Caribbean Trade Law and Development

Tag: CARICOM

  • Future CARICOM-US Trading Relations Beyond the Caribbean Basin Initiative

    Future CARICOM-US Trading Relations Beyond the Caribbean Basin Initiative

    Alicia Nicholls

    A bipartisan bill (HR 991) was recently introduced in the United States (US) House of Representatives proposing to extend the Caribbean Basin Trade Partnership Act (CBTPA), one of the key pieces of legislation comprising the Caribbean Basin Initiative (CBI), to the year 2030. The benefits under the CBTPA are currently due to expire on September 30, 2020, unless extended by a subsequent Act of Congress.

    The CBI has generally been regarded by successive US administrations as being mutually beneficial to both the US and CBI beneficiary countries. However, the current US administration’s greater insistence on reciprocity in its dealings with external trading partners and the on-going re-examination of its current trading arrangements mean that the extension of the CBTPA should not be taken for granted as a fait accompli.

    While this article posits that CARICOM countries should indeed lobby for the CBTPA’s extension, it also proposes that, in the long-term, the region should think strategically beyond the CBI by considering a future CARICOM-US trading relationship which best enhances bilateral trade between the US and CARICOM to foster sustainable and inclusive development.

    The Status Quo: The Caribbean Basin Initiative

    Since 1983, preferential trade between CARICOM countries and the region’s largest trading partner, the US, has been governed largely by the CBI – a unilateral preference scheme of the US government which confers to eligible beneficiary countries non-reciprocal preferential access to the US market for a wide range of goods.

    The CBI was first announced by then US President Ronald Reagan during an address before the Organisation of American States (OAS) on February 24, 1982, to facilitate the economic development and export diversification of Caribbean Basin countries, while also advancing US strategic economic and geopolitical interests in its “backyard”.

    In 1983, the Caribbean Basin Economic Recovery Act (CBERA) was finally signed into law, coming into effect the following year. In 2000, after much lobbying by Caribbean countries, the CBTPA was passed and granted enhanced preferences for eligible textile and apparel from CBI countries on par with those enjoyed by Mexico under the North American Free Trade Agreement (NAFTA). While the CBERA was made permanent in 1990, the CBTPA is scheduled to expire on September 30, 2020.

    Seventeen Caribbean countries and territories are currently CBERA beneficiaries, while seven are eligible for the enhanced CBTPA preferences. Haiti also receives additional benefits for its apparel and textiles under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act of 2006, the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE II) Act of 2008, and the Haiti Economic Lift Program (HELP) Act of 2010, which are scheduled to expire in September 2025.

    Data in the United States Trade Representative’s Twelfth Report to Congress on the Operation of the Caribbean Basin Economic Recovery Act (December 2017) illustrated that for the years 2012-2016, on average about half of US total imports from CBI countries entered the US market otherwise duty-free. This was followed by imports under CBI tariff preferences which accounted on average for less than a quarter of US total imports from CBI countries. Trinidad & Tobago, Haiti and Jamaica were the top three sources of total US imports from CBI countries.

    CBI: Possible Headwinds

    The USTR report noted a 24% decrease in US consumption imports from beneficiary countries in 2016 compared to 2015, and down 58% from 2006. This decline was attributed to lower petroleum prices and an increase in US domestic petroleum production. US imports from CBI countries declined from 0.5% of total US imports from the world in 2012 to 0.2% of total US imports from the world in 2016. Energy products accounted for 39.3% of US imports under CBI in 2016 and textiles and apparel (primarily Haitian apparel) accounted for 34.9%.

    In an article I wrote on this topic a couple of years ago, I outlined some of the structural deficiencies with the CBI as currently operated which I argued circumscribe its effectiveness at promoting economic development and diversification in beneficiary economies. One of those deficiencies is that the CBI preferences apply to goods only, which over time has arguably lessened its value given the increasing contribution of services trade to Caribbean economies.

    Besides the structural issues inherent in the CBI, its continuation faces some possible political headwinds. The CBERA’s incompatibility with the World Trade Organisation (WTO) rules on non-discrimination and its ineligibility for the ‘enabling clause’ exception mean that the US must seek a waiver from the WTO which must be approved by WTO members. The US’ current WTO waiver for CBERA (inclusive of the CBPTA) is due to expire on December 31, 2019. Given this administration’s greater insistence on reciprocity with its trading partners, as articulated in the 2018 Trade Policy Agenda, it should not be taken for granted that the US will seek a new waiver for CBERA. Moreover, the strong opposition made by some developing WTO members the last time the US sought a waiver means that approval of yet another waiver by the WTO is also not a fait accompli.

    Additionally, the current mercantilist tenor of US trade policy has occasioned a greater insistence on reciprocity and enhanced scrutiny of its trade agreements with countries with which the US has a trade deficit. It is this policy shift which hastened the renegotiation of NAFTA and its renaming to the USMCA. While reports do not indicate that the CBI is under the microscope, the programme’s unilateral nature means that preferences thereunder may be unilaterally varied or ended at any time. This adds some uncertainty for Caribbean exporters.

