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  • Caribbean Trade and Development News Digest – October 25 – October 31, 2020

    Caribbean Trade and Development News Digest – October 25 – October 31, 2020

    Welcome to the Caribbean Trade & Development News Digest for the week of October 25-31, 2020! For October, we are going pink for Breast Cancer Awareness Month! 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.

    THIS WEEK’S HIGHLIGHTS

    The big news this week was that although WTO members indicated a strong preference for candidate from Nigeria, Dr. Ngozi Okonjo-Iweala, to lead the WTO, the US blocked Dr. Okonjo-Iweala’s selection who is also ironically a naturalised US citizen. The USTR’s statement objecting to Dr. Okonjo-Iweala’s appointment, while confirming support for candidate South Korea Trade Minister Yoo Myung Hee, can be viewed here. Therefore, as this Bloomberg report notes, the WTO DG race’s fate now depends on the outcome of Tuesday’s US presidential election.

    The 41st Regular Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM) was held virtually on 29 October 2020. The items discussed included COVID-19’s impact on the region, a Caribbean Economic Recovery and Transformation (CERT) Plan, EU blacklisting, a regional tourism policy, inter alia. Read the full communique here.

    Happening this week: Americans officially go to the polls to vote for their next president. A record over 90 million Americans and counting have already cast their ballot in early voting or by mail-in ballot. Read my article on why this election cycle is particularly important for the Caribbean here.

    Regionally, St Vincent and the Grenadines will be holding their elections this week on November 5. On October 31, St. Kitts & Nevis becomes the latest and one of the last Caribbean countries to re-open its borders. Read more here.

    Last week I also had the pleasure and honour of being a panelist at the Barbados International Business Association (BIBA) Global Business Week Conference on the panel entitled “New Opportunities for trade to and from Barbados“. Thank you to the organizers, excellent moderator and awesome fellow panelists for what was a very stimulating session.

    REGIONAL NEWS

    UN SG Calls For A Vulnerability Index For CARICOM

    News Americas Now: Secretary General of the United Nations, António Guterres, is calling for a multidimensional vulnerability index that will help CARICOM countries. Read more

    Cuba Says US Sanctions Have Caused Nearly $5.6B In Losses

    Jamaica Gleaner: Cuba said Thursday that the island has lost nearly $5.6 billion in one year as a result of economic sanctions imposed by US President Donald Trump. Read more

    High interest in intra-regional travel

    Barbados Advocate: Persons eager to visit countries within’ the bubble’, says travel advisor. Country Manager of Going Places Travel Barbados, Alana Gray, says there have been many enquiries for travel within the travel bubble. Read more

    Multilateral financial institutions have failed Caribbean countries: Robinson

    Barbados Advocate: University of the West Indies (The UWI) economist, Dr. Justin Robinson, has lashed out at the multilateral financial institutions, saying that they had failed small countries just when they require financing to get out of their present predicament. Read more

    First ship to arrive at Bridgetown Port on Sunday

    Barbados Today: Barbados will this weekend welcome its first cruise passengers since the global suspension of cruise in March this year. Read more

    Barbados International Business Sector showing resilience

    Barbados Advocate: The International Business and Financial Services sector, despite the current COVID-19 pandemic, is demonstrating its resilience by performing reasonably well under the current circumstances. Read more

    Jamaica earns US$250M from Tourism for June to September period

    Jamaica Star: Minister of Tourism, Edmund Bartlett has disclosed that Jamaica has earned just over US$250 million since the island’s borders reopened in June. Read more

    Guyana sets new oil discovery record – now the largest new conventional liquids play in the last decade

    Kaieteur News: The Yellowtail-2 and Redtail discoveries which were made in July and September respectively have pushed Guyana’s recoverable estimate to approximately nine billion oil equivalent resources. In light of this development, Guyana is now the largest new conventional liquids play in the last decade says Senior Vice President at ExxonMobil, Jack Williams. Read more

    Guyana Gov’t negotiating with CARICOM on better export market access for farmers

    Stabroek: In a bid to assist local farmers access regional export markets, the Guy-ana government is in discussions with the Carib-bean Community (CARICOM) in hopes of securing the relaxation or removal altogether of what it sees as some rigid non-tariff measures on local food produce, Minister of Agriculture Zulfikar Mustapha has said. Read more

    ‘CARICOM Bubble’ statistics being monitored to evaluate COVID-19 cases

    St Kitts & Nevis: St. Kitts and Nevis has the intends to participate in the Caribbean Community (CARICOM) Bubble and has been monitoring what is happening in the eight participating territories, says Chief Medical Officer Dr. Hazel Laws, speaking at the National Emergency Operation Centre (NEOC)/Border Reopening Press Briefing on October 28. Read more

    CARICOM divided on Venezuela at OAS assembly

    NY Carib News: Caribbean Community (CARICOM) countries were divided on the issue of “free and fair” elections in Venezuela, with The Bahamas, Haiti, Jamaica, and St Lucia all voting in favor of the resolution tabled at the 50th General assembly of the Organisation of American States (OAS) that ended here on Wednesday. Read more

