 Hello, everyone, and welcome to another edition of Interview with me, Lisa Joseph. Today we'll be speaking about trade matters, and more specifically, Article 164 in the Revised Treaty of Chagoramas, and that's with CARICOM. With me to discuss is Dr. Thomas Samuel, who is the Director of International Trade within the Ministry of Commerce, and Mr. Cosbert Wood, who is the Program Officer of the Trade Policy Unit within the Organization of Eastern Caribbean States, the OECS Commission. Gentlemen, thank you so much, and welcome. Off-camera we're discussing that you just came back from COTED, which is in relation to this very subject, Article 164. And for the audience, Article 164 speaks specifically to the promotion of industrial development and looking at the less developed countries within the CARICOM region. And that is somewhat in a way of giving them a leg up in being able to position themselves for competition within manufacturing and trade. So we're going to flesh out all of these things. And Dr. Samuel, why don't you give us some background information as to why the agreement to Article 164? Good evening, viewers, and thank you very much, Lisa. Article 164 is one of a number of articles that nested in a chapter in our treaty called Chapter 7. We call it Chapter 7 Provision, which has been established to look at challenges faced by disadvantaged countries, regions or sectors within the CARICOM space. Because it is part of a wider understanding that we are not all equal, not a coalition of equals. We are united in our vision and purpose of the benefits of integration, but we come at this from different levels. So it was understood that we should have within our treaty some provision that recognized that we are differently able. And so Chapter 7, which includes the Article 164, basically seeks to address that difference. And it specifically looks, as you indicated in your preamble, your earlier statement, at the objective of promoting industrial development in LDCs, including St. Lucia and other OACS states and Bellies and Haiti. So the members, that means the framers of our treaty. Decided to include, which is a very creative, I could say, an innovative provision to be able to allow us to compete. It provides some compensatory mechanisms. And so it's a realization, as Dr. Samuel pointed out, that we are not all made equal in the scale of economy. And so we've included Bellies and Haiti in that. And I suppose there are obvious reasons why we can do that. But within the OACS, all of the OACS countries are participating in this. So explain to us how the LDCs are benefiting in this and to whose disadvantage. Okay. I'll attempt to take that question. Yes. And good evening to you and to the viewers out there. Basically, the Article 164 regime, as Dr. Samuel indicated, is part of Chapter 7, which looks at providing technical assistance to disadvantaged countries, regions and sectors. And by virtue of our small size and our vulnerability, the OACS countries would fall within that realm in comparison to the wider caracom grouping. Again, the OACS countries, the OACS protocol member states, making up the major beneficiaries of the LDC component, it is essential that they have a coordinated front in regards to their interventions and their participation in the wider caracom single market and economy. And this is where the OACS commission comes into play, because we have a facilitating role in relation to coordinating economic and trade policy amongst the member states in the context of our own OACS Economic Union, as well as participation in the wider caracom single market and economy. So from my point of view, we work closely with the member states in terms of coordinating a harmonized front in relation to how we trade within the OACS Economic Union and the wider CSME. So on the latter aspect to whose disadvantage, because we are benefiting, and so it means that benefit is coming to us and someone on another end will not be benefited. So let's just flesh it out a bit. Under Article 164, there's special measures that are being put in place where the sectors are going to benefit. Tell us what those measures are. Okay. Essentially, Article 164 is a sort of a too-faceted intervention. The first aspect of Article 164 is a tariff protection, where we are allowed in the treaty, basically, items traded between member states attract zero tariff. So normally, a good originating from any member state, whether the LDC or MDC, to any other member would attract zero tariff. That is really what you have within a free trade arrangement. Now, Article 164 allows us to derogate from that arrangement and allow us the beneficiary LDC countries to actually place a tariff on a good contain on that list originating from MDCs. So for example, the list covers some 14 tariff and product groups, 14 product groups, about 39 tariff lines. Water, you have paint, you have solar water, heaters and so on, which we can get into, you know, bear, malt, stout and so others. But if that good, if a competing good comes from say Trinidad or the MDCs of Trinidad, Jamaica, Barbados and Suriname and Guyana, okay, if a good on that list comes from any of these territories, it would face a tariff coming into an LDC. That gives the good, the competing good made in the LDC some competitive advantage. So that is the first benefit. And that is for a finite period. In this case, it's most likely going to be 10 and for a few products, mainly curry powder and pasta, five years. And so the intention is that they would use that five year period or 10 year period to build their capacity, enjoy the competitive advantage to, you know, grow the market share and be able to export within the region and elsewhere