    One element which might be keeping the CBI out of the current administration’s cross-hairs is that the CBI had immediately led to a spike in US domestic exports to CBI countries (then including other Caribbean Basin economies), peaking at $26 billion in 2005. Although US exports to CBI countries have declined since 2005, the US still enjoys a wide trade surplus with CBI countries – the total value of US exports to CBI countries in 2016 was $10.5 billion, while the total value of US imports to CBI countries in that same year was only $5.3 billion, leading to a US merchandise surplus with CBI countries of $5.1 billion in 2016.

    Indeed, in the statement released by US Representative Terri Sewell (D-AL), one of HR 991’s co-sponsors (the other is Brad Wenstrup (R-OH)), the congresswoman noted, inter alia, that “Extending the U.S. Caribbean Basin Trade Partnership Act will expand the United States’ trade with Caribbean basin countries and increase our nation’s economic growth”.

    CBI: Next Steps

    Let me note that even if the CBTPA is not extended, this does not necessarily affect other components of the CBI programme which in the case of the CBERA is currently ‘permanent’ and with regard to the Haiti-specific preferences are due to expire in September 2025.

    Nonetheless, this is not to diminish the importance of retaining the CBTPA tariff preferences, which still account for an important share of US imports from CBI countries. In 2016, the value of US imports under CBERA was $479 million and $252 million under the CBTPA. For this reason, the best immediate option is for CARICOM countries to step up their lobbying for an extension of the CBTPA. This lobbying effort should, of course, be done in collaboration with the regional private sector, the Caribbean diaspora and friends of the Caribbean in the US Congress. It is in this vein that the closure of the US-based Caribbean Central American Action (CCAA), which did excellent work on behalf of the region in the US, leaves a void which will need to be filled.

    Another issue will be finding ways to increase the rate of utilization by CBI exporters of the CBERA/CBTPA preferences. This is a catch-22, of course, as the current wide US surplus with the region is perhaps the reason why CBI has been outside of the current administration’s crosshairs.

    Nevertheless, US foreign policy has recognised that an economically prosperous Caribbean is in the US’ best interests. The Multi-Year US Strategy for Engagement in the Caribbean, pursuant to the US-Caribbean Strategic Engagement Act of 2016, recognizes this by outlining several broad proposals for improving the trade and investment climate between the US and Caribbean. The mechanism of the US-CARICOM Trade and Investment Council, as provided for under the Trade and Investment Framework, should be used as a forum to discuss the implementation of these proposals and ways to improve CBI beneficiaries’ utilization of the preferences with the view to enhancing their economic development.

    Let me hasten to say, however, that underutilization of the CBI is not simply a product of the structural problems of the initiative, but is symptomatic of the chronic under-utilisation by regional firms of current trade agreements in place between CARICOM and its trade partners. This speaks to wider structural issues prohibiting regional exporters from converting market access into market penetration. For one, navigating the myriad of requirements for exporting to the US under the CBI and other trade preference programmes is not easy for businesses, especially MSMEs which lack scale and have limited resources to interpret and meet the legal and other requirements under these arrangements.

    Beyond CBI: Options for Future CARICOM-US Trading Relations

    Given the CBI’s inherent structural problems and the possible political headwinds which may face the CBTPA’s renewal, CARICOM should seriously consider options beyond the CBI for its future trading relations with its most important partner.

    An appropriate policy response should be evidence-based, that is, backed by sound data, as well as broad-based stakeholder consultations on the way forward. However, at least four options are readily apparent.

    • Trading under WTO MFN conditions

    This is not an attractive (or real) option for CARICOM countries as it would result in regional exporters paying WTO Most Favoured Nation (MFN) rates for goods currently benefiting from CBI tariff preferences, thereby reducing what little margin of competitiveness they currently enjoy in the US market.

    • Trading under the US Generalised System of Preferences (GSP)

    The US GSP was created in 1974 and provides duty-free, non-reciprocal access to the US market for a number of goods from 131 designated beneficiary countries, including 44 Least Developed Countries (LDCs). In March 2018 President Trump signed legislation to renew it to March 2020. Similar to the CBI, the GSP’s unilateral nature still adds an element of uncertainty for traders. The rules of origin under the GSP are also stricter than those under the CBI.

    While some US imports from CBI countries do enter the US market under the GSP, these are much less than those entering otherwise duty-free, under CBI and HOPE Act tariff preferences and under WTO Most Favoured Nation (MFN) terms. Additionally, not all CBI countries are GSP designated countries. For example, Antigua & Barbuda, Barbados and Trinidad & Tobago were graduated and are no longer eligible for preferences under the GSP.

