BARBADOS SIGNED the Economic Partnership Agreement (EPA) in 2008 at the then Sherbourne Conference Centre. I was very proud to witness the signing after having worked closely with the negotiations in my previous job at the Foreign Trade Division as senior economist.
As part of CARIFORUM (CARICOM and Dominican Republic) the region entered into a new dispensation of trade. In my view the EPA should be thought of as a tool for economic development. It certainly presents not only opportunities but also challenges for Barbados. Under the agreement, the European Community (EC) has provided new and enhanced market access for CARIFORUM imports and CARIFORUM has committed to liberalising up to 86 per cent of its imports from the EC over a 25-year transition period.
This transition away from preferential arrangements to a World Trade Organisation compatible reciprocal, open trading regime presents a number of advantages to CARIFORUM states:
1) it widens access to EC markets for almost all Barbadian products;
2) it potentially lowers the price of EC inputs and intermediate goods to local industries here in Barbados;
3) it reinforces the current regional integration effort;
and 4) it challenges the Government to reduce the preferences and incentives that have protected certain industries forcing the private sector to become more competitive.
Whether we can benefit from it depends very much on the extent that we try to aggressively contest the market access and use the development package to deal with capacity constraints both in the private sector and public sector. Just the mere fact of having all of the will in the world does not translate market access into sales. Of course, there may be elements beyond our control.
It is in this context that it is imperative that the export promotion agencies work closely with members of the private sector to assist in identifying and opening potential markets.
We at Barbados Chamber of Commerce and Industry must continue to advance the trade missions aimed at increasing awareness of products and services and also creating connections otherwise not made. In addition, where there are remaining barriers, these issues need to be flagged with the ministries of foreign trade and foreign affairs and commerce in order that they can be addressed in the consultative mechanisms established under the EPA.
Added to these opportunities, it also brings a number of challenges:
1) the growing concern that Caribbean markets will be flooded by goods and services from the EC;
2) concern about non-tariff barriers (NTBs) to trade in the EC (Barbados already cannot export protein products to the EU because of inadequate sanitary and phytosanitary (SPS) legislation – this is a big peeve of mine as we have a few members with market contestability in this sector);
3) uncertainty about the readiness of the business climate to support export-led growth and
4) insecurity about the private sector’s capacity to compete, diversify and innovate in a global liberalised market.
I am fully aware that the benefits derived from free trade will be neither achievable nor sustainable without a business-friendly environment and a strong business sector; that is ready to face the significant challenges that will result from regional integration and international trade liberalisation.
In order to help the Barbadian private sector take advantage of regional and global integration, the Chamber plays a key role in advocating and lobbying for appropriate private sector development and competitiveness policy reforms; in order to helps our members understand and take advantage of the opportunities of the EPA and other trade agreements.
We have particularly been lobbying Government for improved legislation, particularly SPS reform, public sector reform and improved business facilitation across the board. We have also successfully lobbied to sit on the steering committee of the Competitiveness Programme funded by the Inter American Development Bank and we have successfully lobbied for the removal of the Environmental Levy from imported goods.
More recently, we have placed the green economy on the front burner and have worked with key players to advance this important agenda. We hope to, in short order, liaise with other key trade experts to put on short awareness seminars/workshops/business fora to engage our members on specific matters under the EPA.
I must admit that the few times we have tried to advance this there has been very little interest. We recognize that we cannot do it alone and have been collaborating with our other private sector colleagues.
Credit must be given to the sterling work done by the Barbados Private Sector Trade Team, which has worked tirelessly in keeping us (the various member agencies) informed, attending meetings, developing positions and ultimately defending the interests of the private sector in trade developments.
As it relates to awareness, I would say that the private sector is generally aware of the EPA. They understand that there will be some level of liberalisation and they understand that there has been access granted to domestic producers to the European and CARIFORUM markets.
However, I contend that perhaps that level of awareness is superficial. There is a need for businesses to understand specifically how the agreement affects the markets (domestic, regional and European) for the products they produce and/or sell as well as the services they offer.
Lisa Gale is executive director of the Barbados Chamber of Commerce and Industry. This article first appeared in the June edition of the BCCI’s newsletter Chamber Biz.