    CARICOM establishes regional Food Security Task Force

    Loop Barbados: The Caribbean Community (CARICOM) has sought to address the region’s concerns about food security through the establishment of a Food Security Task Force. Read more

    Trinidad & Tobago Govt pushing female entrepreneurs

    Trinidad & Tobago Express: Trinidad & Tobago is the first country in the Caribbean to officially launch SheTrades, an initiative of the International Trade Centre (ITC), which is now part of a community of over 25 countries working towards connecting over three million women entrepreneurs to global markets by 2021. Read more

    Western Union to close in Cuba following new US sanctions

    Jamaica Observer: US-based money transfer company Western Union will close its offices in Cuba following new sanctions from Washington which prevent it from working with Fincimex, a financial company run by the island’s military, Havana said yesterday. Read more

    RUBiS enters petrochemical export market

    Jamaica Observer: RUBiS Energy Jamaica Limited recently dispatched the island’s first export shipment of petrochemicals — a move which sees the country becoming the first in the region to undertake such a venture due to its terminal and storage infrastructure. Read more

    Caribbean Export and WIRSPA partner on the Absolutely Caribbean Virtual Expo

    EU Reporter: Caribbean Export Development Agency (Caribbean Export) and the West Indies Rum & Spirits Producers Association (WIRSPA) are working together to support increased trade of rum and spirits between the Caribbean and Europe with the Absolutely Caribbean Virtual Expo, scheduled for 17-18 November. Read more

    ACS States with new Secretary-General

    Prensa Latina: Panamanian Rodolfo Sabonge began his four-year term of office as Secretary-General of the Association of Caribbean States (ACS) ‘under circumstances we never thought we would meet. Read more

    TT second largest regional supplier of medical products

    Newsday: A UNITED Nations (UN) country database shows that TT was the second largest supplier of medical products to other countries in the region after export restrictions from major suppliers created issues accessing critical medial supplies throughout the region. Read more

    Adjustments needed to the way we negotiate partnerships, says Marshall

    Barbados Today: One senior economist is calling for a review of how Barbados and other Caribbean states negotiate trade agreements with more developed nations. Dr Don Marshall, Director and Senior Research Fellow at the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES), said the time had come for small island developing states to raise issues relating to their vulnerabilities and other developmental concerns when discussing partnerships. Read more

    INTERNATIONAL NEWS

    CBI chief fires parting shot over slow pace of Brexit negotiations

    BBC: Carolyn Fairbairn says the UK economy is in ‘suspended animation’ while issue remain unresolved. Read more

    Brexit talks making good progress, says Ursula Von der Leyen

    The Guardian: European commission president says key issues are level playing field and fisheries. Read more

    Brexit deal hangs in the balance, says EU council president

    The Guardian: Outcome of next two weeks of talks crucial but uncertain, says Charles Michel. Read more

    Chatham House speech: Liz Truss sets out vision for values-driven free trade

    Gov.uk: International Trade Secretary Liz Truss delivers the keynote speech at Chatham House’s ‘Global Trade Live’ event setting out her vision for UK trade policy. Read more

    Liz Truss: NHS ‘off the table’ in Brexit talks with US

    City AM: International trade secretary Liz Truss has insisted the NHS remains “off the table” in post-Brexit trade talks with the US, as the government scrambles to shore up relations with presidential hopeful Joe Biden ahead of next week’s election. Read more

    Trump’s phase one trade deal with China and the US election

    PIIE: President Donald Trump has staked a claim to success in his trade war with China on his phase one trade agreement of January 2020. In his self-proclaimed “historic” deal, China committed to purchasing an additional $200 billion of American-made goods and services over 2020 and 2021. Trump has even boasted that the deal “could be closer to $300 billion when it finishes.” Read more

    US moves closer to expanding tech export controls list as competition with China for future technology builds

    South China Morning Post: Commerce Department moves closer in seeking industry input to identify, define and set criteria for technology that will be subject to export controls. Read more

    Thailand expresses full support for WTO reforms

    The Guardian: Thailand has voiced full support for the World Trade Organization’s (WTO) reforms to make the intergovernmental body aware of trade situations and that would enable it to accelerate the global economic recovery following the pandemic. Read more

    A Biden Win Could Renew a Democratic Split on Trade

    NY Times: Democrats have been unified by their desire to oust President Trump. But if that happens, deep divisions on the issue of trade are likely to reappear. Read more

    China has a golden opportunity to show global leadership, with a WTO fisheries deal

    South China Morning Post: China is a fishing superpower. If Beijing is truly committed to a rules-based multilateral trading system, it must show leadership in securing a meaningful WTO agreement to tackle global fishing subsidies and curb overfishing. Read more

    EU strengthens trade enforcement arsenal with revamped regulation

    EU: Today, the European Commission, the European Parliament and the Council reached a political agreement on reinforcing the EU’s Enforcement Regulation. As part of the agreement, the Commission committed to developing the EU’s anti-coercion mechanism swiftly. Read more

