Caribbean Trade Law and Development

Tag: Caribbean

  • Evaluating Barbados’ WEF GCI Competitiveness Scorecard: Is Top of the Regional Class Good Enough?

    Alicia Nicholls

    Barbados made its grand reappearance on the World Economic Forum (WEF) Global Competitiveness Index (GCI) 2016-2017 after data shortages precluded its 2014-2015 inclusion. According to the WEF’s scorecard, the region’s star pupil topped its Latin American and Caribbean peers in the following subjects: infrastructure, labour market efficiency and technological readiness.

    Barbados is a 166 sq  miles (431 sq km) island nation with a population of about 280,000, a GDP of US4.4 billion and a GDP per capita of US$15,773, which puts us in the high income non-OECD range according to the World Bank. On the surface Barbados’ scorecard is commendable, particularly for a small island developing state (SIDS) whose recovery from the 2008/2009 global economic and financial crisis has been slow and protracted. Personally for me as a Barbadian I am proud of the achievements my country has made since our independence from the UK just shy of 50 years ago.

    But before we uncork the champagne, several things should give us pause. First, Barbados’ current rank of 72nd out of 138 economies marks a precipitous drop from its ranking in the GCI 2012-2013 where it was ranked 44th place out of 144 economies. Second, contrast this slide with the performance of another small island developing state (SIDS), Mauritius, which was ranked 54th in GCI 2012-2013 and has risen slowly but surely up the ranks to reach 45th place out of 138 economies in GCI 2016-2017. Third, only three other Caribbean economies were included on the index this year. While Barbados and Trinidad & Tobago lost ground, the other two Caribbean economies, Jamaica and the Dominican Republic, improved their rankings. Fourth, Barbados’ performance on eleven of the twelve pillars has been on a downward slope since 2012-2013.

    The Good

    Barbados’ top scores were in higher education and training, and infrastructure, where it ranked 29th and 30th respectively. For example, it ranks 6th in fixed-telephone lines /100 population and 25th in overall quality of infrastructure.  These have for a long time been among the island’s competitive advantages despite its small size. However, while the gross tertiary education enrolment rate is 36%, this is likely to decline given the removal of tuition-free tertiary education in 2014.

    Barbados also ranks 31st in technological readiness which is the only one of the twelve pillars on which the island’s performance remains on an upward trajectory. It ranks a commendable 10th in internet bandwidth kb/s/user. Unlike the other three Caribbean economies included, corruption was not seen as a major problem in Barbados.

    The Bad

    The GCI is a useful tool for policy makers to benchmark their economy’s current against its historical performance across over 100 competitiveness indicators. Factors which, according to the WEF GCI, affect doing business in Barbados are: poor work ethic in the national labour force, inefficient government bureaucracy, tax rates, restrictive labour regulations and access to financing.

    Not surprisingly, market size and the macroeconomic environment are the island’s Achilles heel and are a drag on the island’s competitiveness. The Central Bank of Barbados reports economic growth of 1.3% for the first half of 2016 but the island’s fiscal deficit and public debt remain unsustainably high. The island’s economic fragility is reflected in the low rankings on indicators such as government budget balance as % of GDP (122nd), gross national savings (127th) and government debt (127th). The island is rated 72 out of 100 for country credit rating, reflecting the successive downgrades since 2009 and could decline as the downgrades continue. Under the market size pillar, the country ranked 135th out of 136 on GDP (PPP).

    The Way Forward

    The GCI is an important scorecard showing the areas in which an economy is doing well, and those in which remedial attention is needed. Barbados remains a preferred jurisdiction in the Caribbean for doing business and the report shows that the island has clear competitive advantages in some areas that policymakers and the private sector should continue to build on and leverage in our investment promotions.

    However, I believe that while Barbados remains top of the class in the Caribbean, the island’s continued slippage in the rankings, including in areas which are our competitive advantage, is a concern. I dare say that top of the class in this case is not good enough. Discerning investors consult several indices, including the GCI, when considering potential investment locations. Barbados’ previous A-class performance on these indices was one of its selling points and this would carry less weight if the island continues to decline in its rankings.

