Tag: Caribbean

  • Caribbean Trade & Development Digest – November 20-December 3, 2016

    Caribbean Trade & Development Digest – November 20-December 3, 2016

    Photo source: Pixabay

    Caribbean Trade Law & Development is pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World for the weeks of November 20-December 3, 2016. 

    For past issues of our weekly Caribbean Trade & Development Digest, please visit here.

    To receive these mailings directly to your inbox, please follow our blog.

    REGIONAL

    Belize Senate criticises Belize-Guyana Trade Pact

    7 News Belize: One of the motions which we didn’t get a chance to tell you about, was a resolution tabled by the Government. It authorizes the Barrow Administration to ratify a Framework agreement between the Governments of Belize and Guyana for bilateral cooperation.Read more

    IDB Loan will support economic developent and foreign trade in Guyana

    Caribbean News Now: Guyana will improve its public infrastructure and promote economic diversification and foreign trade with a US$9 million Inter-American Development Bank (IDB) loan that will help strengthen the economy and stimulate exports and investments. Read more

    Guyana seeking to register Demarara as Geographical Indication

    Stabroek: The Commercial Registry here has received applications for Demerara Sugar, Demerara Molasses and Demerara Rum. Minister of Foreign Affairs Carl Greenidge said that recapturing the name provides opportunities for producers to obtain market recognition. Read more

    ExporTT Chairman: T&T must improve trade with EU

    Trinidad Guardian: Incoming chairman of ExporTT Ashmeer Mohammed said the agency is committed to improving trade with the European Union (EU) and arresting the current decline in trade between T&T and the EU. Read more

    Region’s exports fall five percent

    Trinidad Guardian: The Economic Commission for Latin America and the Caribbean’s (Eclac) annual report Latin America and the Caribbean in the World Economy 2016 shows that the foreign trade dynamics of the region are having their worst performance in eight decades. Read more

    Illicit Cigarette Trade Booming

    LoopJamaica: The illicit cigarette trade now accounts for a fifth of the local market, according to cigarette distributor Carreras Limited. Read more

    Entities partner to grow exports

    JIS: Four private- and public-sector bodies have signed a memorandum of understanding (MOU), agreeing to work together to grow national exports to US$2.5 billion by 2020. Read more

    Belize and Jamaica squash “beef” over patties

    Breaking Belize News: On November 17, Jamaica’s Minister of Industry, Karl Samuda successfully met with Minister of Trade and Commerce, Tracey Panton, in Guyana during the 43rd meeting of CARICOM’s Council for Trade and Development. Read more

    Jamaica, EU discuss moving EPA to full implementation

    Jamaica Observer: Minister of Foreign Affairs and Foreign Trade Kamina Johnson Smith, in highlighting the concerns of the Jamaica’s private sector about the challenges faced in accessing the European Union markets, said that Jamaica’s strength and advantages in its services sectors would be greatly unlocked if there was a special visa regime between CARIFORUM and European Union (EU) countries. Read more

    Kenya: President Roots for Increased Trade between Kenya, Latin America & the Caribbean

    allAfrica: President Uhuru Kenyatta has called for increased trade between Kenya, the Latin America and Caribbean regions.Read more

    INTERNATIONAL

    Maersk Line to Acquire Hamburg Süd

    Maersk Line: Maersk Line and the Oetker Group have reached an agreement for Maersk Line to acquire Hamburg Süd, the German container shipping line. The acquisition is subject to final agreement and regulatory approvals. Read more

    OPEC Reaches Oil Output Reduction Agreement

    Global Trade Magazine: The thirteen members of the Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, reached an agreement yesterday to reduce oil output by 1.2 million barrels a day beginning next month. Read more

    China says its will promote trade deals regardless of TPP, RCEP Direction

    Reuters: China said it will actively participate in bilateral and multilateral trade deals, with the goal of deepening reform and opening up its economy, regardless of the direction the Trans Pacific Partnership (TPP) or the China-backed Regional Comprehensive Economic Partnership (RCEP) might take. Read more

    Singapore leads global trade ranking for the fifth time

    SBR:  Its domestic market is rated as world’s most open.Singapore topped the Global Enabling Trade Report 2016 once again.  Read more

    EU-Georgia Free Trade Deal Boosting Trade Flows

    Tax News: Trade flows between Georgia and the EU increased 16 percent in 2015, the first full year since the Deep and Comprehensive Free Trade Area (DCFTA) was provisionally applied.The EU-Georgia Association Agreement, which includes a DCFTA, was provisionally applied from September 2014. It fully entered into force on July 1, 2016. Read more

    Sanders to introduce US ‘Outsourcing Tax’ Legislation

    Tax News: US Senator Bernie Sanders has stated his intention to introduce legislation into Congress that would impose an “outsourcing tax” on companies moving jobs out of the United States, as well as stripping them of their US tax breaks and benefits. Read more