    Trump Trade Policy Gets Failing Grades

    Forbes: Donald Trump may believe his trade agenda is a success, but a new analysis gives his administration’s trade policies poor marks. The analysis finds the Trump administration’s policy of raising tariffs and misusing U.S. trade laws have harmed consumers, disrupted supply chains and failed to achieve objectives that are important to the United States. Read more

    Biden Or Trump, Next 4 Years For Canada-U.S. Trade Will Be ‘Bumpy’

    Huffpost: Protectionism is rearing its head again in the United States, leaving the Trudeau minority government to figure out ways to work with an unpredictable neighbour. Read more

    Canadian Ambassador to U.S. says there is no justification to change border restrictions

    CTV: Canada’s Ambassador to the United States Kirsten Hillman said there is no justification to ease the Canada-U.S. land border restrictions any time soon. Speaking to CTV’s Power Play on Friday, Hillman stressed that either country is not prepared to loosen border restrictions before 2021. Read more

    What would a Joe Biden presidency mean for a UK-US post-Brexit trade deal?

    iTV: With the US presidential election days away, focus is shifting to what priorities the winner will have during their four years in power at the White House. Read more

    Cruz, Cornyn Complain to Trump That Mexico Is Undermining USMCA

    Bloomberg: US senators Cruz and Cornyn sent a letter to President Trump arguing that Mexico’s energy policy undermines the spirit of the USMCA trade agreement. Read more

    African trade finance banks urge MDBs to take on greater levels of risk

    Global Trade Review: Trade finance executives across Africa are urging multilateral development banks (MDBs) to “intervene decisively” and boost credit support to banks on the continent as a potential insolvency crisis looms. Read more

    S. Korea, Mongolia to lower tariffs starting 2021 under regional trade pact

    Korea Times: South Korea and Mongolia will lower tariffs on some products starting next year, as Ulaanbaatar joined a regional trade pact known as the Asia-Pacific Trade Agreement (APTA), Seoul’s finance ministry said Friday. Read more

    China-Mongolia trade to benefit from Mongolia’s APTA membership

    Xinhua: China and Mongolia are expecting lower tariffs in bilateral trade after Mongolia’s recent accession to the Asia-Pacific Trade Agreement (APTA), China’s Ministry of Commerce said Monday. Read more

    STRAIGHT FROM THE WTO

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  • Communique issued at the conclusion of the Forty-First Meeting of the Conference of Heads of Government of the Caribbean Community, via Videoconference, 29 October 2020

    Communique issued at the conclusion of the Forty-First Meeting of the Conference of Heads of Government of the Caribbean Community, via Videoconference, 29 October 2020

    CARICOM Secretariat – The Forty-First Regular Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM) was held virtually on 29 October 2020.The Prime Minister of St. Vincent and the Grenadines, Dr. the Honourable Ralph Gonsalves, chaired the proceedings.

    Other Members of the Conference in attendance were: Prime Minister of Antigua and Barbuda, Honourable Gaston Browne; Prime Minister of The Bahamas, Honourable Dr. Hubert Minnis; Prime Minister of Barbados, Honourable Mia Amor Mottley, Q.C, MP; Prime Minister of Dominica, Honourable Roosevelt Skerrit; Prime Minister of Grenada, Dr. the Rt. Honourable Keith Mitchell; President of Guyana, His Excellency Dr. Mohamed Irfaan Ali; President of Haiti, His Excellency Jovenel Moise; Prime Minister of Jamaica, the Most Honourable Andrew Holness; Premier of Montserrat, Honourable Easton Taylor-Farrell; Prime Minister of St. Kitts and Nevis, Dr. the Honourable Timothy Harris; Prime Minister of Saint Lucia, Honourable Allen Chastanet; the President of Suriname, His Excellency Chandrikapersad Santokhi; and Prime Minister of Trinidad and Tobago, Dr. the Honourable Keith Rowley.

    Belize was represented by Attorney General, Honourable Michael Peyrefitte.

    Associate Members in attendance were: Bermuda represented by Premier, the Honourable David Burt; the British Virgin Islands represented by Premier,the Honourable Andrew Fahie; and the Turks and Caicos Islands, represented by Premier, the Honourable Sharlene Cartwright-Robinson.

    OPENING

    Chair of the Community, Dr. the Honourable Ralph Gonsalves, Prime Minister of St. Vincent and the Grenadines, and the Secretary-General of the Community, Ambassador Irwin LaRocque, made brief opening remarks.


    COVID-19 AND ITS IMPACT ON THE REGION

    Heads of Government acknowledged the relative success of the Community in its fight against the multi-faceted challenges posed by the COVID-19 pandemic which they attributed to the application of functional cooperation, one of the core principles of regional integration and which was adopted from the outbreak of the Novel Coronavirus.

    Heads of Government advocated continued vigilance and adherence to the regional public health approach being led by the Caribbean Public Health Agency (CARPHA). They commended CARPHA for its on-going leadership and technical support to Member States in responding to the COVID-19 pandemic. They also expressed appreciation for the assistance provided by International Development Partners.

