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  • Caribbean Trade and Development News Digest – July 5 – 11, 2020

    Caribbean Trade and Development News Digest – July 5 – 11, 2020

    Welcome to the Caribbean Trade & Development News Digest for the week of July 5-11, 2020! 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

    With nominations closed on July 8, there are now officially eight (8) candidates in the race to become the next World Trade Organization (WTO) Director-General. The candidates, all well-qualified and experienced, hail from Egypt, Kenya, Mexico, Moldova, Nigeria, Saudi Arabia, South Korea and the United Kingdom (UK). Learn more about the candidates in this Bloomberg piece here.

    Data published by UNCTAD on June 11 show that merchandise trade fell by 5% in the first quarter of the year and forecast a 27% drop for the second quarter and a 20% annual decline for 2020. Read the UNCTAD report here.

    REGIONAL NEWS

    PM Gonsalves: LIAT liquidation unanimously agreed to last month

    LoopBarbados: At the June 27 meeting on LIAT with the major shareholder governments, it was unanimously agreed there would be the liquidation of the airline. Read more

    The pivotal role of air transportation in CARICOM

    Searchlight: Within the past week, Caribbean Community (CARICOM) nationals got wind of the imminent liquidation of LIAT, a process which if carried out, would bring an end to over 60 years of aviation history for the airline. Read more

    Caribbean leaders meet amid concerns over regional transportation, COVID

    Jamaica Observer: Caribbean Community (Caricom) leaders were meeting virtually on Friday, overshadowed by the impact of the coronavirus (COVID-19) on their socio-economic future and the plight of the regional transportation with the decision to liquidate the financially strapped regional airline, LIAT. Read more

    Jamaica’s trade agenda needs to be more ambitious, says Hylton

    Jamaica Observer: People’s National Party spokesman on industry, competitiveness and global logistics, Anthony Hylton says the country’s trade agenda needs to be more ambitious than the current “defensive posture” of Caricom on external trade. Read more

    Antiguan government establishes “travel bubble” for Caribbean travelers

    CARICOM: The Antigua and Barbuda government says it has established a “travel bubble” that will allow citizens from several identified states within the Caribbean Community (CARICOM) to travel to the island without the necessity to have coronavirus ( COVID-19) tests and certificates to be presented upon entry. Read more

    Protocols For Air Travel To Barbados Effective July 12

    Barbados GIS: Visitors to Barbados, once commercial flights resume on July 12, are being strongly advised to undergo a COVID-19 PCR test at an accredited or certified facility, or laboratory before travelling. Read more

    CARICOM Chairman: Several airlines ready to step in for LIAT

    Loop Jamaica: Six airlines have expressed interest to serve the gap that could be left in the wake of LIAT’s current challenges. They include SVG Air, One Caribbean, Caribbean Airlines (CAL), interCaribbean airlines, Silver Airways and Air Antilles. Read more

    Region celebrates first virtual CARICOM Day

    Barbados Today: CARICOM Day, July 4, achieved another first, as the Caribbean Community’s Heads of Mission in the United Kingdom came together to celebrate the achievements of the region with a number of messages, in a special virtual session under the theme “We are CARICOM, Resilient and Diverse”. Read more

    CARICOM granted access to Africa Medical Supplies Platform

    Searchlight: Member States of the Caribbean Community (CARICOM) have been given access to the Africa Medical Supplies Platform (AMSP), a procurement system for supplies and equipment in the fight against COVID-19. Read more

    Caribbean Rum to benefit from maintained Brexit Tariffs

    Searchlight: Despite changes coming as a result of Brexit, Caribbean Rum will continue to be protected from unfair competition from subsidised cheap rum entering the UK market from other countries. Read more

    INTERNATIONAL NEWS

    U.S., Kenya formally launch trade deal talks

    Reuters: Kenya and the United States formally launched negotiations on Wednesday for a bilateral trade pact that the two economies hope could serve as a model for additional agreements across the African continent. Read more

    Trump administration sends letter withdrawing U.S. from World Health Organization over coronavirus response

