The Framework for Managing Dominica S Trade Policy

THE FRAMEWORK FOR MANAGING DOMINICA’S TRADE POLICY

INTRODUCTION

The current stage of trade policy formulation and implementation is the most negotiation-intensive that Dominica and the rest of the Caribbean have ever faced. Dominica is currently involved in the new World Trade Organisation (WTO) multilateral trade round agreed to at Doha and the steadily advancing negotiations at the Free Trade Area of the Americas (FTAA). In addition negotiations have begun under African Caribbean and Pacific Group of Countries – European Union (ACP-EU) Cotonou Agreement in September 2002. There are also the continuing efforts to deepen the regional and sub regional integration movement at Caribbean Community (CARICOM) and the Organisation of Eastern Caribbean States (OECS) and proposed trade agreements to be negotiated between CARICOM and third countries including Canada, Mercosur and Costa Rica.

These negotiations form part of an increasingly growing trade agenda that now goes beyond traditional issues of border measures such as import tariffs and non-tariff measures on goods to include agreements on trade in services, trade related intellectual property rights, investment, government procurement, environment, electronic commerce and trade facilitation.

As these negotiations proceed Dominica is confronted with the challenge of ensuring that its economic and development interests are taken into account and safeguarded. This requires that Dominica undertake the necessary research and analytical work on the economic and social implications of the negotiations, develops its negotiating positions on the various issues and participates in the many preparatory and negotiating meetings. These positions must encompass the interests of all stakeholders in Dominica. This places tremendous demands on the limited resources of a small economy like Dominica.

In addition to external trade negotiations, trade policy formulation is also concerned with export competitiveness and development. This involves formulating and implementing the right policy measures necessary to improve the supply capacity and competitiveness of the domestic productive sectors. It also involves activities aimed at promoting the goods and services produced in Dominica on the export market. Associated with this are activities surrounding the development of standards and quality for Dominica’s exports. With regards to the domestic arena, the management of trade policy relate to creating the right environment in which businesses and consumers conduct trade and commerce. In that regard the development and implementation of effective fair competition and consumer protection policies are important. Standards are also important for goods imported into Dominica in order to ensure the protection of the health and safety of consumers.

In order to address all the above issues there needs to be an effective mechanism and framework for managing Dominica’s trade policy. In response to this need a new framework was recently put in place by Cabinet and which is outlined below.

MANAGING DOMINICA’S TRADE POLICY

The Stakeholders

Managing Dominica’s trade policy to address the above agenda requires the active involvement and participation of all the stakeholders. Four groups of stakeholders can be identified. The Ministry of Foreign Affairs, Trade Labour and the Public Services (FATLPS) being responsible for the overall development and implementation the trade policy of Dominica needs to interface with these groups at one point or another in its work.

The first group is the political directorate in the Cabinet. FATLPS through its Minister advises and makes recommendations on policy decisions and legislative, regulatory and administrative changes. The FATLPS also receives policy directives from the Cabinet for implementation.

The work of the Ministry requires a significant level of interface with other Government Ministries, Departments and Agencies, which constitute the second group of stakeholders. This includes the Ministries of Agriculture and the Environment; Legal Affairs; Finance and Planning; Communication Works and Housing; and Industry, Enterprise Development and Physical Planning. There also needs to be close collaboration with the Departments of Customs, Statistics, Immigration and Labour and agencies such as DEXIA, NDC and the Bureau of Standards.

The third group are the non-state actors. In order to formulate and implement Dominica’s trade policy there needs to be constant dialogue with the private sector, labour unions and civil society.

Finally the media is playing a greater role in the shaping of the minds of the nation and hence they have a critical part to play in the management of trade policy in Dominica. The FATLPS will have to make use of the media to inform and educate the public on trade policy issues.

The Scope of Activities

The activities in managing trade policy can be categorized under the following broad headings:

a)Technical

b)Advocacy/Representational

c)Administrative

Technical

This speaks to the process whereby positions are defined through thorough analysis of the issues, determination of the interests of Dominica, and the elaboration of an appropriate approach.

Advocacy/Representational

This deals with the actual insertion of the Dominica’s positions into the various fora and at various levels, whether in the documented form or participation at meetings. The Caribbean Regional Negotiating Machinery (CRNM), established to coordinate the region’s participation in trade negotiations, is the principal focal point through which this is done for Dominica.

Administrative

This speaks to the actual management of the processes, through the effective allocation and deployment of all available resources, as well as the coordination and sequencing of the various activities that need to be undertaken.

The above will require a number of specific actions to be carried out. These include, but are not limited to; the conduct of studies; the receipt of studies /reports/documents; the analysis of the relevant documents; consultations/discussions to identify the particular interests of Dominica; preliminary elaboration of proposed positions; refinement of these proposals; communications with the appropriate points/nodes at national, sub-regional, regional, hemispheric, and international levels; attendance and participation at meetings at various levels and in differing forums. These are just indications of what is involved in managing trade policy.

