evidence we have developed over the past five years. Read more 

NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT BLOG

TPP: Acting USTR Submits Withdrawal Letter

Brexit White Paper Released by UK Government

UK-US Trade Inquiry launched by UK Parliament’s International Trade Committee

Brexit Bill Clears First Parliamentary Hurdle

Climate Change, the Caribbean and US-Caribbean Strategic Re-engagement (HR4939)

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

TPP: Acting USTR Submits Withdrawal Letter

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Alicia Nicholls

On January 30, 2017, upon the instructions given by President Donald Trump in his January 23rd executive order, the Office of the US Trade Representative (USTR) submitted a letter to the 11 other Trans-Pacific Partnership (TPP) signatories officially withdrawing the US from the Agreement. This is according to a press release on the USTR’s website.

The letter was also submitted to the TPP Depositary and signed by Acting USTR, Maria Pagan. In addition to indicating the US’ withdrawal, the letter further stated, that “the United States remains committed to taking measures designed to promote more efficient markets and higher levels of economic growth, both in our country and around the world.We look forward to further discussions as to how to achieve these goals.”

Withdrawal from the TPP, which he had denounced as detrimental to American jobs, had been one of President Trump’s least controversial campaign promises during the election campaign. The US had signed the agreement via executive action on February 4, 2016 by then President Barack Obama but the Agreement had never been ratified.

The Agreement’s 11 remaining signatories are Australia, New Zealand, Canada, Singapore, Vietnam, Malaysia, Japan, Mexico, Peru, Brunei, and Chile.

The future of the Agreement sans the US remains uncertain. In the wake of the US’ withdrawal, Malaysia has signaled that it will refocus on trade with fellow ASEAN and Asian countries. According to Reuters’ reporting, Chile has indicated its interest in pursuing an FTA with China which is not a TPP party, and has reportedly invited remaining TPP members, China and South Korea to a summit in March on how to proceed. Australia’s Prime Malcolm Turnbull had initially indicated his interest in salvaging the agreement.

There has also been some speculation that China, which potentially stands to benefit geopolitically from the collapse of the TPP, may accede to the Agreement but Beijing has not confirmed whether it will pursue this option. Alternatively, there are some who argue that the Regional Comprehensive Economic Partnership (RCEP) which involves China provides a realistic alternative to the TPP.

Further information is available on the USTR’s website here.

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

Brexit White Paper Released by UK Government

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Alicia Nicholls

The Theresa May Government has today released its Brexit White Paper . The official policy document, which is entitled “The United Kingdom’s Exit from and new partnership with the European Union“, was introduced into Parliament today by Brexit Secretary, David Davis.

The House of Commons yesterday voted overwhelmingly for the Brexit Bill to proceed to the second parliamentary stage – the Committee Stage where it will be subjected to increased scrutiny by Members of Parliament next week. Already, a number of amendments have been tabled for discussion. However, once the bill becomes law, the Government will have the legal authority to make the UK’s notification of withdrawal from the EU under Article 50 of the Treaty on European Union (Lisbon Treaty).

Setting out the Government’s strategy for its expected upcoming exit negotiations with the EU, the White Paper mostly elaborates on the 12 priorities which had been outlined by Mrs. May in her major Brexit address delivered at Lancaster House last month. The paper reiterated that the objective was not only to build a new partnership with Europe, but to build a “stronger, fairer, more Global Britain”.

Among the priorities identified in the Brexit Strategy are taking control of its own laws, controlling immigration, pursuing a free trade and new customs union agreement with the EU, securing rights of EU nationals in the UK and for UK nationals in the EU, securing new trade agreements with other countries, inter alia. The Plan has received mixed reviews from parliamentarians.

The full White Paper may be accessed here.

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

 

UK-US Trade Inquiry launched by UK Parliament’s International Trade Committee

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Photo source: Pixabay

Alicia Nicholls

The House of Commons’ International Trade Committee is accepting submissions from interested organisations and individuals pursuant to an inquiry it has launched into UK-US trade relations. According to the official press release on the Committee’s website, the inquiry will:

  • examine the potential for a UK-US trade agreement
  • the opportunities and challenges any agreement might present
  • the implications for the production and sale of goods and services on both sides of the Atlantic
  • make recommendations to the Government on how it should approach trade relations with the US.

The Committee is inviting interested organisations or individuals to submit written evidence to the Committee via the inquiry page in accordance with the guidelines provided. The deadline for written submissions is Monday 27 February 2017.

For further information, please see the official page of the Committee.

 

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

 

 

Brexit Bill Clears First Parliamentary Hurdle

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Photo credit: Pixabay

Alicia Nicholls

The Theresa May government may have lost its Supreme Court Appeal last month but today the Government’s Brexit bill cleared its first parliamentary hurdle. After fourteen hours of debate spread over two days, the House of Commons voted 498 to 114 in favour of the European Union (Notification of Withdrawal) Bill, a bill to confer power on the Prime Minister to notify the UK’s intention to withdraw from the European Union under Article 50(2) of the Treaty on European Union (Lisbon Treaty).

Article 50(1) of the Treaty on European Union provides for any member state to decide to withdraw from the EU in accordance with that state’s own constitutional requirements. Last month, the UK Supreme Court, in dismissing an appeal by the UK government, held that a parliamentary vote was required in order for the Brexit process to begin. It should be noted that many of the parliamentarians who voted in favour of the Bill’s advancement had originally supported staying in the EU. However, many felt compelled to put aside personal views in order to give effect to the will of the 52% of British voters who had voted for Brexit. Mrs. May has reportedly indicated that she will publish a White Paper outlining the Government’s Brexit plans.

So what’s next?

Today’s House of Commons vote (the second reading) means that the Brexit bill is one step closer to becoming law, and will go to the next stage in the parliamentary process – the Committee Stage. During the committee stage, the Bill will be subjected to more enhanced scrutiny and it is here that any amendments may be made.

Upon leaving the Committee stage, the bill (whether or not amended) will again be debated and subjected to a final vote in the House of Commons. If the ayes have it, then it will pass to the House of Lords where the process will be repeated. The bill will be referred back to the House of Commons if the Peers make amendments to the bill.

However, once everything goes smoothly (i.e. there are no further amendments and the peers vote in favour of the bill), the Brexit bill will be sent to the Queen for the royal assent and thereupon will become law. This confers on the May Government the legal authority to make the Article 50 notification which commences the formal withdrawal negotiations with the EU. Mrs. May has indicated the end of March 2017 as her timeline for the notification. She has also promised that she will put the final withdrawal deal to a parliamentary vote.

The full text of the Brexit bill and further reporting on the UK House of Commons’ vote may be found here.

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

Caribbean Trade & Development Digest – January 22nd-28th, 2017

Photo credit: Pixabay

Welcome to the Caribbean Trade and Development Digest for the week of January 22-28, 2017 where we share some of the major trade and development headlines from across the Caribbean and the world.

This week was another chaotic week in world news. Dominating this week’s headlines were the series of executive actions signed by President Donald Trump in his first full week in office. See my article about this. However, another major development was the meeting between President Trump and UK Prime Minister Theresa May whose government lost its Supreme Court Article 50 Brexit this week. Some good news is that only 2 more ratifications are needed for the WTO’s Trade Facilitation Agreement to finally come into force.

Below we present the major headlines. For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

To receive these mailings directly to your inbox, please follow our blog.

REGIONAL HEADLINES

Falklands wants trade ties with Barbados

Barbados Today: The Falkland Islands, the British Overseas Territory in South America, is on a mission to improve trading links with the Caribbean, with a special interest in Barbados. Read more

Why Trinidad, Guyana and Suriname should matter to India

Swarajya: As India seeks greater engagement on the international stage, one area where its efforts are producing limited results is Latin America. India has invested neither sufficient time nor resources in appreciating the potential that Latin America offers and its forays into the region have been hesitant and somewhat faltering. Read more 

Trump could be good for Jamaica

Loop Jamaica: President Trump and his incoming government could be good for Jamaica, according to Finance Minister Audley Shaw. Read more 

INTERNATIONAL HEADLINES

Nepal Ratifies the Trade Facilitation Agreement

WTO: Nepal has ratified the Trade Facilitation Agreement (TFA), making it the 108th WTO member to do so. Only two more ratifications from members are needed to bring the TFA into force. Read more 

Thailand Packs Faster Conclusion of RCEP Negotiations

SGGP:The US withdrawal from the Trans-Pacific Partnership (TPP) is likely to help the Regional Comprehensive Economic Partnership (RCEP) wrap up faster than expected, said Thai Deputy Prime Minister Somkid Jatusripitak, adding that the Southeast Asian country supports faster conclusion of the regional deal, reported in Bangkok by VNS.  Read more 

TPP: Why the US Withdrawal Could be a Boon for China

Knowledge@Wharton: With the U.S. earlier this week pulling out from the 12-nation Trans-Pacific Partnership (TPP), that trade agreement is all but dead. Read more 

France’s Holland: EU to talk trade with Pacific Alliance

VOA: French President Francois Hollande said on Monday that he would seek to bolster trade and investment with the Pacific Alliance trade bloc in joint negotiations with the European Union.Read more 

Peru, Colombia vow to stand with Mexico against Trump

NY Post: Peru and Colombia vowed to stand with Mexico as the country faces an uncertain economic future and grapples with a crisis with the United States just days into U.S. President Donald Trump’s administration. Read more 

Trump, Abe agree in Phone to meet in Washington next month

Bloomberg: President Donald Trump and Japanese Prime Minister Shinzo Abe agreed to hold a summit in Washington on Feb. 10 and affirmed the importance of their alliance, Abe told reporters, after the U.S. strained ties by withdrawing from a Pacific trade pact. Read more 

Chile to exit TPP and seek new trade deals with Asia-Pacific Countries 

CCTV: Chile announced it will exit the Trans-Pacific Partnership (TPP) trade deal, but still seek to expand trade with the Asia-Pacific region, local newspaper El Mercurio reported on Tuesday. Read more 

Look to South America not US: Bolivia tells Mexico

Press TV:As Mexico-US ties sour over the new US administration’s controversial anti-immigration policies, Bolivia urges Mexico to turn to the South American countries rather than Washington, citing capitalism’s demise. Read more 

UK Supreme court rules Brexit requires vote by Parliament

Washington Post: Earlier today, the Supreme Court of the United Kingdom ruled that the British government cannot initiate the “Brexit” process of leaving the European Union without first getting the approval of Parliament. Read more

Belarus Resumes WTO Membership Negotiations 

WTO: WTO members welcomed the resumption of WTO membership negotiations for Belarus when the Working Party on the country’s accession met on 24 January 2017 – 12 years after its last formal meeting. Read more

Panel established in dispute over Chinese agricultural subsidies 

WTO: The Dispute Settlement Body (DSB) on 25 January agreed to establish a panel to examine subsidies provided by China to domestic producers of wheat, Indica rice, Japonica rice and corn. Read more

WTO welcomes two new Appellate Body Members

WTO: Two new members of the Appellate Body, Ms Hong Zhao of China and Mr Hyun Chong Kim of Korea, were sworn in at a ceremony at WTO headquarters on 25 January 2017. Read more 

NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT BLOG

A Week of Trumpism in ‘Action’

UK Government Loses Article 50 Brexit Appeal; Parliamentary Vote Needed

President Trump signs executive order pulling US out of TPP

WTO Ministers hold Informal Meeting on Davos Sidelines

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

A Week of Trumpism in ‘Action’

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Alicia Nicholls

If President Trump’s cabinet picks were not enough to demonstrate that his campaign promises to shake up the status quo were not mere puffery, his first full week in the Oval Office provides glaring glimpses into Trumpism in ‘action’. During the past week, Mr. Trump has signed several executive actions aimed at effecting some of his most controversial campaign promises, including on trade, climate change and immigration. Many of these executive actions have implications not just for US domestic policy but the world.

Trumpism

The corpus of beliefs, of which Trumpism is comprised, remains embryonic and imprecise but at its core, Trumpism is undergirded by the nativist credos of “Make America Great Again” and “America First”. Trumpism is informed by President Trump’s core belief that America is losing its global economic and military hegemony, while at home the average American worker is being disadvantaged by the offshoring of manufacturing jobs due to “horrible trade deals”, “corruption in Washington” and the “uncontrolled” influx of migrants, particularly from Mexico. It also believes that immigration is a threat to US national security and public safety.

Trumpism, therefore, sees four main constraints on America’s greatness: badly negotiated trade deals, over-regulation, a high tax burden and porous borders. In light of this, Mr. Trump’s anti-establishment campaign platform was particularly anti-trade and anti-immigration. The President’s campaign promises reflected policy proposals which were targeted not just at the not insignificant segment of the US population which shared his beliefs, but were aimed at making America “win” again.

Withdrawal from TPP

Although President Trump’s Trade Team nominees foreshadowed the seriousness of his mercantilist predilections, in week 1, we further saw the trade component of Trumpism at work, namely a disavowal of large trade deals in favour of bilateral deals.

Mr. Trump signed a presidential memorandum instructing the United States Trade Representative (USTR) to “withdraw the United States as a signatory to the Trans-Pacific Partnership (TPP), to permanently withdraw the United States from TPP negotiations, and to begin pursuing, wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages.” It should be noted that the TPP had been signed but not been ratified by the US. Although TPP had been championed by former President Obama, US withdrawal from the TPP was also an issue on which there was rare bipartisan consensus.

In the memorandum the President confirmed that “it is the intention of my Administration to deal directly with individual countries on a one-on-one (or bilateral) basis in negotiating future trade deals”. On the basis of this, it is likely that the Trans-Atlantic Trade and Investment Partnership (TTIP), which was under negotiation with the European Union (EU), may suffer a similar fate.

Executive Action on Immigration

Nativism is a central pillar of Trumpism and it is no surprise that immigration was one of the main issues he sought to cover with his executive actions this week. President Trump signed an executive order entitled “Border Security and Immigration Enforcement Improvements” to protect American national security and public safety.

Among other things, the Order provides for the construction of a border wall along the 1954 mile border between Mexico and the US, it ends the catch and release policy, provides for increased deportation of criminal immigrants, seeks to add an additional 5,000 border patrol agents and pulls funding from Sanctuary Cities. In regards to the latter, the mayors of several Sanctuary Cities have vowed to defy Trump’s immigration order.

In an ABC interview, the President reiterated that Mexico would be reimbursing the US for the proposed wall and that negotiations will be starting soon. Current Mexican President Enrique Pena Nieto and former Mexican president, Vicente Fox, have both forcefully denied that Mexico would be footing the bill for any such wall.

Mr. Pena Nieto cancelled a meeting with Mr. Trump which had been scheduled for this week to discuss, inter alia, the renegotiation of the North American Free Trade Agreement (NAFTA). When challenged in the same interview on Mexico’s refusal to pay, Mr. Trump noted the US will be reimbursed even if in a “complicated” form. He has since proposed that it will be funded by a tax on Mexican imports, which any student of economics knows would not be a tax on Mexico but on American consumers!

Visa and Refugee Restrictions

Perhaps his most controversial executive action is the Protecting the Nation From Foreign Terrorist Entry Into the United States Order which puts a temporary entry ban on all refugees, as well as on nationals, immigrants and refugees from the following countries: Iraq, Syria, Iran, Sudan, Libya, Somalia, and Yemen. US Green card holders from these countries have also been affected. It also suspends the issuance of Visas and Other Immigration Benefits to nationals of those countries and also cancels the visa interview waiver.

While the President has subsequently claimed it is not a “Muslim” ban, it is quite interesting that all of the countries on the list have majority Muslim populations. It also echoes the statement on preventing Muslim immigration which he had made during the campaign where he had called “a total and complete shutdown of Muslims entering the United States”.

On Saturday, the detention of 12 refugees at John F. Kennedy Airport in New York, some of whom had provided assistance to the US government, sparked protests at major airports across the US and outrage around the world. Hameed Darwesh and Haider Al shalwi filed an Emergency Motion for Stay of Removal on behalf of themselves and others similarly situated.

In the ruling on Darweesh v Trump, United States District Judge Ann Donnelly blocked (a) the removal of individuals with refugee applications approved by the U.S. Citizenship and Immigration Services as part of the U.S. Refugee Admissions Program, (b) holders of valid immigrant and non-immigrant visas, and (c) other individuals from the countries mentioned in the Ban which are legally authorized to enter the United States. However, it should be noted that it was not a ruling on the constitutionality of the Ban.

The Wall Street Journal reports that the 90-day visa moratorium also applies to people who originally come the countries identified but are traveling on a passport issued by any other country.

Iran has subsequently stated it will be taking ‘reciprocal’ action.

A new US UN

In a speech which raised eyebrows around the world, the US’ new United Nations Ambassador, Nikki Haley,threatened America’s allies that if they are not with America, America will be “taking a names”. Ambassador Haley, who is the former Governor of South Carolina, said there will be change in the way the US does business with the UN. She noted that US will show its strength and voice. The video of Ambassador Haley’s speech may be viewed on the New York Times’ online article.

The Ambassador noted that “our goal with the administration is to show value at the U.N., and the way we’ll show value is to show our strength, show our voice, have the backs of our allies and make sure our allies have our back as well.” Without doubt, there are ways in which the UN’s operations can be improved. However, what this seems to be is a return to US unilateralism as opposed to multilateralism.

Actions against the Environment

In keeping with his promise to cut regulations and increase drilling for fossil fuels, Mr. Trump has signed presidential memoranda streamlining, permitting and reducing regulatory burdens for domestic manufacturing and facilitating the construction of the two controversial pipelines (Keystone XL Pipeline and the Dakota Access Pipeline). He also signed an executive order expediting environmental reviews and approvals for high priority infrastructure projects.

All references to climate change were immediately scrubbed from the Whitehouse.gov website upon his taking office. Perhaps more worryingly are the gag orders on various government agencies, including the Environmental Protection Agency (EPA) which will now be headed by a climate change denier.  A report by the Guardian states that the Trump administration is now requiring studies or data from EPA scientists to undergo review by political appointees before they can be made public. US agencies are among some of the most important sources of climate-related data, which are critical in the fight against climate change.

President Trump’s denial of climate change science is not outside of the Republican party mainstream, but as a Sierra Club report stated before the election, he would be (and currently is), the only sitting world leader to deny that man-made climate change exists.

So what does this all mean?

It has only been a week and we are already seeing the chaotic effects of Trumpism in action. Naturally, many of these executive orders will need the cooperation of Congress and the relevant agencies in order to be implemented. For instance, Congress will need to approve funds for the construction of the US-Mexico border wall, which despite President Trump’s assertions, Mexico will never pay for. The Congress is Republican-controlled but many Republican congressmen/women are self-professed fiscal conservatives who may not be willing to make the US taxpayer, of which they are a part, to  foot the astronomical costs for such a wall.

