Negotiations for a free trade agreement between Canada and the 15-nation Caribbean trade group appear to have collapsed with the Canadian government telling its regional counterparts in official correspondence that it has done everything to reach a deal with the group to no avail after six years so it is simply walking away.
The agreement would have replaced the decades-old CaribCan arrangement that has become incompatible with current World Trade Organization (WTO) rules at least for the time being.
The agreement had allowed Caribbean countries to export more than $700M a year in goods largely duty free. CaribCan had been in place since the mid 80s and allowed the region to enjoy a healthy trade surplus in recent years thanks largely to gold exports from Suriname and Guyana as well as petroleum products from oil and gas-rich Trinidad.
The region had also exported millions in apparel, leather, ornaments and a range of other products including liquor under the old trading scheme.
But the one the two sides have been negotiating for the past six years would have been converted to a two-way arrangement had the negotiations been concluded and signed.
The bloc said this week that the Canadians have formally written to leaders indicating that they had applied to the WTO for CaribCan to be extended into the future to allow for a legal framework for trade between Ottawa and the region, meaning that the Canadians have given up hope of a two-way arrangement in the coming months.
Caricom said that trade ministers who are scheduled to meet at bloc headquarters in Guyana after the Easter holidays are expected to discuss the issue and make a final pronouncement on it. A preliminary reply to the Canadians has already been sent but whether this will be ignored until the WTO rules on the application for an extension is left to be seen officials said.
The region had consistently said that all of the smaller Eastern Caribbean states had indicated lukewarm support for the talks because they have little to export in two-way free trade and would have been required to open their economies to goods from Canada and would have lost millions from taxes no longer being imposed on exports.
Should the WTO approve the application for the extension of the life of the old agreement, the region is expected to enjoy an even greater trade surplus with Canada because Toronto-based Guyana Goldfields is expected to open Guyana’s first mega mine later this year and sell most of its production to Canadian refineries.
The last big mine was operated by Montreal-based Omai Gold Mines Ltd. which closed off mining 10 years ago after exporting more than three million ounces of gold from its western Guyana mine.
Gold from Gross Rosebel in Suriname is part of the reason why the region still sells more to Canada than Canada does to the Caribbean as its mine has been churning out hundreds of thousands of ounces per year.
