CARICOM Bi-Lateral Trade Agreements
There are various trade agreements that CARICOM has negotiated bi-laterally. The various trade agreements between CARICOM and its regional counterparts all mark another step in the widening process of trade and economic relations between CARICOM and the countries in the wider Caribbean and Central America. It is an essential element of the response of the Region to the trend towards greater trade liberalization and the conclusion of bilateral trade agreements within the hemisphere.
Nonetheless, members of the private sector are the productive drivers of the economy and the expectation is that there is much to benefit from the expansion in trade regionally. In most instances, Belize has been accorded special treatment in the regional trade agreements. Specifically, the agreements provide for duty free exports from CARICOM Less Developed Countries such as Belize.
The table below provides the value of trade and third countries under the CARICOM bilateral trade Agreements between 2003-2009. The data depicts that Belize has a positive trade balance with the Dominican Republic and a negative trade balance with Cuba, Costa Rica, Venezuela and Colombia.
Table: Belize's Trade with Countries within CARICOM bi-lateral Agreements (US$ 000)
Source: Statistical Institute of Belize
Below are the bi-lateral CARICOM-Trade Agreements and a synopsis of the main provisions.
The CARICOM-Columbia Free Trade Agreement (FTA) was signed on 24th July 1994 between CARICOM and Columbia. (View Agreement) The Agreement is one of the first in accelerating the Caribbean and Latin American integration process. It contains key provisions on trade and economic cooperation between CARICOM and Columbia.
CARICOM Exports to Columbia
Colombia agreed to grant products originating in CARICOM Member States free access to its market for some products and also gradual elimination of non-tariff barriers and for the elimination of tariffs as set out in Annex-i and Annex-ii of the FTA. Those tariffs (duties) on goods listed in Annex-i are eliminated on the entry into force of the Agreement. This means that no duties will be charged on Belize’s exports. Some of those goods found in Annex-i that Belize may have an export interest are: preserved fruits, nuts, jams/fruit jellies, coffee (whether or not roasted), papayas, fresh and dried bananas, cashew nuts, coconuts, fish fillets (frozen), lobster, fish meat (minced or frozen), pepper sauce, red kidney beans, other sauces, condiments (excluding tomato ketchup and mayonnaise), ice cream, bottled purified water, aerated beverages, beer and stout, rum, bitters, other alcoholic preparations, dolomite (whether or not calcinated and not agglomerated, crude petroleum oils, chlorine, essential oils, wood in the rough and sawn, non-coniferous wood, wooden statuettes, wooden handcrafts, baskets and articles of basket work, wicker work, garments knitted or crocheted for textile materials, wooden furniture of a kind used in offices and kitchens.
The Agreement specifies that the tariffs on the products listed in Annex-ii will be eliminated through three equal annual reductions commencing on the date of the entry into force of this Agreement. Most Favored Nation treatment will be applied to products listed in Annex III; this means that the duties will still be charged on these products. The agreement allows for further flexibility since there is an additional list of products chosen from CARICOM's exportable offer, which may receive preferential treatment in Colombia beginning in the fourth year after the entry into force of the Agreement, following negotiations between the Parties.
Imports from Columbia into CARICOM
The agreement provides for the More Developed Countries (MDCs) of CARICOM such as Barbados, Guyana, Jamaica and Trinidad and Tobago, to introduce a programme to eliminate or reduce tariffs on an agreed list of products of export interest to Colombia, commencing at the beginning of the fourth year after the entry into force of the Agreement.
CARICOM Less Developed Countries such as Belize are not required to grant tariff concessions (reduce duties) on imports from Columbia.
Rules of Origin
Rules of Origin is based on the general principle of change of customs classification heading, whenever this involves a substantial transformation process. The establishment of specific requirements by product may be necessary. The origin regime allows for cumulative origin, which allows Member States in CARICOM to source inputs into production from the region and still meet the criteria of originating.
Regarding goods produced in the territories which contain inputs from third countries, the c.i.f. value of materials or products from third countries utilized in the process of production should not exceed 60% of the f.o.b. price of the goods produced or the regional content should not be less than 40% of the f.o.b. price of the goods produced.
CARICOM has signed a bilateral trade agreement with Venezuela in October 1992 which became effective on 1 January 1993 (View Agreement). The objective of the agreement outlined in Article 1 provides for the promotion and expansion of the sale of goods originating in CARICOM through one-way duty-free access to the Venezuelan market, the stimulation of investments and strengthening of the Parties’ competitiveness in world trade, the facilitation of the creation and operation of regional joint ventures and the encouragement of mechanisms for the promotion and protection of investments by nationals of the Parties.
Regarding CARICOM exports to Venezuela, the Agreement provides for duty-free treatment.The list of goods is provided in Annex-i of the Agreement. Some goods that are potential exports from Belize included in Annex-i are: slips and cuttings of citrus and ornamental plants, trees, shrubs and plants of edible fruits, rose bushes, live orchid, citrus, and coffee plants, pepper neither crushed nor ground, and crushed and ground, ginger, nutmeg, and ice-cream and similar products.
Specifically,The CARICOM Exportable Offer has the following treatment:
(i)Immediate duty-free access for products set out in Annex-i;
(ii)Phased reduction of the duties applicable on products set out in Annex-ii as
(a) starting 1 January 1993 - 75 percent of the MFN rate of duty will apply;
(b) starting 1 January 1994 - 50 percent of the MFN rate of duty will apply;
(c) starting 1 January 1995 - 25 percent of the MFN rate of duty will apply;
(d) starting 1 January 1996 - duty-free treatment will apply;
Regarding CARICOM imports from Venezuela, CARICOM member states are to grant most-favored-nation treatment in the application of the Customs Tariff in respect of all importsfrom Venezuela, that is, the same duties that are charged to imports from the rest of the world are similarly charged to Venezuelan products. Hence,Venezuela is not given a concession from CARICOM since the country is not treated any differently.
