Category: Caribbean

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

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

    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.

  • CARICOM Foreign Policy Coordination: Priority or Pipe Dream?

    CARICOM Foreign Policy Coordination: Priority or Pipe Dream?

    Alicia Nicholls

    It has been generally recognized by most Caribbean Community (CARICOM) countries, at least in principle, that a coordinated voice on foreign policy issues endows our small countries with bargaining power beyond our size constraints. Indeed, foreign policy coordination is one of the four pillars of CARICOM, with economic integration, human and social development, and security being the other three. However, given the current and increasing discord among CARICOM countries on key international developments, is CARICOM foreign policy coordination still a priority, or is it merely a pipe dream?

    An exercise of foreign policy is an exercise of a State’s sovereignty. In general terms, a State’s foreign policy is its strategy in interacting with other States, and is influenced by what that State determines to be its strategic national interests, values, goals and priorities. The key words here are “national interests”, and they may be underpinned by ideology, pragmatism or a combination of the two. A State’s foreign policy is not static, and may change depending on the ideology of the Government in power (for example, whether right-wing, left-wing or centrist) and changing national interests, values, goals and priorities.

    As a State’s foreign policy is determined by its national interests, this means that a regional coordinated foreign policy inevitably necessitates the strategic alignment of the national interests of the countries concerned.

    Rationale behind the goal of a coordinated CARICOM foreign policy

    From as early as the days of CARIFTA (the Caribbean Free Trade Area), the predecessor of CARICOM, the founding architects of the Caribbean regional integration project viewed a coordinated foreign policy as a life raft for assisting our small, then newly independent Caribbean States, to navigate often hostile international Cold War waters in which powerful big country sharks would prey on us little small state ‘sprats’.

    Our founding fathers, and later the drafters of the Revised Treaty of Chaguaramas which established the CARICOM Single Market and Economy (CSME), saw a unified foreign policy position as an insurance policy against bullying tactics and the politics of ‘divide and conquer’ – the practice by major powers of playing off CARICOM States against each other, or picking them off one by one through inducements such as aid and other financial support in order to secure votes on hemispheric and international issues. It recognises the old adage of “strength in numbers”. For example, Article 6(h) of the Revised Treaty of Chaguaramas states as one of the Community’s objectives “enhanced co-ordination of Member States’ foreign and [foreign] economic policies”.

    Indeed, there have been several instances where Caribbean countries have successfully leveraged their collective voice and numeric strength to their own benefit. Comprising nearly half of the membership of the Organisation of American States (OAS), CARICOM countries are a crucial voting bloc which powerful countries deem necessary to court for voting support on critical hemispheric issues. In the United Nations (UN), CARICOM countries are a smaller but still critical voting bloc.

    But do CARICOM member States’ national interests really align to such an extent that a coordinated foreign policy on all issues is still (or was ever) achievable? CARICOM comprises fourteen independent countries and one British Overseas Territory (Montserrat). This necessitates balancing national interests, values, goals and priorities which do not always necessarily align. Indeed, CARICOM countries, while all small States, have their differences, whether in terms of language, geography, economic structure, population, resource endowment or size. All of these factors impact on each State’s perceived national interests, values, goals and priorities.

    Foreign policy coordination has been successful in areas like climate change where Caribbean countries see their national interests as inextricably linked. But even on this important issue, there is some policy incongruence. On the one hand, CARICOM countries have demanded more urgent global action to fight climate change, while on the other, some CARICOM member States are still pursuing hydrocarbon exploration and exploitation, as part of their economic development strategy.

    There have also been increasing (and frankly, embarrassing) instances of CARICOM foreign policy disunity, from as far back as the infamous US Ship Rider issue in the 1990s, the inability to unite around a single candidate for Commonwealth Secretary General in 2015, to as recently as the UN vote on the US’ controversial motion to recognize Jerusalem as the capital of Israel (instead of Tel Aviv). There is also the still unresolved issue of the region’s position on the One China Policy – some States recognize the People’s Republic of China, while a few still recognize the Republic of China (Taiwan).

