As is customary at this time of the year, the CLTD blog will be embarking on our annual Christmas vacation hiatus until January. I wish to personally thank each of you for your readership and support of this blog over the past year – a year which we all know has been fraught with challenges.
Next year, 2021, marks 10 years of this blog’s existence! When I started the Caribbean Trade Law & Development blog in 2011, I never would have imagined the regional and global readership it would have attracted years later. Again, I warmly thank you for your comments, suggestions, guest contributions, and continued readership which have all helped to make this blog a leading voice on trade and development issues in the Caribbean region.
I wish you and your families a very Merry Christmas and a wonderful 2021! Be merry and enjoy the ending of what has been a very turbulent year for many, but do remember to stay safe and observe the COVID-19 protocols in your respective jurisdiction!
Season’s greetings! It is that time of the year when we on the CTLD blog do our annual Global Trade Policy Year in Review! And wow, has it been a year! In the Caribbean, we saw the renewal by the United States (US) of the Caribbean Basin Trade Partnership Act (CBTPA) extending preferential access to the US market for qualifying goods from beneficiary Caribbean countries up until 2030. We also saw a formalisation of greater collaboration between the Caribbean Community (CARICOM) and the regional private sector. But what about the global stage?
In our final blog article for the year, we will look at some of the top trade policy developments globally which impact on the Caribbean and on which we will be keeping an eye in 2021.
COVID-19 impact on global trade and FDI
This time last year we heard rumblings of a new virus which had broken out in Wuhan province in China. However, most of us did not foresee that a year later the world would be in the grip of a full-blown pandemic which has, at the time of writing, killed 1.69 million people globally.
Globally, the pandemic has had a significant impact on global supply chains and global travel trade. In its October 2020 forecast, the WTO predicts a 9.2% decline in the volume of world merchandise trade for 2020, followed by a 7.2% rise in 2021. According to UNCTAD’s October forecast, global FDI flows contracted 49% in the first half of 2020 due to the COVID-19 outbreak.
While the COVID-19 death toll in the Caribbean still compares ‘favourably’ to other regions internationally, the economic toll on the region, especially its tourist-dependent economies, has been less forgiving. The region’s tourism-based economies are predicted by the IMF to contract significantly (-9.9%) in 2020.
The good news is that there are now two promising vaccines which have already gotten approval by the UK and US governments so far. However, with on-going spikes, the news of a new variant of the virus affecting the UK and uncertainty over how soon poorer countries will have access to a vaccine, the COVID-19 pandemic and its fall-out will be with us well into 2021 with implications for both policy makers and businesses engaging in cross-border trade.
2. WTO at a cross-roads
With the WTO celebrating its 25th anniversary of existence this year, one would be forgiven for having some optimism that there would be some progress on the myriad of issues facing the organization, of which the Appellate Body crisis is among the most dire. However, many of the problems plaguing the guardian of the rules-based multilateral system have spilled over into this year, while some new problems have cropped up.
Perhaps, most frontally is that the WTO now faces a ‘leadership void’ following the surprise resignation by then Director-General Roberto Azevedo in May 2020 and the US’ blocking of the appointment of Dr. Ngozi Okonjo-Iweala who beat out seven other candidates to be deemed the candidate most likely to achieve consensus. A highly qualified development economist, Dr. Iweala’s appointment would have been historic for being not only the WTO’s first female DG, but its first from Africa. The question of the DG selection has been postponed to next year, another item on the WTO’s growing list of unfinished business.
Negotiations on eliminating harmful fisheries subsidies will continue next year as the much hoped for breakthrough on an agreement did not materialise. WTO Members also failed to agree on a proposed waiver to the Trade-related Intellectual Property Rights (TRIPS) Agreement to temporarily exempt COVID-19 drugs, vaccines etc from intellectual property rights to assist developing countries’ ability to access to these drugs. The WTO Twelfth Ministerial Conference due this year had to be postponed owing to the COVID-19 pandemic. According to Bloomberg’s reporting, a special General Council meeting will be held early next year to decide on the location and date.