    • Acceding to CAFTA-DR FTA

    Acceding to an existing US FTA, such as the CAFTA DR, may be another possible option. Under Article 22.6 (Accession) of the CAFTA-DR, any country or group of countries may accede to the Agreement “subject to such terms and conditions as may be agreed between such country or countries and the Commission and following approval in accordance with the applicable legal procedures of each Party and acceding country.”

    Acceding to CAFTA-DR would create market access openings for CARICOM exporters not only to the US, but to the other CAFTA-DR parties: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, as well as enhanced market access to the Dominican Republic (with which CARICOM already has an FTA).

    Conversely, there are considerations to be borne in mind. Are the commitments under the CAFTA-DR ones that CARICOM Member States are prepared to undertake and capable of implementing? What would be the possible impact of these market access openings on CARICOM’s most sensitive industries?

    There are also political considerations. With the USMCA signed (but still awaiting ratification by all three governments), the current administration is said to be looking closely at the CAFTA-DR, which means that a possible renegotiation of that agreement at some point cannot be ruled out.

    • Negotiation of a CARICOM-US Free Trade Agreement

    The fourth and perhaps best long-term scenario is the eventual conclusion of a CARICOM-US Free Trade Agreement. As noted in the latest USTR Report on CBERA, eight countries (including the Dominican Republic) are no longer CBERA beneficiaries due to being party to FTAs with the US. Indeed, the aim was for the US to conclude an FTA with CBERA beneficiaries as soon as possible.

    There are possible positives to concluding a CARICOM-US FTA, including gaining preferential access to the US market for CARICOM services providers, and the prospect of negotiating a mutually beneficial and binding trading agreement which provides certainty for exporters from both sides.

    However, there are also some potential downsides. An FTA is reciprocal and binding which means CARICOM Member States will be required to make market access concessions to the US as well. CARIFORUM countries are already struggling to implement commitments made under the CARIFORUM-EU Economic Partnership Agreement which has been provisionally applied since 2008. Some CARICOM governments may also worry about the further erosion of tariff revenue.

    It is also doubtful whether the current US administration (or any future one) would agree to the generous level of special and differential treatment as CARIFORUM was able to negotiate with the European Union (EU) under the CARIFORUM-EU EPA. Negotiating a CARICOM-US FTA will also necessitate reconciling differing levels of ambition and competing interests among CARICOM Member States due to asymmetric development levels and capacity for undertaking commitments.

    Nonetheless, of the four future scenarios presented, this is likely to be the most beneficial option for CARICOM. Any post-CBI CARICOM-US trading arrangement should at the very least be reciprocal (not unilateral), provide for special and differential treatment and development assistance, include gender and environmentally sensitive provisions, include an investment chapter which incorporates recent best practices in investment treaty rule-making which seek to ensure a proper balance between investor rights and States’ regulatory rights, and mandate on-going review and monitoring of the agreement to ensure that it is achieving its objectives. These could be best captured in an FTA.

    Conclusion

    In conclusion, the best immediate option for CARICOM at this moment should be lobbying for the CBTPA’s extension. However, given the flaws inherent in the CBI and the possible headwinds facing the programme’s future continuation, CARICOM policymakers would be advised to keep one eye on lobbying for an extension of CBTPA with the other on a longer term view of what its next steps should be regarding the region’s future trading partnership with its most important trading partner.

    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 Foreign Policy Coordination: Priority or Pipe Dream?

    CARICOM Foreign Policy Coordination: Priority or Pipe Dream?

    Alicia Nicholls

    It has been generally recognized by most Caribbean Community (CARICOM) countries, at least in principle, that a coordinated voice on foreign policy issues endows our small countries with bargaining power beyond our size constraints. Indeed, foreign policy coordination is one of the four pillars of CARICOM, with economic integration, human and social development, and security being the other three. However, given the current and increasing discord among CARICOM countries on key international developments, is CARICOM foreign policy coordination still a priority, or is it merely a pipe dream?

    An exercise of foreign policy is an exercise of a State’s sovereignty. In general terms, a State’s foreign policy is its strategy in interacting with other States, and is influenced by what that State determines to be its strategic national interests, values, goals and priorities. The key words here are “national interests”, and they may be underpinned by ideology, pragmatism or a combination of the two. A State’s foreign policy is not static, and may change depending on the ideology of the Government in power (for example, whether right-wing, left-wing or centrist) and changing national interests, values, goals and priorities.

    As a State’s foreign policy is determined by its national interests, this means that a regional coordinated foreign policy inevitably necessitates the strategic alignment of the national interests of the countries concerned.

    Rationale behind the goal of a coordinated CARICOM foreign policy

    From as early as the days of CARIFTA (the Caribbean Free Trade Area), the predecessor of CARICOM, the founding architects of the Caribbean regional integration project viewed a coordinated foreign policy as a life raft for assisting our small, then newly independent Caribbean States, to navigate often hostile international Cold War waters in which powerful big country sharks would prey on us little small state ‘sprats’.