Moreover, some of these actions may be challenged in court, as seen in the case of the Travel Ban. Of course, in light of the opposition to some of these moves it is possible that President Trump may moderate some of his stances. For the Caribbean, whose small island states have felt the ravages of climate change, the greatest worry will be his actions to reverse President Obama’s actions to curb the US’ emissions.

What is most concerning for the world is that Mr. Trump’s actions evince a return to an inward looking US, a country once regarded as the leader of the “free world”. It prioritises a foreign, immigration and trade policy which places unilateralism over multilateralism, protectionism over fair/free trade and xenophobia over diversity. I would submit that this unfortunate shift not only weakens America’s standing in the world, but promotes increased global uncertainty, instability and perhaps, greater conflict.

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

UK Government Loses Article 50 Brexit Appeal; Parliamentary Vote Needed

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Alicia Nicholls

In its ruling made shortly after 9:30 GMT this morning, the United Kingdom’s Supreme Court by a majority of 8 to 3 dismissed the Government’s appeal against a High Court decision that ruled that the Theresa May-led government must attain parliamentary consent before invoking the EU’s exit clause (Article 50 of the Treaty on European Union – Lisbon Treaty). A second issue which the court was called on to give its ruling upon was whether consultation with the devolved legislatures (e.g: Scotland, Wales, Northern Ireland) was required before Article 50 was triggered.

In a judgment written by the 8 justices in majority and delivered by Lord Neuberger (President of the Supreme Court), the Court held that section 2 of the European Communities Act of 1972 Act did not allow the Government to trigger Article 50 without parliamentary authority.

The main reasons for the Court’s decision were, inter alia, as follows:

  • Section 2 of the European Communities Act makes EU law another source of UK law which can override domestic law and will remain so unless and until Parliament decides otherwise.
  • Once the UK leaves the EU and as such is no longer party to the EU treaties, not only will UK domestic law have changed but the rights enjoyed by UK residents granted through EU law will be affected.
  • Under the UK constitution, parliamentary legislation is required for any fundamental changes to the UK’s constitutional arrangements. Withdrawal from the EU treaties would be such a fundamental change as it would cut off the source of EU law. The justices reiterated that there is “a vital difference between variations in UK law resulting from changes in EU law, and variations in UK law resulting from withdrawal from the EU Treaties”.
  • Parliamentary authority is needed because withdrawal from the EU would remove some existing domestic rights of UK citizens.
  • In regards to the June 23rd 2016 referendum, the Court held that “its legal significance is determined by what Parliament included in the statute authorising it, and that statute simply provided for the referendum to be held without specifying the consequences.”

On the second issue under consideration, the Court unanimously held that the Government is not compelled to consult the devolved Parliaments.

The Court’s ruling is final and it was a decision which was much more expected than the results of the June 23rd Brexit result which precipitated it. It should be emphasised that this ruling was on the legal question of whether the Government could make the Article 50 notification using its prerogative powers and not on the political question of whether Brexit should occur. It is also one of several legal challenges which have been filed since the Brexit vote decision.

In brief remarks following the ruling, the Attorney General, Jeremy Wright, said the Government will comply with the ruling. Even before the ruling, the Government had indicated that in case it lost the appeal, it would present a short Brexit bill to minimise the need for lengthy amendments and debate that would jeopardise Prime Minister May’s end of March timeline for making the Article 50 notification. Once the Article 50 notification is received, the UK and EU would have two years to negotiate a withdrawal agreement, with an extension only possible if agreed to. EU countries had indicated that they would not be engaging in any informal negotiations with the UK prior to the latter’s Article 50 notification.

In her long-awaited  speech last week in which she outlined her 12-point Brexit plan, Mrs. May confirmed that the UK would be pulling out of the single market (a move dubbed a “hard Brexit”) but also indicated that Parliament would be given the chance to vote on the final withdrawal deal negotiated with the EU.

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

President Trump signs executive order pulling US out of TPP

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Alicia Nicholls

With the stroke of a pen, newly inaugurated United States president, Donald J. Trump, today made good on one of his least controversial campaign promises; withdrawing his country from the 12-country Trans-Pacific Partnership (TPP) agreement via an executive order.

The Agreement, which was signed by the US and eleven other Pacific-rim participants in February 2016, was intended to be a high standard agreement and was significantly WTO-plus in its provisions. While hailed by big business for its ambitiousness, several aspects made the agreement significantly unpopular with civil society groups and increasingly some politicians which criticised the secrecy under which the negotiations took place, the implications of its intellectual property rights provisions for access to medicines, the choice of the longstanding investor-state dispute settlement mechanism for settlement of investor claims against states, inter alia.

Another criticism was that in absence of significant progress in the WTO Doha Round (which is now all but declared dead) it would set new standards and rules for 21st century global trade given that the parties account for 40% of the global economy and a third of global trade. It would turn the non members into standard-takers without having the chance to have been at the negotiating table. Mr Trump’s criticism of the agreement,however, was simply that it would kill American jobs.

Although President Barack Obama had championed the agreement and had pushed unsuccessfully for its ratification by congress, TPP was a rare point on which there was consensus by then candidates Republican, Donald Trump and Democrat, Hillary Clinton who both criticised its possible implications for US manufacturing and jobs. During the campaign, Mr. Trump had likened the agreement to rape of the country. Previously Mrs. Clinton had called it the “gold standard” but later said she was against the final outcome.

The move is a politically beneficial one for President Trump as it ticks off one of his most popular campaign promises and makes him look like a hero for American workers. It also gets him bipartisan support and will likely improve his approval ratings which have been the lowest for an incoming president.

Mr. Trump’s move also signals that he aims to stick to his “America first” trade policies. In upcoming days Mr. Trump also signalled his intention to start renegotiation of the North American Free Trade Agreement with partners Canada and Mexico to secure a better deal for American workers. Among other proposals, Mr. Trump has restated his threat to impose a border tax on imports from US companies which outsource jobs overseas. The withdrawal of the US from the TPP also raises questions about the future of yet another mega regional trade agreement, the Trans-Atlantic Trade and Investment Partnership Agreement (TTIP) currently under negotiation between the US and the EU.

Mr. Trump will be meeting with UK Prime Minister Theresa May on Friday to discuss, inter alia, UK-US post-Brexit trade relations. Unlike his predecessor, President Trump has indicated that the UK will not be at the back of the queue for a free trade agreement with the US. However, in contrast to Mr. Trump’s neo-mercantilist views, Mrs. May has enthusiastically reiterated her support of free trade and free markets, indicating last week her intention for the UK to become a global leader of free trade.

President Trump has indicated he will seek to negotiate bilateral agreements with those individual TPP countries with which the US does not yet have an FTA. With regard to the future of TPP, the views of the other countries are mixed. Japanese Prime Minister Shinzo Abe previously indicated that TPP without the US was meaningless. Malaysia indicated it would go the bilateral route while Australia indicated it would try to salvage the agreement. A major geopolitical concern raised by foreign policy analysts about the US’ withdrawal is that it misses an opportunity for the US to increase its influence in the Asia-Pacific region, leaving an opening for China which was not a party to TPP. However, negotiations on RCEP, to which China is party and seen as a rival to TPP, have also been slow.

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

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

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Welcome to the Caribbean Trade and Development Digest for the week of January 15-21, 2017 where we share some of the major trade and development headlines from across the Caribbean and the world.

And what a week it was! UK Prime Minister May has finally announced her Brexit plan and the UK Supreme Court announced it will deliver its ruling in the Article 50 Brexit Appeal this coming Tuesday. Globalisation took centre-stage at the Annual World Economic Forum meeting in Davos, while  top of mind was the inauguration of US President Donald Trump who was sworn in as the US’ 45th president, and that’s just the tip of iceberg!

Below we present the major headlines. For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

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REGIONAL HEADLINES

CARICOM optimistic of Trump’s vision

Trinidad Guardian: Caribbean states are hoping America’s new Donald Trump administration – taking over from today – will continue trade and security arrangements as well as other structures which have traditionally been in force between Caricom and the US. Read more 

Dominican Republic applies definite AD on Chinese rebar 

Steel Orbis: Dominican Republic’s Commission for Trade Defense announced it has applied a definite anti-dumping ad valorem duty on Chinese rebar. Read more

Commerce nominee Ross; No position on Cuban embargo

Washington Examiner: Wilbur Ross, the banker-turned-investor and President-elect Donald Trump’s pick to head the Commerce Department, told a Senate hearing Wednesday that he has no position yet on handling trade with Cuba. Read more 

Call for CARICOM agency to vet CIP applications

Antigua Observer: The head of a well-known citizenship advisory firm is making a call for Caribbean Citizenship by Investment Programmes (CIPs) to vet applicants through Caricom’s Joint Regional Communications Centre (JRCC). Read more 

Airbnb and Curacao sign tourism agreement

Curacao chronicle: Today, Curaçao’s Minister of Economic Development, Eugene Rhuggenaath and the Minister of Finance, Kenneth Gijsbertha, on behalf of the government, signed an important agreement with Airbnb that will help to promote Curaçao as world-class tourist destination. Read more 

UWI Lecturer calls for better CARICOM trade under Trump

Trinidad Guardian: A UWI lecturer is calling on T&T and other Caricom member states to establish a united proposal to improve and further develop trade and other relations with the United States under US President-elect Donald Trump, who takes office on Friday. Read more

Trade and investment agreement signed between Curacao and the Dominican Republic

Caribbean news now: An agreement was signed last Tuesday in the office of the consul of the Dominican Republic in Curacao; between ADECK; the Association of Small and Medium size business in Curacao and the Dutch Chamber of Commerce in the Dominican Republic.Read more

Full, frank discussion needed on CSME says Barbados PM Stuart 

Caricom Today: Prime Minister Freundel Stuart believes the time has come to have “full and frank discussions” on the CARICOM Single Market and Economy (CSME). Read more 

UN adviser for new consortium to bolster Haiti’s long term recovery 

Caricom Today: A senior United Nations adviser has called for a new “consortium” of donors to bolster Haiti’s long-term recovery. Read more

Jamaica confident about reviving pork exports to CARICOM 

Jamaica Gleaner: Jamaica’s meat companies are weighing a resumption of pork exports to Caribbean neighbours, but say it all depends on the reception from government agencies throughout the region and the harmonisation of standards. Read more 

INTERNATIONAL

Fiji Signs newest version of the MSG Free Trade Agreement

Fiji Sun: FIji Prime Minister Voreqe Bainimarama has signed the Melanesian Spearhead Group Free Trade Agreement. Read more 

Donald Trump is sworn in as president

New York Times: Donald John Trump was inaugurated as the 45th president of the United States on Friday, ushering in a new era that he vowed would shatter the established order and reverse a national decline that he called “this American carnage.” Read more

Ross prefers inking bilateral trade agreements

The Hill: Commerce Secretary-designate Wilbur Ross echoed Donald Trump’s call for bilateral trade deals instead of larger agreements where he says the United States tends to lose out. Read more 

WTO chief Warns against stumbling into trade wars

Irish Times: The world should be wary of stumbling into trade wars that would destroy jobs, World Trade Organisation director general Roberto Azevedo said on Friday. Read more

Chinese President Xi Jinping: No one can win a trade war

CNN Money: “Many of the problems troubling the world are not caused by economic globalization,” Xi said Tuesday at the World Economic Forum in Davos. “Whether you like it or not, the global economy is the big ocean you cannot escape from.” Read more

New Zealand and Sri Lanka to consider Free Trade Agreement

Reuters: New Zealand and Sri Lanka will open diplomatic posts in each other’s nations and are considering a free trade agreement, the Pacific country’s trade minister said on Friday. Read more 

Indian Cabinet approves Trade Agreement negotiations with Peru

Economic Times (India): The Indian Cabinet has approved holding negotiations for a trade agreement with Peru. Read more 

EU and US publish TTIP state of play assessment

EU: On 18 January Trade Commissioner Cecilia Malmstrom and United States Trade Representative Michael Froman published a joint assessment of the progress made in negotiations for a Transatlantic Trade and Investment Partnership (TTIP) since negotiations started in July 2013. Read more 

US Chamber of Commerce warns Trump on Trade

CNBC: Washington needs to trade with foreign markets if it wants to boost domestic growth, the U.S. Chamber of Commerce warned on Monday. Read more 

PM May Defines “Brexit means Brexit”

FRANHENDY: Today, in an address which lasted just over forty minutes, former ‘Remainer’, Prime Minister Theresa May,added some content and context to her well-worn maxim: brexit means brexit. Read more 

China’s Xi warns of Dangers of Trade War

VOA: Chinese President Xi Jinping warned governments of the dangers of a trade war while speaking at the World Economic Forum in Davos, Switzerland on Tuesday. Read more 

Ottawa Weeks away from starting free-trade talks with China

The Globe & Mail: The Trudeau government is weeks away from an inaugural round of talks on a free-trade agreement with China as it presses ahead a central objective in its plan to deepen ties with the world’s second-largest economy. Read more 

Azevedo welcomes call in Davos for progress at the WTO; urges caution on protectionism

WTO News: Attending the World Economic Forum in Davos, WTO Director-General Roberto Azevêdo welcomed the strong desire shown by ministers and the private sector for new negotiated outcomes to be delivered at the WTO’s Ministerial Conference in Buenos Aires in December this year. Read more 

Nigeria ratifies the Trade Facilitation Agreement 

WTO News: Nigeria has ratified the Trade Facilitation Agreement (TFA), making it the 107th WTO member to do so. Only three more ratifications from members are needed to bring the TFA into force. Read more 

United States files WTO complaint against Canada over measures affecting the sale of wine in stores 

WTO News: On 18 January the United States notified the WTO Secretariat that it requested WTO dispute consultations with Canada regarding measures maintained by the Canadian province of British Columbia governing the sale of wine.Read more 

Free trade talks already under way with range of non-EU countries 

Sky News: Article 50 has yet to be signed but already Theresa May has laid out her negotiating lines and has said that informal talks are already taking place about Britain’s future trade relations with the rest of the world. Read more 

France’s Hollande criticises protectionism as “worst response”

Reuters: France’s President Francois Hollande on Saturday criticized protectionism and with his Chilean counterpart said that Europe would look to strengthen ties with Latin America, speaking a day after U.S. President Donald Trump took office. Read more

RCEP more relevant now more than ever

New Strait Times:When American President-elect Donald Trump called the Trans-Pacific Partnership (TPP) agreement a “disaster” and vowed to pull out of it as soon as he took office, the international media almost instantaneously pronounced the TPP dead. Read more 

Malaysia’s move if TPPA falls through

The Star: Should the Trans-Pacific Partnership Agree­ment (TPPA) fall through, Malaysia may look into the possibility of pursuing bilateral free trade agreements (FTAs) with TPP members, said International Trade and Indus­try Minister Datuk Seri Mustapa Mohamed. Read more 

Djibouti-Ethiopia railway carries hope for Pan-African trade

Financial Times: Great article by FT discussing the prospects that the Djibouti Ethiopia railway will have for Pan-African trade. Read more 

Britain must relax immigration rules for Australians if it wants a free trade deal, says High Commissioner to UK

Independent: Australia will seek ‘greater access’ for its businesspeople before reaching a post-Brexit trade agreement with the UK, says Alexander Downer. Read more

Free trade agreement with India a “high priority” for Canada

The Star: Federal Liberal Infrastructure Minister Amarjeet Sohi, fresh off a trade promotion trip to India, says a free-trade agreement with India “is high priority for our government.” Read more 

Wallonia parliament holds third hearing on EU-Vietnam free trade agreement

Vietnam Net: The parliament of Belgium’s Wallonia region held the third hearing on the European Union-Vietnam Free Trade Agreement (EVFTA) on January 19.  Read more 

 

 

BONUS

Time to solve intra-Africa trade challenges

The New Times (Rwanda): In a CNBC televised debate in Davos, Switzerland, President of Rwanda, Paul Kagame has challenged African countries to solve intra-Africa trade challenges. Read the article here and WATCH VIDEO

NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT

5 Main Points from PM May’s Davos Speech

TTIP: Joint US-EU State of Play Report Published

UK Supreme Court to deliver ruling in Article 50 Brexit Appeal next Tuesday

Why PM May’s “Hard Brexit” Choice is no surprise

President Obama Ends Three Special Parole Programs for Cuban Migrants

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

5 Main Points from PM May’s Davos Speech

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Photo source: Pixabay

Alicia Nicholls

At the World Economic Forum (WEF) Annual Meeting 2017 currently underway in Davos, Switzerland this week, Prime Minister of the United Kingdom, Theresa May, presented what may be considered a follow-up to the major Brexit speech she had given in London earlier this week in which she had outlined her 12-point Brexit plan.

It was the Prime Minister’s first appearance at Davos in her capacity as Prime Minister of the UK and she reiterated many of the main points she had made in her speech earlier this week, focusing most of her attention on Brexit and outlining her plans for building a “truly Global Britain”.

Below are some of the main points from her Davos Speech:

(1) Brexit is not a rejection of Europe

Mrs. May reiterated that the Brexit vote was not a repudiation by Britain of the EU but “simply a vote to restore, as we see it, our parliamentary democracy and national self-determination”. She further explained Britain’s desire to pursue a “bold and ambitious Free Trade Agreement between the UK and the European Union” while also being free to negotiate new trade deals with both longstanding and new allies around the world.

(2) UK to be leader of free markets and free trade

To this extent, she expressed the intention for the UK to “step up to a new leadership role as the strongest and most forceful advocate for business, free markets and free trade anywhere in the world”. Mrs. May noted that discussions on future trade ties have already begun with a number of countries, while others have already signalled their interest.

(3) She will build a “Global Britain”

Aiming to dispel the notion that the UK was turning “inward”,  Mrs. May emphasised her desire to build a “Global Britain” which would be in control of its own destiny once again and would help to underpin and strengthen the multilateral rules-based system. She reiterated that she believes strongly in a rules based global order and that “we must continue to promote international cooperation wherever we can”.

Although Mrs. May has  previously highlighted the need to take control of the UK’s immigration policy, she did mention in this speech that the UK derives “much of our strength from our diversity”, emphasing that “we are a multi-racial, multi-ethnic, multi-faith democracy, and we’re proud of it”.

It is here that her rhetorical tone is strikingly different from that of her counterpart across the pond, incoming US President Donald Trump who has not only expressed his disdain for both the United Nations but called the World Trade Organisation a disaster. Moreover, Mr. Trump has been consistently anti-immigrant, seeing immigration as a threat rather than a strength.

