Internal, external barriers have detrimental effects on trade in Guyana

Dec 08, 2013 News

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Non-tariff barriers as well as certain in-country conditions have been identified as the ‘evils’ which continue to hinder lucrative trade between Guyana and exporters on the international market.

This comment was made by renowned Canadian professor and international business expert, Mr. Thomas Mc Kaig at a press briefing recently at the headquarters of the Guyana Manufacturing and Services Association (GMSA) on Waterloo Street, Georgetown.
Mc Kaig is a published author of academic texts which are used at the Canadian University of Guelph where he serves as an adjunct professor in the Executive MBA and undergraduate business programmes.
With over 30 years of experience, the professor is known to have delivered business solutions on quality management and international trade in over 40 countries.
“Non tariff barriers” simply refers to the method by which countries restrict imports of certain goods into their market despite the existence of trade agreements.
These barriers which may be unfair in some cases, may take forms such as quality standards and other types of certificates at the Ports of Entry into the destination countries.
According to Mc Kaig, these restrictions that many of Guyana’s exporters face have harmful effects on trade and export as well as business revenue for some time now.
As a direct consequence, the expert has outlined that the cost of production of some Guyanese products rose significantly thereby rendering local products uncompetitive in the external market place.
Whilst this is the case, foreign products are allowed to enter Guyana’s market freely since non-tariff barriers are non-existent.
He noted too, that the foreign suppliers and domestic importers do not always adhere to the rules and Guyanese Customs Administration neither makes nor enforces demands for safer, healthier or higher quality imports.
With this in mind, the manufacturing association has decided to tackle this imbalance head-on and eventually propose a common Caribbean non-tariff regime that should do two key things; permit a level playing field across the import and export spectrum, and ensure that all exporters face the same non-tariff requirements.
GMSA in collaboration with its business development partner, the Canadian Executive Services Organization (CESO), invited Mc Kaig to conduct an assessment to ascertain whether the demands for additional certification of product standards and technical regulations amount to unfair practices.
The consultant disclosed that his findings will be handed over to the GMSA soon. A statement on the way forward based on the given recommendations will be provided to the media as soon as possible by the GMSA.
McKaig is expected to outline in his report, his advice on the most effective means of encouraging local companies to comply with existing legally enforceable product standards and trade requirements.
Moreover, the consultant said that in Guyana’s case, two factors which continue to stymie lucrative trade are high electricity costs and the quality of energy supplied, as well as the shallow draught of the Demerara Navigational Channel and Georgetown Port.
The port, he said, prevents vessels of a certain size from entering and reduces the amount of cargo freight allowable.
He noted that while these internal barriers have a “spin off into other issues,” chief among them is higher shipping and transportation costs that are unavoidably passed on to “end-users.”
However, at a recent workshop on energy management, it was disclosed that members of the GMSA are opposed to any audit by the Guyana Energy Agency which is one of the steps mentioned in addressing effectively, high electricity costs.
Dr. Mahender Sharma, the Chief Executive Officer of the GEA, had stated at the seminar that his organization carries out energy audits for companies to help them better manage their energy consumption.
However, Mr. Clement Duncan, one of the Directors of the GMSA said that it’s normal for companies not to be too fond of being audited by a government controlled agency. He said, “Frankly speaking, anything Government owned is government controlled and even members of the GMSA would not be open to audits by the GEA because they fear that certain sensitive information will be leaked to certain government officials. It’s as simple as that. And in order for any audit to take place it would be preferred that it be done by an independent body.”
Also of note was that members of the media informed the professor that there have been similar studies facilitated by the GMSA and to date there are no noticeable improvements in the sector.
Whilst his report is of great importance, it was then asked about corrective measures that would be taken this time around to ensure that his work would not have been done in vain.
To this, Mr. McKaig said that he strongly believes that the executives of the sector will take measures to improve the competitive ability of Guyana.
Mr. McKaig is expected to return early next year to relate his findings with local companies.

 

 

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