    The Venezuela Humanitarian Crisis

    The latest example of foreign policy disunity relates to the devolving political, economic and humanitarian crisis in the Bolivarian Republic of Venezuela – a country which, despite some differences, has been an important friend to the region in terms of aid and other support. I highlight the Venezuela crisis not just because it is one of the biggest hemispheric crises affecting the region, but it is a nuanced issue which clearly shows the divide in CARICOM countries’ national interests, and hence their diverging positions on the perceived solution.

    The suffering of the Venezuelan people wrought by the incompetence of the Maduro regime, and made no better by western countries’ economic sanctions, have caused spill-over security, health, economic and other risks for neighbouring countries. According to the UN, over three million Venezuelans have fled that South American country since the start of the crisis. Many have migrated (illegally in many cases) to neighbouring countries, including Trinidad & Tobago. It is, therefore, in CARICOM countries’ interest for the humanitarian crisis to be solved. However, CARICOM countries differ on what they believe the solution should be.

    On January 10, 2019, the OAS Permanent Council approved a resolution not to recognize the legitimacy of the second term of current Venezuelan President, Nicolas Maduro Moros. CARICOM’s disunity on this issue was again on full display for the world to see. The Bahamas, Guyana, Haiti, Jamaica and Saint Lucia were among the 19 OAS member states which voted to approve the resolution. Dominica, St. Vincent and the Grenadines and Suriname were among the 6 (including of course, Venezuela) which voted against the resolution. St. Kitts and Nevis, Trinidad and Tobago, Antigua and Barbuda, Barbados and Belize abstained, while Grenada was the only OAS member State which was absent for the vote.

    What explains this disunity? To my mind, mainly national interests, exacerbated by the fact that CARICOM remains an inter-governmental organisation. For instance, Guyana is currently embroiled in a long-standing border dispute with Venezuela, which has been inflamed under the current Maduro regime. This may explain Guyana’s vote in favour of the resolution. Ditto could be said for Jamaica which had recently decided to reacquire Venezuela-owned shares in Petrojam. On the other hand, some other CARICOM Member States are members of the Bolivarian Alternative for the Americas (ALBA) and recipients of assistance from Venezuela through, inter alia, the PetroCaribe Initiative. This may explain why they voted against the resolution. National interests not only dictate a country’s position on an issue, but are what determine whether a CARICOM member State will change its vote based on the promise of aid or support.

    Moreover, while the majority of CARICOM member States appear to have adopted a position of non-intervention, some member States (the Bahamas and Haiti) have decided to follow major Western powers in recognizing Opposition leader, Juan Guaido, as interim president of Venezuela.

    Given the region’s friendship with Venezuela and the implications of the ongoing crisis for many CARICOM countries, it is commendable that some CARICOM governments have assumed a leadership role on this issue. Some CARICOM governments have vociferously challenged the pronouncements of the OAS Secretary General His Excellency Luis Almagro as not speaking for all OAS member states. A CARICOM delegation led by current CARICOM chairman Dr. the Honourable Timothy Harris, Prime Minister of St. Kitts & Nevis, recently initiated a visit to the UN to discuss the crisis. It should be noted, however, that not all CARICOM governments took part in this meeting, which shows that even on this very important issue, the region still cannot sing from the same hymn sheet.

    Is a coordinated CARICOM foreign policy merely a pipe dream?

    There appears, at least in rhetoric, a renewed interest by CARICOM leaders in advancing the regional integration process, of which foreign policy coordination has traditionally been a major pillar. This has been aided no doubt by the initiative taken by Jamaica in the commissioning and publication of the Report of the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks, more popularly referred to as the ‘Golding Report’, and the reinvigorated leadership displayed by Barbados under its new Prime Minister (lead for the CSME in CARICOM’s quasi-cabinet).

    The Golding Report identified the glaring failures in foreign policy coordination as one of several challenges currently confronting the regional integration process. The report rightly cites several of the issues which account for this policy disunity, including offers of aid in exchange for votes, lack of political will, inability of diplomats to get clear policy instructions from their capitals, and of course, national interests. As such, recommendation 26 of the Report is to “review the procedures for foreign policy consultation and coordination in order to avoid as far as possible, the types of conflicts and embarrassing positions that have emerged from time to time among CARICOM members depriving it of the collective force it is capable of exerting”.

