Caribbean Trade Law and Development

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  • COVID-19’s Impact on Micro, Small and Medium-Sized Enterprises (MSMEs)

    COVID-19’s Impact on Micro, Small and Medium-Sized Enterprises (MSMEs)

    Deah James, B.Sc., M.Sc.

    Deah James, Guest Contributor

    The World Health Organization (WHO) classified the COVID-19 outbreak as a global pandemic in March 2020. To date, there have been over 8 million persons infected and over 400, 000 deaths worldwide as a result of the virus. Despite it being a health crisis, COVID-19 has not only taken a toll on the persons it has infected but on businesses and economies on a whole.

    In St. Vincent and the Grenadines, the effects of the virus have been no different. Most of our businesses can be categorized as micro, small and medium enterprises. And it is these businesses that are said to have been hit the hardest by the fallout from the pandemic.

    Even though they can be agile in response to the changing world, MSMEs are also susceptible to shocks such as COVID-19. This is because these businesses are vulnerable by nature. Access to finance is a primary obstacle.   

    According to the World Trade Organization (WTO), many of these enterprises depend on international trade. This is because they either export their products through direct or indirect channels or because they import the inputs needed to manufacturer their products to sell on the local markets.

    These types of businesses also account for a large portion of the employment in a country and are a major employer of women and youth.

    With the disruptions in the supply chain caused by unprecedented lockdown measures enacted to contain the spread of COVID-19, MSMEs are finding it increasingly difficult to find new suppliers, deal with price increases that have occurred and also the massive drop in demand for products in most sectors.

    To help business owners, governments have created stimulus packages with the focus on assisting with the effects of COVID 19. One such initiative by the Government of St. Vincent and the Grenadines is the expansion of the existing Promoting Youth Micro-enterprises (PRYME) programme. In addition support for business include loan forbearance, utility bill moratorium, VAT and Tax waivers and extension on filing income tax returns and for payment of motor vehicle licenses and liquor licenses.

    To show the value placed on Micro, Small and Medium Enterprises, the United Nations in April of 2017 adopted resolution 71/279 which designated June 27 as Micro, Small and Medium- sized Enterprises Day. This was done to raise public awareness of their contribution to sustainable development and global economy.

    For this year’s celebrations, the International Trade Centre (ITC) will host a WebTV programme on Wednesday June 24th entitled COVID-19: The great lockdown and its impact on Small business.

    Deah James, B.Sc., M.Sc., is an international trade and development professional with keen interest and experience in the areas of trade facilitation, sustainable development, regional integration, aid for trade and financing for development.    

    Photo credit: Pixabay

  • Webinar: Recovering and Transforming our Economies – New Legal, Regulatory and Trading Imperatives

    Webinar: Recovering and Transforming our Economies – New Legal, Regulatory and Trading Imperatives

    Today I am pleased to be moderating Webinar III in the G.O. Lynch Consultancy Inc and Associates series entitled “Post-COVID 19 Recovery & Rebuilding in the Face of Natural and Manmade Disasters“.

    Join me and the all-star panel today, June 17th at 11:00 am (EST) for our panel entitled “Recovering and Transforming our Economies – New Legal, Regulatory and Trading Imperatives” where we explore the legal, regulatory and trading imperatives as we seek to rebuild Caribbean and other small island economies post-COVID and in the face of natural and manmade disasters.

    Registration

    Register at the link here:

  • Caribbean Trade and Development News Digest – June 7-13, 2020

    Caribbean Trade and Development News Digest – June 7-13, 2020

    Welcome to the Caribbean Trade & Development News Digest for the week of June 7-13, 2020! And a Happy Father’s Day to all readers who are fathers, fathers-to-be or father figures! 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 World Trade Organization’s beleaguered Appellate Body (AB) delivered its final reports in the cases brought by Honduras and the Dominican Republic in “Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging” (DS435 and DS441). Read the AB summary and report here.

    In the meantime, the race for the next WTO Director General is heating up as at least three WTO Members (Mexico, Egypt, Nigeria) have already nominated candidates to be a successor of incumbent Mr. Roberto Acevedo who announced last month that he would step down a year before his term expires.

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

    This week’s article by guest contributor Sandiford Edwards looks at building climate resilience in the Caribbean agricultural sector. Have a read here.

    On a final editorial note, this publication announces its solidarity with the movements currently taking place across the US and the world for racial equality and justice #blacklivesmatter.