    Heads of Government recognised the impact of COVID-19 on several sectors, including health, tourism, education, security and law enforcement, as well as the different phases of the pandemic which individual countries may be experiencing.

    Heads of Government also recognised that in the absence of a vaccine, COVID-19 will continue to be a grave public health, security and economic threat, and the regional approach must continue to be undertaken to manage these ongoing threats.

    In that regard, they further recognised that re-opening and recovery require a careful balance between reducing restrictive measures and ensuring adequate actions to reduce importation and spread of new cases.

    Heads of Government welcomed the COVAX Facility as an initiative to secure access to safe and effective COVID-19 vaccines that will afford countries the best opportunity to fast-track access to COVID-19 vaccines.

    They also welcomed the fact that six CARICOM Member States have been identified for Advance Market Commitment – a financing instrument to support the procurement of vaccines for low and middle-income economies. They noted that the remaining Member States have committed to the COVAX Facility as self-financing countries, but were concerned at the limited criteria used to determine how countries accessed financing.

    Heads of Government expressed deep concern that despite being in the midst of a global pandemic, the per capita income criterion was still being used to determine how countries accessed financing from the COVAX Facility. 

    Heads of Government expressed appreciation to the European Union, CARPHA and the Pan-American Health Organization (PAHO) for their support in facilitating the down payment for self-financing Member States.

    They mandated CARPHA to explore, in collaboration with the CARICOM Secretariat and PAHO, other financing options to cover additional costs for the vaccines.

    Heads of Government mandated CARPHA and the Chief Medical Officers of Member States to meet to refine the common technical standards for the CARICOM Travel Bubble and the entry of external arrivals, and report to the Secretariat within 48 hours.

    CARIBBEAN ECONOMIC RECOVERY AND TRANSFORMATION

    Heads of Government acknowledged that the COVID-19 pandemic exacerbated the development challenges already confronting the Community and that CARICOM States have been more deeply affected than other developing countries. Member States are now faced with a perfect storm of a public health crisis, an economic crisis and a deepening debt crisis.

    Heads of Government agreed on the need to protect lives, while restoring livelihoods through policies and measures for the gradual and safe return to economic activity.

    Heads of Government noted that the economic prospects for the Caribbean had worsened and cited a report by the International Monetary Fund that the Caribbean is the most affected globally by this pandemic, given that it is the most tourism and travel dependent Region in the world.

    Heads of Government noted that the pandemic would also exacerbate already high deficits and debt in many countries in the Region and building back better would have significant capital requirements which required a multi-faceted financing plan.

    In that regard, Heads of Government agreed to the concept of a Caribbean Economic Recovery and Transformation (CERT) Plan, which has been devised by a regional team of experts under the leadership of the Prime Minister of Barbados, Honourable Mia Amor Mottley.

    Heads of Government called for a new Special Drawing Rights (SDR) allocation by the International Monetary Fund’s (IMF) as well as the refinancing of COVID-related debt into long-term low interest instruments.They also urged the early development and use of a Universal Vulnerability Index to determine countries’ eligibility for development assistance.

    A JOINT TOURISM POLICY FOR CARICOM

    Heads of Government noted that over the past seven (7) months, CARICOM Member States had seen an unprecedented decline in tourist arrivals brought on by the global COVID-19 pandemic.

    Heads of Government further noted that several Member States were still recovering from the devastating hurricanes of 2017 and 2019, a situation further compounded by the effects of the pandemic.

    Heads of Government recognised that the resulting reduction in tourism-related tax revenues and the implementation of needed COVID-19 containment, economic and social support mechanisms had placed unparalleled financial demands on Governments across the Community.


    Heads of Government recognised the critical importance of rebuilding the tourism industry and, in that regard, welcomed a proposal by the Government of Saint Lucia for the preparation of a Joint Tourism Policy. They agreed to a Working Group to formulate the policy and report to the Conference by December 31, 2020.

    Given the urgency of the matter, Heads of Government also agreed that a Prime Ministerial Sub-Committee (PMSC) on Tourism be established to provide political oversight for the preparation of the Joint Tourism Policy and other related issues.  The Prime Minister of The Bahamas, as the Lead Head of Government for Tourism in the CARICOM Quasi Cabinet, will preside over the Sub-Committee which will include Antigua and Barbuda, Barbados, Jamaica and Saint Lucia.


    BLACKLISTING

    Heads of Government observed that the European Union, through the actions of the Council and the Commission, have stepped up the economic assault on Small States despite the prevailing global pandemic which has forced the protracted shutdown of economic activity amidst predictions of a slower recovery than envisaged.

    Heads of Government condemned in the strongest possible terms the continued blacklisting by the European Union of Members of the Community through unilaterally and arbitrarily determined standards, and in the absence of any meaningful prior consultation with the affected Members.

    Heads of Government noted that the European Union has steadfastly ignored that capacity constraints and other challenges at the national level continue to impact the speed and depth of reforms in tax administrations, and financial intelligence units in Member States.

