Remarks by Senator The Hon. Guy Mayers at the Opening Ceremony of a National Consultation on Trade and Business Facilitation in Saint Lucia
Senator, Honourable Guy Mayers
Minister for Trade, Industry, Commerce
Opening Ceremony of a National Consultation on Trade
And Business Facilitation in Saint Lucia
Bay Gardens Inn
Tuesday, April 08, 2008
In the area of international trade policy, on June 30, 2006, the member states comprising the LDCs of CARICOM formally indicated that they had met all their obligations under the Revised Treaty of Chaguaramas to accept fully the implications of the CARICOM Single Market and Economy (CSME). This, in effect meant that, Saint Lucia was ready to allow the free movement of the factors of production, providing for greater competition and more optimal allocation of resources within the domestic economy. This is meant to lead to increased output of goods and services thereby creating demand for labour and directly impacting on unemployment and poverty.
The second major trade policy initiative involved the completion of the Economic Partnership Agreement between CARIFORUM and the European Union. On December 16, 2007, CARIFORUM negotiators initialed an agreement with their counterparts from the EU laying the basis for ushering in a new set of relationships that will govern trade between Europe and Saint Lucia. Under this agreement, there will be substantial elimination of import duties on approximately 80% of all the trade between the EU and CARIFORUM. In addition, there has been significant liberalization in the services sector. This agreement with the EU, like the CSME is meant to create an environment conducive to attracting foreign direct investment, increasing output within the domestic private sector, increasing efficiency and productivity and generally making the private sector more competitive.
Thirdly, CARICOM has already commenced the process that will eventually lead to the creation of another free trade agreement; this time with Canada. These are important policy decisions meant to stimulate the domestic economy but how effective will these interventions be in determining the economic fortunes of Saint Lucia. This national consultation, I hope, will attempt to address the importance of the instrument of trade policy to the matters that impact on the real economy in a small open economy such as Saint Lucia.
In addition, I would like to see a greater level of participation and involvement of the private sector in shaping international trade policy. I recognize that the time required to be devoted to trade policy development is enormous but this is an investment in the future of the private sector of this country and therefore must find priority space on the agenda of our private sector organizations.
The Role of Foreign Direct Investment
While I do not want to preempt the outcome of your deliberations, I believe that one of the goals of the free trade agreements that have been negotiated is the attraction of foreign direct investment.
The conventional wisdom is that more open economies tend to attract more FDI and that there is a positive correlation between the quantum of foreign investment and the benefits to the economy. If this positive relationship is to be realized however, I believe that there must be a coherent approach to generating the desired investment into Saint Lucia.
In order to attract quality and sustainable foreign investment I believe that the following are critical:
In Saint Lucia, since our Government came into office in December 2006, one of our achievements has been the clear identification of the priority areas for development and the related type of investment that we would like to attract. This has been most welcomed by both local and international investors. But there are still issues highlighted in both the Business Environment Report prepared for the Government by the OECD and the World Bank’s – Doing Business Report that need to be examined as these address some of the areas already alluded to. In this regard therefore, the Ministry has embarked on a two-pronged study of the investment climate.
The first part of this study attempts to gain from the private sector, their perceptions on the business environment. This study commenced during the month of March this year with questionnaires distributed to approximately 175 firms – both local and foreign owned. This survey is expected to be completed by April 25, 2008.
The second part of this exercise involves public sector assessment of the business climate. The information generated will be used to validate the responses from the business questionnaire. It is expected that the areas which require immediate reform to improve the business climate will be identified.
Once the areas requiring reform has been identified the third part of the exercise will involve taking the appropriate actions.
I believe the time has come for action on the part of Government and the private sector to undertake changes in a joint manner to influence the business environment in St. Lucia for the better.
We must work more closely together in this endeavour as the future of this country depends on the collective wisdom and genuine collaborative efforts of all parties.
I thank you.
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