    A useful feature of the GCI is that it allows for benchmarking against other economies and is a good tool for identifying best practices. Singapore, a small island developing state, currently ranks second place overall on the index and there may be some areas in which Barbados can learn from the reforms they have made. Besides Singapore, we can examine another top 50-rated SIDS, Mauritius, to see what best practices we can consider. We may also be able to learn from the Dominican Republic and Jamaica which, while ranked below us, saw improvements in their rankings.We have strong rankings in our technological and infrastructure capacity. Let us build on these strengths by improving the incorporation of ICTs for improving the ease of doing business and reducing some of the inefficiencies.

    Perhaps the best utility of the GCI is that it provides empirical evidence for identifying policy priorities as countries craft and evaluate their national competitiveness policies. As any eager pupil would, Barbados should take these findings to heart. Several competitiveness reforms have been on-going aimed at tackling some of the weaknesses which the GCI 2016 has again brought to light. For example, the $50 million fund for SMEs announced in the August budget should assist SMEs’ access to finance. The island also received a loan from the Inter-American Development Bank for competitiveness improvement called the Barbados Competitiveness Programme. These are good strides. However, if Barbados wants an A-grade and to be truly at the top of the global class, the island needs to quicken and deepen the pace of its competitiveness reforms, strengthening those things it is good at, working on those which it is not, while also putting mechanisms for monitoring and evaluation of their performance.

    Nonetheless, the responsibility for ensuring long-term and sustainable competitiveness does not rest with government alone but requires strong collaboration, honest dialogue and feedback among all national stakeholders, including for instance, through the social partnership.

    Private sector involvement is key for ensuring Barbados’ obtains a score card each year. A few years ago, I was part of the survey team which administered the WEF Executive Opinion Survey in Barbados, the main instrument used for gathering the data utilised in a whole suite of WEF reports, including the Global Competitiveness Report. While in each instance our team was able to meet our quota, the biggest challenge we found was the unwillingness of some business executives either to participate in the survey, or to complete it satisfactorily and in a timely manner. If insufficient businesses complete the survey, the country will not be included in the index. To encourage greater private sector participation in the survey, I suggest there be closer collaboration between the country partner institute and the various private sector bodies in the country.

     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.

  • Pound Sterling slips to 3 year low: What implications for Caribbean Countries?

    Pound Sterling slips to 3 year low: What implications for Caribbean Countries?

    Alicia Nicholls

    Two main statements enunciated by UK policy makers in the past few days have sent Sterling plunging to a three-year low. The first was Prime Minister Theresa May’s revelation after weeks of speculation that Brexit negotiations will begin in early March 2017. The second is statements by UK Trade Secretary Liam Fox which many have interpreted to show a preference for a “hard brexit”, that is, leaving the EU single market altogether and trading with the EU under WTO  rules.

    Investors were not too happy with these developments. According to CNBC, the pound dropped to a low of 1 GBP to 1.2818 USD on Monday, almost as low as the 31-year low set in the days following the Brexit result of June 23rd. In the weeks following its Brexit low, the pound had regained some ground and appeared to stabilise somewhat around 1 GBP to 1.32 USD. The chart below from MoneyAM shows the 6-month performance of the GBP/USD.

    gbptousd
    Source: MoneyAM.com

    So what does this new slump in the pound mean for UK-Caribbean trade? The majority of Commonwealth Caribbean countries have fixed currencies which are pegged to the US dollar. The Barbados dollar, for instance, has been pegged BBD$2 to US$1 since 1975. The Eastern Caribbean dollar is pegged at 1 USD to EC $2.70. This means that any depreciation of sterling against the US dollar also strengthens US-pegged Caribbean currencies against sterling.

    The positives

    There are both positives and negatives to this development. Let us start with the positives. As I had indicated in an earlier article, this latest drop makes British goods and services cheaper  for Caribbean importers and consumers of UK products. Some of the major beneficiaries of this are students studying in the UK or doing online courses at UK educational institutions who would find their tuition is cheaper. For Caribbean persons who have been longing for that UK trip, now is the time to book your ticket!

