A Trade Strategy for Guyana
Craig VanGrasstek
Washington Trade Reports
Part I
Introduction
Mainstreaming trade policy
into the development strategy
Trade policy is merely one aspect of a
broader national undertaking that will
require a sustained and coordinated
national effort to reduce poverty
through economic opportunity.
Globalisation sets the context in which
this strategy is to be pursued,
presenting risks and opportunities.
Risks and opportunities of
globalisation
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Globalisation is an inevitable trend
The main opportunities are in the
reciprocal removal of trade barriers
The main risks are in the loss of
preferential market access
Guyana has little time to position itself
to make the most of the opportunities
and deal with the risks
The short, medium, and long
terms
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Short term (2003-2004): Preparation
& conduct of negotiations
Medium term (2005-2008):
Absorbing the changes of 2005
Long term (After 2008):
Implementation and exploitation of
trade and investment opportunities
2005 is the key year
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Regional: Completion of the Caribbean
Single Market and Economy
Hemispheric: Ratification of the Free Trade
Area of the Americas agreements
Global: Conclusion of the Doha Round of
World Trade Organisation negotiations
Sectoral: Final phase-out of the apparel
quotas
Globalisation means an expanded
definition of trade policy’s scope
“Trade” no longer means just the
movement of goods across borders and
border measures such as tariffs:
 Services (not the “invisible” or
“untraded” sector any more)
 Ideas (intellectual property rights)
 Capital (investment measures)
 People (movement of natural persons)
All ministries have
responsibilities in trade policy
A few illustrative examples:
 Finance: Trade-related taxes account for about 40%
of revenue, so liberalisation must be budgeted
 Tourism, Industry and Commerce: Promotion of
tourism, administration of export-processing zones
 Agriculture (& NGMC): Exports of traditional & nontraditional agriculture
 Transportation: Shipping costs pose a greater barrier
to Guyana’s exports than do tariffs
Cost of Importing Goods From Selected
Countries and Regions into U.S., 2002
Mexico
Canada
Import Tariffs
Shipping Costs
European Union
World
Venezuela
Central America
Suriname
Jamaica (w/o bauxite)
Brazil
Jamaica (all products)
China
Guyana (w/o bauxite)
Guyana (all products)
0%
2%
4%
6%
8%
10%
12%
Globalisation means shifting
from preferences to reciprocity
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Guyana must be prepared for the transition
from one-way to two-way bargaining
For tariffs, the margins of preference are being
diminished by negotiations
Apparel quotas are being phased out by 2005
Sugar quotas face both dispute-settlement and
a negotiated phase-out
The value of preferences is often overestimated
Changes in U.S. Imports of Non-Oil,
Non-Apparel Goods, 1992-2002
Canada
Mexico
CBI Countries
Andean Preferences
Preferential
Non-Preferential
Average (125.8%)
GSP Countries
Japan
European Union
China
Rest of world
World
0%
100%
200%
300%
400%
500%
Changes in U.S. Imports of Apparel,
1992-2002
Mexico
Canada
CBI Countries
India
China
Preferential
Non-Preferential
Average (105.7%)
Philippines
Hong Kong
Korea
Taiwan
World
0%
100%
200%
300%
400%
500%
600%
Strategy: More than a set of
tactical instructions
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Tactical directions for specific
negotiations have a limited shelf life
The strategy establishes general
principles for the conduct of policy
Each negotiation or other initiative
needs to be seen in the broader
context
Follow-up to the strategy
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WTO’s Trade Policy Review
FTAA Capacity-Building Strategy
(Hemispheric Cooperation Programme)
Improved coordination with the donor
community
Increased presence in Geneva
Enhancing the resources of MOFTIC
Promoting closer collaboration between
ministries and with civil society
Part II
The Strategy
Structure of the strategy
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Section I: Principles and objectives
-- What Guyana should seek in its
trade policy
Section II: Principles and resources
-- What Guyana needs in order to
attain these objectives
Mapping Guyana’s Existing
Rights and Obligations
Guyana has made commitments to its
trading partners (and vice versa) in
CARICOM, the WTO, and other fora.