    Our founding fathers, and later the drafters of the Revised Treaty of Chaguaramas which established the CARICOM Single Market and Economy (CSME), saw a unified foreign policy position as an insurance policy against bullying tactics and the politics of ‘divide and conquer’ – the practice by major powers of playing off CARICOM States against each other, or picking them off one by one through inducements such as aid and other financial support in order to secure votes on hemispheric and international issues. It recognises the old adage of “strength in numbers”. For example, Article 6(h) of the Revised Treaty of Chaguaramas states as one of the Community’s objectives “enhanced co-ordination of Member States’ foreign and [foreign] economic policies”.

    Indeed, there have been several instances where Caribbean countries have successfully leveraged their collective voice and numeric strength to their own benefit. Comprising nearly half of the membership of the Organisation of American States (OAS), CARICOM countries are a crucial voting bloc which powerful countries deem necessary to court for voting support on critical hemispheric issues. In the United Nations (UN), CARICOM countries are a smaller but still critical voting bloc.

    But do CARICOM member States’ national interests really align to such an extent that a coordinated foreign policy on all issues is still (or was ever) achievable? CARICOM comprises fourteen independent countries and one British Overseas Territory (Montserrat). This necessitates balancing national interests, values, goals and priorities which do not always necessarily align. Indeed, CARICOM countries, while all small States, have their differences, whether in terms of language, geography, economic structure, population, resource endowment or size. All of these factors impact on each State’s perceived national interests, values, goals and priorities.

    Foreign policy coordination has been successful in areas like climate change where Caribbean countries see their national interests as inextricably linked. But even on this important issue, there is some policy incongruence. On the one hand, CARICOM countries have demanded more urgent global action to fight climate change, while on the other, some CARICOM member States are still pursuing hydrocarbon exploration and exploitation, as part of their economic development strategy.

    There have also been increasing (and frankly, embarrassing) instances of CARICOM foreign policy disunity, from as far back as the infamous US Ship Rider issue in the 1990s, the inability to unite around a single candidate for Commonwealth Secretary General in 2015, to as recently as the UN vote on the US’ controversial motion to recognize Jerusalem as the capital of Israel (instead of Tel Aviv). There is also the still unresolved issue of the region’s position on the One China Policy – some States recognize the People’s Republic of China, while a few still recognize the Republic of China (Taiwan).

    The Venezuela Humanitarian Crisis

    The latest example of foreign policy disunity relates to the devolving political, economic and humanitarian crisis in the Bolivarian Republic of Venezuela – a country which, despite some differences, has been an important friend to the region in terms of aid and other support. I highlight the Venezuela crisis not just because it is one of the biggest hemispheric crises affecting the region, but it is a nuanced issue which clearly shows the divide in CARICOM countries’ national interests, and hence their diverging positions on the perceived solution.

    The suffering of the Venezuelan people wrought by the incompetence of the Maduro regime, and made no better by western countries’ economic sanctions, have caused spill-over security, health, economic and other risks for neighbouring countries. According to the UN, over three million Venezuelans have fled that South American country since the start of the crisis. Many have migrated (illegally in many cases) to neighbouring countries, including Trinidad & Tobago. It is, therefore, in CARICOM countries’ interest for the humanitarian crisis to be solved. However, CARICOM countries differ on what they believe the solution should be.

    On January 10, 2019, the OAS Permanent Council approved a resolution not to recognize the legitimacy of the second term of current Venezuelan President, Nicolas Maduro Moros. CARICOM’s disunity on this issue was again on full display for the world to see. The Bahamas, Guyana, Haiti, Jamaica and Saint Lucia were among the 19 OAS member states which voted to approve the resolution. Dominica, St. Vincent and the Grenadines and Suriname were among the 6 (including of course, Venezuela) which voted against the resolution. St. Kitts and Nevis, Trinidad and Tobago, Antigua and Barbuda, Barbados and Belize abstained, while Grenada was the only OAS member State which was absent for the vote.

    What explains this disunity? To my mind, mainly national interests, exacerbated by the fact that CARICOM remains an inter-governmental organisation. For instance, Guyana is currently embroiled in a long-standing border dispute with Venezuela, which has been inflamed under the current Maduro regime. This may explain Guyana’s vote in favour of the resolution. Ditto could be said for Jamaica which had recently decided to reacquire Venezuela-owned shares in Petrojam. On the other hand, some other CARICOM Member States are members of the Bolivarian Alternative for the Americas (ALBA) and recipients of assistance from Venezuela through, inter alia, the PetroCaribe Initiative. This may explain why they voted against the resolution. National interests not only dictate a country’s position on an issue, but are what determine whether a CARICOM member State will change its vote based on the promise of aid or support.

    Moreover, while the majority of CARICOM member States appear to have adopted a position of non-intervention, some member States (the Bahamas and Haiti) have decided to follow major Western powers in recognizing Opposition leader, Juan Guaido, as interim president of Venezuela.

