Speech on the Occasion of the Information Session of the European Union’s Public Consultation on Trade and Development Communication, July 12, 2011
I am pleased to be able to address you today at the start of this information session. The European Union has been a trading partner of Guyana’s from before the European Union existed in its present integrated form, and it had traditionally afforded us preferential access for our exports. As a result of this, Europe became one of our most important trading partners and our entire economy became dependent upon trade with Europe.
This Communication which the EU is seeking to develop is an important policy document which goes to the heart of Europe’s relationship with the developing world. It is intended to replace the Communication of 2002 which had defined the trading link with developing countries. The Communication on Trade and Development of 2002 saw trade as a priority area for development policy and as a means of lifting developing countries out of poverty and increasing their economic growth.
This last Communication stated that from 1970 to 1999, the share of developing countries of worldwide merchandise exports rose from 25% to almost 33%. This phenomenon accompanied a shift from primary commodities to manufactured goods. Exports from developing countries to Europe also grew rapidly over the period so that, by the year 2000, developing countries accounted for forty-two percent of imports into the European Union.
The Communication of 2002 emphasised effective market access for exports from developing countries and a rules-based multilateral trading system as well as regional integration. It also featured an EU commitment for trade-related development assistance. However, many countries were not part of the integration process and in actuality the export share of forty-nine Less Developed Countries has been falling. It is necessary now to devise means of integrating these countries into the system of world trade and to find ways to increase their share of world exports without skewing the balance of their economies.
The world has changed since 2002, and the tide of globalisation has engulfed many developing countries even as others have prospered from the increasing openness of their economies. It is imperative now to devise a new Communication which takes into consideration the effects of globalisation, the increased opportunities for trade among developing countries and the impact of the global financial crisis which engulfed many countries of the developed world and had spin-off effects upon developing countries as trade contracted. For the developing world there are now also more stringent rules regarding the environment and the use of child labour in industry.
For Guyana, trade with Europe has been increasing in recent years. In 2006, exports to Europe represented 29% of all exports while imports from Europe accounted for only 13% of all imports. Guyana’s exports to Europe have traditionally consisted of sugar, rice, rum, precious stones and timber products. Exports of fish have been increasing since 2004 when Guyana was certified for fish exports to Europe. The export of traditional products has also been growing. In 2009, forest products exports to the EU amounted to some US$4.55m and by 2010 this had grown to US$8.1m, a 90% increase. Exports of rice have also increased significantly. For the first half of 2010, exports of rice increased by 32.8% over the same period in the previous year. It is necessary, however, to note that, while the volume of exports of sugar has increased, the monetary value has fallen due to steep price cuts as the removal of preferential prices exerted its impact. The removal of preferential prices for exports had varying levels of impact upon different African, Caribbean and Pacific states but was very detrimental for many of the poorest countries.
It is impossible to consider the compilation of a new EU policy on trade and development in 2011 without consideration of the impact of the trade agreements which have been signed with Europe by many developing countries. In Guyana, we have the EU-Cariforum Economic Partnership Agreement which was signed reluctantly by Guyana. This agreement allows for duty and quota free access to the European Union for all our exports but imposes a level of openness which many feel would swamp our local industries which cannot compete with European goods and services. Guyana had already had one of the most open economies in the Caribbean but careful planning will be necessary to ensure that its fledgling industries can successfully compete in the new environment.
In the wake of the trade agreements which the EU has negotiated with many developing countries, any new Communication on Trade and Development must take into account the types of assistance which these countries now need to be able to survive and be healthy partners in increased global trade. Such assistance includes training and information to meet the sanitary and phytosanitary standards demanded by the European consumer as well as direct assistance to help them boost the levels of productivity of their export industries. What is needed is practical assistance to bring developing countries into the fold of trading nations so that they may benefit from, and not be swamped by, the increasing tide of globalisation.
In closing, I would like to thank the EU Delegation and Ambassador Heikens for hosting this Information Session. I am sure that the deliberations will be fruitful.
I thank you.