    Another upside is that a lower pound increases the competitiveness of UK exports which, ceteris paribus, bodes well for the UK economy, and by extension, those Caribbean countries like Barbados for which the UK is the main source market for tourist arrivals and a  major source of foreign direct investment.

    The Negatives

    The severity of the impact will depend on the level of risk exposure Caribbean economies have to the UK economy and by extension to the fluctuation of sterling. There are several channels through which Caribbean countries can be affected economically.

    Caribbean merchandise and services exports will be more expensive for UK buyers and importers. Although the US and in recent years China have replaced the UK as the top trade partners for many Caribbean countries, the UK is Commonwealth Caribbean countries’ top market in Europe.  One way for Caribbean exporters to the UK to mitigate this might be to quote their UK buyers in pounds to eliminate currency risk for the buyer. The Brexit-related uncertainty could also dampen UK foreign direct investment in the region as investors adopt a “wait and see” approach.

    In Barbados, British tourists comprise nearly 40% of tourist arrivals and are a major source of visitor expenditure. As this report by Deutsche Welle suggests, it is likely that Britons may choose to spend their vacations closer to home to cut down on costs. Those who do travel to the Caribbean may cut back their length of stay and/or expenditure. Recent media reports in Barbados seem to indicate that British tourists to the island are spending less.

    Remittance data is quite limited. However, for countries like Jamaica and Barbados with sizable diasporas in the UK, it is not surprising that the UK is one of their major sources of remittances inflows. According to data published by the World Bank’s Bilateral Remittance Matrix, of the US$108 million in recorded remittances Barbados received in 2015, US$21 million (or a roughly a quarter) were from the UK, making the former Mother Country the island’s second largest source of remittances after the US. In Jamaica, which has a higher dependence on remittances than Barbados, $US 292 million out of the total of $2338 million that island received were from the UK. Unlike foreign direct investment, remittances tend to be counter-cyclical. However, it will now be more expensive for Caribbean-UK residents to repatriate remittances and the spending power of the money they send will be less.

    The bottom line

    Despite what appeared to be “buyers’ remorse” on the part of the British public in the days and weeks following the Brexit vote, Prime Minister May has indicated that “Brexit means Brexit”. Her unequivocal announcement  of a firm timeline for the UK’s Article 50 notification shows that there will be no reneging on the will of the British people who voted 52 to 48% to leave.

    Although several international agencies, including the International Monetary Fund (IMF) in its latest Economic Outlook, have downgraded their growth forecasts for the UK economy, the latest post-Brexit vote economic data released by the Office of National Statistics (ONS) has shown no major negative impact on the UK economy thus far. However, with fears of a hard Brexit spooking investors, my hunch is that we have not seen the last of sterling’s roller coaster ride which may intensify as trigger day draws near. Caribbean economies need to brace themselves for the continued volatility come what may.

     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.

     

  • Climate Change, the US Elections and Small Island Developing States’ Survival

    Climate Change, the US Elections and Small Island Developing States’ Survival

    Alicia Nicholls

    “We are the first generation to be able to end poverty, and the last generation that can take steps to avoid the worst impacts of climate change. Future generations will judge us harshly if we fail to uphold our moral and historical responsibilities.” – Ban Ki-Moon, Secretary General of the United Nations.

    In a step that was both historic and symbolic, the Presidents of the United States (US) and China last week ratified the Paris Agreement ahead of the on-going G20 summit in Hangzhou, China. This single showing of solidarity by the world’s two largest industrialised powers was welcomed news for the small island developing states (SIDS) such as those in the Caribbean, Pacific and the Africa, Indian Ocean, Mediterranean and South China Sea (AIMS) states. Through the 44-member Alliance of Small Island States (AOSIS), SIDS  pushed not only for the conclusion of the Paris Agreement but insisted on the inclusion of language in the Agreement in which parties endeavored to “pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels” (Article 2(a) of the Paris Agreement).

