Under the Cariforum-EU Economic Partnership Agreement, Jamaica, along with its Caricom neighbous and the Dominican Republic, enjoys duty-free and quota-free market access into a number of EU member countries.
Trade agreements underutilised
Despite the many complaints from businesses about having little to no access to export markets, data from the Trade Board Limited (TBL) shows that while a number of trade agreements exist, most are underutilised.
Director of export at the TBL Joan Butler told the Jamaica Observer that of the 11 trade agreements to which Jamaica is a party, the nine managed by her entity is found to be marginally used. The other two — the CARIFORUM-European Union (EU) and CARIFORUM-United Kingdom (UK) economic partnership agreements (EPA) — that falls under the control of the Jamaica Customs Agency (JCA) also reflect minimal usage.
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Outlining details about the nine trade agreements it manages, the TBL said these comprise six across the region including the Revised Treaty of Chaguaramas, Venezuela Trade & Investment Agreement, Colombia Trade Economic and Technical Cooperation Agreement, Dominican Republic Free Trade Agreement, Costa Rica Free Trade Agreement, Cuba Trade and Economic Cooperation Agreement; as well as the Caribbean Basin Initiative (CBI), Caribbean-Canada Trade Agreement (CARIBCAN), and the Generalised System of Preferences (GSP).
Based on the usage of each to date, data spanning an eight-year period and reflected on a per shipment basis shows the Revised Treaty of Chaguaramas/Caricom agreement being the most utilised. Despite fluctuating usage across the review period, the number of certificate of origins (COOs) issued under the Caricom agreement in 2015/16 was 3,436 and 3,008 in 2022/23. The data also indicated the most to have been issued were 4,438 in 2016/17.
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Other agreements such as the CBI, CARIBCAN and GSP — which had fairly decent usage, though operating well below the desired levels — saw the number of COOs issued over the period ranging between 62-553.
However, where things got interesting was concerning the individual Caricom country agreements which saw mainly single-digit utilisation rates over the eight-year period, with the number of COOs issued averaging 0 to 49. Of these agreements, the Venezuela Trade & Investment Agreement and Colombia Trade Economic and Technical Cooperation Agreement fared the worst with little to no usage.
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“Based on the data provided over the eight-year period, it is quite evident based on the number of COOs issued that the full potential of some of these agreements are not being exploited. Agreements with the Spanish-speaking countries show minimal trade or just none at all. While there are market access-related issues that sometimes hinder penetration and usage, it can be agreed that manufacturers and exporters are not exploiting fully the benefits under these agreements which include less duty or no duties on their manufactured product,” Butler said in response to queries from the Business Observer about the data.
In light of the findings, she said that the TBL, through increased sensitisation and a number of mixed strategies, has, however, been pushing to ramp up usage of the agreements which allow exporters, after meeting some basic requirements, to export a number of manufactured products across food and beverage, textiles and other goods to a number of countries — oftentimes duty-free based on the specified provisions.
TBL data over an eight-year period shows a number of the existing trade deals remaining largely underutilised.
“In May of this year we launched the project ‘Step up Export with Trade Agreements’ which focuses on one-on-one engagements with over 100 companies while informing them about the various agreements/arrangements and to determine whether or not their manufactured product can qualify for other markets with which we have arrangements,” Butler said.
The TBL, which is the certifying authority for goods exported under the various trade agreements, has responsibility for World Trade Organisation (WTO) requirements on import licensing along with the issuing of import and export licences for specific items. The body, in conducting product analyses, issues certificates of origin for exports under the various preferential trade agreements, ensuring that as a country Jamaica meets its obligations under the international rules of origin.
Following the launch of its Jamaica Trade Information Portal (JTIP), the certifying body said it is also now able to seamlessly provide more services to clients, and in an easier and more efficient manner. The recent development of a 4E strategy by the TBL further seeks to identify and resolve issues surrounding Jamaica’s exports.
CEO of TBL Dr Hugh Blake said that the strategy developed on four pillars seeks to “educate, enable, expedite and evaluate” players throughout the export process.
In 2022 Jamaica imported a record $7.7 billion worth of goods but only exported $1.9 billion worth of merchandise to other countries according to Statin data.
As the country’s trade deficit continues to widen with imports almost touching US$2 billion at the end of the first three months of this year and exports lagging at US$527 million, Butler stressed the need for greater collective action and mobilisation if the imbalance is to be remedied.
Last year Jamaica imported a record $7.7 billion worth of goods but only exported $1.9 billion worth of merchandise to other countries. The United States continues to top the list of import-trading partners with goods being shipped from that country up to March valued over US$840 million.
“Jamaica needs to increase exports and all entities involved in the export process should unite around this issue,” Butler stated.
The Jamaica Customs, speaking on the CARIFORUM-EU and CARIFORUM-UK EPAs for which it has jurisdiction, said these allows for the progressive removal of barriers to trade and enhance cooperation between parties.
CARIFORUM is the block of countries largely made up by Caricom countries and the Dominican Republic. Through these two deals Jamaica has access to trade a number of items with over 30 countries across the EU and with the UK. The agreements, which provide predictable market access for EU and Caribbean traders, ensures duty-free-quota-free market access into the EU for all products except arms.
While locals since the start of this year have been looking to take advantage of the start of zero per cent duty now on motor vehicles originating out of the EU, not as many have been looking to flood EU markets with local produce, except for a small handful of interests from mainly larger companies. According to data from the Statistical Institute of Jamaica, total exports to the EU up to March was US$56.7 million while imports were valued at US$132.6 million. The market for retail sales in the UK is estimated at £496 billion, highlighting the vast opportunities available for local companies to tap into.
The Cariforum-UK EPA, on the other hand, having taken effect in 2021, also comes as largely underutilised, especially since its ratification and full implementation remains incomplete. As a result, many of its provisions cannot be effected and the full benefits realised.
British High Commissioner to Jamaica Judith Slater speaking at a UK-Jamaica Trade Export Business Forum held earlier this year urged Government to speed up the ratification process and to bring the agreement into domestic legislation in order to deepen trade and investment ties across countries.
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