That is not to say that there has not been some progress, however. Joint Statement Initiative negotiations have begun with the hope of an agreement on investment facilitation for development, for example. Some WTO members, spearheaded by the EU, were able to agree on a workaround to the Appellate Body crisis by creating the Multi-Party Interim Arbitration Appeal (MPIA) mechanism but this is only a temporary solution and still has not received significant uptake by the WTO membership as yet.
Without doubt, the WTO remains at a cross-roads which puts the efficacy and future of the rules-based multilateral trading system at stake. What direction the WTO will take hinges a lot on what will be the incoming Biden/Harris administration’s approach to these issues.
3. US Election – A reverse course in US trade policy?
Come January 20, 2021, President-elect Joseph R. Biden will be the new President of the US and Vice President-elect Kamala Harris, the daughter of Indian and Jamaican parentage, will be the VP. President-elect Biden has openly embraced a return to multilateralism, a stark departure from the ‘America-first’ policies pursued by his predecessor.
On China, however, there might not be much policy divergence between the Biden and Trump administrations, at least not initially. The nomination of Taiwanese-American attorney and chief trade counsel for the United States House Committee on Ways and Means, Katherine Tai, as the next US Trade Representative (USTR) demonstrates that China will be an important policy issue for the incoming Biden/Harris administration. Ms. Tai was formerly the USTR’s chief counsel for China trade enforcement, signaling a possible continued hard-lined stance towards China under the administration.
Importantly, as noted previously, it remains to be seen what will be the incoming Biden/Harris administration’s approach to the current crises facing the WTO, including the WTO DG and Appellate Body issues.
4. RCEP Signed
China, Japan and South Korea – three of the countries in Asia with which the Caribbean has the most trade with that region – were among the signatories on November 15, 2020 to the long-awaited Regional Comprehensive Economic Partnership (RCEP) agreement on the sidelines of the virtually held 37th Association of South East Asian Nations (ASEAN) summit. RCEP is the first mega-regional trade agreement (MRTA) to be concluded since the Trans-Pacific Partnership (TPP) was signed in 2016. The benefits of RCEP to the parties extend beyond merely lowering tariffs. Although, some parties to the RCEP agreement already have FTAs with each other, RCEP will streamline customs procedures, converge rules of origin requirements and promote regulatory harmony across the fifteen parties. India, notably, has not signed on to the agreement, having pulled out of the negotiations last year. As Caribbean countries seek to expand and diversify their trade with non-traditional partners, such as with those in the Asia-Pacific region, the region should consider what possible opportunities RCEP might pose for Caribbean-Asia/Pacific relations.
5. Post- Brexit Negotiations: Still no deal
The UK’s departure from the EU on January 31 this year triggered an eleven month transition period due to end December 31 and during which time the UK remains in the EU customs union and single market and is bound by EU rules as if it were still an EU member.
As at the time of writing this article, the UK and EU are still in the throes of negotiations to conclude a trade agreement which would ensure a smooth transition, especially for UK and EU businesses reliant on EU-UK trade. The negotiations will continue this Monday after another deadline (Sunday) was missed. The talks are reportedly hung up on three main issues: fishing, ‘leveling the playing field’ and governance. Both the EU and UK have announced contingency measures in the event of a ‘no deal’ scenario.
From January 1, 2021, the UK will no longer benefit from EU third country agreements. In order to maintain preferential access to those markets, the UK has been signing roll-over agreements, largely replicating the provisions of the existing EU agreement with that third State. The UK signed a similar agreement with CARIFORUM countries – the UK-CARIFORUM EPA – which rolls over the provisions of the EU-CARIFORUM EPA (which remains in force for CARIFORUM and the EU-27 countries) to ensure that CARIFORUM firms and traders would have continued preferential access to the UK market and vice versa.
6. UNCTAD XV postponed to April 2021
UNCTAD XV, which was due to be hosted this year in Barbados, has been postponed to October 2021 due to uncertainty surrounding the COVID-19 pandemic. Barbados would be the first small State to host an UNCTAD quadrennial. Hosting and chairing the UNCTAD XV will give Barbados the opportunity to influence UNCTAD’s global trade and development agenda for the next four years and will definitely be a space to watch in 2021.
