Caribbean Trade Law and Development

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  • WTO and WB call for papers on “TRADE AND POVERTY: A COLLECTION OF CASE STUDIES”

    The WTO and the World Bank Group issue a call for papers for a joint edited volume on trade and poverty. Following their joint report released in June 2015, “The Role of Trade in Ending Poverty”, the WTO and the World Bank Group have committed to further work on this area.

    Authors are invited to submit before 15 September 2016 a comprehensive abstract or a draft paper for consideration to this project. Papers should deal with the topic “Trade and Poverty issues”.

    For further information, please see more here

  • Climate Change, the US Elections and Small Island Developing States’ Survival

    Climate Change, the US Elections and Small Island Developing States’ Survival

    Alicia Nicholls

    “We are the first generation to be able to end poverty, and the last generation that can take steps to avoid the worst impacts of climate change. Future generations will judge us harshly if we fail to uphold our moral and historical responsibilities.” – Ban Ki-Moon, Secretary General of the United Nations.

    In a step that was both historic and symbolic, the Presidents of the United States (US) and China last week ratified the Paris Agreement ahead of the on-going G20 summit in Hangzhou, China. This single showing of solidarity by the world’s two largest industrialised powers was welcomed news for the small island developing states (SIDS) such as those in the Caribbean, Pacific and the Africa, Indian Ocean, Mediterranean and South China Sea (AIMS) states. Through the 44-member Alliance of Small Island States (AOSIS), SIDS  pushed not only for the conclusion of the Paris Agreement but insisted on the inclusion of language in the Agreement in which parties endeavored to “pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels” (Article 2(a) of the Paris Agreement).

    SIDS are the least culpable but most physically and economically vulnerable to the adverse effects of climate change. Rising sea levels have dislocated coastal communities and threaten the territorial integrity of the Pacific states of Kiribati and the Marshall Islands. Earlier this year, Cyclone Winston caused US1.4billion in damage, with the highest economic and human toll in Fiji, while Tropical Storm Erika in 2015 cost the Caribbean state of Dominica nearly half of its GDP. However, as the story of a remote Alaskan village which has voted to relocate from their ancestral home because of sea level rise shows, climate change is not a SIDS’ problem alone. It is a cross-cutting global issue which has implications not just for the global environment but for human health, security, sustainable development and economic growth.

    So what does all of this have to do with the upcoming election for the 45th President of the US? Well, if one considers the wide disparity in climate change rhetoric and policy proposals between the two major candidates running for the Oval Office, it is pellucid that the election of either Mrs. Clinton or Mr. Trump is the difference between strong US support for reducing GHG emissions and leading the global fight against climate change on the one hand, and on the other, a reversal of the gains that have been hard fought for. In other words, the future of SIDS’ survival could depend on the outcome of the US election.

    Current US climate change policy

    Current US policy supports global climate change efforts. US President Obama’s three-pronged Climate Action Plan commits to cutting carbon pollution in America, preparing the US for the impacts of climate change, and critically for the Paris Agreement, leading international efforts to address Global Climate Change. This is a policy position which Democratic candidate, Hillary Clinton, has pledged to honour should she be elected to office by the American people this November.

    The Paris Agreement was concluded in December 2015 at the end of the United Nations Framework Convention on Climate Change (UNFCCC) Twenty-first session of the Conference of the Parties (COP21). Since the Agreement’s opening for signature in April 2016, over 180 states have signed. However, as of September 3, only 26 states so far (representing 39% of global emissions) have ratified it. The recent ratification by the US and China, which together account for about nearly 40% of GHG emissions, is a significant step towards the threshold needed for the Agreement to come into effect; ratification by at least 55 countries which contribute to 55% of global GHG emissions. According to a White House press release on the US-China Climate Change cooperation outcomes, the two countries “committed to working bilaterally and with other countries to advance the post-Paris negotiation process and to achieve successful outcomes this year in related multilateral fora”.

    Climate Change Platforms of Candidates 

    While a four-way race in theory, the candidates of the two major parties, the Democratic Party and the Republican Party, still have a large lead ahead of the two other candidates (Jill Stein of the Green Party and Gary Johnson of the Libertarian Party). Perhaps never before has there been such wide disparity in the positions of two US presidential candidates on the issue of climate change. The democratic candidate, former US Secretary of State, Hillary Clinton, has vowed to “take on the threat of climate change and make America the world’s clean energy superpower”. Some of her major policy initiatives to this end are: launching a $60 billion Clean Energy Challenge, investing in clean energy production and infrastructure, cutting methane emissions across the economy and prioritising environmental and climate justice, inter alia.