    Heads of Government stated that this disproportionate treatment of CARICOM States is a breach of the rights of CARICOM citizens, and called upon the European Council and European Commission to desist from this egregious practice.

    CARICOM PRIVATE SECTOR ORGANISATION (CPSO)

    Heads of Government agreed to designate the CARICOM Private Sector Organisation (CPSO) as an Associate Institution of the Community.

    They also agreed to a Memorandum of Understanding between the Caribbean Community and the CPSO Inc. for cooperation towards the further implementation of the CARICOM Single Market and Economy (CSME).


    BORDER ISSUES

    Belize-Guatemala Relations

    Heads of Government received an update on the most recent developments on the Belize – Guatemala border issue. They noted the extension of the time limits for the submission of the Memorials and the Counter Memorials to the International Court of Justice by Belize and Guatemala, respectively. Heads of Government urged Belize, Guatemala and the OAS to continue implementing fully the Confidence Building Measures that have been in place since 2005, pending the resolution of Guatemala’s claim at the International Court of Justice (ICJ).

    Heads of Government noted that the undertaking by both countries and the Organisation of American States (OAS) to engage in the design and development of a mechanism of co-operation for the Sarstoon River is still outstanding, and called on both countries and the OAS to reinvigorate their efforts to this end.

    They also expressed support for the significant role of the OAS in the process aimed at resolving the dispute arising from Guatemala’s claims on Belize, and further called on the international community to continue supporting the OAS Office in the Adjacency Zone.

    Heads of Government re-emphasised their steadfast support for the sovereignty, territorial integrity and security of Belize.

    Guyana-Venezuela Border Controversy

    Heads of Government noted that the ICJ held an Oral Hearing on Jurisdiction by ‘virtual’ process in the Case of Guyana v. Venezuela on 30 June 2020. A decision is awaited. If the Court affirms its jurisdiction, Guyana will proceed to the next stage of its pleadings as to why the 1899 Arbitral Award is the valid demarcation of the boundary between Guyana and Venezuela, thus providing for a final resolution of the controversy between the two countries as determined by the Secretary General of the United Nations.

    Heads of Government reiterated their full support for this judicial process that is intended to bring a peaceful and definitive end to the long-standing controversy between Guyana and Venezuela.

    Heads of Government further reiterated their firm and unswerving support for the maintenance and preservation of the sovereignty, and territorial integrity of Guyana.


    EXCHANGE OF VIEWS WITH THE UN SECRETARY-GENERAL

    Heads of Government engaged with the UN Secretary-General as their Special Guest. They held an extensive and fruitful exchange of views on issues related to the devastating impact of the COVID-19 pandemic on the Region’s economy, which has exacerbated existing vulnerabilities, in particular, those related to high levels of debt and access to concessional financing. With regard to climate change, the Secretary-General commended the Community for its efforts to become the first climate-resilient Region.

    He also noted the similarity of views on climate change and recovery to the pandemic which were linked through their solutions. Recovery from the COVID-19 crisis, achieving the Sustainable Development Goals (SDGs) and securing climate action are not separate efforts, he stated. He affirmed the United Nations’ support for a multi-dimensional vulnerability index to help in determining access to concessional financing. 

    Heads of Government welcomed the Secretary General’s firm support for the need for urgent debt relief for middle-income developing countries, and for the importance of the recourse to the criterion of vulnerability as opposed to GDP in measuring development.  They recognised that the upcoming meeting of UNCTAD XV, to be held in Barbados in April 2021, would provide an opportunity to discuss a more equitable multilateral trading system.  

    DATE AND VENUE THIRTY-SECOND INTER-SESSIONAL MEETING OF THE CONFERENCE

    The Government of Trinidad and Tobago will host the Thirty-Second Intersessional Meeting of the Conference, to be held on 23-24 February 2021.

    The preceding was from the Caribbean Community.

  • Deeper Caribbean trade and tourism: An aspirin for the COVID-19 ‘heart attack’?

    Deeper Caribbean trade and tourism: An aspirin for the COVID-19 ‘heart attack’?

    Alicia Nicholls

    This week, two noted International Monetary Fund (IMF) economists in a blog post entitled “Pandemic Persistence Clouds Latin America and Caribbean Recovery” aptly likened the economic fall-out emanating from the novel coronavirus disease (COVID-19) outbreak to a ‘cardiac arrest’ in Caribbean economies. This IMF post is one of several analytical pieces published by international institutions over the past months examining the pernicious economic impact of the crisis on Caribbean countries, whose mainly tourism-dependent economies have been significantly hit.

    The COVID-19 pandemic reiterates yet again the exigency of reconsidering and reconfiguring Caribbean Community (CARICOM) Members States’ integration into the global trading system. Indeed, many structural issues have long clogged the arteries of Caribbean economies, serving as risk factors for repeated economic cardiac events. Our countries generally have high merchandise trade deficits, and while we enjoy services surpluses, that services trade is predominantly tourism. In addition to the highly concentrated nature of our exports, similar concentration can be observed in our trading partners. Most of our trade occurs with the United States (US), the European Union (EU), Canada, the United Kingdom (UK) and increasingly, China. However, as a World Bank study argued, there is untapped potential for greater trade with the wider Caribbean.