7. Post-Cotonou agreement reached between EU and ACP
On December 3, negotiators from the European Union (EU) and the Organisation of African, Caribbean and Pacific States (OACPS) (formerly known as the ACP) finally reached a twenty-year post-Cotonou partnership agreement. Though the post-Cotonou Partnership Agreement is not a trade agreement, it is an overarching framework for the relationship between the EU-27 and the 79 members of the OACPS and covers issues such as human rights, sustainable development, the environment, among other things. The agreement will be signed later in 2021. The OACPS, whose name was changed and a revised Georgetown Agreement adopted at its December 2019 meeting, is currently embarking on a restructuring to make the organisation ‘fit for purpose’.
We look forward to monitoring these developments in 2021.
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.
Season’s Greetings! Welcome to the final Caribbean Trade and Development News Digest for the year 2020. We are pleased to bring you the major trade and development news headlines and analysis from across the Caribbean Region and the world from the past week – December 13-19, 2020.
Thank you for your readership of this Digest over the past year and we take this opportunity to wish you and your families a very Merry Christmas and a happy, healthy and prosperous 2021!
THIS WEEK’S HIGHLIGHTS
With entrenched differences still existing, WTO members failed to meet their 2020 deadline for reaching an agreement on eliminating harmful subsidies for illegal, unreported and unregulated fishing which contribute to overfishing. Negotiations will continue into 2021. Read more here.
Negotiations between the EU and UK on a post-Brexit deal will continue this Monday after another deadline (this Sunday) was missed. The talks are hung up on three main issues: fishing, ‘leveling the playing field’ and governance. Read more here.
The UK has taken steps to formalise its independent tariff policy to be applied from January 1, 2021. Importantly, of interest to Caribbean sugar exporting countries, Britain is to allow 260,000 T of tariff-free raw sugar imports. Read more here.
Australia has signalled it will ask the WTO to settle its dispute with China on the latter’s imposed tariffs of 80.5% on Australian barley. China, which is the largest importer of Australian barley, has justified its anti-dumping duties on Australian barley by accusing Australia of subsidising its barley farmers. Read more here.
WHAT WE’RE READING – AMBASSADOR BERNAL’S NEW BOOK!
Next year we will be adding a new section to the Blog entitled “What we’re reading” where we will highlight newly released books of a trade and development nature, particularly those with a Caribbean or small State focus. This week we are pleased to be reading the new book by renowned Caribbean scholar, trade expert and author Professor the Hon. Ambassador Dr. Richard Bernal entitled “Corporate versus National Interest in US Trade Policy: Chiquita and Caribbean Bananas”. In this latest book, Ambassador Bernal not only details how Chiquita Brands International was able to influence the Clinton Administration to challenge the EU on its preferential import regime for ACP bananas, but how this move was actually inimical to the US’ national security interests given the negative impact it had on Caribbean banana-exporting countries. Like his previous four books, Ambassador Bernal’s latest work is a must-read for any student or practitioner of trade policy and may be purchased here.
REGIONAL NEWS
FATF removes The Bahamas from the list of Jurisdictions under Increased Monitoring
FATF: The FATF now de-lists The Bahamas from the list of Jurisdictions under Increased Monitoring. The Bahamas is therefore no longer subject to the FATF’s increased monitoring process. The Bahamas will continue to work with CFATF to improve further its AML/CFT regime. Read more
SIB report on Belize’s economic performance
Amandala: Merchandise exports for the period January to October 2020 totaled just over $325 million, down 9.9 percent or $35.9 million from the same period last year, when total domestic exports were valued at $360.9 million. Read more
Dominica’s DCPS Vows To Fight On Over Caricom Soap
