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Caricom, Canada trade dilemma

Shawn Cumberbatch

Caricom, Canada trade dilemma

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It could be a miserable yuletide season for Barbadian companies which sell millions of dollars in goods to Canada.
Investigations by BARBADOS BUSINESS AUTHORITY revealed that local exporters of “several” items, including rum and other alcoholic beverages, aerated drinks, articles of iron and steel, pepper sauces and sweet biscuits will be forced to pay duties from next month unless the Canadian government acts speedily on a Caribbean Community (CARICOM) request for a special trade waiver.
On November 30, 2011, the World Trade Organization’s (WTO) General Council approved a moratorium allowing Barbados and other CARICOM members to continue benefiting from preferential access to the Canadian market under the old Caribbean-Canada Trade Agreement (CARIBCAN).
Sources explained that the two-year extension was given with the expectation that CARICOM and Canada would have concluded and signed a new “WTO compatible trade agreement” by December 31.
But with regional negotiators unlikely to reach an agreement with their Canadian counterparts before next year, in light of inconclusive talks on several areas including trading in goods and services, it means Barbadian traders might have to pay duties when exporting to the North American country.
BARBADOS BUSINESS AUTHORITY confirmed that CARICOM officials have already told the Canadian government they want another CARIBCAN waiver but up to last Friday the region was still awaiting a response. Canada has to make the relevant request to the WTO.
Reports indicate that the matter is causing concern in the local private sector, a view confirmed by Barbados Private Sector Trade Team trade consultant Joel Richards.
“There is a possibility the waiver would be extended. If it is not extended then from the point of view of the private sector we will have some areas of concern because there are several of our products that would be affected,” he said.
“We export a limited number of products but of the limited number that we export it would impact on those significantly; rum is one of them. In total we exported just over $14 million in alcoholic beverages to Canada in 2012. We also exported articles of iron and steel, aerated beverages and pepper sauces and sweet biscuits as well and the duties for those would range anywhere between three and 11 per cent.
“So the duties are not extremely high, but I think they are high enough to have some kind of impact on the position of our products in that market. So we would prefer if the waiver is extended,” he added.
Richards said there were “several engagements” recently between the CARICOM and Canadian negotiators, but pointed out that the existence of “some outstanding issues” between CARICOM members and between CARICOM and Canada meant the earliest a trade agreement was likely to be reached was in the first half of 2014.
“On the CARICOM side, we still need to decide the extent to which we are going to open up our markets to [goods from] Canada . . . and we have the same considerations as well in terms of services, the extent to which we are going to open our markets to Canadian service providers,” he explained.
 “Barbados . . . is an interesting case because we already have a bilateral investment treaty with Canada, which is fairly comprehensive and so we have already committed a lot of sectors to investment between us and Canada, so it’s just on the services end now to determine how far we are going to go.”

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