As the 3rd edition of the African Caribbean Trade and Investment Forum kicked off in the capital Nassau in the Bahamas, Pamela Coke-Hamilton, the Executive Director of the International Trade Centre, said it was time for the two regions to explore the possibility of establishing a free trade agreement (FTA).
"It is time we begin to explore the possibility of an FTA between Africa and the Caribbean to remove these artificial barriers and create new opportunities," she said during the opening ceremony.
In principle, such an agreement would reduce barriers to imports and exports between Africa and the Caribbean by eliminating all or most tariffs, quotas, subsidies, and prohibitions.
Trade between Africa and the Caribbean has potential to advance. To be exact, ITC projects that trade in goods and services between the two regions will reach $1 billion in value by 2028.
But the ITC boss emphasised that getting to that number will mean getting rid of trade frictions and getting more investment into the right sectors.
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According to the ITC, the last decade alone shows that the share of African exports to the Caribbean has been decreasing with currently less than 0.1 per cent of African exports going to the Caribbean and less than 3 per cent of Caribbean exports going to Africa.
At the same time, the exports in either direction remain far more concentrated in a handful of sectors with little value addition. They include unprocessed chemicals and minerals.
"That is despite the potential that we see in exports like machinery, electricity, plastics, global processed food products and mineral products," she noted, adding that too often what is holding that exports potential back is high tariffs and non-tariff barriers.
The barriers are often more pronounced for the goods that have undergone processing, meaning that value addition which is critical for better jobs and livelihoods becomes counterproductive once it is clear what exporters face at the borders.
Trade in services such as travel and transport between Africa and the Caribbean seems to be performing well, and that is the case perhaps because the Caribbean is a major tourism region.
However, trade in goods is yet to take off.
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Coke-Hamilton, a Jamaican national, stressed that trade agreements are one way to help bring down barriers and open new opportunities, making case for trade and investment cooperation between Africa and the Caribbean to unlock opportunities in specific value chains.
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In particular, she indicated that an FTA would enable the two regions to address the increasing challenges like supply chain disruptions, food insecurity, environmental degradation, and the Covid-19 after mass, which have undone years of economic progress and continue to rip the world apart.
"If we are going to tackle these challenges head on, we need more trade and investment between Africa and the Caribbean. That's what will make economic transformation possible and in a way that benefits both regions by drawing on our shared ties, hopes, and potential," she noted.
Such an agreement exists between the Caribbean and Europe.
"If a region as small as the Caribbean can negotiate a reciprocal Free Trade Agreement with Europe, then why should we not be able to do one with Africa?" Coke-Hamilton wondered.
The Economic Partnership Agreement was signed in 2008 between the EU and Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St Lucia, St Vincent and the Grenadines, St Kitts and Nevis, Suriname, Trinidad and Tobago
