The news has been slow in filtering through, but it’s quite a big deal for the Caribbean in the Brexit scheme of things.
Britain and a number of Caribbean countries under the Cariforum banner have signed a post-Brexit ‘trade continuity deal’.
It’s a sort of memorandum of understanding assuring each other that once - and some even suggest if - the United Kingdom formally exits the European Union, the Cariforum members and the UK will have access on special terms to each other’s market.
According to a British government statement, the trade continuity deal “eliminates all tariffs on all goods imported from the signing Cariforum states into the UK, while those Caribbean states will continue gradually to cut import tariffs on most of the region’s imports from the UK.”
It also says: “Based on current trade flows, exporters of bananas and other fruits and nuts could save over £14 million a year in tariff charges that could apply if the agreement wasn’t in place, while exporters of sugarcane and other sugar products could save more than £20 million.
“Consumers in the UK will continue to benefit from more choice and lower prices for products from these countries.
The agreement also covers the services sector, including tourism.
British tourists spend over $US 1 billion a year during some 900,000 visits to the Caribbean, according to the British government data.
It has been signed by nine countries, including Barbados and Jamaica.
“A further five countries, including the Bahamas and Trinidad and Tobago, have agreed to the deal in principle and are "expected to sign shortly", according to the Department for International Trade.
The Cariforum countries are Barbados, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St Kitts and Nevis, St Lucia, Suriname, Trinidad and Tobago and St Vincent and the Grenadines.
Trade between them and the UK was worth $US 3.25 billion according to 2017 figures.
The UK, traditionally an important export market for the Caribbean due to past historical ties, is the region's main market in the EU for bananas, sugar cane and rum following a pattern - albeit in changed circumstances - from its plantation and empire era in the region.
The Department of Trade says “the UK bought 100% of Saint Lucia’s banana exports, as well as 69% of Belize’s banana exports in 2017. In addition, 81% of Guyanan, and 64% Jamaican sugar cane exports went to the UK.”
This trade continuity commitment might be a bigger deal for the Caribbean countries than it is for the UK.
In the Brexit scheme of things, it hardly causes a ripple on the vast sea of trade deals the UK now needs to sign if, when and how it eventually leaves the EU.
Caribbean countries also have existing trade arrangements with the EU on two fronts; with the Cariforum grouping as well as part of the African, Caribbean and Pacific (ACP) group of former European colonies.
While having guaranteed post-Brexit access to the UK market is vital, the EU market is critical for them.
The EU is Cariforum’s second-largest trading partner, after the US.
The region’s trade with the EU according to 2017 figures, although showing a significant imbalance, is nevertheless valued at over $US 12.5 billion.
Of that, the EU’s exports to the Caribbean market are valued at a little over $US 8.00 billion, while the region earns about half that amount from its exports to the European market.
The European Commission reports that “the main exports from the Caribbean to the EU are fuel and mining products, notably petroleum gas and oils, bananas, sugar and rum, minerals (notably gold, corundum, aluminium oxide and hydroxide), iron ore products, and fertilisers.”
The Caribbean’s main imports from the EU are “boats, ships, cars, constructions vehicles and engine parts, phone equipment, milk and cream, and spirit drinks.”
Cariforum members also benefit from trade access to the EU as part of the African, Caribbean and Pacific (ACP) group of former European colonies.
Trade with ACP countries represents more than 5% of EU imports and exports. The EU is a major trading partner for ACP countries.
But while the Caribbean’s Cariforum countries might relish this early free trade engagement from the UK, it comes amidst warnings that they are being pressured into signing what some campaigners have called “these potentially damaging trade deals”.
They caution that with Britain keen to fill the void left by its planned EU exit these countries are being forced to “sign-up blind”.
The fair trade charity Traidcraft Exchange, say countries such as those in Cariforum are being rushed because of the threat of a no deal Brexit.
It claims they are being “pressured to sign up blind without knowing the value of the deals with a warning they will otherwise be lost."
The UK has been signing up a number of these ‘trade continuity deals’ mainly with developing countries.
While it has had indications from major trading nations that they also would be interested in signing up to trade deals with the UK, negotiations on those can only start once the UK formally departs the EU.
About half of all UK trade is with the EU and it would need to sign individual trade deals with the countries which already have existing pacts with the bloc and which the UK's EU membership guarantees.
That totals around 40 trade agreements with more than 70 countries.
With Brexit, all of that will be scrapped.
These trade continuity deals are meant to smooth the way as the UK embarks on touch negotiations to secure its own trade pacts outside the EU.
Perhaps the most important trade deal it will have to negotiate will be with the same EU.
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