    However, I would go further. In this time of increased introspection by our leaders on the regional integration process, I think there needs to be reconsideration of whether a coordinated foreign policy is really an achievable goal for the region or are we merely chasing a lofty pipe dream which our diverging national interests, values, goals and priorities may be unable to bridge. Indeed, can we really say that the region is any closer to a unified position on the One China policy? Moreover, given the current ideological divide in the region on the issue of citizenship by investment programmes (CIPs), can we really mount an effective and unified CARICOM approach against the EU’s targeting of CIPs in the region?

    Let me clarify that I staunchly support our founding fathers’ conviction that there is strength in unified foreign policy positions. Indeed, the enormity of the global challenges confronting the region, whether from Brexit, the possibility of another global downturn, Venezuela, rising populist and nationalist sentiments internationally, blacklisting etc, means that a unified CARICOM front, to the extent possible, should be the desired default position for helping us navigate these challenges.

    On the flipside, I also recognise that we must be honest with ourselves. We must face the reality that the goal of a coordinated foreign policy on all issues may be too ambitious given divergent national interests which have accounted for the increasing track record of foreign policy disunity. Indeed, these all too public displays of foreign policy disunity only serve to undermine the Caribbean public’s faith in the sincerity of our leaders’ commitment to the regional integration process, and to empower CARICOM-skeptics. We, perhaps, are setting ourselves up for failure.

    An alternative and more achievable approach, therefore, could be for CARICOM member states to clearly identify specific foreign policy priority areas on which they would strive to present a unified policy position. The European Union (EU), for instance, has sought to harmonise its foreign policy (Common Foreign and Security Policy) primarily around security and human rights issues. For CARICOM, priority areas for foreign policy coordination could be more straightforward “low-hanging fruits” such as foreign trade, security, the loss of correspondent banking relationships due to de-risking by global banks, tax issues, and climate change. These are areas in which a unified CARICOM foreign policy position is perhaps most achievable and most effective.

    I appreciate that my view may be unpopular and differs from traditional orthodoxy, but in these times of increased economic and geopolitical uncertainty, the continued desirability of pursuing a coordinated foreign policy is an issue which CARICOM will need to resolve and do so quickly, even if we decide we will only coordinate on certain foreign policy issues.

    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.

  • Post-Brexit UK-Caribbean Trading Relations: What are the options?

    Post-Brexit UK-Caribbean Trading Relations: What are the options?

    Alicia Nicholls

    With the United Kingdom’s Prime Minister Theresa May due to formally begin the Brexit process by making the Article 50 notification this Wednesday (March 29), it is worth considering what are the possible options for future Caribbean trading relations with post-Brexit “Global Britain”. Moreover, should one of the options be participation in a Commonwealth-wide free trade agreement (FTA)?

    UK-CARICOM Trading Relations

    The UK and the Commonwealth Caribbean have a shared and close relationship which goes beyond historical, cultural and diplomatic ties. While Commonwealth Caribbean countries’ trade with the United States dwarfs trade with the UK, the latter remains the region’s largest trading partner within Europe. Caribbean Community (CARICOM) Member States, as part of the CARIFORUM (CARICOM plus the Dominican Republic), enjoy preferential access to the UK market under the CARIFORUM-EU Economic Partnership Agreement (EPA) signed in October 2008.

    As the EU agreements to which the UK is currently part will cease to apply to the UK once it has completely withdrawn from the EU, here is what CARICOM/CARIFORUM will losing preferential access to (a) the world’s fifth largest economy (or sixth largest according to some reports), (b) a market of over 64 million people which includes a Caribbean diaspora population whose potential demand for Caribbean goods and services and as a source of diaspora investment still remains largely under-exploited, and (c) a trading partner with a shared language, shared culture and shared values and a common law legal system which brings a level of assurance and certainty for cross-border commerce.