    This stands in stark contrast to the stated position of Republican candidate, billionaire real estate mogul Donald Trump, who, inter alia, tweeted in November 2012 that “the concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive”. He later said he was joking. Unfortunately, for the world, and especially for SIDS, climate change is no joking matter.

    While Trump’s skepticism on the anthropogenic nature of climate change is not dissimilar to that of most Congressional Republicans, a Sierra Club report has rightly stated that “if elected, Trump would be the only world leader to deny the science of climate change.” He has also denounced the Paris Agreement as a bad deal for America, ascertaining it “gives foreign bureaucrats control over how much energy we use right here in America”, a claim soundly and poignantly rejected by the US special envoy for climate change (2009-2016) in a Washington Post op-ed. Mr. Trump first asserted he would renegotiate the Agreement and later stated that he would ‘cancel‘ the US’ participation in it. He has railed against environmental regulations. His proposals to reverse President Obama’s climate change initiatives, abolish the US Environmental Protection Agency, save the coal industry and continue subsidies to the oil and gas industry would jeopardise the US’s current emission reduction targets.

    Implications for SIDS of US Climate Policy Change

    Should a President Trump, if elected, implement his stated policies, not only will there be a 360 degree reversal of the US’ current commitment to meeting its emission-reduction targets, but an end to US cooperation or support for the global climate change agenda. If this happens, there will be little the world could do,besides raise universal condemnation. This is because one weakness of the Paris Agreement is that there is no binding enforcement mechanism in the agreement to force compliance of countries to the emissions limits they set for themselves. Already, there is skepticism that the current “nationally determined contributions” are not ambitious enough to conform with the Agreement’s goal of “holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels” (Article 2(a) of the Paris Agreement).

    Secondly, should the US withdraw from the Agreement or renege on its commitments, some other high emitters may feel less of a moral imperative to follow through with their own commitments or may withdraw as well.

    Thirdly, climate change finance is important for SIDS’ adaptation to, and mitigation of, the effects of climate change. Under Article 9 of the Paris Agreement developed country members are obligated to provide “financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention”.

    Caribbean countries  and several other vulnerable states around the world have benefited significantly over the years from the US Department of International Aid (USAID)’s projects which aim to build countries’ resilience to climate change. Climate change was one of the Obama Administration’s priorities for DA funding with $310.3 million in funding requested for Global Climate Change in the FY2017 Budget Request. The future of USAID aid flows to developing countries for climate change adaptation is bleak if current US policy towards climate change action changes under a Trump administration.

    What then for SIDS?

    The aim of this article is NOT to be an endorsement of either of the two major candidates running for the upcoming US Presidential election, neither is it an attempt to influence the American people’s decision. The US election is a democratic choice for the American people and only they can decide which of the four candidates’ platform better serves their interests. What this article attempts to do is to discuss and show the wide policy differences which exist between the two candidates of the major parties on climate change, and argues that any negative change in current US climate change policy will have far-reaching implications for the global climate change fight.

    There are a few nuggets of hope, however.  Because of Article 28 of the Paris Agreement, a President Trump would have to wait at least three years from the date the Agreement has entered into force in the US before he could notify his intention to withdraw the US from the Agreement and it would take another year for such withdrawal to come into effect.Any US withdrawal from the Paris Agreement is unlikely to be a popular move among Americans. Recent US polling data show there is grassroots support for Climate Change. Action. This includes not just environmental lobbies but the ordinary man on the street. There would also be universal condemnation by other major countries.

    SIDS may have a few allies in the fight within the US. Outside of federal action, some states, like Oregon, have quite robust climate change initiatives. Moreover, faced with pressure from more discerning and environmentally-aware consumers, more businesses and large corporations are forced to demonstrate their use of energy-friendly processes and products.

    Despite this, however, besides lobbying and moral suasion by other countries, there is little SIDS  can realistically do to change US climate change policy should there be a reversal. The vote for US president is a decision only the US electorate can make. However, for SIDS it could be a matter of survival.

    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.

  • FHA TAX ALERT – Barbados 2016 Budget

    A review of the Barbados Budget Proposals 2016 by FRANHENDY Attorneys

  • Can Sports help Caribbean Countries’ Export Diversification Efforts?

