Monthly Archives: December 2018

Happy Holidays from CTLD Blog!

Dear Valued Readers,

The Caribbean Trade Law & Development Blog will be on Christmas hiatus from today until the New Year. At this time, I would personally like to thank you all for your readership and kind support throughout the year.

Here’s wishing you and your loved ones Merry Christmas and Happy Holidays, and a wonderful 2019!

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With best wishes,

Alicia

Caribbean Trade Law & Development

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‘No Deal’ Brexit Scenario Increasingly Likely: What does this mean for CARIFORUM-UK Trade?

Alicia Nicholls

The countdown is on. With 100 days to go before the United Kingdom’s (UK) scheduled withdrawal from the European Union (EU), and the ratification of the Draft Withdrawal Agreement less likely, both sides have this week announced contingency plans for a ‘No-Deal Brexit’. What do these recent developments mean for CARIFORUM-UK trade, not just at the policy level, but at the firm level as well?

It has been a busy week in Brexit news. After delaying the House of Commons vote on the Draft Withdrawal Agreement which was scheduled for December 11th, UK Prime Minister Theresa May this week announced that the promised vote will be held the week of January 14, 2019. In the interim, Mrs. May will be seeking to obtain additional legal assurances from the EU-27 that the deal’s ‘backstop’ provision would not keep the UK in a customs union with the EU indefinitely.

UK and EU Brexit Contingency Plans Underway

However, in recognition of an increasingly likely ‘no deal’ scenario, the May Government also announced plans to, inter alia, put 3,500 troops on standby, allocate monies from a contingency fund to key government departments, and outlined a post-Brexit immigration plan.

The EU, for its part, has sought to safeguard the interests of its own EU-27 citizens and businesses by implementing a contingency plan comprising 14 legislative measures and targeting key Brexit-vulnerable sectors. Specifically on trade, the EU noted, inter alia, that “all relevant EU legislation on the importation and exportation of goods will apply to goods moving between the EU and the UK”. In a clear signal to the May Government, the EU was quick to point out that its contingency plan is meant to safeguard EU citizens foremost, that the measures do not replicate the benefits of EU membership, and that these will not mitigate all the risks of a ‘no deal Brexit’.

Why is a ‘no deal’ more likely now?

In an article I recently co-authored with Dr. Jan Yves Remy last week, we highlighted at least four scenarios for future UK-EU relations and analysed what each scenario may mean in turn for CARIFORUM-UK relations. Brexit represents the most epochal and seismic shift in UK trade and political policy in recent history. Brexit developments remain quite fluid, but recent developments evince the increasing likelihood of the ‘no deal’ scenario.

EU leaders have repeatedly ruled out a return to the negotiating table. A renegotiated withdrawal agreement, therefore, now appears highly unlikely. Despite calls for a second referendum, including from former British Prime Minister, Tony Blair, this option has been fervently dismissed by the May Administration, which remains committed to her slogan of ‘Brexit means Brexit’, although she had been part of the ‘remain’ camp before the referendum.

Labour leader, Jeremy Corbyn, has tabled a no confidence motion against Prime Minister May which, if successful, could change the current Brexit trajectory. However, despite her current unpopularity, there is no guarantee Mrs. May would be defeated or that her successor would abandon the Brexit plans. As alluring as it sounds, a ‘No Brexit at all’, scenario, therefore, at this stage still appears unlikely.

Possible Implications of ‘no deal’ for CARIFORUM-UK trade

Due to former colonial ties, the UK is currently most CARIFORUM (CARICOM plus the Dominican Republic) countries’ main trading partner within the EU and is also one of the main source markets for tourist arrivals and foreign direct investment to CARIFORUM countries. Given these historic and economic ties, CARIFORUM and the UK are currently in the advance stages of negotiating a roll-over of the concessions under the CARIFORUM-EU Economic Partnership Agreement which currently define CARIFORUM-UK trading relations until the UK leaves the EU. While details about the roll-over negotiations have been sparse, this agreement has reportedly taken into account the possibility of a ‘no deal’ Brexit. It is in the ‘no deal’ scenario that this roll-over arrangement has its most utility as it at least assures CARIFORUM traders of continued preferential market access to the UK if the latter leaves the EU without a transition deal in place.