    Given the region’s friendship with Venezuela and the implications of the ongoing crisis for many CARICOM countries, it is commendable that some CARICOM governments have assumed a leadership role on this issue. Some CARICOM governments have vociferously challenged the pronouncements of the OAS Secretary General His Excellency Luis Almagro as not speaking for all OAS member states. A CARICOM delegation led by current CARICOM chairman Dr. the Honourable Timothy Harris, Prime Minister of St. Kitts & Nevis, recently initiated a visit to the UN to discuss the crisis. It should be noted, however, that not all CARICOM governments took part in this meeting, which shows that even on this very important issue, the region still cannot sing from the same hymn sheet.

    Is a coordinated CARICOM foreign policy merely a pipe dream?

    There appears, at least in rhetoric, a renewed interest by CARICOM leaders in advancing the regional integration process, of which foreign policy coordination has traditionally been a major pillar. This has been aided no doubt by the initiative taken by Jamaica in the commissioning and publication of the Report of the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks, more popularly referred to as the ‘Golding Report’, and the reinvigorated leadership displayed by Barbados under its new Prime Minister (lead for the CSME in CARICOM’s quasi-cabinet).

    The Golding Report identified the glaring failures in foreign policy coordination as one of several challenges currently confronting the regional integration process. The report rightly cites several of the issues which account for this policy disunity, including offers of aid in exchange for votes, lack of political will, inability of diplomats to get clear policy instructions from their capitals, and of course, national interests. As such, recommendation 26 of the Report is to “review the procedures for foreign policy consultation and coordination in order to avoid as far as possible, the types of conflicts and embarrassing positions that have emerged from time to time among CARICOM members depriving it of the collective force it is capable of exerting”.

    However, I would go further. In this time of increased introspection by our leaders on the regional integration process, I think there needs to be reconsideration of whether a coordinated foreign policy is really an achievable goal for the region or are we merely chasing a lofty pipe dream which our diverging national interests, values, goals and priorities may be unable to bridge. Indeed, can we really say that the region is any closer to a unified position on the One China policy? Moreover, given the current ideological divide in the region on the issue of citizenship by investment programmes (CIPs), can we really mount an effective and unified CARICOM approach against the EU’s targeting of CIPs in the region?

    Let me clarify that I staunchly support our founding fathers’ conviction that there is strength in unified foreign policy positions. Indeed, the enormity of the global challenges confronting the region, whether from Brexit, the possibility of another global downturn, Venezuela, rising populist and nationalist sentiments internationally, blacklisting etc, means that a unified CARICOM front, to the extent possible, should be the desired default position for helping us navigate these challenges.

    On the flipside, I also recognise that we must be honest with ourselves. We must face the reality that the goal of a coordinated foreign policy on all issues may be too ambitious given divergent national interests which have accounted for the increasing track record of foreign policy disunity. Indeed, these all too public displays of foreign policy disunity only serve to undermine the Caribbean public’s faith in the sincerity of our leaders’ commitment to the regional integration process, and to empower CARICOM-skeptics. We, perhaps, are setting ourselves up for failure.

    An alternative and more achievable approach, therefore, could be for CARICOM member states to clearly identify specific foreign policy priority areas on which they would strive to present a unified policy position. The European Union (EU), for instance, has sought to harmonise its foreign policy (Common Foreign and Security Policy) primarily around security and human rights issues. For CARICOM, priority areas for foreign policy coordination could be more straightforward “low-hanging fruits” such as foreign trade, security, the loss of correspondent banking relationships due to de-risking by global banks, tax issues, and climate change. These are areas in which a unified CARICOM foreign policy position is perhaps most achievable and most effective.

    I appreciate that my view may be unpopular and differs from traditional orthodoxy, but in these times of increased economic and geopolitical uncertainty, the continued desirability of pursuing a coordinated foreign policy is an issue which CARICOM will need to resolve and do so quickly, even if we decide we will only coordinate on certain foreign policy issues.

    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.

  • Caribbean Trade & Development Digest – January 1 – 13, 2019

    Caribbean Trade & Development Digest – January 1 – 13, 2019

    Happy New Year! Welcome to the first Caribbean Trade & Development Digest for 2019! We do hope you all had an enjoyable holiday season! In this first edition for 2019, we are happy to bring you the latest trade and development news and analysis for  January 1-12, 2019! 

    THIS WEEK’S HIGHLIGHTS

    US and Chinese negotiators met in Beijing from January 7-9 for their first round of US-China trade talks since their declaration of a 90-day tariff truce in December last year. The US-China talks have been hailed as positive by both sides, but the two economic behemoths are still a long ways off from resolving their long-simmering trade differences. The USTR statement released following the conclusion of the talks may be read here, while a translated version of the statement released by China is available here.

    While welcomed, the truce may be “too little, too late”. In its Global Economic Prospects – January 2019 report, ominously titled ‘Darkening Skies’, the World Bank has warned of a darkening outlook for the global economy in 2019 in the face of still elevated trade tensions and softening global trade and investment.

