A SINGLE ECONOMY FOR CARICOM?

EXTRACT FROM  SOME SALIENT ISSUES FOR RESOLUTION IN CARICOM LECTURE BY PM GONSALVES.

The per capita Gross Domestic Product (GDP) of the CSME countries in United States Dollars in 2014 is as follows: Antigua and Barbuda, $13,277; Barbados, $15,454; Belize, $4,617; Dominica, $7,002; Grenada, $7,778; Guyana, $3,628; Jamaica, $5203; St. Kitts and Nevis, $14,123; St. Lucia, $7,291; St. Vincent and the Grenadines, $7,203; Suriname, $9,120; Trinidad and Tobago, $18,798.

It is to be noted that Antigua and Barbuda and St. Kitts and Nevis of the OECS member countries of CARICOM have a comparatively high per capita GDP figure; and it is true, too, that all six OECS member countries of CARICOM have much higher per capita GDP figures than those for Jamaica, Guyana, and Belize.

But the small size and extreme vulnerability of all the OECS Member States of CARICOM demand especial protection and treatment within the CARICOM arrangements; thus, the demand for a special carve-out for these six CSME countries from the OECS plus Montserrat (size: 103 square kilometres; population: 5,179; GDP per capita: $9,455).

The unequally yoked nature of the six OECS member countries of the CSME, plus Montserrat and Anguilla (all members of the Eastern Caribbean Currency Union – ECCU), is further emphasized in their trade in goods (visible trade) with Trinidad and Tobago.

In 2008, the year of the onset of the global economic depression, Trinidad and Tobago exported to the OECS-ECCU countries EC $1.3 billion and imported EC $56.7 million from them, thus occasioning for Trinidad and Tobago a hefty trade surplus in relation to these countries of EC $1.27 billion; in 2016, Trinidad and Tobago exported EC $869.97 million to these OECS-ECCU countries and imported EC $42.57 million from them, thus giving rise to a large trade surplus of EC $827.38 million in favour of Trinidad and Tobago.  In the case of St. Vincent and the Grenadines, in 2015, our country imported EC $158.8 million from Trinidad and Tobago and exported to that country EC $21.0 million, thus according to Trinidad and Tobago a lopsided trade surplus of EC $137.78 million.

Further, the veritable subsidy which producers of goods and services in Trinidad and Tobago receive, places producers in the OECS member countries in a marked disadvantageous position relative to their counterparts in Trinidad and Tobago.  It is well-established that the consumers and producers in Trinidad and Tobago pay far less for energy than those in St. Vincent and the Grenadines and the rest of the OECS-ECCU.

Additionally, “energy” is one of the commodities which attracts the payment of the Common External Tariff (CET) when imported from a non-CARICOM source unless, as is the case of energy products under the Petro Caribe arrangement with Venezuela, a blanket exemption from the CET is accorded by the Council for Trade and Economic Development (COTED); this means, in effect, that CARICOM importers of “energy” cannot easily shop around for supplies from cheaper non-Trinidadian sources.

Clearly, this is unfair and wrong since the “energy” industry in Trinidad and Tobago is a modern, highly competitive one; it ought not to be accorded this CET protection. And I reiterate the fundamental point that producers elsewhere in CARICOM, especially manufacturers, find it challenging to compete with their Trinidadian counterparts because of that country’s cheaper energy.

It is for this reason that many Jamaican manufacturers are seeking to relocate to Trinidad.  Manufacturers from the OECS have no such heft to enable them to so act; in any event, jobs are sucked from elsewhere and are thus aggregated in Trinidad.  The pricing of “Energy” contributes immensely to “the unequal yoking” of CARICOM Member States.

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