    Merchandise trade aside, the UK is an important source of tourist arrivals for many Caribbean countries, while in Barbados, for example, British high net worth individuals (HNWIs) are the largest buyers of luxury real estate on the island, making the UK the largest source of real estate foreign direct investment (FDI) into the island.

    Whilst the UK cannot formally commence negotiations with third States until it has left the EU, the May Government has reportedly already begun preliminary informal trade talks with some States. Indeed, several countries around the world, including Commonwealth states like Australia, Canada and India have lined up in hopes of being among the first negotiate post-Brexit trade agreements with the UK. Here in the Caribbean, the Dominican Republic has also signalled its interest in a post-Brexit UK-DR FTA as the UK is apparently the Dominican Republic’s fastest growing market for Dominican exports according to the statement made by the DR’s Ambassador to the UK.

    To this point, it is heartening to note that Prime Minister May has bucked the protectionist trend and intends to expand the UK’s trading relations around the world under her “Global Britain” banner. Indeed, Mrs. May argued that one of the compelling reasons for Brexit was so Britain would be free to expand its trade with the rest of the world on its own terms. The door is clearly open to the region for dialogue.

    Possible Options for post-Brexit UK-CARICOM/CARIFORUM Relations

    As I see it, the possible options for post-Brexit UK-CARICOM/CARIFORUM trading relations are as follows:

    1. Interim Arrangement which preserves EPA-level concessions before an FTA can be negotiated
    2. Negotiation of a UK-CARICOM or UK-CARIFORUM FTA
    3. Commonwealth FTA
    4. Most Favoured Nation (trading under WTO rules)

    The Commonwealth Advantage?

    This discussion is even more interesting in light of what is clearly a Commonwealth pivot by the UK government as it seeks to map its future trade policy and relations. Most CARICOM countries are member states of the 52-member Commonwealth of Nations, an intergovernmental organisation which consists primarily of former British colonies and current dependencies spanning Africa, Asia, the Americas, Europe and the Pacific.

    The Commonwealth is not a trade bloc. However, despite the absence of a Commonwealth FTA, intra-Commonwealth trade and investment flows are substantial and growing. According to a 2015 report released by the Commonwealth, not only is “trade between Commonwealth members on average 20 per cent higher and trade costs are 19 per cent lower compared with in trading between other partners”, but intra-Commonwealth trade is expected to reach 1 trillion by 2020. The Secretariat’s International Trade Policy section also publishes very timely  and insightful research on trade matters. A good example is this brief which was part of the Meeting documents.

    However, despite this, Commonwealth Trade Ministers have not met frequently. This is why the Inaugural Commonwealth Trade Ministers Meeting two weeks ago was such a momentous event.  From all reports the meeting was not only well-attended but the ministers discussed prospects for deepening intra-Commonwealth trade and investment ties using the “Commonwealth Advantage”. Inter alia, Ministers directed the Secretariat to “develop pragmatic and practical options to increase Commonwealth trade and investment”, to regularise and institutionalise Trade Minister meetings, and to cooperate on the implementation of the WTO’s Trade Facilitation Agreement.

    The prospect of a Commonwealth-wide FTA has been floated informally, although it does not yet appear to be a firm policy proposal. The arguments for a Commonwealth FTA include a ready market of over 2.4 billion people yoked by a shared language and history, common principles and values, respect for the rule of law, the common law legal system, all of which form part of the “Commonwealth Advantage”. Additionally, it is argued by proponents of a pan-Commonwealth FTA that the potential for even greater intra-Commonwealth trade and investment should be harnessed as a buttress against rising protectionism and slowing global trade which are potentially harmful for Commonwealth developing States.

    To be sure, the Commonwealth brings important value for the Caribbean. It has, for example, developed a strong small states agenda, which is not surprising given that thirty-one of its member States are small States. As an illustration, the Commonwealth launched the Commonwealth Small States Trade Finance Facility in 2015. Moreover, the fact that the current Secretary-General, Dame Patricia Scotland QC, is a daughter of the soil is also an advantage for the region.

