A Trade Strategy for Guyana

1
A Trade Strategy for Guyana

• Craig VanGrasstek
• Washington Trade Reports

2
Part I

• Introduction

3
Mainstreaming trade policy into the development
strategy

• Trade policy is merely one aspect of a broader
  national undertaking that will require a
  sustained and coordinated national effort to
  reduce poverty through economic opportunity.
• Globalisation sets the context in which this
  strategy is to be pursued, presenting risks and
  opportunities.

4
Risks and opportunities of globalisation

• Globalisation is an inevitable trend
• The main opportunities are in the reciprocal
  removal of trade barriers
• The main risks are in the loss of preferential
  market access
• Guyana has little time to position itself to make
  the most of the opportunities and deal with the
  risks

5
The short, medium, and long terms

• Short term (2003-2004) Preparation conduct
  of negotiations
• Medium term (2005-2008) Absorbing the changes
  of 2005
• Long term (After 2008) Implementation and
  exploitation of trade and investment
  opportunities

6
2005 is the key year

• Regional Completion of the Caribbean Single
  Market and Economy
• Hemispheric Ratification of the Free Trade Area
  of the Americas agreements
• Global Conclusion of the Doha Round of World
  Trade Organisation negotiations
• Sectoral Final phase-out of the apparel quotas

7
Globalisation means an expanded definition of
trade policys scope

• Trade no longer means just the movement of
  goods across borders and border measures such as
  tariffs
• Services (not the invisible or untraded
  sector any more)
• Ideas (intellectual property rights)
• Capital (investment measures)
• People (movement of natural persons)

8
All ministries have responsibilities in trade
policy

• A few illustrative examples
• Finance Trade-related taxes account for about
  40 of revenue, so liberalisation must be
  budgeted
• Tourism, Industry and Commerce Promotion of
  tourism, administration of export-processing
  zones
• Agriculture ( NGMC) Exports of traditional
  non-traditional agriculture
• Transportation Shipping costs pose a greater
  barrier to Guyanas exports than do tariffs

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Cost of Importing Goods From Selected Countries
and Regions into U.S., 2002
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Globalisation means shifting from preferences to
reciprocity

• Guyana must be prepared for the transition from
  one-way to two-way bargaining
• For tariffs, the margins of preference are being
  diminished by negotiations
• Apparel quotas are being phased out by 2005
• Sugar quotas face both dispute-settlement and a
  negotiated phase-out
• The value of preferences is often over-estimated

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Changes in U.S. Imports of Non-Oil, Non-Apparel
Goods, 1992-2002
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Changes in U.S. Imports of Apparel, 1992-2002
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Strategy More than a set of tactical instructions

• Tactical directions for specific negotiations
  have a limited shelf life
• The strategy establishes general principles for
  the conduct of policy
• Each negotiation or other initiative needs to be
  seen in the broader context

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Follow-up to the strategy

• WTOs Trade Policy Review
• FTAA Capacity-Building Strategy (Hemispheric
  Cooperation Programme)
• Improved coordination with the donor community
• Increased presence in Geneva
• Enhancing the resources of MOFTIC
• Promoting closer collaboration between ministries
  and with civil society

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Part II

• The Strategy

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Structure of the strategy

• Section I Principles and objectives
• -- What Guyana should seek in its
• trade policy
• Section II Principles and resources
• -- What Guyana needs in order to
• attain these objectives

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Mapping Guyanas Existing Rights and Obligations

• Guyana has made commitments to its trading
  partners (and vice versa) in CARICOM, the WTO,
  and other fora. The country must ensure both that
  its own trade laws and agreements, as well as
  those of its partners, are devised and executed
  in accordance with these commitments.

Principle I.A
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Guyanas commitments

• Commitments made in the WTO
• The Trade Policy Review
• CARICOM commitments
• Bilateral, regional, and hemispheric agreements

19
Prioritisation of Future Objectives

• MOFTICs investigative, coordinating, and
  negotiating resources should be allocated
  according to a hierarchy of objectives, with
  sectoral objectives in the lead.

Principle I.B
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Primary Issues Market Access

• In addition to tariffs (preferential and
  non-preferential), these include non-tariff
  barriers imposed for any reason, as well as
  intellectual property rights and barriers to
  trade in services. Guyanas own tariffs and
  services commitments should be addressed in this
  same context.

21
Secondary Issues Legal defense of Guyanas trade
interests

• These include trade disputes (either as
  complainant or defendant), defense against
  actions taken under trade-remedy laws (i.e.,
  antidumping duties, countervailing duties, and
  safeguards), and trade-related issues such as
  intellectual property rights and investment.

22
Tertiary Issues

• Matters that do not bear a reasonably close
  relationship to the primary issues, involve a
  greater investment in capacity-building than may
  be justified, or that are best left in the hands
  of regional Caribbean institutions. These include
  such matters as the governance of international
  organisations and trade-related investment
  measures.

23
Preferential Access to Foreign Markets

• Guyana should make the most of existing
  preferential arrangements, seeking their
  continuation for as long as possible and even
  their expansion, but policymakers must be
  prepared for their gradual diminution in value
  and eventual disappearance altogether.

Principle I.C
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Key issues in preferences

• Sugar and rice
• Special and differential treatment in the WTO and
  FTAA
• Parity with least-developed countries for HIPC
  countries

25
Reciprocal Access to Foreign Markets

• While negotiators should seek whenever possible
  to include principles of SD treatment in these
  agreements, they must also be prepared to make
  specific requests for tariff commitments on
  products of interest to Guyanas exporters, and
  to make reciprocal commitments for reductions in
  the countrys own tariff barriers.

Principle I.D
26
Key issues in reciprocal negotiations

• Using bound rates as the base rates in
  negotiations
• The meaning of substantially all in the context
  of GATT Article XXIV

27
A Voice for Trade in Related National Policy
Debates

• MOFTIC has a key role in promoting the
  principles of competitiveness and compliance.

Principle I.E
28
Defense of Guyanas Interests

• MOFTIC must be prepared to defend the
  countrys trade interests in regional and
  multilateral bodies

Principle I.F
29
Key issues for the defense of Guyanas interests

• Dispute-settlement mechanisms in the WTO and
  elsewhere
• Antidumping law

30
Empirical Preparation

• The most immediate need for MOFTIC is to
  enhance its analytical capacities in advance of
  trade negotiations.

Principle II.A
31
Key issues in empirical preparation

• Identification of sectoral-based negotiating
  objectives (primary issues)
• Identification of rules-based negotiating
  objectives (secondary and tertiary issues)

32
Internal Cooperation, Coordination, and
Colaboration

• Coordination between ministries, and between
  the government and the private sector, is
  essential at all stages of trade policymaking.

Principle II.B
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Key issues in internal coordination

• Inter-ministerial coordination at the Cabinet and
  working levels
• Consultation with the private sector

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External Coordination

• Negotiations with other countries involve not
  only the exchange of commitments, but also the
  establishment of coalitions in larger
  negotiations. MOFTIC must work closely with
  like-minded countries in general and its CARICOM
  partners in particular.

Principle II.C
35
Enhancement of MOFTIC Resources

• The financial, physical, and human resources
  available to MOFTIC must be increased to a level
  commensurate with the ministrys
  responsibilities.

Principle II.D
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Key issues in MOFTICs resources

• Enhanced representation in Geneva
• Increase in MOFTIC staff size
• Improvement in MOFTIC staff capacities
• Improvement in MOFTIC information technology
• Establishment of a trade reference library
• Improving MOFTICs dissemination of information
• Improvement in the trade data system
• Better coordination with the donor community