Cautious optimism over OECS economic recovery

By Admin Wednesday June 25 2014 in Caribbean
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ST. GEORGE’S: A senior Grenadian diplomat has announced that six years after the onset of the global economic crisis, there is evidence that the economies of the sub-regional Organization of Eastern Caribbean States (OECS) are showing signs of rebound.

 

However, Grenada’s Ambassador to the World Trade Organization (WTO), Dr. Patrick Antoine, addressing the Third Trade Policy on behalf of the OECS member countries during a meeting last week in Geneva, Switzerland, said the outlook still remains uncertain and the threats of economic reversal and downside risks is strong.

 

“The performance among the OECS has not been uniform,” said Dr. Antoine. “GDP (gross domestic product) growth statistics indicate that the region contracted for two consecutive years in 2009 and 2010, with high disparities across the grouping.”

 

He said these disparities ranged from in excess of 15 per cent in the case of Antigua & Barbuda to a contraction of approximately 2.7 per cent in the case of St. Vincent & the Grenadines.

 

“One OECS country suffered a contraction in services growth, while other OECS economies demonstrated tremendous slowdown led by tourism and construction and virtually no growth in other services…,” said Antoine.

 

The Grenadian official said that over the past decade, every OECS country experienced a significant fall in the rate of growth compared with the previous two decades and that there were rapid declines in export competitiveness resulting in severely contracted foreign exchange commodity earnings.

 

He said real GDP contracted annually by 1.1 per cent on average over the period 2008-2012, in sharp contrast to an average expansion of 5.1 per cent for the five years just prior.

 

Antoine said that in responding to the crisis, the OECS economies committed to an “Eight Point Stabilization and Growth Program” and that at the level of individual states, a myriad of fiscal measures and reforms have been instituted, including the introduction of a value added tax (VAT) and debt restructuring, which have become staples of the stabilization programs.

 

“Economic recovery in the OECS following the crisis continues to be sluggish, and the forecast for return to pre-crisis growth levels now suggest 2016-2017,” he said. “Notwithstanding, notable progress has been made on some aspects of our Millennium Development Goals (MDGs). However, low growth and a high debt and rising unemployment continue to threaten the region’s developmental and social progress.”

 

The Grenadian official said that the OECS WTO members remain committed “to a fair, equitable, rules-based transparent and inclusive multilateral trading system that meets the needs of all its members and in particular developing countries”.

 

He said the OECS-WTO member states maintain the position that trade negotiations between developed and developing countries must be premised in asymmetry and special and differential treatment for the latter of the two parties.

 

Antoine said the OECS countries – Antigua & Barbuda, Dominica, Grenada, St. Lucia, St. Vincent & the Grenadines, St. Kitts & Nevis – have participated meaningfully in negotiations and have contributed to the leadership shown by the African Caribbean and Pacific (ACP) and the wider G90 in the negotiations on trade facilitation.

 

He said the conclusion of the free trade agreement now require that developed countries and developing countries with the capacity to do so provide the needed and additional financial and technical assistance for effective implementation by developing countries.

 

However, Antoine said that one of the continuing challenges in the trade policy of Antigua & Barbuda and by extension, all OECS member states, is the current failure to reach a satisfactory resolution to the case on Internet gaming with the United States.

 

“This case is a decade old, and it pits the world’s largest economy against one of the world’s smallest and vulnerable. Despite having won a favourable decision of the Dispute Settlement Board, Antigua & Barbuda is yet to receive a reasonable offer from the USTR that could bring this matter to a successful conclusion. Antigua & Barbuda believes that this case presents several systemic challenges to the dispute-settlement mechanism of the WTO, and has the potential to undermine the credibility of the organization.

 

“Antigua & Barbuda is of the view that there ought to be more flexibility in possible options for arriving at a resolution of a case such as this. Antigua & Barbuda is willing to put forward its ideas on these matters in the appropriate WTO forum, and calls on like-minded states to assist in reforming the dispute settlement system of the WTO,” he said.

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