    This article suggests that deepening trade and tourism with the wider Caribbean could be an aspirin to help CARICOM countries deal with the COVID-19 ‘heart attack’.

    What is the wider Caribbean?

    The term ‘Caribbean’ means varying things to different people. For us in the English-speaking Caribbean, the term ‘Caribbean’ usually connotes those countries which comprise the 15-member Caribbean Community (CARICOM), which also includes two non-anglophone Member States – Haiti and Suriname. Nonetheless, for those outside the region, the term ‘Caribbean’ is all-encompassing to include those non-CARICOM independent countries and dependent territories, such as Cuba, the Dominican Republic, the Turks & Caicos to the north and as south as the ‘ABC’ islands – Aruba, Bonaire and Curacao. One can go wider still and refer to the Caribbean Basin – all countries with a coastline which touches the Caribbean Sea, such as Colombia, Venezuela and several Central American States.  

    Deepening relations with the wider Caribbean is not a new concept or aspiration. CARICOM itself has adopted an approach of ‘open regionalism’ as codified in the Revised Treaty of Chaguaramas at Article 3(2).  CARICOM has five Associate Members, all from the wider Caribbean, namely, Anguilla, Bermuda, the British Virgin Islands (BVI), Cayman Islands and Turks & Caicos. and observer members from the non-English speaking Caribbean. Besides the Dominican Republic-CARICOM FTA, CARICOM also has trade agreements (mainly partial scope agreements) with some Caribbean Basin countries, such as Venezuela, Costa Rica, Colombia, while some individual CARICOM Member States have their own partial scope agreements, such as Belize with Guatemala and Guyana with Brazil.

    In addition, the Jamaica government has indicated its intention to deepen its trade links with the Northern Caribbean, as seen in the Golding Report and a 2018 report prepared by ECLAC on this topic at the request of the Jamaican Government. Martinique and Guadeloupe are associate members of the Organisation of Eastern Caribbean States (OECS) and Martinique is one of St. Lucia’s main tourism source markets. It should also be remembered that CARICOM countries had been among the participants of the now defunct negotiations on a Free Trade Area of the Americas (FTAA), which would have created an FTA among all countries of the Americas, except for Cuba and Venezuela for political reasons.

    Barriers impacting wider Caribbean trade

    Intra-CARICOM trade only accounts for a small percentage of CARICOM’s total trade compared with trade with external partners. While it is unknown the exact percentage of CARICOM’s total trade with the wider Caribbean, it is also likely small.

    Several reasons account for why CARICOM’s trade with the wider Caribbean remains limited. One of them is historical factors which account for the linguistic heterogeneity within the countries and territories of the region. International business scholarship shows generally that firms trade more easily with those in countries with which they share linguistic and cultural affinity, often referred to in the literature as ‘psychic distance’. Therefore, while there may be geographic proximity within the Caribbean, there is notable ‘psychic distance’ due to linguistic and cultural differences. Such differences are not non-negligible as they often make firms’ task of conducting market research on potential markets more difficult.

    A second factor to consider, also linked to historical factors, is that while there are excellent transportation links between Caribbean countries and the more traditional markets (US, UK and Europe), intra-Caribbean transportation links often leave much to be desired. It is often easier to send a package to Miami than it is to send one from Barbados to Trinidad, or even more so, from Barbados to Belize. This lack of good intra-regional transportation makes trade more expensive. Moreover, travel within the Caribbean, such as from Barbados to the Bahamas, requires passing through Miami as the easiest route.  Again, this increases the costs of plane tickets and serves as a disincentive for intra-regional trade and travel.

    A third, but no less important factor to consider, is the lack of convertibility among the region’s currencies. To complete cross-border payments, US dollars must be used which means our regional banks must use correspondent banks in order to process payments across the region. This, naturally, incurs fees. One group, the Caribbean Settlement Network is trying to fix this problem by proposing the creation of a blockchain-enabled Caribbean settlement system.

    A fourth issue is that there remain non-tariff barriers to trade, as well as other administrative barriers which often differ among countries, making it difficult for the private sector to access markets, especially if another language is involved.

    Opportunities for trade with the wider Caribbean

    Without doubt, opportunities abound for promoting greater trade within the wider Caribbean. However, as it is often said or not always remembered, it is firms which trade, not States. As such, firms will need an enabling environment if they are to find the wider Caribbean an attractive market.

    On this note, however, it is worthwhile to highlight that the Caribbean Chamber of Commerce (CARICHAM) and the Caribbean Chamber of Commerce in Europe (CCCE) include members not just from the Anglophone Caribbean but non-anglophone countries as well. This shows that there is at least some pan-Caribbean private sector interest in not just sharing ideas and collaborating but also possibly increasing trade with the wider Caribbean.

