Is TT ready for CSME?

Last Thursday’s statement by the Head of the Trinidad and Tobago Caribbean Single Market and Economy (CSME) Unit, Ambassador Extraordinaire Jerry Narace, that this country was 80 percent CSME ready, was accompanied by a list of benefits that the Single Market is designed to bring to the region. What is of crucial importance, however, is whether politicians, trade unions and their general membership, small to medium sized manufacturers and those public officers who will have to interact with importers and exporters, as well as the business community generally, are anywhere near being CSME ready.

This, of course, in the sense that they appreciate fully the need for this country to be competitive in the international market place, and the roles they will be expected to play to make this possible. It may be necessary in the interest of cost cutting and with a long term view of positioning themselves to compete with imports of goods similar to those produced by them, for small and even medium sized manufacturers to consider merging where such a step is practicable. For not only will overall production costs be reduced, but marketing as well, enabling the goods and services provided to reach shelves, whether domestic, regional or international, at lower costs than exist today. There is the need both to retain and where possible expand our markets in CARICOM countries and, even as we do this, to encourage Eastern Caribbean farmers to increase their shipments of fruits and what have you to this country used in the production of jams etc, for export.

In turn, the around the corner University of Trinidad and Tobago should seek to expose domestic and Eastern Caribbean farmers and industries to the latest in production technology. Its courses at the start and more importantly as it progresses should be geared to the turning out of skills necessary to taking this country and the rest of the Caribbean Community of Nations forward. The UTT should see itself as a University catering to the needs of the Caribbean and not simply Trinidad and Tobago. Unless Caribbean people - workers, farmers and the business community  are in a position to readily acquire the skills needed to help the Community’s goods and services become and remain competitive, we will become a region of consumers and, ultimately, proverbial hewers of wood and drawers of water. The University of Trinidad and Tobago can serve the Region in yet another way, that of offering training in a specialist skill, the services of whose graduates, not unlike that of India, are in great demand by industries, for example, in the United States of America.

The world is changing and the international market place is no longer seen in terms of traditional imports and exports of goods produced and sold, but in the provision of in demand services as well. In addition, it is not simply that the services can be offered and had, but they must be of the same quality and be available at a far lower cost than obtains in the United States or whatever the market or markets needing them. A crucial ingredient, however, in the goods and services of Trinidad and Tobago and other CARICOM Member States being competitive, and remaining this way, is the cost of labour. An industry or agricultural concern may possess all the required technology, but unless it can rein in labour costs and increasingly so it will lag behind international rivals and be uncompetitive. The oft heard phrase of trade union leaders on the battle line that “not a man must go” undoubtedly has an emotive appeal. But in the age of globalisation and with the approach of the implementing of the Free Trade Area of the Americas (FTAA) it is a line that could cost a needless loss of jobs through the closing down or hobbling of industries. There will be less money turned around within the economy and with it the threatened loss of yet further jobs.

In addition, there will be a loss of Government revenue by way of corporation and personal income taxes, value added tax, and where this applies, customs duty. Haberdashers and hardware stores will suffer, along with supermarkets, restaurants, fast food outlets, the Public Transport Service Corporation and conventional and maxi taxis. Trade union leaders will need to adjust their thinking with respect to wage levels sought and their insistence that there should not be a reduction in the labour force, regardless. This tactic merely serves to push up the cost of any industry’s products and/or services and trigger an adverse domino reaction along the chain. In the end it may place the final cost of goods and services, even those in enterprises in which representative trade unions may understand the need to be cost conscious, at a disadvantage. And this because the sum total of all of the outside costs impacts negatively.

Several United States industries have relocated to and/or invested in Mexico, Central America and China where the cost of labour is well below that which obtains in Trinidad and Tobago. It follows that unless we are careful we may find our goods priced out of even our domestic market. There is another component, that of State corruption which within the past decade has been horrendous enough to negatively influence public spending as a percentage of GDP. Studies should be undertaken to unearth to what extent State corruption during this period has been a factor in public borrowing and public spending. It would be interesting to see what conclusions would be drawn with respect to corrupt practices in the public sector which to an extent as yet not determined have fuelled inflation. Had the State corruption been allowed to continue this clearly would have contributed to the dulling of the country’s hard won, though fragile, competitive edge.