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  • Caribbean Trade & Development Digest – March 11-17, 2018

    Caribbean Trade & Development Digest – March 11-17, 2018

    Welcome to the Caribbean Trade and Development Digest for the week of March 11-17, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

    REGIONAL

    Work to begin on new CARICOM Strategic Plan

    Barbados Advocate: By year end the CARICOM Secretariat will be hard at work getting the framework in place for the new strategic plan for the Caribbean Community. Read more

    CSME MER Framework Workshop 

    Barbados Advocate: It is imperative that systems be put in place to more effectively monitor and evaluate the CARICOM integration journey. So says Dr. Richard Brown, Director, CARICOM Single Market and Sectoral Programmes. Read more 

    CARICOM observer mission releases preliminary statement on Grenada elections

    CARICOM: At the invitation of the Government of Grenada the CARICOM Secretariat constituted an eleven-member team to observe Grenada’s Parliamentary Election held March 13, 2018.The full statement may be read here.

    Protecting consumers in the CSME

    CARICOM: It is important to consider the protection of the consumer as many persons now engage suppliers in a different jurisdiction. This was posited by a senior official from the Caribbean Community (CARICOM) Secretariat during the Barbados Fair Trading Commission’s (FTC) annual lecture series held in Barbados. Read more 

    INTERNATIONAL

    EU Lists US Exports it could hit 

    CNNMoney: The EU has published a list of hundreds of American products that it could target if President Donald Trump moves forward with new tariffs on imports of steel and aluminum. Read more 

    EP wants to include gender equality in free-trade agreements

    EURACTIV: The European Parliament has adopted a resolution to better account for gender equality in trade agreements. The commission could follow up on the resolution in its agreement with Chile, which would be the first to integrate such a chapter. Read more 

    India-EU trade: India, EU to decide fate of trade agreement next month

    Economic Times: New Delhi: India and the European Union will discuss next month resumption of the much-delayed Bilateral Trade and Investment Agreement (BTIA) that hasn’t progressed much over the past five years. Read more 

    Vietnamese farmers expect higher profits with CPTPP

    Vietnam Net: At least $40 billion worth of export turnover from farm produce in 2018 is within reach, some experts believe. Read more 

    Trade deals a priority at ASEAN-Australia summit 

    Australian Financial Review: Prime Minister Malcolm Turnbull is pushing for free trade deals with Indonesia and the wider region to be signed by the end of this year, as he insisted there were “no protectionists” around the table at the ASEAN-Australia summit in Sydney. Read more 

    Buhari cancels Rwanda trip, reconsiders signing African trade agreement

    Premium Times: President Muhammadu Buhari has cancelled his trip to Kigali, Rwanda scheduled for Monday. Mr. Buhari was expected to attend an Extraordinary Summit of the African Union (AU) on Tuesday, March 21, to sign the framework agreement for establishing the African Continental Free Trade Area. Read more 

    Top five trade deals that changed history

    World Finance: Today, the global trading network is well established, but it has taken multiple decades and various trade agreements to reach the current degree of complexity. Read more 

    Jordan suspends free trade agreement with Turkey

    Ahval: The Jordanian government suspended a free trade agreement with Turkey, citing unfair competition, the Jordan Times reported. Read more

    Winners and Losers in an EU-UK agreement

    Financial Times: Read the article here.

    Indonesian President Widodo wants a free trade agreement with Australia

    Sydney Morning Herald: Indonesian President Joko Widodo will push to sign off an Australia-Indonesia free trade agreement when he meets Prime Minister Malcolm Turnbull this weekend, declaring that only “technical” details were delaying the deal. Read more 

    Why Canada must move quickly on the new Asian trade pact

    The Globe and Mail: Now that International Trade Minister François-Philippe Champagne has put Canada’s signature on the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement, the doors to the Asia-Pacific are about to crack open for Canadian businesses. Read more 

    Severing NAFTA ties harms much more than trade

    The Hill: U.S. ties with Mexico and Canada touch the daily lives of more Americans than ties with any other two countries in the world. Trade, border connections, tourism, family ties and mutual security concerns link us closely, but we are endangering those links and our wellbeing by a contentious modernization of the North American Free Trade Agreement (NAFTA). Read more 

    What impact will trade agreements have on global food markets?