(4) Britain has embarked on “an ambitious programme of economic and social reform”

Mrs. May noted that the UK has embarked on what she termed “an ambitious programme of economic and social reform”. The issues of growing income equality and popular discontent with trade and globalisation have been a consistent theme in the Davos discussions, which is not surprising given the political ramifications which these issues have already delivered.

In tackling these issues Mrs. May outlined what she believed should be the roles of both governments and businesses and that the status quo could not remain. She noted the need for leaders to work together to shape new policies and approaches in order to deliver for all people in their respective countries.

Interestingly, she noted that the role of governments was not to just “get out of the way” as has been the mantra of neoliberal economic theory, but to “step up to a new, active role that backs businesses and ensures more people in all corners of the country share in the benefits of its success”. Turning to businesses, she noted that “it means doing even more to spread those benefits to more people”, including paying their far share of tax and recognising their obligations to their employees, inter alia.

(5) Support for the Compact for Responsive and Responsible Leadership

To this effect, she expressed her support for the World Economic Forum’s new “Compact for Responsive and Responsible Leadership” initiative proposed for signature to all participants of the Annual Meeting 2017. This initiative aims to “create a corporate governance framework with a focus on the long-term sustainability of corporations and the long-term goals of society”.

The full text of her speech may be read here.

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

 

TTIP: Joint US-EU State of Play Report Published

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Source: Pixabay

Alicia Nicholls

“The EU and the United States have made considerable progress in negotiating a Transatlantic Trade and Investment Partnership (TTIP) agreement since the negotiations were launched in July 2013”. This is the assessment according to a Joint Report released today January 17, 2016 by EU Trade Commissioner, Cecilia Malmström and outgoing United States Trade Representative (USTR), Michael Froman, which outlined the state of play of negotiations on the TTIP to date.

In 2013 the US and EU set out to conclude an “ambitious, balanced, comprehensive, and high-standard agreement”. Since then fifteen negotiating rounds have been held between July 2013 and October 2016. The future of the TTIP is currently uncertain given incoming US President Donald Trump’s seeming aversion to mega free trade agreements which he argues could undermine American workers and manufacturing, and his stated preference for bilaterals. While he has railed against the concluded but not yet ratified 12-country Trans-Pacific Partnership (TPP), President-elect Trump has said comparatively little on TTIP and the agreement’s future appears uncertain. It is worth noting though that similar to TPP there has been a significant popular backlash against TTIP. Another spanner in the works is the impending exit of the UK from the EU. President-elect Trump has already indicated an interest in pursuing a US-UK free trade agreement post-Brexit.

The Joint report reiterated the perceived expected benefits to accrue from TTIP, including increased trade and investment flows, promotion of higher standards in the global economy, and strengthen an already strong trans-Atlantic partnership.

In explaining the current state of play, the Joint Report noted some of the things on which the EU and US have found common ground:

  • Exchanged offers to eliminate duties on 97% of tariff lines
  • Identified steps to reduce unnecessarily burdensome requirements and delays at borders
  • TTIP must include strong obligations to protect the environment and foundamental labour rights.
  • Negotiated a dedicated chapter focused on small medium-sized enterprises (SMEs)

However, the report did note that there was still significant work to resolve differences in several important areas. A few of the several areas identified were:

  • how to treat the most sensitive tariff lines on both sides
  • how to expand and lock in market access in key services sectors
  • how to reconcile differences on sanitary and phytosanitary measures; how to encourage the recognition of qualifications to facilitate licensing of experienced professionals
  • how to improve access to each other’s government procurement markets
  • how best to achieve our shared objective of providing strong investor protection while preserving the right of governments to regulate

In perhaps a last ditch to make the case for TTIP before the Trump administration assumes office on Friday, the report expressed the view that political will and continued engagement by both sides could lead to a successful outcome.

To this effect, EU Commission’s press release quotes Commissioner Malmström as stating “We have made considerable, tangible progress, as this summary demonstrates. I look forward to engaging with the incoming US administration on the future of transatlantic trade relations.

The full report may be read here.

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

UK Supreme Court to deliver ruling in Article 50 Brexit Appeal next Tuesday

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Alicia Nicholls

Mark the date Tuesday, January 24th at 9:30 am on your calendars! That is the date on which the United Kingdom’s highest court will deliver its highly anticipated judgment in the appellate case of R (on the application of Miller and another) (Respondents) v Secretary of State for Exiting the European Union (Appellant), known more familiarly as the Article 50 Brexit Appeal. The Supreme Court made this announcement via its official Twitter account today, a day after UK Prime Minister Theresa May laid out her 12-point Brexit strategy.

This case is one of the most consequential constitutional cases in recent UK history. The legal question before the Supreme Court is whether the Government has the power to give notice pursuant to Article 50 of the Treaty on European Union (Lisbon Treaty) of the UK’s intention to withdraw from the EU, without an authorising Act of Parliament. Or put more simply, is it the executive or the legislature which has the power to decide whether Article 50 is to be triggered. While some Brexiteers have seen the case as an attempt to delay or derail the “inevitable” (i.e. the UK’s leaving of the EU), the Court is not being asked to consider the more political question of whether the UK should leave the EU.

The genesis of this case was a legal challenge brought by investment fund manager Gina Miller and hairdresser, Deir Dos Santos in the High Court against Prime Minister May’s assertion that the Government could use its prerogative powers to make the Article 50 notification without first seeking parliamentary approval. Ms Miller argued that due to the principle of parliamentary sovereignty, a crux of UK constitutional law, only the parliament could make such a determination. Relying primarily on the principle of parliamentary sovereignty, the High Court in its October ruling in R (Miller) v Secretary of State for Exiting the European Union held that the Government did not have the power under the Royal Prerogative to make the Article 50 notification. The Government swiftly appealed.

In a rare sitting of all eleven justices on the bench, the UK Supreme Court held a four-day (December 4-8) hearing to consider the Government’s appeal against the High Court ruling. The Court’s ruling will be final.

In her major speech on Tuesday before the announcement was made, Mrs. May stuck to her end of March deadline for making the Article 50 notification. However, the feasibility of that deadline will depend on whether the Supreme Court upholds or overturns the High Court’s ruling. If the Supreme Court dismisses the Government’s appeal, a bill would have to be laid and debated in Parliament. Depending on the length and robustness of debate, it may delay the March 2017 deadline Mrs May has insisted upon. The Government is likely to draft a bill which is as simple as possible to reduce the length of time for debate or for amendments.

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

Why PM May’s “Hard Brexit” Choice is no surprise

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Alicia Nicholls

In a much anticipated speech delivered at Lancaster House on Tuesday, Prime Minister of the United Kingdom, Mrs. Theresa May, confirmed speculation that the UK’s membership of the European Single Market was off the table, an option which has been colloquially dubbed a “hard” Brexit. The news may be dismaying (no pun intended) to some who preferred a “soft” Brexit (remaining in the single market). However, it is not unexpected given the main reasons why 52% of Britons voted in favour of leaving the EU in the first place, inter alia, stemming the tide of immigration and getting away from the “intrusiveness” of Brussels.

In a speech that was both conciliatory but also declarative, Mrs. May said as much as she succinctly outlined the reasons for the UK’s decision. It should be noted that while serving as Home Secretary, Mrs. May was part of the “Remain” camp during the Brexit campaign. However, during her bid to assume the office of Prime Minister, she  strongly and famously stated that “Brexit means Brexit“. Among the reasons enumerated by Mrs. May include Britain’s “profoundly internationalist” history and culture and the belief that EU membership has come at the expense of the UK’s external trade relations. To this effect, she noted that trade as a percent of UK GDP (an indicator of a country’s trade openness) had stagnated.

She went further by noting the difference in political traditions between the UK and EU, including the incongruity between the UK constitutional principle of parliamentary sovereignty and the power of supranational institutions in Brussels to make laws for the UK, and the inability to hold those institutions accountable. While stressing that she did not wish to see a disintegration of the EU, she ultimately argued that there was need for greater flexibility by the EU if it is to succeed.

12-point Brexit Plan

In her biggest speech since coming to 10 Downing Street, Mrs. May sought to quell criticisms over the lack of clarity of her Brexit strategy by outlining a 12-point plan which would guide the UK’s Brexit negotiations, and with the overarching goal of fostering “a new, positive and constructive partnership” between the UK and the EU.

Mrs. May, therefore, ruled out membership of the Single Market, citing instead her preference for a comprehensive free trade agreement (FTA) with the remaining 27 countries of the EU.Five main models of arrangement have been proffered in the literature but Mrs. May has strongly stated that she wants a model unique to Britain.

She has stated that the UK would not have to contribute to the EU budget but noted she was prepared to make contributions if there are any specific European programmes in which the UK may wish to participate.

More confusingly, however, was her statement that she wanted to remain a partial member of the EU Customs Union (EUCU), yet still control the UK’s trade policy by not being bound by the common custom tariff or the EU’s Common Commercial Policy. To my mind, this is at cross-purposes. There is, of course, precedent in the EU of countries being in a customs union relationship with the EU, while not being EU members, such as Turkey, San Marino and Andorra  who apply the CET on only certain goods. However, the essential element which differentiates a customs union from an FTA is that parties to a customs union apply a common external tariff (called the Common Customs Tariff in the EU). I am at pains to see how the UK can be a member of the EUCU without being bound by the CET to some extent. In such a case, it would be best to simply just negotiate an FTA.

More Outward Looking Britain

Besides outlining her vision for a future relationship with the EU, Mrs. May also elaborated that she wanted to build “a truly global Britain” and significantly expand its trade with the world’s fastest growing export markets, as well as have its own tariff schedules in the WTO. As an EU member, the UK was bound by the Common Commercial Policy and was unable to enter into third party trade negotiations.

The outward looking Post-Brexit UK is good news for Caribbean countries. As I noted in previous articles, countries of CARIFORUM (countries of the Caribbean Community plus the Dominican Republic) currently enjoy preferential access to the UK market under the CARIFORUM-EU Economic Partnership Agreement (EPA). Once the UK leaves the EU, it will no longer be bound under the EPA and Caribbean countries will no longer have preferential access to the UK market. Since the UK is a major trading partner for the region and the region’s largest in Europe, it is within the region’s interest to negotiate some form of WTO-compatible preferential agreement with the UK post-Brexit, even though admittingly the region would likely be at the back of the queue.

On this note, she highlighted her newly created Department of International Trade (headed by Mr. Liam Fox) and mentioned the large queue of countries eager to negotiate an agreement with post-Brexit UK, including the US under incoming President Donald Trump. It is worth noting that recently the Dominican Republic indicated its interest in an FTA with the UK.

Deadline and Preparedness to walk away empty-ended

Of interest is that Mrs. May has stuck to her previously stated end of March deadline for making the Article 50 notification under the Lisbon Treaty (which is the only way the formal process of withdrawing from the EU can begin). The UK Supreme Court is set to render its judgment in the appeal on whether parliament or the executive branch has the power to decide to make the Article 50 notification. Depending on the ruling, Mrs. May’s timeline may not be realistic. Mrs. May has called for a phased-in approach to the withdrawal and has also reiterated that Parliament would have a vote on the final withdrawal agreement.

Highlighting that a punitive approach by the EU would be “an act of calamitous self-harm for the countries of Europe”, Mrs. May has indicated that she is prepared to walk away with no agreement rather than a bad one.

Reaction in Europe to Mrs. May’s speech has been mixed as this Telegraph article notes.

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

President Obama Ends Three Special Parole Programs for Cuban Migrants

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Source: Pixabay

Alicia Nicholls

In his final act aimed at further normalising Cuban-US relations, the outgoing United States President, Barack Obama, announced the immediate end to three long standing special parole programmes to which only Cuban migrants were beneficiaries and which had been part of the US’ policy to isolate Cuba.

According to a fact sheet released by the US Department of Homeland Security on January 12, 2017, the following special parole programmes have been ended with immediate effect:

  • The “wet-foot/dry-foot” policy
  • The Cuban Medical Professional Parole Program.
  • An exemption that previously prevented the use of expedited removal proceedings for Cuban nationals apprehended at US ports of entry or near the US border.

The Fact Sheet stated that “it is now Department policy to consider any requests for such parole in the same manner as parole requests filed by nationals of other countries.”

It should be noted that the Cuban Family Reunification Parole Programme was not one of the programmes ended and remains unchanged because it “serves other [US] national interests”.

Cuban Adjustment Act & Wet Foot, Dry Foot 

As part of the US’ attempt to isolate Cuba following the island’s turn to a communist path to development, native born and Cuban citizens have enjoyed special immigration rights in the US since the 1960s. The Cuban Adjustment Act of 1966 provides for the adjustment of the status of a native born or Cuban citizen who reaches the US into a lawful permanent resident once the following conditions are met: inspection, admission or parole into the US, physical presence in the US for at least one year and being otherwise admissible.

This policy was amended by the “wet foot, dry foot” policy  under President Clinton in 1995 as a result of an understanding following the Cuban Rafter Crisis. Under the “wet foot, dry foot” policy, only those Cubans who actually reach dry land (dry foot) can request parole and adjustment to legal residence under the Cuban Adjustment Act of 1966. Those who are intercepted at sea (wet foot) would be arrested and deported to a third country. Hence the term, wet foot, dry foot.

In his Statement, President Obama noted that the “wet foot, dry foot” policy, was “designed for a different era” and that by ending it, the US will be treating Cuban migrants the same as it treats other migrants.

Exemption from Expedited Removal Proceedings & CMPP Programme

Cuban nationals were exempt from being removed through expedited removal proceedings. This will no longer be the case. Moreover,the Department of Homeland Security will no longer accept parole applications from medical professionals under the Cuban Medical Professional Parole programme which was instituted in August, 2006. This programme allowed certain Cuban medical personnel, conscripted to work in a third country (that is, neither in the US nor Cuba), to apply for parole.

In his statement, President Obama noted that “Cuban medical personnel will now be eligible to apply for asylum at U.S. embassies and consulates around the world, consistent with the procedures for all foreign nationals.”

Justifications for ending programmes

In justifying the end to the three special parole programmes mentioned, the Department of State noted that the policies had been “justified by certain unique circumstances, including conditions in Cuba, the lack of diplomatic relations between our countries, and the Cuban Government’s general refusal to accept the repatriation of its nationals.”

These factors no longer apply in light of the steps towards normalisation of US-Cuba relations which began in the second term of Mr. Obama’s presidency in 2014, including the re-establishment of full diplomatic relations between Havana and Washington. Although several restrictions have been eased on Cuba through presidential executive actions, the embargo, however, remains in effect and requires congressional action for its removal. The Cuban government has also agreed to accept repatriated nationals. Another reason proffered by the Department of Homeland Security for the removal of the special parole programmes is “a significant increase in attempts by Cuban nationals to enter the United States without authorization”.

Additionally, in his Statement President Obama made a final plea for the normalisation to be continued by the incoming president, by noting that (bold is my emphasis):

During my Administration, we worked to improve the lives of the Cuban people – inside of Cuba – by providing them with greater access to resources, information and connectivity to the wider world. Sustaining that approach is the best way to ensure that Cubans can enjoy prosperity, pursue reforms, and determine their own destiny.

Reaction

Havana’s reaction to the announcement has been of jubilation, especially as the “wet foot, dry foot” policy is one which the Cuban Government has opposed. The reaction of Cuban migrants, many of whom had been beneficiaries of the special programmes, has been mixed.

A Trump Reversal?

Up to the time of writing this article, US President-elect Donald Trump had not expressed an opinion on this development. The big question on everyone’s mind is how long will this policy reversal last considering that in just a few days, President Obama will hand over the reins of the presidency to the incoming president. President-elect Trump has ambiguously stated that he would “renegotiate the deal with Cuba” unless the Cuban government “offers better a deal” for its citizens.

In light of this, some have speculated that  President Trump may reverse the policies as part of an attempt to walk back the normalisation begun under president Obama? However, a Trump reversal of these changes might not be a foregone conclusion. President-elect Trump has been strongly anti-immigration in his stance and has previously termed the “wet foot, dry foot’ policy unfair.

In this context, I find it unlikely Mr. Trump will reinstate policies which one can argue encourage illegal immigration in a context where his policy platform was based on stemming the tide of immigration and protecting American security and jobs. He may keep the status quo or he may perhaps go further and end the existing Cuban Family Reunification Parole program which allows beneficiaries to travel to the United States before their immigrant visas become available. Considering, however, that that programme serves other national interests, this too may be unlikely. But only time will tell.

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

Caribbean Trade & Development Digest – January 8-14, 2017

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Source: Pixabay

Welcome to the first Caribbean Trade and Development Digest for 2017!  I am pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World for the weeks of January 8-14, 2017. 

