Monthly Archives: March 2019

Caribbean Trade & Development Digest – March 10-16, 2019

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Welcome to the Caribbean Trade & Development Digest for the week of March 10-16, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

THIS WEEK’S HEADLINES

With just two weeks to go before Brexit Day (March 29, 2019), the UK House of Commons has for the second time rejected the Draft Withdrawal Agreement negotiated by Prime Minister Theresa May’s government with the European Union (EU), this time by a margin of 391 votes to 242 votes. A third vote is expected to be held this upcoming week. The Commons also voted against a no-deal Brexit in a non-binding vote, as well as in favour of an extension under Article 50.

The UK Government has also published details on a temporary tariff regime which it would implement in the case of a no-deal Brexit. The major proposal is to temporarily slash tariffs on 87% of imports into the UK in order to cushion the impact on businesses and consumers. Tariffs will remain for certain sensitive industries. Details have been published here.

Turning regionally, the French Overseas Territory of Guadeloupe has acceded to the Organisaton of Eastern Caribbean States (OECS) as an Associate Member, making it the second French Overseas Territory to join that organisation. A Special Meeting of the OECS Authority of Accession of Guadeloupe was held on March 14th and 15th 2019 in Guadeloupe. Read the communique here.

REGIONAL

Label worry

Barbados Today: Barbados’ expanding trade with Latin America has started to create some headaches for the Department of Commerce and Consumer Affairs, as that organisation is witnessing substantial breaches in standardization laws relating to labels in a foreign language. Read more 

Belize among regional sugar producers disenfranchised on the CARICOM market

LoveFM: The movement of sugar in the CARICOM market continues to disenfranchise regional sugar producers. That is what a press release issued today by the Sugar Association of the Caribbean, SAC, is saying. Read more 

GO-Invest facilitated $89.4B in investments last year – CEO

Stabroek: The Guyana Office for Investment (GO-Invest) facilitated approximately $89.4 billion in investments last year and Chief Executive Officer (CEO) Owen Verwey yesterday said there have been no negative indications from businesses and investors stemming from the recent political developments. Read more 

GO-Invest developing plan to revamp operations

Stabroek: The Guyana Office for Investment (GO-Invest) will be developing a strategic plan to overhaul its operations and refine its investment promotion, according to Chief Executive Officer (CEO) Owen Verwey. Read more 

Wto Tariff Cut Fears For ‘40,000 Bahamian Jobs’

Tribune 242: Local contractors have voiced mixed reactions to fears that a WTO-induced 50 percent tariff rate cut on pre-fabricated buildings “puts 40,000 Bahamian construction jobs at risk”. Read more 

Puerto Rico Trade & Export Co. launches support program for women

Caribbean Business: The Puerto Rico government awarded six food trucks to women from various parts of the island, with which they will be able to run, expand and even export their services in the future. Read more

T&T paint company penetrates Cuban market

Loop T&T: Trinidad and Tobago paint manufacturers, ANSA Coatings Limited, on Wednesday loaded a container with over €500,000 worth of product bound for Cuba, the company’s newest export market. Read more 

Energy Exports To Keep T&T’s Current Account In Surplus

Fitch Solutions: Fitch Solutions forecast that Trinidad and Tobago’s (T&T) current account surplus will widen in 2019 due to an expanded traded goods surplus. Read more

EU adds more Caribbean countries to money laundering blacklist

Caribbean News Now: Less than a month after the European Union (EU) blacklisted several jurisdictions worldwide including several Caribbean countries, the EU Commission has added more jurisdictions to its tax-haven and money laundering blacklist. Read more 

Export Saint Lucia anticipates export of mangoes, golden apples to US market

St Lucia News Online: Export Saint Lucia is expressing confidence that some fruits from the island will soon hit the United States (US) market. Read more 

Jamaica Customs On Track To Open Electronic Single Window For Trade In 2021

Jamaica Gleaner: The Jamaica Customs Agency said it is on track to roll out the electronic single-window system for trade in 2021. Read more

OECS welcomes Guadeloupe into fold in a changing regional environment

ST Lucia News Online: Guadeloupe on Wednesday night became the second French-speaking Caribbean country to be associated with the Organisation of Eastern Caribbean States (OECS) in an environment that St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves dubbed as “as a variable explanation of regional integration”. Read more 

Cemented

Barbados Today: Rock Hard Cement, owned by Barbadian construction magnate Mark Maloney, has won round one of a trade dispute with the Arawak Cement Company. Read more 

CARICOM leaders committed to delivering competitive transportation industry

Caribbean News Now: Heads of government of the Caribbean Community (CARICOM) are committed to deliver a competitive transportation industry, and are looking for the right model that would be fiscally appropriate for the provision of air transportation services in the region. Read more 

‘Open amnesty to Caricom nationals’

The Guardian (T&T): Cen­tre for Jus­tice chair­man Har­vey Bor­ris is lend­ing his sup­port to the Min­is­ter of Na­tion­al Se­cu­ri­ty, Stu­art Young for his pro­pos­al of a one-year amnesty for Venezue­lan refugees who are cur­rent­ly re­sid­ing in T&T. How­ev­er, he be­lieves this op­por­tu­ni­ty should al­so be ex­tend­ed to oth­er Cari­com na­tion­als fac­ing a sim­i­lar sit­u­a­tion. Read more

INTERNATIONAL NEWS

How Chinese Investment in Latin America Is Changing

Americas Quarterly: Chinese financing in Latin America is changing. After becoming a major source of capital flows to Latin America and the Caribbean over the past 15 years, a more diverse range of investors has surfaced, interested in more than simply channeling resources towards infrastructure, governments and state companies. Read more 

Trump’s trade war cost U.S. economy $7.8 billion in 2018: study

Hellenic Shipping: President Donald Trump’s trade battles cost the U.S. economy $7.8 billion in lost gross domestic product in 2018, a study by a team of economists at leading American universities published this week showed. Read more 

What to expect from WTO’s 2019 Global Review of Aid for Trade

Devex: The world’s least developed countries have the smallest share of the global trade market, but highest reliance on a small number of commodities to support their economic growth — a key topic on the agenda at the World Trade Organization’s Global Review of Aid for Trade in July. Read more 

U.S. considers sanctions on firms facilitating Venezuelan oil shipments to Cuba

Miami Herald: The Trump administration is considering imposing sanctions on companies from third countries that facilitate the shipment of Venezuelan oil to Cuba, a senior administration official told the Miami Herald. Read more 

Canada open to seamless transition in trade with Britain after Brexit

iPolitics: Tuesday’s massive rejection by the British House of Commons of Prime Minister Theresa May’s eleventh-hour bid for Brexit on her terms leaves Britain’s future relations with the European Union up in the air. Read more 

Gender and trade spotlighted at UN Commission on Status of Women

UNCTAD: Trade policies are not gender neutral and can affect men and women differently due to the distinct roles each plays in our economies and societies, UNCTAD Deputy Secretary-General Isabelle Durant said on 13 March at the United Nations headquarters in New York City. Read more 

Trade wars are growing over the digital economy – and developing countries are shaping the agenda

The Conversation: At the heart of the current US trade war with China is tariffs on imports like steel, sorghum and silicon chips. But, with the growing role of data and digital technology in the world economy, a new arena of digital trade conflict is on the cards. Read more 

Brazil Reportedly Weighing Import Quota for US Wheat

VoA: Brazil is considering granting an import quota of 750,000 metric tons of U.S. wheat per year without tariffs in exchange for other trade concessions, according to a Brazilian official with knowledge of the negotiations ahead of President Jair Bolsonaro’s visit to Washington. Read more

WTO: India pushes for simpler qualification, licensing norms for foreign workers

Hindu Business Line: India has pushed for more transparent and simpler qualification and licensing norms at the World Trade Organization for workers and professionals seeking to work in another country and has circulated a draft paper for consideration of other members. Read more 

As US tightens sanctions, India cuts down oil imports from Venezuela blaming poor infrastructure

Financial Express: India’s import of oil from Venezuela is almost nil since the country’s infrastructure is not up to the mark, say sources. The bilateral trade between the two countries is at $ 6 billion and is in the favour of Venezuela due to oil imports by India. Read more 

UK will cut most tariffs to zero in event of no-deal Brexit

The Guardian: Tariffs will be cut to zero on 87% of imports to the UK as part of a temporary no-deal plan, but prices of some imports including meat, shoes, underpants and cars will go up. Read more 

Brexit: Does NI tariffs plan violate WTO law?

BBC: The UK government’s strategy for the Irish border if there’s a no deal Brexit will mean no tariffs on Irish goods going to Northern Ireland, but some Irish food products entering Great Britain will face high tariffs. Read more 

US trade rep says WTO playbook is outdated, needs reforms 

Reuters: The World Trade Organization is using an “out of date” playbook despite dramatic changes including the rise of China and the evolution of the internet, U.S. Trade Representative Robert Lighthizer said in testimony to Congress on Tuesday. Read more 

Trump seeks to change free-trade agreements with Israel

Israel Hayom: U.S. trade negotiators will travel to Israel this week for advanced talks to rework the countries’ 1985 free-trade accord, upgrade their agricultural trade pact and reduce barriers for American farm exports to the Jewish state, Bloomberg reported. Read more 

Malaysia threatens WTO challenge to EU’s move to drop palm biofuel

New Strait Times: Malaysia on Saturday threatened to bring a World Trade Organisation (WTO) challenge if the European Union goes ahead with recommendations to phase out palm oil from transport fuel used in the bloc. Read more 

UN’s Asia-Pacific Trade And Investment Committee Convenes Amid Global Trade Uncertainty

Eurasia Review: Against the backdrop of uncertain trade relations between the United States and China, senior government officials from across Asia and the Pacific gathered in Bangkok this week to re-iterate their commitment to strengthening regional trade and investment. Read more 

Malaysia is cautiously optimistic on conclusion of RCEP by year end

New Strait Times: Despite some details that need to be ironed out, the government is optimistic on the conclusion of Regional Comprehensive Economic Partnership (RCEP) by year end. Read more 

Commentary: Concluding the high-stakes RCEP in 2019 will need a different approach

Channel News Asia: It’s useful to consider alternative approaches for facilitating the conclusion of the negotiations on the Regional Comprehensive Economic Partnership (RCEP), says ISEAS-Yusof Ishak’s Tham Siew Yean. Read more 

EU tax blacklist could block Pacific trade – expert

Radio New Zealand: A Vanuatu-based business adviser is warning Pacific nations caught on a new EU tax blacklist could get locked out of trade in Europe. Read more 

EU leaders seek clarity from UK before possible Brexit delay

Deutsche Welle: European Union leaders say if Theresa May’s Brexit deal is rejected again, a clearer plan must be put forward. The UK is seeking a three-month extension to the current March 29 deadline in order to come to an agreement. Read more 

European parliament deals setback to EU-US trade talks

France24: The European Parliament on Thursday failed to back the launch of trade talks between the EU and the United States, dealing an unexpected blow to efforts to avert a transatlantic trade war. Read more 

EU Foreign direct investment report: continuous rise of foreign ownership of European companies in key sectors

EU: The report is the first of its kind in terms of the detailed company level data used. It confirms a continuous rise in foreign company ownership in key sectors in the EU and an increase in investments from emerging economies, such as China. It illustrates the need for effective implementation of the freshly adopted EU investment screening framework. Read more 

Commerce Sec Anup Wadhawan: India Looks For Better Deal For Exporters Under Free Trade Agreement

Techgraph: India is in discussions with its key trading partners to expand preferential duties under free trade agreements (FTAs) even as the government is streamlining procedures for exporters to avail benefits from such trade pacts, Commerce Secretary Anup Wadhawan has said. Read more 

Taiwan-El Salvador FTA still effective: MOEA

Focus Taiwan: El Salvador has never asked to cancel a free trade agreement (FTA) with Taiwan so the deal remains in place, even though the Central American country switched diplomatic recognition to China last year, Taiwan’s Ministry of Economic Affairs (MOEA) said Thursday. Read more 

Mnuchin: Lifting tariffs part of plan for USMCA passage

Politico: The Trump administration will work out a solution on steel and aluminum tariffs with Mexico and Canada as part of its efforts to get the new North American trade pact through Congress, Treasury Secretary Steven Mnuchin told lawmakers Thursday. Read more

African finance ministers set to examine fiscal policies key to AfCFTA implementation

The New Times: The 52nd session of the Economic Commission for Africa’s (ECA) Conference of African Ministers of Finance, Planning and Economic Development, will be held in Marrakech, Morocco, next week under the theme; Fiscal policy, trade and the private sector in the digital era: A strategy for Africa. Read more 

Quality Research Needed to Help Implement the Afcfta

AllAfrica: With a few more ratifications needed for the African Continental Free Trade Area (AfCFTA) to become effective, scholars meeting for the Economic Research Conference in Kigali pledged to produce good high-quality research papers to inform policymakers and help move the agreement forward. Read more 

AfCFTA – What Next After Ratifications?

All Africa: The African Continental Free Trade Area Agreement (AfCFTA) could soon gather the minimum required ratifications to put it into effect. Read more 

US requests consultations with South Korea under the free trade pact

Business Standard: The Trump administration has requested consultations with South Korea under the two nations’ free trade pact to try to resolve US concerns about procedures in competition hearings held by a South Korean trade commission. Read more 

UK signs post-Brexit trade deal with Fiji and Papua New Guinea

The Guardian: Ministers rush to do deals with countries UK trades with under EU free trade arrangements. Read more 

China Upbeat on Trade Talks, Denies Huawei Spying Allegations

VoA: China used the closing of its annual top-level political meetings, or “Two Sessions,” to send positive signals about its commitment to resolve trade tensions with Washington and push forward economic reforms. Read more 

China Aims to Placate U.S. With Law Banning Theft of Foreign Trade Secrets

Wall Street Journal: China made last-minute changes to a proposed foreign-investment law, trying to address U.S. complaints about forced technology transfer and bolster a compromise seen as crucial to striking a trade deal with Washington. Read more

WTO NEWS

WTO 2019 Public Forum theme to be ‘Trading Forward: Adapting to a Changing World’

The WTO’s 2019 Public Forum, to be held on 8-11 October, will consider how trade and the trading system can adapt to a changing world. Read more 

The Philippines launches safeguard investigation on clear and tinted float glass

On 13 March 2019, the Philippines notified the WTO’s Committee on Safeguards that it initiated on 19 February 2019 a safeguard investigation on clear and tinted float glass. Read more 

DDG Wolff: Eight reasons for optimism about the future of the multilateral trading system

Despite being tested “as never before” in its 80-year history, the multilateral trading system will endure, improve and survive, Deputy Director-General Alan Wolff predicted in a speech to the Harvard Law School on 12 March. DDG Wolff said there were eight “sound reasons for optimism” about the system’s future. Read more 

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.

 

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Caribbean Trade & Development Digest – March 3-9, 2019

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Welcome to the Caribbean Trade & Development Digest for the week of March 3-9, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

REGIONAL

Saint Vincent and the Grenadines increases export of livestock in 2019

OECS: SVG is known internationally for it’s beautiful chain of islands, but is also taking the Caricom region by storm, as the island witnesses significant increases in fish and livestock exports. Read more 

Renewed Calls To Do More To Protect Conch

Tribune242: There are renewed calls for conch protection measures from environmentalists, including banning the exportation of conch meat and ramping up efforts to tackle the “scourge” of poaching. Read more 

US to allow lawsuits against Cuban firms, foreign businesses excluded for now

CNN: US citizens and companies with claims to Cuban property will soon be allowed to sue Cuban entities, according to a senior State Department official. But foreign businesses operating on the island will be excluded from any lawsuits under the decision to partially suspend Title III of the Libertad Act. Read more

Guadeloupe to accede to associate membership of OECS at Opening Ceremony for Special Meeting of OECS Authority on March 14, 2019

OECS: The OECS Authority is scheduled to meet in special session in Guadeloupe on 14-15 March 2019 at which time Guadeloupe will be admitted as an associate member of the Organisation. Read more 

National Puerto Rican Chamber of Commerce among entities pushing for passage of North American trade agreement.

Caribbean Business: The Pass USMCA Coalition, an alliance advocating for the passage of the United States-Mexico-Canada Agreement, welcomed the National Association of Manufacturers, Domino’s Pizza, Dow, and the National Puerto Rican Chamber of Commerce as its newest members. Read more 

Export development workshop held today in Corozal

Breaking Belize News: The Ministry of Investment, Trade, and Commerce announced that as part of a major deliverable under this consultancy, it is hosting a Validation Workshop of a “Draft Regional Economic Development Master Plan for Corozal” that looks at two main components under the consultancy: I. Free Zone review and repurposing and II. The preparation of an Economic Development Master Plan for the Corozal Region. Read more 

Barbados dismisses claims that island could suffer as a result of CSME requirement

TV6: Barbados has dismissed as “propaganda”, claims that the island could suffer a social fallout as a result of the implementation of the Protocol of Contingent Rights that allows for spouses, young children and dependent parents of skilled Caribbean Community (CARICOM) nationals to reside here. Read more 

All CSME Member States Sign on to Contingent Rights Protocol

Caribbean360: Member States that are participating in the CARICOM Single Market and Economy (CSME) have all signed on to the Protocol on Contingent Rights and most of them are prepared to immediately begin provisional application of the Protocol. Read more

Caricom grants deferral to two member countries on freedom of movement

Jamaica Observer: Two Caribbean Community (Caricom) countries have been granted a five-year deferral on the freedom of movement of Caribbean nationals under the Caricom Single Market and Economy (CSME) that allows for the free movement of goods, skills, labour and services across the 15-member grouping, Trinidad and Tobago Prime Minister Dr Keith Rowley has said. Read more 

PROCOMER Will Promote Export Competencies in Businessmen of the Caribbean Region

Costa Rica News: With the objective of developing export capacities for entrepreneurs in the agricultural, food, and logistics services sectors, the Office of the Costa Rican Foreign Trade Promotor (PROCOMER) in the Huetar Caribe region prepares the 5th edition of the Caribbean Business Meeting. It will take place on March 20th and 21st, 2019, starting at 8:00 am, at the EARTH University of Guácimo. Read more 

Oil import bill on the increase 

Barbados Advocate: AFTER declines in recent years, Barbados’ oil import bill is back up in the air.This increasingly high bill of more than $700 million last year was one of the challenges which continued to confront the Barbados economy in 2018. Read more 

INTERNATIONAL

The Kiwi leading the fight to fix the WTO

Newsroom: With a critical component of the international trading system at risk of collapse, a New Zealander has been tasked with helping to avert crisis. Sam Sachdeva speaks to David Walker about the task ahead of him. Read more

Malaysia says EU palm oil curbs lack scientific proof, breach WTO rules

Reuters: A European Union proposal to limit the use of palm oil lacks comprehensive scientific evidence and breaches global trade rules, Malaysia’s marketing agency for the edible oil said on Friday. Read more 

Kenya negotiating AGOA extension despite low exports

The Star: The government is negotiating for a post Africa Growth and Opportunity Act (AGOA) initiative to grow exports to US. AGOA was enacted in May 2000 and now has seven years to 2025 after its renewal, under which the country is to export duty-free products. Read more 

Americans will need a visa to visit 22 countries in Europe starting in 2021

Insider: In two years, Americans will need to apply for something called ETIAS (European Travel Information and Authorization System) in order to enter the continent. The European Commission says the new visas will be enforced as an effort to upgrade international security, effective January 1, 2021. Read more 

Liam Fox: I fear Brexit may never happen

BBC: A cabinet Brexiteer has voiced fears that Remain supporters in parliament will seek to overturn the referendum result over the next week. Liam Fox told BBC Newsnight that a large number of MPs want to keep the UK “locked in the EU”, adding there needs to be an end to the “self-induced pessimism” which is denying the opportunities offered by Brexit. Read more 

UK and South Africa to co-lead initiative on digital trade, aiming to boost Commonwealth trade to $2tn

UK Government: The Commonwealth initiative will seek to increase prosperity in least developed and developing countries through digital trade. Read more 

Malmström calls for renewed transatlantic cooperation on trade

EU: EU Trade Commissioner Cecilia Malmström appealed to the US not to stray from the international trade order and instead work with Europe to face the challenges of the modern global economy, including China. Updating the World Trade Organisation (WTO) should be at the heart of this rejuvenated reform effort, she argued. Read more 

Trade agreement between the EU and the Republic of Korea shown to have increased EU exports by 76%

EU: A European Commission evaluation shows that the trade agreement between the EU and Korea has been effective in making trade and investment easier, simpler and less costly. This in turn increased trade in both goods and services between the two sides, contributing to jobs, growth and more consumer choice. Read more 

Foreign Investment Screening: new European framework to enter into force in April 2019

EU: The Council of the EU today approved a new framework to screen foreign direct investments coming into the European Union, thus concluding the legislative process on this proposal. Read more 

China’s foreign investment law to usher in new chapter of opening up

ECNS: With a new draft foreign investment law submitted to national lawmakers for a third reading, China is a big step closer to adopting a unified “fundamental law” that will better protect foreign investors and start a new chapter for its opening up. Read more 

Mercosur hopes to become main food supplier of ASEAN

Saigon Online: The South American trade bloc Mercosur hopes to become a main food supplier of the Association of Southeast Asian Nations (ASEAN) in the next 50 years, according to President of the Mercosur-ASEAN Chamber of Commerce Rodolfo Caffaro. Read more 

Trade barriers stall Asean integration, say experts

The Nation: ASEAN integration is “not going anywhere” if trade regulations between Asean countries are not reformed, a recent forum heard. Read more 

In Blow to Trump, America’s Trade Deficit in Goods Hits Record $891 Billion

New York Times: America’s trade deficit in goods with the rest of the world rose to its highest level in history last year as the United States imported a record number of products, including from China, widening the deficit to $891.3 billion and delivering a setback to President Trump’s goal of narrowing that gap. Read more

Europe Trade Czar Warns of ‘Tariffs on Day 1’ After Hard Brexit

Bloomberg: The European Union’s top trade official warned that the U.K.’s impending exit from the bloc risks being “chaotic’’ with some of the EU’s other member states still not prepared for the practical realities of a no-deal Brexit that may be just three weeks away. Read more 

Kenya bank to open office in China to facilitate Sino-Africa trade

Business Report: Kenya Commercial Bank (KCB), a regional financial institution, plans to open a representative office in China in order to lower cost of Sino-Africa trade, officials said Wednesday. Read more 

Brexit: Will it affect the Kenyan flower trade?

BBC: As Britain prepares to leave the European Union, workers in Kenya’s flower industry are closely monitoring developments. Read more

EU trade chief says no support in Europe for US trade deal that includes agriculture

Independent (Ireland): The European Union will not support a comprehensive trade deal with the United States that includes agriculture, the EU’s top trade negotiator said on Thursday, so she is working toward a narrower deal focused on industrial goods and automobiles. Read more 

A key measure of global trade just had its biggest tumble since 2015

Business Insider: Air freight has been weakening since mid-2018 due to “protectionist measures and trade tensions,” according to the International Air Transport Association director general and CEO. Read more 

Venezuelan Diaspora May Number 8 Million by Next Year, Group Says

Bloomberg: More than 3.4 million Venezuelans have already fled in the most severe migration crisis in the world after Syria, the study found. This diaspora will swell to 5.4 million by the end of this year, and to 7.5 million to 8.2 million by the end of 2020, according to the OAS. Read more 

Ports That Boomed on China May Never Be the Same as Trade Shifts

Bloomberg: An industry that saw dramatic growth in the decade before Donald Trump took office is now concerned his administration’s trade tussle with China, and the lack of a deal with Japan, will cut future growth short. Read more 

Big Brexit vote: What do I need to know?

BBC: On Tuesday MPs will pass their verdict on Prime Minister Theresa May’s plan to take Britain out of the European Union on 29 March. Here is what you need to know about the vote. Read more 

China Export Slump Adds to Concerns Over Weakening Global Growth

Bloomberg: China’s exports slumped in February as seasonal factory shutdowns and continued uncertainty from the trade war combined to drag on shipments, adding to concerns over a weakening global economy. Read more

US to Suspend India’s Preferential Tariff Status

Times of India: The US decision to withdraw GSP benefits from India will not have a significant impact on Indian exports to US, says top official. Read more 

India, Australia locked in sugar trade dispute at WTO

Livemint: India has to enter into consultations and answer all the specific issues within 30 days after Australia told the World Trade Organization (WTO) that the minimum support prices (MSP) and export subsidies provided to sugarcane and sugar producers by the Narendra Modi government and several state governments violate global trade rules. Read more

US-Mexico-Canada trade deal is ‘crucial’ for future negotiations and needs to get approved: GOP congressman

CNBC: The trade deal between the United States, Canada and Mexico is crucial for future trade agreements and needs to be “put on the books,” Rep. Tom Reed, R-N.Y., told CNBC on Thursday. Read more 

Peru Moves to Ratify Asia-Pacific Trade Agreement in March

Bloomberg Tax: Peru expects to ratify an 11-nation Asia-Pacific trade agreement in March, slightly more than a year after it was signed. Read more

WTO NEWS

Trade and gender training, new research and EIF initiative announced on Women’s Day at WTO

Director-General Roberto Azevêdo announced new efforts for women’s economic empowerment through trade, including a training module and new research on trade, gender and the environment, at an event at the WTO celebrating International Women’s Day on 8 March 2019. Read more 

“Gender issues are central to who we are,” says DG Azevêdo on Women’s Day

At an event at the WTO celebrating International Women’s Day on 8 March 2019, Director-General Roberto Azevêdo reviewed the organization’s current work in trade and gender, and talked about future work and initiatives. “Gender issues are central to who we are as an organization,” he said in opening the event. Read more

Brazil, Australia initiate WTO dispute complaints against Indian sugar subsidies

Brazil and Australia have requested WTO dispute consultations with India regarding domestic support measures and alleged export subsidies provided by India to producers of sugarcane and sugar. The requests were circulated to WTO members on 5 and 7 March. Read more 

Trade Policy Review: Ecuador

The third review of the trade policies and practices of Ecuador takes place on 5 and 7 March 2019. The basis for the review is a report by the WTO Secretariat and a report by the Government of Ecuador. Read more 

South Africa launches safeguard investigation on threaded fasteners of iron or steel

On 4 March 2019, South Africa notified the WTO’s Committee on Safeguards that it initiated on 1 March 2019 a safeguard investigation on threaded fasteners of iron or steel. Read more 

DG Azevêdo urges open and inclusive discussions on investment facilitation

Speaking at a meeting of the Structured Discussions On Investment Facilitation for Development on 4 March, WTO Director-General Roberto Azevêdo welcomed the progress made in the talks. He said participants have proceeded in an open and transparent manner and urged them to keep working to inform and interact with the full membership. Read more 

NEW ON THE CTLD BLOG

In commemoration of International Women’s Day 2019, I co-authored an article with Dr. Jan Yves Remy, Deputy Director of the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy & Services, discussing the importance of accelerating gender mainstreaming in CARICOM trade policies in order to foster inclusive development. Have a read here: Accelerating Gender Mainstreaming in CARICOM Trade Policy

Also feel free to take a look at my other commentary this week: CARICOM Protocol on Contingent Rights: An important Step to CSME Consolidation

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.

Accelerating Gender Mainstreaming in CARICOM Trade Policy

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Dr. Jan Yves Remy and Alicia Nicholls

While we can all agree that trade offers the potential for inclusive and sustainable growth in small Caribbean states, deployment of a successful trade strategy requires recognition and ultimately monitoring of its differentiated impacts on women and men. Despite immense strides made in empowering women, they remain under-represented in global trade and are disproportionately affected by international competition and technological changes.

On the occasion of International Women’s Day 2019, we highlight the link between trade and gender and make the case that accelerating gender mainstreaming in trade policies of CARICOM Member States promotes not just gender equality, but inclusive growth as well.

Gender Equality and Development Nexus

Under the United Nations Sustainable Development Goal 5, the international community has committed to achieving gender equality and empowering all women and girls by 2030. Not only is enhancing women’s equality and economic empowerment a human right, but the removal of legal and other barriers to women’s economic inclusion has a multiplier effect in the economy due to women’s dual role as caregivers and economic actors. World Bank research has found that women invest up to 90% of their income in their families, with positive spill-overs for their communities and the economy. A recent Mckinsey Global Institute Report found that advancing women’s equality could add $12 trillion to global GDP by 2025.

Despite this compelling data, and although they account for half of the world’s working age population, women remain under-represented in international trade on account of their unequal access to factors of production and inbuilt gender biases. A recently released World Bank Report entitled “Women Business and the Law 2019” found that out of 187 countries globally, women had equal legal rights to men in only 6.

Gender and Trade Nexus

Trade policies are not necessarily gender neutral: they impact women and men differently at both the country and sectoral levels. Recognizing this, a policy of “gender mainstreaming” aims to promote gender equality by integrating gender considerations in the preparation, design, implementation and monitoring of policies.

Trade creates opportunities for women’s empowerment by creating both employment and business opportunities, but it can also alienate them. For example, while e-commerce can improve women’s access to foreign markets, increased competition through trade liberalisation can displace and marginalize women in agriculture. Because they are both caregivers and economic actors, women often have less time on average than men to engage in entrepreneurial and exporting activities. At the same time, their access to market information is often lower due to fewer networks and lower education levels. Knowing this, ex ante gender-based analysis can assist policymakers to avoid negative gender impacts of policies that they implement.

A number of international institutions have developed programmes to increase women’s inclusion in trade. For instance, the International Trade Centre (ITC) has created a She Trades electronic platform; and the World Trade Organization (WTO), at its Buenos Aires Ministerial Conference in 2017, adopted a Joint Declaration on Trade and Women’s Economic Empowerment. Regionally, the Caribbean Export Development Agency’s Women Empowered Through Export (We-Xport) initiative supports Caribbean businesswomen looking to export for the first time or to increase their goods and services exports.

But there is still lots to do in CARICOM. Despite the fact that CARICOM Member States are signatory to a plethora of international treaties aimed at the empowerment of women, their trade policies are to a large extent being enacted and maintained in the absence of evidence and data that is timely, comparable and sex-disaggregated. Mainstreaming gender into CARICOM countries’ trade and development policy-making would help to ensure that initiatives under the CARICOM Single Market and Economy (CSME) and CARICOM’s trade negotiations with third parties are gender-sensitive. It is, therefore, a welcome development that Belize’s recently launched National Trade Policy (2019-2030) incorporates gender equality as a cross-cutting issue. Another praiseworthy development is that in February 2019, it was announced that national consultations were underway on a draft CARICOM Regional Gender Equality Strategy to advance gender equality and equity and the empowerment of women and girls in each of the fifteen CARICOM Member States.

How can CARICOM Member States promote Gender Mainstreaming in Trade?

Based on the above, we recommend the following ways in which CARICOM’s trade policies may be more gender-sensitive:

  • Mainstreaming gender in the design and implementation of National Trade Policies. Belize’s new National Trade Policy can serve as a good model;
  • Gender sensitivity training of key technocrats charged with formulating, implementing and monitoring trade and economic policies and their gendered impact. Gender-based policy making and monitoring will require greater resource allocation to the agencies charged with gender affairs;
  • Enlisting the assistance of civil society and the private sector in designing trade policies and measuring their impact;
  • Increasing specific programmes in Member States’ aimed a promoting women’s entrepreneurship and export activities through capacity-building, improving their access to finance and to trade information;
  • Promoting greater inclusion of gender provisions in CARICOM’s free trade agreements (FTAs). The most far-reaching of these FTAs like the Canada-Chile and Chile-Uruguay FTAs, contain dedicated trade and gender chapters. CARICOM’s trade agreements, however, are generally sparse on gender provisions;
  • Continued lobbying of regional policy makers to honour the commitments they have made both regionally and internationally to promote gender equality, particularly their reporting and gender mainstreaming commitments.

International Aid for Trade programming is becoming increasingly gender-focused. With foreign donors increasingly making gender an important plank of their aid strategies, CARICOM governments seeking development assistance are increasingly under pressure to include gender considerations. However, gender mainstreaming is not just about ensuring CARICOM Member States meet their international treaty obligations or increase their access donor to funding. When properly implemented, gender-sensitive trade policies promote women’s empowerment, eradicate poverty and foster inclusive growth.

Dr. Jan Yves Remy is the Deputy Director of the University of the West Indies, Cave Hill’s Shridath Ramphal Centre for International Trade Law, Policy & Services. Alicia Nicholls is an international trade and development consultant and contributing author to the UWI SRC’s Trading Thoughts column.

CARICOM Protocol on Contingent Rights: An important Step to CSME Consolidation

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Alicia Nicholls

The Government of Barbados has recently announced a Bill entitled the Caribbean Community (Amendment) Bill 2019, which, when passed, would amend the principal Act to give effect to the CARICOM Protocol on Contingent Rights, making it part of Barbadian law.

Barbados, along with six other CARICOM Member States, had signed the Protocol during the 39th Regular Meeting of the Conference of CARICOM Heads of Government in Montego Bay Jamaica in July 2018.

Following the recently held 30th Inter-sessional Meeting of the Conference of CARICOM Heads of Government in St. Kitts & Nevis, it has been reported that all CSME participating Member States have now signed the Protocol. But what is the Protocol about and why is it necessary for the consolidation of the CSME?

What is the Protocol on Contingent Rights and Why is it Necessary?

The Revised Treaty of Chaguaramas confers a number of rights to Community Nationals, including the right of establishment, the right to provide services, the free movement of capital and of skilled Community Nationals to seek employment in other CSME participating Member States. However, it was recognised by Member States that despite these rights (called ‘primary rights’) being conferred, additional enforceable rights (or ‘contingent rights’) were needed to ensure that Community Nationals could enjoy them effectively and without frustration.

For example, there was concern by CARICOM nationals who were working in other jurisdictions about their inability to access social services on the same basis of nationals of the host country, the inability of their spouses to also legally seek employment, and for their children to access primary education on the same basis as the children of nationals of the host country. These barriers frustrate the exercise of the rights conferred in the Revised Treaty.

The Protocol, which was a long time in the making, confers certain enforceable social and economic rights to Community Nationals and their immediate families who make use of the right of establishment, the right to provide services, the right to move capital and the free movement of skilled labour under the Revised Treaty of Chaguaramas. As such, the Protocol is not only a starting point for addressing some of the issues currently faced by Community Nationals seeking to exercise these rights effectively, but is, therefore, an important step towards the consolidation of the CSME.

Rights guaranteed under the Protocol

The framers of the Protocol define ‘contingent rights’ as “rights to which a national and his or her spouse and immediate dependents are entitled, contingent on the exercise by the principal beneficiary of the right of establishment, provision of services, movement of capital or free movement of skills”.

Subject to certain exceptions, the contingent rights currently guaranteed under the Protocol are:

  • the right of a principal beneficiary resident in a host country, his or her spouse or their dependants to transfer capital into and from a host country subject to Article 43 of the Treaty, which speaks to restrictions to safeguard balance of payments;
  • the right of a spouse or dependants of a principal beneficiary resident in a host country to leave and re-enter a host country;
  • the right of the spouse of a principal beneficiary resident in a host country to work in a host country without a work permit;
  • the right of a principal beneficiary resident in a host country and his or her spouse to access on a non-discriminatory basis lands, buildings and other property for residential or business purposes reasonably connected with the exercise of the rights of the principal beneficiary;
  • the right of dependent children of a principal beneficiary resident in a host country to access primary education on a nondiscriminatory basis, where and to the extent provided by the Government of the host country;
  • the right of a principal beneficiary resident in a host country to import into the host country free of duties within six months of being granted a stay, subject to the principal beneficiary having already satisfied the duty regime in another Member State, tools of trade that are (i) reasonably connected with the exercise of any of the
    primary rights of the principal beneficiary; (ii) in the possession of the principal beneficiary in the exercise of any of those primary rights; and (iii) located in a Member State.

These are a minimum standard and as such, Article IV of the Protocol specifically notes that Member States are not precluded from granting greater rights once not done in a discriminatory manner in contravention of the non-discrimination principle (Article 7) and more specifically, the Most Favoured Nation principle (Article 8) of the Revised Treaty respectively. It should be noted that consistent with a phased approach, the Barbados Bill adopts the Protocol as is and does not grant any greater rights.

Who may qualify for these rights?

Principal Beneficiary

The Protocol defines a ‘principal beneficiary’ as a national of a Member State exercising one or more primary rights, that is, rights pursuant to the Treaty in relation to the operation of the CSME and described in Articles 32, 34, 36, 40 and 46 of the Treaty, which deal with right of establishment, right to provide services, the movement of capital and free movement of skilled community nationals respectively.

For example, under the free movement of skilled nationals regime, ten categories of wage earners may move and work freely within CSME participating Member States without having to seek a work permit in the jurisdiction in which they seek to work and once they hold a CARICOM Skills Certificate (formally known as the CARICOM Certificate of Recognition of Skills Qualification).

The five original categories under the Revised Treaty of Chaguaramas were: University graduates, artistes, musicians, sportspersons, media workers. These were later expanded to include five additional categories: nurses, teachers, artisans with a Caribbean Vocational Qualification (CVQ), holders of Associates Degrees or comparable qualification and Household Domestics with a Caribbean Vocational Qualification (CVQ) or equivalent qualification. These eligible categories will soon include others, namely, agricultural workers, barbers, security guards and beauticians.

All other Community nationals need to apply for work permits in order to seek employment in another CSME jurisdiction.

Spouses and Dependents

With a nod to inclusiveness, the framers of the Protocol adopted a broad definition of ‘dependent’ to include any unmarried child of a principal beneficiary or of his or her spouse provided that such child is under the age of 18 years, under the age of 25 years attending school or university full time or over the age of 18 years who is disabled and dependent on the principal beneficiary. However, the definition of ‘spouse’ is still restricted to heterosexual relationships either via marriage, or via common-law unions to the extent that such unions are recognized by the laws of the host country.

Built-in agenda and monitoring

The issue of contingent rights has been a sensitive one as not all CARICOM Member States offer their own nationals the same level of social benefits. There are legitimate fears that there may be undue burdens placed on those States with more generous social welfare programmes, such as free education and free health care, as well as concerns about the potential for abuse of these programs.

One way the framers of the Protocol appear to seek to address this concern is by allowing for a phased approach through a built-in agenda (Article III). It enumerates a list of potential more extensive rights to be adopted by Member States on a phased approach subject to agreement. It also provides for monitoring and review. Additionally, temporary service providers are not entitled to contingent rights and safeguard measures in Article 47 apply to the Protocol mutatis mutandis.

Moving from paper to practice

CARICOM Member States are dualist States, that is, even after a treaty is signed by a Member State, it needs to be translated into domestic law in order for the treaty obligations to be binding on the State domestically. Therefore, the rights under the Protocol can only be enjoyed, and the State bound to provide these rights, once they have been translated into domestic law through an Act of Parliament.

  1. Domestic Ratification Needed by all signatories – For the Protocol to enter into force, it must be signed and then ratified by all parties to the Revised Treaty, which will not be an easy task. The Protocol, however, may be provisionally applied once seven or more of the Parties to the Protocol declare their intention to apply the Protocol provisionally before the Protocol enters into force.The next step is to ensure the Protocol is brought into force as soon as possible, thereby ensuring it is parlayed from mere ink on paper. On this front, it is commendable that Barbados, which has lead responsibility for the CSME in CARICOM’s quasi cabinet, is leading by example through its commencement of the ratification process.
  2. Procedures for implementation and monitoring – Procedures and systems must be put in place domestically and regionally to allow for implementation and monitoring of the Protocol’s operation to ensure Member States are honouring their commitments and to ascertain any problems. Data collection will be key.
  3. Training – Guidance, as well as further training of staff members of agencies which are tasked with implementation and monitoring, may be necessary.
  4. Public Awareness Campaign – As evidenced by the misinformation which was circulated on social media after the Bill was announced in Barbados, it is evident that a public awareness campaign is needed not only to educate CARICOM citizens about the rights contained in the Protocol and how they as nationals may benefit, but to help assuage concerns and fears about the Protocol’s intentions and implications.

The very timely Golding Commission Report, which had examined Jamaica’s relations within CARICOM and CARIFORUM, had spoken of the CSME implementation deficit and challenged regional leaders to chart a way forward. Having this Protocol enter into force would not only facilitate greater movement, but also be a much-needed injection of confidence to show the region’s populace that the CSME is not moribund. On this note, Barbados’ initiative to begin the ratification process is certainly a commendable one, and it is hoped that other CARICOM countries will swiftly follow suit.

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

Caribbean Trade and Development Digest – February 24 – March 2, 2019

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Welcome to the Caribbean Trade & Development Digest for the week of February 24-March 2, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

THIS WEEK’S HIGHLIGHTS

The Government of Belize this week launched its first National Trade Policy 2019-2030. The full text of the policy may be viewed here.

Meanwhile, the US released its 2019 Trade Policy Agenda and 2018 Annual Report, in which it warned, inter alia, that “we will not allow the WTO Appellate Body and dispute settlement system to force the United States into a straitjacket of obligations to which we never agreed”.

CARICOM Heads of Government held their 30th Inter-sessional Meeting this week (February 26-27, 2019) in St. Kitts & Nevis. Agenda items included transportation, the CSME, security, blacklisting and the situation in Venezuela. The communique may be read here.

Two Caribbean representatives (one from Barbados and the other from Jamaica) are among the list of chairpersons for WTO bodies released by the World Trade Organisation (WTO) on February 28, 2019.

REGIONAL 

Amnesty for Venezuelans in Trinidad & Tobago

St Lucia Online: Cabinet will meet on a policy position for illegal and legal Venezuelans in Trinidad and Tobago to be allowed an amnesty where they will be given ID cards and allowed to work in the country for one year. Read more 

CARICOM food import bill set to reach US$8-10 billion by 2020

Stabroek: For all the talk in the Caribbean regarding the relatively food secure status of many of the territories, the real picture is not one that generates unbridled optimism according to an article headlined “Five Overlooked Facts About Caribbean Food Security” authored by the Barbadian writer, Daphne Ewing-Chow, and published on February 20th in Forbes magazine. Read more 

White House to announce new sanctions on Cuba over Maduro support, source says

Fox News: The White House will soon impose major new sanctions against the Cuban government over its support for the regime of contested Venezuelan President Nicolas Maduro, a source familiar with President Trump’s national security team told Fox News. Read more 

CARICOM Says EU’s Shifting Tax Compliance Requirements Encroaching on CARICOM’s Sovereignty

Caribbean360: Caribbean Community (CARICOM) Secretary-General Ambassador Irwin LaRocque has expressed strong disquiet that the constantly shifting parameters for good tax governance set out by the European Union (EU), are encroaching on the region’s sovereignty. Read more

CARICOM among four major markets targeted by Jamaica Ministry of Agriculture

Jamaica Observer: Industry, Commerce, Agriculture and Fisheries Minister, Audley Shaw, says CARICOM is among four major markets being targeted, under the Government’s thrust to attain higher levels of economic growth, through the linkage between agriculture and industry. Read more 

USTDA Supports Port Cybersecurity in the Dominican Republic

BN Americas: Last week, the U.S. Trade and Development Agency awarded a technical assistance grant to Fundación Ramon E. Mella (FRM), a maritime and port organization in the Dominican Republic. The grant will support the development of a national cybersecurity risk assessment, reporting, and management capability platform for port facilities across the Dominican Republic. Read more 

CARICOM Integration advances: All CSME Participating Member States now Signatories to Contingent Rights Protocol

CARICOM: Chairman of the Caribbean Community (CARICOM) and Prime Minister of St. Kitts and Nevis, Dr. the Honourable Timothy Harris, highlighted the gains made towards the regional integration movement, particularly through the signing of the Protocol of Contingent Rights by all CARICOM Member States, as one of the success stories coming out of the 30th Inter-Sessional Meeting of the Conference of Heads of Government, held at the St. Kitts Marriott Resort, Frigate Bay, from February 26-27. Read more 

CARICOM Discussions Highlight Concerns about Single Market and Economy

The Bahamas Chronicle: Efforts to strengthen the advancement of the Caribbean Community (CARICOM) Single Market and Economy (CSME) will continue following recent developments that promote the free movement of people, goods, services and capital, and robust discussions slated for the (CARICOM) 30th Inter-Sessional Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM). Read more 

CARICOM countries sign multilateral air services agreement

St Kitts & Nevis Observer: Several CARICOM Member States including Dominica, Grenada, Jamaica and Trinidad and Tobago, have signed the Multilateral Air Services Agreement (MASA), aimed at expanding the scope for airlines owned by CARICOM nations to provide air services throughout the Community. Read more 

Belize’s exports second lowest in 15 years

Breaking Belize News: Belize’s export revenues for the year 2018 amounted to just under $399 million, making it the second lowest amount earned from exports since the $380 million in 2003 according to the Statistical Institute of Belize’s Annual Export Reports 2003 to 2018. Read more 

INTERNATIONAL

Reforming the WTO: The Swiss View

Swissinfo.ch: The crisis-hit World Trade Organization (WTO) is going through difficult times. World leaders have committed to an overhaul of the Geneva-based institution, but it is unclear what the future holds. Swiss ambassador to the WTO Didier Chambovey link gives his view.  Read more

Australia set to seal Indonesia free trade agreement

Australia Financial Review: A long-anticipated free trade agreement with Indonesia will be signed in Jakarta on Monday, ending more than eight years of negotiations and offering new economic opportunities for industries including the country’s citrus farmers. Read more 

‘India should cut car tariffs for free trade agreement with EU’

MENA FM – Gulf Times: The proposed India-EU free trade agreement (FTA) cannot be finalised without an Indian commitment to lower import duties on cars and car parts since this is a politically sensitive issue in the European Union (EU), the EU Ambassador to India Tomasz Kozlowski said in New Delhi on Friday. Read more 

Mexico pushing labour reform, won’t ratify new NAFTA with U.S. tariffs in place

CBC: Mexico’s Congress will be asked to approve a major labour reform bill this spring as a necessary step to ratifying the new North American free trade pact later this autumn, say Mexican officials. Read more 

Trump said trade wars are ‘easy to win.’ A year later, here’s a timeline of what’s happened with China

CNBC: A year ago, President Donald Trump declared “trade wars are good and easy to win.” The White House has since moved toward its goal of revamping global trade deals, largely through a series of tariffs on — and talks with — China. Read more

U.S., China Are Close to Trade Deal That May End American Tariffs

Bloomberg: Most or all U.S. tariffs on China are likely to be lifted as part of a trade deal between the world’s two largest economies now in its final stages, said two people familiar with the discussions. Read more 

International business engagement key to future of trade, ICC Sec Gen

ICC: Speaking at a conference on current challenges to global trade in Lisbon this week, International Chamber of Commerce (ICC) Secretary General John W.H. Denton AO said business could not afford to sit on the sidelines when it came to global challenges, including reform of the multilateral trade system. Read more

Thailand to apply to join trans-Pacific FTA this month: official

The Mainichi: Thailand will apply this month to join a trans-Pacific free trade agreement, aiming to ensure it is not left behind by its competitors in the vibrant region, according to a senior Thai government official. Read more 

New Zealand’s Two-way trade with CPTPP countries nears $50 billion

Scoop New Zealand: New Zealand’s two-way trade with the combined Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries was $49.6 billion in the December 2018 year, Stats NZ said today. Read more 

New push for Asia-Pacific mega deal

Nikkei Asian Review: Ministers from Asia’s leading economies met here to renew their pursuit of a sweeping regional trade deal as an easing of tensions between the U.S. and China gives momentum to multilateral negotiations. Read more 

Michel Barnier casts doubt on whether UK will leave EU on March 29

ITV News: Michel Barnier has indicated he does not believe the UK will have enough time to approve Theresa May’s Withdrawal Agreement by March 29. Read more 

WTO: India insists on flexibilities in negotiations on fisheries subsidies

Hindu Business Line: India has insisted that larger developing countries should also be extended flexibilities at the fisheries negotiations of the World Trade Organisation that would allow them to retain some subsidy programmes important for small-scale fishers. Read more

The Commission reinforces procedural rights of parties in EU trade defence investigations

EU: The Commission has today updated the terms of reference for the Hearing Officer for trade defence proceedings, the independent watchdog that guarantees fairness and impartiality of EU anti-dumping and anti-subsidy cases. Read more 

EU and New Zealand complete third round of trade negotiations

EU: Trade negotiators from New Zealand were in Brussels from 18-22 February 2019 for the third round of negotiations for a trade agreement with the EU. Read more 

U.S. says rejects WTO’s ‘straitjacket’ of trade obligations

Reuters: The Trump administration filed another salvo at the World Trade Organization on Friday, saying U.S. trade policy was not going to be dictated by the international body and defending its use of tariffs to pressure China and other trade partners. Read more

EU grants Ghana €40 million under Economic Partnership Agreement

Business Ghana: The government has signed a €40-million budget support agreement with the European Union (EU). The grant is to support the country’s national development framework, which focuses on jobs as a means to create prosperity and opportunity for all, thereby contributing to the achievement of the Sustainable Development Goals (SDGs). Read more 

WTO NEWS

WTO issues panel report regarding Chinese agricultural subsidies

WTO: On 28 February the WTO circulated the panel report in the case brought by the United States in “China — Domestic Support for Agricultural Producers” (DS511). Read more 

Summary of General Council meeting of 28 February 2019

WTO: Report by the Chairman of the Trade Negotiations Committee and Report by the Director-General. Read more 

DDG Wolff: More institutional cooperation is needed to address shortages of trade finance

WTO: Speaking to the Expert Group on Trade Finance at the WTO on 28 February, Deputy Director-General Alan Wolff called on the trade finance community to build on the significant progress in recent years in reducing trade finance gaps in developing countries. Read more 

DG Azevêdo: “The time is now to confront systemic challenges”

WTO: At a meeting of the full WTO membership today (27 February), Director-General Roberto Azevêdo commented on the emerging debate on ‘WTO reform’, acknowledging the variety of views held by members and arguing that the trading system must be able to evolve if it is to have a bright future. Read more 

Tunisia initiates new WTO dispute complaint against Morocco book duties

WTO: Tunisia has requested WTO dispute consultations with Morocco concerning final anti-dumping duties imposed by Morocco on imports of school exercise books from Tunisia. The request was circulated to WTO members on 27 February. Read more Read more 

UK set to become a party to the Government Procurement Agreement in its own right

WTO: Parties to the Government Procurement Agreement (GPA) gave their final approval to the United Kingdom’s accession to the pact, in its own right, once it leaves the European Union. At a meeting of the WTO’s Committee on Government Procurement on 27 February, the GPA parties also agreed to grant Paraguay observer status. Read more 

EIF strategic plan seeks to help least developed countries gain more from trade

WTO: A new Strategic Plan launched by the Enhanced Integrated Framework (EIF) seeks to deepen efforts to assist least developed countries (LDCs) benefit from trade. The goals of the new plan are to improve the trade environment for LDCs so there is inclusive and sustainable growth, and to increase their exports and access to international markets. Read more 

Members consider Thai request for panel to rule on Turkish air conditioner duties

WTO: At a meeting of the Dispute Settlement Body (DSB) on 25 February, WTO members considered Thailand’s request for the establishment of a dispute panel to rule on duties levied by Turkey on imported Thai air conditioners. Members also renewed their discussions on resolving their differences over the appointment of Appellate Body members and heard from several members regarding their efforts to implement WTO rulings. Read more 

NEW ON THE CTLD BLOG

My latest commentary is on future CARICOM-US relations beyond the Caribbean Basin Initiative (CBI): Future CARICOM-US Trading Relations Beyond the Caribbean Basin Initiative. 

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.

Future CARICOM-US Trading Relations Beyond the Caribbean Basin Initiative

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Alicia Nicholls

A bipartisan bill (HR 991) was recently introduced in the United States (US) House of Representatives proposing to extend the Caribbean Basin Trade Partnership Act (CBTPA), one of the key pieces of legislation comprising the Caribbean Basin Initiative (CBI), to the year 2030. The benefits under the CBTPA are currently due to expire on September 30, 2020, unless extended by a subsequent Act of Congress.

The CBI has generally been regarded by successive US administrations as being mutually beneficial to both the US and CBI beneficiary countries. However, the current US administration’s greater insistence on reciprocity in its dealings with external trading partners and the on-going re-examination of its current trading arrangements mean that the extension of the CBTPA should not be taken for granted as a fait accompli.

While this article posits that CARICOM countries should indeed lobby for the CBTPA’s extension, it also proposes that, in the long-term, the region should think strategically beyond the CBI by considering a future CARICOM-US trading relationship which best enhances bilateral trade between the US and CARICOM to foster sustainable and inclusive development.

The Status Quo: The Caribbean Basin Initiative

Since 1983, preferential trade between CARICOM countries and the region’s largest trading partner, the US, has been governed largely by the CBI – a unilateral preference scheme of the US government which confers to eligible beneficiary countries non-reciprocal preferential access to the US market for a wide range of goods.

The CBI was first announced by then US President Ronald Reagan during an address before the Organisation of American States (OAS) on February 24, 1982, to facilitate the economic development and export diversification of Caribbean Basin countries, while also advancing US strategic economic and geopolitical interests in its “backyard”.

In 1983, the Caribbean Basin Economic Recovery Act (CBERA) was finally signed into law, coming into effect the following year. In 2000, after much lobbying by Caribbean countries, the CBTPA was passed and granted enhanced preferences for eligible textile and apparel from CBI countries on par with those enjoyed by Mexico under the North American Free Trade Agreement (NAFTA). While the CBERA was made permanent in 1990, the CBTPA is scheduled to expire on September 30, 2020.

Seventeen Caribbean countries and territories are currently CBERA beneficiaries, while seven are eligible for the enhanced CBTPA preferences. Haiti also receives additional benefits for its apparel and textiles under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act of 2006, the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE II) Act of 2008, and the Haiti Economic Lift Program (HELP) Act of 2010, which are scheduled to expire in September 2025.

Data in the United States Trade Representative’s Twelfth Report to Congress on the Operation of the Caribbean Basin Economic Recovery Act (December 2017) illustrated that for the years 2012-2016, on average about half of US total imports from CBI countries entered the US market otherwise duty-free. This was followed by imports under CBI tariff preferences which accounted on average for less than a quarter of US total imports from CBI countries. Trinidad & Tobago, Haiti and Jamaica were the top three sources of total US imports from CBI countries.

CBI: Possible Headwinds

The USTR report noted a 24% decrease in US consumption imports from beneficiary countries in 2016 compared to 2015, and down 58% from 2006. This decline was attributed to lower petroleum prices and an increase in US domestic petroleum production. US imports from CBI countries declined from 0.5% of total US imports from the world in 2012 to 0.2% of total US imports from the world in 2016. Energy products accounted for 39.3% of US imports under CBI in 2016 and textiles and apparel (primarily Haitian apparel) accounted for 34.9%.

In an article I wrote on this topic a couple of years ago, I outlined some of the structural deficiencies with the CBI as currently operated which I argued circumscribe its effectiveness at promoting economic development and diversification in beneficiary economies. One of those deficiencies is that the CBI preferences apply to goods only, which over time has arguably lessened its value given the increasing contribution of services trade to Caribbean economies.

Besides the structural issues inherent in the CBI, its continuation faces some possible political headwinds. The CBERA’s incompatibility with the World Trade Organisation (WTO) rules on non-discrimination and its ineligibility for the ‘enabling clause’ exception mean that the US must seek a waiver from the WTO which must be approved by WTO members. The US’ current WTO waiver for CBERA (inclusive of the CBPTA) is due to expire on December 31, 2019. Given this administration’s greater insistence on reciprocity with its trading partners, as articulated in the 2018 Trade Policy Agenda, it should not be taken for granted that the US will seek a new waiver for CBERA. Moreover, the strong opposition made by some developing WTO members the last time the US sought a waiver means that approval of yet another waiver by the WTO is also not a fait accompli.

Additionally, the current mercantilist tenor of US trade policy has occasioned a greater insistence on reciprocity and enhanced scrutiny of its trade agreements with countries with which the US has a trade deficit. It is this policy shift which hastened the renegotiation of NAFTA and its renaming to the USMCA. While reports do not indicate that the CBI is under the microscope, the programme’s unilateral nature means that preferences thereunder may be unilaterally varied or ended at any time. This adds some uncertainty for Caribbean exporters.

One element which might be keeping the CBI out of the current administration’s cross-hairs is that the CBI had immediately led to a spike in US domestic exports to CBI countries (then including other Caribbean Basin economies), peaking at $26 billion in 2005. Although US exports to CBI countries have declined since 2005, the US still enjoys a wide trade surplus with CBI countries – the total value of US exports to CBI countries in 2016 was $10.5 billion, while the total value of US imports to CBI countries in that same year was only $5.3 billion, leading to a US merchandise surplus with CBI countries of $5.1 billion in 2016.

Indeed, in the statement released by US Representative Terri Sewell (D-AL), one of HR 991’s co-sponsors (the other is Brad Wenstrup (R-OH)), the congresswoman noted, inter alia, that “Extending the U.S. Caribbean Basin Trade Partnership Act will expand the United States’ trade with Caribbean basin countries and increase our nation’s economic growth”.

CBI: Next Steps

Let me note that even if the CBTPA is not extended, this does not necessarily affect other components of the CBI programme which in the case of the CBERA is currently ‘permanent’ and with regard to the Haiti-specific preferences are due to expire in September 2025.

Nonetheless, this is not to diminish the importance of retaining the CBTPA tariff preferences, which still account for an important share of US imports from CBI countries. In 2016, the value of US imports under CBERA was $479 million and $252 million under the CBTPA. For this reason, the best immediate option is for CARICOM countries to step up their lobbying for an extension of the CBTPA. This lobbying effort should, of course, be done in collaboration with the regional private sector, the Caribbean diaspora and friends of the Caribbean in the US Congress. It is in this vein that the closure of the US-based Caribbean Central American Action (CCAA), which did excellent work on behalf of the region in the US, leaves a void which will need to be filled.

Another issue will be finding ways to increase the rate of utilization by CBI exporters of the CBERA/CBTPA preferences. This is a catch-22, of course, as the current wide US surplus with the region is perhaps the reason why CBI has been outside of the current administration’s crosshairs.

Nevertheless, US foreign policy has recognised that an economically prosperous Caribbean is in the US’ best interests. The Multi-Year US Strategy for Engagement in the Caribbean, pursuant to the US-Caribbean Strategic Engagement Act of 2016, recognizes this by outlining several broad proposals for improving the trade and investment climate between the US and Caribbean. The mechanism of the US-CARICOM Trade and Investment Council, as provided for under the Trade and Investment Framework, should be used as a forum to discuss the implementation of these proposals and ways to improve CBI beneficiaries’ utilization of the preferences with the view to enhancing their economic development.

Let me hasten to say, however, that underutilization of the CBI is not simply a product of the structural problems of the initiative, but is symptomatic of the chronic under-utilisation by regional firms of current trade agreements in place between CARICOM and its trade partners. This speaks to wider structural issues prohibiting regional exporters from converting market access into market penetration. For one, navigating the myriad of requirements for exporting to the US under the CBI and other trade preference programmes is not easy for businesses, especially MSMEs which lack scale and have limited resources to interpret and meet the legal and other requirements under these arrangements.

Beyond CBI: Options for Future CARICOM-US Trading Relations

Given the CBI’s inherent structural problems and the possible political headwinds which may face the CBTPA’s renewal, CARICOM should seriously consider options beyond the CBI for its future trading relations with its most important partner.

An appropriate policy response should be evidence-based, that is, backed by sound data, as well as broad-based stakeholder consultations on the way forward. However, at least four options are readily apparent.

  • Trading under WTO MFN conditions

This is not an attractive (or real) option for CARICOM countries as it would result in regional exporters paying WTO Most Favoured Nation (MFN) rates for goods currently benefiting from CBI tariff preferences, thereby reducing what little margin of competitiveness they currently enjoy in the US market.

  • Trading under the US Generalised System of Preferences (GSP)

The US GSP was created in 1974 and provides duty-free, non-reciprocal access to the US market for a number of goods from 131 designated beneficiary countries, including 44 Least Developed Countries (LDCs). In March 2018 President Trump signed legislation to renew it to March 2020. Similar to the CBI, the GSP’s unilateral nature still adds an element of uncertainty for traders. The rules of origin under the GSP are also stricter than those under the CBI.

While some US imports from CBI countries do enter the US market under the GSP, these are much less than those entering otherwise duty-free, under CBI and HOPE Act tariff preferences and under WTO Most Favoured Nation (MFN) terms. Additionally, not all CBI countries are GSP designated countries. For example, Antigua & Barbuda, Barbados and Trinidad & Tobago were graduated and are no longer eligible for preferences under the GSP.

  • Acceding to CAFTA-DR FTA

Acceding to an existing US FTA, such as the CAFTA DR, may be another possible option. Under Article 22.6 (Accession) of the CAFTA-DR, any country or group of countries may accede to the Agreement “subject to such terms and conditions as may be agreed between such country or countries and the Commission and following approval in accordance with the applicable legal procedures of each Party and acceding country.”

Acceding to CAFTA-DR would create market access openings for CARICOM exporters not only to the US, but to the other CAFTA-DR parties: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, as well as enhanced market access to the Dominican Republic (with which CARICOM already has an FTA).

Conversely, there are considerations to be borne in mind. Are the commitments under the CAFTA-DR ones that CARICOM Member States are prepared to undertake and capable of implementing? What would be the possible impact of these market access openings on CARICOM’s most sensitive industries?

There are also political considerations. With the USMCA signed (but still awaiting ratification by all three governments), the current administration is said to be looking closely at the CAFTA-DR, which means that a possible renegotiation of that agreement at some point cannot be ruled out.

  • Negotiation of a CARICOM-US Free Trade Agreement

The fourth and perhaps best long-term scenario is the eventual conclusion of a CARICOM-US Free Trade Agreement. As noted in the latest USTR Report on CBERA, eight countries (including the Dominican Republic) are no longer CBERA beneficiaries due to being party to FTAs with the US. Indeed, the aim was for the US to conclude an FTA with CBERA beneficiaries as soon as possible.

There are possible positives to concluding a CARICOM-US FTA, including gaining preferential access to the US market for CARICOM services providers, and the prospect of negotiating a mutually beneficial and binding trading agreement which provides certainty for exporters from both sides.

However, there are also some potential downsides. An FTA is reciprocal and binding which means CARICOM Member States will be required to make market access concessions to the US as well. CARIFORUM countries are already struggling to implement commitments made under the CARIFORUM-EU Economic Partnership Agreement which has been provisionally applied since 2008. Some CARICOM governments may also worry about the further erosion of tariff revenue.

It is also doubtful whether the current US administration (or any future one) would agree to the generous level of special and differential treatment as CARIFORUM was able to negotiate with the European Union (EU) under the CARIFORUM-EU EPA. Negotiating a CARICOM-US FTA will also necessitate reconciling differing levels of ambition and competing interests among CARICOM Member States due to asymmetric development levels and capacity for undertaking commitments.

Nonetheless, of the four future scenarios presented, this is likely to be the most beneficial option for CARICOM. Any post-CBI CARICOM-US trading arrangement should at the very least be reciprocal (not unilateral), provide for special and differential treatment and development assistance, include gender and environmentally sensitive provisions, include an investment chapter which incorporates recent best practices in investment treaty rule-making which seek to ensure a proper balance between investor rights and States’ regulatory rights, and mandate on-going review and monitoring of the agreement to ensure that it is achieving its objectives. These could be best captured in an FTA.

Conclusion

In conclusion, the best immediate option for CARICOM at this moment should be lobbying for the CBTPA’s extension. However, given the flaws inherent in the CBI and the possible headwinds facing the programme’s future continuation, CARICOM policymakers would be advised to keep one eye on lobbying for an extension of CBTPA with the other on a longer term view of what its next steps should be regarding the region’s future trading partnership with its most important trading partner.

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.