Caribbean Trade Law and Development

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  • BRICS Summit 2023: Expanded Development Options for the Global South

    BRICS Summit 2023: Expanded Development Options for the Global South

    By Tracia Leacock, PhD – Guest contributor

    The 15th BRICS Summit was convened from Tuesday, August 22 to Thursday, August 24, 2023, in Johannesburg, South Africa. The BRICS acronym represents the fact that the current grouping comprises the five nations of Brazil, Russia, India, China, and South Africa, among the world’s largest and fastest growing emerging markets and developing countries, across continents. BRICS aims to serve as a platform for the voices and interests of the Global South.

    As of 2022, the current five BRICS nations accounted for approximately 25 percent of global GDP (but 31.5 percent in terms of purchasing power parity (PPP), already surpassing the G7’s 30 percent), nearly 20 percent of global trade, 42 percent of the entire global population, and 26 percent of the world’s landmass. Intra-BRICS trade in 2022 topped $762 billion.

    All five BRICS nations were represented at the leaders’ discussions by their heads of state (Russia’s President, Vladimir Putin, attended via videoconference, with Foreign Minister Sergey Lavrov leading the in-person delegation).

    This year’s gathering garnered the most media attention of any BRICS summit and was the most heavily attended. South Africa’s President, Cyril Ramaphosa, invited the leaders of all 54 African states, as well as of 15 other Global South nations, in addition to representatives of major international organisations and regional groupings, including the United Nations and the G77+China (which presently includes 134 developing nations, and was represented by Cuba’s President, Miguel Díaz-Canel Bermúdez). 

    During this highly anticipated BRICS summit, member states deliberated on various global affairs issues. Some salient points are as follows[1]:

    Clarification about what BRICS represents

    BRICS leaders emphasised that, contrary to rumours in some pre-summit news coverage, the group is not aiming to challenge the West.

    Brazil’s President Lula da Silva said, “We do not want to be a counterpoint to the G7, G20 or the United States.” “We just want to organise ourselves.” India’s Prime Minister Narendra Modi called on BRICS to be “the voice of the Global South.” Chinese President Xi Jinping also rejected “bloc confrontation,” insisting that “hegemonism is not in China’s DNA,” and called on BRICS to build a more just and equitable international order.

    Reform of global financial institutions

    “…We require a fundamental reform of the global financial institutions so that they can be more agile and responsive to the challenges facing developing economies…,” Ramaphosa told the summit’s Business Forum on Tuesday, August 22.[2] He lauded the achievements made by the New Development Bank (NDB). Known as the BRICS bank, NDB was established by the group in 2015 as an alternative to traditional Multilateral Development Banks (MDBs) such as the IMF and the World Bank.

    In an August 22 interview with Financial Times (FT), Dilma Rousseff, former President of Brazil, and now President of the Shanghai-based NDB, stated that the bank, which already makes loans in China’s renminbi (yuan) currency, would also lend in the national currencies of other BRICS states: Brazilian real, Indian rupee, and South African rand.[3]

    Per FT:

    Rousseff said lending in local currency would allow borrowers in member countries to avoid exchange rate risk and variations in US interest rates. “Local currencies are not alternatives to the dollar,” she said. “They’re alternatives to a system. So far the system has been unipolar…it’s going to be substituted by a more multipolar system.”

    The Brics bank has also tried to distinguish itself from the World Bank and IMF by not setting lists of political conditions on loans. “We repudiate any kind of conditionality,” Rousseff said. “Often a loan is given upon the condition that certain policies are carried out. We don’t do that. We respect the policies of each country.”[4]

    NDB aims to issue 30 percent of its loans in local currencies by 2026, and 40 percent of funding is allocated to climate change mitigation and adaptation, including energy transition.

    Global governance reform

    In his plenary address, Ramaphosa said: “The world is changing. New economic, political, social and technological realities call for greater cooperation between nations. These realities call for a fundamental reform of the institutions of global governance so that they may be more representative and better able to respond to the challenges that confront humanity.”