    The Brexit chaos continues…The British House of Commons MPs last week voted to require the Prime Minister to present to Parliament a ‘Plan B’ within three-days if MPs reject the current Draft Withdrawal Agreement in their upcoming vote this Tuesday (January 15th). Labour Leader Jeremy Corbyn is calling for a general election to break the Brexit ‘deadlock’.

    Regionally, Prime Minister of St. Kitts & Nevis, Dr. The Hon. Timothy Harris, has assumed chairmanship of CARICOM (January – June 2019) under the grouping’s rotating chairmanship. Dr. Harris’ New Year’s message as incoming chairman may be viewed here.

    The CARICOM divide on the question of Venezuela has widened as some CARICOM Member States voted in favour of, and some against, an OAS Permanent Council resolution to not recognise the second term of Venezuelan President, Nicolas Maduro. Some CARICOM Member States abstained.

    Several Caribbean offshore financial centres, including some British Overseas Territories, have been included in a blacklist by the Government of the Netherlands. The backlash by the countries unfairly named has been swift.

    Below are the other major trade and development headlines from across the Caribbean region and the world for last week:

    REGIONAL

    Jamaica takes action to safeguard energy security

    JIS News: In an effort to safeguard Jamaica’s energy security, the Government will take legislative action to retake ownership of the 49 per cent shares in Petrojam, which is held by the Venezuelan state-owned oil and natural gas company, PDV Caribe. Read more 

    Joining WTO no ‘snap election’ decision

    Tribune242: Jeffrey Beckles, the newly-appointed Chamber of Commerce chief executive, told Tribune Business that deciding whether or not it was in The Bahamas’ best interests to become a full World Trade Organisation (WTO) member was a decision that will impact all citizens “for the rest of our lives”. Read more

    ‘Buy Bahamian’ best defence under WTO

    Tribune242: Zhivargo Laing, pictured, speaking as he unveiled The Bahamas’ initial goods and services offers that kickstarted the process of accession to full WTO membership, conceded that Bahamian manufacturers and other vulnerable industries would face intense pricing and other competitive pressures if they lost their existing tariff protection as a result. Read more 

    Dutch blacklist unjustified diversion tactic

    Caribbean News Now: The Cayman Islands government has accused The Netherlands of including the British territory on its separate blacklist as a way of diverting criticisms of its own tax practices by attacking legitimate tax regimes. Read more 

    Regional trade with the US

    Trinidad Guardian: T&T exporters to the US could lose up to US$400 million in special tariff benefits next year if the Caribbean Basin Trade Partnership Act (CBTPA) fails to be renewed when it crosses US President Donald Trump’s desk this year, senior trade consultants calculated last week. Read more 

    Cuba to expand facilities for foreign trade

    Caribbean News Now: Cuba will develop an integrated digital platform this year in order to facilitate foreign trade operations, which will be linked to the simplification of procedures for the export and import of goods. Read more 

    Jamaica’s trade deficit with CARICOM widens

    Jamaica Gleaner: Jamaica’s trade deficit with the Caribbean Community, (CARICOM), increased to US$351.2 million during the period January to October last year, according to the figures released by the Statistical Institute of Jamaica (STATIN). Read more 

    EU provides millions in budgetary support to Montserrat

    Caribbean360: The European Union has disbursed EC$17.55 million (US$6.5 million) to the Government of Montserrat as the first fixed tranche under the Multi Sector Sustainable Economic Development Budget Support Programme. Read more 

    CARICOM remains divided on Venezuela

    TV6: The Bahamas, Jamaica, Guyana, Haiti and St. Lucia supported an Organization of American States (OAS) resolution not recognising the legitimacy of Maduro’s second term as president of Venezuela, while Dominica, St. Vincent and the Grenadines and Suriname voted against the measure. Read more 

    Venezuela plans to remap its offshore oil territory

    Yahoo Finance: Venezuela will remap its Caribbean oil and gas prospects in a move that could further stoke a century-long border dispute with Guyana and collide with Exxon Mobil Corp.’s venture in the region, people with knowledge of the plan said. Read more

    PM Skerrit wants a united approach to investment programme

    Jamaica Gleaner: Prime Minister Roosevelt Skerrit has criticised the Organisation for Economic Cooperation and Development (OECD) for labelling several Caribbean countries as tax havens and called for a unified regional approach to deal with the Citizenship by Investment Programme (CBI). Read more 

    Ross University Opens in Barbados and Officials Say the Spin-offs Will Benefit Local Education

    Caribbean360: The opening of the Ross University School of Medicine’s main campus in Barbados is expected to bring with it a number of benefits to local health care and education. Read more 

    Global coconut profile opening huge opportunity for Caribbean economies. But will they seize it?

