BUSINESS MONDAY: TRADE IN FOCUS: Use of skilled negotiators important given global developments

WHEN she addressed graduates of Cohort 12 of the Masters in International Trade Policy (MITP) Dr. Wendy Grenadae pointed to a situation where the Caribbean will have to use its human resources to deal with the new challenges which have been thrown up.

 

She pointed to a number of global developments which have implications for the Caribbean. Included in the lot were the Brexit vote which will see the UK exiting the European Union, and the emergence of China as a global power.

 

However, the one significant development which is the highlight of her comments, is the ongoing USA Presidential elections and what they could mean for the future of Caribbean – US relations.

 

Last Saturday in an address to a rally Republican Candidate, Donald Trump outlined again just where he wants the USA to go should he be the winner of the November 8 elections. Agreements like NAFTA  and the Trans Pacific Trade Partnership Agreement (TPPA) will be reviewed and re-negotiated.

 

Perhaps one of the more important aspects of his presentation and which this region should follow, is a commitment to prevent American firms from going offshore in search of low tax opportunities. On that score those companies that “lay off staff , closed their USA operations,” moving offshore and then exporting their products back to the USA, will not be allowed, Trump promised.

 

Since those comments were a repeat of what Mr. Trump has been saying throughout the campaign, it would be enough for us in these parts to pay close attention to what these policies could mean for us, although to a large extent they are being pursued by the present US administration.

 

In light of these and other developments, Dr. Grenade believes that the Caribbean needs its skilled trade negotiators now more and than ever before.“You all are a valuable asset to the Caribbean,” she said while indicating that they should be on standby for what is to come.

 

The suggestion makes sense once the region is prepared to pool their resources and meet head on the challenges which this new and unfolding global economic and political environment is shaping.

 

It has been said on numerous occasions that small states like what we have in the Caribbean, are no longer a consideration in the foreign policy making process of major countries. That puts them in a position where they have no alternative but to accept whatever is thrown at them. 

 Currently regional countries want to develop their economies not by way of hand outs but through a process that gives them a share of the global resources which ought to come their way.

 

Over the past decade or so there has been a continuous assault on their international business and financial services sector by major countries. All kinds of rules – the Patriot Act, FATCA and other pieces of legislation have been passed to limit this region’s  involvement in international business activities.

 

Both Trump and Bernie Sanders before him, have vowed to end the use of offshore tax havens by USA companies. It is not a new policy given that the present Barack Obama administration has been very active in that area to recoup more of the estimated US$500 billion  in tax revenues not reaching the USA.

 

As for global trade in goods, the Caribbean continues to play by the rules in opening up their economies to trade. They have liberalised, end protectionism to key economic sectors, avoided the practice of instituting non-tariff barriers, and restructuring their economies where necessary to account for the loss trade preferences for their commodities.

 

These things have been done even to the point of antagonising domestic producers.

 

Where the Caribbean has fallen down is by not going after export markets in a forceful way. They have not been taking advantage of the opportunities created within the CARIFORUM Economic Partnership Agreement and other bilateral agreements with partners in the Caribbean and in Central America.

 

It is against this and the wider background that the relevance of the skilled trade negotiators come into play. Assuming that regional governments are on course to tap into this skill set, they will be the asset to which Dr. Grenade made reference. It is not being suggested here that coming right out of the MITP programme will make these individuals professionals overnight.

 

The MITP programme is as rigorous as one would wish. All facets of trade and trade issues are taught by key personnel in the discipline, in addition to the practical aspects of the profession.

 

So Trade specialists can be located in such areas as ministries and departments of governments where the individuals carry out the  state’s functions on trade matters. They may also be located in industries, especially export industries, private sector bodies and regional organisations whose functions are trade.

 

Their goals would be to analyse trade matters, create an understanding of what their country/business firm want from trade, an understanding of markets, negotiate agreements, and give logistical support to the private sector.

 

A former lecturer in the programme summed up the situation when he said that trade officials are the primary practitioners of commercial diplomacy, charged with solving trade problems.

 

It will be necessary to see how this pans out and how the region will benefit in the new environment going forward.