The country must ensure both that its
own trade laws and agreements, as well
as those of its partners, are devised and
executed in accordance with these
commitments.
Principle I.A
Guyana’s commitments
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Commitments made in the WTO
The Trade Policy Review
CARICOM commitments
Bilateral, regional, and hemispheric
agreements
Prioritisation of Future Objectives
MOFTIC’s investigative, coordinating,
and negotiating resources should be
allocated according to a hierarchy of
objectives, with sectoral objectives in
the lead.
Principle I.B
Primary Issues: Market Access
In addition to tariffs (preferential and
non-preferential), these include nontariff barriers imposed for any reason,
as well as intellectual property rights
and barriers to trade in services.
Guyana’s own tariffs and services
commitments should be addressed in
this same context.
Secondary Issues: Legal defense
of Guyana’s trade interests
These include trade disputes (either as
complainant or defendant), defense
against actions taken under traderemedy laws (i.e., antidumping duties,
countervailing duties, and safeguards),
and trade-related issues such as
intellectual property rights and
investment.
Tertiary Issues
Matters that do not bear a reasonably
close relationship to the primary issues,
involve a greater investment in
capacity-building than may be justified,
or that are best left in the hands of
regional Caribbean institutions. These
include such matters as the governance
of international organisations and traderelated investment measures.
Preferential Access to Foreign
Markets
Guyana should make the most of
existing preferential arrangements,
seeking their continuation for as long
as possible and even their expansion,
but policymakers must be prepared
for their gradual diminution in value
and eventual disappearance
altogether.
Principle I.C
Key issues in preferences
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Sugar and rice
Special and differential treatment in
the WTO and FTAA
Parity with least-developed countries
for HIPC countries
Reciprocal Access to Foreign
Markets
While negotiators should seek whenever
possible to include principles of S&D
treatment in these agreements, they
must also be prepared to make specific
requests for tariff commitments on
products of interest to Guyana’s
exporters, and to make reciprocal
commitments for reductions in the
country’s own tariff barriers.
Principle I.D
Key issues in reciprocal
negotiations
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Using bound rates as the base
rates in negotiations
The meaning of “substantially all”
in the context of GATT Article XXIV
A Voice for Trade in Related
National Policy Debates
MOFTIC has a key role in promoting
the principles of competitiveness and
compliance.
Principle I.E
Defense of Guyana’s Interests
MOFTIC must be prepared to
defend the country’s trade interests
in regional and multilateral bodies
Principle I.F
Key issues for the defense of
Guyana’s interests
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Dispute-settlement mechanisms in
the WTO and elsewhere
Antidumping law
Empirical Preparation
The most immediate need for
MOFTIC is to enhance its analytical
capacities in advance of trade
negotiations.
Principle II.A
Key issues in empirical
preparation
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Identification of sectoral-based
negotiating objectives (primary
issues)
Identification of rules-based
negotiating objectives (secondary
and tertiary issues)
Internal Cooperation,
Coordination, and Colaboration
Coordination between ministries,
and between the government and
the private sector, is essential at all
stages of trade policymaking.
Principle II.B
Key issues in internal
coordination
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Inter-ministerial coordination at
the Cabinet and working levels
Consultation with the private
sector
External Coordination
Negotiations with other countries
involve not only the exchange of
commitments, but also the
establishment of coalitions in larger
negotiations. MOFTIC must work
closely with like-minded countries in
general and its CARICOM partners in
particular.
Principle II.C
Enhancement of MOFTIC
Resources
The financial, physical, and human
resources available to MOFTIC must
be increased to a level
commensurate with the ministry’s
responsibilities.
Principle II.D
Key issues in MOFTIC’s
resources
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Enhanced representation in Geneva
Increase in MOFTIC staff size
Improvement in MOFTIC staff capacities
Improvement in MOFTIC information technology
Establishment of a trade reference library
Improving MOFTIC’s dissemination of information
Improvement in the trade data system
Better coordination with the donor community