For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

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REGIONAL

Brexit looms; Trade Pact now, says Dominican Envoy

Dominican Today: Dominican Republic’s ambassador to the UK on Thursday said negotiations toward a bilateral agreement should be expedited so the country can deal with Brexit’s negative consequences. Read more

Obama ends ‘Wet foot, dry foot’ policy for Cubans

Wisconsin Rapids Tribune: President Obama announced Thursday an end to the 20-year-old “wet foot, dry foot” policy that allowed most Cuban migrants who reach U.S. soil to stay and become legal permanent residents after one year. Read more 

Cuba’s President Raul Castro meets with head of US Chamber of Commerce

Reuters: The head of the U.S. Chamber of Commerce met with Cuban President Raul Castro and in separate meetings with members of Castro’s economic cabinet on Friday, as they prepare for the advent of a more hostile Trump administration next week. Read more 

Serbia formalises diplomatic relations with CARICOM

Jamaica Observer: The Caribbean Community (Caricom) grouping has formalised diplomatic relations with the Republic of Serbia, with the eastern European country indicating that it intends to promote cooperation with a region where it has already been active in the past. Read more

64 percent reduction in Jamaicans being denied entry to Trinidad

The Minister of Foreign Affairs and Foreign Trade is reporting a 64 per cent reduction in the number of Jamaicans who have been denied entry to Trinidad and Tobago for the period March to December 2016. Read more

Persons being sensitised about travel in CSME States

Jamaica Information Service: The Ministry of Foreign Affairs and Foreign Trade has started a public-education campaign to sensitise the public on travel and employment guidelines within CARICOM countries. Read more

CARICOM, UN Women Ink support pact for gender equality

Stabroek: A two-year Memorandum of Understanding (MoU) outlining areas of support to drive the achievement of gender equality goals was signed yesterday by the Caricom Secretariat and the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women). Read more

Crucial Year for CARICOM process, says Secretary-General

Caribbean News Now: The thirty-ninth meeting of the Community Council of Ministers opened on Monday at the CARICOM headquarters in Guyana, under the chairmanship of Guyana’s vice president and minister for foreign affairs, Carl Greenidge. Read more

Japan looking at Barbados Hub

Barbados Advocate: Japan is considering this island as a hub for its tourists who want to experience what this region has to offer. This from Japan’s Ambassador Extraordinary and Plenipotentiary to Barbados, Teruhiko Shinada, during a courtesy call to The Barbados Advocate yesterday. Read more

Jamaica’s relationship with Trinidad & Tobago improving

Jamaica Observer: Minister of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith says that, since the intervention of the Government, there has been a 64 per cent decrease in the number of Jamaicans refused entry into Trinidad and Tobago. Read more

CARICOM seeks to strengthen ties with the US

Antigua Observer: The Heads of Government within the Caricom member states will most likely be acting on a recommendation from the Council of Ministers to push to strengthen ties with the United States (US). Read more

CARICOM wants good working relationship with the Trump Administration

Jamaica Observer: The Caribbean Community (Caricom) Council of Ministers has ended a two-day meeting here Tuesday saying it was appreciative of the Caribbean’s good working relationship with past US administrations and was looking forward to working with the Donald Trump administration.Read more

INTERNATIONAL

US files WTO complaint against Chinese aluminum subsidies

WTO News: On 12 January the United States notified the WTO Secretariat that it requested dispute consultations with China regarding alleged subsidies provided by China to its producers of primary aluminium. Read more

World Bank: 2.7 percent growth in trade in 2017

Global Trade Magazine: Global economic growth is forecast to accelerate moderately to 2.7 percent in 2017 after a post-crisis low last year, the World Bank said in a report released today. Read more

President Obama’s Final Economic Report is Released

Whitehouse: The 2017 Economic Report of the President reviews the economic record of the Obama Administration, focusing on how policies have promoted inclusive growth. Read more 

Global Economy looks to Asia

East Asia Forum: Japan, China and the rest of East Asia enjoyed rapid development and rising living standards by opening up their economies and becoming integral parts of the global trade and economic system.Read more

Products under APTA increased

The Nation: Ministers from countries party to the Asia-Pacific Trade AGreement (APTA) met during the Fourth APTA Ministerial Council to conclude negotiations that will more than double the number of products under preferential tariff treatment in order to expand trade and boost growth in the region Read more 

John Kerry defends TPP in last trip as Secretary of State

Global News (Canada): Secretary John Kerry making his last trip as the top U.S. diplomat, on Friday defended the 12-nation trade pact that the incoming administration said it would scrap and urged countries to refrain from provocative acts in the South China Sea. Read more

Trans-Pacific Partnership not dead yet, says Australia 

Financial Review: The Australian government refuses to concede the Trans-Pacific Partnership is dead and says the United States needs more time to come to a final position on the 12-nation free-trade pact. Read more 

UK Exports show sign of pound boost

BBC: Evidence is emerging that the sharp drop in the pound is boosting UK exports, economists say. Read more 

Obama lifts 20-year sanctions on Sudan

Deutsche Welle: US President Barack Obama is to lift some trade and investments sanctions against Africa’s third largest country. But the country will still remain a state sponsor of terrorism in Washington’s eyes. Read more

Trump Advisor: TPP dead, will move quickly on bilateral trade deals

Reuters: President-elect Donald Trump will not revive his predecessor’s stalled Trans-Pacific Partnership trade deal in any form, but will quickly pursue bilateral trade agreements, a Trump transition policy adviser said. Read more 

Nick Clegg says May should go for Norway-style Agreement with EU

The Guardian: Theresa May should return the UK to the same 1960s trading arrangements it had with Europe before it joined the EU if she decides there is no alternative to a hard Brexit, according to former deputy prime minister Nick Clegg. Read more 

The Netherlands will block and UK-EU deal without tax avoidance measures

The Guardian: The Netherlands will block any EU trade deal with the UK unless it signs up to tough tax avoidance regulations preventing it from becoming an attractive offshore haven for multinationals and the rich, the deputy prime minister of the country has said. Read more

FACT SHEET: The Obama Administration’s Trade Enforcement Record

WhiteHouse: From day one, President Obama and his Administration have vigorously worked to build a far more capable trade enforcement system.  The result has been a strong record of enforcement victories that are helping to level the playing field for American workers and businesses. Read more 

Have we hit ‘peak’ trade?

World Economic Forum: Over the past five years, global trade growth has been stagnant. With protectionist sentiment intensifying across advanced economies and China and other emerging markets (EMs) appearing to pivot away from export-oriented growth strategies that had incentivised the creation of global supply chains in the 2000s, a hypothesis informally known as ‘peak trade’ has become increasingly popular (Economist 2014). Read more 

China exports slump more than expected

CNBC: China’s exports slumped more than expected in December as global trade remained sluggish while the growth in imports also cooled, official data showed Friday. Read more

NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT

St Vincent and the Grenadines ratifies the Trade Facilitation Agreement

In Defence of Caribbean Citizenship by Investment Programmes

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

St. Vincent & the Grenadines ratifies WTO Trade Facilitation Agreement; Four more ratifications to go

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Source: Pixabay

Alicia Nicholls

On January 9, 2017, the Caribbean island nation of St. Vincent & the Grenadines became the 106th country to ratify the World Trade Organisation’s Trade Facilitation Agreement (TFA). Only four more ratifications are needed in order to bring the Agreement into force (two-thirds of the WTO membership, i.e. 110 members).

The first multilateral trade agreement to be agreed since the establishment of the WTO in 1994, the Trade Facilitation Agreement was concluded at the Bali Ministerial in 2013. It aims, in a nutshell, to speed up the process of the movement of goods across  national borders.

As the World Bank’s Annual Doing Business Reports show, countries’ customs procedures can vary from a few to a multiplicity of steps, which can significantly increase the amount of time goods take to clear borders, which increases costs to both suppliers and consumers. As supply chains become  increasingly globalised, so is the need for more expeditious trade flows and standardisation of customs procedures. The Trade Facilitation Agreement’s provisions provide standards which were inspired by international best practices.

Developing countries and Least Developed Countries (LDCs) have the option to determine their pace of implementation by designating each of the provisions according to one of three categories: A,B,C, with A being the commitments each country can undertake as soon as the Agreement comes into force. The Agreement also includes provisions on customs cooperation. A Trade Facilitation Facility was also created at the request of developing countries to assist them and Least Developed Countries in implementing the Agreement.

WTO economists in the World Trade Report 2015 estimated that the Agreement would lower members’ trade costs by an estimated 14.3% on average. So far besides St. Vincent & the Grenadines, the following CARICOM countries have ratified the TFA: Trinidad & Tobago, Belize, Guyana,  Grenada, Jamaica, St. Kitts & Nevis, St. Lucia and Dominica.

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

 

 

In defence of Caribbean Citizenship by Investment (CBI) Programmes

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Alicia Nicholls

A  60 Minutes Special aired by American network, CBS, on January 1, 2017 has added fuel to the fiery debate on the legitimacy of Caribbean countries’ economic citizenship programmes. Whether intended or not, the segment entitled “Passports for Sale” cast a shadow of iniquity on the programmes which certain Caribbean countries, and to which an increasing number of countries are turning in order to stimulate their economies and attract much needed foreign investment.

Last year, St. Lucia joined four other Eastern Caribbean countries: Antigua & Barbuda, Dominica, Grenada and St. Kitts & Nevis by offering a direct citizenship programme. Economic investor programmes fall into two broad types: residency programmes (which only offer investors the right to reside) and citizenship programmes (which confer citizenship, either directly or after a period of residency).

Caribbean CBI programmes fall into the category of direct economic citizenship programmes which entitle qualifying investors and their qualifying spouse and/or dependents (e.g: children or elderly parents) to citizenship of the host country upon making a qualifying investment under that particular programme. Depending on the programme, a qualifying investment could be a monetary contribution of at least a certain amount to a special fund, the purchase of real estate of a minimum value or the purchase of government bonds in some cases. Investors and their co-applicants must also pass stringent due diligence procedures and pay the prescribed fees.

The reporting on the Caribbean CBI programmes was reduced to simply the “sale of passports” without taking into account the rationale behind the operation of these programmes. CBI programmes are not only about raising revenue through foreign investment for cash-starved Caribbean countries, but have wider development goals. These include helping to improve infrastructure, creating jobs and  attracting investors who are the “best of the best”, that is, persons with know-how and skills and networks which could redound to the benefit of the host economy. It is for this reason that an increasing number of countries, including Western countries, have either implemented economic investor programmes or are thinking of doing so.

CBI programmes not limited to small states

Indeed, missing from the CBS segment was that economic investor programmes are not unique to small countries like those in the Caribbean or the EU small state of Malta whose programme has a one-year residency requirement. Economic investor programmes are offered by a growing number of countries around the world. For example, the United States has its EB-5 Immigrant-Investor Programme where eligible investors may obtain a green card once they “make the necessary investment in a commercial enterprise in the United States; and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers”. Several European countries offer Golden Visa programmes, while a number of Canadian provinces offer Provincial Entrepreneur Programs whereby qualifying investors can attain permanent residence once a qualifying investment is made.

As I argued in a recent article I wrote for Henley Partners’ Global Residence and Citizenship Review Q3 2016, once carefully managed, CBI programmes can be tools of development. A prime example is St. Kitts & Nevis, which at one point had been among the world’s most indebted countries, and has seen its economic fortunes turned around.

Focuses on missteps and not changes

The 60 Minutes Special focused almost exclusively on the missteps made under some of the CBI programmes, while comparatively little was said of the changes made to the programmes to increase the robustness of the due diligence processes. For instance, St. Kitts & Nevis undertook a revamp of its programme amidst concerns raised by the US and Canada.

The CBS 60 Minutes Special also harped on the fact that some unsavoury characters had managed to obtain passports through CBI programmes. This is regrettable, no doubt, but “shady”characters have managed to earn residency in western countries which have much greater due diligence capability than do small states. The CBS Special did not mention, for instance, that Caribbean CBI countries maintain a list of restricted nationalities. Nationals from Afghanistan, Iran and Syria are not eligible under St. Kitts & Nevis’ programme, as an illustration.

Moreover, when oligarchs from Russia and the Middle East set up homes in western countries, no one (and rightfully so) questions their intention. Yet, why is a nefarious light cast on a Russian or Middle Easterner who obtains citizenship via a Caribbean CBI programme? Why the double standard? Or better yet, why are Caribbean countries constantly being held to a higher standard? Or is it because Caribbean CBI programmes, just like our much maligned offshore financial services sectors, are one area in which Caribbean countries can actually go toe to toe with developed countries?

Growing demand for secondary passports

One of the biggest falsehoods about CBI programmes is that secondary passports are sought primarily by persons with nefarious intent or as the CBS Special put it “scoundrels, fugitives, tax cheats, and possibly much worse”. This is far from the case. The growing class of High Net Worth Individuals (HNWIs), which includes a growing number of persons from emerging economies, increasingly see second passports as an “insurance policy” against instability or economic uncertainty in their home countries. Moreover, simple things like travelling for business or taking one’s family on vacation can be burdensome if one comes from a country with limited visa-free access to other countries. A good quality passport, therefore, brings mobility benefits.

However, it is not only HNWIs from emerging economies which have sought secondary passports. Many, particularly those living abroad, are renouncing their American citizenship not because they necessarily want to dodge their tax duty, but because of the onerous and costly reporting requirements and the fact that American citizens may be liable to pay tax on income earned abroad to the Federal Government even if they have been resident in another country for years. Added to this, ever since the passage of the Foreign Account Tax Compliance Act of 2010 which requires foreign financial institutions to report to the US Inland Revenue Service on assets owned by US citizens, Americans have been renouncing their citizenship in record numbers.

The demand indicators for secondary citizenship are all trending in the right direction, which is yet another reason why countries are turning to economic investor programmes. The election of President-elect Donald Trump in the US led the Canadian Immigration Department’s website to crash on election night as Americans increased online enquiries about moving to Canada, while the UK’s impending withdrawal has spurred demand by UK nationals for second EU passports.

Additionally, investors who acquire citizenship under Caribbean CBI programmes do not only come from “questionable countries”. The St. Lucia Times reported in December that among the 38 citizenships which were granted in St. Lucia, “there were seven applicants from the Middle East, three from Russia, two from Asia, two from North Africa, two from South Africa, one from North America and one from Europe.”

Attractiveness of Caribbean passports

There is also the erroneous belief that Caribbean CBI programmes’ popularity stems from their  purported corruption or because of the perceived negligible due diligence.  Caribbean passports are attractive for a multiplicity of reasons. Holders of Caribbean passports enjoy visa-free access to a growing number of countries, which tick off the mobility box for investors. The high standard of living and political stability in the Caribbean appeals to those investors in search of a lifestyle change.

CBI Caribbean countries’ citizenship laws  recognise both citizenship by birth (jus soli) and citizenship by descent (jus sanguinis) meaning that investors can pass on their citizenship to their children (born after the investor’s acquisition of citizenship) whether they are born in the host country or not.Moreover, Caribbean countries allow for dual citizenship so they do not have to renounce their current nationality.

Another factor is that the lack of residency requirement reduces the time it takes to acquire citizenship than through naturalisation. There are other factors such as Caribbean countries’ access to international business hubs through frequent flights to international gateways, their tax-friendly climates and their network of tax treaties and investment treaties with third states.

Conclusion

For the above reasons I found the CBS 60 Minutes Special’s “Passports for Sale” segment to be extremely unbalanced. I also question why except for a nominal reference to Malta at the beginning, Caribbean CBI programmes were singled out and why so much attention was devoted to some of the mishaps but little was said of the steps taken to prevent a recurrence. An online petition by One people, One Caribbean has sought to set the record straight and also calls for the retraction of the segment.

That being said, I do believe that robust and honest debate on the functioning of Caribbean countries’ CBI programmes is an important exercise once it is objective and not skewed. For example, the lack of transparency on the number of citizenship approvals granted under CBI programmes and to whom is a problem I have mentioned before. Although some countries have started to release some of their statistics, more data should be released and in a more timely manner.

What is needed as well is greater cooperation among Caribbean CBI countries. Some critics of CBI programmes raise the legitimate fears that increased competition both among Caribbean CBI programmes and with extra-Caribbean CBI programmes may lead to a race to the bottom in order to remain competitive. Perhaps what needs to be done is harmonisation of Caribbean countries’ CBI due diligence requirements so that an investor who fails the due diligence requirements of one Caribbean programme cannot gain access to another’s. Another option could be to harmonise CBI countries’ restricted countries’ lists. I am under no illusion that this would be an easy task but it is perhaps worth considering.

There is some support for greater OECS collaboration on this issue. The Prime Minister of St. Lucia, Allen Chastanet, has called for an OECS approach to CBI programmes through an OECS initiative based at the OECS Secretariat. However, it should be noted that a pan-OECS initiative may be problematic as not all OECS countries are supportive of such programmes. Additionally, CBI programmes must be free of political influence and interference.

Cooperation with the wider Caribbean Community (CARICOM) is also needed. Non-CBI CARICOM countries have raised concerns about reputational and security implications for their own countries. Under the Revised Treaty of Chaguaramas, the broad definition of “Community National” means that an individual who attains citizenship of a CARICOM country would qualify as a community national and be entitled to those benefits.

As I argued before, CBI programmes are not a panacea. Continued monitoring and upgrading of the programmes is needed to ensure that they meet their objectives of contributing to national development, while also ensuring the strictest of due diligence standards.

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

Caribbean Trade and Development Digest – January 1st-7th, 2017

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Photo source: Pixabay

Welcome to the first Caribbean Trade and Development Digest for 2017!  I am pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World for the weeks of January  1-7, 2017. 

For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

To receive these mailings directly to your inbox, please follow our blog.

REGIONAL

Barbados sets new tourism record 

Caribbean News Now: A new tourism record was set for 2016 when 610,000 long-stay visitors visited Barbados. Read more

Changes to Citizenship by Investment programme (St. Lucia)

St Lucia Times: On December 22nd, 2016, the minister to whom citizenship by investment is assigned signed a statutory instrument making amendments to the Citizenship by Investment Regulations No. 89 of 2015. Read more 

PM advocates OECS approach to CIP 

St. Lucia Times: Prime Minister, Allen Chastanet, has voiced support for an OECS approach to the Citizenship by Investment Programme (CIP), being offered by some member states of the group. Read more

IDB approved billions for Latin American and Caribbean projects in 2016 

Nation News: The Inter-American Development Bank (IDB) says it had provided US$11.7 billion for various projects in Latin America and the Caribbean in 2016.Read more

First Cuban exports to US in more than half a century to mark new era of trade 

Caribbean News Now: Reneo Consulting LLC announced on Thursday that its subsidiary company Coabana Trading LLC has finalized an agreement with Cuba Export to import into the United States marabu (sickle bush) charcoal produced in Cuba.  Read more 

The View from Europe: The US should respect the WTO ruling on Antigua

David Jessop: Late last November, the government of Antigua gave notice to the World Trade Organisation’s (WTO) Disputes Settlement Body (DSB) that, if the United States did not reach “an appropriate and beneficial settlement” in relation to a legal adjudication made previously in its favour, it would act to recover the revenue it has lost. Read more 

Dominican mining exports top US $6.5B in 6 years 

Dominican Today: The Dominican mining market exported US$6.5 billion as a result of extractions between 2010 and 2016, foreign sales heading led by the international transaction in gold worth US$4.9 billion in the five years, according to a document by the Energy and Mines Ministry (MEM). Read more

Dominican Republic: Two decades of legal change in favor of foreign investment

The National Law Review: For approximately 16 years now, the Dominican Republic has been implementing a continued legal reform to adjust its legal framework to international standards, specifically aiming to attract foreign investors. Read more 

Progress being made (with CRFM)

The Advocate: Still a long way to go but making progress. This is how Executive Director of the Caribbean Regional Fisheries Mechanism (CRFM), Milton Haughton, described the work being made toward introducing region-wide laws, rules and regulations intended to make Caribbean fish and seafood not only ready for world trade but safe for Caribbean tables. Read more
Regional group welcomes conclusion of regulatory project for CARIFORUM countries
Jamaica Observer: The Belize-based Caribbean Regional Fisheries Mechanism (CRFM) says it has successfully completed a project aimed at helping Caribbean Forum (CARIFORUM) countries to improve the safety of fish and fishery products for consumers in national and export markets, and several activities. Read more 

REGIONAL

NZ highlights Free Trade Agreement gains with Korea

TVNZ: Trade Minister Todd McClay is highlighting gains made in a free-trade agreement with Korea as he looks to make progress in getting one with the European Union. Read more 

UK’s Brexit approach is not muddled at all, says Theresa May

The Guardian: PM defends her government’s approach against charge by Sir Ivan Rogers, the UK ambassador to the EU who quit last week. Read more 

