BUSINESS MONDAY: TRADE IN FOCUS
Mon, 11/21/2016 - 12:00am Barbados1
Guyana, B’dos should continue to strengthen trade linkages
IT is very noticeable that Guyana seems to be a market to which Barbados should pay closer attention and try to work as an outlet for domestic manufacturers.
Earlier this year it was included as one of the stops for a Barbados trade mission to three Caribbean countries and the report on the outcome was positive.
The Trade Mission to Guyana had come against the background of a pick up in the level of Barbadiann exports to that country, as well as Guyanese goods to Bridgetown.
What has made this possible is the restructuring of the Guyanese economy which during the global economic downturn was growing at around four per cent annually.
This was unlike other Caribbean economies and in particular the services based economies which were growing at between less than one per cent and one per cent, and some of the others which were not growing at all.
Representatives of both countries have spoken about the need to increase trade and other commercial contacts. Barbados government officials have been highlighting this fact.
One year ago this country’s Foreign Affairs and Foreign Trade Minister Senator Maxine McClean and her Guyanese counterpart, Carl Greenidge signed the third Joint Commission intended to foster cooperation in key sectors including tourism.
McClean said it is intended to strengthen bilateral ties between the two countries while Greenidge indicated he was looking towards deeper collaboration in the fisheries and maritime sectors.
The initiatives make sense as countries look to broaden their thrust to get more of their goods and services into the other’s markets. In doing so, countries are looking to earn foreign exchange, stimulate economic growth, ensure the survival of domestic exporting enterprises and maintain employment.
Beyond that it could also give a boost to overall trade within CARICOM given the slow pace at which this has taken place as revealed by some commentators and agencies analysing trading patterns across the region.
While they did not participate at BMEX this year, it is known that their presence at the exhibition in previous years was aimed at showcasing some Guyanese products while wanting to boost trade with Barbados.
Both countries possessed a range of exportables which have been traded between them. Food and beverages, chemicals, furniture and wooden products, cement, plastics, paper products, and pharmaceuticals, make up the bulk of items produced in Barbados and many of which are exported across markets in the Caribbean.
For its part Guyana also has vital export industries with food and beverages, wood and other building materials, among the products exports.
There has been relatively strong trade links between both countries going back to the 1970s and 1980s until the impasse over the Caricom Multilateral Clearing Facility (CMCF) upset the momentum.
That facility through settlements for trade were done, has seemingly been handled. Trade subsequently resumed.
Statistics have shown that over the past three years Barbados’ domestic exports to Guyana have increased from about Bds$30.0 million in 2012 to $42.0 million the following year, to $48.0 million in 2014.
On the other hand Guyana’s domestic exports to Barbados were $25.7 million in 2012 but dipped to $21.6 million the following year. However, they recovered last year to reach $27.2 million.
In terms of ranking Guyana has now overtaken St. Lucia as Barbados’ second major market in the region behind Trinidad and Tobago. It should be noted though that as a group the Organisation of East Caribbean States absorbed more products from Barbados than Guyana.
The goals from increasing trade fit in line with the aims of the regional integration movement which sees higher levels of trade among CARICOM states as one of the main features of the integration process.
Chapter V of the Revised Treaty of Chaguaramas which is the template for the move towards the Caribbean Single market and Economy (CSME) gives full coverage to trade matters.
The Chapter pinpoints that the goal of the (Caribbean) Community Trade Policy shall be the sustained growth of intra-Community and international trade and mutually beneficial exchange of goods and services among the member states and between the Community and third States. The establishment of common instruments among other things is also addressed so that once in place will give more meaning to trade and in an environment where there are no barriers or where such barriers are at a minimum.
Three of the instruments that are of importance to this cause (although there are others) are the Rules of Origin, the Common External Tariff (CET), and the Council for Trade and Economic Development (COTED).
The Rules of Origin state that when goods are produced in a CARICOM member state, they qualify to be imported into another member state free of duty.
The CET, according to CARICOM, is a schedule setting out the common rates of duty that are applied by all member countries of a Customs Union to products imported into the union (that is CARICOM) from countries which do not belong to the union (third countries). Member states of a Customs Union have to agree on the level of customs duties to be levied on imports from third countries.
In the meantime one expects to see trade growing between Guyana and Barbados. (JB)