    There is also, of course, merit to fomenting closer commercial and political ties with fellow Commonwealth countries as some of the more developed Commonwealth countries are part of influential fora like the Group of 20 (G20), Organisation for Economic Cooperation and Development (OECD) and the Financial Action Taskforce (FATF) where Commonwealth Caribbean countries are not represented.  This is doubly important in light of the on-going slowdown in global trade flows, an apparent retreat from multilateralism and rising protectionism. Moreover, Commonwealth Caribbean countries have been seeking to diversify their trading partners, including source markets for tourism, foreign investment and international business and deepening ties with the rest of the Commonwealth could be useful.

    Nonetheless, while I have not done any econometric analysis on what would be the possible economic and welfare benefits of any Commonwealth FTA for CARICOM/CARIFORUM, given the length of time it may take to negotiate a Commonwealth FTA, the varying levels of development, the differences in economic profile, and the diverse offensive and defensive interests of the various Commonwealth Member States which will need to be managed, the negotiation of a Commonwealth-wide FTA will not be an easy task. Therefore, I submit that the Caribbean region’s interests will, at least in the short to medium term, be better served by either negotiating an interim arrangement  with the UK which preserves EPA-level concessions until an FTA can be negotiated or negotiating an FTA with the UK straight off the bat.

    So what should a possible UK-CARICOM/CARIFORUM take into account?

    CARICOM countries have limited experience in negotiating FTAs with developed countries. So far the EPA is the region’s only completed FTA with a developed partner, as the Canada-CARICOM negotiations are currently in abeyance. Perhaps, fortuitously, the UK has even less experience with negotiating trade agreements, as trade negotiations have hitherto been handled exclusively by the European Commission, pursuant to the EU’s common commercial policy. So both parties, despite the power asymmetry, will be on a learning curve.

    Commitments made under any prospective UK-CARICOM/CARIFORUM free trade agreement should take into account the sustainable development and economic growth needs and interests of both parties in a mutually beneficial way, while also taking into account differential levels of development among CARICOM/CARIFORUM countries.

    CARICOM/CARIFORUM countries will also want at least the same level of concessions for their service suppliers, particularly in Mode 4 (Presence of Natural Persons) which has been the mode of supply which is the least liberalised. Additionally, as capital-importing States, CARICOM/CARIFORUM countries will likely wish to negotiate an investment chapter which protects, promotes and liberalises investment between CARICOM/CARIFORUM and the UK for the mutual development of both parties.

    Of course, stakeholder consultations with not just the private sector but also civil society and citizens at large should continue to inform the region’s negotiating positions, including whether there is actually the need for an UK-CARICOM FTA and what are the region’s offensive and defensive interests.

    FTA negotiations can take several years. The EPA negotiations, for instance, had been launched in April 2004 and the Agreement was not signed until October 2008. Therefore, unless a WTO-compatible interim arrangement could be negotiated whereby the UK agrees to continue EPA-type concessions to the region until a UK-CARICOM/CARIFORUM FTA is negotiated, it is possible that UK-CARICOM/CARIFORUM trade relations may revert to MFN conditions. Even so, while the UK is also a WTO member in its own right, its schedules are part of the EU’s which means the country will have to work out its own tariff schedules under the WTO post-Brexit. Additionally, WTO MFN conditions will not afford CARIFORUM countries the level of market access, especially for their service suppliers in the UK market, that they currently enjoy under the EPA.

    Although the argument is often rightly made that the Caribbean region will be at the low rung of the negotiation priority ladder, I believe that the region cannot sit idly by as the clock begins ticking come Wednesday. While other major countries have begun to erect barriers, the May Government’s “Global Britain” outlook is a welcomed open door for the region. We should at least signal to the May government our interest in beginning talks on cementing a mutually beneficial UK-CARICOM/CARIFORUM trading arrangement post-Brexit, and take steps to do the ground work for such an eventuality.

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

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

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

    Source: Pixabay

    Alicia Nicholls

    On February 16-17, Heads of Government of the 15-member Caribbean Community (CARICOM) converged in Georgetown, Guyana for the Twenty-Eighth Inter-Sessional Meeting of the Conference of Heads of Government.

