CANADA DESERTS CARICOM

Saying it is fed up of the protracted nature of the talks, the Canadian government has not only walked away from free trade negotiation discussions with the Caribbean trading group but has also asked the World Trade Organization (WTO) to allow it to revert to an old mechanism governing trade between the two because the future for a deal looks quite bleak.

Talks on a deal that would not only allow for two-way free trade but also one that is more compliant with today’s global trading rules started way back in 2009 amid much optimism that an agreement between traditional friends would have been achieved in a short space of time.

As the months wore on, it became clear that the differences in approaches and how each other saw the world would become an impediment that eventually resulted in a complete breakdown of negotiations after six years.

Recently, Canada gave the 15-nation grouping the clearest sign yet that it has abandoned sessions at the round table by formally writing to the WTO, asking it to extend the life of CaribCan, the decades-old agreement that had governed trade between the two.

The problem with CaribCan, however, is that it is a one-way deal in favor of the Caribbean, as it largely allows products from the region to enter Canadian markets duty free or with preferential treatment. A new agreement would have amended this but from all indications, this might not be the case anytime soon unless something dramatic happens from the level of the Canadian prime minister’s office.

The missive to the WTO asks it to extent CaribCan until 2023, the second time an extension would have been sought. The first was to cover the period when negotiations had been active.

In the meanwhile, however, the Canadians have interestingly not indicated any plans to restart talks. Both sides have been arguing that they have granted the maximum level of tax and other concessions to each other, leaving little wiggle room for a restart of talks.

Regional leaders welcomed the move to the WTO by Canada, noting that it “will ensure that existing CARICOM trade with Canada will continue without disruption.”

From the very beginning, the negotiations have had its problems with the smaller Eastern Caribbean states being lukewarm to the sessions, arguing that they had little reason to open their economies to powerful producers and suppliers out of Canada while having little in return to export.

Additionally, duty free trade means they would lose much needed import duties, noting the fact that the U.S. and Europe have already destroyed the lifeline banana export industry and have collapsed other revenue earners such as online gambling.

For the region, CaribCan has been kind to economies. Since the 90s, CARICOM has dominated trade with Canada, enjoying a favorable trade balance thanks largely to bulk gold exports from Guyana and Suriname as well as petroleum products from Trinidad.

This is the second time Canada has asked the world body to approve a waiver and extension of CaribCan. The first had come in the midst of negotiations for a free trade deal.

Officials at regional headquarters in Guyana say that the move by Canada means it has given up on trade negotiations with the region but trade ministers will try to nudge Canadian negotiators back to the table. Leaders are scheduled to meet in Barbados in early July and will discuss the way forward if there is one.

While some officials cling on to hope, the latest announcement from CARICOM speaks of “Canada’s recent decision to suspend trade negotiations with the community,” noting that various levels of meeting in the Caribbean “will give member states the opportunity to decide on the way forward.”

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