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Government to review trade deals as it explore new export opportunities

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September 2023

Government has said that while it looks to make adjustments to existing trade agreements, the outlook was to look beyond these long-standing arrangements, to engage new strategies for export growth.

Above Body

 11 Sep 2023    admin   

Government, in its push to sell more local products to the international market, says its strategy isn't to settle with any one approach but to engage a myriad of strategies as it seeks to drive exports and to settle perennial trade imbalances.

While acknowledging data which point to an underutilisation of a number of trade deals, Senator Aubyn Hill, Jamaica's minister of industry, investment and commerce, told the Jamaica Observer that even as the Government moves to make adjustments where it can to ramp up growth in some areas, the outlook was to look beyond these long-standing arrangements, to engage new strategies as the country hunts more far reaching outcomes for export growth.

"Some of the deals we probably can revive, some we may just have to move on from to look at new trade partners," he said to the Business Observer.

Data from the Trade Board Limited (TBL) show a declining number of certificates of origin are being issued for trade on a per shipment basis. It shows almost three out of every four deals managed by the TBL (and another two), which includes the latter CARIFORUM economic partnership agreements (EPAs) being largely underutilised, especially those across some closely linked Spanish speaking territories.

Hill believes encumbrances such as Law 173 in the Dominican Republic may have been among the underlying factors responsible for the little to no certificates of origin being issued under the Dominican Republic Free Trade Agreement within the last eight years, despite heighten relations across Jamaica and that country in the last few years.

The Dominican Republic's Law 173 of April 1966 concerns the protection of importers of products and contains strict provisions which prevent operators from terminating their distribution and importation contracts with the Dominican Republic unless they have 'just cause' or are willing to pay heavy fees.

As a result of this, many have argued that the law, which appears outdated, may be no longer compatible with international trade rules, given its excessive and unjust protection of local agents. The Dominican Republic in its own justification has, however, said that the law, despite its blurry underpinnings, has not significantly diminished business relationships among foreign companies and local distributors and agents.

"Through the ambassador of the Dominican Republic we have enjoyed great working relationships and we continue to work to deepen ties across both territories. There is, however, some work that needs to be done around Law 173 to find a way to make it more reciprocal and we will be looking at that," Hill stated.

"In the case of Costa Rica and their free trade agreement, we can do more in this area, based on some good historical relationships, so we will have to make sure we also look at that deal. Columbia is another boasting a huge economy of which I would love to see us increasing our footprint and taking advantage of some existing and very good relationships as we see how best we can enjoy the provisions under its trade, economic and technical cooperation agreement," he added.

Hill further said that while it may be prudent to breathe more life in some of the older agreements, "some we may need to look pass as we turn our focus on new trade relationships of which we have a few new ones." To this end he called for increased trading activities with the West African region, targeting expanded business relationships with individual countries such as Somalia, Ghana, Rwanda, Nigeria, and Sierra Leon.

Minister Hill, who has championed the need for Jamaica to widen its export base, has become even more adamant that the country cannot get rich and increase its per capita income if its companies only sell to the island's small population of three million. He has led a number of trade missions to various countries to connect the Jamaican business community with those in outside markets.

"In October 2022, I took my first trade mission to Guyana, with about 35 people…it went so well that we got a second invitation and we took another 73 business people in January 2023, of which they have been reaping some real good business prospects in terms of having more exports with Guyana as well as expanded relationships. After that I took about 35 to Trinidad, over 40 to the Dominican Republic and similar numbers to Miami, Atlanta, Fort Lauderdale, Toronto, and New York," Hill said.

Bemoaning the country's decades-long burgeoning trade deficit — Jamaica recorded a trade deficit for every year over the last 60 years, except for 1966 — the minister insists that a lot more can and will be done.

"As a Government, we are going to have to do this in a manner similar to how we have come together to tackle our debt to GDP [gross domestic product], which has been moved from over 130 per cent to 78 per cent going on to 60 per cent in the last decade," he stated, noting that the trade deficit could be tackled in a similar fashion.

"In the past year I have brought this to the forefront of our thinking and so my aim as the business minister is to make sure we find a way to export a lot more, which means we have to find new markets, but we also have to find greater investments for our products and services which we can export," he added, underscoring the spiralling growth of the business process outsourcing as one of the current successes.

"As I look at what has happened in the past with trade agreements, I now look at finding new markets and taking our business people to these markets, as we take them out their offices to ensure we go and sell those goods and services," Hill said.

Source: Jamaica Observer 

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