CARICOM Seeks FTA With Canada

by Amanda Banks, Tax-News.com, London

22 July 2010

The governments of Antigua and Barbuda and Saint Kitts and Nevis have announced that before the end of the month the two territories will have concluded their public consultations on a proposed regional Free Trade Agreement with Canada, paving the way for the drafting of a text which would outline what goods and services the Caribbean Community (CARICOM) will propose for duty-free access with Canada.

In collaboration with local governments, the Organization for Eastern Caribbean States' Secretariat (OECS) has already undertaken preparatory work that will be used to help refine the Caribbean Community’s (CARICOM’s) negotiating proposals and draft text.

Alongside bilateral trade treaties conducted on an individual basis with Caribbean territories, Canada’s trade relationship with the region is governed by the 1979 CARICOM-Canada Trade and Economic Co-operation Agreement and its Protocols, including the CARICOM-Canada 1998 Protocol on Rum, and the CARIBCAN Agreement, which is a non-reciprocal preferential trade agreement that grants unilateral duty free access to eligible goods from beneficiary countries in the English-speaking Caribbean. However, as a non-reciprocal unilateral preferential arrangement, CARIBCAN has been deemed incompatible with WTO rules and therefore requires a WTO waiver. This waiver is scheduled to expire in 2011.

To overcome this, the Trade and Development Agreement between CARICOM and Canada will be compatible with WTO rules, and will therefore not require a waiver. Furthermore, it is anticipated that the agreement will provide CARICOM with broader and better preferential access to the Canadian market. While CARIBCAN provides duty-free access for a range of CARICOM goods, it does not include services, which are becoming an increasingly important and valuable productive sector within CARICOM.

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