    Point 7 of the summit’s final communiqué also calls for “a comprehensive reform of the UN, including its Security Council, with a view to making it more democratic, representative, effective and efficient, and to increase the representation of developing countries.…”

    Point 8 supports “the open, transparent, fair, predictable, inclusive, equitable, non-discriminatory and rules-based multilateral trading system with the World Trade Organisation (WTO) at its core, with special and differential treatment (S&DT) for developing countries, including Least Developed Countries.”

    Sustainable development goals (SDGs) and climate mitigation

    UNCTAD Secretary General, Rebeca Grynspan, in an interview with Xinhua news service ahead of the BRICS summit, called for a more inclusive multilateral system, naming China’s Belt and Road Initiative (BRI) as an example for cooperation on sustainable development.

    “We need the voice of the South in revitalizing the sustainable development goals as the only real commitment for solidarity and collective action at the global level,” said Grynspan. “All the BRICS countries are also in the G20. We want to make multilateralism more vibrant, more inclusive, and to help build a more multilateral world even in a moment of more multipolarity.” “It’s important to have another platform that represents the perspective of the developing world and the need for development and more opportunities.”[5]

    South African President Ramaphosa said that “…BRICS nations need to advance the interests of the global south and call for industrialised countries to honour their commitments to support climate actions by developing economic progress….”

    Options for global trade currencies and payment settlement systems

    At a BRICS summit plenary session Putin said, “…we see a need in increasing the role of our states in the international monetary and financial system, the development of interbank cooperation, the expansion of the use of national currencies and the deepening of cooperation between tax, customs, and antimonopoly authorities.”

    Pointing out that “Global economic recovery relies on predictable global payment systems and the smooth operation of banking, supply chains, trade, tourism and financial flows,” Ramaphosa also added that BRICS “will continue discussions on practical measures to facilitate trade and investment flows through the increased use of local currencies.”

    At present, BRICS members China and Brazil conduct their $170 billion of trade in their national currencies. China and Russia also settle 80 percent of their $190 billion trade in renminbi (yuan) and ruble using China’s CIPS and Russia’s SPFS payments settlement systems. Other nations settling part of their trade in yuan include Bolivia and Argentina, which recently also used yuan for an IMF loan payment. India offers rupee accounts with a growing number of trade partners, including Guyana.

    Additionally, each of the current five BRICS nations is piloting or trialling its own Central Bank Digital Currency (CBDC), a concept invented and pioneered on the Caribbean island of Barbados.

    Anil Sooklal, South Africa’s BRICS Sherpa said, “What we are talking about is creating more financial inclusion in terms of global financial transactions, global financial trade and how we conduct our payment.”

    The group indicated that complex discussions about a common trade currency are ongoing and would be explored at next year’s summit. Currency deliberations were led by Standard Bank Group CEO Sim Tshabalala, who indicated that the BRICS Business Forum gave noteworthy consideration to Afreximbank’s Pan-African Payment and Settlement System (PAPSS) for cross-border payments within Africa.[6]

    Reuters also reported that “South Africa’s finance minister said on Thursday that the BRICS grouping would not be looking to replace international payment systems including SWIFT, but rather consider creating one that would strengthen trade in local currencies.”[7]

    Such a BRICS platform would hold potential for “networking the networks,” i.e., serving as an umbrella mechanism interconnecting geographically dispersed “satellite” national, regional, and coalitional payment systems.  

    Expansion of BRICS grouping to incorporate more Global South nations

    In 2022 BRICS announced that it would consider accepting new members, and in the lead-up to this year’s summit, over 40 nations expressed interest in joining, with 22 nations submitting formal applications and another 20 making informal enquiries.

    At the end of the summit, current BRICS members announced that they have invited six nations, Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE), to become full members of BRICS effective January 1, 2024.

