Monthly Archives: February 2017

Trump Trade Policy ‘Achievements’: The First Month

Alicia Nicholls

February 20th marked United States (US) President Donald Trump’s first full month in the Oval Office. And what a month it has been! We have seen a lot of focus by his administration on immigration. But what about trade? Trade occupied a major part of the platform of then US presidential candidate Trump. In his Contract with the American Voter , he had enumerated several trade-related pledges as part of his 100-day action plan to “Make America Great Again”. His first one hundred days are not yet up, but it is worth looking at what have been the achievements towards his “America first” trade policy during his first month in office.

President Trump’s Trade Promises

As a reminder, these were the major trade-related promises gleaned from his Contract with the American Voter. He pledged to:

  • Announce his intention to renegotiate the North American Free Trade Agreement (NAFTA) or withdraw from the deal under Article 2205;
  • Announce the US’ withdrawal from the Trans-Pacific Partnership;
  • Direct the Secretary of the Treasury to label China a currency manipulator;
  • Direct the Secretary of Commerce and U.S. Trade Representative to identify all foreign trading abuses that unfairly impact American workers and direct them to use every tool under American and international law to end those abuses immediately;
  • Work with Congress to introduce the “End Offshoring Act” to establish tariffs to discourage US companies from laying off their workers in order to relocate in other countries and ship their products back to the U.S. tax-free.

Three main reasons possibly explain Mr. Trump’s slow progress on his trade agenda thus far. Firstly, two key members of his trade team  who are needed to help effect his policies are still awaiting Senate confirmation, namely his United States Trade Representative (USTR) pick, noted trade lawyer and former deputy USTR under President Ronald Reagan, Robert Lighthizer, and his commerce secretary nominee, Wilbur Ross, an investor and former banker.

Secondly and related to the first point,Mr. Trump’s policy inexperience means he will likely be more reliant on the guidance and advice of his yet-to-be confirmed trade team than would other presidents. Thirdly, it is possible that Mr. Trump is realising that there is a wide chasm between presidential campaign rhetoric and how Washington and the role of president actually work, particularly when contrasted with being a CEO of one’s own company.

What has he achieved so far and what hasn’t he?

With that in mind, it is not surprising that of his stated promises, his only substantive trade policy achievement thus far has been directing the USTR via a presidential memorandum to withdraw the US from the Trans-Pacific Partnership (TPP). Withdrawal from the TPP was a low-hanging fruit. The US had signed but not yet ratified the Agreement and there was almost bi-partisan criticism of the deal. The acting USTR has since followed up on this memorandum, submitting a withdrawal letter to the TPP depository and TPP partners, and indicating their interest in bilateral trade deals with former TPP partners with which the US does not currently have a trade agreement.

Further to the latter point, President Trump and his soon-to-be confirmed trade team have been consistent so far on their preference for bilateralism over multilateralism. Trade was one of the hot button topics at his initial meetings with United Kingdom (UK) Prime Minister Theresa May,   Japan’s Shinzo Abe and Canadian Prime Minister, Justin Trudeau.

In keeping with his campaign promise that post-Brexit UK would not be at the back of queue for a trade deal, Mr. Trump received Prime Minister May as his first foreign head of government. The two have reportedly agreed to establish working groups in regards to a possible post-Brexit US-UK trade deal. Indeed, the UK House of Common’s International Trade Committee has already launched an inquiry on this.  However, formal negotiations on any such deal can only legally begin once the UK concludes its withdrawal agreement with the European Union (EU) pursuant to Article 50 of the Lisbon Treaty.

More immediately possible, however, may be trade talks between Japan and the US. Despite Mr. Trump’s earlier criticism of former TPP partner Japan’s “unfair trade practices”, the meeting with Mr. Abe went cordially, with agreement in principle for beginning US-Japan trade and investment talks. It should be noted that Japan has a large trade surplus with the US, boosted particularly by automobile exports, which might be a bone of contention in any trade talks between the two countries.

Outside of withdrawing from the TPP and these preliminary aspirational trade talks, there has been limited progress so far on his specific campaign promise in comparison to the ambitious agenda he proposed. So far he has not labelled China a “currency manipulator”. Indeed, the International Monetary Fund (IMF) had indicated that China’s currency was no longer below value. Nonetheless, Trump’s Secretary of the Treasury, Steve Mnuchin, hesitated in a recent CNBC interview to “pass judgment” on China’s currency practices, stating his preference to go through the US Treasury’s established process on judging whether China (and other countries) was manipulating its currency to boost exports.

