Trinidad and Tobago Government News: COMMONWEALTH CARIBBEAN BUSINESS MEDIA WORKSHOP COMMONWEALTH CARIBBEAN BUSINESS MEDIA WORKSHOP ================================================================================ 03 June, 2009 04:40:00 ADDRESS BY SENATOR THE MARIANO BROWNE MINISTER OF TRADE AND INDUSTRY AT THE COMMONWEALTH CARIBBEAN BUSINESS MEDIA WORKSHOP 9:30 AM WEDNESDAY 3RD JUNE, 2009 SAN FERNANDO ROOM CROWNE PLAZA HOTEL WRIGHTSON ROAD PORT OF SPAIN  Manoah Esipisu, Deputy Director, Communications and Public Affairs, Commonwealth Secretariat  Cheryl Bruce, Economic Advisor, Commonwealth Secretariat  Ewart Williams, Governor of the Central Bank, Trinidad and Tobago  Dr. Anya Schiffrin-Stiglitz, Professor, Columbia Uviversity  Workshop facilitators  Workshop participants  Members of the Media  Ladies and Gentlemen Good morning everyone, I am delighted to be with you today to share with you some thoughts on “CARICOM and the Global Economy: Opportunities for Trade & Investment”. As you are all aware, the global economy is still grappling with the contagion effects of the US housing crisis, a bit more strongly than the current influenza virus scare. At the top of the agenda is the global financial crisis that is affecting many of us especially here in the Caribbean, who quite frankly, have had no hand in creating this situation. The IMF has adjusted its world economic outlook at least three times in the last six months; from an original forecast of 4 percent, then to 2.5 percent to less than 1 percent, and now to -1.3 percent for 2009. The projection for the Caribbean in 2009 is -.2 percent, and a positive 1.5 percent is projected for 2010. The silver lining in this cloud has been the emergence of the newly industrialised nations and strong growth in some of the developing countries, to provide some counter intuitive influences, not the least of which has been the positive impact of China, India and Brazil, and the recognition that the group of economically powerful countries has widened from the OECD nations to the Group of 20. Further, that the international financial institutions must be recapitalised and the voting bases altered to reflect the new economic realities. This is a signal departure from the events of the last 25 to 30 years, and a recognition of the new areas of growth. We in the Caribbean have been accustomed historically, to the vagaries of international trade, having been apart of its epicentre in the 17th and 18th centuries. Indeed at that time, Canada was considered less important than Martinique, so strong was the economic importance of sugar. That world has changed substantially, and in this modern era the position of CARICOM is far different. In this state of flux, the CARICOM region and more specifically larger Member States such as Jamaica, Barbados and Trinidad and Tobago are in a somewhat better position to weather this financial storm, particularly because the structure of our financial centres within the Anglophone Caribbean is not exposed to the threats of the derivatives market, which was one of the initial causes provoking the global financial crisis. Whilst broadly similar in terms of climate and geography, CARICOM and the wider Caribbean encompass a range of diversity and economic opportunity and investment possibilities, from the sparsely populated but large land reserves of Belize, Suriname and Guyana to the more densely populated OECS countries and the middle income nations, such as the Bahamas in the north. With direct reference to Trinidad and Tobago, our country is in a relatively stronger position to cope with the challenges in this environment as we continue to capitalize and build our economy, firstly on the energy sector, and also through diversifying the services and manufacturing sectors. While the Energy Sector will continue to be for some time the main driver of Trinidad and Tobago’s economy, as I just stated, Government recognizes that we need to direct aggressive efforts toward economic diversification, in other words, developing the country’s non-energy sector, particularly exports of both goods and services, increasing our level of competitiveness and enhancing the business operating environment. Trinidad and Tobago as a Member State of CARICOM and a leading player in the trade negotiation arena, continually seeks to establish new trading arrangements and penetrate new markets that may be of benefit to our local manufacturers and services providers. This year, the Government had the unique opportunity to showcase this Nation’s and the region’s strengths as a forum for international business, trade and investment through hosting of the 5th Summit of the Americas and the Commonwealth Heads of Government Meeting (CHOGM) on 27-29 November, 2009. The theme for this meeting is “Partnering for a More Equitable and Sustainable Future”. This meeting takes place at a time when questions are being asked about the stability and certainty of the global economy and, as the theme suggests, partnership at the multi-lateral level is viewed as critical to resolving these