Small regional manufacturers not ready for EU trade deal

-CARIFORUM mission after Europe visit

Just back from a tour of several European countries, a delegation of private sector officials from CARIFORUM member states have concluded that trade agreements with the European Union (EU) are unlikely to bring significant economic gain to small operators in the short to medium term. Post-visit assessments of the significance of the visit to Europe have cited small scale production in plants in CARIFORUM countries as a factor that will affect pricing and the ability to compete.

Sonya Dunstan, Chief Executive Officer of the Jamaican firm Taste of Caribbean Ltd. and a spokesperson for the group that visited Europe is quoted as saying that CARIFORUM countries are “not yet ready for the Economic Partnership Agreement (EPA), citing an inability to compete on account of “economies of scale” as the reason for the current handicap. “The manufacturers are huge overseas and what one company can produce in a day is what local companies may take months to produce,” she said.

Representatives from twenty-two regional manufacturing companies from CARIFORUM countries visited the United Kingdom, Germany, and France during the period June 20 – 29 on a fact-finding mission organized by the Caribbean Export Development Agency and the African, Caribbean and Pacific Group (ACP).

While noting the focus in Europe on CARIFORUM countries signing on to the EPA the visiting CARIFORUM delegation reportedly expressed concern over inequities in development and the impact of those on trade between the two blocs.

As recently as June this year the EU was reportedly expressing concern over the length of time it was taking for some CARIFORUM countries to reduce import duties for products arriving in the region from Europe. While tariff cuts under the EPA were scheduled to be in place by January last year, fiscally challenged CARIFORUM countries have continued to hold on to revenues secured from Customs duties which, in the case of Jamaica, is expected to climb from J$21 billion in 2011 to J$26 billion this year.

Concerns among regional manufacturers also focus on difficulties which regional producers are likely to continue to face in meeting the high food safety standards that obtain in EU countries despite huge investments which some regional manufacturers continue to make in seeking to meet those standards.

The CARIFORUM delegation also observed that while EU importers are open to doing business with regional manufacturers, deficiencies in product packaging and marketing are likely to serve as barriers to goods from CARIFORUM countries securing greater access to EU markets.

The 22 participating firms were drawn from sectors spanning food and beverages, condiments, staples, essential oils, herbs, spices and organic food, and represented Antigua and Barbuda, The Bahamas, Belize, Dominica, the Dominican Republic, Grenada, Jamaica, St Lucia, and Suriname.

The EU tour is a precursor to the second CARIFORUM-EU Business Forum scheduled to take place in the UK on August 8 and 9 during the Caribbean Export’s ‘London Export Initiative.’