Additionally, President has not yet triggered the 90-day notice period by informing Congress of his intention to renegotiate NAFTA, which he had promised to do “immediately”. While Mr. Trump has criticised the shift of US jobs to Mexico and the US’ large merchandise trade with that NAFTA partner, it is also not clear on what particular provisions of the agreement he wishes to “tweak”.

What is clear is that Mr. Trump’s main grievance with NAFTA appears to be with Mexico more so than with Canada. Indeed, Mr. Trump took a less protectionist stance towards Canada during his meeting with Prime Minister Trudeau, speaking collectively of keeping jobs and wealth within North America (US and Canada) and not just the US. While reporting on his meeting with Canada’s Prime Trudeau indicates that he would be looking for greater access by American firms to Canadian procurement markets, it is unclear when the NAFTA renegotiation talks will begin.

With respect to the promise to direct the USTR to identify countries engaging in “unfair trade practices”, his USTR nominee is still awaiting confirming. However, it has been longstanding US policy to challenge nations whose actions are against US economic and trading interests, as evidenced by the large number of disputes brought by the US before the WTO’s dispute settlement body.  Therefore, President Trump will not be doing anything more than what previous US administrations have done in this regard, although we will likely see an even more aggressive stance towards China’s trade practices.

Mr. Trump has spoken frequently against US companies which offshore production processes (and therefore jobs), as evidenced by his deal with air conditioner maker Carrier. He has promised to, but has not yet proposed, legislation to impose a punitive tax on US companies seeking to offshore may receive stiff opposition from the business community and from Congress.

He has, however, vacillated in his views on the controversial Border  Adjustment  Tax (BAT) proposal being pushed by Congressional Republicans as part of their tax reform plan. Different from Trump’s border tariff proposal, the GOP BAT Proposal seeks to convert the US corporate income tax from an origin-based to a destination-based tax. It would prevent companies from deducting the costs of their imported goods as an expense, while giving a tax break to companies which export. However, while some business leaders have praised the idea, some economists have argued that it will not boost US exports.

What next?

Besides the questions surrounding the renegotiation of NAFTA and which other nations the Administration will earmark for future bilateral deals, it is unclear what will be the Trump administration’s stance on other existing trade agreements, and on the on-going negotiations, including the Trans-Atlantic Trade and Investment Partnership (TTIP) with the EU and on the plurilateral negotiations such as the Trade in Services Agreement (TISA). There is also need for clarity on the Administration’s position on key multilateral trade issues, bearing in mind the WTO’s upcoming 11th Ministerial Conference in Buenos Aires at the end of this year.  Nonetheless, it is early days yet and it is hoped there will be greater policy clarity before the one hundred days have elapsed.

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.

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Caribbean Trade & Development Digest – February 19-25, 2017

Source: Pixabay

Welcome to the Caribbean Trade and Development Digest for the week of February 19-25,2017!  I am pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. 

The biggest trade news this week has the entry into force of the World Trade Organisation’s Trade Facilitation Agreement which seeks to slash border red tape and costs and thereby facilitate the smooth flow of cross-border merchandise trade. This week also marks the first month since US President Donald Trump assumed office.

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

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REGIONAL NEWS

Belize Exports Rebound in 2017

Breaking Belize News: After several consecutive months of underperforming, Belize’s exports increased by 51.2 percent at the beginning of 2017. Read more 

CCJ blocks lawsuit against Dominica in Tommy Lee Sparta detention case

Jamaica Observer: The Caribbean Court of Justice (CCJ) has blocked an application by show promoter Cabral Douglas against the island of Dominica for refusing entry to Jamaican dancehall artiste Tommy Lee Sparta who was contracted to perform in the eastern Caribbean country. Read more

Local music industry important to sustainable development of T&T

T&T Newsday: The Ministry of Trade and Industry (MTI) in collaboration with its state agency and subsidiary company, The Trinidad and Tobago Creative Industries Company Limited and the Trinidad and Tobago Music Company Limited hosted a workshop on February 17, at the National Academy of Performing Arts, Port-of-Spain on the “Business of Calypso”. Read more 

