The next Canada-Caribbean Free Trade Agreement must recognize that the two sides are vastly different and provide special and deferential treatment for the many small developing island states that comprise the Caribbean Community and Common Market, says Toronto-based Audel Cunningham, the legal adviser in the CARICOM Office of Trade Negotiation.
Cunningham says any agreement must include trade in services and access for Canadian companies to the Caribbean market and vice versa, and also expand access to the Canadian market for Caribbean imports.
The current CARIBCAN trading relationship initiated in 1986 is a unilateral extension by Canada of duty-free access to the Canadian market for most commodities originating from the Caribbean. The agreement ends next year when the current five-year World Trade Organization (WTO) waiver for the Caribbean countries’ tariff expires on December 31, 2011.
The waiver is necessary because under the WTO’s Most Favoured Nation Principle, all members are entitled to receive the most beneficial tariff treatment offered by a member.
“What we are now negotiating is a system of reciprocal preferences, meaning Canada would give the Caribbean tariff-free treatment and we in exchange will do the same for them,” said Jamaican-born Cunningham. “CARIBCAN has severe limitations attached to it and it’s not really conducive to the Caribbean’s economic development. It’s only goods and the beneficiaries are the agricultural sector. But in the region, we know that these are not very competitive at all.
“What we are therefore aiming to develop in the region are our service industries. We believe that our insurance providers can, in some instances, come to Canada and offer their products competitively. We also believe that our musicians can come and be very competitive here. So we are seeking to broaden the opportunities for economic development and CARIBCAN can’t do that because it’s an outdated instrument based on what Canada believed we needed back in 1986. It’s no longer responsive to our development plans right now.”
Cunningham, who holds a Bachelor of Laws from the University of the West Indies and a Masters in International Trade Law and European Business Law, said the new agreement has to offer more favourable terms of access and an instrument that provides for development in the region.
“The real benefit we see in this trade agreement is that we can, in one clear instrument, lock in Canada to giving us access for service practitioners such as bankers, insurance agents and our musicians,” he said. “That’s the real benefit the Caribbean is going after. We are in this for development since we know where we are right now.
“Canada must be willing to work with the region to help push us along the path to development. If we can’t get supporting measures like development finance that will help us to underwrite some of the things we have to do, that is where the problems will arise in this negotiation.”
Cunningham said all the CARICOM countries with the exception of Montserrat, which is a British colony, are included in the negotiation process. The British government has not authorized Montserrat to participate.
He also said that Haiti, which had capacity constraints prior to last January’s devastating earthquake, is still being allowed to be part of the negotiations even though the country is crippled by the disaster that claimed nearly 250,000 lives.
The first round of CARICOM-Canada negotiations began last November while the second round took place in Barbados March 29-31 with both sides advancing discussions on scope and coverage of the negotiations.