    China urges U.S. to abide by WTO anti-dumping agreement

    Reuters: China on Friday urged the United States to abandon a surrogate country approach it uses to calculate anti-dumping measures against Chinese exports, as a related clause in China’s World Trade Organization (WTO) deal is set to expire. Read more

    MEPs reject call for Court Review of CETA

    Tax News: The European Parliament has rejected a request by 89 Members of European Parliament to refer the EU-Canada Comprehensive Economic and Trade Agreement to the European Court of Justice for an opinion.  Read more

    China, New Zealand To Upgrade FTA

    Tax News: The launch of negotiations to upgrade the existing China-New Zealand free trade agreement (FTA) was announced on November 21, following a meeting between Chinese Commerce Minister Gao Hucheng and New Zealand’s Trade Minister Todd McClay at the Asia-Pacific Economic Cooperation Summit in Lima. Read more

    Next Round of RCEP Negotiations in Jakarta Dec 5

    Economic Times: The single-tier system of duty relaxation under the proposed mega trade deal RCEP will be the central issue to be discussed at the next round of negotiations of 16 countries, including India and China, in Jakarta from December 5. Read more

    WTO chief says no indication Trump wants to take US out of WTO

    Reuters: World Trade Organization chief Roberto Azevedo said on Thursday he had no indication that U.S. President-elect Donald Trump wanted to withdraw the United States from the global trading body. Read more

    NEW ON CARIBBEAN TRADE LAW & DEVELOPMENT

    President-elect Trump’s trade team takes shape: What implications for the Caribbean?

    Happy Independence! Tribute to Barbados at 50

    Dominica Ratifies WTO Trade Facilitation Agreement

    WTO Panel Rules Tax Incentive to Boeing a Prohibited Subsidy

    Fidel Castro; Friend to the Caribbean & Anti-Imperialist Hero

    TPP: Trump to withdraw from the Agreement on Day One

    For past issues of our Caribbean & Trade Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

     

  • World Economic Forum Releases Global Enabling Trade Index 2016; Caribbean countries continue to lag

    World Economic Forum Releases Global Enabling Trade Index 2016; Caribbean countries continue to lag

    Photo source: Pixabay

    Alicia Nicholls

    The World Economic Forum (WEF) and the Global Alliance for Trade Facilitation released the 2016 edition of the Enabling Trade Report today November 30, 2016. Singapore topped the ranking for the 5th time in a row and was in the top 3 for 5 of the 7 pillars.

    For Latin America and the Caribbean, Chile was the top economy and led in all but 2 pillars. With a rank of 21st out of 136 economies, Chile was also the highest ranked emerging economy on the index. According to the WEF, the two main findings from this edition of the index were (1) a large part of the world is still excluded from globalization, and (2) some of the world’s largest economies offer limited market access. Another major finding is that the ASEAN market has become more accessible than European Union (EU) and the United States markets.

    Caribbean countries’ performance 

    Only three Caribbean economies were included on this year’s index: Dominican Republic (78), Jamaica (89) and Trinidad & Tobago (106).

    Dominican Republic

    The Dominican Republic ranked 78 out of 136 economies in 2016, compared to 77 out of 134 in 2014 and has not as yet ratified the WTO Trade Facilitation Agreement. The Dominican Republic’s best performance was on Pillar 4: Availability and Quality of Transport Infrastructure where it ranked 54th. Its worst was on Pillar 6: Availability and Use of ICTs where it ranked 95th.

    The most problematic factors identified for importing were tariffs/non-tariff barriers, burdensome import procedures, high cost or delays caused by domestic transportation, corruption at the border and high cost or delays caused by international transportation. The most problematic factors identified for exporting were difficulties in meeting quality and quantity requirements of buyers, identifying potential markets and buyers, high cost or delays caused by domestic transport, access to trade finance and inappropriate production technology and skills.

    Jamaica

    Jamaica ranked 89 out of 136 economies in 2016, compared to 88 out of 134 economies in 2014 and has ratified the WTO Trade Facilitation Agreement. Jamaica’s best performance was on Pillar 2: Foreign Market Access where it ranked 34th. Its worst was on Pillar 5: Availability and Quality of Transport Services where it ranked 108th.

    The most problematic factors identified for importing were burdensome import procedures, tariffs/non-tariff barriers, corruption at the border, crime and theft, and domestic technical requirements and standards. The most problematic factors identified for exporting were identifying potential markets and buyers, difficulties in meeting quality and quantity requirements of buyers, access to imported inputs at competitive prices, access to trade finance and inappropriate production technology and skills.