However, while the EPA ‘roll-over’ preserves the market access status quo, it does not mitigate all the risks of a ‘no deal Brexit’. Without a transition agreement in place, UK goods (and imported goods entering through UK ports of entry) will immediately after March 29, 2019 no longer have free circulation within the EU single market and will revert to World Trade Organisation Most Favoured Nation (MFN) levels – that is, they will be subject to EU import duties and non-preferential rules of origin. This, therefore, takes away the incentive for CARIFORUM firms which, due to a shared language and customs, would have used the UK as a ‘springboard’ for entering the wider EU market by establishing a commercial presence in the UK.

Moreover, because many CARIFORUM countries’ air and sea links to continental Europe are still mainly through the UK, CARIFORUM firms will have to consider what impact these new ‘no deal’ arrangements (such as reimposed customs duties and customs checks) may have on their trade with both UK and EU partners and on their supply chains. New arrangements for aviation and haulage between the EU and UK will also add delays and increased freighting costs. These higher costs will have to be borne in mind in business planning, pricing and other decisions.

One of the biggest threats of a ‘no deal’ Brexit is the volatility of sterling which has seen large drops in value whenever unfavourable news hits the market. If not already done, currency risks will have to be taken into account by CARIFORUM firms when negotiating commercial terms with UK trading partners and in their own risk assessments.

With regard to tourism, the reduced spending power of UK visitors to the region, or any downturn in the UK economy due to fall-out from a ‘no deal’ Brexit’, would adversely impact those CARIFORUM countries where UK tourists account for a sizable market share or where UK purchasers account for sizable real estate purchases. Changes in UK-EU aviation arrangements may also make the cost of travel to the region more expensive for those continental European travellers which have to transit through the UK to reach the Caribbean (those which do not have the benefit of direct flights). As such, it would be beneficial for CARIFORUM countries to expand their direct air and sea links with continental Europe.

In spite of the above, it is not all doom and gloom. There is the opportunity for CARIFORUM to redefine CARIFORUM-UK trading relations by going beyond the mere EPA roll-over and negotiating a new free trade agreement in the future with the new ‘Global Britain’ the May Administration seeks to advocate. It also gives CARIFORUM countries an additional nudge to expand their trading relations with the EU-27 themselves by making better use of the EPA, which is currently underutilised. This is also an opportune time as CARIFORUM, as part of the African, Caribbean and Pacific (ACP) grouping, is in the process of renegotiating a post-Cotonou arrangement with the EU.

The takeaway is that the uncertainty continues! With all the news about Brexit, it is not surprising that some firms or persons may experience ‘Brexit fatigue’. It is, however, incumbent on regional firms which currently do business with, or are seeking to conduct business with those in the UK to keep abreast of these developments and to make the necessary contingency plans to ensure minimal disruption to their trading.

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

COP 24: Paris Agreement Rule Book Agreed But Is It Enough?

Alicia Nicholls

On December 15th, 2018, nearly 200 countries signed off on the rules required for translating the Paris Agreement from mere aspirational words on paper to an operable agreement. Agreement on the Paris Agreement ‘rule book’ came late on Saturday night, one day after the Twenty-Fourth Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24) talks were scheduled to conclude.

While there is understandable international relief and jubilation that an agreement for operationalising the Paris Agreement has been reached after two weeks of at times tension-filled negotiations, climate-vulnerable countries like Small Island Developing States (SIDS) would be justified in opining that the global political response to the climate change crisis still remains well below what is needed to stop irreversible global warming which threatens their very existence, and the future of the planet.

Background

Over 20,000 delegates from 196 nations converged in the small Polish town of Katowice from December 3-14, 2018 with one primary objective in mind – formulating the guidelines and institutional mechanisms for giving life to the landmark Paris Agreement adopted at COP21 in 2015 in Paris, France.

While far from perfect, the Paris Agreement represents a commitment by the parties to hold the global average temperature increase to levels below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit it to 1.5 degrees Celsius, to increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience, to make available finance flows for climate change mitigation and adaptation, and to reach global peaking of greenhouse gas emissions as soon as possible.

The Paris Agreement rule book includes the modalities, procedures and guidelines for making this happen. A deadline of December 2018 was set for the rule book’s completion, which meant that negotiators were in a double race against time.