    Stabroek: What is being regarded globally as a breakthrough period for the coconut industry linked to skyrocketing demand for coconut water, oil and other products is being regarded as an opportunity for the region which it cannot afford to pass up. Read more 

    Gonsalves reiterates call for unity 

    Jamaica Gleaner: Prime Minister Dr Ralph Gonsalves yesterday reiterated a call for the Caribbean Community (Caricom) to adopt a united position regarding the European Union’s request that regional countries pass legislation to deal with what Europe has termed ‘economic substance”. Read more 

    Sir Dennis praises Caribbean Court of Justice’s achievements

    St Kitts & Nevis Observer: Former President of the Caribbean Court of Justice (CCJ), the Right Honourable Sir Dennis Byron, a native of St. Kitts and Nevis, has praised the accomplishments of the Trinidad-based court, which was established in 2005 to replace the London-based Judicial Committee of the Privy Council as the region’s final court and to function as an international tribunal interpreting the Revised Treaty of Chaguaramas that governs the regional integration movement. Read more 

    INTERNATIONAL

    Juncker hints at helping out Theresa May over Brexit deal 

    The Guardian: has signalled that he will offer a last-minute helping hand to Theresa May in her bid to get her Brexit deal passed by MPs – but hinted at deep scepticism in Brussels at her chances of success. Read more

    Macron vows to exclude UK creative industries from future EU deal 

    Sunday Express: French President Emmanuel Macron has pledged to restrict market access to the European Union’s markets for Britain’s creative industry in order to protect “cultural diversity” in France. Read more 

    US Recession Risks Hit Six-Year High Amidst Trade War and Shutdown 

    Bloomberg: Economists put the risk of a U.S. recession at the highest in more than six years amid mounting dangers from financial markets, a trade war with China and the federal-government shutdown. Read more 

    Air freight demand flat in November 

    IATA: The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), was flat (0%) in November 2018, compared to the same period the year before. This was the slowest rate of growth recorded since March 2016, following 31 consecutive months of year-on-year increases. Read more 

    Beijing says latest US-China trade talks were extensive, made progress on forced tech transfers

    CNBC: In a Thursday morning statement, China’s Commerce Ministry said the just-concluded round of trade talks with the U.S. were extensive and established a foundation for the resolution of each others’ concerns. Read more 

    What is stopping India from joining RCEP trade deal?

    Economic Times: If you have been paying attention to developments in global trade, you would already know that the contours of what is poised to become the world’s largest trading bloc is taking shape. India and 15 other nations in Asia and Asia-Pacific regions have been working to sew up contentious remaining areas, forge an agreement and put in place a deal by the end of 2019.  Read more

    Design of single African Union passport for all to be unveiled this year

    Euronews: The African Union (AU) is set to reveal the design of a passport for all countries, bringing the continent one step closer to completely free movement. Read more

    US and China wrap up trade talks in Beijing. What happens next?

    CNN: US and Chinese negotiators wrapped up three days of trade talks in Beijing on Wednesday as they seek a way out of the damaging trade war between the world’s two biggest economies. Read more 

    New database of all subsidies investigated by EU

    EU: The European Commission has made a new database of all its anti-subsidy investigations available on the DG Trade website. Read more

    Storm Clouds are brewing for the global economy

    World Bank: Growth in emerging market and developing economies is expected to remain flat in 2019. The pickup in economies that rely heavily on commodity exports is likely to be much slower than hoped for. Growth in many other economies is anticipated to decelerate. Read more 

    WTO seeks to ban government raids on corporate data

    Nikkei Asian Review: As countries such as China tighten control over information flowing across their borders, a group of World Trade Organization members led by the U.S., the European Union, Japan, Singapore and Australia will propose rules that prohibit excessive interference by governments into business-related data. Read more 

    Carr to rejoin ‘like-minded’ for next talks on WTO reform at Davos

    CBC (Canada): International Trade Diversification Minister Jim Carr’s office has confirmed he’s attending the next gathering of 13 members of the World Trade Organization looking to reform the institution in the face of ongoing threats to the rules-based multilateral trading system. Read more 

    Europe ready to help with WTO reform

    The Atlantic: A multilateral effort needs to be made to save the World Trade Organization (WTO), the European Union’s Commissioner for Trade Cecilia Malmström said at the Atlantic Council in Washington on January 10, noting that the twenty-four-year-old intergovernmental body to regulate international trade is “under increasing pressure.” Read more 

    Brexit: Jeremy Corbyn demands election to ‘break deadlock’

    BBC: Labour leader Jeremy Corbyn has stepped up calls for a general election “at the earliest opportunity” to “break the deadlock” over Brexit. Read more 

    WTO NEWS

    Philippines launches safeguard investigation on ceramic floor and wall tiles

    WTO: On 11 January 2019, the Philippines notified the WTO’s Committee on Safeguards that it had decided to initiate on 20 December 2018 a safeguard investigation on ceramic floor and wall tiles. Read more

    Venezuela initiates WTO dispute complaint against US measures on goods and services

    WTO: Venezuela has requested WTO dispute consultations with the United States regarding US measures affecting goods and services of Venezuelan origin. Venezuela’s request was circulated to WTO members on 8 January. Read more

