1 / 20

Trade and Competitiveness in the Context of the CARICOM Single Market and Economy (CSME) ~

Trade and Competitiveness in the Context of the CARICOM Single Market and Economy (CSME) ~ Trade- Related Issues Ambassador Patrick Antoine, Ph.D 5 May 2005 Central Bank Auditorium, Barbados. Competitiveness is.

lam
Download Presentation

Trade and Competitiveness in the Context of the CARICOM Single Market and Economy (CSME) ~

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Trade and Competitiveness in the Context of the CARICOM Single Market and Economy (CSME) ~ Trade- Related Issues Ambassador Patrick Antoine, Ph.D 5 May 2005 Central Bank Auditorium, Barbados

  2. Competitiveness is. . . • The ability of a firm/industry to realise higher rates of profits in the production and trade of goods relative to other firms/ industries: • Technology • Product characteristics • Investment • Firm strategy & industry structure • Trade & regulatory environment • Human capital & managerial expertise • Factor endowments • Factor supplies • Scale & scope economies

  3. 12 10 8 6 Intra regional imports as % of the total imports 4 2 0 1985 1990 1995 2000 % of Total The Status of Trade Integration • CARICOM Trade shares increased 13% -1990; 20% - 2000; 16% - 2001; • CARICOM intra-regional trade – lowest shares of all groupings (see graph) .

  4. CARICOM 10% Other: 26% CARICOM 21% LA: 2% Other: 23% EU: 17% LA: 2% EU: 12% USA US: 48% 39% - Distribution of exports by country destination 1980 2000

  5. Product Complementarity Index

  6. CARICOM trade dominated by services: two trends: • merchandise exports declined: 52% -1990; 45% - 2001; • agricultural exports declined relatively more than merchandise exports • Intra-regional imports: 9% -1990; 11% -2001. • Net deficit on goods trade: 320% increase; US$2.2 Bln (1990) to US$7.3 Bln (2001)

  7. Intra-regional trade highly concentrated Bilateral Herfindahl-Hirschmann Index

  8. Intra-Regional trade: CARICOM: 12.9% - 2000; 9% - 2001 • Barbados: 19% - 1985/82; 33.4% - 1985/96; 17% - 2001; • Trinidad, highest intra-regional exports-US$ 939 Mln (2000); Bdos 2nd highest, US$97Mln; • Trinidad & Tobago (petroleum-based products) & Jamaica (alumina) dominate; • T&T: 80 (Exp); 60 (Imp) • Reinforced by results of gravity model (1994) “effects of larger consumer base outweigh effect of self-sufficiency on bilateral trade flows” • 89% of suspensions & derogations granted to 2 countries; these have hi-tech content.

  9. Exports of MDCs to the OECS classified by Factor Intensity

  10. Export Structure by technological intensity (% of exports)

  11. Empirical evidence: CARICOM has led to some trade diversion • Some products not traded intra-regionally– largely agricultural: • Opportunities: • eliminate remaining NTBs & quantitative restrictions (not as critical for non-agriculture) • agree & strengthen regulatory regimes • establish standards & technical norms • enforce national treatment re taxes • rights of establishment • Creation of Single Market – stimulus for consolidation & growth

  12. Opportunities for growth in: • processed products • energy and energy related areas (key inputs in processed products) • products containing hi-tech inputs – key!

  13. Electricity Costs 30 25 20 US cents/kWh 15 10 5 - Haiti Jamaica Guyana Grenada St. Lucia Suriname Dominica Singapore Barbados Dom. Rep. Nevis N.Zealand Tobago St. Kitts and Trinidad and the Grenadines St. Vincent and Source: Castalia (2004).

  14. Opportunities for: • substantial benefits from free movement of labour (possibility to extend to all categories) – embodied human capital (specialization, supply, returns, economies of scale); • social partnership (protocol for implementation of prices and incomes policy) • greater pool of formally trained workers will contribute to increasing productivity growth and income; • promotion of industry clusters.

  15. Challenges: • FDI flows into manufacturing • Customs facilitation • Complete competition policy regime • Unfair trading practices (anti-dumping & countervailing measures, SPS measures,intellectual property rights…acquisition of knowledge & technology negates economies of scale and distance)

  16. Unfinished Agenda: • Development fund • Rationalisation of CET regime & harmonization of CET rates • Elimination of Suspensions • Correction of bias in structure of CET

  17. Rationalisation of CET Regime & Harmonization of CET Rates: an example Agricultural Items on which Suspension of the CET under Article 32 of the Common Market Annex have been granted for an indefinite period subject to review by the Council, with the rates to be applied by Member States

  18. Unfinished Agenda: • External Orientation (EPA, WTO, FTAA, Bilaterals) • Single market regime (strategic goods) • Exploration of regional safeguard mechanism (??) • Synchronization of internal CSME & external agendas (WTO, Bilaterals, FTAA) • Efficiency/scale of operation (case of cement – can public policy play a role) • Transportation – based on results of gravity model (2004) transportation critical based on distance between importer and exporter(significance of results).

  19. CSME Built-in Agenda: Article 239 - Undertaking The member states undertake to elaborate a protocol relating inter alia • Government procurement • Free zones • Free circulation

  20. Niggling Concerns: • OECS Economic Union; • Spectre of two CSMEs; • Inadequate checks and balances (no clear mechanism to correct for dis-equilibrium); • Convergence.

More Related