    Devex: The political uncertainty surrounding the Trans-Pacific Partnership Agreement and North American Free Trade Agreement, as well as the implications of Brexit, has left experts struggling to understand what their impacts will have on markets — particularly in developing countries. Read more 

    BONUS

    Trade War Bad for Region

    My commentary in the Business Authority of March 18 (page 15) on the possible fall-out of any trade war between the US and other major trading powers on the Caribbean.

    Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

  • Caribbean Trade & Development Digest – March 4-11, 2018

    Caribbean Trade & Development Digest – March 4-11, 2018

    Welcome to the Caribbean Trade and Development Digest for the week of March 4-11, 2018! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

    REGIONAL

    CARICOM Institutions talk CSME Free Movement of Persons

    CARICOM: The Caribbean Community (CARICOM) Secretariat this week engaged regional institutions based in Barbados on the processes for Free Movement of persons under the CARICOM Single Market and Economy (CSME). Read more 

    Trade Stakeholders from the Public and Private Sectors in St. Kitts and Nevis to Explore Importance of Trade in Services

    WINN FM: Trade stakeholders from the public and private sectors are currently participating in a three day Seminar on the General Agreement on Trade in Services (GATS) in St. Kitts and Nevis with the aim to better understand the importance of services sectors from an international trade perspective. Read more 

    CARICOM Reviews Dutch Territories’ Applications For Membership

    Curacao Chronicle: Even as the Caribbean Community (CARICOM) continues to examine the issue of an enlargement policy, heads of government have mandated the secretary-general to begin negotiations for associate membership by the Dutch territories of Curaçao and Sint Maarten. Read more 

    CARICOM seeking to step-up implementation of building codes

    St Kitts & Nevis Observer: Recognising that implementing building codes is still a significant challenge to the region’s efforts to build resilience, CARICOM heads of government have asked the Caribbean Disaster Emergency Management Agency (CDEMA) to provide recommendations to expedite implementation of the codes. Read more 

    Regional Standards to be set for quality and safety of coconut water 

    Barbados Advocate: Given concerns about food safety issues in relation to the quality of coconut water sold at retailers in Barbados and across the region, efforts are being made to establish regional coconut water quality standards and protocols, to better protect consumers. Read more 

    Chastanet supports OECS oversight of Citizenship by Investment

    St Lucia Times: Prime Minister, Allen Chastanet, has said that Saint Lucia supports the idea of the Citizenship by Investment Programme (CIP) being run out of the Organisation of Eastern Caribbean States (OECS). Read more 

    Consumer Protection in Digital Era is CARICOM goal

    St. Kitts & Nevis Observer: It is important to consider the protection of the consumer as many persons now engage suppliers in a different jurisdiction. This was posited by a senior official from the Caribbean Community (CARICOM) Secretariat during the Barbados Fair Trading Commission’s (FTC) annual lecture series held 8 March at the Accra Beach Hotel & Spa in Barbados. Read more 

    Exports down in January

    Breaking Belize News: Belize’s exports got off to a rough start in 2018, falling by more than 20 percent when compared to January 2017, according to the Statistical Institute of Belize (SIB). Read more 

    New trade dispute brewing with Jamaica 

    Trinidad Guardian: Jamaican manufacturers say they intend to approach the island’s Anti-Dumping and Subsidies Commission after accusing their T&T counterparts of dumping flour onto the local market. Read more 

    Barbados No.1 with travellers

    Nation News: Seventy thousand travellers across the world have chosen Barbados as their place to visit in the 2017 Destination Satisfaction Index (DSI). Read more

    Concern that Caribbean women are still being marginalised

    Barbados Today: The economic progress of women in Barbados and the Caribbean as a whole continues to be thwarted, despite gains made in some areas, a senior Jamaican trade official has said. Read more 

