Caribbean Trade Law and Development

Month: January 2021

  • EU-CARIFORUM EPA Monitoring Report finds five-fold increase in EU FDI to CARIFORUM

    EU-CARIFORUM EPA Monitoring Report finds five-fold increase in EU FDI to CARIFORUM

    Alicia Nicholls

    Foreign Direct Investment (FDI) from the European Union (EU) increased five-fold to CARIFORUM countries on a whole over the period 2013-2017, with the Bahamas and to a lesser extent, Barbados, being the main destinations. This increase, however, was not as a direct result of the EU-CARIFORUM Economic Partnership Agreement (EU-CARIFORUM EPA). These are some of the conclusions emanating from the final report of the study “Ex-post evaluation of the Economic Partnership Agreement (EPA) between the European Union and CARIFORUM” evaluating the implementation of the EPA over the period 2008-2018.

    The EU-CARIFORUM EPA was signed in 2008 and has been provisionally applied since then. It liberalises trade and investment between the EU and CARIFORUM on the basis of asymmetrical reciprocity and provides for development cooperation. It comprises 15 countries on the CARIFORUM side and had included the then 28 EU Member States when the United Kingdom was still an EU member. The first EPA monitoring report of 2014 had found several implementation shortcomings and it appears not much has changed since that first report.

    The current report found overall that implementation of the Agreement has been “mixed”, noting that while “clear progress in implementation has been made, several shortcomings remain.” It revealed implementation shortcomings in a number of categories, namely, liberalisation commitments, regulatory commitments, as well the institutional commitments. It further stated that “while in the EU not many shortcomings in terms of EPA implementation were observed, there are clearly barriers in place which can limit the CARIFORUM countries’ expected benefits under the EPA.” Several implementation shortcomings on the CARIFORUM side have been noted, including regarding commitments on intellectual property rights, electronic commerce and regional preferences.

    Implementation gaps related to the institutional commitments are common to both Parties, according to the report. Ratifications have, however, increased since the last report with 25 out of the (then) 28 EU countries and 10 out of 15 CARIFORUM countries having ratified the agreement.

    It is not lost on the reader that there are some clear assumptions expressed in the report, some of the same assumptions that have resulted in the EU unfairly placing some CARIFORUM countries on its blacklists for tax and anti-money laundering and countering the financing of terrorism (AML/CFT) purposes. For one, with regard to the increase in FDI, the report questioned “to what extent these are productive investments, as they are concentrated in the Bahamas and to a lesser extent Barbados”, which are low tax jurisdictions, and that “in the consultations, no clear champions could be identified”.

    The EU remains the top provider of development assistance to the region. It is, therefore, curious that while the report rightly listed a number of development challenges facing CARIFORUM, including climate change and the COVID-19 pandemic, it unfortunately appears to flippantly note that “the countries do not face these challenges alone, but together with their key partners”. That statement ignores the fact that CARIFORUM countries are primarily small island developing States whose capacity to meet these challenges, is much more circumscribed than that of larger countries. One only needs to look at the fact that CARIFORUM countries face significant challenges in accessing COVID-19 vaccines for their populations on equal terms as larger countries.

    Another interesting finding from the report regarding FDI is that the EPA has had a low impact on EU FDI into the CARIFORUM tourism sector. The EPA, it argued, was rarely among the decisive factors driving FDI to the region and “the level of awareness of the EPA is very low, with even large investors often being unaware of the EPA.”

    It should be noted that the EPA does not include a full investment chapter as the EU Commission at the time only had competence to negotiate investment liberalisation. Investment protection provisions are not included in the EPA’s investment chapter. Investors would have to rely on protections included in the individual BITs existing between various CARIFORUM and EU countries, where available and in force, most of which predate the EPA.

    In sum, the study found that the EPA had occasioned limited changes in overall trade and investment between the EU and CARIFORUM, leading to a conclusion of a lack of a clear impact of the EPA. It also outlines several recommendations.

    The executive summary of the final report may be accessed here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. All views herein expressed are her personal views and should not be attributed to any institution with which she may from time to time be affiliated. You can read more of her commentaries and follow her on Twitter @LicyLaw.

  • Caribbean Trade & Development News Digest – January 17 – 23, 2020

    Caribbean Trade & Development News Digest – January 17 – 23, 2020

    Welcome to the Caribbean Trade and Development News Digest for the week of January 17-23, 2021! We are pleased to bring you the major trade and development news headlines and analysis from across the Caribbean Region and the world.