    SIDS are the least culpable but most physically and economically vulnerable to the adverse effects of climate change. Rising sea levels have dislocated coastal communities and threaten the territorial integrity of the Pacific states of Kiribati and the Marshall Islands. Earlier this year, Cyclone Winston caused US1.4billion in damage, with the highest economic and human toll in Fiji, while Tropical Storm Erika in 2015 cost the Caribbean state of Dominica nearly half of its GDP. However, as the story of a remote Alaskan village which has voted to relocate from their ancestral home because of sea level rise shows, climate change is not a SIDS’ problem alone. It is a cross-cutting global issue which has implications not just for the global environment but for human health, security, sustainable development and economic growth.

    So what does all of this have to do with the upcoming election for the 45th President of the US? Well, if one considers the wide disparity in climate change rhetoric and policy proposals between the two major candidates running for the Oval Office, it is pellucid that the election of either Mrs. Clinton or Mr. Trump is the difference between strong US support for reducing GHG emissions and leading the global fight against climate change on the one hand, and on the other, a reversal of the gains that have been hard fought for. In other words, the future of SIDS’ survival could depend on the outcome of the US election.

    Current US climate change policy

    Current US policy supports global climate change efforts. US President Obama’s three-pronged Climate Action Plan commits to cutting carbon pollution in America, preparing the US for the impacts of climate change, and critically for the Paris Agreement, leading international efforts to address Global Climate Change. This is a policy position which Democratic candidate, Hillary Clinton, has pledged to honour should she be elected to office by the American people this November.

    The Paris Agreement was concluded in December 2015 at the end of the United Nations Framework Convention on Climate Change (UNFCCC) Twenty-first session of the Conference of the Parties (COP21). Since the Agreement’s opening for signature in April 2016, over 180 states have signed. However, as of September 3, only 26 states so far (representing 39% of global emissions) have ratified it. The recent ratification by the US and China, which together account for about nearly 40% of GHG emissions, is a significant step towards the threshold needed for the Agreement to come into effect; ratification by at least 55 countries which contribute to 55% of global GHG emissions. According to a White House press release on the US-China Climate Change cooperation outcomes, the two countries “committed to working bilaterally and with other countries to advance the post-Paris negotiation process and to achieve successful outcomes this year in related multilateral fora”.

    Climate Change Platforms of Candidates 

    While a four-way race in theory, the candidates of the two major parties, the Democratic Party and the Republican Party, still have a large lead ahead of the two other candidates (Jill Stein of the Green Party and Gary Johnson of the Libertarian Party). Perhaps never before has there been such wide disparity in the positions of two US presidential candidates on the issue of climate change. The democratic candidate, former US Secretary of State, Hillary Clinton, has vowed to “take on the threat of climate change and make America the world’s clean energy superpower”. Some of her major policy initiatives to this end are: launching a $60 billion Clean Energy Challenge, investing in clean energy production and infrastructure, cutting methane emissions across the economy and prioritising environmental and climate justice, inter alia.

    This stands in stark contrast to the stated position of Republican candidate, billionaire real estate mogul Donald Trump, who, inter alia, tweeted in November 2012 that “the concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive”. He later said he was joking. Unfortunately, for the world, and especially for SIDS, climate change is no joking matter.

    While Trump’s skepticism on the anthropogenic nature of climate change is not dissimilar to that of most Congressional Republicans, a Sierra Club report has rightly stated that “if elected, Trump would be the only world leader to deny the science of climate change.” He has also denounced the Paris Agreement as a bad deal for America, ascertaining it “gives foreign bureaucrats control over how much energy we use right here in America”, a claim soundly and poignantly rejected by the US special envoy for climate change (2009-2016) in a Washington Post op-ed. Mr. Trump first asserted he would renegotiate the Agreement and later stated that he would ‘cancel‘ the US’ participation in it. He has railed against environmental regulations. His proposals to reverse President Obama’s climate change initiatives, abolish the US Environmental Protection Agency, save the coal industry and continue subsidies to the oil and gas industry would jeopardise the US’s current emission reduction targets.

