Caribbean must take advantage of trade opportunities - WTO
Director General of the World Trade Organization (WTO) Pascal Lamy Tuesday urged developing countries to ensure they have the necessary trade capacity to take advantage of a changing global environment.
Addressing the launch of the Caribbean Regional Aid for Trade (AFT) Strategy, Lamy said however having trade opportunities is not enough.
“We must translate the “trade can” into the “trade has” by ensuring developing countries have built the necessary trade capacity. And this is what Aid for Trade is about: helping transform trade opportunities into trade realities.”
Aid for Trade refers to the flow of development finance from developed countries and multilateral funding agencies to developing countries to enhance their participation in the multilateral trading system.
The Caribbean strategy, which was developed with the assistance of the Inter-American Development Bank (IDB), aims to create consensus within CARICOM on priorities for ensuring growth and a more diversified regional economy.
It presents a coherent approach to obtaining funding and provides a framework for collaboration among CARICOM Member States and international development partners (IDPs) or investors with an interest in providing support for the Region’s development.
The IDB, along with the International Trade Centre (ITC), the WTO and the Caribbean Export Development Agency all have collaborated with the CARICOM Secretariat for the launch of the strategy under the theme “Turning Market Access Into Market Presence”.
Lamy said that four years ago he met with CARICOM on the AFT and that his message was that the strategy was a platform for the region around which the development partners and private investors could coalesce.
“Since that time, the global Aid for Trade agenda has continued to mature. Testament to this is the focus of the 4th Global Review of Aid for Trade on connecting developing countries to value chains and highlighting the growing role of the private sector,” he said.
The WTO official said the region has made some initial, but crucial steps in concretizing the role that Aid for Trade can play in its economic development.
He said Belize and Jamaica have launched two “excellent” national strategies, both of which were profiled in Geneva as examples of best practice, and for the past year the region has been actively working on a regional strategy.
“This strategy is an excellent assessment of the constraints and opportunities faced by the region and a clear framework of the region's priorities, effectively aligned with the priorities of the member states. It is reflective of the time and effort which was placed in its conception and is rich with the results of the in-depth national consultations which were held in the different member states. The region has delivered on its promise.”
But he said now it is time to focus on effective implementation, monitoring of the strategy at the national and regional level and allowing this to be the blueprint for the region's dialogue with development partners and domestic and foreign investors.
“This process will not be an automatic one. This strategy is being launched in a period of increasing strains on the budgets of your traditional development partners,” Lamy said, noting that although the resource mobilization pillar of AFT has been successful, it is also clear that a tough period lies ahead.
But as the support from traditional donors may be strained, trade support from South-South partners is increasing, as is the funding stream from the private sector.
The Caribbean region registered close to one billion US dollars in Aid for Trade commitments in 2011, which is a substantial increase over the baseline period of 2002-2005 when the region received less than US$300 million.
Officials said disbursements have also increased from around US$100 million during that baseline period to close to US$600 million last year.
But Lamy noted that a significant aspect of the AFT goes to Haiti, the only least-developed country in the hemisphere.
He said the region's high per capita income and high debt to gross domestic product (GDP) ratio has traditionally been seen as a handicap in accessing traditional grant-based development assistance.
“This is unlikely to change in the future. I am aware that the issue of using per capita income as a gauge for receiving development assistance is a sensitive one for this region and it points to the importance of exploring other forms of support and collaborative ventures, including with the private sector.”
Lamy said that the regional strategy seeks to do this by tapping into the lever of regional integration and the growing attraction of regional projects and programmes which can deliver exponential outcomes and impacts for a wider berth of countries and people.
“The strategy seeks to build on the promise of a region free of barriers by identifying transformative projects that support closer integration. The Caribbean needs closer regional integration. And as you celebrate the 40th anniversary of the signing of the Treaty of Chaguaramas this year, I think it is a fair question to ask how the region can accelerate the pace which I witnessed some 10 years ago...”.
Lamy said the best way to honour the architects of the Caribbean Community is to recommit to regional integration as the most successful and economically viable route towards greater and sustained development for the region.
But harnessing this potential requires more efforts channelled towards increasing intra-regional trade. Lamy said that intra-Caribbean trade now stands at just 13 per cent which, as CARICOM itself notes, is on average, at 46 per cent below its trade potential.
“There are tremendous opportunities for increasing the role of trade in the region's growth strategy,” Lamy told the launch, noting that the outlook for growth in Latin America and the Caribbean is around 3.5 per cent for 2013, slightly up from three per cent last year.
“But for the Caribbean, high debt and weak competitiveness will constrain growth leading to projections of around 1.25 per cent in 2013,” he added. (CMC)
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| Date Posted | June 13 2013 |