Export Competitiveness in the
context of Trade Negotiations (rev)
Regional Workshop on Export Competitiveness Strategies
23-25 May, 2006
Amaryllis Hotel, Barbados
1
CARICOM’s Competitiveness vs. select
Investment Competitors
-10
Jamaica
Trin & Tob
India
Dom Rep
Costa Rica
China
10
30
31
50
53
70
70
90
110
50
60
50
64
65
Growth Competitiveness
Microeconomic Competitiveness
49
57
n= 116
102 101
Source: Global Competitiveness Report 2005. World Economic Forum
2
What is the big deal about trade
negotiations?
CARICOM Gaining market share
• LNG: 60% vs 12%
• Beer: 12% vs 7%
• Diamonds: 60% vs -19%
• Fresh papaya: 16% vs 12%
• Fertilizers: 556% vs 13%
• Frozen fish fillets: 27% vs 10%
• Electrical relays: 307% vs 4%
CARICOM Losing market share
• Bananas: -8% vs 7%
• Shrimp/prawns: -4% vs 0%
• Portland Cement: -1% vs 6%
• Female underwear: -16% vs 5%
• Medicaments: -9% vs 29%
• Surface active preps: -4% vs 16%
• Toilet soaps: -5% vs 9%
3
Summary of External Negotiations
Arena
Status
Critical issue(s)
WTO
Formula for tariff ;
HK Ministerial in
December failed to
Services offers; trade
break deadlock in
facilitation rules
subsidies agriculture.
 Service contracts; faster customs
clearance; agriculture will be in
trouble if not on special products list
EPA
Phase 3 started in St.  ROOs; reciprocity
Lucia- drafting text in levels in mkt access for
progress
goods and services.
Food safety and
customs rules.
Competition for vulnerable
companies; Ability to attract JV/devt
financing; change prodn to meet
ROOs;
FTAA
Brazil and US trying
to break deadlock.
Disagreement on
cross plurilateral
process
US granting other companies CBI
benefits erodes our export share
Trade facilitation; SPS
Impact on Competitiveness
4
Summary of External Negotiations
Arena
Status
Critical issue(s)
Impact on Competitiveness
CSME
12 MS signed
treaty; 9 have
enacted into
Domestic law
Movement of natural persons;
elimination of capital/investment
restrictions;
Reduction in transaction costs;
Ability to attract JV;  Service
contracts but services framework
needs completion;
Bilats
Canada
Canada wants an FTA, which we
don’t want
Continued duty preferences into
Canada when CARIBCAN expires
in 2006;
DR
Services and Investment provisions
not yet finalized
DR agreement is important to
exploit US$5 bn in untapped trade
Costa
Rica/Cuba/Venezu
ela
MERCOSUR
US FTA
LATAM provides cheap inputs for
Tourism etc.
No clear mandate for a US-FTA
US FTA important to provide
continued duty preferences in 5
2008
How do the issues being discussed in
Negotiations affect my firm’s competitiveness?
Issue
Likely Outcome
Subsidies ↓ subsidies in
traded goods
Tariff
Business Impact
↑ prices for some imported raw materials.
↑ ability to compete with imported finished
products,  ↓ local sales
↓ tariffs on non↑ margins for importers/distributors. ↓
sensitive items. Shift local manufacturing margins. Companies
to internal charges. need to know trade defense.
Quotas
No quotas or tariff
rate quotas
Services
↓ in domestic
regulations
↑ price competition in export market. ↓
export margins. Consignees/distributors
leverage ↑
More open services trade environment.
6
How do the issues being discussed in
Negotiations affect my firm’s competitiveness?
Issue
Likely Outcome
Preferences Eliminated.
Trade
facilitation
Export
credits
Non-Tariff
Measures
Business Impact
↓ in export revenue. More
difficult to get foreign partners.
↑ notification, faster customs ↓ time to clear raw materials;
clearance time. Transaction predictable customs rules and
based customs valuation.
import valuations.
More restrictions on use of
Banks could be restrained in
credits (inc > 180 day LCs) terms of working capital loans.
NTMs itemized and
NTB’s continue to inflate
categorized.
production costs and retard
7
export growth
CSM Services framework being
widened
• Currently covers 5 categories (graduates, media
workers, musicians, artistes and sportspersons);
• Revised treaty committed MS to provide wider
coverage (self employed, businesspersons, spouses
etc), but timetable staggered;
• CARICOM accreditation agency being established
by July 5, 2006
• CARICOM is also consulting various sectors (health)
• Professional services study being contracted
8
Important deadlines in Current trade
negotiations
• April 2006- tariff reduction formula in WTO to be decided.
Decisions to be made on sensitive products.
• July 2006: Services offers/requests finalized
• Dec 06- CARIBCAN waiver expires [new agreement required]
• Sep. 30, 2008- CBI expires [new agreement required]
• 2013- agricultural subsidies to be eliminated
• EPA discussions ongoing to replace Cotonou by 2008 (check
www.crnm.org).
• Bilaterals between Canada and possibly US and Mercusor
9
If Private Sector does not prepare
positions on these issues then….
• We will continue to “undercompete”. We do not adequately
enforce the rights that we so costly negotiate. In many
cases this results in poor development benefits of FTAs
such as rural development, environmental protection etc.
• National and regional PSOs will lose membership;
• Private sector not able to maximize export sales;
• Imports will continue to displace local sales;
• Customs procedures will continue to be more focused on
revenue than trade facilitation
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When you go back to your firm….
1. Spend 20 minutes/week to read TradeBrief and
listen our Caribbean TradeBeat on www.crnm.org
2. Speak to your staff and unions/staff associations
about trade issues. People need to know why they may either
be called to move to another branch being opened overseas, or
lose their jobs;
3. Email me [email protected] with your
comments and suggestions. All emails are
confidential. Also contact your Chamber and trade
Ministry
4. PARTICIPATE IN OUR SURVEYS
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