    Implications for SIDS of US Climate Policy Change

    Should a President Trump, if elected, implement his stated policies, not only will there be a 360 degree reversal of the US’ current commitment to meeting its emission-reduction targets, but an end to US cooperation or support for the global climate change agenda. If this happens, there will be little the world could do,besides raise universal condemnation. This is because one weakness of the Paris Agreement is that there is no binding enforcement mechanism in the agreement to force compliance of countries to the emissions limits they set for themselves. Already, there is skepticism that the current “nationally determined contributions” are not ambitious enough to conform with the Agreement’s goal of “holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels” (Article 2(a) of the Paris Agreement).

    Secondly, should the US withdraw from the Agreement or renege on its commitments, some other high emitters may feel less of a moral imperative to follow through with their own commitments or may withdraw as well.

    Thirdly, climate change finance is important for SIDS’ adaptation to, and mitigation of, the effects of climate change. Under Article 9 of the Paris Agreement developed country members are obligated to provide “financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention”.

    Caribbean countries  and several other vulnerable states around the world have benefited significantly over the years from the US Department of International Aid (USAID)’s projects which aim to build countries’ resilience to climate change. Climate change was one of the Obama Administration’s priorities for DA funding with $310.3 million in funding requested for Global Climate Change in the FY2017 Budget Request. The future of USAID aid flows to developing countries for climate change adaptation is bleak if current US policy towards climate change action changes under a Trump administration.

    What then for SIDS?

    The aim of this article is NOT to be an endorsement of either of the two major candidates running for the upcoming US Presidential election, neither is it an attempt to influence the American people’s decision. The US election is a democratic choice for the American people and only they can decide which of the four candidates’ platform better serves their interests. What this article attempts to do is to discuss and show the wide policy differences which exist between the two candidates of the major parties on climate change, and argues that any negative change in current US climate change policy will have far-reaching implications for the global climate change fight.

    There are a few nuggets of hope, however.  Because of Article 28 of the Paris Agreement, a President Trump would have to wait at least three years from the date the Agreement has entered into force in the US before he could notify his intention to withdraw the US from the Agreement and it would take another year for such withdrawal to come into effect.Any US withdrawal from the Paris Agreement is unlikely to be a popular move among Americans. Recent US polling data show there is grassroots support for Climate Change. Action. This includes not just environmental lobbies but the ordinary man on the street. There would also be universal condemnation by other major countries.

    SIDS may have a few allies in the fight within the US. Outside of federal action, some states, like Oregon, have quite robust climate change initiatives. Moreover, faced with pressure from more discerning and environmentally-aware consumers, more businesses and large corporations are forced to demonstrate their use of energy-friendly processes and products.

    Despite this, however, besides lobbying and moral suasion by other countries, there is little SIDS  can realistically do to change US climate change policy should there be a reversal. The vote for US president is a decision only the US electorate can make. However, for SIDS it could be a matter of survival.

    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.

  • Can Sports help Caribbean Countries’ Export Diversification Efforts?

    Can Sports help Caribbean Countries’ Export Diversification Efforts?

    Alicia Nicholls

    The Brazil-hosted XXXI Summer Olympiad has come to an end with all of the panache one would expect from “a cidade maravilhosa” (the marvelous city) of Rio de Janeiro. I would be the first to admit that unlike most persons, I was not glued to the Games. However, seeing the success of Caribbean athletes, particularly the Jamaican team which can boast of having the fastest man and woman in the world for the third Olympiad in a row, made me ponder on the possibilities sports could have for Caribbean export diversification. Much of the discourse on sport as an export diversification strategy is often limited to sports tourism. However, I believe that the opportunities for sports trade go beyond simply sports tourism to encompass a wider array of sporting services which will be the focus of this article.

