Wowwwww…so many life changing and dare I say earth shattering things are happening and have unfolded over the past two weeks or so. I want to zoom in on one significant thing and that thing I believe may have some long term implication for those who engage in business and who trade in goods and services. I have been led to reflect on this matter because over the past week I have had the privilege of attending two well thought out events that were aimed at educating businesspersons on how to operate a viable and sustaining businesses. These were namely the hosted by the Jamaica Chamber of Commerce/Jamaica Coalition of Service Industries and the SEBI Summit ( A JN Foundation/USAID/ British Council et al affair).Both were extremely well planned and organized to optimize the resource persons quite effectively.
The ‘significant thing’ though was US President Donald Trump’s decision not to join the Trans-Pacific Partnership (TPP), which was a flagship trade deal with 12 countries from Latin America and the Caribbean, North America, Asia and Oceania.The TPP was to constitute the largest free trade area in the world, as measured by its members’ combined GDP, and it differed from most previous trade agreements in that it was both plurilateral and interregional, as well as for the breadth of subjects it covers. The TPP had a strong regulatory harmonization component in such areas as e-commerce, public procurement, regulatory coherence and various labour and environmental matters. The agreement was signed in 2016 but was not ratified, thus Trump’s executive order took care of that. It is to be noted that the previous Obama led administration had argued that the deal would have provided an effective counterweight to China in the region.
The implication for the LAC region, which includes Jamaica can be inferred from the economic outlook provided by ECLAC which had outlined that;
the region’s participation in the global economy continues to lag: its share in global exports of goods and services remains stagnant and it has lost ground in trade of high-technology goods and modern services. Although the share of Latin America and the Caribbean in global foreign direct investment flows has risen, its low-technology specialization has deepened. The region’s participation in global value chains has increased this century, but remains below the global average and consists mainly of providing raw materials for third countries’ exports. Poor digital connectivity also hampers the region’s capacity to enter new dynamic sectors. Amid still-sluggish regional and global economic growth, the Latin American and Caribbean region’s exports and imports [fell] for the fourth year running in 2016. [However it was expected that] thereafter, a modest upturn is projected in regional trade in 2017-2020.
This is especially complex as according to an investement expert in the government of Jamaica entrepreneurship and the medium to small microenterprise sector is poised at the forefront of Jamaica’s growth agenda. This is within the context that fiscal challenges continue to be the biggest concern for the government as Jamaica seeks to control its public finances. Evidenced by the growth rates of 0.9%, 1.1% and 2.2% in the first three quarters of 2016, respectively, posted for the Jamaican economy with growth projected at 1.1% in 2016 and 1.2% in 2017. The implication is of a gradual strengthening in growth, largely owing to the negotiation of a precautionary agreement between the government and the International Monetary Fund.
We have matured enough to understand that trade with our cousins up North is still important. The challenge will therefore be navigating with other members of the global marketplace to forge new or expanded trade partnerships. Similarly countries within the LAC configuration with flagging economies perhaps have to take cautionary measures to insulate manufacturing and increase employment opportunities within borders. Buying local is also a major cornerstone for growth.It will be interesting to see how small economies maneuver the itinerant trade and foreign policy landscape. We are afterall one global village and one big marketplace.