WTO: Members’ Development Status (Part III): Implications for CARICOM Members
When the World Trade Organization (WTO) resumes work shortly, the Members of the Caribbean Community (CARICOM), like others, will need to be prepared to address the issues on WTO reform which include proposals on special and differential treatment (S&DT) and differentiation/graduation. In addition, preparations will commence for the 12th WTO Ministerial Conference (MC12) to be held in Kazakhstan, 8-11 June 2020.
Of the fifteen (15) CARICOM Member States, thirteen (13) are WTO Members. The Bahamas is an Observer and commenced membership accession in 2001. CARICOM countries represented in Geneva are now Jamaica, Trinidad and Tobago, Barbados, the Eastern Caribbean jointly, and Guyana. The CARICOM members participate at the WTO as individuals but the Caucus of Ambassadors coordinate trade and other issues making joint representation as necessary.
CARICOM Members collectively account for an estimated 0.24% of world merchandise trade and are still endeavouring to diversify and integrate into world trade.
All CARICOM Member States are developing countries with Haiti the only Least Developing Country (LDC). For 2019, however, the World Bank, based on GDP per capita, has classified Antigua and Barbuda, the Bahamas, Barbados, St. Kitts/Nevis and Trinidad and Tobago as high income countries and the others, including Jamaica, as upper middle income.
CARICOM Members have always supported special and differential treatment (S&DT) for developing countries in the United Nations Conference on Trade and Development (UNCTAD), the General Agreement on Tariffs and Trade (GATT) and the WTO. In UNCTAD, the Caribbean supported a proposal for a sub-category on Small Island Developing States to highlight their fragility in trade and development. Such a group exists, as an alliance, at the United Nations (UN) in discussions on sustainable development.
S&DT has been important to Caribbean countries in trade enabling the provision of unilateral, one-way market access through the Generalized System of Preferences (GSP); the African, Caribbean and Pacific (ACP)/ European Union (EU) agreements and arrangements with the USA and Canada. The ACP/EU Lomé and Cotonou trade provisions on sugar and bananas were successfully challenged in GATT/WTO dispute settlement championed by the USA and others. S&DT also enabled Caribbean participation in GATT/WTO negotiations.
In the WTO Doha “Development” Round (DDR), the CARICOM Members were among those who negotiated for inclusion of specific development issues, including a work programme on small economies. It was evident as work progressed that the developed countries were not committed to this work programme. Associated with this was the group on Small Vulnerable Economies (SVEs) which negotiated to have their concerns included in the DDR draft texts.
Differentiation/Graduation – a wider issue for CARICOM
CARICOM countries support the multilateral system. Mutilateralism has been challenged in the WTO and the UN system by the Trump Administration. Its splintering would be a loss weakening equal participation and alliance-building. CARICOM’s participation in bilateral and plurilateral trade negotiations demonstrated their lack of leverage to secure a development dimension to these agreements and protect their interests.
Now classified as high and upper middle income countries, the CARICOM Members are at increased risk of graduation from development support programmes and being treated as developed countries in spite of their economic and social deficiencies and vulnerability to external shocks. In the Caribbean’s post Cotonou negotiations with the EU, it will be necessary for their vulnerability to remain a key consideration.
In the WTO, CARICOM Members could lose S&DT and technical cooperation which at this stage is important in the implementation of the Trade Facilitation Agreement (TFA).
The differentiation/graduation issue for CARICOM goes beyond the WTO into global economic fora such as the Organization for Economic Cooperation and Development (OECD) and deliberations on the UN Sustainable Development Goals. CARICOM needs to further strengthen its case for development status not to be assessed mainly on GDP per capita and for their own differentiation in the WTO as small vulnerable economies.
Submitted by Elizabeth Morgan, Specialist in International Trade Policy and International Politics