    REGIONAL NEWS

    CCJ Upholds COTED Decision on Cement Tariff Increase

    CCJ: In a judgment released Wednesday, the Caribbean Court of Justice (CCJ) upheld the decision of the Council for Trade and Economic Development (COTED) to raise the tariff on “other hydraulic cement” imported into Barbados. Read more

    Belize signs revised Georgetown agreement for Organization of African, Caribbean and Pacific States

    Breaking Belize News: Belize officially signed the revised Georgetown Agreement today June 9, 2020 in Brussels, Belgium. Read more

    “Major decline in imports, slight decline in exports,” says Statistical Institute of Belize

    Breaking Belize News: Веlіzе’ѕ ехреndіturе оn іmроrtѕ drорреd bу оvеr 30 реrсеnt whіlе rеvеnuеѕ frоm ехроrtѕ wеrе dоwn bу 2.7 реrсеnt fоr thе mоnth оf Арrіl, ассоrdіng tо thе Ѕtаtіѕtісаl Іnѕtіtutе оf Веlіzе (ЅІВ). Read more

    No hindrance to commercial exports — CLA

    Jamaica Observer: The Cannabis Licensing Authority (CLA) says licence holders are not hindered in their ability to export products from Jamaica due to the non-passage of import/export legislation. Read more

    MICAF Celebrates Increase in Exports

    JIS: A number of Jamaican companies are experiencing a rise in the exportation of their products amidst the COVID-19 pandemic. The Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF) congratulates manufacturers and exporters who have seized the opportunities that have arisen. Read more

    We are ready for regional exports — JMEA president

    Jamaica Observer: The Jamaica Manufacturers and Exporters Association (JMEA) says based on the growing need for more exports across the Caribbean, the productive sector stands ready to supply outside markets and replace imports where necessary. Read more

    UK aid to boost Caribbean trade

    Jamaica Observer: A plan of action to support trade in several Caribbean states was launched last week. Read more

    Economic Diplomacy Programme launched

    Jamaica Observer: JAMAICA Promotions Corporation (Jampro) and the Ministry of Foreign Affairs and Foreign Trade (MFAFT) have officially launched a new Economic Diplomacy Programme (EDP) aimed at aggressively promoting Jamaica as the ideal country for investment and trade opportunities. Read more

    INTERNATIONAL NEWS

    NZ signs first digital trade agreement

    Stuff.co.nz: New Zealand has signed the first trade agreement to focus on issues solely relating to the digital economy. The Digital Economy Partnership Agreement (DEPA) with Chile and Singapore facilitates trade by encouraging paperless trading, e-invoicing and payments, and streamlined customs procedures for parcels. Read more

    Singapore, Chile, NZ ink deal to boost digital economy cooperation

    The Straits Times: Singapore, Chile and New Zealand have signed an agreement that will bolster cooperation on issues in the digital economy. Read more

    Trade Minister ‘very disappointed’ with EU’s first offer on free trade deal

    Radio New Zealand: The first formal offer on the table from the European Union on a free trade agreement is a far cry from what New Zealand wants, but talks will continue with both parties appearing willing to strike a deal. Read more

    China Trade Surplus Surges to Record as Medical Exports Jump

    Bloomberg: China’s trade surplus surged to a record in May as exports fell less than expected, helped by an increase in medical-related sales, and imports slumped along with commodity prices. Read more

    China exports protective materials to 200 countries, regions: white paper

    XinhuaNet: China exported protective materials to 200 countries and regions from March 1 to May 31 to help them fight against COVID-19, said a white paper released Sunday by China’s State Council Information Office. Read more

    UK says intensified timetable for free trade talks agreed with EU

    Reuters: Britain said it had agreed an intensified timetable for free trade negotiations with the European Union in July as both sides try to strike an agreement by the end of the year. Read more

    UK Statement to the WTO Council for Trade in Goods – Item 9

    Gov.uk: The UK’s Ambassador to the WTO and UN in Geneva, Julian Braithwaite, delivered this statement at a meeting of the WTO’s Council for Trade in Goods on 10 June 2020. Read more

    Factbox: Who’s bidding to be next World Trade Organization chief?

    Reuters: The World Trade Organization (WTO) began the process on Monday of selecting a new director-general to replace Brazil’s Roberto Azevedo, who is stepping down a year early at the end of August. Read more

    WTO accepts nomination of Okonjo-Iweala as DG despite opposition from Egypt

    Nairametrics: WTO has acknowledged the nomination of Ngozi Okonjo Iweala, as one of the candidates for the position of the DG of the organization. Read more

    Hogan’s Run: Could Ireland’s Commissioner get the top WTO job?