Management of Dominica’s trade policy in light of the agenda has been affected by several problems. The principal ones are outlined below.

THE NEED FOR A NEW FRAMEWORK FOR MANAGING DOMINCICA’S TRADE POLICY

The Problem of Integrated Planning and Trade Mainstreaming

One of the principal factors that have affected the management of trade policy in Dominica has been the absence of an integrated planning framework and systems that are supportive of strategic approaches to the implementation of agreed priorities. This in turn has hindered the development of a well-planned and strategically located trade policy for Dominica. The need for an integrated planning framework has been recognised with the Integrated Development Plan (IDP) in the process of development.

However, a further factor has to do with the position of trade issues on the national economic agenda of Dominica and in the IDP development process. It is widely recognised that trade is now a very important instrument of economic development policy. Trade issues are now at the centre of relations between countries. It is also the foundation of the current global economy. It is critically important, therefore, that the importance of trade issues are recognised and become an important part of the national dialogue with the appropriate political oversight from Cabinet.

The Problem of Capacity

The Trade and Marketing Division of the FATLPS has a structure which provides for five (5) Trade Officer positions and the Director of Trade. Currently there are only three (3) technical persons including the Director. This does not include the Permanent Secretary. With this number of staff the Ministry is not able to effectively follow all the trade policy issues under discussion and negotiations in the various arenas around the world. Hence it has been necessary to identify priority issues, which will be monitored. They are agriculture; trade in services; and smaller economies.

The FATLPS requires greater capacity to adequately deal with the trade policy agenda facing Dominica nationally, regionally and internationally. This increased capacity is needed in the form of additional staff, additional training and additional financial resources. Increased capacity would also be achieved through greater input from other Ministries to the work of the Ministry where these other Ministries impact on trade policy. This is dealt with below.

The need to have dialogue with non-state actors also implies developing technical competence within the private sector and civil society. The capacity of non-state actors to influence trade policy will depend of their ability to understand the many dimensions of trade and economic development.

The Problem of Internal Coordination and External Consultation

The operational interface arrangements within the public sector on trade policy issues are currently extremely weak. There is simply not enough coordination between the ministries, departments and agencies on trade policy issues. Decisions are sometimes taken in other Ministries that have significant impact on Dominica’s trade obligations without prior consultation with the FATLPS. On the other hand the FATLPS has sometimes had to make trade policy decisions in areas that impact heavily the work of other Ministries and department without sufficient input from these ministries.

There is also the absence of a system to support constructive policy dialogue between the public and private sector on trade policy in Dominica. All dialogue between the FATLPS and the non-state actors in the past has been ad hoc, sporadic and on the whole ineffectual. There is no ongoing interaction through which the private sector and civil society is helping to shape the trade policy response to the challenges facing Dominica.

The Problem of Knowledge of Trade Issues

There is a general lack of understanding of the trade issues confronting Dominica within the public sector, private sector and in the political directorate. Very few persons within the four stakeholder groups identified above have knowledge of the multilateral, plurilateral and regional trade agreements and their provisions as they affect Dominica. This can greatly hinder the management of trade policy in Dominica.

THE NEW FRAMEWORK FOR TRADE POLICY MANAGEMENT

The National Component

Based on the current trade policy agenda, the scope of the activities in managing trade policy and the problems faced in Dominica a new framework for managing trade policy was established in Dominica. Similar frameworks to a greater or lesser extent exists in Grenada, Jamaica, Trinidad and Tobago and Barbados while more extensive ones exist in the developed countries such as the US, Canada and the EU. The elements of this new framework are as follows:

Cabinet Sub-Committee on Trade and Development
Trade Policy Coordinating Committee (TPCC)
National Trade Policy Advisory Committee (NTPAC)

Cabinet Sub-Committee on Trade and Development

The sub-committee of Cabinet was established to specifically address the trade policy issues as they relate to the economic development of Dominica and make recommendations to Cabinet. The primary benefit of the creation of this sub-committee is the facilitation of quick and timely decision making where necessary for the negotiations. There will be times when Dominica needs to make a decision on a position to be taken at the negotiations at a very high level in a very short time. The process of going to Cabinet for a decision could involve more time than is available. The issue could be brought to the Sub-committee for a quick decision. The Sub-Committee would then report to the full Cabinet.

The Sub-Committee comprises not more than four Ministers and include:

The Minister for Foreign Affairs, Trade, Labour and the Public Service
The Minister for Agriculture and the Environment
The Minister for Finance and Planning
The Minister for Tourism, Industry and Enterprise Development
The Minister for Legal Affairs and Immigration

Trade Policy Coordinating Committee

This Committee is responsible for crafting positions, providing technical and analytical inputs and assessments based on areas of competence and producing comprehensive position papers and policy briefs on the various trade policy issues. Specifically the Committee provides information and advice relating to the negotiation of bilateral, regional and multilateral trade agreements as well as facilitate coordination in carrying out the responsibilities of FATLPS for CARICOM Affairs.