    Trinidad & Tobago

    Trinidad & Tobago ranked 106 out of 136 in 2016, sliding from 93 out of 134 in 2014 and ratified the WTO Trade Facilitation Agreement. Trinidad & Tobago’s best performance was on Pillar 6: Availability and Use of ICTs where it ranked 57th. Its worst performance was on Pillar 7: Operating Environment where it ranked 119th.

    The most problematic factors identified for importing were: burdensome import procedures, tariffs/nontariff barriers, corruption at the border, crime and theft and high cost/delays caused by international transportation. The most problematic factors for exporting were: identifying potential markets and buyers, access to trade finance, difficulties in meeting quality and quantity requirements of buyers, access to imported inputs at competitive prices and technical requirements and standards abroad.

    About the Index

    The Enabling Trade Index ranks economies according to “their capacity to facilitate the flow of goods over borders and their destination”.The index is useful as countries seek to implement the World Trade Organisation’s Trade Facilitation Agreement concluded in 2013 at the Bali Ministerial. It helps countries to see where they are excelling and where there is a room for improvement. It is therefore disappointing that more Caribbean countries are unable to be ranked.

    On this year’s index, one hundred and thirty-six (136) economies, accounting for 98 percent of world GDP and 98.3 percent of world merchandise trade, were ranked on seven pillars: domestic market, foreign market, efficiency, transparency and border, availability and quality of transportation infrastructure, availability and quality of transport services, availability and use of ICTs and operating environment.

    The full report may be accessed here.

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

     

  • Trump Presidency: What priorities for US-Caribbean Economic Engagement?

    Trump Presidency: What priorities for US-Caribbean Economic Engagement?

    Alicia Nicholls

    The United States’ position as most Caribbean countries’ largest economic partner and an important foreign policy ally means that constructive engagement with the incoming Trump administration is not just a choice but an imperative. The Caribbean Community (CARICOM) and individual Caribbean governments have all expressed congratulatory messages, emphasizing their willingness to work with Mr. Trump and continuing the harmonious US-Caribbean relationship.

    But in contrast to the idealism attending then Senator Barack Obama’s “Yes we can” message eight years ago, a spectre of profound uncertainty shrouds the President-elect not just because of his extreme rhetoric on trade and foreign policy, undergirded by his “Make America Great Again” and “America First” refrains, but also the lack of policy specificity.

    In this article, I will outline what I believe are five key priorities which will likely frame US-Caribbean economic and foreign policy engagement for the foreseeable future:

    1. Correspondent Banking/De-Risking

    A first order of business will be continuing the conversation that CARICOM governments and stakeholders have started with US officials and regulators on the de-risking activities of US-based international banks, including the withdrawal and restriction of correspondent banking relationships. These relationships are Caribbean’ lifeline to the global financial and trading system, critical for the trade, investment and remittance flows which buoy our small open economies and sustain households.

    US foreign policy orientation towards the Caribbean has constantly recognized that an economically secure “third border” complements US’ strategic security interests. Any threat therefore to the region’s economic and financial inclusion is something which should be of mutual concern. Unfortunately, there appears to be limited progress on the correspondent banking issue.

    While de-risking is a cost-benefit decision for banks, it is also partly fuelled no doubt by ambiguous regulations and the Caribbean’s undeserved reputation in some quarters as a high risk place for doing business. To their credit, the US Treasury and Federal Banking Agencies released a Joint Factsheet on Foreign Correspondent Banking. Additionally, the US Treasury has reiterated that the de-risking issue is a “key priority”.

    However, actions by US authorities which unfairly label Caribbean countries as “tax havens” contribute to the perception that Caribbean jurisdictions and banks are higher risk. In 2015 the state legislature of Montana, and the District of Columbia, had included several Caribbean countries among their proposed lists of tax havens. This is despite Caribbean countries’ having taken steps to ensure their compliance with the Foreign Account Tax Compliance Act (FATCA) and our clean bill of health by the Organisation for Economic Cooperation and Development (OECD).Continued engagement with US states and federal authorities on this issue is a must.

    1. International Financial Services & FATCA

    Although President-elect Trump has promised to lower the US federal corporation tax rate from 35% to 15% and  provide a deemed repatriation of corporate profits held offshore at a one-time tax rate of 10%, his orientation towards international financial centres (IFCs) in general is not well-known.

    The Obama administration has not been friendly to Caribbean IFCs, and that is putting it mildly. On the other hand, Mr. Trump’s background as a businessman may make him more appreciative of the role IFCs play in making US businesses more efficient and profitable, which in turn facilitates their contribution to US economic and job growth. Moreover, conventional wisdom holds that Republican governments are usually friendlier to the Caribbean than are Democratic governments, and there is good anecdotal evidence to support this.

    Additionally, continued engagement with US authorities will be necessary to iron out any implementation and reporting issues under FATCA.