Given the need to balance the national interests of almost 200 countries, the many technical issues to be negotiated, the threat to multilateral diplomacy posed by growing nationalism and populism, and the current climate-skeptic rhetoric by the world’s second largest anthropogenic carbon dioxide (CO2) emitter (the US), the success of the talks was hoped for, but not assured. Negotiators were walking a thin rope and the negotiated outcome reflects many areas of compromise, including on areas where climate-vulnerable countries, like SIDS, would have wished more robust language to reflect the urgency of the political action needed.

What was agreed?

The majority of the rule book has been completed. The parties have decided on the rules for reporting on their mitigation, adaptation and financing efforts in a universal and transparent manner.

As opposed to a bifurcated system (separate rules for poor and rich countries), the rule book establishes a single set of rules for transparent reporting. This was one of the lines drawn in the sand by the US and the European Union (EU) to ensure, in particular, that large developing countries like China abide by the same transparency rules as they.

The rules for the enhanced transparency framework provide flexibility for “developing country parties that need it in the light of their capacities” in the implementation of the transparency provisions of the Paris Agreement. This will be on the basis of self-determination, and developing countries seeking to avail themselves of these flexibilities must clearly indicate the provision to which flexibility is applied, concisely clarify capacity constraints, and provide self-determined estimated time frames for improvements in relation to those capacity constraints.

A further flexibility comes with respect to reporting support. The rule book uses the legally binding language of “shall” for developed country parties with respect to providing information on support given, while for other parties, it uses less forceful language in the form of “should”.

Under the Paris Agreement, each party committed to progressively ambitious Nationally Determined Contributions (NDCs) which reflect their pledges to climate action and are to reflect their highest possible ambition. Of note is that the interim public registry developed by the UNFCCC Secretariat will serve as the public registry for parties’ NDCs. The registry will be accessible for use by the parties, stakeholders and the public. From 2031 onward, parties are to apply common time frames to their NDCs. The exact time frame is to be determined later.

One of the issues at COP24 was scaling up parties’ ambitions by 2020 because when calculated, the current ambition level in countries’ existing NDCs puts global average temperature increases on track for more than 3 degrees Celsius above pre-industrial levels. This was noted in a Special Report on Global Warming at 1.5 Degrees Celsius released by the Intergovernmental Panel on Climate Change (IPCC). This temperature increase would be well-above the Paris Agreement goal and towards levels that would lead to even more irreversible global warming, and would put some low-lying SIDS under water, literally.

The IPCC further warned that restricting temperature increases to 1.5 degrees Celsius above pre-industrial levels would limit some of the more severe climate change impacts, than at 2 degrees, confirming what SIDS were arguing under their “1.5 to stay alive” campaign in the lead up to COP21 when the Paris Agreement was signed.

How these scientific findings in the IPCC report were to be treated was a major sticking point in the COP24 negotiations. In a blow to climate activists and SIDS, fervent objection by the US and the major oil-exporting nations of Russia, Saudi Arabia and Kuwait led to a weak statement which merely welcomes the “timely completion” of the Report, but is silent on its dire findings.

Financing for developing countries’ mitigation and adaptation efforts is critically important, especially for SIDS whose climate vulnerability far exceeds their ability to self-finance their mitigation and adaptation efforts. It was agreed that the Adaptation Fund, which was established under the Kyoto Protocol, will serve the Paris Agreement. Some countries have also made additional pledges to the Green Climate Fund, another multilateral fund. Another nugget of good news is that parties have agreed to increase the collective climate finance goal post 2020 beyond the current goal of 100 billion USD per year. However, it is not yet decided by how much.

While the parties recognise the importance of capacity-building, they put off adoption of a decision on the initial institutional arrangements for capacity building to COP25.

Loss and damage due to climate change’s irreversible and adverse impacts remains a sensitive issue for developed countries, but one on which climate-vulnerable countries, such as SIDS, are particularly concerned. Indeed, climate change impacts have cost some SIDS like Dominica after Hurricane Maria in 2017 the equivalent of 226% of GDP, at a time when that country was still recovering from the devastation of Tropical Storm Erika in 2015.

SIDS fought hard for the inclusion of loss and damage in the Paris Agreement, and although ‘loss and damage’ is also included throughout the rule book, the language is less robust than desired. The transparency rules provide that countries “may, as appropriate” report on loss and damage, and the global stocktake rules “may take into account, as appropriate..efforts to avert, minimise and address loss and damage”.