    Can Sports help Caribbean Countries’ Export Diversification Efforts?

    Alicia Nicholls

    The Brazil-hosted XXXI Summer Olympiad has come to an end with all of the panache one would expect from “a cidade maravilhosa” (the marvelous city) of Rio de Janeiro. I would be the first to admit that unlike most persons, I was not glued to the Games. However, seeing the success of Caribbean athletes, particularly the Jamaican team which can boast of having the fastest man and woman in the world for the third Olympiad in a row, made me ponder on the possibilities sports could have for Caribbean export diversification. Much of the discourse on sport as an export diversification strategy is often limited to sports tourism. However, I believe that the opportunities for sports trade go beyond simply sports tourism to encompass a wider array of sporting services which will be the focus of this article.

    No longer viewed as simply pastimes and sources of entertainment and recreation, the global sports industry is a lucrative and growing one.  A study by AT Kearney found that this industry is worth $480-620 billion dollars. For an appreciation of the sheer economic scale of the recently concluded Rio Olympic Games, this article by the BBC shows there were “more than 10,000 athletes, representing 207 nations, [competing] in 31 sports in Brazil.” It is therefore little surprise why an increasing number of developing countries are exploring the ways in which the commercialisation of their sporting industries can contribute to their economic diversification efforts.

    If we turn to the medal count statistics in the Rio Olympics, we see that Jamaica, a Caribbean small island developing state with a population shy of 3 million, won 11 goals (6 gold, 3 silver and 2 bronze), while Jamaican sprinting legend Usain Bolt won a historic three consecutive goals in the 100m, 200m and 4x100m relay further engraving his legacy on history’s page as the fastest man on earth. Caribbean countries’ sporting prowess is not limited to athletics. The West Indies Cricket Team dominated the cricketing world for many years. Here in Barbados we can boast of Sir Garfield Sobers who is regarded internationally as “the greatest cricketer the world has ever seen”, and of being the inventors of road tennis. The raw sporting talent is obviously there so how can we convert our sports talent into economic and export opportunities?

    Sports as Export Services

    The  commercialisation of sporting services has been internationally recognised in trade classifications. Under the World Trade Organisation (WTO) services classification, “sporting and other recreational services” is one of the sub-sectors of Recreational, Cultural and Sporting Services (other than audiovisual services). The sub-classes of sporting services are quite limited as they only capture a narrow range of the activities currently engaged in by sporting services suppliers, namely,  sports event promotion services; sports event organisation services; sports facility operation services and other sporting services. The UNESCO Framework for Cultural Statistics considers sports as part of the cultural industries.

    Caribbean countries’ existing market access and national treatment commitments in “recreational, cultural and sporting services (other than audiovisual services)” in their GATS schedules of specific commitments have been modest. This is not surprising as sporting services have not been a sector most countries have traditionally sought to liberalise. Only Cuba, Dominica, Grenada, St. Kitts & Nevis, St. Lucia, Trinidad & Tobago have made market access and national treatment commitments in sporting and other recreational services (CPC 964) in their GATS schedules.

    Sports Tourism

    When we speak of sports commercialisation in the region, our discussion tends to be limited primarily to sports tourism which involves travel to another destination for participation or observation of sporting events, sports conferences and meetings. This would be considered a services export under Mode 2 (consumption abroad). Countries around the world joust with each other to host major sporting events from the Olympics to World Cup Football. The Caribbean has had a piece of the action by successfully hosting the ICC Cricket World Cup in 2007, while also hosting several other smaller hemispheric and regional sporting events such as the Commonwealth Youth Games which the Bahamas will host in 2017.The rationale for hosting these events is not just for the immediate inflows of tourist arrivals and expenditure, but also the marketing and promotional opportunities which such intense media attention could bring.

    Non-Tourism Sporting Services

    Besides sports tourism, there are other possibilities for sporting services exports as the schematic below shows utilising the four modes of supply under the General Agreement on Trade in Services (GATS):

    • Mode 1 (Cross border supply)  – from the territory of one Member into the territory of any other Member e.g: sports consultancy firm providing consulting services to clients in another country online
    • Mode 2 (Consumption Abroad) -in the territory of one Member to the service consumer of any other Member e.g : an athlete of one country attending a training facility in another country
    • Mode 3 (Commercial presence) – by a service supplier of one Member, through commercial presence, in the territory of any other Member e.g: an investor establishing a sports academy  in another country
    • Mode 4 (Movement  of Natural Persons) – by a service supplier of one Member, through the presence of natural persons of a Member in the territory of any other Member e.g: coaches providing training in another country

    If we take Jamaica as a case study of sporting services exports, the country already conducts sporting services exports under Mode 4 as Jamaican coaches coach at overseas universities and training facilities. It also exports under Mode 2 as it hosts international sporting events (sports tourism) and its IAAF-funded High Performance Training Centre provides training for both Jamaican and international athletes. Unfortunately, the value of these services to the Jamaican economy is difficult to measure.

