Business in dark over FTAA impact: TTMA official

The local business community still seems to be in the dark as far as the implications of the FTAA are concerned, said Anthony Hosang, First Vice President of the Trinidad and Tobago Manufacturers Association (TTMA). “It is felt that the FTAA, as important as it is to the development of the future of TT and the region, is not viewed as it should be. The importance is not recognised.” Hosang was speaking to members of the media at a seminar on the FTAA held recently at the Chamber of Commerce. Joined by his colleagues, Trade Consultant, Anthony Guiseppi and Lawrence Placide, Director of  International Trade Negotiations Unit of the Chamber of Industry, Hosang stressed that there is still a lot to be learned about the FTAA and what it means for the Caribbean region. “We are negotiating services on this trading block, so there is a vested interest from the standpoint of all professionals,” he asserted.

Such negotiations are being done by the International Trade Negotiations Unit  (ITNU), a Caribbean trade project established in April 2002 as part of an agreement between the Chamber and the Canadian Government. The Chamber officially entered into agreements with the Canadian International Development Agency (CIDA) through the Caribbean Regional Trade Policy Responsive Fund (CRRF) for a total of CDN $100,000. The main goal of the project is to sensitise the private sector to the ongoing negotiations of the FTAA. According to a release from the Canadian High Commission, it was designed to ensure that the interests of the private sector are appropriately represented in the negotiation process of the FTAA and dispense timely information on the course and results of negotiations. “The FTAA is the inevitable response to the powerful economic blocs being formed elsewhere in the world,” it stated, noting that “the sweeping changes brought about by globalisation will be intensified as the countries in this hemisphere concentrate on creating their own economic space in the emerging world order.”

It went on to state that given the current status of FTAA negotiations, it is critical that the private sector develops its negotiating positions in the range of areas covered by these agreements, and that a structure be put in place to provide firms with easily retrievable information on trade agreements that have been completed and those that are in the process of negotiation. The Chamber has agreed to focus on specific negotiating areas: Services, Investment, Competition Policy and Government Procurement. Although the FTAA is roughly two years away, talk of its inception has already raised the hackles of various groups which see it doing more harm than good. One organisation, the Global Exchange - a non-profit research, education and action centre founded in 1988, described the FTAA as “another example of the kind of free-market fundamentalism that has created a global race to the bottom that erodes environmental protection, workers’ livelihoods and human rights.”

According to the group’s website (www.globalexchange.org), the FTAA “will very  likely increase economic inequality both within and between countries by concentrating wealth, promoting privatisation of human and other essential services in addition to removing protections for small farmers and businesses.” FTAA is bound to increase profits for multinational corporations without providing real benefits to society as a whole, the group said. According to Dr Esteban Perez, Economic Affairs Officer of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), the recent globalisation process poses significant challenges to small developing economies such as those in the Caribbean, which are already dealing with a number of  issues in their pursuit of sustainable development. “The reduction,” he maintained, “of trade barriers and the increasing openness of these economies have not led to a significant increase in interregional trade or helped them to obtain a growing share of the extra-regional export market.” “In fact, they are dependent on preferential market access schemes granted by developed countries,” Dr Perez stated, adding that Caribbean economies are characterised by differences in per capita income and stage of development that are hard to reconcile with deeper integration schemes. In Dr Perez’s estimation, globalisation has both fostered and brought to light a process of sectoral change in the composition of output in favour of the services sector.  But this was to the detriment of agriculture and manufacturing.

He said, “this process accentuates the differences among Caribbean economies by creating a dual pattern of specialisation, so that countries are divided between service-based and goods-producing economies.” It also highlights the dependence and vulnerability of these economies, he noted. Dr Perez expressed his view that Caribbean economies have a narrow export base, since their direction of trade is highly concentrated towards North America and Europe due to preferential access for their major export products. “They are vulnerable to external shocks such as natural disasters and terms of trade, making their incomes prone to volatility,” he asserted, adding that their national savings fall short of the investment needs for developing economies. “Their small size limits the extent to which they can realize economies of scale in production and distribution and they exhibit limited institutional capacity to develop a competitive environment,” he said.