    1. Caribbean Basin Initiative & Other Market Access Issues 

    Manufacturers in most Caribbean countries enjoy non-reciprocal duty-free access to the US market for most goods under the Caribbean Basin Initiative (CBI), an initiative of the Reagan administration in the 1980s which had both economic, ideological and geopolitical imperatives. The CBI is unilateral which means that the benefits can be unilaterally revoked and the criteria for eligibility changed at any time. However, CBI is generally believed to be beneficial to US manufacturing and jobs and Caribbean has a large trade deficit with the US, which should keep CBI off the President-elect’s immediate radar.

    One sticking point in US-Caribbean trade relations is the cover over subsidies which the US Federal government pays to the US territories of Puerto Rico and the US Virgin Islands out of excise taxes it collects from imported rums, which has made Caribbean rums less competitive in the US market. Turning to merchandise trade in general, non-tariff barriers such as sanitary and phyto-sanitary and labelling requirements have also been a constraint on market access.

    Caribbean workers benefit from temporary employment under the US Farm Workers and Hospitality Workers programmes. However, outside of this, Caribbean service providers have no preferential access to the US market. The CBI does not cover services trade. Caribbean business persons seeking to supply a service in the US instead rely on non-immigrant visas. Mr. Trump has promised to tighten the US’ border and control policy. It is not certain whether this will be extended to non-immigrant visas as well.

    1. Immigration & Workers’ Programmes

    Mr. Trump made tightening immigration one of the cornerstones of his campaign platform. While his ire was directed towards Mexican and Muslim immigrants, Caribbean immigrants will be collateral damage. For instance, undocumented immigrants who had come to the US as children and had identified themselves in good faith when applying for protection under the Deferred Action for Childhood Arrivals (DACA) programme might have unwittingly made themselves prime targets for deportation if Mr. Trump goes through with his plans.

    Most Caribbean immigrants are law-abiding citizens who are making sterling contributions to the American society. However, another pertinent concern is Mr. Trump’s vow to accelerate the deportation of those immigrants convicted of crimes to their country of birth, which has been a sticking point in US-Caribbean relations for some time. Caribbean governments have criticised the deportation of persons who were born in the Caribbean but socialised in the US with only superficial Caribbean roots. They have also linked these deportations to increased violent crime in the Region.

    Mr. Trump has also spoken earlier about reforming legal immigration. This will make it difficult for Caribbean persons to emigrate legally to the US. This also has implications for remittances, a lifeline for many poorer Caribbean households.

    5. Mobilising Climate Finance

    Climate finance is needed to assist countries, particularly poorer and most vulnerable countries, in their climate change adaptation and mitigation efforts. It is something which the Small Island Developing States in particular were adamant upon during the negotiations leading up to the eventual signing of the Paris Climate Change Agreement.

    Developed countries committed themselves to mobilising 100 billion USD in climate finance from a variety of sources each year by 2020, a pledge which dates back to Copenhagen in 2009 and one which President Obama has supported. Caribbean countries have also received climate change aid under USAID programmes.

    Mr. Trump, however,  is not a believer in anthropogenic (man-made) climate change, and has vowed to “cancel the Paris Agreement”, to ramp up fossil fuel production and to defund the clean energy initiatives. Further US contribution to the Green Climate Fund, which was established to assist developing countries like those in the Caribbean, is now in question.

    Conclusion

    Mr. Trump’s election has evoked an aura of uncertainty over what will be the future paradigm of US-Caribbean relations. Although the Caribbean had not featured in the policy discussions during the campaign, Mr. Trump’s populist rhetoric illustrated a marked departure from the tenets of current US economic and foreign policy. He has, however, been light on specifics. If implemented, his proposals will be a strong departure from current US policy, particularly in the area of climate change which I addressed in a previous post.

    Nonetheless there are two sparks of hope. Firstly, President-elect Trump is a businessman at heart and should be more attuned to a ‘dollars and cents’ argument. Secondly, Mr. Trump’s malleability in regards to his positions evinces some pragmatism on his part. It is worth remembering that for much of his public life, Mr. Trump has espoused liberal views until becoming an independent and then a Republican in later years. He has also softened some of his most ardent positions during the campaign and since winning the election, and has also been rumored to be considering some of his former Republican opponents for Cabinet positions.

    These two factors suggest that there may be more scope for discussion with a Trump administration than may initially be perceived. What will the emerging Trump Doctrine mean for the Caribbean? And whether we will see a “hard” or “soft” Trump, to borrow the clever nomenclature employed by former WTO Director General, Pascal Lamy, no one knows. A clearer sense of Mr. Trump’s true policy orientation will be more discernible when more of his Cabinet picks are revealed and his proposals are elaborated upon.

    While these issues I have highlighted will not be policy priorities for the Trump Administration, they are issues of importance to Caribbean countries. As such, Caribbean governments and other stakeholders must be pro-active in their engagement with the Trump administration from day-one when he assumes office in January 2017.

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