Another example of compromise is in the weak compliance mechanism provided for. Under the Paris Agreement, this mechanism is “to facilitate implementation of and promote compliance with the provisions of the Agreement”. The rule book makes clear that the committee is to “neither function as an enforcement or dispute settlement mechanism, nor impose penalties or sanctions, and shall respect national sovereignty”. This mechanism, therefore, will have to rely on moral suasion for ensuring compliance.

The compliance mechanism will consist of an elected 12-member committee which is to function in a manner that is “transparent, non-adversarial and non-punitive”. In a nod to developing countries, the committee membership is to have “2 members each from the five regional groups of the United Nations and 1 member each from the small island developing States and the least developed countries, taking into account the goal of gender balance”. It “shall pay particular attention to the respective national capabilities and circumstances of Parties.”

A critical area which remains incomplete is that of voluntary market mechanisms. Agreement on this was held up as Brazil objected strongly to rules preventing double counting. This issue has been deferred to COP25 which will be held in Chile.

What next?

The rule book is a welcomed achievement given the swirling headwinds it had to face leading up to its negotiation. But the reality of balancing varying political interests meant that the text features many areas of compromise, with the net result that the political response and ambition do not adequately reflect the urgency needed to confront the magnitude of the climate crisis.

The Global Carbon Project released a report noting that global carbon emissions are to reach an all-time high in 2018. While SIDS are undoubtedly at the frontlines of the climate change battle, natural disasters, such as the impact of Hurricane Harvey (2017) and Hurricane Katrina (2005) in the US, show that large countries are by no means immune to climate change’s most disastrous effects. Climate action is, therefore, in all countries’ interests.

Political headwinds, however, still threaten the global climate response as powerful fossil fuel interests now have climate deniers in the highest positions of political power. Brazil has withdrawn its offer to host next year’s COP25. Its incoming President Jair Bolsonaro, a climate change denier, has already signalled his support for increased agricultural production in the Amazon – the world’s largest green lung. The Trump Administration has re-emphasised a commitment to so-called ‘clean’ coal, rolled back many Obama-era emissions-cutting initiatives and has indicated earlier this year that the US is withdrawing from the Paris Agreement. Under the Agreement, the US cannot withdraw until 2020 and its delegation played an active role in the COP24 negotiations, especially on the issue of transparency. However, should President Trump be re-elected in 2020 and the US make good on its threat to withdraw, this will have implications for the Agreement and on global climate action more widely.

The next few years will be critical for climate action. At COP25 in Chile next year, the parties will seek to finalise the final details of the rule book. However, before this, a special climate summit will be convened in September 2019 to mobilise ambition. The deadline for current emissions commitments is 2020 and new targets will have to be set. Failure to scale up ambitions puts SIDS and future generations at risk of climate disaster. More ambitious political action will be needed to ensure a transition to a low carbon and climate resilient world which ensures that the most deleterious climate change impacts are averted.

The informal text may be found here.

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

Domestic Squabbles and International Blunders: Will There Be a No-Deal Brexit Scenario?

By Renaldo Weekes, Guest Contributor 

Renaldo Weekes ping pong

Renaldo D. Weekes

The United Kingdom’s (UK) Prime Minister, Theresa May, has had her hands full ever since she took the job and began leading the Brexit negotiations. She has had to suffer through several resignations as various Secretaries and Ministers opposed her Brexit deal. More recently, she has been ensued in a serious battle with the House of Commons and, more specifically, Members of Parliament (MPs) from her own party. With the high tension squabbles that surround the Brexit deal in the UK, European Union (EU) leaders are finding it increasingly difficult to maintain confidence in May and are not willing to change any part of the current deal, much to the Prime Minister’s detriment.

No Confidence Vote

Tensions surrounding the Brexit have culminated when Prime Minister May decided to delay Monday’s Brexit vote until January. Feeling as though they have tolerated enough, her own MPs launched a no-confidence vote against her. She survived that vote and we now continue on the same path as before. Theresa May’s options remain the same, those being: succeeding with her current deal or an amended deal, holding a second referendum, unilaterally reversing Brexit, a no-deal Brexit and a relatively new option of restarting the process that inadvertently arose out of the European Court of Justice’s ruling on Monday, December 10. The no-confidence vote was merely a bump in the road for the most part and Tory MPs cannot challenge her leadership for at least another year.

