Editorial | Private sector’s challenge

In times of uncertainty and turmoil, such as has been unleashed by Donald Trump’s tariff war against the world, people expect their governments to lead.

But the challenge is not theirs alone. So, The Gleaner agrees with Prime Minister Andrew Holness that notwithstanding Mr Trump’s conduct, including his imposition of a 10 per cent base tariff on all imports from Jamaica, businesses can’t merely cower, retreat or play dead.

They have, too, as Prime Minister Holness said, to look for opportunities in the upheaval. As individual entities and as the private sector writ large.

It is not clear who, apart from its technocrats, the administration has at the table as it conducts, according to Dr Holness, “a detailed technical assessment … of the implications for Jamaica’s trade and industrial policy” of Mr Trump’s policies.

Which is why this newspaper is surprised at the absence, thus far, of a public statement from the Jamaica Manufacturers and Exporters Association (JMEA), the Jamaica Chamber of Commerce (JCC) or the umbrella Private Sector Organisation of Jamaica (PSOJ), on Mr Trump’s tariff and geo-strategic actions.

Neither are we aware that any of these bodies has been privately convening strategy sessions of the Trump effect on global markets and how Jamaica and its partners in the Caribbean Community (CARICOM) might have to conduct business in the future.

CONFOUNDING

The JMEA’s silence is more confounding, and indeed ironic, given its biennial trade expo last weekend, at which there were more than 250 exhibitors, who displayed over 5,000 products and services, as well as 884 registered domestic and international buyers.

When the JMEA was organising its expo and inviting foreign buyers, some of them from the US, much was premised on the fact that, as Prime Minister Holness reminded the exposition’s attendees, “nearly 90 per cent of Jamaican exports to the United States enter under … preferential terms”, via the Caribbean Basin Initiative (CBI) and the Caribbean Basin Economic Recovery Act (CBERA).

Indeed, the US Congress was, by September, to undertake its periodic review (and was expected to roll over) of the preferences that Mr Trump effectively discontinued with his baseline tariff 10 per cent on CARICOM countries, except for Guyana, which faces a minimum duty of 38 per cent.

While the specifics of Mr Trump’s tariff regime were only unveiled last week, he had signalled while campaigning for the presidency that high duties on imports would be a centrepiece of his strategy to entice manufacturing back to the United States.

He had also made it clear his antipathy to China’s involvement in this region, an animus reiterated by Marco Rubio, Mr Trump’s secretary of state, on his visits to Western Hemisphere countries, including his recent stops in three in the Caribbean – Jamaica, Guyana and Suriname.

That is the context in which this newspaper, when it became clear that Mr Trump would again be America’s president, insisted that Caribbean governments and their private sectors should, individually and as CARICOM, urgently view US-Caribbean relations to map the region’s coping strategy in the Trump era.

GOOD RELATIONS

The Caribbean and Jamaica must inevitably have good relations with the United States, a powerful neighbour where over 1.2 million Jamaicans live. They annually send home over US$3.3 billion (19 per cent of GDP). Jamaica also conducts over 40 per cent of its trade with the US. And approximately seven in 10 of the island’s tourists (Jamaica’s biggest industry) are from the United States.

Given Mr Trump’s transactional approach to government and governance, it would be useful for regional governments and their private sectors to strategically calculate what they can offer the US administration without compromising or surrendering their sovereignty. Nor by giving up existing and worthy friendships.

At the same time, the region must aggressively exploit other partnerships and opportunities that they have allowed to lie fallow because policy was focused on the big US market next door; because it would require too much effort; or because governments and firms paid too little attention to these possibilities. Firms remained ignorant of these agreements.

This largely sums up the case of the Economic Partnership Agreement (EPA), an asymmetrical free-trade pact between the European Union and CARIFORUM (CARICOM and the Dominican Republic).

Indeed, a 2018 review of the EPA concluded: “... Consultations showed that there is still a lack of awareness of the EPA and that practical information on the opportunities it offers is scarce. In addition, the number of companies that consider the EU a priority market is limited, as the focus of exporters is more on nearby markets.”

It is unlikely that much has changed since that analysis. Except that Donald Trump’s behaviour should be a catalyst for action.

Apart from whatever else the Government does, or is doing, the Jamaican private sector should be undertaking its own studies and analyses of how they might finally make good use of the EPA, the similar scheme that exists with Britain, and the other trade regimes that CARICOM has with third countries.

It is perhaps time, too, that the PSOJ, and other private sector bodies, establish, and appropriately fund, their own research arm to inform their members about potential strategic positionings, as well as influence government policy.