    INTERNATIONAL

    11 countries sign revamped TPP trade deal without US

    The Star (Malaysia): Eleven nations signed a slimmed-down version of the Trans-Pacific Partnership (TPP) trade agreement, moving to lower tariffs just as US President Donald Trump seeks to raise them after withdrawing from the deal. Read more 

    In full: Theresa May’s Speech on future UK-EU Relations

    BBC: Here is the full text of Theresa May’s Mansion House speech setting out her vision for the UK’s relationship with the EU after Brexit. Read more 

    Africa: Women-Friendly Trade – What Can Governments Do Better?

    AllAfrica: Informal cross-border trade is one of the oldest forms of economic survival for women. Prevalent across Southern and Eastern Africa, the plight of women traders are well-documented, but policies still tend to overlook their specific needs.  Read more

    2018 USTR Trade Agenda Highlights WTO Reform, FTA Talks

    ICTSD Bridges: US Trade Representative (USTR) Robert Lighthizer released the latest version of the annual President’s Trade Policy Agenda last week, outlining the administration’s plans for the coming year. Read more 

    Brexit: EU rejects Theresa May’s trade plan

    The Independent (UK): The EU has rejected Theresa May’s vision for a post-Brexit trade relationship, laying out its own plans and warning that her choices will have “negative economic consequences” for Britain. Read more 

    Report shows extent of endangered animal trade between Africa and Asia

    CNN: The report says that almost 1,000 at risk but legally exportable species have been transported from dozens of African nations to countries in East and Southeast Asia between 2006 to 2015. Read more 

    Theresa May’s Brexit plan to register millions of EU citizens risks descending into ‘chaos’

    Business Insider: Theresa May’s plan to register 3 million EU nationals ahead of Brexit risks failure due to under investment and government fears of a backlash by the Daily Mail, a senior former Home Office official has told Business Insider. Read more 

    Trump tariffs: China warns trade war would be ‘disaster’

    The Guardian: Any trade war with the United States will only bring disaster to the world economy, the Chinese commerce minister Zhong Shan has said, as Beijing stepped up its criticism of metals tariffs introduced by the White House. Read more 

    Canada, Mexico Stick to Nafta Plan After Trump’s Tariff Reprieve

    Bloomberg: While Donald Trump ’s tariff gambit spared his NAFTA partners for now, Canada and Mexico are pledging it won’t make them budge at the bargaining table. Read more 

    NAFTA termination could result in loss of 85k jobs in Canada: report

    Global News: The Conference Board of Canada is predicting a 0.5 per cent decline in the country’s economy resulting in the loss of about 85,000 jobs within a year if the North American Free Trade Agreement (NAFTA) is terminated. Read more 

    Donald Trump signs order for metals tariff plan, prompting fears of trade war

    The Guardian (UK): Trump pushes forward with plan for 25% tariff on imports of steel and a 10% tariff on aluminum, but says exceptions will be made. Read more 

    Trump threatens with tariffs on European cars as trade war looms

    Deutsche Welle: US President Donald Trump has once more attacked the EU over trade barriers and threatened to slap a tax on imports of European cars. His comments come amid fears of a trade war over new US steel and aluminum tariffs. Read more 

    Commission extends anti-dumping measures on Chinese steel products

    EU: The Commission today prolonged the existing anti-dumping measures on Chinese imports of seamless pipes and tubes of stainless steel for another five years. Read more

    EU halts trade barrier investigation after Turkey lifts restrictions on paper

    EU: The EU officially halted its probe into trade barriers in Turkey after the country removed measures concerning imports of a particular variety of paper. Read more 

    European Commission outlines EU plan to counter US trade restrictions on steel and aluminium

    EU: The College of Commissioners discussed today the EU’s response to the possible US import restrictions for steel and aluminium announced on 1 March. Read more 

    European Commission responds to the US restrictions on steel and aluminium affecting the EU