    By including three OPEC nations (Saudi Arabia, UAE, and Iran), BRICS membership will now count six of the world’s top 10 oil producing nations (with almost 50 percent of both global oil production and reserves), and at least four of the world’s top 10 gas producing nations (in total, seven of the top 20) in its fold. By including Argentina, the group now has three of the top five lithium producing countries (Brazil and China being the other two). Recently, Iran also has discovered vast lithium deposits, potentially the world’s second largest reserves. In addition, BRICS includes four of the top five agricultural producing countries (now seven of the top 20). This expanded BRICS group includes seven of the G20 nations, thereby solidifying the input of the Global South.[8]

    South Africa’s Minister of Finance, Enoch Godongwana, has indicated that this is just the first phase of admission of new members. BRICS leaders already have embarked on a second round of discussions, seeking consensus on additional member nations.[9] More countries are still in the queue to join BRICS, with Algeria, Bangladesh, Bolivia, Cuba, Indonesia, Kazakhstan, Kuwait, Thailand, Venezuela, and Vietnam among them. By next year’s summit, BRICS also aims to develop further guidelines for accepting prospective partner countries.

    Fortification and diversification of global supply chains

    In point 33 of the BRICS Summit 2023 final communiqué, the members state: “We encourage further cooperation among BRICS countries to enhance the interconnectivity of supply chains and payment systems to promote trade and investment flows.”

    A cursory glance at a map of the globe will suffice to demonstrate the impact of this new phase of BRICS member expansion on stabilising global supply chains and securing key maritime and overland trade routes. The following graphic from an article by Marcus Lu (and Bhabna Banerjee) is useful[10]:

    Russia–Ukraine conflict

    Addressing the open plenary session of the summit, Ramaphosa said, “BRICS has proven itself to be a credible entity that stands in solidarity and seeks to promote a more equitable global system. We thank you also for the efforts that are being made by a number of BRICS countries to bring about a peaceful end to the conflict between Ukraine and Russia…. We agree that… these types of conflicts are best brought to an end by negotiations…BRICS members will continue to be supportive of the various efforts to bring this conflict to an end through dialogue, mediation and negotiation.”

    Tracia Leacock, Ph.D. is an Independent Research and Content Consultant, with a keen interest in international relations. She may be contacted via Linkedin here.

    [1] The full joint statement for BRICS Summit 2023 is accessible at member states’ government websites. PDF link at South Africa presidency website, “XV BRICS Summit Johannesburg II Declaration,” August 23, 2023, https://www.thepresidency.gov.za/content/xv-brics-summit-johannesburg-ii-declaration-24-august-2023

    [2] In point 10 of the BRICS Summit 2023 final communiqué, the members state: “We call for reform of the Bretton Woods institutions, including for a greater role for emerging markets and developing countries, including in leadership positions in the Bretton Woods institutions, that reflect the role of EMDCs in the world economy.”

    [3] NDB lending in Russian ruble was suspended with the onset of the Russia–Ukraine conflict.

    [4] Michael Stott, Financial Times (FT), August 22, 2023, “Brics bank strives to reduce reliance on the dollar,” https://www.ft.com/content/1c5c6890-3698-4f5d-8290-91441573338a

    [5] Martina Fuchs, Xinhua, August 22, 2023, “Interview: UNCTAD chief urges ‘inclusive multilateral system’ ahead of BRICS summit,” https://english.news.cn/20230822/f8ed708a1c074b2b8f7f2d71bbd96f0a/c.html

    [6] Siphelele Dludla, DFA, August 23, 2023, “BRICS nations reach stalemate on potential common reserve currency,” https://www.dfa.co.za/opinion-and-features/brics-nations-reach-stalemate-on-potential-common-reserve-currency-2e19b006-2340-41a0-ac5a-05256b8befea/

    [7] Reuters, August 24, 2023, “BRICS payment system would not replace SWIFT—S. Africa finance minister,” https://www.reuters.com/world/africa/brics-payment-system-would-not-replace-swift-safrica-finance-minister-2023-08-24/

    [8] See Marcus Lu (and Bhabna Banerjee), Visual Capitalist, August 24, 2023, “Visualizing the BRICS expansion in 4 charts,” https://www.visualcapitalist.com/visualizing-the-brics-expansion-in-4-charts/, for a detailed overview of the impact of the BRICS expansion.

