THIRD GLOBAL REVIEW OF AID for TRADE

Statement on behalf of the Caribbean Community Geneva, July 18-19, 2011 The Caribbean Community (CARICOM) attaches great importance to the III Global AfT Review. One measure of the importance attached by the highest political level in our Region to this event has been the submission of 19 Case Stories, including four by the Regional and Sub Regional Secretariats. This III Global Review represents an opportunity to take stock, evaluate the impact, establish best practices and recommit to Aid for Trade as a developmental tool. Given the uncertainty surrounding the conclusion of the multilateral trade negotiations, we cannot fail also with respect to delivering the trade capacity building measures required if the developmental benefits of trade are to be fully realized. The CARICOM Region faces the twin challenges of being small and vulnerable, highly indebted economies with all the attendant features as articulated in the 2006 SVE submission to the Aid for Trade Task Force. Some of the more notable characteristics include: (a) no automatic linkage between trade liberalization and increased exports; (b) high costs of infrastructure, in particular, transportation and utilities; and (c) high dependence on trade, albeit with a narrow range of exports and markets. The small size and geographic dispersion of CARICOM countries add to the challenges faced in reaping the benefits of trade. The Caribbean has traditionally been preferencedependent in a global marketplace characterized by diminishing value of preferences. Mechanisms geared towards facilitating trade adjustment are therefore required to assist in the recalibration of our economies. This should necessarily include support for strengthening productivity and trade competitiveness. Such an approach would, ensure the optimization of the benefits that should accrue from increased market access opportunities. The global economic crisis continues to dampen the performance of our economies and has further deepened the Regions chronic indebtedness. Sadly, the international economic governance architecture fails to internalize the specificities of small, vulnerable and highly indebted economies such as ours, as per capita income is used as the blunt variable to measure eligibility for access to funding on preferential terms. CARICOMs primary policy response rests with the vigorous pursuit of strengthened regional integration. In that regard, we have established the institutional framework for the Single Market and Economy through a Revised Common External Tariff (CET), the 1

Caribbean Court of Justice (CCJ) with original jurisdiction on CSME matters, a Caribbean Competition Commission, the CARICOM Development Fund (CDF) for disadvantaged countries, sectors and regions and the Caribbean Regional Office for Standard and Quality (CROSQ). CARICOM Heads of Government have already signed an inter-governmental agreement establishing the CARICOM Agricultural Health and Food Safety Agency (CAHFSA). The Community is working towards operationalising this agency which will be responsile for putting in place the Regional SPS Regime. As we consolidate the Single Market, additional emphasis will be placed on the establishment of the framework for a Single Economy through focus on sectoral development. The Region is also realigning economic relations with major trading and development partners as evidenced from the implementation of CARIFORUM-European Union Economic Partnership Agreement (EPA) and the current negotiations for a CARICOMCanada Trade and Development Agreement. CARICOM countries continue to be active participants in the DDA process and remain committed to the realization of a multilateral trading system that places development at its core. Far from standing still, we are forging ahead with strengthening regional integration, while seeking to recalibrate the multilateral trading system in a manner that takes full cognizance of the development needs of small, vulnerable and poor economies. We are also attempting to enhance our global competitiveness. We have an ambitious but necessary trade agenda. All of this requires the active and generous support of our traditional development partners and new partners. We acknowledge the very valuable support we are receiveing from our development partners in terms of putting in place the soft infrastructure required. But, the Regions private sector is becoming impatient and CARICOM heads of Government have determined that new assistance should directly address private sector competitiuveness and job creation. In short, they want tangible results on the ground. CARICOM Heads of Government have identified the major areas for which Aid for Trade support is needed. In the short term, as a region comprising many small island and coastal developing states we need support in Maritime Transport. We also need support on ICT to enable us to enter into and compete in a global technology based economy and we will need support in the trade facilitating areas including Sanitary and Phyto-Sanitary Measures. The four Caribbean-wide Aid for Trade projects which were the subject of Case Stories remain relevant in terms of designing projects to attenuate preference erosion, spur regional integration, enhance the capacity of the private sector to increase its competitiveness and move up the value chain. A key example is CARTFund a 10 million pound sterling facility funded by the UKs Department for International Development (DfID) aimed at assisting Caribbean countries in boosting growth and reducing poverty through trade and regional integration. There are two critical lessons that can be distilled from this project. First, the rate of disbursement has been strong and dispatched in a timely manner. In light of other experiences of the Caribbean , this is a most welcome development. The second lesson is that offering built-in support for project design and preparation resulted in high project approval rates. It therefore appears prudent that inserting capacity building measures in Aid for Trade projects might yield considerable results.

Another Case Story submitted by CARICOM was that of the Support to the Caribbean rum sector. This EU-funded programme had several components all aimed at addressing preference erosion. A business development services window also facilitated beneficiaries to access support in the preparation of project proposals. One other major characteristic of this programme concerns empowering the private sector to seize trade opportunities. These are invaluable lessons that could be applied to other AfT initiatives. We are currently finalizing arrangements with the EU for some support to implement the EPA. We are also working with the IDB to develop specific proposals on Maritime Transport and ICT. At the same time, also with the assistance of the IDB and DfID, we are taking steps to formally design and promote a CARICOM Regional Aid for Trade Strategy on the basis of which we will intensify our resource mobilization endeavours with our International Development Partners. I take this opportunity to place on record CARICOMs appreciation for the close collaboration and support being provided by the IDB, in particular the staff of its Integration and Trade sector. We also express our appreciation for the support being provided by the EU, Canada through CIDA and Germany through the Agency for International Cooperation (GIZ) to our ongoing work to develop the CARICOM Single Market and Economy and by extension our international trade agenda.. While we can be proud of a number of lessons learnt, we also need to improve in a number of major respects. Primary among these is convincing our development partners of the imperative of delivering AfT resources in a time-sensitive manner. We need their understanding on the magnitude of the adjustment task facing small vulnerable highly indebted economies like ours. We are confident that they will not only hear us but that they will respond positively and expeditiously. I thank you.

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