Elizabeth Morgan | Jamaica: 25 years at WTO [Part III] Challenges and achievements
Small developing countries are trade dependent and value a well-functioning multilateral trading system where their needs may be articulated, understood and accommodated.
It is generally difficult for small developing countries, like Jamaica, to participate in the work of the World Trade Organization (WTO) as, if represented in Geneva, their staff is small. Staff in capitals is also small. Jamaica is represented in Geneva through the Ministry of Foreign Affairs and Foreign Trade and is actively involved in the WTO’s work through its Councils, Committees and Working groups. Alliance building enables Jamaica to work with CARICOM members, the African, Caribbean and Pacific (ACP) group and other like-minded members in its trade policy advocacy aimed, in trade and development concerns, at maintaining preferential market access and development concessions.
Capacity-building has been very important for Jamaica as limited availability of trade experts is a continuing deficiency in the public and private sectors as well as civil society. Implementing the WTO agreements required improving domestic legislation and practices and procedures. Jamaica is benefit from capacity-building programmes offered by the WTO, other regional/international organisations, and bilateral partners at institutional and human resource levels.
With the assistance of the Organization of American States (OAS), the Masters Programme in International Trade Policy was established in 2004 at the Sir Shridath Ramphal Centre, The University of the West Indies (UWI), Cave Hill Campus. Scholarships are needed to enable more Jamaican students to earn this degree. More internships and secondments would also be useful. Jamaica needs to have a cadre of experts to participate in trade negotiations at the multilateral, regional and bilateral levels. The public and private sectors and civil society bodies must also be willing to employ qualified trade specialists.
The WTO facilitated tremendous improvements in global trade. The director general, Roberto Azevêdo, reports that the real volume of global trade expanded 2.7 times since 1995. Regrettably, Jamaica has not benefited from this trade expansion on the export side. When most countries’ exports were expanding, Jamaica’s were contracting. Increase in goods exports continue to be anaemic, while imports have increased significantly. The country has been able to apply tariffs under WTO rules but producers have still struggled to compete in the domestic market. It must be recalled, however, that Jamaica unilaterally liberalised customs duties outside of the GATT/WTO regimes.
Jamaica’s non-reciprocal access to the European Union (EU) market changed to the WTO endorsed (GATT Article XXIV) reciprocal preferential access under the free trade Economic Partnership Agreement (EPA) with duty-free, quota-free access for goods. With the Most Favoured Nation (MFN) waivers granted in the WTO, Jamaica still trades with the USA and Canada on non-reciprocal terms. The country also still has access to the Generalized System of Preferences (GSP) programmes of various WTO Members approved under the GATT/WTO Enabling Clause. With supply constraints, Jamaica is not fully utilising this range of preferential market access.
Jamaica’s access to many developed countries’ markets, however, is still restricted as they provide subsidies to their farmers and other producers and facilitate private standards exceeding international standards. Dumping also affects Jamaican producers who need to better utilize the services provided by the Anti-dumping and Subsidies Commission in conducting dumping investigations. The WTO Agriculture Agreement allows developing countries to provide a range of government support measures, “green box” subsidies. The handicap here is the inability of the Government to finance such programmes. On the other hand, Jamaica had to phase out export subsidies in free trade zones. This meant reviewing policies for its Special Economic Zones (SEZs). Strengthened quality and intellectual property rights regimes to promote innovation and exports should be considered as benefits.
In services, Jamaica was able to liberalise its telecommunications sector which is also a benefit. Given the increasing importance of tourism and other services to the economy, the country remains unable to effectively collect and disaggregate trade in services data which impacts policymaking. There is limited ability to analyze bilateral and regional trade in services. More work is also needed in services regulation, certification and accreditation to further facilitate trade in a wider range of services sectors. The private sector needs to support the Statistical Institute of Jamaica in improving the collection of services data.
The Government and private sector should focus more on developing areas such as e-commerce. A high percentage of trade is being conducted electronically by MSMEs and there are now proposals in the WTO to regulate e-commerce transactions.
In dispute settlement, countries like Jamaica have reservations about initiating cases because of the cost and concerns that some major trading partners, such as the USA, will not implement unfavourable rulings and foreign investors will retaliate. Reform is needed which will enable the small developing members to use the mechanism confident of receiving a just outcome.
In Aid for Trade, it could be assessed that Jamaica received benefits with financing for trade and trade-related projects through the Planning Institute of Jamaica.
The truncated Doha Development Agenda (DDA) has not brought the development outcomes initially expected, especially for small developing economies. The DDA is now practically in abeyance. Benefits from the Agreement on Trade Facilitation, if fully implemented by members, would be customs modernisation and enhanced capacity-building support. As it is linked to the UN SDG 14 on sustainable development of oceans, seas and marine resources, there remains hope that an agreement on Fisheries Subsidies could be finalised and adopted at the Ministerial Conference (MC12) in June. This could preserve fish stocks and stem illegal fishing.
The WTO is now looking at new, innovative means of negotiating issues such as e-commerce, investment facilitation, domestic regulations in services, and ways to make it easier for small businesses (MSMEs) to participate in global trade.
There is concern now about the future of the multilateral trading system as the USA and others demand reform, including in the designation of developing countries and the application of S&DT through differentiation and graduation. Jamaica is vulnerable here as the World Bank has classified it as an upper middle income country and thus it is less eligible for development concessions. Jamaica and its allies must be urging reforms which serve the interests of all WTO members.
Engaging the public and private sectors and civil society, Jamaica should be focusing on strengthening its trade infrastructure through measures such as implementing its National Foreign Trade Policy, thus enhancing its ability to further participate in global trade and trade policy formulation.
Indeed, on farms and in companies, factories and institutions across Jamaica, and within the region, much more needs to be done to increase production and exports and to provide further guidance to our foreign service officers and civil servants on actions now required in the WTO and in the wider global arena.
- Elizabeth Morgan is a Specialist in International Trade Policy and International Politics.