Jamaica Gleaner: Dominica Coconut Products Successors Limited, DCPS, has confirmed that it is contemplating legal action to press its claim that the duty-free importation into Jamaica of noodles or chips from which soaps are made is illegal. Read more
Trade policies top regional manufacturers’ agenda
Stabroek: Business communities across CARICOM are likely to be waiting with bated breath to determine whether last month’s establishment of a new CARICOM Manufacturers Association (CMA) will serve as an eventual precursor to the building of sturdier bridges among member countries of the regional movement in the areas of manufacturing and trade. Read more
Pledge for Bajan exports to bounce back
Barbados Today: An all-out effort will be made to boost Barbadian exports in 2021, the minister for manufacturing has promised. Read more
Visitor arrivals a fraction of “normal” seasonal arrivals, says airport official
Barbados Today: Barbados can expect close to 20,000 visitors to fly into the island this month, significantly down from its monthly average of well over 200,000. Read more
Inclusive tourism on the cards in Barbados
Barbados Today: Come January next year, the Ministry of Tourism is expected to engage in a national consultation in an effort to map out a new “inclusive and sustainable” tourism product for Barbados. Read more
UK to compensate victims of immigration scandal from the Caribbean
Loop News Barbados: Britain will step up compensation for thousands of long-term UK residents originally from the Caribbean who were wrongly caught up in a government drive to reduce illegal immigration, officials said Monday. Read more
Launching Paris – A CARICOM Moment of Ambition: Snapshots of Member States Nationally Determined Contributions
CARICOM: Several Caribbean Community Member States showcased their ambitions to further address climate change at a CARICOM Moment of Ambition event held on the eve of the fifth anniversary of the adoption of the Paris Agreement, on Friday 11 December 2020. Read more
INTERNATIONAL NEWS
OACPS Ministers endorse new OACPS-EU Partnership Agreement, proposals on Fisheries and the EU Blacklist at 111st session of the Council of Ministers
OACPS: Meeting virtually on 14, 15 and 17 December 2020, the Council of Ministers of the Organisation of African, Caribbean and Pacific States (OACPS) approved eight decisions and two resolutions on key issues affecting its Member States (MS) and pertaining to the administrative and financial management of the Organisation during the 111th session of the OACPS Council of Ministers. Read more
BBC: The US has suggested that the process to find a new Director-General of the World Trade Organization (WTO) needs to be reopened, in what would be an unprecedented move. Read more
Legislation for the UK’s independent tariff policy
Gov.uk: From the 1 January 2021 the UK Global Tariff will replace the EU’s Common External Tariff as the UK’s Most Favoured Nation tariff – the framework it will use to trade independently outside of free trade agreements. Read more
U.K.’s Johnson to Visit India in January as Trade Talks to Start
Bloomberg: U.K. Prime Minister Boris Johnson will visit India in January to try to boost ties, with talks on a free-trade agreement due to start next year. Read more
Taking China to the World Trade Organisation plants a seed. It won’t be a quick or easy win
ABC (Australia): Australia is reportedly ready to initiate its first litigation against China at the World Trade Organisation. China has this year taken punitive action against imports of Australian coal, wine, beef, lobster and barley. Read more
UK and Mexico sign trade deal
Gov.uk: The UK has today (Tuesday 15 December) signed a trade deal with Mexico, locking in tariff-free trade and other benefits for British businesses and consumers. Read more
UK and US in talks over mini trade deal
BBC: The outgoing US administration is in talks with the UK to try to seal a mini-deal to reduce trade tariffs, Donald Trump’s trade chief has said. US Trade Representative Robert Lighthizer told the BBC he was hopeful for a deal that could see punitive tariffs on Scottish whisky lowered. Read more
What are Australian-style and Canadian-style Brexit trade deals?