    THIS WEEK’S HIGHLIGHTS

    US President Joseph R. Biden and his Vice President Kamala Harris were inaugurated this week. Already the Biden administration has signed a raft of new executive orders aiming, in particular, to get a handle on the COVID-19 pandemic but also covering things such as immigration, discrimination, tackling the climate crisis, among others. Importantly, the US will be staying in the World Health Organization (WHO) and will also join the WHO-led COVAX facility which assists poorer countries’ access to vaccines.

    Belize and St. Kitts & Nevis this week settled a trade dispute that had been ongoing in the Caribbean Court of Justice (CCJ) over trade in brown sugar. Read more

    REGIONAL NEWS

    CARICOM engaged with region’s post-COVID recovery pursuits

    Stabroek: If the Georgetown-based Caribbean Community Secretariat has not been exactly ‘hogging the headlines’ insofar as its role in the regional response to the COVID-19 pandemic is concerned, it appears that the Secretariat is very much in the ‘thick of things’ in terms of coordinating the work of the Caribbean Community (CARICOM) insofar as the ongoing engagements pertaining to the recovery of the region from the impact of the virus on its respective economies are concerned. Read more

    Caribbean’s Foreign Trade At Its Worst Since Global Financial Crisis

    Jamaica Gleaner: The Economic Commission for Latin America and the Caribbean (ECLAC) says the region’s foreign trade in 2020 had its worst performance since the global financial crisis of 2008-2009, because of the economic crisis prompted by the global COVID-19 pandemic and the restrictions imposed by governments to stop its spread. Read more

    Use the Caribbean Trade Centre

    Barbados Advocate: The Caribbean Trade Centre (CTC) of the Caribbean American Chamber of Commerce could be utilised to build a strategy to put the region in a stronger position for negotiating. Read more

    Vibrant export-led strategy essential (for Barbados)

    Barbados Advocate: Barbados faces some very tough times in a troubled world and with that must come measures that are able to respond to the situation. Against this background, the call is again being made for such as the search continues for a better performing economy and to put the country on a path of sustainable growth, unlike the long talk which is getting Barbados nowhere. Read more

    Jamaica Senate Passes Microcredit Act

    JIS: The Microcredit Act 2021, which aims to license and regulate microcredit institutions that provide financing to individuals and micro, small and medium-sized enterprises (MSMEs), was approved in the Senate on Friday (Jan. 22). Read more

    Complex identities: Kamala Harris and US foreign policy towards the Caribbean

    The Atlantic Council: When Indian Prime Minister Narendra Modi congratulated US Vice-President elect Kamala Harris, he noted that her victory “is a matter of immense pride not just for your chittis, but also for all Indian Americans.” Prime Minister Andrew Holness of Jamaica said that Jamaicans “are proud that [Harris] bears Jamaican heritage,” while Prime Minister Mia Mottley of Barbados added that “we, in the Caribbean, will look forward with optimism to working with the new administration.” Read more

    INTERNATIONAL NEWS

    Readying regional trade agreements for future crises and pandemics

    UNCTAD: Policy responses to the COVID-19 pandemic have heavily disrupted trade and supply chains, with many countries putting in place ad hoc trade-restrictive measures, seemingly without any concern about their effect on trading partners – at least during the early stages of the crisis. Read more

    Key statistics and trends in trade policy 2020

    UNCTAD: With the notable exception of the increase in bilateral tariffs between the United States and China, tariffs have remained substantially stable during the last few years with tariff protection remaining a critical factor only in certain sectors in a limited number of markets. On the other hand, the use of regulatory measures and other non-tariff measures remains widespread. Read more

    Malaysia takes WTO legal action against EU over palm biofuel curbs

    Euractiv: Malaysia is taking legal action at the global trade watchdog against the European Union and member states France and Lithuania for restricting palm oil-based biofuels, the government said. Read more

    Britain’s Boris Johnson presses Biden for new trade deal

    AP: British Prime Minister Boris Johnson made clear to President Joe Biden on Saturday that he’s eager to forge a new U.S.-U.K. trade deal. Read more

    ‘She’ll be first American woman to lead WTO’ — US leaders write Biden to back Okonjo-Iweala

