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Straight to the point: Trinidad – Benefiting from CARICOM
By John Blackman
Last week, Mr. Richard Cozier, Managing Director of Banks Holding Limited, pleaded with the Government to intervene in the terms of trade with Trinidad. His appeal came as no surprise to this writer who deems it appropriate to quote from this column of Sunday November 21, 2010.
“Trading – A study of trading in CARICOM would reveal that Trinidad is perhaps the greatest beneficiary in terms of trade. It exports considerably more to any member states than they do to the twin-island Republic. For example, in 2001, the Prime Minister of Barbados stated that the terms of trade were five to one in favour of Trinidad. Barbados had imported a whopping $300 million in goods and services from Trinidad, but exported a miserly $60 million dollars to the twin-island republic.
“M. Arthur admitted also that the free entry of Busta drinks from Trinidad had closed down the Barbadians soft drink JU-C Pepsi factory. He promised then that it would be tit for tat in retaliation. However, nine years after, tat is still very much alive and kicking, while tit was a miscarriage. In1987-88, Trinidad unilaterally and without warning imposed immediate import restrictions on Barbadian goods. This sudden policy destroyed Barbadian manufacturers in furniture, garments, mauby and pepper sauce. Many of them went out of business. Nevertheless, Barbados never retaliated. On the contrary, Barbadian fishermen were still catching royal jail (no pun intended) in Trinidad years after the Trinidadian decision closed down businesses of Barbadian manufacturers.”
The following table shows the total exports and ratios between Barbados and Trinidad In millions of dollars.
Year Trinidad Barbados Ratio
2001 300, 60, 5:1
2009 631.4, 69.4 9:1
2010 748.9 86.8 8.6:1
2011 1000 111.3 8.9 :1
The table demonstrates the increasing negative terms of trade for Barbados.
Jamaica is in similar or even worse position than Barbados ... Writing in The Sunday Gleaner of August 10 last year, in an article titled “Jamaica’s Costly Affair with CARICOM”, former Cabinet Minister Claude Clarke states inter alia: “I invited a re-examination of Jamaica’s experience in CARICOM … I emphasised the fact that our government’s revenue and our overall economy have suffered enormously in our trade with the region. The situation has worsened since then, and our trade deficit with CARICOM now stands at US$1.6 billion, and exceeds our total exports to the region 40-fold … It is, therefore, quite amazing that Jamaican governments have sat by for so many years and allowed the Trinidadian government, in particular, to use subsidies and other devices to put its producers on a superior with electricity bills at rates as high as 25 cents per kWh (JPS inefficiency not withstanding).
Such subsidies give Trinidad’s producers an insurmountable advantage and are incompatible with the fundamental principles of fair trade within a common market.
Trinidad’s producers now completely dominate Jamaica’s market, while Jamaican producers have minimal presence in theirs. How can it be rational for our Government to ask us to sacrifice revenues we desperately need for our schools, our hospitals and our security forces so as to allow subsidised Trinidadian goods to drive Jamaican goods produced in Jamaican farms and factories by Jamaican workers, out of the Jamaican market?”
Barbadians can rewrite the last paragraph by substituting:” “Barbados” for “Jamaica,” and “Barbadian” for “Jamaican”.
They will certainly be monitoring in” terms of trade’ the depth of sincerity in the apology of the Trinidadian Trade Minister, Stephen Cadiz.