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Minister Pinder’s Remarks at Caribbean Exporters’ Colloquium

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Caribbean Exporters’ Colloquium

Bridgetown, Barbados

20th March 2013

 

Time for Action – Report of the West Indian Commission –

Where are we today?

 

Remarks by

 

Hon. Ryan Pinder, Minister of Financial Services,

With responsibility for international trade and industry

 

Panel Guests

His Excellency Irwin Larocque, Secretary General of CARICOM;

Colleague Ministers

Pamela Coke Hamilton, Executive Director of Caribbean Export Development Agency and Other CEDA Executives

Members of the Diplomatic Corp

Ladies and Gentlemen

First, let me say how very pleased I am to be in beautiful Barbados.  The view from my room reminds me of home in The Bahamas!  Looking at the ocean further reminds me of how much we, as members of the Caribbean, share in common; our great similarities, which extend beyond geography, and include our shared histories, progressively integrating common purposes and our hope of a vibrant future.

Second, I would like to congratulate the Executive Director of CEDA, Ms Pamela Coke Hamilton, other CEDA Executives and contributing agencies on the organisation of this Exporters’ Colloquium.  I reviewed the subject matters which we are to address over these two days with great interest.  The dialogue regarding “where we are today”, in the context of being countries exporting from our region, is of particular importance at this time, during this fifth year of many of our countries having signed the Economic Partnership Agreement with the European Union, and indeed between ourselves as members of CARIFORUM, and the obligation which this brings for us to account during this year on our efforts to implement the EPA and, more importantly I believe, on what benefit it has brought to our countries. 

Economic Regional Integration

Today, we speak about regional integration and the effectiveness of its implementation.  Regional integration in the context of the Caribbean has many facets, including: economically, diplomatically, educationally and socially. 

I am of the view that in order to claim success at regional integration and in order for our people in the region to benefit and appreciate regional integration, we must be successful at economic regional integration.  Without the creation of opportunities for our people on an economic basis, meaning employment, the chance to build careers, entrepreneurial opportunities, and business expansions, regional integration cannot succeed. 

Regional integration in the Caribbean in the economic sense has been almost exclusively based on the concept of intra-regional trade, which many have opined has had questionable success. 

It has been argued that the intra-regional trade policy has caused competing member countries to have increased vulnerability in certain products.  It has also been argued that the focus on intra-regional trade has caused undue strain on Government resources and that there has been a break down between economic practice and economic theory.  The numbers on intraregional trade also tell this story.  Net of oil trade, intra-region exports have not even accounted for 10% of total CARICOM trade, and future growth in trade is expected to come from exchange outside CARICOM.  Intraregional trade has been challenged by a high dependence on foreign markets for industrial inputs into goods and a historical colonial heritage that has caused our countries to develop as an economic compliment economically to our European counterparts. 

Despite the challenges experienced as a region, I believe regional integration can succeed, that it can provide the economic opportunities for our people.  I believe the success of regional integration lies in the ability for us to leverage our respective assets and expertise to develop a regional trade for global export, not exclusively for intraregional purposes.  Some say we are poorly positioned as individual nations for global trade competition, however, they have argued that we are properly positioned for success in value added goods trade and services trade, a trend in global trade that is increasing. The Director General of the World Trade Organization recently identified that “Today, almost 60 per cent of trade in goods is in intermediates or trade in tasks.  Around 40 per cent of world exports are in fact imported inputs.”   These inputs are to be used to create other products.  Global trends are not supportive of a traditional industry concept of manufacturing a product from the ground up.

It is in this latter context which I proffer today that we:

  • strongly pursue a model of regional trade integration through production based on value-chain trade;
  • do this in the context and using as the foundation Article 238 on Regional Preferences in the Economic Partnership Agreement; and
  • reap the benefits of increased exports collectively as a region or group of countries.

I am cognisant that I sit on a panel with preeminent minds in our jurisdiction, particularly as regards matters of economic integration and trade. However, I believe that there are significant gains to be had by this model.  For success, we must ensure that the production structures, and logistics structures of the region are linked together.  Regional integration from an economic sense can lie in the liking of our countries from a production basis to further a value chain trade agenda for export outside of our Region, as shift in concentration from solely an intraregional trade approach.

Intra-region Value-Added Trade

The Value-Added Trade Strategy is often referred to as value-chain trade. It seeks to increase the value of a product at each point on a chain of production, such points which may occur on different islands or in different jurisdictions. 

It maximizes both the utilisation of trade in goods and services.  It does not require each of our countries to be responsible for producing an item from the ground up, and then exporting.  It allows us to specialise on one component of the production, add value and export regionally, with the goal of an ultimate export of a finished product to markets outside of the region.  This approach encourages the development of new inter-linked industries between our countries.