    Washington Post: The Trump administration has begun the process of withdrawing the United States from the World Health Organization, a move that could hurt the U.N. agency’s response to the coronavirus pandemic and reshape public health diplomacy. Read more

    U.S. slaps French goods with 25% duties in digital tax row, but delays effective date

    Reuters: The Trump administration on Friday announced additional duties of 25% on French cosmetics, handbags and other imports valued at $1.3 billion in response to France’s digital services tax, but would hold off on implementing the move for up to 180 days. Read more

    EU urges U.S. to return to negotiations at OECD on digital taxes

    Reuters: The European Union on Friday urged the United States to return to negotiations about digital taxation at the Organization for Economic Cooperation and Development, but said it stood ready to make a new proposal at the EU level if those talks failed. Read more

    What do you need to know: What comes next in the WTO director-general race

    Borderlex: Dmitry Grozoubinksi on what comes next in the nomination process for the World Trade Organization’s top job. We are now off to the races, but the finishing line is still far away. Read more

    Brexit: UK nominates Liam Fox to lead World Trade Organization

    BBC: The UK government has nominated former cabinet minister Liam Fox as its candidate to lead the World Trade Organization. The body is searching for a new director-general to replace Brazilian Roberto Azevedo at the end of August. Read more

    Free trade ‘will not go away’ – leaders and experts weigh in on trade in a post-COVID world

    World Economic Forum: Free trade is important and it will not go away – it’s for us just to make sure we are on top of it.”Those were the words of Mattias Hedwall, Global Head of International Commerce & Trade at Baker & McKenzie International, at the start of the first public session of the Forum’s Trade Multistakeholder Conversation on 8 July. Read more

    Trade multilateralism need to be sustained in post Covid world: Think-tank

    Economic Times: Trade multilateralism need to be sustained in post Covid world: Think-tank
    Drawing from the historical role that multilateralism has played in fostering global peace and stability, Rohinton Medhora, President of Canada-based Centre for International Governance Innovation, said that “Not just the decline in the volume of trade, we need to understand how that undermined the values of the multilateral trading system”. Read more

    Turkey, UK ‘very close’ to free trade deal

    Anadolu Agency: Turkish Foreign Minister Mevlut Cavusoglu says 2 countries are close to finalizing talks, according to Financial Times report. Read more

    Taiwan Preps for Possible End to Landmark Trade Deal with China

    VoA: China now has the chance to reconsider its 10-year-old Economic Cooperation Framework Agreement with Taiwan, the biggest-ever trade pact between the two rivals, and a Chinese media outlet hints at the agreement’s demise. Read more

    Pandemic highlights importance of AfCFTA

    African Business Magazine: A delay to implementation of the AfCFTA should provide the opportunity for a much-needed rethink of Africa’s development trajectory, says Dianna Games. Read more

    Trudeau ‘concerned’ by U.S. threat of tariffs on Canadian aluminum and steel

    CBC Canada: Prime Minister Justin Trudeau said today he is concerned by reports suggesting Washington is considering reimposing tariffs on Canadian metals just as Canada, the United States and Mexico are celebrating the launch of a new free trade deal. Read more

    Liz Truss: US trade deal ‘won’t mean lower food standards

    BBC: International Trade Secretary Liz Truss has denied the UK is preparing to water down its food safety standards in order to reach a trade deal with the US. Read more

    STRAIGHT FROM THE WTO

    NEW ON THE CTLD BLOG

    This week I participated as a panelist in a UWI Open Campus/Global Executive Trade Webinar on ‘Global Trade & Supply Chains: Tips for your Business to Succeed”.

    I was also presenter at a CAC-ECSEA Webinar on ‘Welcoming the New Normal’ where I discussed the impact of COVID-19 on the Caribbean, the need for a relook of our trade and investment agreements if we are to navigate this ‘new normal’.

    Here is the latest content on the CTLD Blog:

    BONUS

    Watch this great interview by Prof. Gilbert Morris discussing the impact of COVID-19 on the Caribbean and some economic solutions for recovery.

    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:

  • CAC-ECSEA Webinar – Welcoming the New Normal

    CAC-ECSEA Webinar – Welcoming the New Normal

    On Friday, July 10, I am pleased to be a presenter in the CAC-ECSEA Webinar ‘Welcoming the New Normal’ hosted by the Caribbean-ASEAN Council. Please see flyer for details!