President Trump invites Trinidad PM to Washington

Caribbean360: Trinidad and Tobago’s Prime Minister Dr Keith Rowley got a surprise calls from American President Donald Trump during which the leader of the twin-island republic was invited to Washington. Read more

Free trade zones in the DR, an engine for competitiveness and jobs: World Bank Report

Dominican Today: A new report presented today by the World Bank suggests a series of policies designed to strengthen free-trade zones in the Dominican Republic as a path toward sustainable and inclusive economic growth, and its effective use in order to attract foreign direct investment and generate better-qualified and better-paid jobs. Read more

Mississippi ports eye Cuba, sign agreements in Havana

Reuters: The Mississippi ports of Pascagoula and Gulfport signed agreements in Cuba on Monday with an eye to future business and with a Republican U.S. senator from the state looking on, despite concerns President Donald Trump might backtrack on improved relations. Read more 

CSME a Journey, not a Destination, says CARICOM

Jamaica Gleaner: A comprehensive review of the current status of the CARICOM Single Market and Economy (CSME) was among matters before Caribbean Community heads of government at the just concluded 28th inter-sessional meeting in Guyana. Read more

OECS firms to showcase at Specialty Caribbean Expo

St Lucia Times: The OECS Commission, Saint Lucia’s Trade Export Promotion Agency (TEPA), and the Ministry of Commerce have collaborated to stage a high profile trade show, under the theme “A Unique Buying Experience.” Read more 

INTERNATIONAL NEWS

ACP wants continued strong relations with UK after Brexit

Jamaica Gleaner: Secretary General of the African Caribbean and Pacific (ACP) Dr Patrick I Gomes says while the grouping is supportive of a strong Europe, it has no desire of neglecting its relationship with the United Kingdom following its decision to leave the EU. Read more 

Commonwealth trade negotiators being seconded to Britain to help train civil servants ahead of Brexit

Telegraph: Ministers are recruiting the “best” trade negotiators from across the Commonwealth to help train civil servants in securing trade deals ahead of Brexit. Read more 

WTO Trade Facilitation Agreement enters into force

WTO News: A major milestone for the global trading system was reached on 22 February 2017 when the first multilateral deal concluded in the 21 year history of the World Trade Organization entered into force. In receiving four more ratifications for the Trade Facilitation Agreement (TFA), the WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the TFA into force. Read more

EFTA/Mercosur talks confirmed to begin next June in Buenos Aires

Mercopress: The first round of formal trade negotiations between Mercosur and EFTA, European Free Trade Association, is scheduled to take place in Buenos Aires next June according to information from Brussels where there was a preliminary encounter between the two sides. Read more

Bangladesh aims to raise trade volume to $5 bln/year with Canada by 2022

Reuters: Bangladesh aims to raise its annual bilateral trade with Canada to $5.0 billion by 2022 from the current $2.0 billion, a senior government official said on Saturday. Read more

Indonesia and Australia agree to strengthened trade and defence ties

News.com.au: Indonesia and Australia have mended a rift to restore full defence ties following formal talks between Malcolm Turnbull and visiting Indonesian President Joko Widodo. Read more

Commission publishes negotiating proposals for EU-Indonesia trade deal

EU Commission: The European Commission has published nine initial European proposals for the trade agreement under negotiation with Indonesia, as well as the report from the second round of talks that took place in Indonesia between 24 and 27 January. Further EU proposals will be made available as the negotiations progress. Read more.

Commissioner Malmström and Japan’s Foreign Affairs Minister confirm commitment for an early conclusion of EU-Japan FTA negotiations

EU Commission: Meeting in Bonn, Commissioner Malmström and Minister Kishida exchanged views on domestic reforms that Japan is undertaking, and on their possible impact on the negotiating process calendar, as well as on the international situation and the perspectives for world trade. Read more

Latvia becomes 1st EU country to sign CETA

CBC: The journey toward full ratification of Canada’s trade deal with the European Union will be long and complicated, but an early step was taken Thursday as Latvia’s parliament voted in favour. Read more 