    Turkey launches safeguard investigation on yarn of nylon or other polyamides

    WTO: On 3 January 2019, Turkey notified the WTO’s Committee on Safeguards that it initiated on 30 December 2018 a safeguard investigation on yarn of nylon or other polyamides. Read more 

    Madagascar launches safeguard investigation on detergent powder

    WTO: On 7 January 2019, Madagascar notified the WTO’s Committee on Safeguards that it had decided to initiate on 31 December 2018 a safeguard investigation on detergent powder. Read more

    NEW ON THE CTLD BLOG

    In Has Canada become Collateral Damage in the US-China Trade War?, our frequent blog contributor, Renaldo Weekes, explores the case involving the arrest of Huawei’s CFO and whether Canada is an unwitting casualty of the US-China trade war.

    Have a read of my first blog for the year, Global Trade Policy in 2019: What to Watch?taking a look at the major trade policy news from 2018 and what we’ll be keeping an eye on for 2019!

    The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.

  • Eight Key Outcomes from the St. Anns Declaration on CSME

    Alicia Nicholls

    Caribbean Community (CARICOM) Heads of Government met from December 3-4, 2018, in Port of Spain, Trinidad last week for the 18th Special Meeting of the Conference of Heads of Government of CARICOM which was a special meeting on the CARICOM Single Market and Economy (CSME).

    The CSME envisions deepened economic integration among participating CARICOM Member States by creating a single economic space for the free movement of Community goods, services, capital and labour, with the aim of promoting economic development and increased well-being of Community nationals. All independent CARICOM Member States, except the Bahamas, are part of the CSME, while Haiti is not yet a full participant.

    Progress towards implementation of the CSME has been painstakingly slow, a point noted in numerous reports commissioned to look at this issue, including the Jamaica-government commissioned Golding Commission Report released earlier this year which examined Jamaica’s relations within the CARICOM and CARIFORUM frameworks.

    At the end of the special CSME meeting last week, CARICOM leaders released their St. Ann’s Declaration on CSME in which they recommitted to the regional integration process and outlined several priority areas for immediate action, including setting timelines for some action areas.

    Based on the St. Ann’s Declaration on CSME, here are eight key outcomes from the CSME Special Meeting:

    1.Recommitment to national action to further CSME implementation

    CARICOM leaders recommitted to take action at the national level to advance the regional integration agenda. In their preamble to the Declaration, they reiterated that the CSME “continues to be the most viable platform for supporting growth and development” in CARICOM Member States, but acknowledged that progress on the CSME should have been further advanced by now. They welcomed Haiti’s commitment to full integration into the CSME by 2020.

    2.Greater voice for private sector and labour

    CARICOM leaders have agreed to establish a formalised and structured mechanism to facilitate dialogue between the Councils of the Community and the private sector and labour. They also agreed to amend the Revised Treaty of Chaguaramas to include representative bodies of the regional private sector and labour as Associate Institutions of the Community.

    3. Full Free Movement in 3 years (for willing Member States)

    CARICOM leaders have set a timeline of the next three years for those Member States which are willing to do so to move towards full free movement. The leaders have also agreed to reinforce the operation of their security mechanisms to ensure the integrity of the regime allowing the free movement of CARICOM nationals.

    4. Expansion of categories of skilled nationals entitled to move

    Agricultural Workers, Beauty Service Practitioners, Barbers and Security Guards will be added to the categories of skilled nationals who are entitled to move freely and seek employment within the Community.

    CARICOM leaders also reiterated that a skills certificate issued by one Member State would be recognised by all Member States. They also agreed to complete domestic legislative and other arrangements for all categories of free movement of skilled persons.

    5. Greater CARICOM-OECS collaboration

    They have mandated that steps be taken to deepen cooperation and collaboration between the Secretariats of CARICOM and the OECS “to avoid duplication and maximise the utility of scarce resources”.

    6. Single Domestic Space for passengers in the Region

    CARICOM leaders agreed to examine the re-introduction of the single domestic space for passengers in the Region and agreed to work towards having a single security check for direct transit passengers on multi-stop intra-Community flights. They also agreed to conduct a special session on Air and Maritime Transportation at the Intersessional meeting of the Conference to be held next February to focus on this matter.

    7. Public Procurement and Mutual Recognition of Member States’ incorporated companies

    CARICOM leaders set a timeline of 2019 for the finalization of the regime that permits citizens and companies of the Community to participate in Member States’ government procurement processes. They also agreed to take the necessary steps to allow for mutual recognition of companies incorporated in a CARICOM Member State.

    8. Restructured Commission on the Economy

    CARICOM leaders have restructured the Commission on the Economy to advise Member States on a growth agenda for the Community. Leading Barbadian-UK economist, Professor Avinash Persaud, has been appointed to lead this restructured commission, while its nine other members include distinguished regional and international persons.

    The text of the St Ann’s Declaration on CSME 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.