global challenges. We believe that CARICOM and the CSME integration process is part of the multi-lateral solution given the numerous economic, social, and political benefits which can be derived from such a union. At present, CARICOM is a customs union with a Free Trade Area, which enhances intra-regional trade as there are no tariffs or quotas on merchandise or goods originating from within the Region. The duty applied to extra regional items is the Common External Tariff or CET. When applied, the CET is used to maintain a price preference on regionally produced goods above goods produced outside of CARICOM. This is designed to create great advantages for Member States as they are able to access larger and deeper markets and manufacturers are encouraged to produce and export more goods and services. I think we recognize that we have more or less come to the end of that road and must do more to move forward in the current global climate. But Trinidad and Tobago, and by extension CARICOM, must look further afield, to the Greater Caribbean and beyond. Our emphasis thus far has been on developing trade relationships with specific Latin American countries, as well as advancing new trading arrangements with our traditional trading partners, the most recent being the Economic Partnership Agreement (EPA) signed in 2008 with the EU. In particular, the EPA holds significant opportunities for investment, especially in the services arena and it offers enhanced protection for investment activities in both regional groupings, areas not traditionally covered in an average trade agreement. This will serve as a common basis for other trading arrangements we will begin to negotiate shortly. Many of our local manufacturers have become complacent given that they dominate the Regional market; face little competition and thereby generate significant profits. However we are also blessed with a cadre of aggressive, visionary manufacturers and service providers who are eager to venture more deeply into wider markets, via strategic partnerships with international counterparts, through joint ventures, etc. and thereby generate investment opportunities regionally and internationally. Another advantage the CARICOM region holds in terms of investment opportunities is the enlarged market space, which provides greater scope than small individual nation states. In this regard, the stock exchanges of Jamaica, Barbados, and Trinidad and Tobago coupled with the Regional Stock Exchange promote cross-border investment opportunities and increase the attractiveness of the Region as an area for both foreign direct investment (FDI) and domestic investment. For 2008, the Trinidad and Tobago Stock Exchange recorded a trading value of US$353.8million, whilst FDI inflows in 2007 were US$830.0million, indicating there is an investment capacity. These numbers are small by international comparison. But they are large enough in opportunity in the transformation effort to play a greater role in world economy. We must realize that although we can weather the current financial challenges, we cannot remain complacent and not seek to engage the world at large. This current situation is a clear signal that we must revamp our activities in the areas of market access, attracting FDI and export promotion. Regionally, we must look for the positives that can come from this challenge to strengthen the position of CARICOM and CARICOM businesses within the global economy. For example, last week I was pleased to participate in KC Confectionery’s launch of its new hard candy automated system, a direct example of confidence in both the local and regional economy, as KC exports over 70 percent of its goods both regionally and to CARICOM, the US, Canada, the UK and the EU. While this is not a huge investment in dollar terms, TT$10M, this is evidence of company determined to invest at a time when others are shrinking away from investment. In fact any financial analyst will tell you, the time to invest and upgrade your business is when things are slow and prices are better. Billionaires are made in a downturn. One only recognizes the success when the upturn comes around. For us in CARICOM, and by extension the CARIFORUM grouping, which includes the Dominican Republic, deepening the integration process through enhanced CSME implementation will enable domestic firms to increase their level of competitiveness firstly within the region and then extra-regionally, improve the services provided by governments through co-operation among Member States, compare policy approaches across countries and subsequently adopt best practices suitable for the Caribbean. We in the Caribbean, both English and non-English speaking nations, are responsible for carving out a more favourable position for this region in the global economy. While times are tough right now, we cannot depart from our path. This is not the time to adopt outdated protectionist policies and be overcome by fear. We must step forward and engage the world, as an integrated region, to maximize what lies out there. I thank you.