Business / Weekend News

Private sector considers EU study on a world without CARICOM

Benjamin Flowers

Several private sector stakeholders gave their opinions on the European Unions’ proposed study on the opportunity costs of not having the Caribbean Community (CARICOM).

While the study is only a proposal to explore the pro’s and con’s of not having CARICOM, many exporters agree that the community’s existence is vital to the longevity and expansion of Belizean exports.

Otto Freezen, chief executive officer of BelCar Export and Import Company Limited, explained that 75 percent of his company’s exports are sent to CARICOM countries. He added that the company name stands for Belize-Caribbean. He also said that his company does serve other markets including the United States, Europe and the Middle East.

According to Freezen, CARICOM preferential market system, which penalizes purchases from non-Caribbean countries with large tariffs, allows for his company to provide the Caribbean with red kidney beans at a slightly higher price. He underscored that without CARICOM this would be impossible, and would represent an average loss of US$3.5 million per year.

Freezen believes that the data gathered from the study can be useful, but shuns the idea of not having a CARICOM.

Trade statistics indicate that citrus is one of Belize’s key exports, reaching markets as far as the EU and Asia. According to Nickito Usher, group marketing and sales manager for Citrus Products of Belize Limited, 30 percent of those exports go into the CARICOM market.

“Belize is one of the only exports of citrus to CARICOM,” Usher said, explaining that CARICOM countries have to pay a 40 percent tariff if they buy citrus from outside the Caribbean.

He added that having CARICOM is becoming increasingly important, since other countries are signing preferential agreements with importers such as Mexico and Japan. Due to Mexico and Japan’s agreement, Belize’s citrus exports fell from 250 containers at 90 drums each, to only 10 containers at 90 drums each.

Usher believes that the data from the study will show in what other areas CARICOM can be beneficial to member states, but like Freezen, does not believe that CARICOM’s end would benefit Belize.

The Statistical Institute of Belize heralded shrimp as one of the country’s most vibrant exports, and Mr. Alvin Henderson of Royal Maya Shrimp Farmers, says a significant amount of that shrimp goes to CARICOM.

Henderson explained that in 2010 Belize’s shrimp exports were valued at $24.6 million, by 2013 it was worth $86 million. He added that CARICOM was largely responsible for the expansion, and believed that the data from the study would only serve to improve the relationship between Belize and CARICOM but doesn’t think highly of a world without it.

The banana industry had the only dissenting opinion about CARICOM or the study. Sam Matthias of Banana Enterprises Limited said that Belize’s bananas have no real presence in the CARICOM market. He added that with the structure of the market doing business with CARICOM would not be lucrative, so his company would not be at all affected by a world without CARICOM.

On May 26, Ewout Sandker, head of cooperation, delegation of the EU to Guyana, Suriname and Trinidad and Tobago and the Dutch Overseas Countries and Territories, the EU announced that it is willing to fund a study that would explore the opportunity costs of not having CARICOM in place.

He explained to a gathering of senior government officials, statisticians, and representatives of international organizations that, in the 1980s, the EU conducted a similar study to explore the opportunity costs of not having a fully integrated market. He recounted that the results of the study provided favorable results and pointed to opportunities for the private sector in Europe to mobilize.

“If you can’t measure it; if you don’t know the compliance at national levels with different areas of integration, how can you allocate resources in a sensible way? If you don’t know, you cannot prioritize. If you don’t know what the impact of the regional integration process is, how can you argue that it is a good thing? How can you argue that you should go further and deeper,” he queried.


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