    The Cable: Some US leaders, including Nobel Laureate Joseph Stiglitz, have written President Joe Biden, urging him to support the candidacy of Ngozi Okonjo-Iweala for the office of the director-general of the World Trade Organisation. Read more

    UK firms told ‘set up in EU to avoid trade disruption’

    BBC: UK firms that export to the EU say they are being encouraged by the government to set up subsidiaries in the bloc to avoid disruption under new trade rules. Read more

    Rotting fish, lost business and piles of red tape. The reality of Brexit hits Britain

    CNN: For all the fanfare made when Prime Minister Boris Johnson struck a trade deal with Brussels on Christmas Eve, the inescapable reality of leaving the European Union’s customs and regulatory territory has already started to bite. The fact that the deal was only agreed one week before it came into effect meant that dangerous disruption to countless businesses that relied on seamless supply chains was inevitable. Read more

    After Brexit, Ireland and France cut out the middleman – Britain

    Reuters: From his office overlooking Cherbourg docks, general manager Yannick Millet points to trailers destined for Ireland that belong to Amazon and FedEx, new customers and a signal of a potential big shift in post-Brexit trade. Read more

    Businesses must deal with post-Brexit trade ‘challenges’ – Barnier

    Irish Times: Businesses, north and south, must deal with the consequences of Brexit and accept that it cannot be “business as usual” for trade with Britain, the EU’s chief negotiator Michel Barnier has said. Read more

    EU will have stronger powers in trade disputes

    EU: On Tuesday, Parliament adopted new rules allowing the EU to use countermeasures in trade disputes when arbitration is blocked. Read more

    China falling short of US trade deal targets

    BBC: China is falling short of its commitment to buy an extra $200bn (£146bn) worth of US goods over 2020 and 2021. China agreed to buy the goods in a trade deal with the US agreed last January in exchange for reduced tariffs on $120bn worth of goods. Read more

    China plans to expand free trade network, accelerate FTA talks

    Global Times: China has planned to expand its network of free trade and is willing to sign more free trade agreements (FTAs) with its trade partners to jointly promote free and convenient trade and investment, Gao Feng, spokesperson of the Ministry of Commerce said at a regular press briefing on Thursday. Read more

    Chinese exports rise 3.6% in coronavirus-plagued 2020; only economy with positive trade growth

    Global Times: With China’s export machine roaring into full swing, and helping mend the coronavirus-fractured global supply chains despite intermittent threats and hostile moves notably by the US and Australia, the country’s exports have proven to be a tower of strength with a full-year gain of 3.6 percent in dollar terms over 2020. Read more

    Biden speaks to leaders of Canada and Mexico on trade and migration

    Bloomberg: President Joe Biden spoke with the leaders of Canada and Mexico on Friday, his first calls with foreign counterparts since his inauguration this week. Read more

    WTO finds for South Korea over U.S. trade measures, in challenge for Biden

    Reuters: The World Trade Organization recommended on Thursday that the United States revise a series of duties imposed in the pre-Trump era on South Korea, presenting new U.S. President Joe Biden with a dilemma. Read more

    UK-Africa trade: What will Brexit change?

    Deutsche Welle: As part of its post-Brexit global vision, Britain is hosting a UK-Africa trade forum this week. But with its new trade deals failing to offer African nations much extra, the UK is falling behind as a key trading partner. Read more

    India-US trade deal may be put on the back burner

    Livemint: President Joe Biden may not be too keen to immediately pursue the India-US mini-trade deal that was under negotiation, choosing instead to focus on chalking out a China strategy and restoring US credibility in multilateral forums, including the World Trade Organization. Read more

    Indian Trade Promotion Council of India seeks flat 5 per cent GST on processed food

    New Indian Express: “Therefore, Indian texting facilities should be made at par globally with safe standards, so that it is accepted worldwide. Read more

    Qatar suspends WTO dispute with UAE as Gulf conflict thaws

    Reuters: Qatar has suspended its case at the World Trade Organization against the United Arab Emirates over measures it said were designed to isolate Qatar economically. Read more

    Portugal wants quick ratification of EU/Mercosur deal, but there are many objections

    Mercopress: Portugal which last week took the rotating presidency of the European Union for six months as of January 1st, said that it will try to conclude the bloc’s free trade agreement with Mercosur, agreed in 2019 after two decades of negotiations that have not yet been finalized. Read more

