Using high tariff barriers and other practices to limit competition from imports into the region is a thing of the past, a CARICOM trade official has said, urging Caribbean economies to focus instead on building their firms’ capacity and become more competitive as they seek to emerge from the COVID-19 pandemic.
This advice has come from Leo Preville, the CARICOM Single Market (CSME) programme manager at the CARICOM Secretariat, who said the launch of a second project under a standby facility should assist regional economies to deal with several external shocks.
The funding is provided by the European Union for the Caribbean Forum (CARIFORUM) under their Economic Partnership Agreement (EPA). CARIFORUM, the bloc of former European colonies in the African, Caribbean and Pacific (ACP) group, is made up of the 15-nation CARICOM and the Dominican Republic.
He explained that in light of the ongoing COVID-19 pandemic and disruption in global commerce regional economies are forced to review their production systems, what constitutes national output and how they will continue to trade.
Preville said: “The fact is our private sector, like what obtains in most developing countries, is comprised mainly of micro, small and medium enterprises, whether producing goods or services. It is also a fact that we are made up of mainly small open economies engaged in international trade. Hence, our private sector will be subject internally to competition from goods and services produced outside the region.
“The era of protection of domestic market space using high tariff barriers or subjective licensing and quota regimes is all but ended. Building competitiveness is the only sustainable way forward to respond to increased competition from imports and cross border flow of services from outside the region. Faced with that reality, a focus on the development of quality infrastructure in CARICOM and CARIFORUM member states is a strategic response that must be adopted and embraced.”
Preville was speaking on Wednesday during a virtual launch of the second project under the Standby Facility for strengthening regional quality infrastructure in Barbados, Dominica and St Kitts & Nevis.
The Standby Facility, which was introduced last year and forms part of a wider $54 million (€21 million) support package for implementing the Economic Partnership Agreement with Brussels, is a pool of funds with over $19.6 million (€8 million).
It is available to trade-related organizations across CARIFORUM for country-specific activities focused on improving trade, economy and lives of citizens.
It is anticipated that the support from the Standby Facility will deepen interconnectivity of Caribbean economies and enable greater exploitation of the CSME and increase access in the use of regional goods.
Preville said: “A culture of excellence which can only be sustained using best practices or international standards must be the defining ethos of our private sector. This, however, all begins by our countries having in place a robust national quality infrastructure.”
He said the new project in the three participating countries was “a step in the right direction”, adding besides having a lack of economies of scale, the region’s vulnerability from not having a diversified economy “has once again been exposed by the COVID-19 pandemic”.
He added that given the difficulties the tourism industry faced over the past year, the value of having a wider range of competitive economic activity was even more pronounced.
Preville said he was confident the new project will help to build much-needed capacity in the beneficiary countries to assist their manufacturing sector.
Daniel Best, Director of the Projects Department at the Caribbean Development Bank (CDB), described the regional project as “a targeted intervention promoting inclusive growth and sustainable development by stimulating commerce, enhancing economic integration and deepening cooperation”.
He explained that the project’s activities will directly have an impact on expertise and resources at specialized labs, providing enhanced measurement and calibration services at designated facilities in the participating countries.
“Further, this project will add value to local business processes by significantly reducing the cost of metrology and calibration services for entrepreneurs requiring testing services at labs,” he said.
In addition to providing infrastructure and strengthening of local capabilities, the project will also offer technical support to the government of St Kitts and Nevis for the development of a national quality policy.
Best said in the participating countries, the project will have a focus on several sub-sectors including agro-processing, transportation and construction.
With lack of enforcement of product quality having been identified as one of the main constraints to MSMEs, limiting trade, officials say they were confident the Standby Facility will help the national quality assurance organization to alleviate this hurdle.
Urging the beneficiary member states to take advantage of the facility, Best said: “It is now up to local entities, businesses, and state agencies to leverage these resources so they can transform these interventions into the tangible and intangible benefits to be derived. It is now up to you.”
Locally, the Barbados National Standards Institution (BNSI) is to benefit from the facility through capacity building and laboratory upgrade, which should result in improvement in testing and metrology infrastructure.
It is expected that for the first project under the Standby Facility a total of $3.4 million (€1.4 million) of the allocated $13 million (€5.3 million) will be utilized for several approved projects in the Organization of Eastern Caribbean States and Barbados. (MM)
