CARICOM Urged To Expand US-Caribbean Trade Relations

CARICOM needs to engage the U.S. to expand trade on services,  and seek timely resolution of Rum issue

Ft. Lauderdale – Member states of the Caribbean Community (CARICOM) need to collectively engage the United States in discussions designed to expand the trade in services from the Caribbean region as well as seek to have the problem of Caribbean rum exports to the U.S. resolved soon.

These were among the recommendations put forward by the Chairman of the Board of Directors of the Guyanese American Chamber of Commerce (GACC), Oscar Spencer when he addressed participants at the 2nd annual Florida Conference on Current Caribbean Issues: The Diaspora Discussion, held earlier this week as part of the Florida International Trade Conference and Expo (FITCE 2016) in Fort Lauderdale, Florida.

Spencer, a retired senior executive of the Inter-American Development Bank (IDB) noted that although the CBI was envisioned as a program to encourage and facilitate the economic development and export diversification of Caribbean Basin economies, the U.S has, and continues to benefit significantly from the program.

From as early as 1985, for example, two years after the initiation of the program, the U.S has maintained an overall trade surplus with the CARICOM region. This surplus which was about $2.0 billion in 1998, grew to about $4.6 billion in 2014.

“This serves to highlight the fact that, in the overall scheme of things, there are opportunities for the expansion and enhancement of the US-Caribbean trade arrangements that could further benefit all participants under the program,” Spencer pointed out.

“In keeping with the foregoing therefore, I would like to make the following recommendations that:

• Caribbean countries continue to work aggressively to improve the business climate in the region, with increasing efforts at easing the supply side constraints. Progress in these areas would lead to greater productivity and attractiveness of the region and, would have greater impact on export and trade.

• CARICOM countries must also seek to diversify their exports towards higher value-added products since it has been shown that countries that do so generally tend to achieve higher levels of growth.

• More importantly, given the weakening performance under the CBI, CARICOM must seek to promote dialogue with the United States, to explore ways how the US-CARICOM Trade Agreement can be re-shaped to include at least some service sectors. This is a contentious issue but could be explored in the spirit of the Engel’s Bill, (H.R. 4939) which seeks to enhance US-Caribbean Engagement.

These steps, no doubt, could go a far way in enhancing US-Caribbean trade and related relations.

“Finally, I would like to take a few moments to talk briefly about the Rum Provisions under the CBI and the issue of Caribbean rum entering the US markets. This issue relates to the application of a ‘cover-over’ program that provide subsidies to large multi-national companies operating in two US territories. In 2010, these subsidies amounted to around US$450m.

Not surprising, rum producers from CARICOM countries, as well as their Governments view this development with significant unease, since they recognize the dangers for themselves and the region’s largest agriculture-based export industry – an industry that is an important provider of employment in the region and which generates tens of millions of dollars in foreign exchange and tax revenues.

“Their concern is that if this matter in not carefully addressed, it could allow other large international distilling groups to take advantage of the current arrangements which will result in Caribbean Rum Producers seeing their share of the US market wiped out by subsidized products.

“We understand that this is a complicated matter and hope that the ongoing dialogue between CARICOM and U.S authorities (USTR), would lead to an early resolution of the problem, to the mutual benefit of all parties,” Spencer concluded.