IN THE SMALL ECONOMIC SPACE that is Barbados, manufacturing can no longer be premised or built solely on supplying the local market.
In the early days of the manufacturing sector, import substitution was the goal that was promoted and this was supported by an appropriate import duty structure.
With trade liberalization and the establishment of a single market for regionally produced goods, that duty structure underwent significant change.
Entities that existed because of a licensing or duty concession found themselves exposed to the new market forces and soon recognized the need to change their operations in order to compete.
Among the changes was the need to consider the Caribbean Region your market rather than just Barbados. With the Common External Tariff in place, there was some comfort that duty structures across the region were similar and thus regional brands would start with somewhat of an advantage over extraregional imports.
Manufacturing for export in this region, however, is not without its peculiar challenges.
In spite of the stated position of duty-free access across CARICOM for regionally manufactured brands, there are several instances where “barriers” are in place – the recent issue with milk into Trinidad is an example.
There are other instances where access is limited as a matter of the very trade agreements embedded in the CARICOM treaty.
Carbonated beverages, for example, can trade freely between the More
Developed Countries (MDCs) in CARICOM – Trinidad, Jamaica, Guyana, and Barbados – but exports from these countries to the Lesser Developed Countries (LDCs) is restricted through licensing or “tariffication”.
Trade from LDC to MDC has no such restriction. This “classification” goes back tothe 1970s and there still aren’t any defined criteria for countries to graduate from LDC to MDC or be downgraded.
In exporting to any country, pricing is a challenge. There are costs we have control over and costs generated through policies and systems that are not reflective of the needs of the manufacturer
Our port, for example, operates under a system that is not user-friendly – limited opening hours and labour restrictions.
The added costs must be recouped in selling prices and this presents a challenge in external markets where similar brands from other regional states do not incur the same costs.
Outside of CARICOM, there are opportunities within Europe and North America.
These markets are much more mature and open, however, and there are minimum standards that we must meet.
As a country, we need our agencies to be resourced and empowered to deliver the certifications expected by importing countries.
Currently this is a deficiency in respect of our phytosanitary legislation, so that no animal or animal byproducts can be exported to these countries until this situation is rectified.
In spite of the above, we have opportunities we can use to our advantage; one of these is to leverage our brands on the worldwide high regard for Barbados.
It affords local manufacturers the opportunity, specifically when penetrating markets in Britain, Europe and North America, to state “a quality product of Barbados” on their label, a point of differentiation that no third country import can claim.
