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Regional Co-ordination and ‘Aid For Trade’

Skill gaps in the region are particularly acute in areas such as legislative drafting, competition policy, trade remedies and intellectual property rights. In fact, it is proving difficult to source staff and resources for many of the new institutions such as the Regional Competition Commission. Once more, donor funding has been critically important in filling gaps. For example, the IDB is currently providing support to CROSQ (US$1.4M). In the absence of external funding, governments have had to utilize scarce funds to mount large-scale training programmes in key areas such as customs and immigration. It is now recognized that the establishment of the CSME will require much more time and resources than originally envisaged. The CSME will therefore be developed in two phases: • •

Phase I (Mid 2007 to 2008): Consolidation of the Caribbean Single Market and Initiation of the Single Economy; and Phase II (2009–2015): Completion of the Single Economy

Perhaps the most difficult challenge that the CSME now faces, however, relates to the distribution of benefits among member states. A major contention is that Trinidad and Tobago, which accounts for about 90% of intra-CARICOM goods exports, stands to gain the most from deepening integration. In response to growing resentment against it, the government of Trinidad and Tobago recently launched a Caribbean Trade Support Programme (CTSP) “to assist its sister CARICOM States to enhance their economic performance by fostering diversification and improvement in trade capacity.” [8] The main component of the programme is a TT$100 million (US$16M) Technical Assistance Fund for the period 2004–2007, which is to be disbursed in the form of loans on an interest free basis to CARICOM firms (excluding those from Trinidad and Tobago). Funds are to be used for procuring technical assistance for consultancy services and training programmes, among others, for business development projects. Besides the CTSP, the Government of Trinidad and Tobago recently established a Petroleum Stabilisation Fund of TT$300M (US$50M) as a grant facility to assist countries experiencing economic hardships from oil price increases. Unfortunately, neither of these initiatives has helped to reduce the level of resentment against Trinidad and Tobago. A few of the OECS countries welcome the CSME for its ability to absorb excess, unskilled labour from their countries. But some fear that the CSME will cause skilled labour to migrate to the larger, more developed countries and create a ‘brain drain.’ They are also concerned about their growing negative balance of trade in goods with the region. In fact, there was an initial delay in bringing the Single Market into full force in January 2006 because the OECS had refused to sign onto the agreement unless a promised Regional Development Fund that would compensate losers had been finalized. Chapter 7 of the Revised Treaty of Chaguaramas had made provisions for assistance to be given to disadvantaged countries, regions and sectors in the CSME. Accordingly, governments have agreed to set up a CARICOM Development Fund (CDF) and a Regional Development Agency (RDA) to help countries adjust to the CSME. The CDF will be capitalised at US$250 million, with US$120 million to be contributed by member states and the remainder by the region’s private sector and regional development partners. The Trinidad and Tobago government

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mobilizing aid for trade: focus on latin america and the caribbean: proceedings of the regional r...  

this report was prepared by the integration and trade sector (int) as a contribution to the regional meeting on mobilizing aid for trade: la...

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