    No longer viewed as simply pastimes and sources of entertainment and recreation, the global sports industry is a lucrative and growing one.  A study by AT Kearney found that this industry is worth $480-620 billion dollars. For an appreciation of the sheer economic scale of the recently concluded Rio Olympic Games, this article by the BBC shows there were “more than 10,000 athletes, representing 207 nations, [competing] in 31 sports in Brazil.” It is therefore little surprise why an increasing number of developing countries are exploring the ways in which the commercialisation of their sporting industries can contribute to their economic diversification efforts.

    If we turn to the medal count statistics in the Rio Olympics, we see that Jamaica, a Caribbean small island developing state with a population shy of 3 million, won 11 goals (6 gold, 3 silver and 2 bronze), while Jamaican sprinting legend Usain Bolt won a historic three consecutive goals in the 100m, 200m and 4x100m relay further engraving his legacy on history’s page as the fastest man on earth. Caribbean countries’ sporting prowess is not limited to athletics. The West Indies Cricket Team dominated the cricketing world for many years. Here in Barbados we can boast of Sir Garfield Sobers who is regarded internationally as “the greatest cricketer the world has ever seen”, and of being the inventors of road tennis. The raw sporting talent is obviously there so how can we convert our sports talent into economic and export opportunities?

    Sports as Export Services

    The  commercialisation of sporting services has been internationally recognised in trade classifications. Under the World Trade Organisation (WTO) services classification, “sporting and other recreational services” is one of the sub-sectors of Recreational, Cultural and Sporting Services (other than audiovisual services). The sub-classes of sporting services are quite limited as they only capture a narrow range of the activities currently engaged in by sporting services suppliers, namely,  sports event promotion services; sports event organisation services; sports facility operation services and other sporting services. The UNESCO Framework for Cultural Statistics considers sports as part of the cultural industries.

    Caribbean countries’ existing market access and national treatment commitments in “recreational, cultural and sporting services (other than audiovisual services)” in their GATS schedules of specific commitments have been modest. This is not surprising as sporting services have not been a sector most countries have traditionally sought to liberalise. Only Cuba, Dominica, Grenada, St. Kitts & Nevis, St. Lucia, Trinidad & Tobago have made market access and national treatment commitments in sporting and other recreational services (CPC 964) in their GATS schedules.

    Sports Tourism

    When we speak of sports commercialisation in the region, our discussion tends to be limited primarily to sports tourism which involves travel to another destination for participation or observation of sporting events, sports conferences and meetings. This would be considered a services export under Mode 2 (consumption abroad). Countries around the world joust with each other to host major sporting events from the Olympics to World Cup Football. The Caribbean has had a piece of the action by successfully hosting the ICC Cricket World Cup in 2007, while also hosting several other smaller hemispheric and regional sporting events such as the Commonwealth Youth Games which the Bahamas will host in 2017.The rationale for hosting these events is not just for the immediate inflows of tourist arrivals and expenditure, but also the marketing and promotional opportunities which such intense media attention could bring.

    Non-Tourism Sporting Services

    Besides sports tourism, there are other possibilities for sporting services exports as the schematic below shows utilising the four modes of supply under the General Agreement on Trade in Services (GATS):

    • Mode 1 (Cross border supply)  – from the territory of one Member into the territory of any other Member e.g: sports consultancy firm providing consulting services to clients in another country online
    • Mode 2 (Consumption Abroad) -in the territory of one Member to the service consumer of any other Member e.g : an athlete of one country attending a training facility in another country
    • Mode 3 (Commercial presence) – by a service supplier of one Member, through commercial presence, in the territory of any other Member e.g: an investor establishing a sports academy  in another country
    • Mode 4 (Movement  of Natural Persons) – by a service supplier of one Member, through the presence of natural persons of a Member in the territory of any other Member e.g: coaches providing training in another country

    If we take Jamaica as a case study of sporting services exports, the country already conducts sporting services exports under Mode 4 as Jamaican coaches coach at overseas universities and training facilities. It also exports under Mode 2 as it hosts international sporting events (sports tourism) and its IAAF-funded High Performance Training Centre provides training for both Jamaican and international athletes. Unfortunately, the value of these services to the Jamaican economy is difficult to measure.

