Elizabeth Morgan | Another US-CARICOM trade and investment meeting

In my article last week, I looked at the important role of trade in implementing the UN Sustainable Development Goals (UN SDGs). This month, it is reported that member states of the Caribbean Community (CARICOM) will be meeting with main trade partners, the USA and Canada. Increasing exports to both would be beneficial.

The first meeting should be with the United States, its office of the US Trade Representative (USTR), on October 13 in this region. This would be a meeting of the Trade and Investment Council (TIC), which is held periodically under the US-CARICOM Trade and Investment Framework Agreement (TIFA). The updated version was signed in 2013. The last TIC meeting was held in June 2019 in Miami, Florida.

The USA remains the principal trading partner of all CARICOM member states. It has had a continuing trade surplus with the region. Trade actually occurs under the non-reciprocal Caribbean Basin Initiative (CBI), which comprises the Caribbean Basin Economic Recovery Act (CBERA) and the Caribbean Basin Trade Partnership Act (CBPTA). The Most Favoured Nation (MFN) waiver, which gives legitimacy to the CBERA/CBPTA in the World Trade Organization (WTO), was renewed for six years to end on September 30, 2025.

In 2022, US exports to CARICOM countries were estimated at US$19 billion, while imports were valued at US$12 billion. The US surplus was US$7 billion. Only Trinidad and Tobago, and now Guyana, had a trade surplus with the USA through exporting petroleum products; all other CARICOM countries were in deficit.

In 2022, Jamaica imported US$2.6 billion in goods and exported US$350 million. The deficit was US$2.2 billion. Up to August of 2023, Jamaica had imported US$1.7 billion in goods from the USA, while exporting US$260 million.

The trade in services, as expected, is mainly in tourism for Jamaica and several other CARICOM countries. In 2022, there was a significant upturn in tourist arrivals in the Caribbean region, with most of the visitors coming from the USA. Over four million US visitors came to the CARICOM region, with 1.8 million coming to Jamaica.

Practically, CARICOM countries need to be examining ways of increasing exports of both goods and services to the USA, which is a large and close market with direct transportation.

USING BILATERAL AGREEMENTS

For years, it has been said that CARICOM countries could be making better use of the CBI. There have been continuous efforts to sensitise exporters in Jamaica to the provisions of these agreements, even though they have been in place for decades. There has been talk of looking at whether the CBI could accommodate trade in services, beyond tourism, as it would not make a major impact on the US economy and would benefit CARICOM service providers. There is no indication that this has made any headway.

It was also considered that the TIFA could be put to better use in promoting trade and investments between the region and the USA. A TIFA should help to deepen discussions on advancing the trade and investment relationship between the parties. Apart from establishing the TIC and holding periodic meetings, I do not think it has facilitated any substantial developments.

The 2016 US-Caribbean Strategic Engagement Act also deals with trade and requires a report to Congress on implementation. I do not think that it has had any significant advances in trade either.

In the recent USTR sector trade reviews on telecommunications, intellectual property rights, and barriers to trade, I did not see any major issues identified for CARICOM countries.

45TH CARICOM HEADS

At the 45th CARICOM Heads of Government Conference held in Port of Spain last July, under external trade negotiations, the heads decided that as part of its transformational trade agenda, CARICOM would adopt a more strategic and sustained engagement in trade agreements with traditional hemispheric partners, to include services and prioritising cooperation on trade finance, trade facilitation, transportation and payments arrangements.

The traditional hemispheric partners are the USA and Canada, and the existing trade agreements are unilateral and non-reciprocal. I had hoped that the heads would clarify this decision at their retreat which was scheduled to be held in Dominica in August, but it was postponed.

The USTR’s Office of Western Hemisphere is responsible for trade policy for the CARICOM region and the rest of Latin America and the Caribbean. In CARICOM, the US is now focused on Guyana and its petroleum resources, links with Venezuela, concerns about Haiti, and the activities of China in the region.

On a policy level, we have to look to the Summit of the Americas, held in California in June 2022, when President Biden announced the Americas Partnership for Economic Prosperity (APEP). This APEP is intended to foster a strong regional bond by including partners from across the Americas open to, among other things, reinvigorating regional economic institutions; mobilising investment; building more resilient supply chains; creating clean energy; and ensuring sustainable and inclusive trade.

It is reported that in January 2023, the US hosted a virtual ministerial meeting to advance this initiative. Barbados was among 10 countries invited. The US wants to ensure that this hemisphere remains among the world’s most dynamic economic regions, and thus would be moving quickly to implementation.

I admit to needing further clarity on this initiative and its intended implementation. But this seems to be the US’s trade and investment policy initiative in Latin America and the Caribbean.

It will be recalled that Vice-President Kamala Harris met with CARICOM leaders in The Bahamas in June, focusing on another trade-related outcome from the Summit of the Americas, the US-Caribbean Partnership to Address the Climate Crisis (PACC 2030).

I look forward to seeing what items will be on the agenda of this upcoming TIC meeting, and whether there will be any new initiatives in US and CARICOM trade.

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