Funnily enough, if the rebellious MPs won the vote, things would not have been any better. The same options would be open to the new PM and his or her team. The likelihood of each option happening would change, however, and it seems a no-deal Brexit would be even more likely. May’s current deal would be scrapped as MPs have made it clear that they do not like the deal in its current form. Holding a second referendum or reversing Brexit are not likely to happen because the MPs who challenged May are not willing to even open the possibility of slowing down Brexit. There seems to be no intent to revoke their article 50 notification because doing this may be interpreted as retreating from the battle.

Appeasing the Tories

On Thursday, fresh off the heels of her victory against the no-confidence vote, Theresa May headed to Brussels to squeeze more concessions out of the EU. Her elation from winning the vote did not last long as the EU made it clear that it will not be budging. The EU is not being stubborn for the sake of it, however. According to reports, EU leaders are not sure they can trust Prime Minister May anymore. Not because she is being underhanded but rather, she does not know what she is doing. She has offered what has been described as either vague or impossible changes that relate to the backstop on the Irish border.

One of her suggestions was to have a sunset clause on the backstop whether or not a deal is reached. This is rather dangerous because the point of the backstop is to prevent a hard border between Northern Ireland and Ireland. If the backstop deal comes to an end with no replacement, the border they were trying to prevent will be realized. Some fear that this will resume conflicts that were put to a halt 20 years ago with the signing of the Belfast or Good Friday Agreement. The fact that Tories are willing to let this happen because they want to be completely severed from the EU shows their irresponsibility. They have not suggested ways to deal with the backstop, they simply want a Brexit and they want it now. How can May really appease persons who are not suggesting a fix to the main problem? Understandably, she would try to tweak a deal that, in its current state, will not pass the House of Commons but she and the Tories must face facts. If this squabble of theirs continues, there will be a no-deal scenario.

The Wishful Immovable Object and the Ostensibly Unstoppable Force

Prime Minister May has maintained her stubbornness throughout this entire ordeal until the crucial December 11 vote came and she postponed it until January. We finally saw the ostensibly immovable object shake under pressure. This continued on when the no-confidence vote hit and she essentially begged the EU to make more concessions but they rebuffed her. May is still standing, however, and continues to dismiss the idea of a second referendum as folly even though some of her Cabinet members are reportedly flirting with the idea.

Though the Prime Minister wants to maintain the image of being an immovable object, she has been clearly rattled. There is also the impending, ostensibly unstoppable force that is a no-deal Brexit. A no-deal Brexit is not as unstoppable as it may appear. Its status as ‘unstoppable’ depends on how immovable Theresa May wants to be. If May is willing to change her position and, at the very least, holds a second referendum, it is more probable that she prevents the UK’s disastrous crash out of the EU. If she revokes the Article 50 notification, she prevents Brexit almost immediately and can even restart the negotiation process to craft a better deal.

It is sad to see the state of affairs that the UK finds itself in because of the unrealistic and irresponsible demands of some Tory MPs and a Prime Minister who is trying to mollify these MPs but, at the same time, wants to remain unnecessarily obdurate in the face of legitimate concerns about where the country is headed as the March 2019 deadline approaches. Only time will tell if things will change, whether for better or worse.

Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage.

Caribbean Trade & Development Digest – December 9-16, 2018 (Final for 2018)

Welcome to the final Caribbean Trade & Development Digest for 2018! We are happy to bring you the latest trade and development news and analysis for the week of December 9-16, 2018

As this will be our last edition for 2018, we take this opportunity to thank you for your readership over the past year and to wish you and yours the very best for the season! 

THIS WEEK’S HIGHLIGHTS

At COP24, nearly 200 countries have reached an agreement on the implementing guidelines – the ‘Rulebook’ –  for the operationalization of the Paris Agreement (2015). This agreement came on Saturday night, a day after the two week UN Climate Talks were scheduled to end.

The Brexit saga continued. UK Prime Minister Theresa May postponed a scheduled vote on her draft Withdrawal Agreement with the EU in the face of fervent political opposition, survived a confidence vote and  has been thus far unable to win additional concessions from the EU to placate MPs’ fears about the Withdrawal Agreement.

See my article with Dr. Jan Yves Remy, Deputy Director of the University of the West Indies’ Shridath Ramphal Centre, analysing what these latest Brexit political headwinds mean for CARIFORUM-UK trading relations!