    [9] Nokukhanya Mntambo, Eyewitness News (EWN), August 26, 2023, “Algeria likely to be among second batch of countries to join BRICS—Godongwana,” https://ewn.co.za/2023/08/26/algeria-likely-to-be-among-second-batch-of-countries-to-join-brics-godongwana

    [10] Marcus Lu (and Bhabna Banerjee), Visual Capitalist, August 24, 2023, “Visualizing the BRICS expansion in 4 charts,” https://www.visualcapitalist.com/visualizing-the-brics-expansion-in-4-charts/

  • BRICS Summit 2016: Five Key Trade Takeaways

    BRICS Summit 2016: Five Key Trade Takeaways

    Alicia Nicholls

    The BRICS grouping, comprising of the emerging economies of Brazil, Russia, India, China and South Africa, held its 8th Summit in Goa, India under the theme “Building Responsive, Inclusive and Collective Solutions” October, 15-16, 2016. India currently holds the chairmanship of the five-nation grouping.

    Here are the main trade takeaways from the Summit:

    1. Support for the WTO-based Multilateral Trading System

    The BRICS leaders have reiterated their support for the rules-based multilateral trading system and the World Trade Organisation’s centrality. Leaders noted the increased spaghetti bowl of bilateral, regional and plurilateral trade agreements and advocated that these agreements should be complementary to the multilateral trading system. According to the Goa Declaration, BRICS leaders also encouraged parties to ” align their work in consolidating the multilateral trading system under the WTO in accordance with the principles of transparency, inclusiveness, and compatibility with the WTO rules.”

    2. Continued support of Doha Development Agenda

    Contrary to the G20 Statement where the Doha Development Agenda was essentially scrubbed from the trade vocabulary, BRICS leaders reiterated their support for advancing negotiations in the DDA, reflecting the sharply divided opinion on the future of Doha  which was demonstrated in the Nairobi Ministerial Statement. They also emphasised the importance of implementing the decisions taken at the Bali and Nairobi Ministerial Conferences and urged all WTO members to work together to ensure a strong development oriented outcome for MC11 and beyond.

    3. Promoting BRICS Economic Cooperation

    The BRICS leaders praised progress made so far on the implementation of the Strategy for BRICS Economic Partnership and emphasised the importance of the BRICS Roadmap for Trade, Economic and Investment Cooperation until 2020.

    4. Improving intra-BRICS Customs Cooperation

    The BRICS leaders commended the establishment of the Customs Cooperation Committee of BRICS and the signing of the Regulations on Customs Cooperation Committee of the BRICS in line with the undertaking in the Strategy for BRICS Economic Partnership to strengthen interaction among Customs Administrations.

    5. Double intra-BRICS trade by 2020

    In his plenary address, India’s Prime Minister Narendra Modi called on fellow BRICS leaders to double the value of intra-BRICS trade to $500 billion by  2020. According to Prime Minister Modi, intra-BRICS trade was $250 billion in 2015. He further noted that this target would require “businesses and industry in all five countries to scale up their engagement” and “for governments to facilitate this process to the fullest”.

    The full text of the Goa Statement 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.

  • WTO Panel rules in US’ Favour in Solar Dispute against India

    Alicia Nicholls

    A World Trade Organisation (WTO) Dispute Settlement Body panel has issued its report in the dispute  India — Certain Measures Relating to Solar Cells and Solar Modules in which the United States challenged the domestic content requirements imposed by India relating to solar cells and solar modules under the latter’s Jawaharlal Nehru National Solar Mission. The Panel found in favour of the US’ view, holding that India’s domestic content requirements were discriminatory and inconsistent with India’s obligations under Article III:4 of the General Agreement on Tariffs and Trade (GATT) 1994 and Article 2:1 of the Agreement on Trade Related Investment Measures (TRIMs).

