Jamaica and Trinidad and Tobago Trade Wars
 |
| Sir Ronald Sanders |
The state of the
Jamaican economy and the increasing hostility to trade with Trinidad and Tobago
by Jamaican manufacturers are matters that should concern all of the other 13
member countries of the Caribbean Community and Common Market (Caricom).
It may be that in some form of quiet diplomacy
unknown to the publics of the 15-nation Caricom, the secretary general of the
Caricom Secretariat is already engaged in behind-the-scenes activity to try to
end the verbal slogging that has characterised the recent relations between
Jamaica and Trinidad and Tobago.
If that is so, then hopefully his efforts will
result in an understanding of how the two most populous English-speaking
countries in Caricom can resolve the differences that have arisen. If no such
initiative has as yet been taken, then consideration might be given to doing
so.
The intra-Caricom trade figures reveal two
important facts. Trinidad and Tobago is the most outstanding beneficiary of
intra-Caricom trade. For example, the value of its exports to Caricom in 2011
was US$2 billion while the value of its Caricom imports was US$140.9 million.
By the same token, in that same year, Jamaica was the biggest market for
Caricom with imports valued at US$1 billion.
However, the value of its exports to Caricom
was US$67 million.
The bulk of Jamaica and Trinidad and Tobago's
trade relationship in Caricom would be between each other.
At a recent investment conference in Trinidad
and Tobago, the minister of trade, industry and investment, Senator Vasant
Bharath, stressed the importance to Trinidad and Tobago of the health of the
economies of neighbouring countries which, combined, represent the second
largest market for Trinidad and Tobago's exports after the United States of
America.
He made the telling point that Trinidad and
Tobago has a vested interest in the health of Caribbean economies since, if
their economies decline, so too does their capacity for buying goods and
services from Trinidad and Tobago that contribute to sustaining revenues and
employment.
By extension of the minister's insightful
observation, Trinidad and Tobago should have a keen concern about the economic
circumstances of Jamaica. So too should all Caricom countries that recognise
the size of the Jamaican market as important to their own exports.
To be fair, manufacturers in Trinidad and
Tobago are alert to the troubling financial circumstances of Jamaica. The
majority of them want the Jamaican economy to improve so that Jamaica can
continue to purchase their manufactured goods. For this reason, many of them
are anxious to see the allegations in Jamaica against some Trinidad and Tobago
products dealt with and settled satisfactorily. They also want the accusation
that unfair non-tariff barriers are being applied by Trinidad and Tobago to some
Jamaican products to be investigated and resolved.
These are issues that are now crying out for
urgent attention in the spirit of "community" that is the purpose of
the Caricom Treaty. One thing is for sure, and it is that if Jamaica follows
the call of the lemmings to withdraw from Caricom, it will do no more than go
over the cliff. For Caricom is much more than about intra-regional trade -
important though it is. No one throws away a motorcar because one of its tyres
is punctured.
The imperative, therefore, is to fix the
puncture, inflate the tyre and get the car back on the road. To do so, in this
case, may require a mix of innovative approaches which could include the deeper
integration of the factors of production between Jamaica and several Caricom countries,
particularly Trinidad and Tobago; investment by Trinidad and Tobago financial
institutions and companies in the productive sectors of Jamaica to help promote
economic growth and more employment; and, maybe even an "aid for
trade"component given that Trinidad and Tobago has enjoyed a consistently
high balance of trade surplus with Jamaica.
Another factor to be considered is that the
recent effective devaluation of the Jamaican dollar, which makes U$1 equal
J$100, means that the cost of Jamaica's imports of goods from Caricom would
have increased, making them less competitive against Jamaican-produced goods,
and Jamaica's labour cost of production would have decreased re-balancing the
higher costs for energy that Jamaica pays, and making the cost of their exports
cheaper. This is now an advantage to Jamaica.
With regard to the fact that Trinidad and
Tobago companies pay lower energy costs than do other companies in Caricom,
making them more competitive, this is simply a reality. If Jamaica or Guyana or
any other Caricom country were to discover oil and gas tomorrow and could begin
production, every government would pass on the benefit to its domestic and
commercial consumers to make them more competitive in the international market
and to reduce prices for their people.
Many of the difficulties of price
differentials for oil and gas between Trinidad and Tobago and other Caricom
countries might be overcome in a Caricom Single Market to which regional
governments have said they are committed. But sadly, the single market is still
to be completed.
In this connection, Trinidad and Tobago's
advantage of being a significant oil and gas producer should be acknowledged
for the reality it is, and further ways should be explored of how a portion of
the revenues earned by Trinidad and Tobago, through oil and gas sales to
Caricom countries, might be utilised for concessionary loans or budget support
for big importers of Caricom products such as Jamaica.
At the end of the day, neither Trinidad and
Tobago by itself, nor Caricom as a whole, can cure Jamaica's present
difficulties, but they can be helpful in easing the burden through creative
approaches worked out and implemented jointly with Jamaica.
The complaints of Jamaican manufacturers
should be taken seriously and dealt with expeditiously and thoroughly. If their
present concerns about competitive access to the Caricom market, including
Trinidad and Tobago, can be addressed, perhaps the discussion can be taken to a
higher level of how the factors of production can be integrated to sell joint
Caricom goods and services in the global marketplace and so accelerate economic
growth, increase foreign exchange revenues and expand employment for the region
as a whole.
Myriad reports exist on how to integrate
Caricom production to sell globally. What is needed is the will to implement
them.
- Sir Ronald Sanders is a
consultant, Visiting Fellow at London University and former Caribbean diplomat
(Jamaica Observer, Sunday June 16, 2013)
Comments