Rules of Origin
The following are considered as originating in CARICOM Member Countries:
(a) The following items included in Appendix-i of the Agreement that is produced in the territory:
i) Mineral, vegetable and animal products (including those from hunting and fishing) extracted, harvested or gathered, born in its territory or territorial waters and exclusive economic zones; and
ii) Products of the sea extracted beyond its territorial waters and exclusive economic zones, by ships of its own flag or leased by enterprises which are legally established in its territory.
(b) Items wholly produced in the territories of CARICOM Member Countries, when such items are exclusively produced with materials from any of said Countries.
(c) Items manufactured using materials from third countries provided that they result from a process of substantial transformation, carried out in the territory of CARICOM Member Countries, which create a different product characterized by the fact of being classified within the Harmonized Commodity Description and Coding System in a heading different from that of such materials.
(d) Items that are the result of assembly operations which constitute a process of substantial transformation, carried out in the territory of a CARICOM Member Country and in the production of which materials from such countries, from Venezuela and from third countries are used, when the destination port c.i.f. value or the maritime port c.i.f. value of the materials from third countries does not exceed 50 per cent of the f.o.b. export value of such products.
(e) Items that, besides being produced in the territories of CARICOM Member Countries, comply with the specific origin requirements established in Appendix 2 of the Agreement.
The Certificate of Origin is valid for 180 days and should be provided by an authorized agent.
The CARICOM-Dominican Republic Free Trade Agreement provisionally entered into force in December 2001 (View Agreement). The Protocol, together with the Framework Agreement (View Framework Agreement) which was signed on 22 August 1998, represent the most ambitious and far-reaching FTA that CARICOM has signed with a regional counterpart.
Unlike other bilateral agreements between CARICOM and regional countries, the CARICOM-DR FTA is based on reciprocity or two-way trade with the five CARICOM More Developed Countries (MDCs) and non-reciprocity with the Less Developed Countries (LDCs) until 2005. This means that CARICOM LDCs such as Belize were given asymmetrical or special treatment to export the goods covered under the agreement on a duty free basis. Further, the goods exported by the Dominican Republic to LDCs will have to pay the same duties that other countries pay (Most Favored Nation rate).
The Agreement contains provisions to further expand the terms and conditions of the agreement. Negotiations of Intellectual Property Rights and Trade and Services have been deferred until after the completion of negotiations for a Trade Agreement between CARICOM and Canada.
The Protocol (view) specifies the tariff treatment which would be extended to goods that would be traded between CARICOM and the Dominican Republic. The Protocol provides for duty-free trade for about ninety percent of the goods traded between the Dominican Republic and the More Developed Countries (MDCs) of CARICOM -Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago.
For those products not eligible for duty free treatment, the Protocol provides for phased reduction of duties by 2004, and the Most Favorable Nation treatment for the remainder.
In consonance with promoting agricultural diversification, the Protocol takes into consideration the interests of the farming community and provides for Special Trading Arrangements for Selected Agricultural Products. Those arrangements allow for a selected list of agricultural products which would normally be traded duty-free to be subject to duty (the most favored nation rate) in times of glut. These special arrangements relate to trade only between the Dominican Republic and the CARICOM More Developed Countries. CARICOM Less Developed Countries such as Belize are not required to grant duty-free treatment to any imports from the Dominican Republic even though their exports would benefit from such preferential (duty free) treatment upon entry into the Dominican Republic market.
Rules of Origin
The Protocol also sets out the Rules of Origin for each tariff heading of goods.
In addition, it provides an agreed timetable for negotiating a Trade in Services regime and commits the Parties to doing the same for Reciprocal Promotion and Protection of Investment and for Government Procurement.
The Protocol contains special provisions for the reciprocal promotion and protection of investments and allows for the Temporary Entry of Business Persons into the countries of the Contracting Parties.
Belize has not ratified this agreement.
The CARICOM-Costa Rica Free Trade Agreement is the most recently concluded bilateral agreement between CARICOM and a third country within the Central Americas (View Agreement). Signed on March 15, 2003, the Agreement provides for free trade or preferential access for a wide range of products. Some sensitive products have been excluded. A special list of products will be granted differentiated market access between Costa Rica and each of the CARICOM MDCs.
CARICOM less developed countries (LDCs) such as Belize and those in the Organization of Eastern Caribbean States (OECS) benefit from duty free access for exports to Costa Rica and are not required to grant similar access to Costa Rican products. CARICOM More Developed Countries (MDCs) such as Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago, in turn, provide duty free access to most products from Costa Rica. A limited number of products continue to attract duty when traded under the Agreement. Initially, the Agreement had called for some duties to be phased by January 1, 2007.
CARICOM products covered by the Region’s Oils and Fats Agreement will continue to be protected and will not be subject to free trade.
The Agreement contains provisions for the Settlement of Disputes, the application of Anti-Dumping Measures and for the Parties to enhance their Sanitary and Phyto-sanitary Measures. The agreement also provides for a review of the trade agreement by Parties to consider inclusion of provisions on Trade in Services, Investment, Competition Policy and Government Procurement.