    In 2013 the then Government under Prime Minister, Portia Simpson-Miller introduced the Jamaica National Sports Policy which provides a framework for the development of sport in Jamaica includes upgrades to sports infrastructure, improvements in schools’ physical sport infrastructure and tax relief for contributions to amateur sport under the Charitable Organizations (Tax Harmonization) Act 2013 and the Charities Act 2013. Jamaica is known as the Sprint Capital of the World for its prowess in athletics, adding to the strength of Brand Jamaica. This is already reaping benefits and sports is one of the sectors in which Jamaica promotes foreign investment. Besides athletics, Jamaica has also enjoyed international success in cricket, football, netball and bobsled.

    Some sports-related investment already exists in the Caribbean such as in the Caribbean (Cricket) Premier League. Sports services trade through mode 3 (commercial presence) is possible through  foreign direct investment in the form of sports academies, colleges and other sports facilities which can generate foreign exchange and direct and indirect employment. However, strong regulatory and monitoring frameworks need to be in place to ensure these meet world anti-doping standards and anti-money laundering laws.

    Linkages with other sectors

    Sporting services can have strong linkages with, and spill-over benefits for other sectors, such as in manufacturing, health & wellness, education, research & development, and audiovisual services. According to this article in the India Times, Usain Bolt requires brands wishing to feature him in advertising campaigns to film in his home country of Jamaica to allow his country to benefit.

    Conclusions

    Caribbean countries have produced world-class sporting talent which far exceeds their small physical and economic sizes. There are opportunities to leverage that talent into sports services export opportunities which go beyond simply sports tourism. The current contribution of sporting services trade, such as sports festivals, to Caribbean countries’ GDPs is not being captured and remains undertapped.

    One of the reasons for the paucity of data on sporting services internationally is that there is the need for the broadening and refining of the CPC classification of sporting services beyond the four currently recognised sub-classes. Better classification and measurement is needed in order to assess the current value, impact and contribution of sports trade to Caribbean countries. This data would assist in the formulation of evidence-based policies and interventions to promote the development of sports as an export diversification strategy.

    The level of development of the sports industry and the policy frameworks and support structures for the development of sport varies by country across the region. Sportpersons benefit under the free movement of skilled labour under the CSME but there is no regional policy for the development of sport as an export. Sports are still not seen as a legitimate career option for many young people due to limited financing opportunities and lack of world-class training facilities in many Caribbean countries.

    Alas, however, there has also been progress in the right direction. There has been the introduction of sports degrees at the University of the West Indies campuses which could also attract international students. Several Caribbean countries have introduced national sports policies and have invested in upgrading their sports infrastructure. Some have made sports tourism part of their marketing plan e.g: Barbados hosted the 2014 Top Gear Festival at its newly redeveloped Bushy Park Circuit.

    If Caribbean countries are serious about commercialising their sports sectors, it is perhaps time that those countries which had not made any commitments in “sporting and other services” in their GATS schedules of specific commitments to consider taking commitments, while those which have already done so to consider  modifying the quality and number of their existing commitments. There is also the need to explore how Caribbean sports services suppliers can benefit from existing trade agreements like the CARIFORUM-EC Economic Partnership Agreement and from cooperation and funding under bilateral cooperation agreements with third states.

    An evidence-based approach would allow the region to determine what incentives and public/private sector support are needed to develop sporting services trade, the human resource, infrastructure and financing constraints  being faced and what additional public and private sector support can be given to regional sportspersons and sporting bodies. In the five Caribbean countries where citizenship by investment is offered, these countries can consider the feasibility of making an investment in sport one of the options of a qualifying investment.

    The good news is that while I was conducting my research for this article I stumbled across this document for a consultancy to conduct an assessment of the economic contribution of the sporting sector, especially sports tourism to the CARICOM Single Market and Economy (CSME) and the development of a Draft Regional Strategy for Sporting Services. This is a step in the right direction.

    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.