    EU: The European Commission takes note of the announcement by the President of the United States of the imposition of restrictions in the form of an import surcharge on EU exports to the US of steel and aluminium. Read more 

    Members adopt catalogue of instruments for managing food safety, animal, plant health issues

    WTO: WTO members successfully concluded almost four years of discussion by adopting the “Catalogue of Instruments” available to WTO members for managing sanitary and phytosanitary (SPS) issues, at an SPS Committee meeting on 2 March. Read more

    Azevêdo calls on members to avoid triggering an escalation in trade barriers

    WTO: DG Azevêdo warned of the risks posed by such measures, calling on members to reflect and avoid escalation. Read more 

    Least-developed countries urge WTO members to facilitate use of services waiver

    WTO: At a meeting of the Council for Trade in Services on 2nd of March chaired by Ambassador Julian Braithwaite (UK), least-developed Countries (LDCs) called on WTO members to undertake capacity building measures that would enable their suppliers to take advantage of preferential treatment notified under the LDC Services Waiver. Read more

    NEW ON CTLD BLOG

    ECJ rules arbitration clauses in Intra-EU BITs contrary to EU Law

    Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

  • ECJ rules arbitration clauses in Intra-EU BITs contrary to EU Law

    ECJ rules arbitration clauses in Intra-EU BITs contrary to EU Law

    Alicia Nicholls

    In a landmark and much-anticipated judgement delivered on Tuesday, March 6th, the European Court of Justice (ECJ) ruled that arbitration clauses in bilateral investment treaties (BITs) concluded between European Union Member States were incompatible with, and had ‘an adverse effect’ on EU law.

    The background to the judgement involved a claim brought against the Slovak Republic by a Dutch private sickness insurance services subsidiary, Achmea, after the former had briefly prohibited the distribution of profits generated by private sickness insurance activities. This prohibition was later ruled unconstitutional by that country’s Constitutional Court, and Achmea subsequently brought a claim for damages under the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and Czechoslovakia (Netherlands- Slovak Republic BIT), to which the Slovak Republic had succeeded upon Czechoslovakia’s dissolution.

    In 2012 an arbitral tribunal established in Frankfurt am Main, Germany, pursuant to Article 8(2) of the Netherlands-Slovak Republic BIT found in favour of Achmea and ordered the Slovak Republic to pay 22.1 million euros in damages. As German law applied (since Frankfurt am Main was the chosen place of arbitration), the Slovak Republic turned to the German courts to have the arbitral award set aside.

    The Slovak Republic argued that the arbitration clause in Article 8 of the Netherlands-Slovak Republic BIT was compatible with Articles 18, 267 and 344 of the Treaty on the Functioning of the European Union. Given the importance of this question and its implications for the many remaining intra-EU BITs in force, the German Federal Court of Justice referred this question to the ECJ

    In its judgment, the ECJ held that

    Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the BIT, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.

    The ECJ came to its decision based on the fact that arbitral tribunals established under such treaties may be called on to interpret and apply EU law, but could not be classified as a court or tribunal ‘of a Member State’ within the meaning of Article 267 of the TFEU. The tribunals had no power to refer matters to the ECJ and could stop disputes from “being resolved in a manner that ensures the full effectiveness of EU law even though they might concern the interpretation or application of that law”. The Court went further by stating that Article 8 of the BIT in question “has an adverse effect on the autonomy of EU law” and was not compatible with the principle of sincere cooperation.

    Unlike state to state dispute settlement, ISDS allows an investor of a party who believes its rights have been violated to bring a claim directly against the host State before an arbitration tribunal. The rationale was that it precluded investors from having to convince their home State to bring a claim on their behalf, and was also borne out of distrust of the courts in host States (usually mainly developing countries).

    ISDS has come under much fire, particularly due to inconsistent arbitral rulings (which are final under most BITs with these clauses), the lack of transparency in the process, and the concern about the system’s implications for States’ regulatory flexibility and authority in the public interest, particularly with regard to the protection of public health and the environment. Moreover, for small States, such as those in the Caribbean, the financial and reputational burdens of an adverse judgement are magnified.

    In the EU context, intra-EU BITs have long been a controversial issue due to treaty shopping; investors have often favoured the ISDS provisions in intra-EU BITs over EU judicial channels for the settlement of disputes. This is costly for EU Member States having to defend themselves against claims and has implications for the uniform interpretation of EU law.

    Newer investment agreements, including BITs,  have increasingly included express language regarding a party’s right to regulate in the public interest,  have considerably narrowed the scope of applicability of ISDS clauses, or have abandoned ISDS altogether. In light of the growing backlash against ISDS within the EU, the European Commission has already signalled that it is moving away from the ISDS model of dispute settlement in favour of an investment court as the Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada shows.

    Implications for Caribbean BITs with EU countries  

    The ECJ ruling is clear that the ISDS clauses in the nearly 200 BITs currently in force between EU member states inter se are incompatible with EU law. What is not so clear-cut is whether this also applies to BITs concluded between individual EU member countries and third States, such as those in the Caribbean. In such cases, the governing law in such disputes might not be EU law but the law of the third State.

    While there is little evidence that the existence of a BIT is a major factor in a European investor’s decision to invest in the Caribbean, given that the BITs existing between European and Caribbean countries are generally of an older vintage and in need of modernisation, the time is ripe to have a relook at the regime for the protection and promotion of investment between the EU and CARIFORUM countries which is currently fragmented. Such a review is provided for under Article 74 of the Agreement.

    At the time of the negotiation of the CARIFORUM-EC Economic Partnership Agreement, the European Commission only had competence to negotiate market access for investment, which explains why the investment chapter (Chapter 2: Commercial Presence) of the EPA is limited mainly to market access, national treatment, most favoured nation treatment, with some provisions on investor behaviour and a requirement that parties do not lower standards to attract FDI. More extensive investment protection provisions, such as the controversial fair and equitable treatment clauses, are covered in the BITs between individual EU and Caribbean States, many of which were signed before the EPA and also lack the more development friendly provisions of newer BITs.

    Conclusion

    The ECJ’s ruling is significant and may be considered another nail in the ISDS coffin. It is worth considering what, if any, impact this ruling may have for EU Member States’ BITs with third States, such as those in the Caribbean, and whether it is time to re-examine the regime for EU-CARIFORUM investment as provided for under Article 74 of the EPA.

    The full judgement may be viewed here.

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

  • CARICOM Heads to meet this week for 29th Intersessional HoG Meeting

    Alicia Nicholls

    Heads of Government of the Caribbean Community (CARICOM) will meet this week, February 26 & 27, 2018, in Port au Prince, Haiti for their 29th Intersessional Meeting. The meeting will be chaired by current chairman of the Conference of the Heads of Government, Haitian President, His Excellency Jovenel Moise.

    Chairmanship of the Conference of Heads of Government rotates every six months. Haiti, which became a full member of CARICOM in 2002, will hold chairmanship from January 1st to June 30th. Jamaica’s Prime Minister Andrew Holness will assume chairmanship on July 1st.

    Major agenda items for the intersessional meeting include building climate resilience, crime and violence, the impact on CARICOM Member States of blacklisting actions and de-risking actions by global banks.

    Additionally, according to the official press release, the meeting “will seek to advance plans to further strengthen key elements of the CARICOM Single Market and Economy (CSME)  including those related to travel and trade”.

    CARICOM Secretary-General Ambassador Irwin LaRocque; the immediate-past CARICOM Chairman, Prime Minister Dr. Keith Mitchell of Grenada and current Chairman, President Moise of Haiti, will make remarks at the Opening Ceremony carded for February 26 and which will be live streamed on CARICOM’s website.

    In anticipation of the meeting, Haiti’s Ministry of Trade held a Public Forum last Friday to discuss “Integration of Haiti in CARICOM: Challenges and Opportunities”.

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