  • COVID-19: Why Caribbean Countries should re-examine their investment treaties

    COVID-19: Why Caribbean Countries should re-examine their investment treaties

    Alicia Nicholls

    All Caribbean countries have signed at least one treaty containing provisions meant to reciprocally protect, promote and liberalise the flow of investments between themselves and their treaty partner(s). Unfortunately, the vast majority of our countries’ international investment agreements (IIAs) are older generation bilateral investment treaties (BITs) which lack many of the development-friendly language and best practices of newer vintage IIAs. The end result is that Caribbean countries could potentially face significant legal exposure to claims brought by investors under these treaties.

    Although most Caribbean countries’ experience thus far with investor claims have been contract-based and not treaty-based, the threat for treaty-based claims looms larger now in the midst of the novel coronavirus (COVID-19) pandemic. This is because Caribbean governments, like those governments around the world, have had to take measures to contain and mitigate the spread of the virus, and may face claims from foreign investors who feel aggrieved by these measures and seek legal protection under these BITs.  

    This article argues that the time is long overdue for Caribbean countries to re-evaluate whether their BITs remain ‘fit for purpose’ and to take proactive steps to mitigate the risk for investor disputes post COVID-19.

    CARICOM Investment treaty landscape

    CARICOM countries are party to a spaghetti bowl of IIAs. Some are investment chapters in free trade agreements, such as the CARIFORUM-EU Economic Partnership Agreement. However, the majority are the 83 BITs signed by individual Caribbean governments with external treaty partners, many dating back to the 1980-1990s. Of these BITS, 56 are currently in force according to data from UNCTAD’s IIA Navigator.

    Although the effectiveness of IIAs at attracting foreign direct investment (FDI) inflows remains debated in the academic literature, countries sign these agreements in order to increase their attractiveness to foreign investors. Signing IIAs shows their commitment to guaranteeing investors and their investments certain minimum standards of treatment, as well as protection from heavy-handed State action, such as, for example, direct or indirect expropriation of investors’ investment(s) without compensation.

    Another feature of IIAs is the inclusion of Investor-State Dispute Settlement (ISDS), allowing investors to by-pass domestic courts and bring a claim against a host State before a neutral and independent arbitration tribunal, either ad hoc or established under the rules of an established arbitration centre, such as the International Centre for Settlement of Investment Disputes (ICSID).

    Though popular back in the 1980s-90s, in recent years, however, the legitimacy of ISDS internationally has been increasingly questioned for many reasons. Firstly, arbitral tribunals have been criticized for their generous interpretation of vaguely drafted provisions, such as the Fair and Equitable Treatment (FET) standard, in favour of investors. Secondly, in many cases, tribunals have arrived at different decisions on the same facts. Thirdly, there is concern about the lack of geographic and other diversity of persons who serve as arbitrators on these panels. Fourth, there is the potential of using Most Favoured Nation (MFN) clauses for treaty shopping.

    A study I conducted a few years shows that there is no consistency in Caribbean countries’ BIT practice, which is reflective of our unequal bargaining power as rule-takers. Moreover, because of their vintage, our older BITs lack the best practices in development, such as more express provisions for the State’s right to regulate in the public’s interest, development exceptions and provisions on investor obligations.

    There are, of course, defences that States can make to investor claims, but many of these older BITs have very broadly drafted protections and lack the exceptions or defences newer BITs have included permitting the State to take action in the interest of public health. Failing this, States would have to rely on other defences under international law, such as necessity.

    ISDS and Caribbean countries

    Caribbean countries have had some experience with claims brought by foreign investors. Although the majority of these claims have been contract-based, one of the most well-known examples of a Caribbean country which was on the losing end of an investor dispute under a treaty-based claim was that of the Dunkeld International Investment Ltd. V Government of Belize. Following Belize’s compulsory acquisition of certain shares in Belize Telemedia Company, in which Dunkeld held an interest, Dunkeld brought a claim against the Government of Belize under the Belize-UK BIT. Belize was ordered by the arbitral tribunal to pay millions of dollars in compensation.

