TRADE POLICY REVIEW OF THE ORGANIZATION OF EASTERN CARIBBEAN STATES (OECS)
U.S. Statement delivered by Rachel Bae
June 17, 2014
Thank you, Chair. The United States welcomes the opportunity to participate in the third WTO Trade Policy Review of the Organization of Eastern Caribbean States (OECS)-WTO Members. We are pleased to greet the WTO Members of the OECS delegation to engage in this key component of the WTO’s work. We greatly appreciate your reports for this meeting, which we found to be useful in learning more about OECS WTO Members’ trade, economies and most importantly, efforts in recent years to integrate and diversify their economies. As always, we are grateful to the Secretariat for its report on these countries’ trade and economic environment. Together the reports helped us to better understand the developments that have taken place in each OECS WTO Member country, and in the region, since the last Trade Policy Review. We would also like to thank the discussant, Dr. OTACHI KAKONGE (Kenya) for his insightful remarks today.
At the 2007 trade policy review, we noted the strong commercial relationship that we share with East Caribbean States, based on geographical proximity and historic ties as well as personal and family ties that join us.
We are particularly pleased that the OECS WTO Members together with the other members of the Caribbean Community concluded a Trade and Investment Framework Agreement with the United States in May of 2013. This agreement represents our mutual intent to expand trade and investment working through a Trade and Investment Council established by the agreement. The Trade and Investment Framework Agreement replaces a prior trade agreement and reflects developments in the relationship between trade and investment with environmental standards, worker rights, the transparency of laws and regulation, innovation and technology, and bribery and corruption. The trade preferences available under the Caribbean Basin Initiative, which have been in place since 1984, are also central to our trading relationship with Caribbean states. On the request of certain East Caribbean States and other members of CARICOM, we have initiated a review to consider their access to additional preferences available under that program.
Exports of goods from OECS countries to the United States have increased during the past several years. The United States is also the primary source for tourists for most of these countries. Total two-way trade in 2013 was over $1.3 billion.
The OECS WTO Members have made impressive strides in their efforts to integrate regionally and globally since the 2007 TPR. These achievements include the trade and economic commitments reflected in the Revised Treaty of Basseterre, the creation of a Competition Commission under CARICOM and a Competition Treaty at the OECS level, as well as participation in the CARIFORUM-EU Economic Partnership Agreement. The OECS WTO Members have also made advances to comply with WTO Agreements, such as the TRIPS Agreement and export subsidy commitments. We commend all of these accomplishments.
While we applaud and recognize these regional achievements, we notice that many of the issues that this Body identified in 2001 and again in 2007 with respect to participation in the WTO system have not been fully addressed. For example, the Secretariat notes several areas where legal or regulatory amendments are needed to comply with WTO provisions in most of your countries, such as in subsidies and countervailing laws. Import licensing is also still prevalent and the Secretariat reports that there have been no changes to import licensing regimes since the last review. Unfortunately, the administration of these licenses can be trade restrictive, and we hope that the OECS countries will review their regimes to ensure that trade flows unimpeded in light of the Import Licensing Procedures Agreement. Notifications consistent with WTO obligations continue to lag, including SPS and import licensing notifications. In some cases, applied tariff rates exceed bound rates. As was the case in 2007, none of the OECS-WTO Members is a party to the WTO Agreement on Government Procurement and none have functioning competition legislation in place.
We welcome the news that some countries have taken steps to comply with their 2007 commitment to eliminate export subsidies no later than 2015. We look forward to hearing what actions are being taken by each of the OECS Members to inform investors that currently benefit from the export subsidy schemes that the programs will be eliminated by 2015.
The new EPA agreement with the European Union, the CARICOM agreement on a Common External Tariff and the new commitments, among other things, to liberalize the flow of goods, services and investment under the Revised Treaty of Basseterre all hold great promise to increase trade within the region and with third parties. These agreements serve a critical need to pool and maximize resources and foster regional integration and help contribute to greater resiliency to external shocks. However, we note that the power of these agreements to cut costs and diversify trade is undercut by complex, if not contradictory, webs of national policies, regional undertakings, and exceptions. We also understand that the implementation of the commitments has fallen behind schedule. OECS countries also continue to apply an array of charges and fees on imports beyond tariffs. All of these practices undercut the potential gains in efficiency and reduced transaction costs that are the core objective of the agreements, besides increasing costs for citizens and businesses.
We look forward to continued work with WTO Members of the Organisation of the Eastern Caribbean States, both bilaterally and within the WTO. We especially hope to work closely with the OECS Members in implementing the WTO Trade Facilitation Agreement, recognizing the considerable benefits that will accrue to countries like the OECS Members.