T&T's
bilateral trade agreements with the Spanish-speaking
World: A valuable economic tool
Trinidad Express
Port
Spain
Petroleumworldtt.com
12 17 06
Did
you know that Trinidad and Tobago is the Caribbean's
leading producer of oil and gas? Similar to a David
and Goliath situation, our tiny country, with a
population of just over 1,300,000, has to compete
yearly with larger, more powerful nations both regionally
and internationally.
A
small population means a small domestic market.
Therefore, our manufacturers and exporters must
have access to foreign markets for us to become
a serious international competitor. According to
the Honourable Minister of Trade and Industry Kenneth
Valley, "The Government has been working diligently
to lay the foundation for sustainable economic growth
by seeking to integrate our economy into the Latin
American economy." One of the ways our government
achieves this is by Bilateral Trade Agreements.
Given our close proximity to Latin America and with
the
Cabinet
- mandated Spanish As the First Foreign Language
(SAFFL) initiative, it is no wonder that all of
the Bilateral Trade Agreements to which this country
is a signatory to are with Spanish-speaking countries.
As
the name implies, a Bilateral Trade Agreement is
basically a trading arrangement whereby two countries,
referred to as the Parties, agree to reduce tariffs
and quotas on goods imported and exported between
them. These arrangements are also often aimed at
solving specific trade problems between the two
Parties and capitalising on specific market opportunities
available in the respective countries. Trinidad
and Tobago signs these Agreements as a More Developed
Country (MDC) of the Caribbean Community (Caricom),
and as a result, has to make reciprocal market access
concessions to its Bilateral Trade Partners. LessDeveloped
Countries (LDCs) do not have this obligation but
still benefit from duty-free access to the Partner's
markets.
Trinidad
and Tobago's Bilateral Trade Agreements are normally
designed to promote investment and development in
the region in order to increase the international
competitiveness of the region. Additionally, "considering
the desirability of developing a more dynamic and
balanced commercial economic relationship",
they also facilitate joint ventures between the
two signatory Parties and foster the use of mechanisms
to promote and protect the investments of nationals
from both Parties. Under each Bilateral Trade Agreement,
a Joint Council or a Joint Commission, comprised
of representatives from both Caricom and the respective
country, is often formed. Its primary function is
to ensure that both Parties comply with the provisions
of the Agreement and to resolve any problems or
disputes which may arise in relation to the Agreement.
However, it may also be assigned additional functions
by the Parties. Meetings are usually held once a
year or at the request of either Party.
Minister of Trade and Industry Kenneth Valley.
Situated
just 10 kilometres off the coast of Venezuela, it
comes as no surprise that Trinidad and Tobago's
oldest Bilateral Trade Partner is none other than
Venezuela. Signed on October 13, 1992, the Caricom/Venezuela
Agreement on Trade and Investment is a "one
way preferential agreement designed to promote Caricom
exports to Venezuela." Consequently, goods
like spices, by-products of iron and steel and propane,
proceeding from Caricom countries including Trinidad
and Tobago, now have duty-free access to the Venezuelan
market of more than 25 million people, via the implementation
of programmes of tariff reduction and the elimination
of non-tariff barriers. According to the Central
Statistical Office, in 2005 this country's main
exports to Venezuela were motor spirit gasoline
and machinery parts, while our main imports from
Venezuela were crude petroleum and gas oil.
Another
neighbouring country with which we have a Bilateral
Trade Agreement is Colombia, which offers a market
of over 43 million. The Agreement on Trade, Economic
and Technical Cooperation between Caricom and the
Government of the Republic of Colombia was signed
on July 24, 1994. This aforementioned Agreement,
provided for preferential tariff rates to Caricom
goods entering Colombia. However, this was later
amended to also allow for tariff reductions on imports
from
Colombia into Barbados, Guyana, Jamaica, and Trinidad
and Tobago.
Naturally,
the primary objective of the Agreement is also to
"strengthen the trade and economic relations
and technical cooperation between the Parties."
However, unlike the Agreement with Venezuela, this
Agreement clearly identifies as one of its objectives
the promotion of the active participation of the
private sector, including business exchanges between
the Parties. Some of the key products traded between
Colombia and Trinidad and Tobago are crude petroleum,
urea and sugar.
In
addition, the first Free Trade Agreement signed
by Caricom was with the Dominican Republic on August
22, 1998. It allows duty-free access for all goods,
excluding those listed in the Appendices to the
Agreement, to the Dominican Republic market, which
presently represents more than 9 million consumers.
The goods listed in the Appendices are either subject
to phased reduction of the Most-Favoured-Nation
(MFN) rate over a specific period or are goods which
will remain subject to this rate of duty. A key
element of this Agreement is the provision of trade
liberalisation not only on goods but also on services,
and the creation of projects to develop other areas
of cooperation "including reciprocal promotion
and protection of investment and government procurement."
Caricom
signed another important Bilateral Trade Agreement
on July 05, 2000 with the Cuban government. This
comprehensive Trade and Economic Cooperation Agreement
shares most of the objectives of the aforementioned
Agreements and like the Agreement with the Dominican
Republic, also seeks to liberalise trade in services.
However, it also seeks to discourage anti-competitive
business practices between the Parties and to promote
"an ongoing system of consultation and coordination
for the exchange of information and views on economic
and social matters of mutual interest."
Other
significant aspects of this Agreement are specific
provisions made for the tourism industry, intellectual
property rights, and trade promotion and facilitation.
Perhaps the establishment of this country's Trade
Facilitation Office in Cuba earlier this year is
the clearest indication of the Parties' success
in fulfilling the provisions of the Agreement. It
is also curious to note that no quantitative restrictions
exist for goods traded under this arrangement.
Costa
Rica is also a country with which Caricom has a
Free Trade Agreement which was established on March
09, 2004. In addition to increasing trade and diversification
between the Parties, the Agreement also aims to
promote conditions of fair competition and promote
regional integration in the Americas, which in turn
will assist in gradually eliminating trade and investment
barriers. Therefore, it provides for either free
trade or preferential access for a wide range of
goods. At the end of 2005, some 95 per cent of products
were eligible for duty-free trade. However, some
items like cigarettes and chocolate are still subject
to duty while the duty on others is gradually being
eliminated.
This
Agreement establishes Free Trade Coordinators to
monitor its implementation and Standing Committees
on Market Access, Trade in Services and Investment,
and Anti-Competitive Business Practices unlike the
other Agreements. It also makes provisions for anti-dumping
and a review of developments related to "trade
in services, investment, competition policy, and
government procurement."
Trinidad
and Tobago also has a Bilateral Investment Treaty
with Cuba and as recently as October 03, 2006 signed
a similar treaty with Mexico, allowing our manufacturers
and investors easier access to a market of over
107 million individuals. Spain is one of five European
countries targeted for investment promotion by the
Government and bilateral trade negotiations and
underway with Argentina and Chile. This trend in
using Bilateral Trade Agreements with the Spanish-speaking
economic powerhouses to boost trade and investment
opportunities for our country is increasing, as
T&T adopts Spanish as its First Foreign Language.
The above column was compiled by the Ministry of
Trade and Industry.
For
more information about the Spanish As the First
Foreign Language (SAFFL) initiative, please contact
the Secretariat for the Implementation of Spanish
(A Division of the Ministry of Trade and Industry)
at 624-8329 / 627 - 9513 or fax us at 623-0365
Trinidad
Express
Wednesday, December 13th 2006
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©2006 Trinidad Express. All Rights Reserved.