Members of the Committee areSenior or High Level Officials of Government Ministries, Departments and Agencies as follows:

FATLPS
Ministry of Agriculture and the Environment
Ministry of Finance and Planning
Ministry of Tourism, Industry, and Enterprise Development
Ministry of Legal Affairs and Immigration
Ministry of Communication, Works, Housing and Physical Planning
Coordinator of the Local Council for Human and Social Development (COHSOD)[1]
Customs Department
NDC
DEXIA
Dominica Bureau of Standards
Chairperson of the NTPAC

It is proposed that the Chairperson of the NTPAC sit on the TPCC to establish a link and to give a sense of transparency and inclusion.

National Trade Policy Advisory Committee

This Committee comprises representatives from primarily the private sector, civil society, NGOs, media and all other non-government national stakeholders. It serves as a consultative and advisory mechanism, which convenes in order to discuss new or evolving developments or implementation matters. The FATLPSis represented on that committee to establish the necessary link with the TPCC.

The following are the recommended organisations that would be represented on the Committee.

FATLPS
DAIC
Dominica Hotel and Tourism Association
The Trade Unions – one representative for all
National Association of Non Governmental Organisations (NANGO)
The Bar Association
The National Youth Council
Media Association
Dominica Cooperative Societies League Ltd

Committee of Permanent Secretaries

The Committee of PSs provides general oversight or monitoring role of the framework, particularly the TPCC, below the Cabinet Subcommittee level. The Committee will receive periodic (monthly, bi-monthly or quarterly) reports on the functioning of the TPCC. The Committee receives, for information, copies of position papers, recommendations and policy briefs that are submitted to the Cabinet Subcommittee.

The Sub-regional and Regional Processes

Dominica’s trade policy formulation is not carried out in isolation of regional initiatives at the OECS and CARICOM. Dominica is a member of the OECS and CARICOM and has agreed to coordinate its trade policy with the other Member States of these regional organisations. In fact the Conference of Heads of Government of CARICOM has decided that CARICOM will negotiate as one unit within all external economic negotiating fora. Hence the need to develop and maintain a strong link between the national and regional processes is extremely important. Negotiating positions and policies developed at the national level will need to be fed into the regional frameworks.

The CARICOM Framework

The CARICOM framework is constituted of the following:

The Conference of Heads of Government
The Prime Ministerial Subcommittee on External Negotiations
The Council for Trade and Economic Development (COTED)
The Ministerial Spokespersons with responsibility for External Negotiations
The Caribbean Regional Negotiating Machinery (CRNM)

The Conference of Heads is the highest decision making body of CARICOM made up of heads of government and from it there is a subcommittee responsible for overseeing external negotiations. The COTED, which is composed of the Ministers responsible for trade, agriculture, industry and economic development, is responsible for promoting the trade and economic development of the Community. All negotiating positions in principle must be approved by the COTED before they can be articulated at negotiating meetings. The Ministerial Spokespersons were appointed to superintend the conduct of external negotiations in the various negotiating theatres.

The CRNM is the organisation responsible for coordinating the region’s participation in negotiations.

The OECS Framework

The OECS framework is made up of the following:

The OECS Authority
The Economic Affairs Committee (EAC)
The Trade Negotiating Group (TNG)

The Authority is the highest decision making body in the OECS. The EAC is the counterpart to the COTED in the OECS. The TNG is made up of senior officials from the Ministries of Trade and is responsible for developing the OECS positions for the negotiations.

Feeding Into these Processes

The link between the national process and the regional process could follow two tracks. Final negotiating positions from Dominica approved by Cabinet would be forwarded to the OECS Secretariat. At the TNG, followed by the EAC and finally the Authority an OECS position would be developed which would then be forwarded to the CARICOM Secretariat and the CRNM. There, at the COTED, with technical support from the CRNM and the Ministerial Spokespersons a CARICOM position would be formulated for final approval by the Prime Ministerial Subcommittee and the Heads.

Given the nature of the negotiating process, which can involve very short notice, the process can become very fluid in which national positions from the OECS are forwarded directly to the CARICOM/CRNM for the development of a regional position. In certain cases the regional position may need to come back to the national Cabinets for approval.

The Trade Policy Coordinating Committee

Responsibilities

The TPCC shall:

Coordinate the formulation and development of Dominica’s external trade policy;

Recommend external trade policy positions to the Cabinet and the Cabinet Sub-Committee on Trade and Development;

Coordinate the formulation of negotiating positions for all external economic and trade negotiations that Dominica is involved;

Provide technical and analytical input and assessment based on areas of competence and producing comprehensive position papers and policy briefs on the various trade policy issues;

Advise on the readiness of the productive sectors and civil society to face the challenges and opportunities that trade liberalisation and globalisation will bring.