    The meeting, which was chaired by President of Guyana, His Excellency Brigadier (Retd’), David Granger, addressed a wide array of issues currently confronted by the Community. However, economic development and International Relations were among the three broad identified by CARICOM Secretary General, Ambassador Irwin LaRocque, in his opening remarks to the conference. The third was crime and security.

    Ambassador LaRocque noted that the issue of economic development, including economic growth, was foremost, observing that the majority of CARICOM member States have been struggling with low growth, high debt and fiscal pressure. Further to this point, it should be noted that just last week the Caribbean Development Bank stated that although they project the Region to experience economic growth of approximately 1.7 percent in 2017, they also suggested that “this will not be enough to stimulate employment, particularly among youth, and reduce high regional debt levels”, and that a long term plan was needed to “facilitate the Region’s participation in global supply chains and drive sustainable economic growth”.

    Ambassador LaRocque highlighted the importance of collective action to confront the problems facing the region, and reiterated the fact that the CARICOM Single Market & Economy (CSME) had been identified by member States as the “best vehicle” to promote our overall economic growth and development.

    Indeed, a  major discussion point in the meeting was the status of the CSME. According to the official communique from the meeting, the Heads of Government received a review of the status of the CSME and noted the “the significant progress” in its implementation. They also agreed on priority areas to be addressed, including the challenges of payments for goods and services traded within the Region and the completion of the protocol on procedures relating to the facilitation of travel. They also supported the need for continually reviewing the impact of the CSME in both achieving the objectives of the Revised Treaty of Chaguaramas and on the lives of CARICOM peoples.

    According to the communique, the Heads of Government also considered some impediments to furthering the CSME. Noting the importance of transportation to the movement of Community nationals, they called for a focused discussion on transportation in the context of the integration movement and also urged greater collaboration among the regional airlines.

    Indeed, transportation issues also featured in the Heads of Government’s discussion on tourism,  which they reiterated was a vital sector for CARICOM member States. Inter alia, the Heads of Government called for “an urgent meeting of the Council for Trade and Development (COTED)-Transportation to address air transport issues in particular, including those related to the tourism sector”.

    De-risking strategies of global banks, which include the restriction or withdrawal of correspondent banking services to banks in the region, was again an important agenda item. The Heads of Government endorsed the need for a continued regional approach to the challenge, including continued concerted action and advocacy. To this end, they considered the Strategy and Action Plan submitted by the Committee of Central Bank Governors and directed the Committee of Ministers of Finance with responsibility for Correspondent Financing to assume oversight of the roll-out.

    Turning to the issue of international relations, the recently concluded negotiations by the CARICOM-Cuba Joint Commission on the Second Protocol to the Trade and Economic Cooperation Agreement was welcomed by the Heads of Government, who agreed that it would strengthen the economic relations and cooperation between CARICOM and Cuba.

    US-CARICOM relations was another important agenda item. The Heads of Government welcomed the US-Caribbean Strategic Engagement Act of 2016. Emphasising the importance of the long-standing relationship between CARICOM and the US, the Heads of Government expressed their desire to continuing the “fruitful and mutually beneficial relationship with the new US Administration”.

    CARICOM is part of the Caribbean sub-grouping of the Africa, Caribbean & Pacific (ACP) group. In light of the impending expiration of the Cotonou Agreement in 2020, Heads of Government noted the Cotonou Agreement’s importance as “a unique and valued instrument from which CARICOM has benefited with regard to trade, development co-operation and political dialogue with Europe” and suggested that the Agreement be renewed. Heads of Government also expressed their desire for the ACP to be strengthened, emphasising that membership in the ACP Group “remains a valuable construct which has facilitated relations with Africa and the Pacific”.

    Besides these issues, the Heads of Government also discussed the on-going border disputes between Belize and Guatemala, and Guyana and Venezuela, relations with the Dominican Republic, an update on preparations for CARIFESTA, inter alia.

    The full communique may be viewed here.

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