Below are the other major trade and development headlines from across the Caribbean region and the world for last week:

REGIONAL

Antigua-Barbuda calls on WTO to reform dispute settlement body

Caribbean News Now: Antigua and Barbuda has officially intervened in the ongoing discussions concerning the reform of the Dispute Settlement Understanding of the World Trade Organisation (WTO). Read more 

Barbados Ambassador to Geneva sounds warning

CBC (Barbados): Ambassador Blackman was addressing the WTO’s General Council Meeting. He told the body Barbados continues to believe in the WTO’s rules based trading system, but the country remains concerned about the impasse in the selection process for Appellate Body members. Read more 

St Vincent becomes first OECS island to decriminalise marijuana

LoopT&T: Saint Vincent and the Grenadines (SVG) has made history as the first OECS Member State to decriminalise marijuana for medical purposes and scientific research. Read more 

CARICOM to review intra-regional transportation

LoopBarbados: Come next year, the Caribbean region will see a host of new measures, including improved intra-regional transportation. Read more 

Antigua Asks For Delay In Further Free Movement, Says It Already Has Large Numbers Of CARICOM Nationals

Antigua News Room: The Government of Antigua and Barbuda says it has asked to be excluded, for now from implementing measures under Caricom which would see free movement of more classes of people. Read more

CARICOM Secretary General holds talks with Aruba on associate membership

TV6 (Trinidad): The  Secretary-General of the Caribbean Community (CARICOM), Ambassador Irwin LaRocque  on Wednesday met with Prime Minister of Aruba Hon Evelyn Wever-Croes on Associate Membership in the 15 member regional grouping – the Caribbean Community (CARICOM)  for the Dutch Territory. Read more 

Regional Statement on the IPCC Special Report 

CARICOM Today: CARICOM ministers with responsibility for addressing climate change released a statement on the IPCC’s Special Report. Read more 

Belize accepts chairmanship of AOSIS

CARICOM: Belize’s acceptance of the chairmanship of AOSIS from the Maldives in January 2019. Belize will hold the chairmanship for two years to be followed by Antigua and Barbuda in 2021. Read more 

INTERNATIONAL

UK and Switzerland agree to transition trade agreement after Brexit

UK Government: The UK Government and the Swiss Federal Council have approved the transition of a trade agreement, allowing businesses to continue trading freely after the UK leaves the European Union. Read more 

Commission reports on trade negotiations with Australia, New Zealand and Indonesia

EU: As part of its commitment to transparency, the European Commission published today a report from the latest round of negotiations between the EU and Australia, as well as the EU’s six initial text proposals tabled during this round. Read more 

U.S. Rejects the EU’s Trade Reform Proposal, Putting WTO at Risk

Bloomberg: The U.S. rejected the European Union’s proposal to reform the World Trade Organization, dealing a blow to international efforts to bolster the Geneva-based body, which has come under attack from President Donald Trump’s administration. Read more 

EU-Japan trade agreement on track to enter into force in February 2019

EU: The European Commission welcomes today’s approval in the European Parliament of the EU-Japan Economic Partnership Agreement and the EU-Japan Strategic Partnership Agreement. Read more

China buys US soybeans for first time since trade war

BBC: China has bought US soybeans for the first time since the trade war between the two countries started in July. The country’s finance ministry also confirmed it would temporarily reduce tariffs on US car imports from 40% to 15%, beginning on 1 January. Read more 

Shipping costs from China to the US have more than doubled as trade war sparks a ‘bonanza’

CNBC: The price of shipping a container from China to the United States has risen dramatically in the last year due to uncertainty surrounding trade tensions between Washington and Beijing. Read more 

AEC pushes for an inclusive African Continental Free-Trade Agreement

African Review: A successful implementation of the African Continental Free Trade Area (AfCFTA) agreement cannot be achieved without the “people dimension,” ensuring that the integration process does not lead to widening inequalities or exclusion, the AEC Forum observed. Read more 

Appellate Body issues report on revised US “dolphin-safe” tuna labelling measure

WTO: On 14 December the Appellate Body issued its report in the cases brought by Mexico and the United States in “United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products — Second Recourse to Article 21.5 of the DSU by Mexico” (DS381). Read more 

India appeals panel ruling in dispute with Japan over safeguard duties on steel products

WTO: India filed an appeal on 14 December concerning the WTO panel report in the case brought by Japan in “India — Certain Measures on Imports of Iron and Steel Products” (DS518). The panel report was circulated to WTO members on 6 November. Read more 

Appellate Body issues report regarding Brazil tax measures

WTO: On 13 December the Appellate Body issued its report in the cases by the European Union and Japan in “Brazil — Certain Measures Concerning Taxation and Charges” (DS472 and DS497). Read more

Trade Policy Review Body: Overview of developments in the international trading environment

WTO: Speech by WTO Director General Roberto Azevedo. Read more.

