Will national security concerns galvanize transformation in global production and trade policies?


By Elizabeth Morgan

As this article is published, the Heads of Government of the Caribbean Community (CARICOM) will be entering the second day of their thirty-third inter-sessional meeting in San Pedro, Belize, chaired by the Prime Minister John Briceño.  With the second anniversary of the COVID-19 pandemic restrictions, they will be examining its status in the region. The agenda also includes the situation in Haiti; implementing the CARICOM Single Market and Economy (CSME);  advancing the CARICOM Agri-Food systems agenda including regional food and nutrition security; engaging with representatives of the Private Sector, Labour and Civil Society; and,  on Climate Change, assessing the outcomes of COP26 and outlining the Region’s plan for COP27.

With the pandemic, CARICOM has been focusing on CSME implementation and food security for the “build back better” recovery process. There is now further reason to prioritize these, including development of renewable fuels, to the extent possible.

A question is; will national security concerns further influence the transformation of global production and trade policies?

Ukraine/Russia crisis

Undoubtedly, the Heads will also deliberate on the implications of the conflict in Europe between Russia and Ukraine, which, if there is no resolution by day 2 of their meeting, will certainly be having far-reaching implications for the international community, including the CARICOM countries. In my article of February 9, I alerted that CARICOM and its Member States needed to be concerned about tensions between Russia and Ukraine. Without a resolution to this conflict, the discussions on the CSME and food security will take on even greater importance.  

In an article in Forbes by Daphne Ewing-Chow titled “Caribbean Food Security Likely to be impacted by Russia-Ukraine Conflict” dated February 27, she points to the increases in food prices which will be felt in CARICOM countries generated by increased prices on the world market, as both Ukraine and Russia are major producers of fuel, wheat and corn. This will be added to the high freight and other prices already being experienced.

Changes in production and trade policies

It has struck me that this conflict between Russia and Ukraine could galvanize countries to more deliberately make significant changes to national and regional production and trade policies in their security interest.  COVID-19 had already signaled that it was unwise to have production of critical medical and technology supplies off-shore and thus with the possibility of shortages and products being used as bargaining tools.

With the assistance of the US and European private sectors, after 2001, when China joined the World Trade Organization, it became the world’s factory. It was cheaper to produce goods there. Outsourcing became the way of our times. So, consumers have benefitted from increased trade and cheaper goods. Most goods are labeled “made in China”. If we are honest, here in the Caribbean, they are cheaper and, in some cases, inferior in quality. If the goods are not made in China, they are made somewhere else in Asia – India, Vietnam, or Taiwan. This includes much of the souvenirs sold in the regional tourist industry.

A lot of inputs to production are imported. This is the situation in many countries. In a crisis, production could be halted as the supply chains are disrupted.

We are now seeing the effect on food supplies. The Caribbean is a net importer of food mainly from the USA, Canada and elsewhere. Problems in these markets mean problems for Caribbean suppliers. From researching my article last week, I noted that Haiti, in 2020, imported 116,000 m. tonnes of poultry meat, mainly from the USA, valuing possibly US$75 million according to one online source. Can food production and supply be effectively improved in the region?

The other major import is fossil fuels. Europe now has a problem resulting from its dependence on oil and gas imports from the Russian Federation. It seems there will now be public pressure to reduce this dependence. Other countries will also be assessing their situations.

CARICOM countries are both net oil/gas importers and exporters.  Trinidad and Tobago and Guyana will benefit from higher prices due to the Ukraine/Russia crisis, but Jamaica and other countries will see oil imports and electricity prices increasing.

Will countries now begin to take not only climate change mitigation seriously, but also their national security? Will they be increasing investment and research and development in renewable energy? More electric cars may be coming sooner than planned. Will they be looking more keenly at moving production home or closer to home – focusing more on near-shoring? I see these as outcomes from this Ukraine/Russia conflict.

I do hope that this European conflict is a further clarion call to CARICOM Member States to get the CSME implemented, including food security, and focusing on renewable fuels. Again, a plan is needed to assist oil importing Members in the short term.

The global trade and economic structures will most likely be transforming as is being predicted.

Submitted by Elizabeth Morgan, Specialist in International Trade Policy and International Politics

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