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Saving the CARICOM-Canada Talks

Saving the CARICOM-Canada TalksNegotiations between Canada and the 15 member-states of the Caribbean Community (CARICOM) on a Free Trade Agreement (FTA) are now in danger of ending without result on June 30 – a ‘drop dead’ date that both sides accepted toward the end of last year.

After six rounds of negotiations since March 2009 – the last one being held in Canada in March 2014 – the Canadian government has reportedly told CARICOM governments that they should ‘raise their level of ambition’ or, on June 30, Canada will end the talks.
 
By ‘raising their level of ambition’, the Canadian government means that CARICOM governments should, among other things, commit to removing tariffs on Canadian goods imported into CARICOM markets, grant more binding protection for Canadian investment into wider areas of Caribbean economies, agree on rules that determine the true origin of products, and allow competition from Canadian companies to bid for projects in the region.  Of course, there would be reciprocal arrangements granted to CARICOM companies into the Canadian market.  But, given the relatively meagre resources available to Caribbean companies, they would hardly be able to take advantage of these arrangements, whereas Canadian companies, with considerably greater capacity, would. 
 
CARICOM’s experience with the Economic Partnership Agreement (EPA) that its member-states signed with the European Union (EU), does not encourage Caribbean governments or the Caribbean’s private sector to sign another FTA, particularly one that will not contain a specific commitment to development assistance over a predictable period – and Canada has been reluctant to include such a commitment in the Agreement.  This is not because the Canadian government will not provide development assistance to the region since it has already undertaken to do so separately; it is because Canada does not want to set a precedent for FTAs with other countries with which Canada is also negotiating.
 
Canada’s commitment to providing assistance to CARICOM countries was announced by Prime Minister Stephen Harper in 2007.  The commitment was for CAN$600 million over 12 years and includes CAN$14.5 million for the Caribbean Community Trade Competitiveness Programme, CAN$20 million for the Caribbean Disaster Risk Management Programme and CAN$20 million for the Caribbean Institutional Leadership Development Programme.  Seven years into the disbursement of the pledged assistance and less than five years from its conclusion, CARICOM governments would be keen to secure a further commitment from Canada for development assistance.


 
In the event, what is at stake here?  The reality is that in terms of trade in goods between Canada and CARICOM countries, not very much.  Canada’s merchandise trade with CARICOM is less than 1% of its total trade, and CARICOM’s exports to Canada represent only 4% of its total export of goods.  So, Canada has very little to lose in terms of trade in goods if it walks away from the trade negotiations.  In 2012 (the last year for which reliable statistics are available to the CARICOM Secretariat), CARICOM enjoyed a trade surplus with Canada of US$735.1 million with only a portion benefitting from duty-free treatment under the existing Canada-Caribbean agreement.  But, for many CARICOM countries, the value of exports of goods to Canada is miniscule.  For example, in 2012 the value of exports for the Bahamas was US$21.8 million; Barbados, US$7.5 million; Antigua and Barbuda, US$500,000; St Lucia, US$356,136; Dominica, US$124,598 and St Kitts-Nevis US$30,461.   The four CARICOM countries that enjoyed the greatest value from their exports to Canada in 2012 were Suriname, US$458.2 million; Guyana US$401.9 million; Jamaica, US$261.2 million and Trinidad and Tobago US$251.5 million.   The larger portion of the exports of Suriname, Guyana and Trinidad and Tobago, principally gold, alumina, petroleum and natural gas, would not be affected whether or not an FTA is signed because they enjoy a zero Most Favoured Nation (MFN) tariff.
 
In 2009, Professor Norman Girvan (lately deceased) had pointed out the relative smallness of trade in goods between Canada and CARICOM and how little trade would be liberalized by an FTA between them.  He had also signalled that if such an FTA gives Canada any more favourable terms than the EPA with the EU, the EU will be entitled to claim equal benefits from Caribbean countries, putting them at a greater disadvantage.  In this connection, CARICOM governments would calculate that they have more to lose from signing an FTA with Canada that does not address their needs than in having no bilateral agreement at all.
 
Of course, the relationship between Canada and CARICOM countries goes far beyond trade in goods, and it would be in the interest of both sides to work diligently to maintain their overall beneficial relationship even if the current negotiations on trade in goods collapses on June 30.  As I pointed out in a commentary in January 2014, Canada is home to a significant number of CARICOM’s diaspora; it is a major source of tourists to the region; and Canadian private sector investment in the region in a variety of industries, including banking, tourism and mining, is huge – direct investment is in excess of US$75 billion, and trade in services is roughly US$3 billion annually. From Canada’s standpoint, CARICOM states have been natural allies with whom it shares traditions, values and a long history of connections at many levels.  In a sense, these links are more valuable than trade in goods.

A greater effort should be made by both sides to settle an FTA with which they could both live.  In this context, CARICOM governments might consider moving the current discussions beyond the trade negotiators who are hobbled in their work by too rigid mandates from their governments.
 
To lift the discussion and to try to save the negotiations, CARICOM governments might consider an initiative to send, within the next three weeks, an empowered delegation of decision-makers to talk with decision-makers in Canada, including the Trade Minister, to seek flexibility on the matters that both sides regard as crucial to them and that would allow them to conclude an agreement. It would be up to Canada whether or not it accommodates such an initiative from CARICOM governments, but at least CARICOM would have made the effort.
 
Simply announcing failure to agree on June 30 would not be good for Canada or CARICOM countries.

Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat.

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10 Comments In This Article   

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@Skye

#10 Jumbee Picknee » 2014-05-27 01:00

A Super WHO?
A Super Walmart...
In Antigua...Skye, the day that said Super Walmart opens its doors in Antigua, it's the day, your Empowerment Zone for Local Entrepreneurs dies, and gets buried in Lady Nugent.

Super Walmart, means Super Headache for the Local Business person.
Walmart is like a huge wrecking ball, been used to demolish an entire ghost town, once all of the residents vacate it.

Many developing Communities are vehemently opposed to Wally's World...
Say No to Walmart...
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Jumbee Picknee

@Skyewill

#9 Telluride » 2014-05-26 17:45

It was and still is a direct question to you.What have you done to help the people of Antigua and Barbuda in any way.Except for listening to yourself and hearing yourself and answering yourself.
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Telluride

Learning

#8 JD » 2014-05-26 15:43

I do hope that government ministers and wannabes here and in the region/CARICOM read these articles too - in case they need any guidance and advice on what they should be doing, and they will probably learn a thing or two along the way... Any mutually benefiting relationship is worth thought and effort.
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JD

Take the lead Mr. Leader - cum outa dat, cum ina dis

#7 Skyewill » 2014-05-25 20:35

Ever wonder why St. Marteen does so well? The island is split into to different countries. 1 side is duty free and booming the other side is slow. Other Islands go to St. Marteen for goods and supplies and this my friends is a form of tourism for them. Imagine a Super Walmart and an improved health care system in Antigua providing jobs and attracting other small islanders to our shores to shop as well. Cost of living would decrease and all the other businesses in ANU would have increased business. reduce ABST to a maximum 10%, o% on food, health and pharmaceuticals, baby and elderly products. Legalize hemp and tax it 50%. Why do we have to jump over the cliff with the rest of them? Why can't we lead from a different angle? The problem for us is that we have nothing to trade and with no imagination there is nothing in sight. We have to find solutions that will create need in Canada, US, UK, China, and the commonwealth. The in turn realizing our needs and purchase our products. six rounds of negotiations since March 2009 IS NOT SERIOUS!
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Skyewill

Telluride & Slythatguy

#6 Skyewill » 2014-05-25 18:41

@ Telluride - Sure, its no one fault. Everything is wonderful, Let's just continue as is. Last week you made a similar statement and a few days later EVERYONE including the HEADLINES Used my exact words. I have heard reasoned men and women make the same statement and even worst and they were right in MY OPINION. What Have I done? Do your own research. You may find a lot of people done a lot of things that you don't know nothing about.

@ Slythatguy - You got 10 apples 9 of them have worms and you just either eat all or though away all. When will there come a person that will stand out, think outside the box, be a true leader. So we are in a club that Canada says NEED TO RAISE OUR AMBITION and we will NOT because we are in a group and the group is going over the cliff and we are just waiting our turn to jump. It is time to break away from the pack. Leadership matters and a vision of a harmonious and modernized Antigua & Barbuda; an economic powerhouse in the Caribbean; a country of equality of opportunity and justice irrespective of colour, creed or class will need aggressive and out the box thinking even if it means leaving the pack behind. Sly, I read a lot and I know your comment invokes the communists view that your leaders should not be criticized and those that do should be put to death but it does not work that way in a democracy.
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Skyewill

Skyewill and the blame game again.

#5 Telluride » 2014-05-25 16:32

They will knock you down and knock you down.You see the hate that they're serving on a platter.So what we going to have dessert or disaster.Skyewill,te ll me one thing you have done to help the people of Antigua and Barbuda in anyway.
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Telluride

@ skyewill

#4 SlyThatGuy » 2014-05-25 10:58

What's your reason for singling out our government and fiercely criticizing it with respect to this matter? You know very well that this affair is concerning 15 different CARICOM countries, but you seem to want the government of Antigua and Barbuda to selfishly make deals with the Canadian government because you see an opportunity for our country to make money. But that's not the way it works, my friend! They must work out a deal where each member-state will reap equal benefit from it. There is no need to go out of you way just looking for reasons to accuse prime minister Spencer and the UPP.
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SlyThatGuy

@skywill

#3 Two Cents » 2014-05-25 09:56

Its high time to raise the standards. Maybe we can look forward to that from our future younger brighter leader.
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Two Cents

CARICOM Leaders/governments are big jokers

#2 ABLP Diehard » 2014-05-25 05:03

@Skyewill, these CARICOM Leaders/governments in our smaller islands are big jokers. You are 100% correct. They are not ambitious and thinking about their peoples just their deep pockets. The smaller islands in CARICOM have not manufactured much to export or have not developed much of the items that Canada can't get cheap from China etc. 21st century technology production in agriculture and manufacturing are areas that the smaller islands could develop to create badly needed employment and good revenue stream. Hopefully, ABLP will focus on manufacturing the goods Canada, Europe, China and the USA could use. With elections just 18 days away for Antigua and Barbuda, these are the issues that should be bold in the ABLP manifesto. Over the past 10 years, our UPP government was a deadbeat on exporting manufactured goods anywhere. Leadership Matters. We have good farmlands in the smaller islands of CARICOM and that is our oil. Food is needed all over the world to feed hungry peoples. This is where we could become rich with 0 unemployment.
Visit www.slideshare.net/DuPont/agricultural-innovation-productivity-for-the-21st-century-17044720
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ABLP Diehard

raising their level of ambition’

#1 Skyewill » 2014-05-25 04:17

reciprocal arrangements granted to CARICOM companies into the Canadian market. . As with Antigua and Barbuda the current leaders lack any ambition at all but a better word to use would be CREATIVITY. They can not begin to imagine how they will have enough money to steal and live large without the money generated and have no idea of how to create new revenue streams with out their lazy a$$es doing hard work. One of the sources of this attitude comes from the cultivated culture of being educated at the University of the West Indies.
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Skyewill

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Sir Ronald Sanders

Sir Ronald Sanders is a business executive and former Caribbean diplomat who publishes widely on Small States in the global community.

 

 

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