and be more competitive. That's the benefit. The second aspect of Article 164 is what we call a program of support measures. Support measures that look at how, what sort of environmental, what initiatives that can benefit the firm operating in the environment. Some things are outside the firm and some things are specific to the firm. And the OSES has done some work and you'll probably hear a bit more when CrossFit speaks on it. And we will hear more about that as well as the tariffs and how we're going to decide what those tariffs are on the other side of the break. Stay with us. We'll be back with Dr. Thomas Samuel and Cosmos, Cosbot Woods. We'll be right back. And welcome back. We're continuing the discussion with Dr. Thomas Samuel, who is the Director of International Trade within the Ministry of Commerce and Cosbot Woods, who is the Program Officer, the Trade Policy Unit within the OSES Commission. And just before we went to break, Mr. Woods, you were going to jump in and talk to us about under Article 164 some of that supporting mechanism that Dr. Samuel had alluded to. The LDCs and the Article 164 companies, these are the ones that are currently disadvantaged. And by virtue of this particular regime and the complementary support measures, it is to bring them up to even level to be able to compete with the MDCs and in the global market in relation to those goods which they are producing. Now, in terms of the second aspect which looks at the Program of Support Measures, as Dr. Samuel indicated, the approach is to look at it from a very holistic point of view. So you look at interventions that would be required at the firm or the industry level in terms of enhancing their capacity, developing their skillset and to be able to assist them in becoming more competitive. You look at the business ecosystem. So the logistics associated with the production in terms of sourcing inputs, production methodology, access to finance. And then at the macro level, you also look at matters pertaining to supportive government policies, incentive regimes and things of that nature which would be able to not only benefit the companies but the wider manufacturing industries within St. Lucia and the wider LDCs. So that is how the various interventions would be broken out in a very systematic manner, looking from the micro level to the meso level and up to the macro level. If I could add to that, one of the other areas that will be looked at under the support measures is the issue of standards. For example, we sometimes need to meet particular standards to enter various markets, technical standards or standards relating to product specifications and so forth. And to do that, we also would engage the regional bodies across Q, which is our Caribbean Regional Organization for Standards and Quality. So a lot of these measures that we just spoke about will be getting the support and be part of the program of work of a regional body whose mandate it is to deal with that. We have, for example, trade financing. We will be getting some support from Caribbean export and the Caribbean Development Fund. Now, Caribbean Development Fund is an agency, a regional body, established under Article 158 of a treaty, which is also part of the chapter 7 provisions. It's there to help LDCs compete better within the CSME construct. And so the ultimate goal of Article 164 is to make the manufacturing sector more competitive. So to give it that break that it needs. And so for emphasis, products, the list of products that have been agreed upon by all of CARICOM, including the MDCs, because it's important to know that the MDCs are very much on board with this. So that agreement, it's going to allow the goods that are coming out from MDCs to have a tariff, which will make them perhaps slightly more expensive than what will be locally produced and also produced from the other LDC countries. So we wanted to emphasize that point. I could also just go back to the point that you made regarding the concurrence of the MDCs. The treaty spells out the criteria or the procedure that must be satisfied for the regime to be implemented properly. In other words, to be binding on the region as part of community law. And that is all LDCs and at least two MDCs must give support to this so that it becomes a decision binding on the region. So that certainly is the case, if not. And actually, that was one of the reasons why we had the delay. We needed to have all the LDCs formally indicate their support for this regime. Because we essentially were asking them to adjust the tariff rates above the normal rates that would apply, the CET. And I must add another component that must not be lost in this arrangement. The Article 164 also raises the tariff on competing goods covered on the list from outside the region, not just MDCs, okay? And by a higher tariff margin. And actually, more importantly, there is a tariff wedge which ensures that the MDCs enjoy the same protection they would otherwise as well enjoy in the absence of the regime relative to imports of the same good from outside the region. What I mean by that is, before Article 164, the producers of the good in an MDC enjoyed, say, 20% or 30% tariff margin relative to the rest of the world. That was the CET, common external tariff. They will still enjoy that same tariff margin with Article 164. So they are not affected relative to the rest of the world. That's important. Okay. I want to thank you very much, Dr. Thomas Samuel, who is the Director of International Trade within the Ministry of Commerce and Cosport Woods, the Program Officer within the Trade Policy Unit of the OECS Commission. We've been discussing Article 164. Minister Joseph, see you next time.