    In an excellent article from April 2020, the International Institute for Sustainable Development (IISD) raised the alarm about a possible deluge in investor claims post-COVID-19 and called for a ‘global, coordinated response’ to this risk. This fear and call to action are not unfounded as in the aftermath of the Global Financial Crisis, Argentina faced a litany of investor claims. The stakes are even higher for small States like ours. Defending investor claims is costly and the award amounts, if on the losing end, can be in the millions or billions of dollars, a cost which cash-strapped Caribbean governments, whose economies have been severely impacted by months of shutdowns and border closures, can ill-afford to pay.  There is also the potential for reputational damage for those countries involved in investor disputes, which could affect their investment attractiveness.  

    How can we get around this?

    Even prior to the COVID-19 pandemic, a growing number of countries around the world have already either suspended or completely overhauled their BITs to limit their legal exposure to investor claims under these treaties. For example, a couple years ago India unilaterally terminated its BITs with over 50 treaty partners, including Trinidad & Tobago, and South Africa terminated BITs with several EU countries.  More recently, in May 2020, 23 EU countries signed an agreement to terminate all intra-EU BITs.

    The CARICOM Secretariat has for many years been working on a Draft CARICOM Investment Code, as well as a template Member States could use for investment agreements with third country partners, incorporating many of the most recent investment treaty best practices. However, to my knowledge, there has not been a systematic review by individual CARICOM countries of their BITs and whether they are indeed ‘fit for purpose’, that is, drafted in a way that promotes investment for sustainable development. Moreover, current economic exigencies may make such a comprehensive evaluation of our BITs low down on the policy totem pole for Caribbean countries.

    Despite this, Caribbean governments should support calls for a multilateral solution to prevent what many anticipate could be a slew of investor claims arising from governments’ COVID-19 measures. However, there are interim mitigating measures they can take, such as deciding with their treaty partners to issue interpretive notes for some of the most used (and abused) provisions by investors or carving out COVID-19 related measures from the application of ISDS.

    On a final note, Caribbean governments need to be more actively involved in efforts to ensure investment rule-making actually creates an environment conducive to attracting investment for sustainable and inclusive development. We must move from simply being ‘rule-takers’ to part of the ‘rule-makers’. As such, our governments should, for example, consider taking an active part in the UNCITRAL Working Group III on ISDS reform.

    Alicia Nicholls, B.Sc., M.Sc., LL.B is an international trade and development specialist. Read more of her commentaries here or follow her on Twitter @licylaw. All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may from time to time be affiliated.

  • Caribbean Trade and Development News Digest – June 28-July 4, 2020

    Caribbean Trade and Development News Digest – June 28-July 4, 2020

    Welcome to the Caribbean Trade & Development News Digest for the week of June 28- July 4, 2020! 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 UNCTAD-OECD-WTO Report on G20 Trade and Investment Measures released June 29, 2020 found that during the review period, G20 economies implemented 154 new trade and trade-related measures, 95 of them trade-facilitating and 59 trade-restrictive. It further found that “of these measures, 93 – or about 60% – were linked to the COVID-19 pandemic”. Read the full report here.

    The USMCA, the replacement for NAFTA, has taken effect but there is no end to the trade tensions among the three parties.

    This week the Hague-based International Court of Justice (ICJ) held its first virtual hearing on whether it has jurisdiction in the territorial dispute between Guyana and Venezuela to find that the 1899 arbitral award is binding. Read here

    The big news this week in the Caribbean has been the decision by leaders of the Caribbean Community (CARICOM) to dissolve regional air carrier LIAT. However, not all leaders are in favour. Antigua & Barbuda Prime Minister Gaston Browne has indicated his disagreement with giving up on the regional airline.

    CARICOM leaders met virtually on Friday, July 3. Barbados Prime Minister, Mia Amor Mottley, who held the six month rotating chairmanship of the regional bloc since January 2020, officially handed over to incoming chairman St Vincent & the Grenadines Prime Minister, Ralph Gonsalves. Watch a video from the Hand Over here.

