Avia Collinder, Business Writer
Trade agreements with the European Union have little to offer small operators in the medium term, according to some local manufacturers, citing small-scale production in many Jamaican plants, which affects pricing and the ability to compete.
"We are not yet ready for the Economic Partnership Agreement (EPA). Due to economies of scale, we will not be able to compete," said Sonya Dunstan, CEO of Taste of Caribbean Limited, in the wake of a tour of European firms in June.
"The manufacturers are huge overseas and what one company can produce in a day is what local companies may take months to produce," she said.
Dunstan's and and five other Jamaican companies were among 22 manufacturers from across Cariforum who participated in the study tour organised by Caribbean Export Development Agency and the African Caribbean and Pacific group from June 20-29.
They visited Manchester, United Kingdom; Hamburg, Germany; and Paris, France. The aim was to form strategic business alliances with their European counterparts.
Norman Wright, another tour participant, expressed concern over inequities in development and its impact on trade between the two blocs.
"In France, in meetings with a government senator, the need was stressed for the EPA to be signed to provide the framework for trade development and expansion to take place. I discussed the need in that meeting for reciprocity in trade arrangements, taking into account our state of development in the Caribbean and our ability to compete profitably," said Wright.
As late as mid-June, the EU, through its representatives, expressed discontent with the slow pace at which Jamaica and seven other Cariforum countries were moving to cut import duties for products coming from Europe.
Under the EPA, the tariff cuts should have started in January 2011, but the fiscally strapped governments have been playing for time. Jamaica, for example, earned J$21 billion through Customs duties during the last fiscal year, and is projecting revenue of J$26 billion this fiscal year.
Dunstan, who says the issue of small manufacturer readiness will have to be tackled at the regional level, is especially concerned about food-safety standards.
"The food-safety standards of these European countries are extremely high and some of us labour and borrow money from the banks to attain or meet these food-safety standards. It becomes more elusive as the bar is raised higher and higher," she said.
"Food safety is important to our wellbeing, but could also be seen as trade barriers as a few small companies that are exporting will soon not be able to."
The companies on the tour also identified weaknesses in marketing and product packaging, having viewed the more sophisticated operations in Europe.
"The EU is a potential market for Caribbean products. We found that they are open to do business with Cariforum countries, however, Caribbean agro-processors need to improve our packaging to match what obtains in the EU market where sauces are packed in widemouth glass bottles, of varying size and shapes, instead of the five ounce straight necked bottle," said manager at Southern Fruits & Food Processors, Donna Bromfield.
"In order to be competitive, we also need to reduce operational costs or improve efficiencies. Some retail prices there are lower than our ex-factory prices. In the supermarket, products on the shelves were at a lower prices than our ex-factory prices," said Bromfield.
The 22 participating firms were drawn from sectors spanning food and beverages, condiments, staples, essential oils, herbs, spices and organic food, and represented Antigua and Barbuda, the Bahamas, Belize, Dominica, the Dominican Republic, Grenada, Jamaica, St Lucia, and Suriname.
The tour is said to be a precursor to the second CARIFORUM-EU Business Forum scheduled to take place in London on August 8 and 9 during Caribbean Export's 'London Engage' initiative.