Although much of the pre-summit focus was the contentious question of reparations for chattel slavery, a significant outcome of last week’s conference of Commonwealth leaders was the attention they paid to bolstering trade and investment between their countries.
The heads of government endorsed an ambitious goal of doubling intra-Commonwealth trade to US$2 trillion by 2030, and declared an intent of galvanising the bloc as a “modern economic partnership, open, inclusive and resilient, capable of advancing sustainable growth and shared prosperity in an increasingly complex and turbulent geo-economic environment”.
This is a matter that should be of significant interest to Jamaica and other Caribbean members of the Commonwealth, mostly small island and developing island economies, which have been badly hit by the undermining of international trade rules, the disruption of global supply chains and the deepening uncertainties caused by the climate crisis.
These long-standing problems were, of course, exacerbated by US President Donald Trump’s unilateral imposition of high tariffs on trading partners and his bending of the rules-based order. However, the Caribbean cannot assume that last week’s chastening defeat by Mr Trump’s Republicans in America’s midterm elections will mean a fundamental shift in US policies and/or an easing of pressure on developing economies. Even with greater congressional oversight, Mr Trump has two years of his presidency remaining, with significant powers to govern, including the execution of foreign policy.
ACCELERATE EFFORTS
In other words, as this newspaper has consistently urged, Jamaica and its Caribbean Community (CARICOM) partners, notwithstanding any shift in the political alignments in the United States, should accelerate efforts to expand economic and political partnerships, including with countries of the Global South that share common interests. The Commonwealth is one platform from which to pursue that agenda.
With 56 members and 2.7 billion people, a third of the world’s population, and a combined GDP of US$14.5 trillion, the Commonwealth accounts for around 15 per cent of world trade. But the bulk of that commerce is by a handful of rich members or big economies, such as Britain, India, Canada, Australia, Singapore and South Africa. Indeed, with over 30 of its members categorised as small economies, each accounts for less than a quarter of one per cent of world trade. Moreover, intra-Commonwealth trade is less than three per cent of world trade and the equivalent of a fifth of the bloc’s trade with other countries.
It is this potential and deficiencies that leaders indicated they wanted to harness, but without transforming the Commonwealth, which rests on no formal agreement but a set of principles, into a free trade area or customs union.
Rather, as last week’s post-conference communiqué indicated, the strategy is to buttress the effort with “regulatory alignment”, including a model law on digital trade and support from the Commonwealth Investment Network (CIN), an agency that mobilises public and private capital primarily for climate resilience investment in poorer member countries.
“We commit to deepen practical economic cooperation across the Commonwealth, harnessing our collective strengths, networks and diversity to unlock new opportunities for trade, investment and sustainable development,” the leaders said.
RESCUSCITATION OF WTO
They also called for a resuscitation of the World Trade Organisation (WTO), with a “fully functioning dispute settlement system”, a process that America sidelined long before the advent of Mr Trump’s presidency. Notably, too, they proposed a return to global trade negotiations with a reform agenda that includes a “development” component, suggesting a return to the agenda of the stalled Doha Round, at which the concerns of developing countries topped the list.
The Gleaner doubts that the broader trade agenda, as outlined by the Commonwealth, will gain traction anytime soon from rich nations, especially the United States. Which doesn’t mean that it ought not to be pursued. However, Jamaica and CARICOM should operate on several tracks at the same time, making use of political momentum opened by the summit.
Indeed, with his country buffeted by Mr Trump’s tariffs and belittling comments about his sovereignty, the Canadian prime minister, Mark Carney, has been seeking to broaden Canada’s economic and political relationships. For instance, while Canada and the European Union have an existing economic and trade agreement, late last month they announced an Alliance for the Future partnership that stopped short of Canada’s associate membership of the EU, as initially proposed, but covers areas of defence procurement, scientific research, and investment, among other issues.
MIDDLE POWERS
Although Mr Carney’s advances have been primarily to the world’s middle powers, in St John’s, on the sidelines of the Commonwealth summit, he met with CARICOM leaders, hoping to, according to Canadian officials, “build momentum for the renewed Canada-CARICOM Strategic Partnership”.
Under the more than four-decade-old Carib-Can agreement, Canada offers CARICOM non-reciprocal duty-free entry to the Canadian market for most of the region’s exports. The programme, however, has not been transformative. Perhaps it should be built upon, with a strong economic and political component.
The Caribbean should also seek to expand its burgeoning economic relations with India, the world’s sixth-largest economy, which has a cultural footprint in parts of CARICOM. The Commonwealth’s declaration is also a timely opportunity for CARICOM to accelerate and deepen its economic relations with African countries. The African Union has not only designated the diaspora as the fifth region of the continent, but the Africa Export-Import Bank has set aside billions of dollars for investment in the region.
This momentum mustn’t be wasted.