    REGIONAL NEWS

    Guyana short-lists 19 companies to market its oil

    Reuters: A group of 19 companies including oil majors, trading houses and state-run firms were approved by Guyana’s government for the next phase of a competitive process aimed at selecting an agent for marketing its share of crude produced in the country. Read more

    Guyana Wants World Court To Confirm Border With Venezuela

    News Americas Now: Guyana may be embroiled in its own election fiasco, but it took time out Tuesday to urge the world court, the International Court of Justice (ICJ), to confirm the border between Venezuela and the then-colony of British Guiana once and for all. Read more

    Tourism bodies get funding to help in fight against illegal trade in wildlife

    Stabroek: The Tourism and Hospitality Association of Guyana (THAG) and the Guyana Tourism Authority (GTA) have received funding from the Latin American Trade Association (LATA) Foundation to create a Counter Wildlife Trafficking Communications Toolkit. Read more

    MSME Sector hard hit by COVID-19

    Barbados Advocate: The micro, small and medium enterprise (MSME) sector has been hard hit by the COVID-19 pandemic, as businesses have reported a fall-off in revenue due to measures taken to curb the spread of the virus and employers opted to go the route of layoffs rather than implementing pay cuts for their employees, during the lockdown period. Read more

    Government initiatives to help struggling small businesses coming soon

    LoopBarbados: Government will be rolling out a variety of programmes and initiatives to help Micro, Small, and Medium-Sized Enterprises (MSMEs) over the next few months. Read more

    PM Minnis: No Free Trade Zone for Andros

    EyeWitness News: Prime Minister Dr Hubert Minnis yesterday assured that the government will not approve a free trade zone in Andros and insisted his administration will not sell vast tracks of Bahamian land. Read more

    Saint Lucia launches ‘I AM CARICOM’ campaign

    St Lucia News Online: The Regional Integration Unit in the Office of the Prime Minister, in collaboration with the Caribbean Community (CARICOM) Secretariat, announces the launch of the ‘I AM CARICOM’ Communications Campaign in Saint Lucia. Read more

    Challenges of 2020 Amplify Importance of Regional Cooperation – CARICOM Outgoing Chair

    CARICOM: Outgoing Chair of the Caribbean Community (CARICOM), Prime Minister Mia Mottley of Barbados, has expressed profound gratitude to the organisation and institutions that have steered the Community through the unprecedented challenges posed so far by the year 2020. Read more

    PM Gonsalves Praises CARICOM Achievements, says Challenges Must Strengthen Movement

    CARICOM: The challenges of nature and the global political economy must serve as driving forces to build a stronger, better Caribbean Community (CARICOM), said Dr. the Hon. Ralph Gonsalves, Prime Minister of St. Vincent and the Grenadines. Read more

    CARICOM to conduct survey on impact of COVID-19 on food security

    NYCaribNews: The Guyana-based Caribbean Community (CARICOM) Secretariat Monday announced the launch of the second round of the Caribbean coronavirus (COVID-19) Food Security and Livelihoods Survey. Read more

    New models needed to encourage FDI in agriculture

    Barbados Today: The agriculture sector, which makes a significant contribution to the Gross Domestic Product (GDP) in many Caribbean economies, must look at new financing models to encourage foreign direct investment (FDI), as it seeks to rebuild from the fallout of the COVID-19 pandemic. Read more

    Imports down 39.7% in May, says SIB

    Amandala: The Statistical Institute of Belize (SIB) reported that Belize’s imports for May 2020 saw a dramatic decrease of $67.3 million, down 39.7% from the $169.4 million worth of goods we imported in May 2019. The SIB attributes most of this decrease to the COVID-19 pandemic, which resulted in an economic slowdown. Read more

    Jampro Pitching Seven Limestone Packages To Big Investors

    Jamaica Gleaner: Jampro on Wednesday pitched seven limestone packages to local and investors geared at exploiting around 50 billion tonnes of reserves laying idle across Jamaica. Read more

    We Gatherin’ could restart

    Barbados Today: Government has not closed the door on the possible restart of its Vision 2020 We Gatherin’ campaign that would see Barbadians from the diaspora returning to connect with their heritage, according to Project Coordinator for the campaign Selma Green. Read more

    Caricom SG says last four months exceptional for region

    NYCaribNews: Caribbean Community (Caricom) Secretary-General Irwin LaRocque said yesterday that the past four months have proven to be the “most exceptional periods” for the 15-member regional integration movement. Read more

    INTERNATIONAL NEWS

    The WTO needs a shake up before it’s too late

    Telegraph: Our global trading system is in trouble, and it’s only going to be made worse by the coronavirus pandemic. Read the full op-ed by Liam Fox here.