UK ambassador to the EU Sir Ivan Rogers resigns 

BBC: The UK’s ambassador to the EU, Sir Ivan Rogers, has resigned. Sir Ivan, appointed to the job by David Cameron in 2013, had been expected to play a key role in Brexit talks expected to start within months. Read more 

Container ship fleet growth expected to accelerate in 2017

JOC: The global container ship fleet will grow around 3.1 percent in 2017, a level of growth faster than 2016, and one that may or may not increase the gap between container shipping demand and supply, according to shipowner association Bimco. Read more 

5 International Arbitration Cases to watch in 2017

Law360: International arbitration attorneys will be keeping a close eye on the proceedings involving former Yukos shareholders as they seek to revive their historic awards totaling $50 billion against Russia, a trio of interrelated cases involving Belize in the U.S. Supreme Court, and other disputes that could affect the arbitration and enforcement landscape for years to come. Read more 

Ghana ratifies the Trade Facilitation Agreement

Pacific Scoop: Ghana has ratified the Trade Facilitation Agreement (TFA), making it the 104th WTO member to do so. Only six more ratifications from members are needed to bring the TFA into force. Read more 

Minister: Malaysia ready to face possibility of TPPA cancellation

Malay Mail Online: Malaysia is ready to face any eventuality arising from the possibility of the Trans Pacific Partnership Agreement (TPPA) being scrapped. Read more 

US imports rose in 2016 despite adversity

JOC: The US container trade in 2016 expanded an estimated 3.6 percent to a record of approximately 20.4 million 20-foot-equivalent units on the back of subdued import prices and further gains in home sales.Read more

The WTO option for Brexit is far from straightforward

The Economist: The two sides of the Brexit debate do not agree on much, but they agree on this: if Britain fails to reach a trade deal with the EU it will have to revert to the “WTO option”. Read more 

Good Prospects for RCEP to wrap up negotiations this year 

The Star: The Regional Comprehensive Economic Partnership (RCEP), involving 16 countries including Malaysia, has good prospects to wrap up negotiations in 2017, said HSBC Bank plc. Read more

Free Trade Agreement: Pakistan, Malaysia in talks to cut duties

The Express Tribune: Pakistan and Malaysia are negotiating to further reduce duties on existing and additional tariff lines under the Free Trade Agreement (FTA) to facilitate businesses of both countries.Read more

Trump taps Lighthizer for Trade Representative

The Hill: President-elect Donald Trump will nominate Robert Lighthizer for U.S. trade representative, his transition team announced early Tuesday. Read more 

US-NAFTA trade falls in October, reports BTS

Logistics Management: US trade with North American Free Trade Agreement (NAFTA) partners Canada and Mexico fell 3.6 percent to $93.2 billion on an annual basis in October, according to data issued by the Department of Transportation’s Bureau of Transportation Statistics. Read more 

NEW ARTICLES ON CTLD BLOG

New articles on the CTLD blog are:

Trump Trade Team Poised to Reset US Trade Policy

Seven Major Trade Developments of 2016: Trade Year in Review & Look Ahead

Fathering a Nation: Barbados and the Legacy of Errol Walton Barrow 

 

For past issues of our Caribbean & Trade Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Trump Trade Team poised to reset US Trade Policy

pixabaynegotiation

Photo source: Pixabay

Alicia Nicholls

Just three weeks shy of his inauguration date, United States President-elect Donald Trump has completed his trade team by nominating veteran trade lawyer and negotiator, Robert Lighthizer, as the next United States Trade Representative (USTR). Last month the President-elect had announced Wilbur Ross Jr as his Commerce Secretary nominee and Peter Navarro as head of the new White House Trade Council.

A cabinet-level office, the Office of the USTR is responsible for developing and coordinating US trade and investment policy and overseeing negotiations with third countries. Mr. Lighthizer’s pick comes as no surprise as he was an early Trump supporter. Moreover, a former deputy USTR in the Reagan Administration, Mr. Lighthizer is the most qualified of Mr. Trump’s nominees to date, bringing considerable technical expertise and professional experience to the post of USTR. Currently a partner with law firm Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates, he also served as the Chief of Staff of the United States Senate Committee on Finance. Mr. Lighthizer will be taking over from current USTR under President Obama, Michael Froman. One of his first tasks from day one will likely be working on the renegotiation of the North-American Free Trade Agreement (NAFTA) as promised by President-elect Trump in his 100 days proposal.

Mr. Lighthizer’s conservative views on trade, including his criticism of free trade, are in consonance with the President-elect’s binary trade views, as well his hard-line position on China’s so-called currency manipulation. Mr. Lighthizer also had some harsh words for the WTO’s dispute settlement system in regards to dealing with what he had termed China’s “mercantilism”.

His choice of the word “mercantilism” is curious as it can actually be used to describe Mr. Trump’s “America first” stance on trade. Mercantilist theory, prevalent during 16th century Europe and also refined by Alexander Hamilton during the US’ post-independence period, views trade in a zero sum way, that is, only one country can win in trade. It favours the use of protectionist policies, such as tariffs, subsidies and quotas, to protect domestic industries from foreign competition.

Granted lingering traces of protectionist practices are not alien in current US trade policy and all modern “great powers” have used mercantilist policies to develop in their early stages (see the works of Professors Erik Reinert and Ha-Joon Chang for greater information on this). Just consider the protection given to sensitive sectors like agriculture. This is true not just for the US but for most other trading nations as well. However, in the last three decades US trade policy has been guided (if not always in practice, at least in theory) by neoliberal tenets, based on the works of Adam Smith and later David Ricardo, which extolled the benefits of free markets and became the dominant economic theory. However, while trade is a good thing, there are winners and losers, and the “losers” made their voices known this election, and increasingly in other western states.

Capitalising on the populist backlash to free trade, Mr. Trump’s trade team seems poised to break with this three-decade old policy stance towards a more neo-mercantilist disposition, with an emphasis on positive trade balances, and a proclivity for the use of protective and retaliatory tariffs to discourage imports in order to protect American jobs and industries and punish “cheaters”. On this front at least, Mr. Trump has tremendous popular support, especially in the rust belt, at home.

So what can we in the rest of the world expect? We can probably expect greater confrontation by the US with China on trade matters. We can expect even more aggressive US pursuit of countries in general believed to be engaging in “unfair trade practices” (and the USTR has already been doing this through the WTO’s dispute settlement system), However, there might be less emphasis under the Trump administration on utilising the WTO’s rules-based system and a resort to unilateral action, with the possibility of trade wars.

Perhaps, one saving grace is that the US Congress alone has the power to impose tariffs, although this CNN Money article notes there are several pieces of legislation which give the President some flexibility, for example, during “times of war” or during “a national emergency”.

As I have said in previous posts on Trump’s trade policy, President-elect Trump has changed his positions on many things so there is still great uncertainty about which of his policy proposals he will seek to implement. However, if the Carrier deal were not enough to show that Mr. Trump’s “America first” trade policy is more than mere bloviating on his part, his protectionist-leaning trade team confirms his intention  to shake up American trade policy, and not just in optics.

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

 

Happy 2017! New on the CTLD Blog

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Photo source: Pixabay

Alicia Nicholls

Happy 2017, dear readers! I trust you and your families had a wonderful holiday season, whether you celebrate Christmas, Hanukkah, Kwanzaa or otherwise!

With a new year comes new changes so here is what is new on the CTLD Blog for 2017:

  • I updated the Papers & Articles section of the blog with my newest publications. Please check them out and keep tabs on this page as I have several articles coming out this year.
  • There is now a Guest Contributions page for readers who may be interested in being featured as guest authors. Hitherto, guest contributions were by invitation only.
  • CTLD also has its own Facebook page now which you can check out and ‘Like’: https://www.facebook.com/caribbeantradelawdevt

I will be continuing the weekly Caribbean Trade & Development Digest which highlights major trade and development headlines across the Caribbean Region and the World. To receive these mailings directly into your inbox, please follow the Blog.

Thank you again for your continued readership.

Here’s wishing you all a happy and healthy 2017! And may all your resolutions be fulfilled!

Best regards,

Alicia 

Caribbean Trade Law & Development

Seven Major Trade Developments of 2016: Trade Year in Review & Look Ahead

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Alicia Nicholls

Popular support for global trade took its greatest hammering in 2016 than it has in recent times.  Below are seven of the major international trade developments in 2016 and some thoughts on what 2017 may bring.

1.Continued slowdown in Global Trade Growth

Global merchandise trade growth continued to be lacklustre in 2016, according to the World Trade Organisation (WTO). The WTO in its September update downgraded its forecast for global trade growth for 2016 to 1.7%  from the April forecast of 2.8%, and for 2017, to between 1.8% and 3.1% from the April forecast of 3.6%.

According to the Director General Roberto Azevedo in his Annual Report, if realised, this would be the slowest pace of global trade growth and output since the global financial and economic crisis in 2008. The reasons proffered were a fall in import demand and a slowdown in global GDP (particularly among emerging economies such as China and Brazil but also some deceleration in North America).

Trade restrictive measures remain high. According to the DG’s Annual Report, 182 new trade restrictive measures (outside of trade remedy measures) were put in place by member states since the last report. The monthly average represented a reduction from 2015 but the Director General cautioned that “this does not mean that we are on a downward trend. Rather, it seems to be a return to the somewhat steady levels we have witnessed since 2009.”

2. UK votes to leave the European Union 

The first political bombshell of 2016 came on June 23rd when voters in the United Kingdom voted for the UK to withdraw from the 28-member European Union, its largest trading partner. Then UK Prime Minister, David Cameron, who backed the “Remain” camp, voluntarily resigned after the result.

The value of Sterling has fallen significantly since the Brexit vote, improving the price competitiveness of UK exports. A BBC report noted that in the three months following the vote, the UK economy grew 0.5% on average, which while slower than the previous quarter, was higher than the rate predicted by many economists. However, the vote has created a climate of uncertainty not just with regard to the City of London’s future as the financial hub of Europe,  but also what level of access UK exporters would have to the EU single market once a withdrawal agreement is concluded pursuant to Article 50 of the Lisbon Treaty. In other words, will there be a “hard” or “soft” Brexit ?

The new Prime Minister, Theresa May’s slated timeline of making the Article 50 notification by the end of March 2017 is now in doubt. The UK High Court held in R (Miller) v Secretary of State for Exiting the European Union that a parliamentary vote was needed which may extend the timeline (and that is if Parliament votes in favour of making the notification). The May-led government appealed and the UK Supreme Court is expected to render its judgment in R (on the application of Miller and Dos Santos) v Secretary of State for Exiting the European Union and associated references early this year.

3. Donald Trump is elected US President

In another unexpected political twist, billionaire businessman, Donald Trump, defeated establishment favourite, democratic nominee Hillary Clinton, in the November 8th US Presidential election poll. President-elect Trump will take office on January 20, 2016 but already many have questioned what will be the US’ new trade orientation in light of Mr. Trump’s trade policy proposals during and since the campaign.

Both Canada and Mexico have indicated their willingness to come to the negotiating table in regards to renegotiating the North American Free Trade Agreement (NAFTA). It is not clear what will be the fate of the Trans-Atlantic Trade and Investment Partnership (TTIP) which was being negotiated between the US and the EU or any of the fourteen other free trade agreements under negotiation by the US. Additionally, the nature of the US’ continued involvement in the plurilateral negotiations of the Trade in Services Agreement (TISA), the Environmental Goods Agreement (EGA) and the Fisheries Subsidies Agreement, is uncertain.

There are also concerns about a possible trade war between the US and China. Mr. Trump has promised to name China a currency manipulator and has also stated he would impose a tariff on Chinese imports.

4. EU & Canada sign CETA 

One agreement does appear to have bucked the trend. After nearly being derailed by the Belgian region of Wallonia, the Comprehensive Economic and Trade Agreement (CETA) was finally signed by the European Union and Canada in October, 2016. The Agreement will need the approval of the EU and Canadian parliaments into order to take full effect.

One major question is what impact will the UK’s possible impending departure from the EU have on CETA especially given that the UK is Canada’s largest EU trading partner. A Bloomberg report quotes Canada’s Trade Minister, Chrystia Freeland, as stating that once the European Parliament passes CETA, Canada will have a trade deal with Britain which can be built on. There would be no need for a separate trade agreement with the UK.

5. Maersk acquires Hamburg Süd

The world’s largest shipping company Maersk acquired the German container shipping line, Hamburg Süd, the world’s seventh largest operator. It was noted in the press release announcing the acquisition agreement that Hamburg Süd would continue as a separate brand. The Wall Street Journal reports that the deal, which is estimated to be worth $4 billion dollars, would boost Maersk’s presence on North-South shipping routes and would make the shipping company the leading player in and out of Latin America.

Overcapacity due to larger vessel capacity but weaker demand has plagued the global container shipping industry and has seen declines in global shipping rates. According to a report by American Shipper, credit rating agency Moody’s “holds a negative outlook for the shipping industry in 2017”. With declining profitability, it is likely that more mergers and acquisitions may follow in order to create scale in an industry which remains quite fragmented.

6. Paris Climate Agreement comes into effect

The Paris Climate Agreement, agreed by 195 countries at the UNFCCC’s COP21 in December 2015, came into effect, which is great news for the planet and especially for small island developing states and coastal states which are the most vulnerable to the ravages of climate change.

While there is concern about whether the incoming US administration will adhere to the Agreement, the Agreement’s entry into force will have several possible impacts on global trade trends. Firstly, there may be increased trade in climate-friendly and renewable energy products as businesses and countries seek to reduce their carbon footprint in line with commitments made by countries under Nationally Determined Contributions and in line with businesses’ corporate social responsibility goals. Concomitantly, there might be reduction in trade in fossil fuel and other environmentally dangerous products.

More trade disputes are likely as a result of climate change policies implemented by member states which may be deemed to be protectionist or discriminatory to other member states’ exports. The challenge for states will be in crafting environmental policies to promote a low carbon economy which also conform with their trade obligations.

7. Oil producing nations reach deal to cut oil output 

On November 30, 2016 oil producing nations, including member countries of the Organisation of Petroleum Exporting Countries (OPEC), reached a deal for the first time since 2008  to cut back oil production in order to stem a two-year glut. According to Wall Street Journal reporting, the deal would lead to 558,000 barrels less of crude oil per day and represents almost 2% of global oil supply. Saudi Arabia, the largest producer, has committed to cutting  back its output by 4%, according to The Economist’s reporting.

Oversupply has led to two years of oil prices dropping to unprecedented lows, to the detriment of some oil-producing economies, most notably Venezuela but a much needed reprieve for oil importing nations. In the wake of the announcement, the price of Brent crude surged to over $50 a barrel, the highest in over a year. However, both oil prices and WTI futures fell shortly thereafter amidst skepticism about whether output would actually be reduced in light of higher output by oil-producing countries that same month.

The “success” of this deal depends on several factors, including to what extent can an increase in US shale production compensate. Recall also that President-elect Trump has also promised to increase US production in order to ensure energy dependence. It will also depend on whether Russia will follow through with cutting output, and whether OPEC members themselves actually adhere to their own proposed production cuts.

So what does this deal mean for trade? For starters, expect higher fuel costs to lead to higher freight  and production costs.

What does this mean for 2017?

In light of the above, what does 2017 portend? At the time of this article’s writing, we are just hours into 2017. The good news is that we are ever closer to the Trade Facilitation Agreement coming into force.

However, the biggest buzzword for 2017 is uncertainty. A growing rise in populist anti-trade, anti-immigrant fervour has led to the election of Donald Trump, while anti-EU sentiment was one of the contributing factors underlying the UK Brexit vote. Will the election of anti-EU, anti-trade governments continue and what does this mean for the future of that trade bloc? Several European elections scheduled for 2017, including the French presidential elections (with the leader of the right wing Front National, Marine LePen, a strong candidate), the German presidential and parliamentary elections and the Netherland elections.

Besides this, will the UK actually make its Article 50 notification? Will Donald Trump follow through with his promise to jettison the TPP and renegotiate NAFTA and will there be a trade war between the US and China? What about global trade? Will we see a pickup this year? Turning to the multilateral trade negotiations, what progress (if any) will be made at the WTO’s Buenos Aires ministerial this December? Will OPEC members follow through with the proposed cuts? No one knows.

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

Fathering a Nation: Barbados and the Legacy of Errol Walton Barrow

Alicia Nicholls

Last year (2016) I received the honour and privilege of submitting a contribution to an edited book entitled “Fathering a Nation: Barbados and the Legacy of Errol Walton Barrow” in honour of my country Barbados’ first prime minister, national hero and “Father of Independence”, the late Right Excellent Errol Walton Barrow. The fact that the book was released in time for my beloved nation’s 50th anniversary of independence made its significance even more poignant.

The book is edited by His Excellency Guy A.K. Hewitt, Barbados’ High Commissioner to the United Kingdom and Northern Ireland. The book’s foreword was authored by current Prime Minister of Barbados, the Right Excellent Freundel Stuart and features an introduction by our country’s sole living national hero and the man regarded as “the greatest cricketer the world has ever seen”, the Right Excellent Sir Garfield Sobers.

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“Fathering a Nation” edited by H.E. Guy A. K. Hewitt

Without giving too much away, the book features not only speeches by the late Mr. Barrow but also contributions and reflections on Mr. Barrow’s life and legacy by a distinguished cast of contributors, including current and former statesmen, former heads of international organisations, academics, social activists, journalists and other prominent persons. The pan-Caribbean nature of Mr. Barrow’s legacy is no more evident than in the diversity of the book’s contributors.

My contribution entitled “Statesman and Caribbean Visionary”was based on an article I had authored a couple of years ago while I was a law student. As a millennial, I am  truly appreciative of the opportunity to share, on behalf of many like-minded young Barbadians, my gratitude to our Father of Independence for the far-sighted policies he pioneered and for turning Barbados into the model small island developing state which was once described by former United Nations Secretary General, Mr. Kofi Annan, as “punching above its weight”.

Lest one think this book is only aimed at Barbadians, the insightful speeches by Mr. Barrow and the reflections by the contributors make it required reading not just for Barbadian and Caribbean persons both at home  and in the diaspora but also persons from other small states.

I would like to publicly extend a hearty congratulations to High Commissioner Hewitt, Hansib Publications and all fellow contributors on a job well done!

The book may be purchased at Hansib Publications here.

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

Happy Holidays from CTLD!

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Dear Valued Readers,

Caribbean Trade Law & Development 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 a very Merry Christmas (or Happy Holidays)  and a wonderful 2017!

In the meanwhile, please feel free to check out my most recent articles:

The Sustainability of Citizenship by Investment Programmes“. Global Residence and Citizenship Review Q3 2016. Henley Partners. Contact me.

The Trump Doctrine: A Re-write of US-Caribbean Trade Relations?” Caribbean Studies Association Newsletter – December 2016. Available here

Priorities for Strategic US-Barbados Relations Under a Trump Presidency“. Business Barbados – December 2016. Available here:

With best wishes,

Alicia

Caribbean Trade Law & Development

Caribbean Trade & Development Digest – December 4- 10, 2016

Photo source: Pixabay

Caribbean Trade Law & Development is pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World for the weeks of December 4-10, 2016. 

For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

To receive these mailings directly to your inbox, please follow our blog.

REGIONAL

IDB Warns of Low Rate of Exports in LAC

Jamaica Observer: The Inter-American Development Bank (IDB) is warning of a lower rate of export contraction due to the stabilisation of commodity prices.Read more

Tourism Key to US-Caribbean Interests

Jamaica Observer: The Caribbean Hotel and Tourism Association (CHTA) has joined Caribbean-Central American Action (CCAA) in urging the US Senate to adopt the US-Caribbean Strategic Engagement Act of 2016 (HR 4939), which has already received bipartisan support in the House of Representatives, and which recently moved out of Senate Committee for consideration by the full Senate.Read more 

 

INTERNATIONAL

Dates fixed for 2017 Ministerial Conference in Buenos Aires 

WTO: WTO members have agreed that the organization’s Eleventh Ministerial Conference (MC11) will take place from 11 to 14 December 2017 in Buenos Aires, Argentina. The dates were endorsed at a 7 December meeting of the WTO’s General Council.. Read more

US Companies Dominate the Global Arms Trade Business

Forbes: According to new data on the international arms industry released by the SIPRI the world’s top 100 arms companies sold $370.7 billion worth of military equipment in 2015. Despite a 2.9 percent decrease on 2014, companies in the United States continue to dominate the trade, with 2015 sales amounting to $209.7 billion.. Read more

Beyond CETA: Building a Progressive Global Trade System 

Huffington Post (Canada): For the past 30 years, economic globalization has accelerated, and its effects are felt in nearly all economic areas and the day-to-day lives of many million people in various ways..Read more 

China challenges EU and US over Market Economy Status 

Financial Times:  China has launched a legal challenge against the EU and US over their reluctance to treat it as a “market economy” under World Trade Organisation rules..  Read more

 

For past issues of our Caribbean & Trade Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

Article 50 UK Supreme Court case starts; Crown begins its submissions

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Photo source: Pixabay

Alicia Nicholls

One of the most consequential and politically-sensitive constitutional law cases in United Kingdom legal history commenced on Monday before the Kingdom’s highest court. A panel comprising all eleven Supreme Court justices heard opening submissions from Attorney-General, Jeremy Wright QC and veteran government lawyer, James Eadie QC, on behalf of the Crown. Reiterating the arguments the Crown had made during the High Court case, both counsel for the Crown argued that the Government does not need to consult Parliament first in order to make its notification of withdrawal from the European Union (EU) under Article 50 of the Treaty of Lisbon as such power lies within the Crown’s prerogative powers – powers belonging to the sovereign (but mostly exercised by the executive branch) which may be exercised without requiring parliamentary consent.

Background

In a referendum held on June 23, 2016 the British people by a 51.9% to 48.1% majority voted in favour of the UK withdrawing from the EU. This led to the resignation of then Prime Minister, David Cameron, and his succession by Theresa May who despite not being part of the “Leave” campaign during the run-up to the vote has since vowed to uphold the will of the British majority with her famous words “Brexit means Brexit”. As part of this pledge, Prime Minister May has argued that the Government can by-pass a parliamentary vote on whether to trigger Article 50 due to the Royal Prerogative.

The Government’s argument was challenged by Mrs Gina Miller, a Guyanese-born British investment fund manager, and Deir Dos Santos, a Spanish-born hairdresser, who were the lead claimants in a case heard by the UK High Court on the matter. In its ruling  R (Miller) v Secretary of State for Exiting the European Union the High Court sided with Mrs. Miller, holding that Article 50 could only be triggered by parliamentary action. The Crown promptly appealed the November 3rd ruling and it is this appeal which is currently before the Supreme Court.

Opening statements by Attorney General

In his opening submissions on Monday, counsel for the Crown, Mr. Wright reiterated that the majority of those who voted in the referendum supported the UK leaving the EU and that Article 50 provides the specific legal mechanism for doing so. He said the divisional court treated this fact as “legally irrelevant” and erred in concluding that it is only by parliamentary action that Article 50 can be invoked. He further argued that “use of the prerogative in these circumstances would not only be lawful, but fully supported by our constitutional settlement, in line with parliamentary sovereignty and in accordance with legitimate public expectations”.

He went on to explain the importance of the foreign affairs prerogative, which includes the power to make and unmake treaties, as “not an ancient relic”, but a “contemporary necessity”.  Acknowledging the UK constitutional law tenet of parliamentary sovereignty, Mr. Wright noted that where parliament has chosen to limit the prerogative, it has done so “sparingly” and “explicitly conscious” of the importance of prerogative powers to government business. A portion of Mr. Wright’s opening submissions may be watched on the Guardian’s site here.

Mr. Wright’s submissions were followed by government lawyer, James Eadie QC, who was asked several questions by the judges during the course of his submissions.

What’s at stake?

According to BBC reporting, the proceedings are expected to last four days and a decision is expected to be rendered in January. It should be reiterated that the matter being decided upon by the Supreme Court is not whether Brexit should take place, but whether the Crown in exercise of the Royal prerogative has the power to trigger Article 50, without first consulting Parliament. As the UK’s highest court, the court’s decision is final.

The stakes are high for the government as not only would the need for parliamentary approval endanger the deadline which Prime Minister May has set for the start of Brexit negotiations, but a possible constitutional crisis of sorts may ensue in the case where  MPs vote against the triggering of Article 50. The governments of Scotland and Wales have been given permission to “intervene” into the case. In Scotland, some 62% of voters had supported remaining in the EU. It should be noted as well that once Article 50 is triggered, it cannot be reversed.

Symptomatic of the public interest and polarisation which this case has generated, various news reports have indicated that there were long queues waiting to get into the court house, as well as protesters on both sides on the streets.

Court resumes tomorrow at 10:15 am (UK time). Please feel free to tune in to any of your favourite media houses for live coverage.

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

Caribbean Trade & Development Digest – November 20-December 3, 2016

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Caribbean Trade Law & Development is pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World for the weeks of November 20-December 3, 2016. 

For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

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REGIONAL

Belize Senate criticises Belize-Guyana Trade Pact

7 News Belize: One of the motions which we didn’t get a chance to tell you about, was a resolution tabled by the Government. It authorizes the Barrow Administration to ratify a Framework agreement between the Governments of Belize and Guyana for bilateral cooperation.Read more

IDB Loan will support economic developent and foreign trade in Guyana

Caribbean News Now: Guyana will improve its public infrastructure and promote economic diversification and foreign trade with a US$9 million Inter-American Development Bank (IDB) loan that will help strengthen the economy and stimulate exports and investments. Read more

Guyana seeking to register Demarara as Geographical Indication

Stabroek: The Commercial Registry here has received applications for Demerara Sugar, Demerara Molasses and Demerara Rum. Minister of Foreign Affairs Carl Greenidge said that recapturing the name provides opportunities for producers to obtain market recognition. Read more

ExporTT Chairman: T&T must improve trade with EU

Trinidad Guardian: Incoming chairman of ExporTT Ashmeer Mohammed said the agency is committed to improving trade with the European Union (EU) and arresting the current decline in trade between T&T and the EU. Read more

Region’s exports fall five percent

Trinidad Guardian: The Economic Commission for Latin America and the Caribbean’s (Eclac) annual report Latin America and the Caribbean in the World Economy 2016 shows that the foreign trade dynamics of the region are having their worst performance in eight decades. Read more

Illicit Cigarette Trade Booming

LoopJamaica: The illicit cigarette trade now accounts for a fifth of the local market, according to cigarette distributor Carreras Limited. Read more

Entities partner to grow exports

JIS: Four private- and public-sector bodies have signed a memorandum of understanding (MOU), agreeing to work together to grow national exports to US$2.5 billion by 2020. Read more

Belize and Jamaica squash “beef” over patties

Breaking Belize News: On November 17, Jamaica’s Minister of Industry, Karl Samuda successfully met with Minister of Trade and Commerce, Tracey Panton, in Guyana during the 43rd meeting of CARICOM’s Council for Trade and Development. Read more

Jamaica, EU discuss moving EPA to full implementation

Jamaica Observer: Minister of Foreign Affairs and Foreign Trade Kamina Johnson Smith, in highlighting the concerns of the Jamaica’s private sector about the challenges faced in accessing the European Union markets, said that Jamaica’s strength and advantages in its services sectors would be greatly unlocked if there was a special visa regime between CARIFORUM and European Union (EU) countries. Read more

Kenya: President Roots for Increased Trade between Kenya, Latin America & the Caribbean

allAfrica: President Uhuru Kenyatta has called for increased trade between Kenya, the Latin America and Caribbean regions.Read more

INTERNATIONAL

Maersk Line to Acquire Hamburg Süd

Maersk Line: Maersk Line and the Oetker Group have reached an agreement for Maersk Line to acquire Hamburg Süd, the German container shipping line. The acquisition is subject to final agreement and regulatory approvals. Read more

OPEC Reaches Oil Output Reduction Agreement

Global Trade Magazine: The thirteen members of the Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, reached an agreement yesterday to reduce oil output by 1.2 million barrels a day beginning next month. Read more

China says its will promote trade deals regardless of TPP, RCEP Direction

Reuters: China said it will actively participate in bilateral and multilateral trade deals, with the goal of deepening reform and opening up its economy, regardless of the direction the Trans Pacific Partnership (TPP) or the China-backed Regional Comprehensive Economic Partnership (RCEP) might take. Read more

Singapore leads global trade ranking for the fifth time

SBR:  Its domestic market is rated as world’s most open.Singapore topped the Global Enabling Trade Report 2016 once again.  Read more

EU-Georgia Free Trade Deal Boosting Trade Flows

Tax News: Trade flows between Georgia and the EU increased 16 percent in 2015, the first full year since the Deep and Comprehensive Free Trade Area (DCFTA) was provisionally applied.The EU-Georgia Association Agreement, which includes a DCFTA, was provisionally applied from September 2014. It fully entered into force on July 1, 2016. Read more

Sanders to introduce US ‘Outsourcing Tax’ Legislation

Tax News: US Senator Bernie Sanders has stated his intention to introduce legislation into Congress that would impose an “outsourcing tax” on companies moving jobs out of the United States, as well as stripping them of their US tax breaks and benefits. Read more

China urges U.S. to abide by WTO anti-dumping agreement

Reuters: China on Friday urged the United States to abandon a surrogate country approach it uses to calculate anti-dumping measures against Chinese exports, as a related clause in China’s World Trade Organization (WTO) deal is set to expire. Read more

MEPs reject call for Court Review of CETA

Tax News: The European Parliament has rejected a request by 89 Members of European Parliament to refer the EU-Canada Comprehensive Economic and Trade Agreement to the European Court of Justice for an opinion.  Read more

China, New Zealand To Upgrade FTA

Tax News: The launch of negotiations to upgrade the existing China-New Zealand free trade agreement (FTA) was announced on November 21, following a meeting between Chinese Commerce Minister Gao Hucheng and New Zealand’s Trade Minister Todd McClay at the Asia-Pacific Economic Cooperation Summit in Lima. Read more

Next Round of RCEP Negotiations in Jakarta Dec 5

Economic Times: The single-tier system of duty relaxation under the proposed mega trade deal RCEP will be the central issue to be discussed at the next round of negotiations of 16 countries, including India and China, in Jakarta from December 5. Read more

WTO chief says no indication Trump wants to take US out of WTO

Reuters: World Trade Organization chief Roberto Azevedo said on Thursday he had no indication that U.S. President-elect Donald Trump wanted to withdraw the United States from the global trading body. Read more

NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT

President-elect Trump’s trade team takes shape: What implications for the Caribbean?

Happy Independence! Tribute to Barbados at 50

Dominica Ratifies WTO Trade Facilitation Agreement

WTO Panel Rules Tax Incentive to Boeing a Prohibited Subsidy

Fidel Castro; Friend to the Caribbean & Anti-Imperialist Hero

TPP: Trump to withdraw from the Agreement on Day One

For past issues of our Caribbean & Trade Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

 

President-elect Trump’s trade team takes shape: What implications for the Caribbean?

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Alicia Nicholls

US President-elect Donald Trump’s trade team is starting to take shape. A successful billionaire himself, Mr. Trump has so far stayed true to his promise of selecting business people as opposed to the traditional career politician for most of his Cabinet and administrative-level choices, with the selection of billionaire private equity investor, Wilbur Ross, as Commerce Secretary and Todd Rickets as Deputy Commerce Secretary. Former Goldman Sachs’ banker, Steven Mnuchin has been picked as Secretary of the Treasury. Mr. Trump’s pick for the US Trade Representative (USTR) has not yet been announced but it has been reported by POLITICO that Representative Charles Boustany is in the bidding for that post.

Mr. Trump’s pick for the head of the Department of Commerce, Mr. Ross, appears to share the President-elect’s skepticism of America’s current trade deals, calling them “dumb deals”, and to support the President-elect’s  broad trade policy proposals. In this interview with Fox’s Maria Bartiromo, Mr. Ross reiterated that theTrans-Pacific Partnership (TPP) “isn’t going to happen” and that the North American Free Trade Area (NAFTA) needs to be “fixed”. Mr. Ross has expressed a preference for bilateral trade agreements perhaps because it may be felt that the US might have more bargaining power in a bilateral deal. Personally, I would submit that this is a non-starter. Because of its economic prowess, large market size and the USTR’s team of skilled negotiators, the US has leverage even when negotiating with groups of countries. As I have argued elsewhere, the TPP’s investment chapter is with few exceptions basically a replica of the US model BIT.

So what does this mean for the Caribbean? As I have stated previously, the US is Caribbean countries’ largest trade and economic partner which means any changes in US trade and economic policy has implications for the region.

Except for the Dominican Republic which is part of the US-CAFTA-DR free trade agreement, US-Caribbean trade and economic relations are framed by the non-reciprocal Caribbean Basin Initiative (Caribbean Basin Economic & Recovery Act and the Caribbean Basin Trade Partnership Act) and additionally for Haiti, the HOPE I&II and HELP Acts, as well as bilateral investment treaties and double taxation agreements where such exist between the US and individual Caribbean countries.

At some point the Caribbean Community (CARICOM) will want to negotiate a free trade agreement with the region’s largest trading partner as the aforementioned preference schemes are unilateral and can by ended by the US at any time, require WTO waivers and also do not include services trade. However, negotiating bilateral agreements with individual Caribbean countries, save maybe for Trinidad & Tobago and Jamaica which have populations (potential markets) of around 1,300,000 and 2,800,000, respectively, will make little economic sense for the US because of the small market sizes of most Caribbean countries.

Either way, this will be the team that regional leaders will have to interface with as we continue dialogue on the issues affecting US-Caribbean trade, as well as the correspondent banking/de-risking issue. Like all cabinet picks, these nominations will need to be confirmed by the Senate but seeing that Mr. Trump will be benefiting from a Republican-controlled Congress, it is unlikely there will be any major issues preventing their nominations.

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

World Economic Forum Releases Global Enabling Trade Index 2016; Caribbean countries continue to lag

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Alicia Nicholls

The World Economic Forum (WEF) and the Global Alliance for Trade Facilitation released the 2016 edition of the Enabling Trade Report today November 30, 2016. Singapore topped the ranking for the 5th time in a row and was in the top 3 for 5 of the 7 pillars.

For Latin America and the Caribbean, Chile was the top economy and led in all but 2 pillars. With a rank of 21st out of 136 economies, Chile was also the highest ranked emerging economy on the index. According to the WEF, the two main findings from this edition of the index were (1) a large part of the world is still excluded from globalization, and (2) some of the world’s largest economies offer limited market access. Another major finding is that the ASEAN market has become more accessible than European Union (EU) and the United States markets.

Caribbean countries’ performance 

Only three Caribbean economies were included on this year’s index: Dominican Republic (78), Jamaica (89) and Trinidad & Tobago (106).

Dominican Republic

The Dominican Republic ranked 78 out of 136 economies in 2016, compared to 77 out of 134 in 2014 and has not as yet ratified the WTO Trade Facilitation Agreement. The Dominican Republic’s best performance was on Pillar 4: Availability and Quality of Transport Infrastructure where it ranked 54th. Its worst was on Pillar 6: Availability and Use of ICTs where it ranked 95th.

The most problematic factors identified for importing were tariffs/non-tariff barriers, burdensome import procedures, high cost or delays caused by domestic transportation, corruption at the border and high cost or delays caused by international transportation. The most problematic factors identified for exporting were difficulties in meeting quality and quantity requirements of buyers, identifying potential markets and buyers, high cost or delays caused by domestic transport, access to trade finance and inappropriate production technology and skills.

Jamaica

Jamaica ranked 89 out of 136 economies in 2016, compared to 88 out of 134 economies in 2014 and has ratified the WTO Trade Facilitation Agreement. Jamaica’s best performance was on Pillar 2: Foreign Market Access where it ranked 34th. Its worst was on Pillar 5: Availability and Quality of Transport Services where it ranked 108th.

The most problematic factors identified for importing were burdensome import procedures, tariffs/non-tariff barriers, corruption at the border, crime and theft, and domestic technical requirements and standards. The most problematic factors identified for exporting were identifying potential markets and buyers, difficulties in meeting quality and quantity requirements of buyers, access to imported inputs at competitive prices, access to trade finance and inappropriate production technology and skills.

Trinidad & Tobago

Trinidad & Tobago ranked 106 out of 136 in 2016, sliding from 93 out of 134 in 2014 and ratified the WTO Trade Facilitation Agreement. Trinidad & Tobago’s best performance was on Pillar 6: Availability and Use of ICTs where it ranked 57th. Its worst performance was on Pillar 7: Operating Environment where it ranked 119th.

The most problematic factors identified for importing were: burdensome import procedures, tariffs/nontariff barriers, corruption at the border, crime and theft and high cost/delays caused by international transportation. The most problematic factors for exporting were: identifying potential markets and buyers, access to trade finance, difficulties in meeting quality and quantity requirements of buyers, access to imported inputs at competitive prices and technical requirements and standards abroad.

About the Index

The Enabling Trade Index ranks economies according to “their capacity to facilitate the flow of goods over borders and their destination”.The index is useful as countries seek to implement the World Trade Organisation’s Trade Facilitation Agreement concluded in 2013 at the Bali Ministerial. It helps countries to see where they are excelling and where there is a room for improvement. It is therefore disappointing that more Caribbean countries are unable to be ranked.