DG Azevêdo: Huge amount of work ahead to deliver outcomes at MC11

WTO News: At a meeting of all WTO members held on 23 February to discuss the organization’s work, Director-General Roberto Azevêdo reported on a range of consultations that have taken place so far in 2017, concluding that while engagement is strong in many areas “we still have a long way to go, and a huge amount of work ahead if we are to arrive at concrete outcomes” for the 11th WTO Ministerial Conference. Read more 

Appellate Body issues report regarding Russian import restrictions on pigs, pork from EU

WTO News: On 23 February 2017, the WTO Appellate Body issued its report in the case “Russian Federation – Measures on the Importation of Live Pigs, Pork and Other Pig Products from the European Union” (DS475). Read more

Brexit could help EU strike free trade deal with India, MEPs believe

TheGuardian: The EU believes it may stand a better chance of striking a free trade deal with India after the UK leaves the union, despite the importance Britain attaches to trade with its old colony. Read more 

Trump is off to a slow start on Trade Promises

Business monitor: President Donald J. Trump keeps firing verbal broadsides at Mexico and China, but so far his new administration has not acted to keep specific campaign promises about trade policy. Read more 

Enda calls for united Ireland clause in Brexit Deal

Financial Times: Enda Kenny, Ireland’s prime minister, is pressing Brussels to include measures in the eventual Brexit deal to allow “ease of access” into the EU for Northern Ireland in the event of Irish reunification under the Good Friday peace agreement. Read more 

BONUS

Securing ACP Economic Interests After BREXIT

Indepth News: See extensive excerpts as part of this report by Indepth News from a presentation by the ACP Secretary-General during launch of the book “After Brexit – Securing ACP Economic Interests” by The Ramphal Institute on February 17, 2017 at King’s College London. Read more here

NEW ON CTLD BLOG

WTO Trade Facilitation Agreement: Why is it important for Caribbean Small States?

WTO Trade Facilitation Agreement enters into force

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

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

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.

WTO Trade Facilitation Agreement: Why is it important for Caribbean Small States?

Alicia Nicholls

History was made on February 22nd when the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA) finally came into force. Coming into effect some four years after its conclusion at the WTO’s 9th Ministerial held in Bali, Indonesia in 2013, the TFA is a momentous achievement for the world, but also a plus for Caribbean small States which, like other developing countries, stand to benefit the most from the Agreement’s full implementation. Indeed, WTO economists estimate that full implementation of the TFA “could reduce [global] trade costs by an average of 14.3% and boost global trade by up to $1 trillion per year.”

Economic growth was one of the three broad themes discussed at the 28th Intersessional Meeting of the Heads of Government of the Caribbean Community (CARICOM) held in Georgetown, Guyana last week. Trade, both intra- and extra-regional, is an important contributor to economic growth, employment and poverty reduction. CARICOM Secretary-General Irwin Larocque recalled that the Community “has identified the CARICOM Single Market and Economy (CSME) as the best vehicle to promote our overall economic growth and development”.

However, despite trade accounting for between 54-135% of Caribbean countries’ GDP according to World Bank data, the region’s share in global trade has been on a decline. Export performance and investment attraction remain lacklustre. Market and product diversification remain limited. Moreover, according to the last Caribbean Trade and Investment Report published in 2010, although intra-CARICOM merchandise trade was gaining momentum, it still only comprised “a minute portion of total CARICOM trade”.

Trade Facilitation can improve Caribbean trade

There is no one factor which explains the region’s declining trade performance or the still limited intra-CARICOM trade. For instance, a 2015 Compete Caribbean study noted that except for three countries, customs and trade regulations were found not to be a significant obstacle for doing business. With regard to intra-regional trade, high transportation costs remain one of the biggest barriers. However, with regard to extra-regional trade, a 2013 World Bank Report highlighted the low customs performance of Caribbean countries’ despite their high trade openness.  Another World Bank report noted that port handling charges in the Caribbean “can be two to three times higher than in similar ports in other regions”.