    E-commerce presents a perfect opportunity to promote greater intra-regional trade, particularly services trade. Things such as telemedicine, management consulting and other professional services can be offered online. Educational services are a big opportunity, particularly the e-teaching of foreign languages since there is demand by those countries to learn English and for our countries to learn Spanish, French and Dutch, for example. Another related opportunity relates to translation and interpretation services which can be delivered online.

    An excuse often made is that Caribbean countries’ similar export profiles means there is not much which we could trade with each other. This argument is misguided. Instead of relying so heavily on extra-regional food imports, there are opportunities for greater sourcing of food products from the wider region, such as fresh fruits and vegetables which might not be available in all islands due to costs of production or climatic factors. Jamaica, for instance, grows oranges.

    Greater air connectivity will incentivize greater intra-regional trade. However, governments must create an enabling environment for intra-regional trade. This means seriously considering the removal of the high taxes, fees and other charges they impose, which significantly adds to the cost of purchasing tickets. There is little incentive for Caribbean persons to travel within the region for leisure, unless to visit family and friends, if the cost of a ticket to Miami is much cheaper than a ticket from Trinidad & Tobago to the Turks & Caicos.  

    According to the IMF blog post previously mentioned, “Caribbean countries are dependent on tourism for anywhere between 20 to 90 per cent of GDP and employment”. With the spike in COVID-19 cases in the US and Europe, now is the time that our tourist boards should be pushing more heavily towards promoting intra-regional tourism. CARICOM currently has a travel bubble whereby persons travelling within the bubble are treated as low risk and are exempt from COVID-19 tests and mandatory quarantine.

    Intra-regional travel could help shore up our economies which are struggling to cope with the precipitous drop in arrivals and tourist spend from our main source markets due to the COVID-19 epidemic. Whether it is the Bahamas’ famous Blue Hole, Barbados’ Harrison’s Cave, Jamaica’s Dunn’s River Falls , Martinique’s Mont Pelee or St. Lucia’s signature Pitons, each Caribbean island has its own unique marvels which make it attractive not just to extra-regional tourists, but those from the region as well who would prefer to travel closer to home and to a less risky jurisdiction. As such, deeper intra-regional tourism is an opportunity well-worth exploring.

    Negotiating trade agreements would help to eliminate the tariff and non-tariff barriers which currently exist as barriers to trade with non-CARICOM Caribbean countries. A World Bank study entitled “Trade Matters: New Opportunities for the Caribbean” found that implementation of a common market would lead to significant gains for the region, and that those countries such as St. Lucia and Barbados that already have a significant portion of their exports going intra-regionally stand to benefit the most. However, it found that greater trade integration with North America or Latin America would be even greater and could be achieved by joining the NAFTA (now the USMCA). A cautionary note is that CARICOM’s trade agreements remain under-utilised as a study by McClean for ECLAC in 2015 showed. As such, it should be determined whether there is sufficient private sector interest in wider Caribbean markets to justify spending limited negotiating capital on yet another trade agreement.

    Just like heart attack patients are counselled to change their lifestyles and adopt healthier eating habits, so too must CARICOM Member States address the risk factors which increase their susceptibility to economic cardiac events. Diversifying their trade and tourism source markets by deepening such links with the wider Caribbean would be one such ‘lifestyle change’.

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

  • Caribbean Trade and Development News Digest – October 18 – 24, 2020

    Caribbean Trade and Development News Digest – October 18 – 24, 2020

    Welcome to the Caribbean Trade & Development News Digest for the week of October 18-24, 2020! For October, we are going pink for Breast Cancer Awareness Month! 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.

    THIS WEEK’S HIGHLIGHTS

    According to the World Trade Organization (WTO), “Global trade in services in the second quarter of 2020 plunged by a record 30% year-on-year, with the travel sector particularly hard hit by COVID-19 and associated restrictions”. Read more here.

    UNCTAD estimates show a 5% drop in world trade in the third quarter of 2020 compared to 2019. While this is an improvement from the 19% decline in the second quarter, UNCTAD notes that it is insufficient to pull trade out of the red. Read more here.

    REGIONAL

    Belize files lawsuit against St Kitts and Trinidad and Tobago over sugar exports

    LoveFM: The Government of Belize is suing St Kitts along with Trinidad and Tobago over sugar importation. Love News understands that the two countries have been acquiring sugar from Guatemala without paying the required taxes. According to the Minister of Food and Agriculture Godwin Hulse the lawsuit was filed earlier this month. Read more

    Cuba to promote exports to Caribbean countries

    Prensa Latina: Cuba will promote exports of products and services to representatives of Caribbean nations, the Chamber of Commerce reported. Read more

    IMF describes COVID-19 pandemic as a ‘crisis like no other’ for Caribbean

    NYCaribNews: The International Monetary Fund (IMF) on Friday said the economic impact of the coronavirus (COVID-19) pandemic on the Caribbean has been “massive”, particularly for tourism-dependent countries in the region, but that lower commodity prices were also having a “major impact” on Caribbean commodity exporters. Read more

    John Beale looking to strengthen Barbados-Belize trade

    Barbados Today: Beale, who spoke to Barbados TODAY after receiving his official accreditation at the Ministry of Home Affairs, today, said during his tenure he will be focusing on strengthening the relationship between the two countries, particularly in the area of trade. Read more