    RTE: If Phil Hogan does confirm his candidacy to be head of the World Trade Organisation it will have ramifications for an incoming Irish government, which will have to send a new commissioner to Brussels, and for the new European Commission, which only formally took office on 1 December. Read more

    Brexit: Checks on EU imports to be phased-in amid coronavirus crisis

    BBC: Checks on EU goods coming into the UK will be phased in next year to give firms “time to adjust”, as ministers formally ruled out extending the Brexit transition period beyond 31 December. Read more

    Majority of Britons back Brexit extension to help beat coronavirus

    Independent: A no-deal Brexit later this year during winter and amid coronavirus would be ‘a vicious, and avoidable, combination of risks’ says Health Foundation. Read more

    Wamkele Mene: Africa is fully committed to AfCFTA despite delay to start date

    African Business Magazine: The start of trading for the Africa Continental Free Trade Area (AfCFTA) originally due to commence on 1 July 2020 has been delayed due to the Covid-19 pandemic, but in this exclusive interview with Omar Ben Yedder and Stephen Williams, its newly elected secretary-general, Wamkele Mene, stresses that the continent is still fully committed to the AfCFTA, a critical component of Africa’s recovery strategy. Read more

    How will COVID-19 impact Africa’s trade and market opportunities?

    World Bank: The COVID-19 pandemic is expected to hit African economies extremely hard. According to the World Bank biannual Africa’s Pulse report, as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020, depending on the success of measures taken to mitigate the pandemic’s effects. This means that the region will experience its first recession in 25 years. Read more

    Africa free trade zone could launch on Jan 1, says official

    Reuters: The African Continental Free Trade Area (AfCFTA) could begin operating on January 1 next year, after the COVID-19 pandemic made its original launch date untenable, the official charged with overseeing the bloc’s establishment said on Thursday. Read more

    Thailand to consider membership of trans-Pacific trade partnership

    Reuters: Thailand has set up a committee to consider by mid-July whether the country should join a trans-Pacific free-trade agreement, as opposition parties and some business groups say membership could harm the farm and healthcare sectors. Read more

    India not ready to take up RCEP’s ‘flexible’ offer

    Hindu Business Line: India is not ready to respond any time soon to the offer made by the 15-member Regional Comprehensive Economic Partnership (RCEP) to rejoin the free trade negotiations on much easier terms than before, especially as its industry and farmers are struggling to cope with the Covid-19 crisis, according to officials. Read more

    UK to start post-Brexit trade talks with Japan

    BBC: The UK and Japan are set to begin talks on Tuesday aimed at reaching agreement on a post-Brexit trade deal. Read more

    UK seeks swift Japan trade deal and TPP membership

    Nikkei Asian Review: The U.K. is looking to accelerate trade deals with countries and blocs across Asia, as the country’s transition period for departure from the European Union is set to expire at the end of the year. Read more

    Vietnam ratifies free trade deal with EU

    Euractiv: Vietnam ratified a free trade agreement with the European Union on Monday (8 June) that will cut or eliminate 99% of tariffs on goods traded between the Southeast Asian country and the bloc, and provide Vietnam with a much-needed post pandemic boost. Read more

    Commonwealth leaders reject automatic second term for Baroness Scotland

    BBC: Commonwealth governments have rejected a fresh attempt to give the organisation’s secretary-general Baroness Scotland an automatic second term of office. Read more

    STRAIGHT FROM THE WTO

    NEW ON THE CTLD BLOG

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  • Building Climate Resilient Agriculture

    Building Climate Resilient Agriculture

    Sandiford Edwards, MA, MBA, ACCA

    Sandiford Edwards, MA, MBA, ACCA – Guest Contributor

    Agri-Sector Vulnerability

    There can be no denying that the coronavirus disease 2019 (COVID-19) has had a deleterious effect on livelihoods and economies around the world, with a precipitous decline in global travel, upending many traditional brick and mortar businesses and reorganising of many hospitality services. The Caribbean Region has not been exempted from the scourge of COVID-19 and the consequent economic fallout.

