Making Effective Use of Trade Agreements Presentation by Pamela Coke-Hamilton

Access to Foreign Markets CARIFORUM-EC EPA (2008) CARICOM-Costa Rica (2004) CARICOM-Cuba (2000) CARICOM-Dominican Republic (1998) CARICOM-Colombia (1994) CARICOM-Venezuela (1992) CARIBCAN (1986) CBI (1983)

Status of Agreements EPA – all CARIFORUM Member States expected to have completed domestic procedures to allow for provisional application of the EPA by mid December 2008 CARICOM-DR – to discuss the implications of the regional preference provision of the EPA CARICOM-Cuba – consideration is being given to expansion of market access provisions information taken from the statement at the conclusion of 26th COTED (24-25 November 2008)

CARICOM Exports to FTA Partners Dominican Republic Venezuela Colombia Costa Rica Cuba We find that in the case of the Dominican Republic and Colombia there has been an increase in exports to these countries after the signing of the trade agreements, though in the case of Colombia this has occurred after 2004. The value of exports to Cuba also has increased compared to the value of exports at the time of signing. However much of the increase in exports is due to exports from a single country -Trinidad and Tobago. (note that data for Antigua and Barbuda and Montserrat are missing, also note that the definition of CARICOM is as used in the respective trade agreements, eg. in both agreements with Colombia and Venezuela, Bahamas , Suriname and Haiti are not included, while in Costa Rica, Bahamas, Haiti and Montserrat are not included, while in the DR Bahamas, and Haiti are excluded) Source of data is the IMF Direction of Trade Statistics

Limited Effective Market Access Share of Imports from CARICOM in Respective Country Total Imports (%) Date of Signature of FTA 2007 Costa Rica 0.24% (2004) 0.15% Cuba 1.06% (2000) 0.76% Dominican Republic 0.65% (1998) 1.85% Colombia 0.52% (1994) 0.97% Venezuela 0.52% (1992) 0.19% Share of partner countries’ markets have only increased in two cases, the Dominican Republic and Colombia (data taken from the IMF direction of trade statistics)

Utilization Rate (%) of CBI by CARICOM The data finds that over the last eight years an average of 33% of the goods exported by CARICOM to the US entered that market under the preferential terms accorded by CBI. .(utilization rate defined as US imports under CBI from CBI country divided by total US imports from CBI country) Source of data is USITC

2007 Utilization Rate (%) of CBI A look at more detailed figures for 2007, finds that there is a wide dispersion in the use of the CBI provisions from a high of 88% in Haiti to 1.6% in the case of Antigua and Barbuda (and 0% in the case of Montserrat). Though for five of the countries, just over 30% of their exports benefit from CBI. The source of this information is the USITC

% of Imports that Benefit from CARIBCAN Year Imports Under CARICAN ($CDN millions) Total imports ($CDN millions) CARIBCAN Imports as of total imports (%) 2006 114.7 925.8 12.4 2005 116.7 862.0 13.5 2004 120.9 784.1 15.4 2003 109.4 769.6 14.2 2002 152.5 705.6 21.6 2001 111.6 764.9 14.6 2000 62.0 519.0 11.9 1999 64.9 527.2 12.3 1998 40.7 547.6 7.4 1997 22.6 531.6 4.3 Over the last 10 years an average of 12.8% of imports from the CARIBCAN CARICOM beneficiaries benefit from the CARIBCAN duty-free preferential treatment. Though the current trend indicates that the value of the goods benefiting from the preferential treatment has been declining, from a high of 21.6% in 2002 to 12.4% in 2006

Canada Imports from CARICOM in 2006 Country MFN Free as % of Total Imports GPT Free as % of Total Imports CARIBCAN Free as % of Total Imports Total Free as % of Total Imports Antigua & Barbuda 38.42 .. 20.08 58.50 Bahamas 73.25 0.00 20.88 94.13 Barbados 44.28 30.65 21.66 96.59 Belize 87.68 2.02 0.66 90.36 Dominica 31.64 Grenada 44.16 29.36 26.06 99.58 Guyana 95.8 3.54 0.26 99.59 Jamaica 94.42 0.05 3.59 98.06 Montserrat 77.41 St. Kitts & Nevis 34 0.11 34.11 Saint Lucia 86.69 St. Vincent/Gren. 79.07 1.62 80.68 Trinidad & Tobago 69.12 29.62 98.79 Total 84.20 1.08 12.39 97.67 One feature of CARICOM trade with Canada is that even though there is low utilization of the preferences available under CARIBCAN, a significant portion of the countries’ exports enters Canada duty free due to zero tariffs offered under most favoured nation (mfn) and the general preferential tariff (gpt)

EC 27 Imports from CARIFORUM Countries (€’ millions) Jan-Aug 2007 Jan-Aug 2008 Antigua & Barbuda 177.3 100.1 Barbados 34.5 28.7 Bahamas 480.7 511.9 Belize 68.5 78.8 Dominica 8.8 6.9 Dominican Republic 573.7 579.0 Grenada 3.9 8.6 Guyana 131.0 132.8 Haiti 23.5 22.0 Jamaica 337.9 379.1 St. Kitts & Nevis 2.8 1.6 St. Lucia 43.9 15.1 St. Vincent & the Grenadines 79.6 117.0 Suriname 176.9 131.9 Trinidad & Tobago 657.9 1,594.8 In total during the eight month period of 2008, during which the CARIFORUM countries were provided with duty-free access to the EU markets, the EU imported some €3.7 billion from these countries compared to €2.8 billion in same period in 2007. The main driver was the petrochemical sector in Trinidad and Tobago. In the case of Grenada and St. Vincent and the Grenadines the exportation of boats contributed to the increase in exports.

Reasons for the Lack of Implementation Capacity Funding Shift of methodology – Private Sector Infrastructure Supply side constraints, etc.

Need for Implementation Mechanism Critical need for implementation mechanism Currently present institutional structures extremely overwhelmed and under funded Mechanism would implement all agreements in cohesive and coherent manner Regional linked to National

Structure for Implementation Lobbying /Political Research AG BS BB BZ DM GD GY JM KN LC VC TT SR HT OECS Member Countries Executive Director RA LA Legal Private Sector Project Fund Development National Impl. Liaison National Implementation Bodies PSO T.S. P.O. Regional Implementation Mechanism Mon.& Eval. Unit ME.O

Potential Winners Tourism Cultural/Entertainment Services Geographical Indicators – eg Caribbean Rum, Grenadian Nutmeg, Trinidad Cocoa, IPR – biological diversity – development of natural medicines – traditional knowledge

Example of the functionality of the mechanism Eg. The objective would be to increase the CARICOM’s share of the EU tourism market - # of visitors and € & £ Need to identify target market and their current and future needs Develop plans with countries to harmonize or sufficiently diversify industry in the region so that CARICOM countries are not in competition with each other Ensure that development of industry is sustainable Discuss with the private sector and individual country implementation units their needs to undertake industry development Develop project profiles in accordance with donor requirements to submit for funding Market Research – Specific potential for market penetration, potential niche markets; what will sell, what will work Legal – Mutual Recognition Agreements; Immigration policies, professional services; Private sector- Understanding how the private sector works- what are the specific needs and shortcomings; how do they need to retool to take advantage National Liaison Unit – self evident Project Fund Development – Inherent weakness in capacity of the Caribbean to draw down on available funds – several reasons however is a reality that needs to be addressed in order to ensure timely, relevant and continuous access to critically needed funding Monitoring and Evaluation Unit

Thank you Pamela Coke-Hamilton Director of Trade and Tourism Organization of American States