Elizabeth Morgan | Updating existing hemispheric free trade agreements

Last week, I looked at the decisions from the 45th CARICOM Heads of Government Conference in Port of Spain on External Trade Negotiations. Among the decisions, heads decided that the region should prepare for and engage in negotiations to update the community’s existing hemispheric trade agreements with a sense of urgency and a willingness to arrive at mutually beneficial outcomes within the shortest possible timeframe.

These agreements are with Venezuela, Cuba, the Dominican Republic, and Costa Rica. Negotiations to update the agreement with Colombia are in progress after some years of lobbying by Colombia. These trade and economic cooperation agreements were negotiated between 1992 and 2004 and deal with trade in goods.

They have not been utilised through the years to the extent envisioned when they were negotiated. Trinidad and Tobago has been the main user of these agreements.

Jamaica’s exports to Colombia in 2021 were valued at US$1.3 million; with Costa Rica, US$4 million; Cuba, US$3 million; Dominican Republic, US$2.7 million; and Venezuela, US$15,000. Jamaica has fairly significant imports from Colombia (US$170.4 million), Dominican Republic (US$116 million), and Costa Rica (US$58.4 million). Jamaica imports oil from Colombia. This had been the main import from Venezuela in the past under the PetroCaribe Agreement. Thus, Jamaica has a trade deficit with four of the countries, only having a surplus with Cuba.

These agreements require review and analysis at the domestic and regional levels with the private sector playing a key role in this process. It was my understanding that decisions to engage in further negotiations on trade agreements should be based on data and analysis and consultations with the private sector.

Free trade agreements are instruments which promote reciprocal trade meaning that market access is not one way. CARICOM countries are required to also open their markets to goods from these trading partners. In the past, Jamaican farmers have been concerned about entry into the country of agricultural products from these neighbours. So, it will be necessary to review the sectors already open for trade and what has been excluded.

These agreements should function under the supervision of joint councils or commissions. These have not met on a regular basis.

Through the CARICOM/Cuba Joint Commission, negotiations took place at the initiative of Cuba in 2007 for preferential access for additional products. The Second Additional Protocol to the CARICOM/Cuba Trade and Economic Cooperation Agreement was signed in November 2017, 10 years later.

Jamaica only ratified the CARICOM/Costa Rica Free Trade Agreement in 2015 when the first meeting of the Joint Council was held.

I have not seen a meeting of the CARICOM/Dominican Republic Joint Council since 2005. The implementation of this agreement was further complicated by market access decisions taken under the 2008 CARIFORUM/European Union (EU) Economic Partnership Agreement.

It is possible that a meeting of the Joint Council with Venezuela has not been held in some years. The situation with Venezuela has been strained in recent years. The interest here has been to have US sanctions against Venezuela lifted enabling a return to oil imports from Venezuela under the PetroCaribe Agreement.

CARICOM needs to be serious about external trade, but I am not certain that the decision of heads to prepare for and engage in negotiations to update the community’s existing hemispheric trade agreements with a sense of urgency and in the shortest time possible is actually very realistic. Preparations require review and analysis of the agreements, their utilisation, and national and regional consultations with the private sectors. Preparations also require that the region has the manpower and resources to engage in multiple trade negotiations simultaneously.

The region is already negotiating with Colombia. To upgrade these agreements would mean addressing non-tariff barriers, such as Dominican Republic’s Law 173, possibly adding services, and other aspects of trade not now included in these agreements. The joint councils/commissions would also need to meet to consider launching any new negotiations.

In my opinion, as I indicated last week, this decision under external trade negotiations needs a rethink at the August heads retreat in Dominica. CARICOM member states need to review and develop their external trade and production policies and strategies.

Elizabeth Morgan is a specialist in international trade policy and international politics. Send feedback to columns@gleanerjm.com.