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Realigning trade alliances

Trinidad Guardian

Realigning trade alliances

By Felipe Noguera

21 May 2011

The age of reciprocity did not put an end to trade subsidies however. The advent of the World Trade Organisation ensured that developing countries would face sanctions if they subsidised agriculture for example. The US, France and other metropolitan countries still use a variety of subsidies; call them non-tariff barriers, to resist opening their markets to competition from low-cost producers with minimal leverage. As the sixth largest exporter of LNG in the world and the most dynamic economy in the English-speaking Caribbean, Trinidad and Tobago’s competitive advantages in hydrocarbon energy must be diversified and extended to other sectors in order to be sustained. The Ministry of Trade’s BizLink is an information technology platform which provides a single electronic window designed to facilitate business and trade and to promote a national change management process that modernises the way companies connect with government enabling opportunities for trade diversification.

In the 1990s Trinidad and Tobago’s non-energy exports, especially in the area of processed foods and beverages, dominated Caricom groceries and were the least expensive in the region, allowing low cost foods to be enjoyed by citizens of this country. The decline of regional banana, rice and sugar exports from the Caribbean into Europe under preferential market access coincided with pressures from OECD developed nations to eliminate off-shore financial services in the Caribbean and limited our trading options. In terms of its imports, the US is Trinidad and Tobago’s major trade partner, supplying machinery, vehicles and manufactured goods. Latin America and Europe however have been the major suppliers of food to this country in recent years. Under the People’s Partnership Government, the goal of making Trinidad and Tobago a knowledge-based, economic and financial hub of the Caribbean continues to be a development objective as it was in the previous administration. Diplomatic and trade relations with the Commonwealth and the Organisation of American States have continued as Prime Minister Kamla Persad-Bissessar has led trade missions to London, Washington and most recently, Brazil.

A significant difference however, between the PP and its predecessor is that rather than emphasise bricks and mortar or sky scrapers—the International Financial Complex, that remain largely unoccupied and have yet to attract foreign direct investment—current policy is attempting to foster national competitiveness through an export strategy that supports innovation and the use of technology to move the country forward. By stressing national rather than sectoral competitiveness, diversified products and services being produced by business are being viewed and encouraged by the Ministry of Trade as cross-sectoral promotion rather than near exclusive emphasis on petrochemicals. Taking a cue from competitiveness guru, Harvard Prof Michael Porter, prosperity is being viewed as created rather than inherited. Consequently, the Ministry of Trade, supported by incentives advanced by the Ministry of Finance, is attempting to create a business environment that invests in innovation, refocuses on the local and regional (Caricom) market to push demand and to encourage support industries based on entrepreneurship. The PP recognises the opportunity to raise competitiveness and improve performance by assessing the overall business environment so that business is facilitated by a vibrant and responsive market. This is the case, notwithstanding the continued need for the State to serve as an effective regulator against abuses, predatory, monopolistic or unfair trading practices. In this country, the State continues to control the ‘commanding heights’ of the economy—owning Petrotrin, 51 per cent of TSTT, National Flour Mills and other large industries.

It also continues to be the largest employer in the country. Although the emphasis is on market-led growth, T&T is still very much a mixed economy. Trinidad and Tobago’s trade mission to Brazil represents an important shift from the traditional northern focus to a southern one which offers new vistas for this country’s international trade. The stated intention of the mission was to diversify trading partners, reduce vulnerability to external shocks and assess the market for the export of this country’s expertise in the petrochemical industry to the southern, Portuguese-speaking giant. Prime Minister Kamla Persad-Bissessar said on the occasion of the trade and investment mission to Brazil, “Indeed we have been used as a model by other countries which are now developing their gas industry. This is particularly so for the African countries and our National Gas Company has been recently selected to partner with Ghana to develop and implement a project to transport, process and distribute natural gas to their existing downstream facilities.” The aim of the mission was to forge alliances enabling both nations to share technologies, create new jobs and further develop their mutual economies based on balanced trade flows. The Prime Minister stated that her goal was not only to increase trade in goods and services with a rapidly growing market of nearly 200 million consumers, but to learn from Brazil’s model of development. Our hope is that these lessons can make a difference in T&T’s international trade position. “Wealth has to be earned through righteousness. Desire has to be for Liberation.”