One senior economist is calling for a review of how Barbados and other Caribbean states negotiate trade agreements with more developed nations.
Dr Don Marshall, Director and Senior Research Fellow at the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES), said the time had come for small island developing states to raise issues relating to their vulnerabilities and other developmental concerns when discussing partnerships.
He argued that this was critical given the experience over the last six months when some of the region’s partners imposed several restrictions.
Dr Marshall was addressing a joint University of the West Indies (UWI) and European University Institute (EUI) online dialogue on Thursday on the topic COVID-19 and Trade: Sharing the Experiences of the Caribbean and Europe.
The online dialogue comes several months after the signing of a memorandum of understanding between the two institutions in July of this year.
Painting a picture of how widespread and devastating the effects of the COVID-19 pandemic have been on Caribbean economies, Dr Marshall recalled that tourism-dependent nations saw a dramatic decline in tourism, oil producing countries in the region suffered as a result of a tank in oil prices, the absence of seasonal overseas jobs and a decline in remittances.
He also pointed out that some of the region’s trade partners were guilty of putting restrictions in place.
“So what has been the net effect? We have seen as at October 2020, all of CARICOM countries have experienced double digit declines in their GDP (gross domestic product). Yesterday we learnt from the Central Bank Governor in Barbados that the economy contracted by 16 per cent,” he said.
He said what should be of particular concern to Barbados and other regional economies when it comes to trade experience was the level of “rising protectionism” from some countries in wake of the COVID-19 pandemic and the economic woes “triggered” thereafter.
Several countries including the US and those in Europe, imposed restrictions on the export of personal protective equipment and critical medical supplies. The US still has some restrictions in place that should last until the end of December.
Marshall said while Barbados benefited from the US Centres for Disease Control and Prevention global COVID-19 contributions, the restrictions by the US were not a “great development in world trade”.
He said while the EU had removed its limitation on the export of personal protective equipment the region was still reeling from its border policies relating to travellers from that region to other countries.
During the height of the pandemic, several larger producing nations were also lowering their import duties and taxes on the personal protective equipment so they could get more. They were also heavily subsidizing their agriculture sector so they could produce more and increase their export, thus impacting local production.
“I want to suggest to you that going forward we have to treat to the issue of not only what we mean by small island state vulnerabilities but what we mean by economic partnerships. The trade and economic development compact work in such a way that the trade is meant to augment the economic development strategies of the countries involved in the Free Trade Agreements and World Trade arrangements.
“We have to think now about what trade means in a context where small island, middle-income countries cannot gain any concessional financing to help them with post covid-19 reconstruction,” explained Marshall.
The university lecturer also suggested that the notion of the private sector taking the lead in growing and developing the local economy should be reviewed.
“We have to take a step back in relation to how we frame development, because we have to bring the State back in . . . So the notion that the private sector is the engine of growth, we have to take a step back,” he said.
“State-led models of development with the private sector playing a part has to be part and parcel of the everyday discussion about how we rebuild economies,” said Marshall, adding that greater state support for the agriculture sector has to be a cornerstone principle going forward in light of the COVID-19 and its effects.
The researcher also took a jab at the European Union (EU) and the Organisation for Economic Cooperation and Development (OECD) for imposing sanctions on Barbados and other developing countries.
“We cannot have global governance institutions treating to our international business sector in the way they have in the past, where they illegally seek not only to impose blacklists on countries they deem not complying with certain tax information exchange arrangements, but this business of threatening to impose economic sanctions when international law does not give the OECD and the EU that authority. These things need to be addressed,” said Marshall.
Earlier this year, the OECD Global Forum placed Barbados on its list of “partially compliant” jurisdictions because the country missed the deadline for the July 2015 to June 2018 review period.
And despite the necessary changes being made by the end of December 2019, the EU then decided to keep the island on its list of “non-cooperative tax jurisdictions”.
([email protected])
Read our ePaper. Fast. Factual. Free.
Sign up and stay up to date with Barbados' FREE latest news.
Barbados Today firmly discourages any commentary or statements that are libelous, disruptive in nature or incites others to violate our Terms of Use. Any submissions made on our comment section, are solely the views of the individual and not Barbados Today.