I have been in discussions recently with a number of Ministers of Trade within the region on building ties and strengthen trade between ourselves utilising the value-added strategy.  In each instance the focus has been on what the expertise of each country is, whether it be agriculture, raw materials for refinement, logistics and ease of access to the international markets.  Every country has an opportunity to bring something to the table to create a product for evenutal export.  Working together for the overall success of international trade, building successful, sustainable and effective regional integration one step at a time. 

Regional Value Added Trade under the EPA

The value-added trade strategy, creating a production value chain within the region, is premised on preferential trade between ourselves, and then ultimately international market access.  A number of potential mechanisms exists by which to effect this: the CSME amongst some CARICOM countries; the CARICOM-DR Free Trade Agreement amongst fewer CARICOM countries and the DR; the provision of regional preference pursuant to the EPA. The challenge has been the fact of the existence of the multiple schemes.

The Bahamas is of the view that it has taken monumental steps towards economic integration when it acceded to the Economic Partnership Agreement between CARIFORUM and the European Union.  The new Government of The Bahamas has signaled its commitment regionally and internationally to fulfilling its obligations under the EPA by finalizing steps to ensure that our commitments in trade in services and investments were duly incorporated within the EPA.  I mention this only to point out the Government’s readiness to implement the EPA in all its forms, in particular as regards to provision of regional preferences between CARIFORUM countries.

We proffer that Article 238 of the EPA be used to garner immediate gains which might be had from regional preferential trade in developing a platform for value added trade, successful international exports, and ultimately successful economic regional integration.  The advancement on international exports utilizing intraregional trade to support the end result, and the successes to the respective countries as a result causes success in intraregional integration.  I might occur systematically, instead of all at once, however, it will be achieved on finite successes, and most importantly, the expansion of our respective narrow economies, providing opportunities to our people. 

 

Regional Integration Culturally and Socially

We in the region have a basis for global expertise that likewise can serve as a basis for economic trade success, but also serve as the foundation for regional integration from a social and cultural point of view.  In the context of regional integration we can learn a lot from the youth of our region.  Young people under the age of 30 comprise 60% of the region’s citizenry.  The youth of CARICOM in a 2010 report have observed that the rich cultural diversity is to be our region’s greatest resilience factors.  The young people likewise observed that sports and culture are two areas in which the youth has contributed to regional identity internationally, for which they need to be recognized. 

The role of sports in enhancing economic development and social cohesion is yet to be realised with the Caribbean, which many observe has a natural advantage in outstanding talent of its youth.  In fact, in the coming weeks The Bahamas will host events under the Caribbean Free Trade Association, better known as CARIFTA – uniquely by name connecting the concept of trade in the region to sports.  Sports remains a common bond, an example of true regional integration, it is the great equalizer.  We have an opportunity to transform the success of regional integration of sports into economic opportunities, especially for our youth.

Culture and the Creative Industries is another success in regional integration, especially identifiable with our youth.  Young people identify strongly with the many cultural expressions that have distinguished the region internationally including literary artists; music and dance; art and craft and musical and art festivals.  These, embodying the creative industries, is the fastest growing section in the global marketplace, is evidence of future success for regional integration, properly supported can be a dominant export market, and is an area where the youth are the backbone.  We as countries in the region must embrace the promotion and economic development of the creative industries in order to realise economic success, and benefits and opportunities for our people, and particularly the youth, from regional integration.  Youth unemployment in the region are among the highest in the world, we must advance our youth as we look for strategies and policies to demonstrate and effect economic benefits from regional integration.  These lie, in my opinion, but providing the economic framework to sports, culture and the creative industries. 

Conclusion

There have been successes and challenges when it comes to regional integration.  In order for those of us elected or appointed to serve our respective nationals and Caribbean people more generally, in pursuit of all objectives, we have to proceed with a mindset of providing the best and most sustainable opportunities for their advancement.  In certain instances this required adjusting to global environments, building on strategies established, and implementing new strategies.  Regional integration is of fundamental importance to the Caribbean, in all sense of the term. 

Economic regional integration, historically some say challenged, must succeed, must cause for the advancement of our respective citizens.  We as a region must cause for strategies to adapt and adjust, especially in the context of trade, to ensure that we as a region get to the forefront of the international paradigm, to cause on a regionally integrated fashion, the lifting up of our respective countries.  In my opinion, economic regional integration is based in part upon the successful implementation of a regional value added trade, or value chain trade strategy built upon the framework of the EPA which because of its unique characteristics causes for trade preferences both regionally, as well as internationally with the European Union.  We each may have a country to build, collectively we have a region to build, one that will cause for the economic advancement of our people, let’s cause for it to happen, lets advance our partnership together in the region.

Thank you.

 

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