Ross Sheil, Staff Reporter
BERNAL
"THE CARIBBEAN is at a critical point in its international trade relations, but would be naive to immediately abandon its preferential trading agreements," said Ambassador Richard Bernal, director-general of the Caribbean Regional Negotiation Machinery (CRNM).
Ambassador Bernal spoke to The Gleaner on Monday in response to the World Bank's recent report, 'A Time to Choose: Caribbean Development in the 21st Century', which was launched last week in Kingston.
Its central argument, which Ambassador Bernal shared, is that the Caribbean must take immediate action to position itself strategically as a trading bloc for goods and services.
However, the ambassador described as "dangerous and naive", the suggestion by the report's author, Sanjay Kathuria, that the Caribbean would benefit by 'goodwill' aid from donors in exchange for giving up preferences.
"Aid has an entirely different effect than trade. Trade is a productive activity, generating employees and investment, but aid goes directly to the public sector and does not have the same impact," explained the CRNM head. "Aid tends to be large in promise, but limited in actual delivery. It only lasts for a certain time just look at the sugar and banana and preferences, which are set to end."
His reference is to the near 30-year trading agreement between African, Caribbean and Pacific countries and the European Union, which allows the former to export agricultural commodities to the European market on favourable terms. But, under pressure from World Trade Organisation (WTO) rules, these traditional preferential trading arrangements will come to an end in 2008, to be replaced by economic partnership agreements.
However, Ambassador Bernal welcomed the World Bank's recommendation that the region should concentrate on producing goods and services.
SUCCESS OF OFFSHORE UNIVERSITIES
"Services now dominate the region's trade and foreign exchange earnings, something that has been said before but has not fully sunk in. Ten years ago, nobody could have predicted our success with offshore universities, and we have also demonstrated a competitive advantage with back-office operations call centres and accounts," he related.
Speaking at the report's launch, Caroline Anstey, World Bank country director for the Caribbean, called for a regional plan around which to rally donors. In a similar vein, Ambassador Bernal said consensus was needed at a time when the region was negotiating agreements with the WTO, Free Trade Area of the Americas, Canada and the European Union, all likely to be resolved by 2008.
He identified three steps for the Caribbean:
Keeping preferences for as long as possible.
Orderly transition.
An aid package in exchange for ending preferences.
Per capita growth in the Caribbean, the report warns, could fall to 2.3 per cent for 2001-2010, compared to 4.3 per cent in the 1970s, if its recommendations are not acted upon. Meanwhile, debt has grown from a regional average of 67 per cent in 1997 to 96 per cent in 2003, and the region's share of European and North American imports fell from 0.71 per cent in 1985 to 0.27 per cent by 2000.