    EU trade chief Hogan says he will not seek to head WTO

    Euractiv: European Trade Commissioner Phil Hogan said on Monday (29 June) he would not seek to become the next director-general of the World Trade Organisation, despite having previously stated he was looking into the possibility. Read more

    Who Will Lead the WTO and Help It Avoid Collapse?

    Washington Post: The campaign to lead the World Trade Organization during the most turbulent period of its 25-year existence has officially begun. Playing out against the backdrop of a pandemic, a worldwide recession, the U.S.-China battle for trade supremacy and the American presidential election, there couldn’t be more at stake. Read more

    WTO needs urgent reform, says Saudi trade group

    Arab News: The World Trade Organization (WTO) requires urgent reform in the wake of the COVID-19 pandemic, according to the Think20 (T20) engagement group. Read more

    As New NAFTA Takes Effect, Much Remains Undone

    New York Times: The beginning of a new trade deal does not signal an end to trade disputes between United States, Canada and Mexico. Read more

    Justin Trudeau might skip US-Canada-Mexico summit due to tariff and coronavirus

    New York Post: Canadian Prime Minister Justin Trudeau might be skipping the United States–Mexico–Canada Agreement (USMCA) summit in Washington DC next week. Read more

    Brexit: Serious differences over trade deal, say UK and EU

    BBC: The UK and EU have said serious differences remain over a post-Brexit trade deal, following the latest negotiations in Brussels. EU negotiator Michel Barnier said the bloc’s position needed to be “better understood and respected” by the UK if an agreement is to be found. Read more

    U.K., Kenya to Negotiate Post-Brexit Trade Deal

    Bloomberg: British Prime Minister Boris Johnson and Kenya’s President Uhuru Kenyatta agreed to start negotiations for a post-Brexit trade agreement between the two nations. Read more

    UK sets September deadline for EU trade deal

    Euractiv: The UK has earmarked September as its deadline for agreeing on a new trade deal with the EU after negotiators held their first face-to-face meetings since the start of the coronavirus pandemic. Read more

    A ‘new Cold War’?: How the US-China trade dispute is deepening

    Al Jazeera: More industries are being penalised as bipartisan anti-China sentiment rises before the November polls in the US. Read more

    Niue ratifies regional PACER Plus trade agreement

    Radio New Zealand: Niue has ratified the regional trade agreement PACER Plus, pushing it closer to implementation. Read more

    China and India are sparring but neither can afford a full-on trade war

    CNN: Last month’s deadly border battle between India and China has already begun to affect business and technology. But the world’s two most populous countries have a lot to lose should the dispute escalate into a full-on trade war. Read more

    Why Accelerating Implementation of AfCFTA Must Remain a Top Priority

    Inter-press Service: 1 July 2020 was supposed to be the official date to start trading under the African Continental Free Trade Area (AfCFTA). It was a much-anticipated follow up to the 2019 African Union Summit, that launched the operational phase of the AfCFTA in a colorful ceremony in Niamey – Niger. Read more

    India may invoke GATS security exception at WTO to justify ban on Chinese apps

    Hindu Business Line: India may use its right to invoke security exceptions under the General Agreement on Trade in Services (GATS) at the World Trade Organization (WTO), if required, to justify the ban on 59 Chinese mobile apps, including the popular TikTok app, imposed by the Centre earlier this week, a government official has said. Read more

    UK statement to the WTO Committee on Trade and the Environment

    Gov.uk: The UK’s Ambassador to the WTO and UN in Geneva, Julian Braithwaite, delivered this statement at a meeting of the WTO Committee on Trade and the Environment on 3 July 2020. 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: