Whether we are talking about Brexit, Trump’s strategies to “Make America Great Again”, or bilateral arrangements with another Caribbean or international country, the impact of trade agreements on the smaller islands of the Caribbean is significant and require special attention if we are to achieve any benefits.
When you take into consideration the fact that many of our indigenous products are manufactured on very small scales, making regional trade somewhat redundant, and the fact that trade liberalization came into full force on February 22nd, 2017 – all this while we are still trying to figure out how to benefit from the Cariforum Economic Partnership Agreement, and completing the Brazil Partial Scope Agreement, trade seems arduous at best.
Taking our eyes off the ball can be costly! Recently a petition for the US Border Wall was filed which, had it been successful would have increased operating costs for the manufacturing sector which provides 10 per cent of the jobs across the Federation of St. Kitts and Nevis. What does the US Border Wall have to do with us? That is a question we are still asking. Somehow, a US Senator thought it would make sense to have Caribbean islands contribute to the cost of the wall by paying a 2 per cent fee on remittances from the United States. Every time a relative, corporate headquarters or customers transfers money from the United States to St. Kitts and Nevis, they would incur a 2 per cent fee. Less than 1 per cent of the estimated 43.7 million persons making up the population of the Caribbean would ever travel to Mexico and less than that would ever see this wall if it is built. Of all the Caribbean persons living in the United States, however they got there, it is very unlikely that they crossed the border from Mexico to the US.
This was only one of several attempts to disrupt trade relations involving the Caribbean, a situation which clearly indicates that trade experts in the region need to pay attention to what is happening with all countries with whom we enjoy trade relations.
St. Kitts and Nevis has benefited from the Caribbean Basin Initiative upon which it established the enclave sector. In 2000, this bill was expanded into the Caribbean Basin Trade Partnership Agreement (CBPTA) which expanded trade opportunities for the Caribbean. Since many of the manufacturing entities across both islands are micro enterprises and without the support of an export agency that can provide advice on how to utilize these agreements the benefits of the CBPTA has yet to be utilized by St. Kitts and Nevis. It is set to expire in 2020.
The CBPTA is not the only agreement to which we need to pay attention, as the requirements of the “rules of origin” for all trade agreements provide options that enable us to qualify for the benefits and also challenges restricting us from achieving qualifying targets.
Other trade arrangements such as the Common External Tariff (CET) that provides protection for trade across the region, is another agreement to which we have signed on, and application of the rules has proven to be challenging as we grapple with the need to improve national livelihoods as our first priority before any allegiance paid to regional trade regimes.
Trade Agreements, therefore, are not just for manufacturing entities. They impact many other sectors both directly (such as shipping agents and banks) and indirectly (such as retail stores). Understanding how to maximize these agreements is important to all of