Reeling from trade with Caricom, Part 2
Fri, May 04, 2012 - 12:00 AM
Continued from last week.
Can anyone explain why cash-strapped Jamaica should bear the cost of waivers on more than US$1.2 billion of CARICOM imports when we do not export more than US$60 million to the region?
The waivers over which our governments have been agonizing are dwarfed by those being given to CARICOM. Our slavish adherence to the CARICOM treaty has bled tens of billions of dollars of revenue from our treasury over the years, with no clear compensating advantage.
For nearly 40 years, Jamaica has been at the fulcrum of the regional movement.
Our leaders have been hailed as heroes of the regional community. Our technocrats, ministers and prime ministers have participated in meetings with grandiose agendas. Impressive papers on a range of issues have been written. Grand communiqués have been issued with decisions presumed to advance the region’s interest.
But all the technical work, the pomp and the ceremony have done nothing to address the haemorrhage of the Jamaican economy that has been induced by our destructive trade relationship with CARICOM.
With the depth of Jamaica’s ongoing economic crisis, the needs of our largely poor people and the austere solutions likely to be imposed by the International Monetary Fund to ensure that our external debt is repaid, Jamaica can no longer afford the fiscal and economic cost of CARICOM.
The raison d’être for the protective Common External Tariff is the predicate that CARICOM goods are more costly than their extraregional equivalents. But Jamaica can no longer continue the senseless practice of spending more foreign exchange than necessary for our imports to benefit other CARICOM producers and at the same time forgo as much as JAM$14 billion (BDS$314 million) of desperately needed revenue for our people.
Trading blocs are intended to provide a level competitive playing field on which all the participating countries are able to benefit economically. This requires continuous reciprocity, without which trade between the states will be uneven, and some states will be disadvantaged. Uneven trade within CARICOM has bettered some countries and beggared others.
There can be no doubt that Jamaica now heads the list of the beggared. Yet nothing we have heard from our leaders suggests that they appreciate the grave and debilitating nature of the economic disadvantage we suffer in our trade with CARICOM, or that they are prepared to act to rectify it.
The communiqué coming out of the last Heads of Government Meeting, the first for this administration, presents a long list of subjects of beneficial interest to other regional governments. These range from Grenada’s dispute with the EXIM Bank of Taiwan to the case by Eastern Caribbean interests against CLICO and BAICO.
Yet Jamaica, in the midst of its most crippling economic crisis, could advance no more critical an issue than cricket and the Chris Gayle dispute with the West Indies Cricket Board.
No country in the regional group has suffered the economic disadvantage Jamaica has. It is, therefore, remarkable that any meeting of regional leaders could be convened without the issue of equity and reciprocity in regional trade topping the agenda. The Jamaican government must insist that urgency be brought to returning equity in our economic relations within CARICOM.
There is no gainsaying the culpability of the Jamaican government in undermining the competitiveness of the Jamaican economy and leaving our producers at a disadvantage in CARICOM trade. Dismal performance as the custodians of Jamaica’s economic interest in the region is a central part of that failure.
However, though much damage has been done, it is not too late for the government to begin to discharge its responsibility and use its lead role in CARICOM to move Jamaica from the position of disadvantage to one of parity in our trade with the region.
After all, CARICOM was intended to help our economy, not harm it.
• Claude Clarke is a Jamaican businessman and former minister of trade. This article appeared in the April 15 Sunday Gleaner.
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