The following is from the 23 January 2013 edition of Embassy Magazine.
Canada should take the lead in trying to wrap up a trade deal this year with the Caribbean Community, called CARICOM.
Such a deal could become a model for Canada’s negotiations with other developing countries on its priority list, thus improving prospects for trade negotiations in other parts of the world. A deal with CARICOM also provides an opportunity to put recent statements by CIDA Minister Julian Fantino on trade and development into practice.
Lack of progress
But this will be difficult to achieve without a change in approach on both sides. Canada and CARICOM are currently nowhere near an agreement. After four formal rounds of negotiations and several informal discussions, there is still no consensus on a full negotiating agenda.
There are practical reasons for the lack of progress to date.
On the CARICOM side, their leaders so far see little upside to a deal. The region’s main challenge is too few domestic firms that can compete effectively in their home markets while also having competitive goods and services to sell successfully in international markets.
Domestic economic reform would do more to improve these conditions. More trade deals are too often seen as a threat to this process until firms become more competitive. Hence, the thin support across the region for concluding a deal.
For Canada, the Caribbean is an important market for our banks and some other firms and a key destination site for tourists and returning family members. The Caribbean has typically been assumed by Canadian policy-makers to be a region where the value of the political, economic, and people linkages with Canada are greater than the sum of their individual parts.
Launching free trade negotiations in 2007 as part of Canada’s Americas strategy was the latest in a history of attempts to leverage these relationships. But in the absence of a strong domestic constituency pushing for the deal, and with other priorities coming to the fore, political will is lagging in Canada as well.
A new energy
But there is a window of opportunity now to close the deal.
In the Caribbean, there is an energy on the streets, in the universities, within pockets of the business community, and among many political leaders for new ways of doing things. The all-knowing taxi driver in Bridgetown, Castries, or Kingston is tired with the status quo and will tell you without much prompting: “We can do better.”
Canada is looking for the best talent and the best ideas, wherever they can be found. The federal government is actively engaging Canada’s diasporic communities in new ways to attract investment and increase trade. CIDA Minister Julian Fantino has also underlined that trade, investment, and development aid can work together to boost the self-reliance of current aid recipients. He would find allies in the Caribbean for his approach.
To move forward, Minister Fantino should put into practice his recent statements by demonstrating through words and actions that Canada acknowledges the development challenges of a bilateral trade deal and is committed to CARICOM’s further integration into the global economy.
Immigration Minister Jason Kenney should join him and address Caribbean concerns that Canada’s increased emphasis on attracting talent will not lead to more brain drain. Rather, through development assistance and working together with Caribbean universities and political and business leaders, immigration reform will lead to brain gain for both sides.
Trade Minister Ed Fast and his counterparts in the Caribbean should provide new instructions to their respective negotiating teams to focus more clearly on the few issues, including CARICOM’s development challenges, that are proving an obstacle to a deal, and build a practical agreement from the ground up rather than remain hung up on existing templates.
Canada is used to negotiating trade deals with developed countries, and its model for negotiations reflects that. But the future trade agenda is mainly in the developing world, where Canada has less experience. By moving now, Canada can position itself as an innovator in how developed and developing countries can work together to grow the world economy.
Phil Rourke is the executive director of the Centre for Trade Policy and Law at Carleton University and the University of Ottawa, and the principal adviser to the Shridath Ramphal Centre at the University of West Indies in Barbados. He is the author of the recently released C.D. Howe Institute paper “A Canada-CARICOM ‘Trade-not-Aid’ Strategy: Important and Achievable.”
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