Unnecessarily burdensome border procedures and costly border fees make it difficult for exporters to access other markets, even where trade agreements or preferential arrangements exist. This is made even more difficult in cases where customs and other administrative procedures are opaque and rely largely on paper-based processes as opposed to electronic payments and e-documents. While large firms can invest the time, human and financial resources in navigating complex border rules and procedures in other markets, small-and medium sized enterprises (SMEs)’s often lack this luxury. Add in a foreign language, and it gets even more complicated. Improving trade facilitation can help boost Caribbean countries’ competitiveness, while facilitating policies and support structures can assist Caribbean firms’ access to regional and international markets. After all, States do not trade, firms do.

The TFA addresses one of the biggest constraints of SMEs seeking to do business internationally through the simplification, harmonisation and modernisation of customs procedures, while also fostering transparency and reducing transaction costs. The TFA includes provisions aimed at facilitating the release and clearance of goods through customs, requires States to publish rules and procedures and to establish contact points for enquiries, facilitates border agency cooperation, provides procedures for appeal and review and disciplines for fees and penalties, inter alia.

Developed countries have committed to implementing all of the provisions of the Agreement upon its entry into force, which means accessing those markets should be easier at least from a customs standpoint. Like other WTO developing country and Least Developed Country (LDC) Member States, Caribbean countries’ implementation of the TFA will be based on their ability to do so. Member States are allowed to schedule their commitments for the Agreement’s provisions into three categories: A, B, C, with category A commitments being those which the Member State can implement upon the Agreement’s entry into force (or within one year of entry into force for an LDC). Importantly for Caribbean countries, they will also have access to the Trade Facilitation Agreement Facility which was established to assist developing countries and LDCs in their implementation efforts.

In a world with increasingly globalised supply chains, the smooth flow of trade across borders is important for improving Caribbean countries’ competitiveness and ability to participate in Global Value Chains (GVCs). Implementing the reforms pursuant to the TFA can also be beneficial for intra-regional trade, through the harmonisation of customs procedures.

Trade facilitation has other benefits as well, as noted in the WTO study on this issue. An improved trade and investment climate increases the attractiveness of a country for foreign direct investors. Moreover, transparent customs procedures reduce the opportunity for customs fraud and corruption, and improves revenue collection. It should be noted that not only are foreign direct investment inflows critical for Caribbean economies, but customs and other import taxes remain an important revenue source for many Caribbean governments.

Trade Facilitation Measures in the Caribbean

The encouraging news is that several Caribbean countries have begun trade facilitation reforms, including improvements in port infrastructure and simplification of customs procedures in recent years. As was noted in the World Bank’s Doing Business Report – 2017, Antigua & Barbuda removed the requirement of a tax compliance certificate for import customs clearance, while Grenada streamlined its import document submission procedures.  Haiti has allowed the submission of supporting documents online under its SYDONIA electronic data interchange system.

Trinidad & Tobago was among the first countries to ratify the TFA, while Belize, Guyana, Grenada, Jamaica, St. Kitts & Nevis, St. Lucia and Dominica have also ratified the Agreement. Trinidad & Tobago (in regards to advance rulings) and the Dominican Republic (has not yet ratified the TFA) and Jamaica (authorised traders) are among several countries which have been identified as case studies in the implementation of trade facilitation measures.

With the help of a loan from the Inter-American Development Bank (IDB) Barbados (which has not yet ratified the TFA) has introduced an Electronic Single Window, part of a wider competitiveness programme. Through its Global Logistics Initiative, Jamaica is seeking to take advantage of its location in one of the world’s busiest shipping lanes to become the premier logistics node within the Americas. However, in light of increased competition from other parts of the world, particularly for global investment flows, there is the need for the region to increase the pace of its trade facilitation reforms.

What is next?

Given the benefits that the at-the-border and behind-the-border reforms pursuant to the TFA can have for regional SMEs and for facilitating Caribbean trade, it is hoped that other Caribbean countries will ratify the Agreement. For those which have not yet done so, ratification of the Agreement could serve as a powerful signal to investors of their commitment to trade and business facilitation.

Caribbean countries should move expeditiously to develop and implement national strategies for trade facilitation. This would involve assessing their country’s readiness to implement the various provisions of the TFA through identifying capacity gaps and implementation needs, on which basis they will categorise the provisions and make their notifications. Implementation capacity, of course, varies from one country to another. Caribbean countries should also continue to make use of technical and financial assistance and capacity building support for the implementation of the measures.

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

WTO Trade Facilitation Agreement enters into force

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

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

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

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.

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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

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