Fundamental disequilibrium in CARICOM/Canada trade talks, says Bahamas PM
Bahamas Prime Minister Perry Christie has hit out in relation to crucial trade talks between the Caribbean Community (CARICOM) and Canada over continued access to its market, suggesting there is a “fundamental disequilibrium” in Canada’s approach to the matter.
Addressing the University of the West Indies St Augustine’s campus in Trinidad and Tobago on the topic “Role of The Bahamas in CARICOM”, Christie pointed to the trade talks with Canada as an area of cooperation between CARICOM and The Bahamas, but said meetings with Canada have “proven difficult and a settlement has been nettlesome”.
His comments echoed those of other governments in recent weeks, including the ministry of foreign affairs of Jamaica, which said in a statement that “there is little time remaining in which CARICOM and Canada can seek to bridge the gaps in the negotiations.”
In his address on Monday, Christie argued that it should not have been so difficult for The Bahamas and Canada to reach an agreement on the crucial trade pact.
“We must harness the political will to settle the issues. We remember that it was Canada who came to us to ask us to support their resistance to the move of the headquarters of the International Civil Aviation Organization (ICAO) from Montreal. They did so on the basis of our traditional friendship, yet our traditional friendship has not been strong enough so far to be leveraged into the conclusion of a trade pact. It is highly arguable that there is a fundamental disequilibrium in that.”
In a recent address to the Bahamas Chamber of Commerce and Employers’ Confederation’s first National Conclave of Chambers of Commerce, Minister of Financial Services Ryan Pinder pointed out the importance of concluding a trade pact with Canada, noting that without it Bahamian exports such as lobster, salt, pharmaceuticals and blended fuel from BORCO would be subject to a 35 percent duty going into Canada.
Goods going into Canada from the Caribbean had been going in duty-free under a waiver obtained by Canada from the World trade Organization (WTO) for the so-called “preferential” arrangement. Under the WTO, WTO members such as Canada and much of the Caribbean are not permitted to offer each other trade terms which are better than those that they offer to other WTO members, and as such talks have been underway since 2007 to conclude a “reciprocal” agreement whereby Canada gets equal benefits to those offered to the Caribbean for its goods and services entering this region.
As with the Economic Partnership Agreement (EPA) with Europe, the new agreement would cover not only trade in goods, but also in services and investments.
In January 2014, the region was able to obtain an agreement from Canada to hold off on raising duties on Caribbean goods until Caribbean-Canada Trade Agreement (CARIBCAN) negotiations had been concluded, following the expiry of the WTO on December 31, 2013.
Admitting that the talks to conclude a new agreement are “very tenuous” at present, Pinder said last week that while all Caribbean countries would also be disadvantaged by an increase in the duty charged on their goods, it would not be as severe as in The Bahamas’ case, given that they are members of the World Trade Organization, and therefore while the duty rates applicable to their products would rise, it would not be as high.
He used the example of what would happen in the case of a lack of agreement in the Canada trade talks as evidence of the importance of The Bahamas finally acceding to the WTO.
“You may as well say to our crawfishermen we have no access because it’s not competitive on price.
Morton Salt (will be charged) 35 percent duty on salt (exported to Canada). You might as well say to them that market is closed to you, that’s the implication we face. This is a real world, real time implication and effect of us not being members of the WTO.”
A fifth round of negotiations on CARIBCAN was held in Barbados in January. Part one of the sixth round was held in Kingston, Jamaica on March 3 to 7. Part two is being held in Ottawa, Canada and was slated to end on April 4, having started on March 31, according to the Jamaica Gleaner.
Contacted yesterday for an update on the latest round of talks, Pinder said that there is “nothing to report, except that they are ongoing”.
Negotiations on the agreement have to date been projected to conclude no later than June 2014.
The region’s leaders have called for a “pro-development agreement which takes account of the differences in the levels of development between CARICOM and Canada, and which would support the sustainable economic and social development of the peoples of the region.