    Whilst international supply chains and connectivity (air and sea) remained relatively stable for agri-food products, local and regional producers were faced with the double burden of market interruptions, on the occasion of the imposition of ‘stay-at-home’ orders and excess supply for agri-food products primarily targeted for the hotel, restaurants and fast-food markets. This tested the resiliency of their enterprises and by extension the agri-food sector.  

    Overshadowed by the COVID-19 pandemic, primary agri-food producers in many parts of the Region struggled with long term drought. The 12-month review (April 2019 to March 2020) according to the Caribbean Regional Climate Centre, indicated that conditions were severely to exceptionally dry[i]. In the absence of well-developed and implemented integrated water management plans and corresponding irrigation system, primary agri-food producers many of whom are small family farmers, reliant on rain fed agriculture were front and center, experiencing the excruciating pain of limited availability of water for their crops and livestock.

    The acute water stress finds genesis in the fact that Caribbean agriculture is highly seasonal being dependent on weather. Natural climate variability but more so climate change has altered the status quo making traditional agricultural methods less efficient.

    June 1st ushered in the 6-months long annual Atlantic hurricane season which according to the National Oceanic and Atmospheric Administration – Climate Prediction Center is expected to be an extremely busy season, “forecasting a likely range of 13 to 19 named storms (winds of 39 mph or higher), of which 6 to 10 could become hurricanes (winds of 74 mph or higher), including 3 to 6 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher)”[ii].

    The unnerving prediction can potentially exacerbate the lingering effects of both the drought and the COVID-19 pandemic on the agri-food sector, exposing its fragile structure and huge vulnerability. Interestedly, the majority of the countries in the region have been ranked as medium – high on the classification of vulnerability to external shocks – inclusive of exposure to natural hazards and climate change[iii].

    Exposure to this exogenous threat is evident in the recurrent incidences of tropical cyclones of varying magnitude to befall the region over the last two decades, averaging once in less than every two years (Table 1).

    Table 1 – Weather Systems Impacting the Region from 2000 – 2019

    YearNameYear Name Year Name
    2000Keith2005Emily2015Joaquin
    2001Iris2005Wilma2016Matthew
    2002Lili2005Katrina2017Irma
    2003Isabel2007Dean2017Maria
    2004Ivan2014Gonzalo2019Dorian

    Additionally, over the last two decades, the Region has suffered approximately US $32 billion in damage and loss for which infrastructure, housing and agriculture were most pronounced[iv].

    Notably, examples of impact of tropical weather systems in the Region are: Hurricane Ivan in 2004, was estimated to have stripped over 91 percent of the forest land and watershed vegetation in Grenada and wiped out an entire years’ crop, destroying approximately 85 percent of nutmeg trees, Grenada’s main export crop[v]. In the case of Dominica, damage and loss to the agriculture was estimated at US$170 million from hurricane Maria[vi]. Thirdly, the Bahamas reportedly lost approximately 60,000 livestock with damage and loss to agriculture assessed to be upwards of us$ 80 million as a result of hurricane Dorian[vii].

    The question therefore, is whether the Region has learnt the lessons from previous catastrophic climatic events and has truthfully embarked on the journey to strengthen its agriculture resilience with a level of urgency. 

    Achieving Resilience

    Resilience personifies the concept of having an adequate policy-induced ability for an economy to withstand or recover from the effect of exogenous shocks[viii]. More broadly put, the level of resilience will be determined by how well the actions and interplay of the various systems (political, economic & societal) can safeguard the performance of the economy[ix]. Resilience is therefore, underpinned by robust institutional frameworks to dampen or render shocks negligible or the speed to which an economy can return and surpass normal productivity following shock events.

    Interestingly, vulnerability does not equate to inability to achieve resilience as seen in the “Singapore Paradox” which confirmed the paradigm that small countries with high economic vulnerability ratings can still be economically resilient and attain consistently high Gross Domestic Product (GDP) growth rates with a consummate elevated level of Gross National Income (GNI) per capita and high standard of living as measured by the Human Development Index (HDI).

    As governments seek to reopen borders aimed at boosting economic activities, they cannot afford to be blindsided by COVID-19, losing sight of the imperative of building the resilience of the agri-food sector to the potential wreckage that can arise on the occasion of climatic weather events.  

    Hope that the next few months will bring respite from any other exogenous shock might be misplaced as this year’s Atlantic hurricane season has already recorded two named storms. Evidence of COVID-19 and the impact of tropical weather systems on the region elucidates the rationale behind the need for governments to have a long term commitment to agri-food resilience building.