    In 2013 the then Government under Prime Minister, Portia Simpson-Miller introduced the Jamaica National Sports Policy which provides a framework for the development of sport in Jamaica includes upgrades to sports infrastructure, improvements in schools’ physical sport infrastructure and tax relief for contributions to amateur sport under the Charitable Organizations (Tax Harmonization) Act 2013 and the Charities Act 2013. Jamaica is known as the Sprint Capital of the World for its prowess in athletics, adding to the strength of Brand Jamaica. This is already reaping benefits and sports is one of the sectors in which Jamaica promotes foreign investment. Besides athletics, Jamaica has also enjoyed international success in cricket, football, netball and bobsled.

    Some sports-related investment already exists in the Caribbean such as in the Caribbean (Cricket) Premier League. Sports services trade through mode 3 (commercial presence) is possible through  foreign direct investment in the form of sports academies, colleges and other sports facilities which can generate foreign exchange and direct and indirect employment. However, strong regulatory and monitoring frameworks need to be in place to ensure these meet world anti-doping standards and anti-money laundering laws.

    Linkages with other sectors

    Sporting services can have strong linkages with, and spill-over benefits for other sectors, such as in manufacturing, health & wellness, education, research & development, and audiovisual services. According to this article in the India Times, Usain Bolt requires brands wishing to feature him in advertising campaigns to film in his home country of Jamaica to allow his country to benefit.

    Conclusions

    Caribbean countries have produced world-class sporting talent which far exceeds their small physical and economic sizes. There are opportunities to leverage that talent into sports services export opportunities which go beyond simply sports tourism. The current contribution of sporting services trade, such as sports festivals, to Caribbean countries’ GDPs is not being captured and remains undertapped.

    One of the reasons for the paucity of data on sporting services internationally is that there is the need for the broadening and refining of the CPC classification of sporting services beyond the four currently recognised sub-classes. Better classification and measurement is needed in order to assess the current value, impact and contribution of sports trade to Caribbean countries. This data would assist in the formulation of evidence-based policies and interventions to promote the development of sports as an export diversification strategy.

    The level of development of the sports industry and the policy frameworks and support structures for the development of sport varies by country across the region. Sportpersons benefit under the free movement of skilled labour under the CSME but there is no regional policy for the development of sport as an export. Sports are still not seen as a legitimate career option for many young people due to limited financing opportunities and lack of world-class training facilities in many Caribbean countries.

    Alas, however, there has also been progress in the right direction. There has been the introduction of sports degrees at the University of the West Indies campuses which could also attract international students. Several Caribbean countries have introduced national sports policies and have invested in upgrading their sports infrastructure. Some have made sports tourism part of their marketing plan e.g: Barbados hosted the 2014 Top Gear Festival at its newly redeveloped Bushy Park Circuit.

    If Caribbean countries are serious about commercialising their sports sectors, it is perhaps time that those countries which had not made any commitments in “sporting and other services” in their GATS schedules of specific commitments to consider taking commitments, while those which have already done so to consider  modifying the quality and number of their existing commitments. There is also the need to explore how Caribbean sports services suppliers can benefit from existing trade agreements like the CARIFORUM-EC Economic Partnership Agreement and from cooperation and funding under bilateral cooperation agreements with third states.

    An evidence-based approach would allow the region to determine what incentives and public/private sector support are needed to develop sporting services trade, the human resource, infrastructure and financing constraints  being faced and what additional public and private sector support can be given to regional sportspersons and sporting bodies. In the five Caribbean countries where citizenship by investment is offered, these countries can consider the feasibility of making an investment in sport one of the options of a qualifying investment.

    The good news is that while I was conducting my research for this article I stumbled across this document for a consultancy to conduct an assessment of the economic contribution of the sporting sector, especially sports tourism to the CARICOM Single Market and Economy (CSME) and the development of a Draft Regional Strategy for Sporting Services. This is a step in the right direction.

    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.