Trade Barriers

Jun 19, 2008 Editorial

The recent publicity given to the efforts of the government in CARICOM to their quest for secure food security was in large part due to the calamitous rise in food prices across the globe and, of course, the Caribbean.

The Jagdeo Initiative, which had been proffered since 2002 to break the logjam in getting our act together in the area of agriculture, has been a seminal and prescient policy innovation in this regard.

By identifying the ten major constraints that have stymied our efforts since the formation of CARICOM and delegating responsibility to the several member states to take the lead in formulating plans to overcoming those obstacles, it would appear that progress might be made if our leaders can demonstrate the necessary political will.

However, we know for a fact that most political leaders are typically fixated on their day-to-day domestic political contingencies and it is for this reason that we have been insisting that the CARICOM Secretariat and the other CARICOM bodies become much more energetic in the execution of their mandate to facilitate the plans of our regional body.

We are expecting that they will become much more pro-active in the present drive to expand our production of food to fill the region’s need.

However, they must be aware that while the present overall bill for food imported into the region amounts to a staggering US$3.5 billion, when this is broken down into individual food categories, our markets may still be too small to deliver the full benefits from optimum scales of production.

It should be evident therefore that in addition to satisfying the regional markets, we have to also look further afield to develop markets.

So even though we are still in the throes of identifying investors and investment possibilities in our agricultural sector, CARICOM ought to examine what barriers may exist in other countries against shipping our products there.

For instance, last year a CARICOM-funded study showed that papaws from Guyana are prohibited from entering the US market but did not identify the reasons for the ban.

Have they rectified this oversight yet or are they waiting for us to invest in papaws and then discover we cannot ship the excess production (above that to our tourist hotels, etc) to the US, which is the world’s largest market for the fruit?

The point is that trade barriers are still a feature of the modern world and the moribund state of the Doha Round of the WTO negotiations to deal with them highlights the need for CARICOM to be very active in this area.

One of the major stated objectives of the WTO was to assist developing countries such as ours secure a share in global trade commensurate with our development needs.

However, to date, there has been at best only symbolic progress in enhancing market access for developing countries.

Though trade among developing countries — also called “south-south trade” — is on the rise, developed countries continue to be the major markets for exports originating in developing countries.

Therefore, increased market access in developed countries is vital to the promotion of exports by developing countries and, to repeat the point, the CARICOM machinery will have to more diligent in identifying barriers and how they might be overcome.

UNCTAD has consistently pointed out that developed countries continue to maintain a multitude of barriers against products from developing countries.

Of interest to us, in the instance of agricultural products, UNCTAD data shows that while developed countries on average reduced tariffs on agriculture exports from other developed countries by thirty-nine per cent, the reduction on exports from developing countries was a measly twelve per cent.

Higher tariffs are not the only barrier to our increased trade with the lucrative developed countries markets – there are their agricultural subsidies, which as a point of fact, brought the Doha round to a halt.

Even where traditional trade barriers may be low – as possibly in the soon-to-be-signed EPA with the EU – non-traditional barriers (NTBs) make market access difficult.

The NTBs include anti-dumping and countervailing duties; and health, environment and safety standards and technical regulations.

There are two courses open to us – bilateralism or multilateralism in trade negotiations. Hopefully the bilateral EPA with the EU has persuaded even the mandarins of CARICOM that those negotiations will be too one-sided. That leaves the multilateral fora. How are we doing there CARICOM?

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Trade Barriers

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