On this year’s index, one hundred and thirty-six (136) economies, accounting for 98 percent of world GDP and 98.3 percent of world merchandise trade, were ranked on seven pillars: domestic market, foreign market, efficiency, transparency and border, availability and quality of transportation infrastructure, availability and quality of transport services, availability and use of ICTs and operating environment.

The full report may be accessed here.

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

 

Happy 50th Anniversary of Independence Barbados! Tribute to Barbados at 50

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Alicia Nicholls

I would like to take this opportunity to extend a happy 50th Anniversary of Independence to all my fellow Barbadians both at home and in the diaspora. Our country Barbados, with an area of just 166 sq miles and a population of around 280,000, may be little more than a small dot on the geographical map but it is hard to deny how far we have come from a small British colony prior to November 30, 1966.

Barbados lacks any real natural resources. But thanks to the steady hand of successive governments, we became a country that former UN Secretary General, Kofi Annan, once described as “punching above its weight”. We are known as the inventors of road tennis, home to the third oldest Parliament in the world, the birthplace of international superstar Rihanna, the greatest cricketer the world has ever seen Sir Garfield Sobers and the inventor of the precursor to the search engine Alan Emtage, just to name a few.

We cultivated a reputation both in the Caribbean and abroad as a country with an enviable level of social development, respect for the rule of law, good governance, a strong democratic tradition,  a 99% literacy rate, and a well-educated people who make our country proud wherever we roam. We punch above our weight on social indicators, ranking high on the Human Development Index. We are classified by the World Bank as a high income non-OECD country. In our 50 years of independence, we can boast of always having peaceful transitions of power. Political assassinations, coup d’etats, dictatorships and civil wars are alien to the Barbadian way and have never occurred in our country.

On the global stage we have earned the respect of fellow countries by joining with other developing countries to provide decisive leadership on international issues affecting small island developing states such as climate change, and on issues critical to small vulnerable economies in the World Trade Organisation (WTO).

Like every country, Barbados is not without its challenges. The post-Global Recession years have not been kind, exposing structural weaknesses which have festered for too long and need to be addressed by decisive leadership. There are things we need to improve upon to ensure that the gains our forefathers, like the late father of independence, Errol Walton Barrow, worked hard to build, will remain for future generations. Complacency will do us no favours.

However, despite the challenges, I have no doubt we have the skills and creativity to overcome them. We just need the will. When I saw the recent newspaper article which showed some 110 people became new Barbadian citizens at the latest citizenship ceremony, it reiterated to me why we Barbadians are so proud of our country. For all its faults, there is no place like the 246. No matter where we roam, the “Rock” will always be home.

Happy 50th Anniversary of Independence, Barbados!

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

Dominica Ratifies WTO Trade Facilitation Agreement

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Photo source: Pixabay

Alicia Nicholls

Dominica has become the latest Caribbean Community (CARICOM) member state to ratify the World Trade Organisation’s (WTO) Trade Facilitation Agreement, according to a WTO press release. On November 28, 2016 Dominica, along with Mongolia, deposited its instrument of acceptance to the WTO. These two ratifications bring the number of WTO member states to have ratified the Agreement to 100, just 10 shy of the number (two thirds of WTO membership) needed for the Agreement to go into effect, according to the press release.

The Trade Facilitation Agreement, which was concluded at the WTO’s Bali Ministerial in 2013, aims to lower trade costs by expediting the movement, clearance and release of goods, thereby cutting red tape, and improving cross-border customs cooperation on trade and customs compliance issues. Upon the request of developing and least developed country (LDC) WTO members, a Trade Facilitation Agreement Facility  was established in 2014 to assist them with implementing and gaining the benefits from the Agreement.

The WTO expects the Agreement to  boost global merchandise exports by up to $1 trillion per year if fully implemented. As I had noted in a previous post on the Agreement, ratification and full implementation  of the Trade Facilitation Agreement by all CARICOM states could also improve Caribbean regional integration by easing transaction costs of exporting across CARICOM states. Implementing these reforms would also send a strong signal to the international business community of these countries’ commitment to improving their ease of doing business.

The following other CARICOM countries have already ratified the Agreement: Trinidad & Tobago, Belize, Guyana, Grenada, St. Lucia, Jamaica and St. Kitts & Nevis.

The WTO press release may be viewed here.

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

WTO Panel Rules US Tax Incentive to Boeing a Prohibited Subsidy

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Photo source: Pixabay

Alicia Nicholls

In the latest saga of the on-going battle between aircraft giants Airbus and Boeing, a World Trade Organisation (WTO) dispute settlement body panel on November 28, 2016 has ruled that Washington State’s business and occupation (B&O) aerospace tax rate for the manufacturing or sale of commercial airplanes under Boeing’s 777X programme currently in development is a prohibited subsidy under the WTO’s Subsidies and Countervailing Measures (SCM) Agreement. The tax breaks to Boeing had been extended by Washington State in 2013 from 2024 to 2040.

The Dispute

The dispute DS487: United States — Conditional Tax Incentives for Large Civil Aircraft was brought by the European Union (EU) which claimed that seven tax incentives extended by Washington State to the civil aerospace industry, which would benefit Boeing’s 777x programme, constitute prohibited subsidies under Articles 3.1(b) and 3.2 of the WTO’s Subsidies & Countervailing Measures Agreement because they de jure require Boeing to use domestically assembled and not imported body and wings for its 777x jets.Such a measure would fall under a prohibited subsidy under Article 3.1(b) of the SCM Agreement as it is a subsidy tied to the use of local content. The EU had claimed that Boeing would gain over $5.7 billion in benefits from the measures.

Findings

The Panel found that all seven of the measures at issue were subsidies under Article 1 of the SCM but found that only the B&O aerospace tax rate for the manufacturing or sale of commercial airplanes under the 777X programme was a prohibited subsidy under the SCM Agreement as it was contingent on the use of domestic over imported goods.

The Panel recommended that the US withdraw this prohibited subsidy without delay and within 90 days.

With respect to the six other challenged measures, the Panel held that the EU did not demonstrate that the aerospace tax measures are de jure contingent upon the use of domestic over imported goods and were therefore not prohibited subsidies.

Reactions

Interestingly, both sides appear to have claimed victory which is perhaps not surprising as the WTO ruled only one out of the seven contested measures to be prohibited.

The European Commission has hailed the ruling a “major win” in its press release following the ruling. In that release EU Trade Commissioner, Cecilia Malmstrom is quoted as stating:

“Today’s WTO ruling is an important victory for the EU and its aircraft industry. The panel has found that the additional massive subsidies of USD 5.7 billion provided by Washington State to Boeing are strictly illegal. We expect the US to respect the rules, uphold fair competition, and withdraw these subsidies without any delay”.

Boeing’s rival, the EU-based Airbus termed it a “knock-out blow”. In its own press release, Airbus claimed that “Boeing has caused at least $95 billion in commercial harm to Airbus, opening the door to trade sanctions against the US in an equivalent amount.”

In its response to the ruling, Boeing stated that “the World Trade Organization (WTO) today rejected virtually all of the European Union’s challenges to the Washington state tax incentives”. Boeing’s General Counsel, J. Michael Luttig stated that “we fully expect Boeing to preserve every aspect of the Washington state incentives, including the 777X revenue tax rate.”

What next?

Either party can appeal the ruling and it is expected that this will occur. This dispute is just the latest in the 12-year old dispute between aerospace rivals Airbus and Boeing over the extent of “illegal” government support the manufacturers have received from EU member countries in the case of Airbus, and the US in the case of Boeing.

The ruling comes on the heels of a report by a WTO compliance panel released September 2016 which held that the EU had not complied fully with a ruling against support provided to Airbus in the EC and certain member States – Large Civil Aircraft dispute. In 2017 the WTO is also expected to issue its ruling on another case regarding US support for Boeing.

The full panel report may be viewed here.

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

Fidel Castro: Friend to the Caribbean and Anti-Imperialist Hero

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(Photo source: Pixabay)

Alicia Nicholls

Former Cuban President and leader of the 1959  Cuban Revolution, Fidel Castro Ruz, took leave of this earthly realm on November 25, 2016 at the age of 90. Coincidentally, his passing took place on the anniversary of the Granma’s departure from Mexico in 1959 to liberate Cuba.

Despite the prevailing Washington narrative of Comrade Castro as a “brutal despot and tyrant” who trampled human rights and impoverished his people, most of us in the Caribbean remember “El Comandante” as a revolutionary figure, a freedom fighter, a friend to the Caribbean and an anti-imperialist hero.

In these few paragraphs, I will outline some of the things that are often forgotten in the common narrative about the bearded Commander who seized power from corrupt dictator Fulgencio Batista in 1959 and ruled Cuba for nearly five decades, until transferring power to his younger brother, Raul Castro, in 2006 during a period of illness. On February 24, 2008 Raul Castro officially became President.

Friend to the Caribbean

Since the 1970s, Caribbean countries have enjoyed close diplomatic ties with Cuba and have repeatedly called for the US to bring an end to the embargo.  Thanks to Mr. Castro, thousands of Caribbean students have benefited from Cuban government scholarships to study medicine at Cuban universities. Many other persons have benefited from medical treatment, particularly ophthalmological treatment, by Cuban doctors.

Cuba’s solidarity with its Caribbean sisters has continued under current President Raul Castro. Cuba has sent medical doctors to assist Caribbean countries in the wake of disasters, including to Haiti following Hurricane Georges in 1998, the earthquake in 2010 and more recently, sending over 30 additional doctors to the country to provide assistance after Hurricane Matthew.

Mr. Castro’s Cuba was a founding member of the ALBA, pioneered by the late Venezuelan president, Hugo Chavez Frias, and which in English translates to the Bolivarian Alternative for the Americas.

Social Justice Icon

Today it hurts us if a Cuban is hungry, if a Cuban has no doctor, if a Cuban child suffers or is uneducated, or if a family has no housing. It hurts us even though it’s not our brother, our son or our father. Why shouldn’t we feel hurt if we see an Angolan child go hungry, suffer, be killed or massacred?” — President Fidel Castro, March 30, 1977

Despite his well-off social status, being a law graduate from the University of Havana and the son of a Spanish-born sugar planter, Mr. Castro fought for social justice for the Cuban people and drew inspiration from  the late Jose Marti “Apostle of Cuban Independence”.

Comrade Castro, along with eighty other revolutionaries including another iconic figure, Argentine-born Ernesto “Che” Guevara, set sail from Mexico on November 25, 1959 aboard a yacht called the Granma with the aim to liberate Cuba from President Batista. Under Batista’s rule Cuba had been a hedonistic enclave for wealthy Americans and US multi-national companies, while income inequality in Cuba widened and the Cuban economy stagnated.

During his presidency, Mr Castro proposed reforms to return sovereignty to the Cuban people, including land reforms, agrarian reforms and economic diversification. He  started a literacy campaign and introduced free universal education and health care for each Cuban citizen. By controversially expropriating foreign owned lands, he sought to end US domination of the Cuban economy and retake Cuba for Cubans. Criticism is made of the poverty under which many of Cuba’s 11 million residents still live but little mention is made of the role the US’ illegal trade, financial and economic embargo has played in retarding Cuba’s economic progress.

Moreover, very little is generally said in western media about the social strides Cuba has made despite the embargo. For example, Cuba has the lowest HIV/AIDS infection rate in the Caribbean, and one of the lowest in the world. Its  literacy rate of 99.8% is one of the highest in the world, while its low infant and maternal mortality rates were praised by the UN Population Fund in 2012. Even in the face of the US embargo, Cuba has pioneered medical research as noted in this Huffington post article, and has willingly shared its medical, education and scientific expertise with other developing countries. Cuba has also distinguished itself in the area of sport.

In the early years, Cuba sought to export its revolution to the world with Soviet help. Castro’s right hand man, Che Guevara, was murdered in Bolivia in 1967 while trying to promote revolution in that South American country. In more recent years, Cuba has shifted to soft power, exporting its highly-trained doctors and other health care professionals to countries in need of humanitarian aid. His offers of assistance were not limited to allies and developing countries. Notably, in 2005 then President Fidel Castro offered to send 1,600 Cuban doctors, field hospitals and medical supplies to the US after Hurricane Katrina devastated New Orleans, a gesture which Washington refused.

Anti-Apartheid

Mr. Castro also fought against racism and oppression. When western governments unapologetically supported the racist apartheid government in South Africa, Mr. Castro’s Cuba instead supported anti-apartheid movements in that African country, a fact which Jacob Zuma, current South African president reiterated in his statement on Mr. Castro’s death:

“[Fidel Castro] inspired the Cuban people to join us in our own struggle against apartheid. The Cuban people, under the leadership and command of President Castro, joined us in our struggle against apartheid”. – Jacob Zuma

Anti-Imperialist & Anti-colonialist Hero 

Cuba is not opposed to finding a solution to its historical differences with the United States, but no one should expect Cuba to change its position or yield in its principles. Cuba is and will continue to be socialist. Cuba is and will continue to be a friend of the Soviet Union and of all the socialist states.” President Fidel Castro, December 20, 1980

For anti-imperialists, the “David and Goliath” analogy is no more blatant than in a small island state like Cuba openly defying and provoking the ire of the United States, the most powerful country in the world. Located just 90 miles off the Florida coast, Cuba went from being “America’s whorehouse” to becoming Washington’s public enemy number one because of its embrace of Communism and of the Soviet Union at the height of the Cold War. As a result, successive US governments have since the 1960s punished Cuba with an illegal economic, trade and financial embargo, which despite the detente started by now outgoing US President Obama in 2014, remains in effect.

While weaker men would have bowed to western pressure, Mr. Castro’s  defiant fight against western imperialism was not limited to Cuba. Cuba provided soldiers, military training and moral support for revolutionary movements in Latin America, and anti-colonial, independence movements throughout Africa, including most notably Angola.

Recalling Cuba’s assistance to the people of South Africa and of other African countries, then South African President Nelson Mandela is reported to have said on his  1991 visit to Cuba as follows:

The Cuban people hold a special place in the hearts of the people of Africa. The Cuban internationalists have made a contribution to African independence, freedom, and justice unparalleled for its principled and selfless character, President Nelson Mandela

In global politics, Castro’s Cuba also played a leading role, including being a founding member of the Non-Aligned Movement (NAM) and later assuming the presidency of that organisation from 1979-1983 and again from 2006-2009.

Global Reaction to his passing

Mr. Castro was a polarising figure in both life and death. Predictably, US President-elect Donald Trump in a statement released following news of Mr. Castro’s death noted that “Today, the world marks the passing of a brutal dictator who oppressed his own people for nearly six decades.” Aside from the nausea-inducing rejoicing by US media, politicians and Cuban-Americans at the news of Mr Castro’s passing, the heart-felt reactions of many of the world’s leaders are testimony to the friend and Great man which many regarded him to be:

Irwin LaRocque (Secretary General of the Caribbean Community – CARICOM) – “The passing of Fidel Castro marks the end of a life dedicated to fighting for the dignity of all people which ensures his place in history.”

Enrique Pena Nieto (President of Mexico) – “Fidel Castro fue un amigo de México, promotor de una relación bilateral basada en el respeto, el diálogo y la solidaridad” (A.N. Translated: Fidel Castro was a friend of Mexico, promoter of a bilateral relationship based on respect, dialogue and solidarity.)

Narendra Modi (Prime Minister of India) – “Fidel Castro was one of the most iconic personalities of the 20th century. India mourns the loss of a great friend.”

Xi Jinping (President of the People’s Republic of China) -“the Chinese people have lost a close comrade and a sincere friend.”

Justin Trudeau (Prime Minister of Canada) – “Fidel Castro was a larger than life leader who served his people for almost half a century. A legendary revolutionary and orator, Mr. Castro made significant improvements to the education and healthcare of his island nation.”

Outgoing US President Obama’s carefuly worded statement was not marked by effusive praise of Mr. Castro, possibly not to offend the Cuban Americans, but it avoided the inflammatory tone of the President-elect’s. Mr. Obama did, however, make note of the warming of relations between the US and Cuba under his watch and stated that  “the Cuban people must know that they have a friend and partner in the United States of America.”

His Legacy will live on

“Condemn me. It does not matter. History will absolve me.” — Fidel Castro while on trial on October 16, 1953

A thorn in Washington’s side, Mr. Castro has survived over 600 assassination attempts, as well as the Bay of Pigs invasion of 1961. He was not perfect (No leader is!). He jailed dissenters, for example, and publicly accepted responsibility for the persecution of LGBT persons during the 1960s and 70s. But despite his faults, he was far from the inhumane despot the West portrayed him to be and is generally beloved by the Cuban people. Moreover, western countries’ support of brutal and repressive regimes in the name of preserving their geopolitical and economic interests while demonising Fidel Castro smacks of nothing less than hypocrisy at the highest level.

Comrade Castro’s contribution to the anti-imperialist movement is immeasurable. His strength of conviction in the face of opposition by the world’s most powerful nations was without comparison. He was a freedom fighter and revolutionary hero who was quick to lend humanitarian support and expertise to other countries and provide global leadership against imperialism, racism, fascism, foreign aggression and oppression.

Whatever his faults, his heart was in the right place. His failings were outweighed by his achievements. For us in the Caribbean, Castro’s Cuba will always be a symbol of anti-imperialist strength. His friendship to the Caribbean region and to other nations of the Global South will always be remembered. His death leaves an unfillable void, but his legacy is indelible. I express my empathy and solidarity with the Cuban people as they endure these days (and years) of mourning.

Que descanses en paz, camarada Fidel (Rest in peace, Comrade Fidel).

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

TPP: Trump to Withdraw US from Agreement on day one

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Alicia Nicholls

United States (US) President-elect Donald Trump has made clear his intention to honour one of his more popular campaign pledges; withdrawing his country from the Trans-Pacific Partnership (TPP) Agreement. He reiterated this promise in an online video aimed at updating the American people on the progress of his transition and policy plans for the first one hundred days of his presidency which will officially begin on January 20, 2017.

In a video which was silent on his more controversial plans like building a wall Mexico would supposedly pay for or pulling out of the Paris Climate Change Agreement, Mr. Trump stated that on the first day of taking office he would “issue a notification of intent to withdraw” from the 12-member mega-regional trade agreement whose members account for forty (40) percent of global GDP.

Referring to the TPP as “a potential disaster for our country”, the President-elect stated that he would instead “negotiate fair bilateral trade deals that bring jobs and industry back to American shores”, one of the main cornerstones of his Trade Policy. The US has signed the TPP but has not yet ratified it.