WTO-World Bank joint publication highlights need for policies to maximize trade gains for extreme poor

WTO: Trade has made a significant contribution to poverty reduction but further integration of developing countries into international markets and policies to share the gains from trade more widely will be essential for further reducing poverty and ensuring that no one is left behind, according to a joint publication by the World Bank Group and the World Trade Organization launched today (11 December). Read more 

Report shows sharp rise in the coverage of trade-restrictive measures from WTO members

WTO: The Director-General’s annual overview on trade-related developments presented to members on 11 December at a meeting of the Trade Policy Review Body (TPRB) shows a significant increase in trade coverage of trade restrictive measures by WTO members from mid-October 2017 to mid-October 2018. Read more

EU parliament approves huge free trade deal with Japan

Japan Today: The European Parliament on Wednesday approved an accord with Japan that has been dubbed the world’s biggest trade deal, covering economies that represent a third of the world’s GDP. Read more

The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.

ECJ Brexit Ruling: What are the implications?

Renaldo Weekes ping pong

Renaldo Weekes, Guest Contributor 

The European Court of Justice (ECJ) ruled on Monday, December 10th, 2018, that a European Union (EU) member state has the ability to unilaterally revoke its notification of intent to leave under Article 50 of the EU’s Lisbon Treaty. This ruling comes at a time when anti-Brexit and pro-Brexit persons alike are showing great opposition to British Prime Minister Theresa May’s Brexit deal. Anti-Brexit persons, in particular, are feeling vindicated by this ruling because it allows them to double down on their stance and try to force Prime Minister May into submission.

However, the British Government stood its ground despite the ECJ’s ruling, with British Environment Secretary, Michael Gove, arguing that the British people voted to leave the EU in 2016 and it will not reverse that decision. The Government even argued that point in the ECJ case, saying it does not plan to reverse its decision so the question of whether the United Kingdom (UK) can unilaterally revoke its Article 50 notification was merely hypothetical and of no consequence.

May’s Brexit deal in more peril

Can the British Government continue to take its tough stance in light of the ECJ’s ruling and all the controversy that shrouds Brexit? Some may find it admirable that the Government is not willing to waver, even in the face of fierce opposition. At some point, however, it must face facts. Anti-Brexit lawmakers will be less likely to back down. As part of its judgement, the ECJ said that the UK’s decision to revoke their Article 50 notification reflects a sovereign decision. This has essentially put absolute power into the hands of UK Members of Parliament (MPs) to change course as they do not have to yield to the EU. There is no doubt that MPs will exercise that power. To anti-Brexit lawmakers, there are no more excuses that Prime Minister May can use to prevent a second referendum or prevent Brexit. In light of this, lawmakers are more likely to vote down on the deal; though there was no doubt that they would have done otherwise.

Responsibility and accountability

The ECJ ruling also puts ultimate accountability on the Prime Minister and her team. The European Commission and the Council argued in the court case that article 50 could not be interpreted as allowing a member state to unilaterally revoke its notification; the member state would need the EU’s permission to revoke the notification. If this turned out to be true, and the EU refused to allow the UK to change its decision, Government would have been able to argue that the EU is at fault for restricting the UK’s sovereignty. That, however, is not the case now. Should the government refuse to reverse Brexit or, at the very least hold a second referendum, there is no other institution that holds responsibility for any ensuing consequences that should come from what is likely to be a hard or even no deal Brexit.

Abuse of the process

Another possible impact of the ECJ ruling was actually cited by the European Commission and the Council during their argument to the court. They noted that if member states can unilaterally revoke their notification to leave, they may abuse that process in order to retrigger the 2 year negotiation period should the original negotiations not go their way. On the face of it, this argument may not hold much weight as there is already a process through which a member state can request an extension of the negotiating period. However, should the member state not agree to the extension period proposed by the council, it may still seek to retrigger the mandated 2 year negotiating process which forces the council into a position where it must agree to the member state’s desired negotiation period. The member state may also opt to not apply for an extension and immediately retrigger the process.

