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Biden visit good for Caricom

220px-Joe_Biden_official_portrait_cropBy Julien Neaves T&T NEWSDAY

The Caribbean Basin Initiative (CBI), which allows Caricom countries preferential treatment on a number of goods to the United States (US), has benefitted the region for the past three decades. Following the State visit of US Vice-President Joe Biden to Trinidad last month President of the American Chamber of Commerce of Trinidad and Tobago (AmCham TT), Hugh Howard, has expressed hope that the CBI will be expanded to include services.

“I think the visit of the Vice-President not only augurs well for Trinidad and Tobago but Caricom as well. Over the years the position was taken by the US, correctly, with the organisation called Caricom (is that) rather than having divisiveness with each constituent state (you should) have a multilateral arrangement which covers the whole of Caricom,” he said.

Howard noted this relationship dated back to the 1980s and the CBI. “The US thought it would be a very good idea to have an arrangement which gives Caricom preferential treatment. So quite a number of goods have been able to go to the US market duty free and one way,” he said.

Howard pointed out that this was not a bilateral agreement, so US products coming into CARICOM markets did not receive this preferential treatment.

According to the US International Trade Administration CBI “is a broad program to promote economiHugh Howardc development through private sector initiative in Central American and Caribbean countries. A major goal of the CBI is to expand foreign and domestic investment in nontraditional sectors, thereby diversifying CBI country economies and expanding their exports”.

The CBI, which provides customs duty-free entry to the US on a permanent basis for a broad range of products from CBI beneficiary countries, was launched with the Caribbean Basin Economic Recovery Act (CBERA) of 1983 (amended in 1990) and was “substantially expanded” with the Caribbean Basin Trade Partnership Act of 2000 (CBTPA), according to the Office of the US Trade Representative. Eighteen countries currently benefit from CBERA and eight of these, including Trinidad and Tobago, are also beneficiaries of the CBTPA.

Howard said the CBI has worked extremely well over the first two decades. He noted the pieces of legislation not only provided preferential arrangement to Caricom but Central American like Panama, Guatemala and El Salvador.

He pointed out that the Central American countries, around 2005, formed the common market arrangement Central America Free Trade Arrangement including the Dominican Republic. Howard said since that time those countries have not been a strong recipient of the CBI preference arrangement, and it has been essentially Caricom countries that have been beneficiaries.

He noted that AmCham has been advocating for the US to include under the CBI trade in services, as currently it deals with trade in goods.

Howard explained that for quite a number of Caricom countries their main source of revenue and main contributor to GDP is the services sector.

“We (AmCham) have been saying now there is a change regarding drivers of the economy make CBI continue to be meaningful to a number of recipient states, (and) add services,” he said.

Biden met with Caricom leaders on May 28 during a state visit to this country as the last leg of a three-nation regional tour. Trade was one of the items on the agenda for discussion.

Howard said he would be “surprised” if the issue of including services in the CBI had not been raised in closed door meetings between Biden and Caricom heads. He pointed out this was especially important for Eastern Caribbean States, which were really tourism-based, and Barbados and Antigua which are involved in financial services.

He said Trinidad and Tobago has oil and gas resources and have not been “pushing tourism” as it should. He noted that this country now has to diversify due to the state of local production and the reserves of oil and gas, and the development of shale oil and shale gas in the US reducing their demand for natural gas from Trinidad.

He said this country will have to “push” the services sector, including entertainment and tourism, and there is a prime market in the US for these services, especially in the diaspora. He noted other areas that are being looked at are financial services, ICT, and the creative industries such as music and film. He stressed that this country cannot survive on any one area.

“So it is question that our very survival will hinge on diversifying the economy,” he added.

On the inclusion of services to the CBI Howard noted that it has not happened yet but AmCham will continue to advocate for it.

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