The TPP has faced tremendous opposition. Among other things, TPP critics have denounced the negotiations’ secrecy and lack of transparency, the potential impact on access to medicines by the stronger intellectual property rights provisions, and the investor-state dispute settlement provisions which allow investors to sue . However, Mr. Trump’s criticisms of the Agreement have been largely vague centering around the need to bring back American jobs and take back control of the American economy. On the campaign trail Mr. Trump famously called the TPP “a rape of our country“.

While Mr. Trump’s former opponent, former Secretary of State Hillary Clinton, had revoked her support of TPP during her democratic primary fight against Senator Bernie Sanders, current US President Barack Obama has been a staunch supporter of the TPP. The outgoing President recently defended the Agreement at last week’s Asia-Pacific Economic Cooperation (APEC) summit in Lima, Peru.

Mr. Trump’s promise to withdraw from the TPP may be music to the ears of TPP critics and workers in US ‘rustbelt’ states but fellow TPP member states are not optimistic. Japanese Prime Minister Shinzo Abe has said the TPP would be “meaningless” without the US. Reuters reports that Peru has proposed talks to save the TPP. It should be noted that none of the countries have ratified the Agreement as yet. With the TPP practically “dead on arrival”, Asian states appear to be already pivoting towards the China-pushed rival deal, the Regional Comprehensive Economic Partnership  (RCEP), and the Free Trade Area of the Asia-Pacific (FTAAP).

In the short video, President-elect Trump also reiterated his promise to cut regulations and increase the production of fossil fuels and pledged to “direct the Department of Labour to investigate all abuses of visa programmes that undercut the American worker”. Mr. Trump has promised in the video to share more updates in upcoming days.

The President-elect’s full video may be viewed here.

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

Trump Presidency: What priorities for US-Caribbean Economic Engagement?

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Alicia Nicholls

The United States’ position as most Caribbean countries’ largest economic partner and an important foreign policy ally means that constructive engagement with the incoming Trump administration is not just a choice but an imperative. The Caribbean Community (CARICOM) and individual Caribbean governments have all expressed congratulatory messages, emphasizing their willingness to work with Mr. Trump and continuing the harmonious US-Caribbean relationship.

But in contrast to the idealism attending then Senator Barack Obama’s “Yes we can” message eight years ago, a spectre of profound uncertainty shrouds the President-elect not just because of his extreme rhetoric on trade and foreign policy, undergirded by his “Make America Great Again” and “America First” refrains, but also the lack of policy specificity.

In this article, I will outline what I believe are five key priorities which will likely frame US-Caribbean economic and foreign policy engagement for the foreseeable future:

  1. Correspondent Banking/De-Risking

A first order of business will be continuing the conversation that CARICOM governments and stakeholders have started with US officials and regulators on the de-risking activities of US-based international banks, including the withdrawal and restriction of correspondent banking relationships. These relationships are Caribbean’ lifeline to the global financial and trading system, critical for the trade, investment and remittance flows which buoy our small open economies and sustain households.

US foreign policy orientation towards the Caribbean has constantly recognized that an economically secure “third border” complements US’ strategic security interests. Any threat therefore to the region’s economic and financial inclusion is something which should be of mutual concern. Unfortunately, there appears to be limited progress on the correspondent banking issue.

While de-risking is a cost-benefit decision for banks, it is also partly fuelled no doubt by ambiguous regulations and the Caribbean’s undeserved reputation in some quarters as a high risk place for doing business. To their credit, the US Treasury and Federal Banking Agencies released a Joint Factsheet on Foreign Correspondent Banking. Additionally, the US Treasury has reiterated that the de-risking issue is a “key priority”.

However, actions by US authorities which unfairly label Caribbean countries as “tax havens” contribute to the perception that Caribbean jurisdictions and banks are higher risk. In 2015 the state legislature of Montana, and the District of Columbia, had included several Caribbean countries among their proposed lists of tax havens. This is despite Caribbean countries’ having taken steps to ensure their compliance with the Foreign Account Tax Compliance Act (FATCA) and our clean bill of health by the Organisation for Economic Cooperation and Development (OECD).Continued engagement with US states and federal authorities on this issue is a must.

  1. International Financial Services & FATCA

Although President-elect Trump has promised to lower the US federal corporation tax rate from 35% to 15% and  provide a deemed repatriation of corporate profits held offshore at a one-time tax rate of 10%, his orientation towards international financial centres (IFCs) in general is not well-known.

The Obama administration has not been friendly to Caribbean IFCs, and that is putting it mildly. On the other hand, Mr. Trump’s background as a businessman may make him more appreciative of the role IFCs play in making US businesses more efficient and profitable, which in turn facilitates their contribution to US economic and job growth. Moreover, conventional wisdom holds that Republican governments are usually friendlier to the Caribbean than are Democratic governments, and there is good anecdotal evidence to support this.

Additionally, continued engagement with US authorities will be necessary to iron out any implementation and reporting issues under FATCA.

  1. Caribbean Basin Initiative & Other Market Access Issues 

Manufacturers in most Caribbean countries enjoy non-reciprocal duty-free access to the US market for most goods under the Caribbean Basin Initiative (CBI), an initiative of the Reagan administration in the 1980s which had both economic, ideological and geopolitical imperatives. The CBI is unilateral which means that the benefits can be unilaterally revoked and the criteria for eligibility changed at any time. However, CBI is generally believed to be beneficial to US manufacturing and jobs and Caribbean has a large trade deficit with the US, which should keep CBI off the President-elect’s immediate radar.

One sticking point in US-Caribbean trade relations is the cover over subsidies which the US Federal government pays to the US territories of Puerto Rico and the US Virgin Islands out of excise taxes it collects from imported rums, which has made Caribbean rums less competitive in the US market. Turning to merchandise trade in general, non-tariff barriers such as sanitary and phyto-sanitary and labelling requirements have also been a constraint on market access.

Caribbean workers benefit from temporary employment under the US Farm Workers and Hospitality Workers programmes. However, outside of this, Caribbean service providers have no preferential access to the US market. The CBI does not cover services trade. Caribbean business persons seeking to supply a service in the US instead rely on non-immigrant visas. Mr. Trump has promised to tighten the US’ border and control policy. It is not certain whether this will be extended to non-immigrant visas as well.

  1. Immigration & Workers’ Programmes

Mr. Trump made tightening immigration one of the cornerstones of his campaign platform. While his ire was directed towards Mexican and Muslim immigrants, Caribbean immigrants will be collateral damage. For instance, undocumented immigrants who had come to the US as children and had identified themselves in good faith when applying for protection under the Deferred Action for Childhood Arrivals (DACA) programme might have unwittingly made themselves prime targets for deportation if Mr. Trump goes through with his plans.

Most Caribbean immigrants are law-abiding citizens who are making sterling contributions to the American society. However, another pertinent concern is Mr. Trump’s vow to accelerate the deportation of those immigrants convicted of crimes to their country of birth, which has been a sticking point in US-Caribbean relations for some time. Caribbean governments have criticised the deportation of persons who were born in the Caribbean but socialised in the US with only superficial Caribbean roots. They have also linked these deportations to increased violent crime in the Region.

Mr. Trump has also spoken earlier about reforming legal immigration. This will make it difficult for Caribbean persons to emigrate legally to the US. This also has implications for remittances, a lifeline for many poorer Caribbean households.

5. Mobilising Climate Finance

Climate finance is needed to assist countries, particularly poorer and most vulnerable countries, in their climate change adaptation and mitigation efforts. It is something which the Small Island Developing States in particular were adamant upon during the negotiations leading up to the eventual signing of the Paris Climate Change Agreement.

Developed countries committed themselves to mobilising 100 billion USD in climate finance from a variety of sources each year by 2020, a pledge which dates back to Copenhagen in 2009 and one which President Obama has supported. Caribbean countries have also received climate change aid under USAID programmes.

Mr. Trump, however,  is not a believer in anthropogenic (man-made) climate change, and has vowed to “cancel the Paris Agreement”, to ramp up fossil fuel production and to defund the clean energy initiatives. Further US contribution to the Green Climate Fund, which was established to assist developing countries like those in the Caribbean, is now in question.

Conclusion

Mr. Trump’s election has evoked an aura of uncertainty over what will be the future paradigm of US-Caribbean relations. Although the Caribbean had not featured in the policy discussions during the campaign, Mr. Trump’s populist rhetoric illustrated a marked departure from the tenets of current US economic and foreign policy. He has, however, been light on specifics. If implemented, his proposals will be a strong departure from current US policy, particularly in the area of climate change which I addressed in a previous post.

Nonetheless there are two sparks of hope. Firstly, President-elect Trump is a businessman at heart and should be more attuned to a ‘dollars and cents’ argument. Secondly, Mr. Trump’s malleability in regards to his positions evinces some pragmatism on his part. It is worth remembering that for much of his public life, Mr. Trump has espoused liberal views until becoming an independent and then a Republican in later years. He has also softened some of his most ardent positions during the campaign and since winning the election, and has also been rumored to be considering some of his former Republican opponents for Cabinet positions.

These two factors suggest that there may be more scope for discussion with a Trump administration than may initially be perceived. What will the emerging Trump Doctrine mean for the Caribbean? And whether we will see a “hard” or “soft” Trump, to borrow the clever nomenclature employed by former WTO Director General, Pascal Lamy, no one knows. A clearer sense of Mr. Trump’s true policy orientation will be more discernible when more of his Cabinet picks are revealed and his proposals are elaborated upon.

While these issues I have highlighted will not be policy priorities for the Trump Administration, they are issues of importance to Caribbean countries. As such, Caribbean governments and other stakeholders must be pro-active in their engagement with the Trump administration from day-one when he assumes office in January 2017.

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

Caribbean Reflections on Soft Power

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Jo-Ann Hamilton, Guest Writer

What do China and the United States have in common? Global influence? Economic Hegemony? Let’s throw Qatar and Iceland into the mix. Any thoughts? The answer is soft power. China invests globally in infrastructure around the globe often in countries largely ignored by the international community. The Chinese government also gives away millions in scholarships to students around the globe to be educated in its Chinese universities.

Whilst traditionally the Americans have often wielded hard power in the form of military might, they have also pioneered the concept of soft power through their powerful media business, namely American cinema. Silicon Valley’s technology in the form of Facebook, Google and Twitter are just a few examples of the American brands associated with innovation and the American entrepreneurial spirit.

Qatar’s regional and international influence is being channeled through its state-funded global media network, Al Jazeera. The creation of the Qatar Foundation is the mini state’s approach to developing itself into a knowledge based economy whilst at the same time sharing this knowledge globally.

Lastly, there is Iceland, a small nation in Northern Europe. Unlike its powerful neighbours the UK and other countries in the EU it wields no great power. What it does have is a clever and innovative approach which sets it apart as a leader in fields as diverse as science, computer research and public health. They are not too dissimilar to its other Northern European neighbours, such as Sweden and Finland who are global leaders in the area of sustainability.

But what does this have to do with the Caribbean? The Caribbean is usually on the receiving end of soft power. What can the region do to leverage its soft power? How can it persuade and influence both collectively and individually to position itself as players in the global economy?

Brand Caribbean.

Brand Caribbean must be carefully orchestrated by each individual nation within the region but first it must gain significant buy-in from the citizens of each nation, who tend to possess a silo-ed pride. Like any good branding campaign, Brand Caribbean must position itself as being a source of inspiration, changing the world, doing good and developing its people.

One great example of this is in the United Arab Emirates. Its Vice President Sheikh Mohammed bin Rashid Al Maktoum, who is also the Emir of Dubai, recently released his UAE strategy for the Future, in which he stated,

“ As a nation, we have always been forward-looking and planning for the future, which has been a key driver of our success. With our future planning model, we will serve as a model for the world. The citizens of the UAE are our most important resource in building our future. To nurture their skills, we will strengthen education and training initiatives.”

This is a brand based on upliftment, where collaboration, strategy, education and an investment in its human capital is key to its success.

Brand Caribbean must speak with one voice and with a unified message. One may ask how can an entire Caribbean region which is so nuanced and diverse speak in one tone? How can this be achieved? The answer is simple, if the Caribbean region has a strong desire to propel itself and its people into the future, it has no choice. With the right leadership, enthusiasm, patience, confidence and discipline nothing is impossible. This is not a job solely for governments, but for the region’s intellectuals, culturalists, innovators,
entrepreneurs and changemakers, both at home and in the diaspora.

“Leadership is the capacity to translate vision into reality” Warren G. Bennis

Brand Caribbean should be infused in every aspect of our wider societies and communities, leaving no one behind and promoting a society for all. So, what exactly is Brand Caribbean? Brand Caribbean is the representational self image of regional pride and ambition, which will lead the region beyond sun, sand and sea. Many reading this will think, the Caribbean is not a superpower, it is not wealthy, it has no military might or
massive oil fields. Yes, this is all accurate but the beauty and brilliance of soft power is that it requires introspection, depth, emotional maturity and intellect. It is not measurable by any international standard it is merely a way to gain influence by using what you have. It is based on being who you are and begins with where you are.

Soft power affects behaviour, it changes attitudes and perceptions, which in turn attracts the right kind of attention and visibility. This power is influential and stems from knowing one’s own worth. Unlike relational power it does not seek to position itself by comparisons to a wider authority or through deference but through self efficacy and knowing that it indeed has something unique to offer the world.

Singapore is a small first world nation in South-East Asia, which was 50 years ago a member of the third world club. It was once dismissed as a nation barely surviving. Today it boasts world class universities, and is a global finance, commerce and trade hub amongst other notable things. It holds many firsts and exists in a world of superlatives.

“The most valuable of all capital is that invested in human beings.” Alfred Marshall

The Caribbean is the “Green Queen” which makes her a region for innovation on all matters sustainable from renewable energy to agriculture to fashion and all in between. She boasts the world’s best athletes, with a legacy spanning cricket, baseball and track and field. She has a vibrant literary, music and theatrical culture and she is a land of many people, living together for the most part peacefully resulting in every hue and cultural mix imaginable to the human race.

This makes her an example for diversity and cultural capital of all forms. Each nation has
something special. Her unique selling points are capable of solving some of the world’s biggest problems where the environment and diplomacy are concerned. Her music, art and culture can act as a hub for innovation centering peace and conflict resolution. Her diaspora is vast, therefore scope and reach are unlimited.

In the end the biggest convincers of Brand Caribbean are not outsiders but those inside the
community. We must first become our own early adopters and appreciate the diverse cultures, values and traditions we bring to the world.

What do all of the Caribbean nations have in common? There are no low costs reliable ferries or planes offering multiple daily services throughout the region. Island hopping is extremely difficult and in some cases impossible. In many instances most Caribbean nationals do not travel inter-regionally. If we do not know ourselves how can we set goals for our region and make decisions which enable and have a long lasting impact? If soft power rests on ideas which are appealing, how can this be accomplished if we don’t know each other? In the end what we think of ourselves, is much more important than what others think of us. May our self esteem lead us into a new era, where our region leads with soft power.

Jo-Ann Hamilton is a Caribbean-born, globally active freelance writer, UN Women Global Champion, consultant and the founder of SecretBirds which empowers women and young girls through entrepreneurship. You can follow her on Twitter at @JAlexandrHamil and read more of her work at SecretBirds Headquarters.

De-Risking remains “a key priority”, according to US Treasury

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Alicia Nicholls

De-risking remains a “key priority” for the United States’ (US) Department of the Treasury. This is according to Acting Under Secretary for Terrorism and Financial Intelligence in the US Department of the Treasury, Mr. Adam Szubin, in a key note address delivered at the American Bankers Association/American Bar Association’s annual Money Laundering Enforcement Conference held in Washington DC November 13-15, 2016.

The withdrawal and/or restriction of correspondent banking services as part of banks’ de-risking efforts has been a growing problem internationally, with small states in the Caribbean appearing to be the most affected, according to a World Bank study published last year. For small open economies, the loss of correspondent banking relationships threatens to sever their access to global trade, finance and remittance flows. Belize in particular has been seriously impacted by de-risking as even its Central Bank has seen some of its CBRs severed.

Responding to those who highlight that the current regulatory environment is prohibiting  financial inclusion, Mr. Szubin noted that “we at Treasury firmly believe that expanding access to the financial system and protecting it from illicit activity are mutually reinforcing goals that can and must be addressed simultaneously.”

He went on to discuss what the Treasury found were the reasons why some international banks were reassessing their business relationships:

  • Correspondent banking is a low-margin business in a global banking environment that has seen many multinational banks reassess their global strategic footprint, cut costs, and reallocate capital.
  • Heightened prudential standards following the global financial crisis
  • There are often very real concerns about the risks presented by anti-money laundering and countering the financing of terrorism (AML/CFT) compliance

It should be pointed out that Caribbean-based research on De-Risking and Its Impact found that “[banks’] decisions are based on a complex of factors, including the cost of compliance with laws and regulations, and is an unintended consequence of decisions taken by the official sector in globally systemic countries.”

It is also worth noting that no CARICOM state is currently on the CFATF’s watch list, not even Belize which has been the most affected. Therefore, the view of Caribbean countries as “high risk” is unfounded. Another issue is that US banks themselves have highlighted the need for better regulatory guidance on de-risking, which shows that ambiguous regulations are indeed part of the problem. A good step is the Joint Fact Sheet entitled “Joint Fact Sheet on Foreign Correspondent Banking” released by the US Treasury and US regulators this August.

Mr. Szubin then outlined the following ways in which the US is dealing with the problem:

  • On-going engagement with the private sector, foreign jurisdictions, money services businesses, non-profit organizations, including with the Caribbean
  • Ensuring that the global standards in place are well understood and implemented consistently and effectively e.g: release of its Factsheet clarifying that Knowing your customer’s customer – KYCC is not required
  • Treasury’s Office of Technical Assistance offers technical assistance to roughly 18 countries, including a number of countries impacted by de-risking
  • Information sharing and he gave an example of Mexico

Mr. Szubin called the perception that banks are taking an indiscriminate approach to terminating, restricting, or denying services across entire sectors as “inaccurate and overblown and not, in fact, what most institutions are doing in terms of best practice”. This, however, has not been the experience of some banks in the Caribbean which have had their correspondent banking relationships severed without a concrete explanation and often with only a short notification period. Bank of America’s abrupt termination of its relationship with Belize’s largest bank, Belize Bank, is perhaps the most glaring example.

Mr. Szubin did, however, encourage banks “to continue to take the time and effort to assess your controls and the risks presented by individual clients and where you cannot manage effectively that risk make conscientious decisions.”

It is, however, comforting to know the US Treasury has reiterated its prioritisation of the phenomenon of de-risking, which bodes well for Caribbean governments and other stakeholders as they continue their lobbying on this issue.

The full remarks may be accessed here.

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

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