    The dispute is  one in a growing body of WTO disputes in which one member’s government support programmes for the renewable energy sector (whether local or national) have been challenged by another member as being inconsistent with the former’s obligations under WTO rules. It is therefore not surprising that a long list of countries notified their interests as third parties to this dispute, namely: Brazil, Canada, China, Ecuador, the European Union, Japan, the Republic of Korea, Malaysia,Norway, Russia, Saudi Arabia, Chinese Taipei and Turkey.

    Background

    The Indian Government launched the National Solar Mission (NSM) in January 11, 2010 as one of the eight national missions under India’s National Action Plan on Climate Change (NAPCC). The NSM has the aim to promote the use of solar energy in India, foster energy security and make India a global leader in solar energy. According to the Indian Ministry of New and Renewable Energy’s website, the NSM’s ambition is “to deploy 20,000 MW of grid connected solar power by 2022” and to reduce the cost of solar power generation in India through four key aspects, including domestic production of critical raw materials, components and products.

    At the heart of the dispute, the Indian Government required solar developers (or their successors to the contract) to purchase or use solar cells or solar modules of domestic origin in order to be eligible to enter into and maintain certain power purchase agreements under the NSM.

    The US argued that these domestic content requirements mandated by the Indian Government under Phases I and II of the NSM were discriminatory and inconsistent with India’s WTO obligations. Specifically, the US challenged the measures’ consistency with Article III:4 of the GATT 1994 (National Treatment), arguing that they accord less favorable treatment to imported products than to like domestically produced goods.Additionally, the US argued that these domestic content requirements were trade-related investment measures which fell within paragraph 1(a) of the Illustrative List of the TRIMs Agreement’s annex and were therefore inconsistent with Article 2.1 of the TRIMs Agreement.

    In its defense, India argued that its domestic content requirements at issue were not inconsistent with Article III:4 of the GATT 1994 or Article 2.1 of the TRIMS Agreement. India also sought to rely on the exceptions in  Article III:8(a), Articles XX(j) and/or XX(d) of GATT 1994 (General Exceptions).

    The US requested consultations with India initially in February 2013 and then in relation to Phase II of the NSM in February 2014. A panel was established in May 2014 and the parties agreed to the panel’s composition in September of that same year.

    Ruling

    In its report circulated today, the Panel found in favour of the US’ view. It held that:

    • India’s domestic content requirements in question were trade-related investment measures for the purposes of the Illustrative List in the TRIMs Agreement’s Annex and were therefore inconsistent with Article 2.1 of the TRIMs Agreement.
    • The Panel also found that the domestic content requirements in question do accord “less favourable treatment” within the meaning of Article III:4 of the GATT 1994

    In regards to India’s argument about the government procurement derogation under Article III:8(a) of the GATT 1994, the Panel referred to the Appellate Body’s interpretation of that article in the Canada — Renewable Energy / Feed-In Tariff Program dispute in which the EU had successfully challenged domestic content requirements imposed by the Ontario provincial government in relation to its Feed-In Tariff (FIT) programme. Relying on its interpretation in that dispute, the Panel held that discrimination relating to solar cells and modules under the domestic content measures is not covered by Article III:8(a) of the GATT 1994.

    The Panel also argued that India failed to show that the domestic content requirements were justified under the general exceptions, Article XX(j) or Article XX(d) of the GATT 1994.

    The big picture

    What this dispute and others like it concerning domestic support for renewable energy programmes show is the increasing intersection and conflict between  trade and environmental policy, in particular, trade and climate change policy.It is an issue which is more than moot for small island developing States  like Barbados  (a Caribbean leader in solar energy which aims to become a “green economy”) in regards to how much policy space is available to policy makers to provide support for the advancement of the renewable energy sector in the country without running afoul of the country’s WTO obligations.

    The relationship between trade and climate policy is one of the issues which was discussed at length in the E15 Initiative Report entitled “Analysis and Options for Strengthening the Global Trade and Investment System for Sustainable Development”, particularly in this think piece  considering “the costs and benefits  for adjusting WTO rules to provide additional policy space to mitigate climate change and promote renewable energy”.

