AS I SEE THINGS: Trade in Caribbean context
Since the advent of the World Trade Organisation, there has been a constant push to promote free trade globally in order to boost world income, economic growth and poverty reduction. What this all means is that barriers to trade in the form of high tariffs, quotas, quantitative restrictions and export subsidies, among others, should be reduced and, if possible, eliminated.
In essence, then, measures that provide protection to domestic producers have to be re-evaluated to ensure that they generally do not distort world trade. In the same context, policies implemented to subsidise foreign production should also be adjusted so that other competitors are not unduly disadvantaged.
On the surface, the issues that arise generally in debates over free trade may seem simple but in reality they are much more difficult to resolve. And that is why from time to time conflicts emerge which in some instances take many years to resolve.
For example, the balance of trade between China and the United States has been more favourable to China for several years based on the argument that the value of China’s domestic currency has been kept low making goods from China relatively cheap to American consumers. This results in huge increases in exports from China, boosting economic growth in return. Even though the US has been trying to persuade China to increase the value of its local currency to “level” the playing field a bit, not much has happened in that regard.
What is clear, therefore, is that despite all the rules and regulations governing world trade, despite all the mechanisms in place to deal with dispute settlements, international trade will always produce winners and losers and the “playing field” may never be levelled. Hence, if countries are to participate in global trade, they have to accept that “equality” in benefits and sacrifices will never exist.
Countries all over the world will continue to seek out ways and means of benefiting from their participation in international trade given their physical sizes, resource endowments and overall capacities to compete.
If we in the Caribbean accept those arguments, then, it is logical to understand why the provisions of Article 164 of our regional trade agreement exist and do make sense.
Logically, the smaller and less resourceful countries in CARICOM may not be able to compete at the same level as the “more developed” countries among us and hence some safeguards must be put in place to ensure that if the “less developed” countries in CARICOM are to fully participate in trade with some benefits, then, they should be in a position to protect what are called sensitive products or industries.
Going forward then, as a regional grouping, we have to look at all the critical issues that would lead to more trade among CARICOM countries, not less trade. We have to ensure that those provisions such as Article 164 are “fair” and that they do not lead to any significant disputes among our various countries. It is within that spirit that we all should engage the recent action by St Lucia in relation to Barbadian exports.