Trade Agreements
Trinidad and Tobago is well poised to become a point for transhipment and trading with South, Central and North America as well as the Caribbean. This is due to its strategic location, air and sea links, its well developed human resource base and the existing as well as new trade agreements with countries in these regions. In particular, the Government is moving fast to establish trading relationships with its South American neighbours.
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Caribbean Basin Initiative (CBI)
Trinidad and Tobago is a Caribbean Basin Initiative (CBI) beneficiary country. The CBI is a broad programme to promote economic development through private sector initiative in the Central American and Caribbean countries. Its major goal being to expand foreign and domestic investment in non-traditional sectors, thereby diversifying CBI countries' economies and expanding their exports. The Caribbean Basin Economic Recovery Act of 1983 (amended in 1990) provides customs duty-free entry to the United States on a permanent basis for a broad range of products from CBI beneficiary countries.
Initially launched in 1983, through the Caribbean Basin Economic Recovery Act (CBERA), and substantially expanded in 2000 through the U.S.-Caribbean Basin Trade Partnership Act (CBTPA), the CBI currently provides beneficiary countries with duty-free access to the U.S. market for most goods.
The CBTPA entered into force on October 1, 2000, and continues in effect until September 30, 2020, or the date, if sooner, on which a free trade agreement as described in legislation enters into force between the United States and a CBTPA beneficiary country.
The major elements of the CBI programme available to all CBI beneficiary countries are:
Duty-free entry to the United States for a wide range of products grown and manufactured in CBI countries in order to stimulate investment and expanded export production.
Eligible Products:
- Electronic and electro-mechanical assembly
- Handicraft, giftware and decorative accessories
- Wood products, including furniture and building materials
- Recreational items, such as sporting goods and toys
- Fresh and frozen seafood
- Tropical fruit products and winter vegetables
- Ethnic and specialty foods, such as sauces, spices, liqueurs, jams, etc.
- Ornamental horticulture
- Medical and surgical supplies
- However, the CBI law excludes the following articles from duty-free entry status:
- Most textiles and apparel
- Canned tuna
- Petroleum and petroleum products
- Footwear, except disposable items and footwear parts such as uppers
- Certain leather, rubber and plastic gloves
- Luggage, handbags, and flat goods
- Certain leather apparel
- Watches and watch parts, except if any component originated in a communist country
- CBI Textile programme: A special access programme (Guaranteed Access Levels) for textiles and apparel that guarantees markets for apparel assembled from U.S. -formed and -cut material.
- CBI Government Procurement: National treatment for producers in CBI countries in bidding for certain types of U.S. Government procurement opportunities.
- Exemption for CBI exports to the US from US Import Merchandise Processing Fees.
- A wide range of US government, state government, and private sector business development programmes, including trade and investment financing, business missions, and technical assistance programmes, partially supported through US foreign economic assistance.
There are currently 18 CBERA beneficiary countries: Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, British Virgin Islands, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago.
Eight of these 18 are also beneficiaries under CBTPA: Barbados, Belize, Guyana, Haiti, Jamaica, Panama, St. Lucia, Trinidad and Tobago.
2009 Caribbean Basin Initiative (CBI) Report: http://www.ustr.gov/node/5377
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Lomé Convention
The Lomé Convention extends preferential treatment to many products from African, Caribbean, and Pacific (ACP) nations allowing them to enter the European Community duty-free and without quota restrictions. Only products originating in the ACP nations qualify for this preferential status.
In 1995, the United States government petitioned to the World Trade Organization to investigate whether the Lomé IV convention had violated WTO rules. Then later in 1996, the WTO Dispute Settlement Body ruled in favor of the plaintiffs, effectively ending the cross-subsidies that had benefited ACP countries for many years. But the US remained unsatisfied and insisted that all preferential trade agreements between the EU and ACP should cease. The WTO Dispute Settlement Body established another panel to discuss the issue and concluded that agreements between the EU and ACP were indeed not compatible with WTO regulations. Finally, the EU negotiated with the US through WTO to reach an agreement.
ACP-EEC CONVENTION: http://www.acpsec.org/en/conventions/lome1.htm
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Cotonou Agreement
The Cotonou Agreement offers a framework for the European Union’s (EU) cooperation relations for the economic, social and cultural development of the African, Caribbean and Pacific States (ACP).
European Development Fund (EDF) is the main instrument for providing Community assistance for development cooperation under the Cotonou Agreement. The EDF is funded by the EU Member State on the basis of specific contribution keys. Each EDF is concluded for a multi-annual period.
From 1975 until 2000 the Lomé Convention provided the framework for trade relations and cooperation between the European Union and former colonies of its member States that gained independence after World War II. These newly independent countries benefited from duty-free access to the European market for a number of export products from African, Caribbean, and Pacific States (ACP) on a non-reciprocal basis. In 2000, the Lomé Convention was replaced by the Cotonou agreement, named after the city in Benin where the agreement was reached.
The Cotonou agreement aims to “promote and expedite the economic, cultural and social development of the ACP States, with a view to contributing to peace and security and to promoting a stable and democratic political environment”. It envisages four broad areas of support and spells out new orientations regarding economic and trade cooperation.
