Calls for intra-regional trade increase, while cutting import bill

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Calls for intra-regional trade increase, while cutting import bill

Business reporter

Wednesday, May 13, 2020

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At a recent Food and Agriculture Organization (FAO) and Caricom forum, several stakeholders have renewed calls for the promotion of increased intra-regional trade among member states, which they say will help to boost the region's agricultural sector and reduce the hefty food import bill in most of the Caribbean territories.

With Caricom members over the last few years importing about 80 per cent of their food and amassing billions in import bills yearly, stakeholders have once again reiterated the need for more intra-regional trade—as only some 17 per cent of imports are sourced internally, and the regional body weakly connected with the rest of the world in terms of global value chains.

In the Web forum held last week, Saboto Caesar, minister of agriculture for St Vincent and the Grenadines, said that though the region has been encountering many shocks— ranging from droughts to the ongoing pandemic and an upcoming hurricane season on the horizon — it is imperative that necessary steps be taken and frameworks drafted to remove some of the existing barriers to trade.

“We have been able to come up with a framework whereby we have identified several commodities that we want to address in the short to medium term that we can trade intra-regionally. We are now working on addressing issues of sanitary and phytosanitary (SPS) protocols, which historically have been seen as barriers to trade,” he said.

Caesar, who is also the chairman of Caricom's agriculture sector COVID-19 response task force, said that in order to improve its efficiency, the region will have to come up with an effective system in order to move commodities on the single market and economy likewise address shortfalls with shipping. He cited the absence of organised information, marketing intelligence as well as the uncertainty of price as some existing issues which must be addressed; noting that it can be done if good production plans are put in place.

“Member states will need the work of technicians working along with importers and exporters to ensure that this happens, the cost for shipping is another variable we also have to address.

I'm of the view that we are going to do well in this period, however, there is a need for a recommitment by all member states, all stakeholders in the agricultural sector in order to be able to carve out a significant portion of the food import bill and create great wealth by moving more commodities intra-regionally, he said.

Caribbean Private Sector Organisation (CPSO) representative Dr Patrick Antoine, for his part, added that as a part of the future outlook, the region must begin to become concerned about driving exports, cutting imports and driving intra-regional trade. This, he believes, can be done with the right amount of private sector investment.

“We want to look at large investment opportunities that will make a huge impact on Caricom's trade balance, foreign exchange and overall economic footprint from a trade perspective. We want to cut imports by 25 per cent by 2025 per cent,” he stated.

He also pointed to the challenges that exist with shipping in the region. “Private sector investment in infrastructure is going to be critical; geographically, because of logistics. For transportation we have been close, but really we have been physically distanced, because it's very difficult to ship efficiently to markets that are close by— this is important as we recognise that underlying are some things that need to be fixed.”

He strongly advocated for the use of information communication technologies (ICTs) being integral to the processing of information related to trade and shipping, noting that some good things were already started, but structural impediments must be fixed and protocols finalised to facilitate easier movement among countries of the region.

Assistant secretary general of Trade & economic Integration at Caricom, Joseph Cox further said that though challenges also exist at the local level, greater efforts were indeed needed for the way forward. He noted that though the region's effort was still a work in progress, there has been a renewed impetus for regional integration, of which he believes the solution is not far away.

“We are working very closely with the member countries to see if we can treat with those matters. We do recognise that coming out of the COVID-19 pandemic it will be a brand new ball game and for us to respond, it won't just be a matter of cross border investment, it's also a matter for us to finally as a region grapple with the issue of production integration. There are some synergies which can be obtained with that sort of cross border interaction on which we have not yet capitalised. In this new world that we are going into—that would have to be a part of the focus,” he said.

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