    As countries take more aggressive measures in order to meet their national emissions reduction targets in the spirit of the Paris Agreement’s goal to limit the global temperature increase to no more than 2 percent above pre-industrial levels (with the best endeavour goal of 1.5 percent), there is likely to be more conflict between WTO rules and climate change policies in years to come. WTO members will be forced to address ways in which the WTO rules can be flexed to more adequately accommodate members’ climate change mitigation policies, while at the same time ensuring that they are not used as a guise for protectionism.

    For further information on the US-India Solar dispute, please see the  WTO’s case summary and the full Panel Report.

    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.

  • Embracing ‘Mother India’: Some thoughts on prospects for enhanced India and Trinidad & Tobago trade

    Alicia Nicholls

    I was quite delighted when I read in the news last week that the Prime Minister of Trinidad & Tobago, the Hon Kamla Persad-Bissessar, is currently on a ten day official mission to India at the invitation of Indian Prime Minister, the Hon Manmohan Singh. Though I am not Trinibagonian or Indian for that matter, the news piqued my interest, particularly because I am a firm believer in south-south trade and development.  Two weeks ago, I wrote about the prospects of enhancing Brazil-CARICOM trade. This week, the state visit by Prime Minister Persad-Bissessar serves as a good backdrop against which to consider the prospects for enhanced Trinidad & Tobago-India trade.

    India-Trinidad & Tobago connection

    Trinidad & Tobago proudly calls itself the land of steelpan, calypso and chutney. Successive waves of European colonialism, indenture-ship and later waves of migration have made the twin island republic one of the most multicultural societies in the Commonwealth Caribbean.

    Trinidad & Tobago and India share more than just a deep passion for cricket. Though separated by many thousands of kilometers of land and sea, they are united by deep historic and cultural bonds rooted in the colonial experience. Indo-Trinibagonians are estimated to comprise 42% of that country’s population. Take a walk down the streets of Port of Spain on an average day and you can see restaurants and street vendors selling Indian-inspired local delicacies like roti and buss-up-shut. The uptempo rhythm of Chutney music shares the airwaves with soca and calypso and national holidays like Indian Arrival Day, Diwali and Eid-ul-Fitr are celebrated with reverence.

    Prime Minister Kamla Persad-Bissessar, whose ancestral village is in Bihar in India, is the first woman and the second person of Indian descent to ascend to the reins of Government in Trinidad & Tobago. She is also the first woman of the wider Indian diaspora to become a Head of Government.  Accompanied on the mission by a high-level ministerial and business delegation which also includes cricketing legend, Brian Lara, Prime Minister Persad-Bissessar is the chief guest at the 10th Pravasi Bhartiya Divas (PBD) ‘Global India-Inclusive Growth’ in Jaipur and will be conferred the coveted Pravasi Bharatiya Samman Award.  The PBD is a prestigious annual event which unites distinguished persons of Indian origin across the world. The event is part of India’s wider efforts to court and harness the potential of its vast diaspora for socio-economic development in the homeland and Trinidad & Tobago has seized the opportunity with open arms.

    Trinidad & Tobago-India Bilateral Trade

    Trinidad & Tobago and India have long shared strong diplomatic ties, which have been cemented through formal and informal cultural exchanges over the years, including the establishment of the Mahatma Gandhi Institute for Cultural Cooperation in Port of Spain and the provision of Indian Technical and Economic Cooperation (ITEC) programme scholarships to  Trinibagonian students each year.

    Trinidad & Tobago and India already do a fair and growing amount of bilateral trade.  According to a recent study published by the Export-Import Bank of India, Trinidad & Tobago is the leading country for Indian imports from the region, accounting for 79% in 2009-10 and is the second largest importer of Indian goods from the region (after the Bahamas).  The report reveals that manufactures of metals account for nearly half of Trinidad & Tobago’s imports from India followed by petroleum products, primary & semi-finished iron & steel, pharmaceutical products and plastic & linoleum products. Trinidad & Tobago is also the largest destination for Indian investment in the region, receiving 67.5% of these flows. The main sectors  for Indian investment in Trinidad & Tobago include finance, iron and steel and metal and food processing. Several major Indian multinational firms like Arcelor Mittal and the New India Assurance Co already have a presence in that country. India and Trinidad & Tobago also have a double taxation treaty.

