Audrey Marks, Contributor
Recently, while spending a few days in Washington, visiting the head office of the American Chambers of Commerce (AMCHAM) and the Inter-American Development Bank (IADB), I witnessed the full force of private/public sector partnerships to transform businesses and economies. In the midst of the financial meltdown on Wall Street; Washington's alphabet streets were buzzing with international deal-making.
At the Association of American Chambers of Commerce in Latin America and The Caribbean (AACCLA) conference, various presentations made it clear that over the last decade private sector leadership in Latin American countries have taken the lead in trade negotiations with the USA and are reaping amazing results.
For most of the last decade, Jamaica, its CARICOM partners, together with the Dominican Republic and Haiti, organised as CARIFORUM, focused their energies on negotiating the European Union Economic Partnership Agreement (EPA). A team of international negotiators was recruited and a regional negotiating machinery instituted specifically for the process.
The discussions on the draft agreement in the Jamaican Parliament show clearly that many of our parliamentarians have yet to grasp the hard realities of today's international economic environment. The first of these hard realities is the substitution of trade for aid as a component of economic development. Jamaica and the other former colonial territories in the Caribbean must now abandon the idea that they are entitled to aid in perpetuity as some form of reparation for colonial exploitation. The developed nations with whom we seek to negotiate agreements have no intention of transferring their tax revenues to support other countries' budgets.
Impending termination
The second hard reality is the impending termination of preferential trade arrangements, as globalisation increasingly forces all goods and services to compete in one global market. We need to come to terms with the fact that preferential trade arrangements are a thing of the past, and accept that the goods and services we produce and exchange internally must approximate the standards of quality and the cost of production of these same goods and services globally. There is no good reason why the consumer of any country should be asked to pay a higher price for a product than that which obtains in the cheapest markets.
The economic future of Jamaica therefore will be decided by our ability to compete and negotiate. As Prime Minister Bruce Golding warned his colleagues in the Jamaican Parliament, even if there is a valid case to be made for development assistance, there is no entitlement and as a country and as a region we must "purge this mendicancy". We must begin to make our way in a world in which trade has grown 500 per cent in real terms since 1980 and its share of the world GDP has risen from 36 to 55 per cent.
While the agreement with the European Union offers opportunities which can be exploited to our benefit, the EPA alone will not satisfy Jamaica's needs for trade and investment. We must, as a matter of urgency, expand our economic horizons and establish a far more dynamic presence in other international capital markets as well.
Priority
At the 19th Inter-Sessional Meeting of CARICOM, it was stated that there were a number of other countries with whom negotiations are scheduled, including Canada, the United States, Costa Rica and the Dominican Republic. The question is, when will these negotiations be completed? Judging from the time it took us to negotiate with the European Economic Community and looking at the time table for the other negotiations, it is clear that we cannot allow CARIFORUM to determine Jamaica's economic future. Even if we can't negotiate trade agreements unilaterally, we can certainly move at a quicker pace to establish more mutually beneficial economic relations with other countries. As I have indicated before, our priority in this regard is the USA.
For over a century the US has been Jamaica's major trading partner, and the US market together with US entrepreneurship and capital have been at the centre of every significant expansion of the Jamaican economy. Today, the US provides the largest number of tourists to our island and is the major market for bauxite and alumina. At the same time it is home for the largest number of Jamaican citizens who reside outside of the island and the remittances of these citizens account for the single largest inflow of hard currency.
Greater sense of urgency
It is against the background of these realities, that we insist on a greater sense of urgency in our efforts to build an economic partnership with our neighbour to the north. The fact that at present, the US economy is facing major challenges does not diminish the reality that it just happens to be the most powerful industrial nation in today's global economy. The underpinning self-interest of the capitalist system will not allow failure. The US economy will rebound.
There are two major reasons for Jamaica's anaemic growth over the past two decades; one, a failing education system, and two, a hostile environment for local entrepreneurs.
As I have argued before, a successful partnership with the US requires that Jamaica takes immediate steps to improve the productivity of the labour force. The weakness of our education and training system is reflected in the fact that some 70 per cent of our labour force is neither certified nor trained for the jobs they perform.
Productive labour force
Jamaica needs a far more productive and trained labour force to compete in today's world economy in which the service sector is the fastest growing component. From the last decade of the 20th century, the average annual growth in trade commercial services overtook the trade in merchandise. In the United States, services generate 72 per cent of GDP, 30 per cent of US exports and 75 per cent of total employment.
The current administration, led by the prime minister, the finance minister, Audley Shaw, and the minister of industry and commerce, has articulated a pro-business mandate to underpin the growth and development of the Jamaican Economy. However, with all the "fire-fighting" that is currently consuming the Government's focus, the private sector must take the initiative in actualising this mandate
Even with our weak showing in the Global Competitiveness Index for 2007-2008, Jamaica's tourist industry has a real potential for expansion and diversification even while we work on improving of education and training; this we should begin to exploit now. The expansion of tourism is particularly important in light of the projected slowdown of economic growth in the Caribbean over the next two years from 5.7 per cent in 2007 to 3.8 per cent in 2009.
Main determinants
While our ability to trade and negotiate will be the main determinants of our economic future, we must utilise every advantage. There are many individuals and organisations ideally placed to make a significant contribution to the building of a broader and more mutually beneficial economic relationship between the private sectors of Jamaica and the USA. One such organisation is the American Friends of Jamaica Inc, which was established in 1982 to assist Jamaican charities in the areas of education, health care and human and economic development.
This organisation has been chaired by a succession of eminent Americans some of whom have served as US ambassadors to Jamaica. These include former US ambassadors, Lauren Lawrence, Glen Holden and Sue Cobb. The membership includes successful entrepreneurs in a range of enterprises. The current US ambassador, Brenda LaGrange Johnson, is already active in the AFJ and brings to the table both business capacity and experience.
The prime minister has just completed a successful trip to the USA. The reports from Washington indicate that the stage has been set for Jamaica to take the lead in negotiation for trade opportunities currently being enjoyed by our Latin American neighbours.
Framework for action
As a member of the Jamaican private sector and as president of the American Chamber of Commerce, I would like to indicate the chamber's readiness to work with all stakeholders including the Government of Jamaica and its agencies here and abroad, the US Embassy in Jamaica and the American Friends of Jamaica Inc to achieve this objective. Our immediate aim is to establish an effective mechanism endorsed by the Governments of both countries for the meaningful collaboration between both private sectors to expand investment, trade and cooperation.
Audrey Marks is president of the American Chamber of Commerce in Jamaica. Feedback may be sent to columns@gleanerjm.com
