Private sector wants high-level meeting on Brazil trade pact

-after years of frustration

The Private Sector Commission wants a meeting with the Brazilian Ambassador and Minister of Foreign Affairs Carl Greenidge to explain the myriad obstacles Guyanese businesses face accessing the benefits of the Guyana/Brazil Partial Scope trade agreement.

It is their hope that from hearing first-hand of their plight, which has seen years of lamentation by the local business community about access to the Brazilian market, that the two sides will hasten to put mechanisms in place that can see a renewed commitment and bolstering of trade.  The 2001 partial scope pact which took effect from 2004 established tariff reductions for a number of items.

“We have had several meetings over the years with the Brazilian trade teams that came here from northern Brazil and the question of shipping, preferential treatment and the government’s understanding of the requirements and how we can simplify it but we still are lagging behind,” President of the PSC, Eddie Boyer told Stabroek News in an interview.

“We were hoping to access their market, especially for bulk produced items … but it has been difficult. We are saying it is a work in progress and are really supportive of the minister’s concern, and a suggestion at this time would be to meet with the Brazilian ambassador, minister of foreign affairs and the PSC to fast track this,” he added.

The PSC’s position comes against the background of Minister of Foreign Affairs Carl Greenidge saying that enough is not being done by the local business community to maximize the benefits of Guyana’s Partial Scope Agreement (PSA) with Brazil.

Last week, Greenidge pointed out that while government negotiates with Brazil for an increase in the items under the agreement, much more can be done presently from this side and that Guyana’s business community needed to look at diversification of market items.

“You have to diversify, you have to find new products, and you have to move up the value chain. You just can’t be producing paddy and rice and selling it abroad. So, work has to be done in the agriculture sector and in processing to find products that command higher prices and in which wider margins are associated,” he said.

“If you look around the range of products that are exported, they are far too limited and that is where the major constraint arises,” he added.

Greenidge told Stabroek News that only this week he met with the Trade and Investment Sub-Committee of the PSC and discussions were had pertaining to the PSA.

The PSC, he said, is supposed to liaise with government so that it can have a better understanding of the difficulties being faced by the business community here and put measures in place to help alleviate this.

But while he understands that there are complaints about trade with Brazil, he has urged that the standards here be upped and the necessary requirements be met if the process is to be fast-tracked.

Barrier

“The main barrier has to do with sanitary and phytosanitary conditions. The companies have to upgrade their capacities in many ways. They have to look at the markets and try and see what their needs are because all of these countries are tightening up their sanitary and phytosanitary and you just have to meet them if you want to be in.

“When a sector is underdeveloped, such as ours, they have to invest in resources, recruit skills, pursue criteria avenues diligently …they have to try as far as possible to meet the requirements,” he added.

The Minister of Foreign Affairs informed that at the meetings between the PSC and his trade personnel, an action sheet is given to both sides for evaluating if the objectives of the meetings are being realized.

He is confident that government is doing its part and realizing the targets set out by both parties.

Former President of the Guyana Manufacturing and Services Association and current executive, Clinton Willams says that he agrees with Greenidge that enough is not being done to exploit the full benefits of the PSA but it is largely because of the average businessperson’s unfamiliarity with the contents of the PSA.

“I agree with the Minister totally. A lot of us do not even know what is enshrined in the Partial Scope Agreement. They can’t tell you what is available and under what terms and conditions.

“However, I am telling you also that we simply do not have the mechanisms in place, I am talking sanitary, packaging to meet the demands of that market anyway. To get into a market, and this is just basic, you have to be able to satisfy the conditions and criteria needed. There has to be some proactive mechanisms between the two sides“.

For PSC trade representative Ramesh Dookhoo, Greenidge’s position is two-fold.

He explained: “Brazil is a peculiar case. A lot of businesses applied for lands in Lethem for depots as their business. That came to a standstill and those are some of the constraints. This coupled with the issues in Lethem, there is the road, the issue of containers crossing and so forth, has stymied the process somewhat. The PSC has also been waiting for over five years to have more items added to the PSA list.  I think to a certain extent we are to be blamed but there are other mitigating factors that they have to also understand,” he said.

“However, we understand the lack of knowledge and all of those things and we will jointly with the minister be holding some seminars with the business community to sensitize them on this,” he said.

Refused entry

Lethem businessman and Private Sector executive Daniel Gajie says that both Guyana and Brazil have to do more in ensuring that the terms of the PSA are met. This is because quite often items are taken to the border from here only to have them refused entry by Brazil’s customs and border personnel.

He said that he doesn’t think that government needs to do much more at this stage since the agreement is already there it just needs enforcement on both sides and that Guyanese businesses needed to take advantage of what is being offered.

“There are many reasons, but the main one is that the Brazilian custom officials on the border claim that they do not have the authorisation to enforce the PSA. The other important reason is that the manufacturing entities need to be aware of the procedures necessary for export to Brazil such as labelling in Portuguese and English and clearly stating ingredients, nutrition, facts and dates of manufacturing and expiration. There are also necessary export and import licences and other regulations that must be in place and respected.

It is actually not too challenging after one would have gone through the process. Unfortunately, it has been quite a while since serious efforts were made by Guyana to have their items exported to Brazil and there is a need for a properly coordinated trade and commerce forum between Guyana and Brazil…already flour and paddy is being exported and this shows that business can be done with Brazil,” he added.

But both the PSC’s President and Executive Gerry Gouveia maintain that Brazil seems to be getting a better deal out of the agreement.

“One of the things of free trade is that it is not necessarily free trade. Non-tariff barriers that don’t really make it profitable from this end. You try to enjoy the benefits but sometimes it seems one-sided,” Gouveia posited.

When asked why he believed that it was skewed in favour of Brazil, Boyer said “Why it is working on a one-sided basis is that the Brazilian government will have to energize the partial scope agreement with their counterpart business community and customs and border personnel. This is because there are some difficulties for our niche products where there is too much red tape on their side while on this side it is not.

“We have had several meetings over the years with the Brazilian trade teams that came here from northern Brazil and the question of shipping, preferential treatment and the government understanding of the requirements and how we can simply it. This has been raised for years to no avail, he posited.

He believes that once there is a high-level meeting with all sides going in guaranteeing positive, tangible outcomes, the lag the minister speaks of can be significantly reduced.

“If we meet with the Brazilian Ambassador with our Foreign Affairs minister I am confident that we can fast track this,” he said.

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