    Embracing ‘Mother India’

    The move by Prime Minister Persad-Bissessar to capitalize on India’s overtures towards engaging its diaspora for homeland development is a smart and strategic one. Despite its current economic woes, India remains one of the most robust and dynamic economies in the world.  Currently the world’s tenth largest economy, India is predicted by the economic think tank the Centre for Economics and Business Research (CEBR) to become the world’s  fifth largest economy by 2020.   Besides the gains which Trinidad & Tobago-India trade present for south-south trade, Indian expertise and investment could help in Trinidad & Tobago’s export diversification, while greater trade links with India could help reduce the vulnerability associated with an over-reliance on too few export markets.

    Moreover, the move to embrace ‘Mother India’ is one which has global precedent. The Pacific island nation of Mauritius, which bears several similarities with Trinidad & Tobago including a large Indian diaspora, has strategically deepened its economic and cultural links with the sub-continent.  Mauritius is not only among the top direct investors in India, but the island is currently one of the preferred destinations for Indian outward FDI and serves a gateway for Indian investment in Africa.

    Though Indian investment in foreign countries has slowed, closer economic ties between India and Trinidad & Tobago could make it easier for Indian businesses to invest in and do business in Trinidad & Tobago and vice-versa.  The Export-Import Bank of India study cited several areas of potential sectors of Indian investment in Trinidad & Tobago, chiefly energy, fish processing, film and ICTs.  Besides its low energy costs, well-skilled workforce and favourable investment climate and incentives package, the twin island republic’s geographic location  has also been touted by its Prime Minister as the perfect base for Indian investment in the Latin America and Caribbean (LAC) region and for Ayurveda and wellness centres specialising in traditional Indian medicine and healing.

    In terms of Trinidad & Tobago-India services trade, there is much potential as well given the skills and know-how which Indian professionals could continue to bring to Trinidad & Tobago, particularly in the areas of engineering, traditional Indian medicine and information technology. This expertise sharing will not be one-way. As Prime Minister Persad- Bissessar  acknowledged, Trinidad & Tobago can provide to India over a hundred years of technical expertise in oil and natural gas production. Indeed, Trinidad & Tobago is already sharing this expertise with other developing countries, including Ghana.

    There is also much scope for expanded cultural industries trade and tourism given the strong cultural affinity many in the Indo-Trinibagonian community feel with ‘Mother India’ and the popularity of Bollywood music and films in Trinidad & Tobago. Trinidad & Tobago has also signaled an intention to promote steelpan music in India. Despite the long distance and prohibitive costs of air travel, Indo-Trinidadians seeking to trace their Indian roots and to learn about their ancestral home could be a good target market for Indian tourism officials. In regards to Indian tourism in Trinidad & Tobago, the Trinidad & Tobago government has already waived visa restrictions on Indians visiting that country for tourism and business purposes within a 90 year period.

    Indeed, the prospects for deepening Trinidad & Tobago and Indian trade are bright and exciting. According to the joint statement released by India and Trinidad & Tobago, bilateral agreements have already been signed on cooperation in the areas of air services, culture, technical education and traditional Indian medicine. Prime Minister Persad-Bissessar has also offered Trinidad & Tobago as a venue for hosting PBDs in the Caribbean. I think it would be useful for Trinidad & Tobago and India to encourage cooperation between their respective investment promotion agencies in order to better inform potential investors of investment opportunities in their respective countries and to facilitate the flow of investments between the two countries.  Just two more days are left in the official visit. I look forward to what other prospects they bring.

    Alicia Nicholls is a trade policy specialist and law student at the University of the West Indies. You can contact her here or follow her on Twitter at @LicyLaw.