The Conversation: Negotiations for a post-Brexit trade deal between the European Union and the UK have been ongoing since March. Both have until the end of the Brexit transition period – December 31 – to strike a free trade deal. If no agreement is reached, the UK-EU trading partnership will be governed by World Trade Organization (WTO) rules. Read more
WTO Members Delay Agreement on Fisheries Subsidies to 2021
IISD: World Trade Organization (WTO) members did not conclude negotiations on an agreement on curbing harmful fisheries subsidies by the 2020 deadline. A new schedule for meetings in 2021 is being developed, with the aim of bringing “this negotiation to the finish line.” Read more
Ban on food aid restrictions blocked at WTO
Reuters: World Trade Organization members were at odds on Friday over a proposal that would ban countries from restricting food aid deliveries, potentially complicating the response to a feared COVID-fuelled humanitarian catastrophe next year. Read more
We’re proud of what we’ve done, says Trump’s trade chief
BBC: He rarely talks to the media, but mindful of the legacy of four years of ripping up the international trade system, he told the BBC he had fundamentally reoriented the trade system towards working Americans, and that President Trump’s successor would not now change this sceptical stance to slow down and reverse globalisation. Read more
Trade deal: Hope ‘early harvest’ proposition of India will be accepted by UK, says Piyush Goyal
Economic Times: Commerce and Industry Minister Piyush Goyal on Thursday hoped that the UK would accept India’s ‘early harvest’ proposition within the framework of a larger free trade agreement, which both the countries are working towards. Under an early harvest arrangement, two trading partners significantly reduce or eliminate customs duties on a limited number of goods with a view to promoting trade. Read more
Mercosur debates on revising Common External Tariff
ANBA: Brazil’s FM said in a meeting of the highest-level agency of the bloc that revising its CET is a priority and will benefit international trade and investments. Read more
Argentina assumes temporary presidency of MERCOSUR
Radio Cadena Agramonte: In a speech in which he opted for more and better Southern Common Market (MERCOSUR), Argentine President Alberto Fernández called today to overcome the globalization of indifference and build the universalization of solidarity. Read more
Argentina: Mercosur will address EU environment concerns
AP: South America’s Mercosur countries will address environmental concerns raised by the European Union that have stalled ratification of a free trade deal between the two trade blocs, Argentina’s foreign minister said Monday. Read more
Uruguayan president warns of post-pandemic protectionism at Mercosur Summit
XinhuaNet: Countries should be wary of turning to protectionist trade measures in a bid to shore up their pandemic-hit economies, Uruguay’s President Luis Lacalle Pou said on Wednesday. Read more
Asean to accelerate digital integration for period of post-COVID economic recovery
Khmer Times: To boost regional recovery in the post-COVID 19 era, Asean should accelerate its digital integration, which has the potential to generate a $1 trillion uplift in gross domestic product (GDP) by 2025, said Dr Aladdin D. Rillo, deputy secretary-general for Asean Economic Community, at an online panel. Read more
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A resolution on the European Union (EU)’s List of High Risk Jurisdictions for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) was among the outcomes agreed to by Ministers of the Organisation of African, Caribbean and Pacific States (OACPS) at their 111th Council of Ministers session held virtually on 14, 15 and 17 December 2020.
The EU’s updated List of High Risk Jurisdictions for AML/CFT purposes in force from October 1, 2020 includes several ACP states. Note that this list is different from the EU’s list of non-cooperative tax jurisdictions.
Expressing concern about the list, the Council condemned the “unilateral, non-transparent and discriminatory approach” adopted by the EU in publishing the list especially in light of the socio-economic challenges wrought on the listed countries by the COVID-19 pandemic. The Council therefore “recommends a programme of action to effect a reasonable comprise in response to the situation”. It is assumed that details of this programme of action will be worked out at a later date.
The meeting was chaired by H.E. Prof. Palamagamba John Aidan Mwaluko Kabudi, Minister for Foreign Affairs and East African Co-operation, United Republic of Tanzania, and President-in-Office of the OACPS Council of Ministers.
The full paragraph on the EU blacklist from the OACPS press release is reproduced below:
The inclusion of Member States of the OACPS on the EU’s List of Third Countries at High Risk for Anti-Money Laundering and the Financing of Counter Terrorism (AML/CFT) continues to be a contentious issue for the OACPS despite the exchange of letters between the OACPS and the relevant EU institutions. In light of the existing situation, and recognizing that the fight against money laundering and the financing of terrorism is an immense global challenge and of equal concern to the OACPS as it is to the EU, the Council expressed its deep concern for the unilateral, non-transparent and discriminatory approach adopted by the EU in publishing the list of “small developing countries”, especially with respect to the additional socio-economic challenges caused by the COVID-19 pandemic, and recommends a programme of action to effect a reasonable compromise in response to the situation.
The Council of Ministers also endorsed the Political Agreement of the ACP-EU Partnership Agreement concluded on December 3, 2020. The new partnership agreement, which replaces the Cotonou Agreement, will be signed in Apia, Samoa in January 2021. They also approved decisions for restructuring the OACPS, as well as a resolution in support of action on fisheries subsidies.
According to the press release, the signed list of decisions and resolutions will be posted on the OACPS’ website at a later date.
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.
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