A key objective is to integrate the beneficiary countries into the global economy. Non- reciprocal trading arrangements will gradually be replaced by fully reciprocal integration areas in the form of regional Economic Partnership Agreements (EPAs) which also provide for supporting initiatives in a several broad areas. The EPAs would form the basis for the establishment of a free trade area with the European Union (EU). ACP countries launched the EPA negotiations in September 2002 and CARIFORUM began the regional negotiations for the Caribbean in 2004. The EPAs timetable includes four phases. Presently CARIFORUM is about to embark on the third phase of the EPA negotiations, with the objective of arriving at elements of a draft agreement by December 2006. More details about Cotonou Agreement:
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Caribcan
Caribcan is the Canadian Government's programme that provides duty-free access to the Canadian market for most Commonwealth Caribbean exports.
Products, with the exception of textiles and apparel, footwear, luggage and handbags, leather garments, lubricating oils and methanol, are eligible for duty-free status if they are certified as being the growth or manufacture of the Commonwealth Caribbean, defined as having a minimum input of 60 percent of the ex-factory price of the goods (including overhead and reasonable profits) originating in any of the Commonwealth Caribbean countries or in Canada.
This agreement after running its course for around twenty years, has been slated to be replaced by a full composit Caribbean-Canada Free Trade Agreement, with reciprocal equal access for Canadian companies to the Caribbean market as well.
More details about Caribcan: http://ctrc.sice.oas.org/Trade/caribcan/Caribcan_e.asp
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Caribbean Community (CARICOM) and Republic of Venezuela Agreement
The fundamental objective of this agreement is to strengthen the economic and trade relations between CARICOM and Venezuela (hereafter referred to as "the Parties") through:
- The promotion and expansion of the sale of goods originating in CARICOM through, inter alia, one-way duty-free access to the Venezuelan market;
- The stimulation of investments aimed at taking advantage of the markets of the Parties and strengthening their competitiveness in world trade;
- The facilitation of the creation and operation of regional joint ventures; and
- The encouragement of mechanisms for the promotion and protection of investments by nationals of the Parties.
As such, Venezuela has agreed to grant products originating in Member States of the CARICOM, free access to its markets by means of the implementation of programmes of tariff reduction and the elimination of non-tariff barriers according to detailed schedules laid out in the agreement, with the exception of certain items including but not limited to, beef, certain milk products, coffee & cocoa beans, vegetable oils & fats, orange juices, oxygen, carbon dioxide, nitrous oxides, anhydrous ammonia, aluminum sulphate, other carboxylic acids, medicaments constituted by a mixture of products prepared for therapeutic or prophylactic use, urea, paints and varnishes based on modified synthetic or natural polymers, dissolved in an aqueous or non-aqueous medium, insecticides, disinfectants and a variety of iron & steel products.
CARICOM - Republic of Colombia Agreement
The fundamental objective of this agreement is to strengthen the economic and trade relations and technical cooperation between CARICOM and Colombia (hereafter referred to as "the Parties") through:
- The promotion and expansion of the sale of goods originating in CARICOM and Colombia with particular emphasis on exports from CARICOM states in the early stages of the implementation of this Agreement;
- The promotion and protection of investments aimed at taking advantage of the opportunities offered by the markets of the Parties and strengthening their competitiveness in the international market;
- The facilitation of the creation and operation of regional joint ventures;
- The development of technical and scientific cooperation activities which may be agreed upon between the Parties;
- The promotion of private sector activities, including business exchanges between the Parties.
The Parties have agreed to promote a programme of trade liberalization taking into account the difference in the levels of development between Colombia and CARICOM generally, and, in particular, these countries designated the Less Developed Countries (LDCs) of CARICOM.
As such, Colombia has agreed to grant products originating in Member States of the CARICOM, free access to its markets by means of the implementation of programmes for the elimination of tariff and non-tariff barriers according to detailed schedules laid out in the agreement.
Single market and economy
In 2001, the heads of government signed a Revised Treaty of Chaguaramas thus clearing the way for the transformation of the idea for a Common Market aspect of CARICOM into instead a Caribbean (CARICOM) Single Market and Economy. Part of the revised treaty among member states includes the establishment and implementation of the Caribbean Court of Justice.
Three countries—Barbados, Jamaica and Trinidad and Tobago—had originally set 5 January 2005 as the date of signing the agreement relating to the (CSME). The ceremony had then been rescheduled to coincide with the 19 February 2005 inauguration of the new CARICOM-headquarters building in Georgetown, Guyana, but this was later postponed after a ruling by the London Privy council caused alarm to several Caribbean countries.
The prospect was that ten of the remaining twelve CARICOM countries would join the CSME by the end of 2005. The Bahamas and Haiti were not expected to be a part of the new economic arrangement at that time. The CARICOM Secretariat maintains frequent contact with another organisation named the Organisation of Eastern Caribbean States (OECS), which represents seven Full members and two Associate members of CARICOM in the Eastern Caribbean. Many of the OECS countries are seeking to maintain themselves as a micro-economic grouping within CARICOM.
The CARICOM Single Market and Economy treaty finally went into effect on 1 January 2006, with Barbados, Belize, Jamaica, Guyana, Suriname and Trinidad and Tobago as the first full members. On 3 July 2006, the total membership was brought up to twelve when Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines became full members. The British overseas territory of Montserrat is seeking permission from the United Kingdom to become a part of the single market; Haiti will not join the market initially because of its difficult internal political situation; and the Bahamas will not join because of local opposition to a provision that allows skilled workers to move more easily among nations.
CARICOM Official website: http://caricom.org/