In view of the dire economic challenges facing the government, a review of Jamaica’s trade policy has become urgent, if only to stem the decline of manufacturing and boost exports. The following are some of the highlights of the current trade policy.

On September 24, 2001, Cabinet agreed to adjust trade policy, the outcome of which is summarised in Ministry Paper # 69 of October 29, 2001. To facilitate the review and adjustment, the Jamaica Trade and Adjustment Team (JTAT) was established, thereby “deepening and widening the Consultative Process in trade policy to include a wider cross-section of businesses, an expanded number of public sector organisations, new agencies involved in trade policy, local authorities, the Regional Negotiating Machinery and a comprehensive cross-section of civil society. The JTAT continues its work today with regular meetings at the Ministry, assisting, formulating and reviewing programmes and policies designed to improve competitiveness that guided trade negotiations with the European Commission towards the EPA, now being implemented.

The Trade Policy has three key objectives:

* To create new, diversified exports by facilitating the growth of domestic capital as the basis for diversifying exports and facilitating market penetration.

* To displace imports, that is, steadily reduce the share of imports relative to outputs;

* To increase the flow of net positive returns from overseas assets that have been generating significant remittances and other capital flows for Jamaica.

Hence the adjusted trade policy seeks to enhance Jamaica’s export capacity by going beyond the narrow focus on market access issues, to promoting measures that facilitate market penetration.

To broaden the export base and create new, diversified exports, the policy proposes to:

* “Negotiate for removal of tariff and non-tariff barriers in overseas markets within an asymmetrical timeframe that can enable effective market penetration.

* Support grant incentives for foreign investment and foreign technical and financial assistance targeted at facilitating domestic capital formation.

* Engage in sector-specific negotiations and issues that address supply-side constraints and facilitate targeted market penetration.

* Increase systematic information gathering and analysis of strategic firms/sectors to inform trade negotiations.

* Use trade remedies as defensive tools to assist the development of strategic firms/ sectors that create and use domestic capital.

The policy recognises the need to prepare for the end of preferential arrangements and to preserve preferences only as long as is necessary for adjustment to take place, while preparing for reciprocal trade by 2005 and ending EU preferences by 2008.

The time has come to review the trade policy, expand its scope and objectives, and harmonise its aims with the changing international trade environment, accelerated by the disastrous world economic recession. Fortunately, the review and reform of the trade policy has been substantially accomplished with the preparation of Jamaica’s National Export Strategy (NES), a comprehensive exposition of Jamaica’s critical export performance.

The NES seeks to improve export performance at two levels; first “enhancing the trade and business environment, and second, improving competitiveness of firms and sectors”. The paper outlines the current situation, the national vision and recommendations for its achievement, that in essence, are principal components of trade policy. Space does not allow amplification of all relevant sections of the NES, which is recommended reading for all exporters.

The NES has set goals for the next five years, some of which follow:

* “To increase the export contribution to GDP from 19.2 per cent to 30 per cent by 2013”. While such ambition is laudable, it seems optimistic when viewed in the context of the world recession, and the economic compression resulting from new taxes and the effect of the JDX.

To achieve greater diversification of the export sector by:

* “Achieving higher value addition in the agriculture commodities sector”. This is long overdue and should include West Indian Sea Island Cotton, ginger and cho-cho – Costa Rican style.

* “Increasing the current value of non-traditional exports of goods by 50 per cent by 2012 through increased volumes and higher value addition”. A high ambition!

* “Increasing the contribution of services exports as a percentage of overall exports with particular emphasis on developing professional services and creative industries export sectors”. Services now account for 73 per cent of GDP.

* “Accessing new and emerging markets and increasing market penetration in existing markets”. This should require the appointment of resident Trade Commissioners to facilitate market penetration.

The international trade arena is awash with challenges overwhelming our very limited resourced trade capacity, already negotiating a Trade and Development Agreement with Canada, which has just completed its first round of formal negotiations.

Furthermore, the former US administration indicated that a Caricom/US Free Trade Agreement (FTA) was no longer possible, leaving Caricom to continue trading under the Caribbean Basin Initiative which does not include services. Since the advent of the new Democratic administration, there has been no new articulated trade policy until December 31, 2009, with the presentation of the 8th Report to Congress on the operation of the Caribbean Basin Economic Recovery Act by the US Trade Representative .

Unexpectedly, the report reversed the previous dictum on the possibility of a Caricom/US FTA thus: “In the CBTPA, Congress highlighted the commitment of the United States to promoting economic growth in the Caribbean Basin, and noted that it is the policy of the United States to seek a Free Trade Agreement with willing countries in the region at the earliest possible date.” Jamaica, however, is unable to avail itself of this opportunity at this time owing to resource constraints.

Much more needs to be said on this critical subject.