    Caribbean Export Development Agency launches first virtual expo event

    EU Reporter: The Caribbean Export Development Agency (Caribbean Export) has announced the launch of its first virtual expo event named ‘Absolutely Caribbean, unlocking the profit potential of the Caribbean’. Taking place on 17th and 18th November 2020, the event will bring together around 50 producers to showcase some of the best products that the Caribbean has to offer. Read more

    Caribbean Export builds services supplier registry for region

    Jamaica Observer: The Caribbean Export Development Agency (Caribbean Export) has announced its development of an online registry for suppliers of Caribbean-based services. Read more

    TT signs trade agreement with Chile

    Newsday: Caricom and Foreign Affairs minister Dr Amery Browne said the signing of the general framework agreement for the partial scope trade agreement between TT and Chile will allow for deepening, widening and enhancing of bilateral ties between the two countries. Read more

    Private sector groups want 2-year tax relief on digital devices

    Jamaica Observer: Some of the country’s major private sector groups yesterday jointly urged the Government to remove “all duties and taxes” on digital devices for at least two years. Read more

    INTERNATIONAL

    New portal tracks trade’s contribution to sustainable development

    UNCTAD: The SDG Trade Monitor offers a one-stop shop for users to obtain updated and disaggregated official data on global trade’s contribution to the UN Sustainable Development Goals. Read more

    Africa: Trade Experts Call for Implementation of AfCFTA

    AllAfrica: African trade experts have called for the swift implementation of the African Continental Free Trade Area (AfCFTA) to lift the continent out of an economic downturn caused by COVID-19. Read more

    Africa trade bloc will drive investment

    New Vision: The Economic Commission of Africa’s (ECA) Regional Integration and Trade Division Director, Stephen Karingi, said this while presenting discussion reports by the ECA on investment issues during the Annual Investment Meeting (AIM2020) Africa. Read more

    Positive reaction for PACER Plus ratification in Australia and NZ

    RNZ: Australia’s government says trade and prosperity in the Pacific will thrive when the PACER Plus regional trade agreement comes into force within two months. Read more

    South Pacific trade deal comes into force

    Australia Financial Review: Australian producers will gain hundreds of millions of dollars in new sales with tariffs on beef, dairy products, car parts and toiletries to be reduced or eliminated when a Pacific islands free trade deal comes into force in December. Read more

    China’s purchases of U.S. farm goods at 71% of target under trade deal: U.S.

    Reuters: China has substantially increased purchases of U.S. farm goods and implemented 50 of 57 technical commitments aimed at lowering structural barriers to U.S. imports since the two nations signed a trade deal in January, the U.S. government said on Friday. Read more

    Norway, Britain in provisional trade agreement on goods for no-deal Brexit scenario

    Reuters: Norway and Britain have signed a temporary, limited agreement to help maintain trade in goods in case there is no final Brexit trade deal in place by year-end, the Norwegian Industry ministry said on Wednesday. Read more

    6 home truths for the new head of the WTO

    WTO: The race to be the next Director-General (DG) of the World Trade Organisation is now down to two candidates: Ngozi Okonjo Iweala of Nigeria, and Yoo Myung-hee of South Korea. Whoever prevails will face the reality as the global trade body chief. Read more

    WTO members discuss proposal of India, South Africa for easing IP rules for COVID-19

    Financial Express: The WTO states the proponents of the proposal argued the relaxations would avoid barriers to the timely access to affordable medical products, including vaccines and medicines. Read more

    India opposes binding pact on open services trade at WTO

    Hindu Business Line: New Delhi insists on flexibility on movement of professionals. Read more

    UK-US trade deal cannot happen if Brexit talks fail, ex-official says

    Telegraph: US presidential candidate Joe Biden says the UK must honour the Good Friday agreement in EU negotiations. Read more

    Brexit: EU-UK trade deal talks to resume after London has a change of heart

    Euronews: London will resume talks over a post-Brexit trade deal with the EU from Thursday – less than a week after threatening to walk away from negotiations. Read more

    EU leaders weigh up hard choices over Brexit trade deal

    BBC: On the eve of their two-day summit in Brussels, the prime minister reminded EU leaders of his words back in early September. Read more

    Brexit: Hopes of EU trade deal rise as Michel Barnier stays on for more talks

    The Times: Michel Barnier has remained in London for intensive talks, prompting hopes that a trade deal with the EU will be concluded. Read more

    Whether Trump or Biden wins, US-China relations look set to worsen

    The Guardian: Tensions will persist whoever is in the White House. The key difference, observers expect, will be in approach. Read more

    U.S. to Sign Limited Trade Deal With Brazil

    New York Times: The new pact is expected to ease trade barriers, strengthen regulation and crack down on corruption. Read more

    STRAIGHT FROM THE WTO

    NEW ON THE CTLD BLOG

    The Caribbean Trade & Development Digest is a weekly trade news digest produced and 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 subscribe to our Blog below: