The rising costs of oil and commodities – fuelled in part by the political crisis in the Middle East and North Africa - and the impact on the Region’s economies, was a main agenda item of the just-concluded Thirty-Second Meeting of the Council for Trade and Economic Development (COTED).

The measures the Ministers agreed at the Meeting included the immediate establishment of a technical team to determine a list of goods for consideration for suspension of the Common External Tariff (CET) for a two-year period. The goods must have significant weight in the consumer price index, and must not be produced or have a close substitute in the Region.

In addition, the technical team will determine the reduction or elimination of the CET on some inputs and equipment used in food production and preparation with the aim of reducing the cost of production and delivery of food within the Region. The team is also tasked with formulating strategies to continue the protection of the Region’s consumers, from exploitation, given the adverse impact on Member States resulting from the increased prices on commodities.

Oil prices reached US$115 a barrel in mid-March 2011, an increase of over 40 percent from an average of US$80 a barrel in 2010. As a consequence, the cost of transportation – intra- and extra-regionally – rose, as did the cost for inputs to food production. Food prices rose 52 percent between 2007 and 2008, and in January this year, the Food and Agriculture Organisation (FAO) Global Food Price Index surpassed the high level it had reached in 2008. Food prices are predicted to remain at high levels into the foreseeable future.

After robust and lengthy discussions on the subject, Ministers also agreed that urgent action should be taken to advance the implementation of policy actions such as the Jagdeo Initiative, the Common Fisheries Policy and the Regional Food and Nutrition Security Policy (RFNSP). The Ministers took note of the work being undertaken on the RFNSP Action Plan in response to rising food prices and recommended policy action to address the short-, medium-, and long-term constraints to agricultural development.

The Meeting also urged Member States to make use of the offers made by Belize and Guyana to make land available for increased production of food.

With regard to energy, the Ministers recognized that there were limited short-term options to respond to the increasing energy prices, but recalled the decisions taken at the Special COTED Meeting on Energy held earlier this year in Georgetown, among which were the redoubling of efforts towards energy efficiency and conservation, and the exploration of alternate energy options.

Ministers also agreed that led by the CARICOM Secretariat, the Community must engage in more forecasting, risk analysis, research and development in order to be better prepared for eventualities such as price shocks that are likely to occur.

Ministers underscored that the Region’s responses should be fashioned through partnerships with the private sector, regional institutions and international development partners. They pointed out that the Region could benefit from South- South cooperation, for example with EMBRAPA (Brazil’s Agricultural Research Institution).

The Ministers identified the business community, regional institutions such as the University of the West Indies (UWI) and the Caribbean Agricultural Research and Development Institute (CARDI), and international development partners including the Food and Agriculture Organisation (FAO), the Inter-American Institute for Cooperation on Agriculture (IICA) and the European Union (EU), to collaborate towards easing the consequences of the current price hikes.

Matters related to CSME

Over the two days in Georgetown, COTED also took decisions regarding government procurement, the Consumer Protection Bill and matters related to mergers and acquisitions in the CARICOM Single Market and Economy (CSME)

With regard to Government Procurement, the COTED approved the CARICOM Framework Policy on Public Procurement. The Meeting agreed to submit the approved policy to the Inter-Governmental task Force (IGTF) for negotiation of the Protocol to revise the Treaty of Chaguaramas.

The government procurement market within CARICOM is estimated between US$22-30B annually. The implementation of the regional procurement policy will open up this multi-billion dollar market to suppliers within the Single Market. Ministers also agreed that procurement officials would continue to meet to discuss implementation of the policy arrangements such as an electronic regional information system; a CARICOM electronic public procurement notice board; a joint bidding facility; and e-enabling legislation.

After years of policy and legal review, the COTED welcomed the completion of a Model Consumer Protection Bill, and has recommended it for approval of the Legal Affairs Committee. Key to the protection of consumers is the development of a rapid response system for the exchange of information on dangerous goods.

Meanwhile, the COTED took the first important step towards the extension of the CARICOM rules of competition under Chapter Eight of the Revised Treaty to include a policy for mergers and acquisitions. On the basis of a policy study which was completed in 2010, the COTED endorsed 13 core recommendations which would comprise the central elements of the policy and referred the issue of merger control for inclusion in the revision of the Treaty. The Meeting also approved the reconstitution of the Competition Task Force to refine the policy and to prepare rules for the control of mergers and acquisitions in the CSME.

The decisions were taken against the background of the charge made to delegates at the opening ceremony of the meeting that practical, workable decisions be made, and for the resolution of recurring items on the COTED’s agenda.

CONTACT: piu@caricom.org