The effects that the ECJ’s ruling may or may not have on the UK and other member states notwithstanding, we must still wait to see if the British government will budge in any way as the March 2019 deadline approaches against the backdrop of MPs threatening to upend the deal and a shaky Government trying desperately to maintain its power.

Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage.

Eight Key Outcomes from the St. Anns Declaration on CSME

Alicia Nicholls

Caribbean Community (CARICOM) Heads of Government met from December 3-4, 2018, in Port of Spain, Trinidad last week for the 18th Special Meeting of the Conference of Heads of Government of CARICOM which was a special meeting on the CARICOM Single Market and Economy (CSME).

The CSME envisions deepened economic integration among participating CARICOM Member States by creating a single economic space for the free movement of Community goods, services, capital and labour, with the aim of promoting economic development and increased well-being of Community nationals. All independent CARICOM Member States, except the Bahamas, are part of the CSME, while Haiti is not yet a full participant.

Progress towards implementation of the CSME has been painstakingly slow, a point noted in numerous reports commissioned to look at this issue, including the Jamaica-government commissioned Golding Commission Report released earlier this year which examined Jamaica’s relations within the CARICOM and CARIFORUM frameworks.

At the end of the special CSME meeting last week, CARICOM leaders released their St. Ann’s Declaration on CSME in which they recommitted to the regional integration process and outlined several priority areas for immediate action, including setting timelines for some action areas.

Based on the St. Ann’s Declaration on CSME, here are eight key outcomes from the CSME Special Meeting:

1.Recommitment to national action to further CSME implementation

CARICOM leaders recommitted to take action at the national level to advance the regional integration agenda. In their preamble to the Declaration, they reiterated that the CSME “continues to be the most viable platform for supporting growth and development” in CARICOM Member States, but acknowledged that progress on the CSME should have been further advanced by now. They welcomed Haiti’s commitment to full integration into the CSME by 2020.

2.Greater voice for private sector and labour

CARICOM leaders have agreed to establish a formalised and structured mechanism to facilitate dialogue between the Councils of the Community and the private sector and labour. They also agreed to amend the Revised Treaty of Chaguaramas to include representative bodies of the regional private sector and labour as Associate Institutions of the Community.

3. Full Free Movement in 3 years (for willing Member States)

CARICOM leaders have set a timeline of the next three years for those Member States which are willing to do so to move towards full free movement. The leaders have also agreed to reinforce the operation of their security mechanisms to ensure the integrity of the regime allowing the free movement of CARICOM nationals.

4. Expansion of categories of skilled nationals entitled to move

Agricultural Workers, Beauty Service Practitioners, Barbers and Security Guards will be added to the categories of skilled nationals who are entitled to move freely and seek employment within the Community.

CARICOM leaders also reiterated that a skills certificate issued by one Member State would be recognised by all Member States. They also agreed to complete domestic legislative and other arrangements for all categories of free movement of skilled persons.

5. Greater CARICOM-OECS collaboration

They have mandated that steps be taken to deepen cooperation and collaboration between the Secretariats of CARICOM and the OECS “to avoid duplication and maximise the utility of scarce resources”.

6. Single Domestic Space for passengers in the Region

CARICOM leaders agreed to examine the re-introduction of the single domestic space for passengers in the Region and agreed to work towards having a single security check for direct transit passengers on multi-stop intra-Community flights. They also agreed to conduct a special session on Air and Maritime Transportation at the Intersessional meeting of the Conference to be held next February to focus on this matter.

7. Public Procurement and Mutual Recognition of Member States’ incorporated companies

CARICOM leaders set a timeline of 2019 for the finalization of the regime that permits citizens and companies of the Community to participate in Member States’ government procurement processes. They also agreed to take the necessary steps to allow for mutual recognition of companies incorporated in a CARICOM Member State.

8. Restructured Commission on the Economy

CARICOM leaders have restructured the Commission on the Economy to advise Member States on a growth agenda for the Community. Leading Barbadian-UK economist, Professor Avinash Persaud, has been appointed to lead this restructured commission, while its nine other members include distinguished regional and international persons.

The text of the St Ann’s Declaration on CSME may be viewed here.

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

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