    Proactive steps are therefore needed to confront this looming challenge of the predictive above-average Atlantic hurricane season.

    Recommendations

    Having regard to the foregoing, the prevailing conditions around regional food and nutrition security and cognisant of the inexhaustible compendium of policy recommendations already available and intensely debated, I wish to highlight a few areas of consideration that I consider germane and an absolute imperative for building resilient agriculture.

    1. Hurricane Resistant Agriculture Technology – it will be foolhardy if the region continues to promote the use of greenhouse and other protective agriculture technology (livestock, crops & aquaculture) that are not technically designed to withstand hurricanes. The urgency to sustain livelihoods or even to build back after the impact of a climatic event should not be traded for inappropriate technology ill-suited for the regions challenges. According to the United States based National Institute or Building Sciences, every $1 spent on mitigation saves at least $6[x]. Transposing this conclusion without accounting for variables would imply that investment of $175 million in disaster mitigation and appropriate climate smart technology can yield over $1 billion in savings.
    • Policymakers should institute a well-coordinated and systematic integration of climate adaptation principles into agriculture and food and nutrition security development policies, plans, programmes, projects, budgets and processes. For example, the Caribbean Climate Risk and Adaptation Tool (CCORAL) should be a standard feature in the evaluation of the agriculture projects. The use of CCORAL should also be augmented with sub-sector and geographic considerations to ensure local relevance.  
    • Updating of national integrated water resources management strategies, enhancement of agriculture catchment storage capacities and aggression transition from a predominantly rain-fed agriculture approach to irrigated agriculture. Technical skills in the region should be enhanced for drip irrigation technologies with a mass proliferation of same among farming systems.

    Farmers should receive training in water conservation measures, especially in drought -impacted areas. Additionally, where countries have not yet introduce funding mechanisms for water resources management, they should commence budgetary allocations for implementation, monitoring and enforcement (especially within the upper watershed, i.e. sustainable use of forest resources and disposal of agricultural waste).

    • Mainstreaming of climate smart and regenerative agricultural techniques – this should no longer be a buzz phrase but ought to be diligently implemented noting its potential to achieve resilient agriculture impact, especially within vulnerable communities. Simple practices such as organic mulching, agro-forestry, housing animals in raised pens or high ground to combat flooding, proper storage practices for agriculture inputs, provision of shade and ample water for livestock to safeguard animal health and protect from heat-stroke should be common practice.

    Sandiford Ruel Edwards, MA, MBA, ACCA is a Development Finance Specialist with experience in many countries in the Region.

    The views and opinions expressed herein are solely those of the guest author and are not necessarily representative of those of the Caribbean Trade Law & Development Blog.

    [i] CariSAM Bulletin Vol 3 Issue 12 May, 2020, Caribbean Regional Climate Centre

    [ii] https://www.noaa.gov/media-release/busy-atlantic-hurricane-season-predicted-for-2020

    [iii] Ram, Justin; Cotton. J, Jason; Frederick, Raquel; and Elliot, Wayne (2019) Measuring Vulnerability: A multidimensional vulnerability Index for the Caribbean, Caribbean Development Bank Working Paper No. 2019 /01 https://www.caribank.org/sites/default/files/publication-resources/Measuring%20Vulnerability-A%20Multidimensional%20Vulnerability%20Index%20for%20the%20Caribbean.pdf.

    [iv] Source Caribbean Development Bank Estimates cited in Ram, Justin (2020) Resilience Impact Securities with Equity (RISE) — How to Finance and Democratize Resilience Building during and after the POST COVID-19 Era. https://medium.com/@justinram/resilience-impact-securities-with-equity-rise-how-to-finance-and-democratize-resilience-b8bd0290557a

    [v] Grenada:  A Nation Rebuilding an assessment of reconstruction and economic recovery one year after Hurricane Ivan, (2005) The World Bank

    [vi] Antoine, Patrick (2018) Dominica, A Glo9bal Centre for Agriculture Resilience Among SIDS

    [vii] http://www.tribune242.com/news/2020/may/26/bahamas-lost-60000-livestock-to-dorian

    [viii] Lino et al, (2008). Economic Vulnerability & Resilience. United Nations University

    [ix] Brinkmann, Henrick, (2017). Economic Resilience. A new Concept for Policy Making?

    [x] https://www.pewtrusts.org/en/research-and-analysis/articles/2018/01/11/every-$1-invested-in-disaster-mitigation-saves-$6