    Latin America’s Foreign Trade Drops to 12-Year Low: UN Agency ECLAC

    The Rio Times: In its newly-released annual report International Trade Outlook for Latin America and the Caribbean 2020, the UN agency estimated the value of regional exports dropped 13 percent in 2020, while imports shrank by 20 percent. Read more

    STRAIGHT FROM THE WTO

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  • Belize and St. Kitts-Nevis Settle Trade Dispute over Brown Sugar

    Belize and St. Kitts-Nevis Settle Trade Dispute over Brown Sugar

    Belmopan (January 22, 2021): Belize and the Federation of Saint Christopher and Nevis this week settled a trade dispute that had been ongoing in the Caribbean Court of Justice (CCJ) over trade in brown sugar.

    Belize had sued Saint Kitts-Nevis, the Republic of Trinidad and Tobago and CARICOM, alleging that the two CARICOM member states were importing brown sugar from countries outside the Single Market without imposing the 40% Common External Tariff (CET). Belize alleged that because of this treaty violation, Belize Sugar Industries Ltd. (BSI) and Santander Sugar were losing sales to these countries. It was also alleged that the CARICOM Secretariat had failed to ensure that the CET was imposed by St. Kitts and Trinidad & Tobago, which by extension facilitated trade by the two respondents in which they did not apply the CET.

    Belize is seeking a ruling from the CCJ that requires the full application of the 40% CET on Brown Sugar imported from non-CARICOM sources; the establishment of the Monitoring Mechanism for Sugar that was approved by the COTED in 2019; implementation of the Monitoring Mechanism once finalized; and compensation for lost sales suffered by the sugar industry of Belize as an economic injury.

    Shortly after being notified of the legal action taken by Belize in the CCJ, the Government of Saint Kitts-Nevis commenced discussions with Belize on a possible out-of-court settlement. After targeted negotiations led by the Office of the Solicitor General, in collaboration with the Ministry of Foreign Affairs, Foreign Trade and Immigration and BSI, Saint Kitts-Nevis and Belize reached an out-of-court settlement on conditions satisfactory to Belize.

    This out-of-court settlement is a major victory for the sugar industry of Belize, which has been disadvantaged by imports of sugar from non-CARICOM sources, including Guatemala, as this sugar is displacing regionally produced sugar from the CARICOM Single Market. The sugar industry is now assured that it will get the trade policy support that it is entitled under the Revised Treaty, including application of the CET, and a renewed opportunity to fully enter the market of Saint Kitts-Nevis.

    The case continues in the CCJ against the Republic of Trinidad and Tobago and CARICOM.

    The Government of Belize extends its thanks and appreciation for the support provided by the BSI, Santander Sugar, and the Sugar Association of the Caribbean in the ongoing effort to secure access to the CARICOM market for sugar and to ensure the survival and sustainable development of the sugar industry of Belize.

    The preceding was a press release from the Government of Belize’s Press Office.

    Image by Gabriela Sanda from Pixabay

  • Biden/Harris Victory: What might it mean for US-Caribbean Relations?

    Biden/Harris Victory: What might it mean for US-Caribbean Relations?

    Today, United States (US) President-elect Joseph R. Biden will take the oath of office to become the 46th President, while Vice President-elect Kamala Harris will take hers to become Vice President. Here is a throwback to an article I did shortly after the election on what the Biden/Harris administration might mean for US-Caribbean relations on a variety of fronts!

    caribbeantradelaw's avatarCaribbean Trade Law and Development

    Photo credit: Image by heblo from Pixabay

    Alicia Nicholls

    Caribbean leaders have joined with those around the world to warmly congratulate US President-elect, Joe Biden, on winning the US presidential election of November 3, 2020. Of particular pride for the region is that his second-in-command, Senator Kamala Harris, who has both Jamaican and Indian parentage, is not just the first woman Vice President-elect, but first person of colour and first person of Caribbean descent to ascend to such high office in the US.

    As of the time of this article’s writing, incumbent Republican president, Donald Trump, who has now lost the popular vote twice, has not yet conceded defeat and has launched several legal challenges, calling the election ‘fraudulent’.

    Beyond the symbolism of the Biden/Harris win, and assuming a peaceful transfer of power come January 20, 2021 (the date set for Biden’s inauguration), what does the Biden/Harris victory portend for…

    View original post 1,246 more words