David Jessop
IMAGINE AWAKING one morning to the news: 'Taxi drivers across the Caribbean are on strike. Thousands of tourists are stranded at hotels and airports. The main roads into Bridgetown and Kingston remain closed as protesting taxi men and women block access to city centres. In an unprecedented move, cruise ship companies have announced they will no longer call at Caribbean ports until the local dispute with foreign-owned taxi companies is resolved.'
Impossible: probably. Unheard of: no.
In early July, Italy's taxi drivers went on strike, protesting, sometimes violently, against a decision by their Government to liberalise protected professions and services including taxi driving. The result was that the lives of visitors and residents alike were disrupted, damaging Italy's all-important tourism industry.
No one, so far as I know, has proposed in the negotiations for an economic partnership agreement (EPA) with Europe or in the services negotiations at the World Trade Organisation (WTO) that taxi driving in the Caribbean should be liberalised so as to allow in foreign taxicab operators.
TANGIBLE EXAMPLE
Notwithstanding, events in Italy provide a tangible example of the implications of the often impenetrable and largely obscure negotiations to liberalise trade in services. That is to say, negotiations that relate to tourism, the retail trade, transport, telecommunications, the financial sector, including banking and insurance, professional services and a myriad other activities, all of which are defined as a service.
That such negotiations are hardly ever mentioned, points to just how difficult it is for those involved to describe the practical implications of exchanges that tend to focus more on generic concepts rather than on specific activities. Despite this, the sustained competitiveness of the Caribbean services sector, particularly in the context of the tourism industry and financial services, now represents much of the region's future economic viability.
IMPORTANCE OF SERVICES SECTOR
Information on the size and value of the Caribbean services sector to prove this is hard to come by, but a 2004 report produced by the U.K.-based Overseas Development Institute provides statistics that paint a picture of the Caribbean economy six years ago, already dominated by the service sector.
The study, with the singly unappealing title of Special and Differential Treatment in Post Cotonou Services Negotiations has at its end, tables that draw on figures from the United Nations and other agencies. These establish unequivocally, the importance of the services sector to the Caribbean. They indicate that in 2000, 91 per cent of Antigua's total exports were in services as were 87 per cent of those from St. Lucia. Other figures tell a similar story: 83 per cent in the Bahamas, 79 per cent in Barbados, 61 per cent for Dominica, and 61 per cent for Jamaica.
Elsewhere, tables show the services sector accounting for the total value of goods and services produced (GDP) at the level or 76 per cent of GDP in Antigua: 73 per cent in Barbados; through to figures just above or below 50 per cent for Jamaica, Belize and Trinidad, with surprisingly, even Guyana services sector registering a 40 per cent contribution to GDP.
In absolute numbers, table after table detail how the region's tourism, insurance, telecommunications, IT, royalties and financial services industries now contribute vastly more to most Caribbean economies than agriculture. So much so that the value of services exports to Europe for the Caribbean in 2001 amounted to US$2.13 billion.
What this suggests is that the Caribbean is fighting the wrong war, spending too much of its energy on the past and older industries when the future and real opportunity lie elsewhere.
This is not to denigrate the importance of agriculture or achieving a gradual and successful transition away from preference for the many of the hundreds of thousands of farmers and allied workers that it employs. Instead it is to suggest that there is something wrong about the way the region's future is being debated.
PRESSING REGIONAL AND INTERNATIONAL ISSUES
Earlier this month, Caribbean heads of government met in St. Kitts. In their final communiqué, there was language about sugar, agriculture, cricket, international trade negotiations and as one would expect, the many pressing regional and international issues that face the region. But, not once were any of the service industries that much of the region now depends on, referred to. Most noticeably of all, tourism, the region's largest and most successful export industry went unnoticed.
In justification it is suggested by some officials that this was because there was nothing politically pressing affecting tourism (or it seems any other services industry).
But, ask the tourism professionals and they say the reality is very different. They indicate there are many worrying political, economic and environmental issues that threaten the viability of the industry and by extension, the regional economy. They cite climate change and the impact on the region's tourism product and the need to develop positive programmes that fully integrate the region's tourism economy with agriculture and other sectors so as to retain ever more what visitors spend. They also point to the need for politicians to say more about defending and promoting their industry in international trade negotiations and to highlight concerns about issues such as changing U.S. legislation relating to passports.
Very soon the services sector will face a significant challenge. As matters now stand, the EPA negotiations with Europe continue to be dominated by discussions on agriculture and the trade in goods. In these areas, legal texts are about to be discussed. In due course, requests for tariff liberalisation are likely to be exchanged between European and Caribbean negotiators.
Somewhere, just over the horizon no one seems to know when the same will occur for services.
In previous negotiations with Europe, services have been sidelined in texts despite their significance for the region. Whether this happens again depends to a great extent on representatives of industries such as tourism and the financial services sector mobilising and making their voices heard so that those who know their industry or profession best can see their views translated into a negotiating position and text that reflects their interests.
To their credit and almost alone, the Barbados private sector team has been producing papers analysing the implications of services liberalisation. More recently, they, together with the Caribbean Hotel Association and the Caribbean Tourism Organisation, have been working on possible language on tourism for a Caribbean economic partnership agreement with Europe. The Barbados Government has also made it clear, politically, that the interest of the tourism industry will be advanced in international trade negotiations through a special act on tourism within an EPA.
Let us hope that they succeed and that no one has to suffer the political wrath of the Caribbean taxi drivers associations.
David Jessop is the
director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org.
