CARICOM-Canada Trade Development Forum - Unlocking Business Potential between CARICOM and Canada [HC Buxo, High Commissioner of Trinidad & Tobago, Canada]

Unlocking Business Potential Between CARICOM and Canada

CARICOM-Canada Trade Development Forum

November 2011

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Overview of CARICOM and Canada: Trade and Investment Trade between Canada and CARICOM is relatively small though growing For Canada, the region is a small trading partner with 1-2 % of total trade in

goods in the Caribbean For CARICOM, Canada is also a small trading partner with for 2.3% for

total imports and 3.3 % for exports* CARICOM-Canada two-way merchandise trade has more than doubled

over the last decade, from CDN $1.1 billion in 1999 to $2.5 billion in 2008 and to $2.4 billion in 2010

Canadian imports from CARICOM were valued at CDN $1.6 billion in 2010, up from $575.1 million in 2000

Canadian exports to CARICOM were valued at CDN $779.45 million in 2010, up from $361.0 million in 2000

Source: Statistics Canada and “Prospects on Enhanced Trade Agreements,” by Ramesh Chaitoo 20062

Overview of CARICOM and Canada: Trade and Investment Canadian direct investment in the CARICOM region was CDN

$56.56 billion in 2009, mainly in financial services such as banking and insurance an increase of 102% since 2001

CARICOM’s direct investment in Canada, mainly from Bahamas and Barbados, was CDN $405 million in 2010

CARICOM investment into Canada increased by 35% since 2001, reaching a level of CDN$ 719 million in 2009

Source: Statistics Canada3

Overview: Services Sector

Canada-CARICOM two-way trade in services was $3.4 billion in 2008

Canada’s service sector represents 72% of the economy and is the fastest growing segment of Canada’s international trade

Canada imported more services than it exported to CARICOM between 2003 and 2007

The services traded between both entities include travel, commercial, transportation and government services

The most dominant and highest income generation for both parties was commercial services

Sources: Statistics Canada and CARICOM-Canada Trade Development Forum Market Intelligence Report 4

Overview: Services Sector

The CARICOM-Canada Trade Development Market Intelligent Report identifies skills shortages which “exist across all provinces and territories in a number of areas“

This provides the opportunity for CARICOM countries to export more services to Canada

For example, there is already a great deal of movement from the professional services of all member states to all the provinces: 66 005 foreign workers were recorded from CARICOM to Canada

between 2003-2009 The greatest potential for trade with the CARICOM member states are

with the Provinces of Ontario, Quebec, Alberta and British Columbia; these existing connections can be capitalized on

Source: CARICOM-Canada Trade Development Forum Market Intelligence Report5

Overview: Goods

CARICOM exports to Canada were up from $400 million in 1999 to over $1.4 billion in 2009. For example: CARICOM exporters of Agribusiness products generated $70.4 million,

and expanded by 6% / year between 2001 and 2008 Canadian wheat exports to CARICOM grew from $3.7 million to $72

million between 2001 and 2010

CARICOM represents a number of varied opportunities for Canadian exporters interested in any one of the 15 member states, and vice versa

Source: CARICOM-Canada Trade Development Forum Market Intelligence Report6

Future Trade and Investment Overview: Canada According to EDC, Canada’s accelerating trade market

diversification story outlines a determined shift away from traditional markets towards the stronger growth in emerging markets

Emerging markets are forecast to collectively grow by 6% in 2010 and 2011, well ahead of the pace of traditional markets and a trend that EDC expects will continue to change the shape Canada’s economic growth profile

These markets will account for 20% of Canada’s exports by 2016 and almost 30% by 2020

In the period since 2000, growth in exports to non-traditional markets has consistently outpaced other export sales by a sizable factor

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Future Trade and Investment Overview: Canada Although the non-traditional market segment is small, sales to

emerging markets grew by more than 12% annually between 2001 and 2008, compared to traditional exports, which grew just over 1% annually

Mr. Peter Hall, EDC Vice President and Chief Economist recently stated that, “by simply staying the current course, emerging market exports are poised to transform Canadian trade patterns inside the current decade… Emerging markets could account for 50 % of Canada’s total merchandise trade by 2025. Under this scenario, Canada’s annual export growth could rise to 3.5 times the current pace”

Canada’s increasing focus on non traditional markets represents a growth opportunity for CARICOM investors

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CARICOM-Canada Synergies

Strategic locations for entry into additional markets Latin American markets through CARICOM EU markets through CARIFORUM’s Economic Partnership Agreement American markets via NAFTA

Safe, stable and sustainable investment opportunities

Attractive investment climates for foreign investors

High literacy rates and common language

Large and diverse marketplaces: The CARICOM region boasting 15 member countries Canada a significant diaspora population from the CARICOM region

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Increasing Bilateral Trade and Investment

A CARICOM –Canada Trade and Development Agreement will facilitate increased bilateral trade and investment between Canada and CARICOM

Better, broader access for the service sector Ensure a predictable and stable environment of Canadian regulations

for CARICOM service providers Increased transfer of professionals and skilled workers Creation of strong investment rules that will attract foreign investment Ensure open access to CARICOM goods and services Ensure that technical barriers to trade and services are addressed

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Some Private Sector Concerns

Supply and demand, specifically CARICOM’s ability to achieve a supply capacity to meet demand

Assumptions that small economies cannot compete in international markets -- is not valid

Information asymmetries regarding the regulatory environment in different sectors. This is essential if CARICOM firms are to take advantage of any market access created by a new Trade Agreement (lack of templates)

Recognition of professional training and experience for skilled workers, and residency requirements, lack reciprocity between Canada and CARICOM

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Some Suggestions for Improving Returns on Bilateral Cross Border Trade Responding to the changes in regional and international trading

environments through increased competitiveness and innovation

Improving human resources and focused research, including support via relevant government institutions

Forging alliances between the public and private sector aimed at identifying strategies designed to achieve competitive advantage for the region

Opening up the CARICOM and Canadian markets for the movement of professionals and less-skilled workers, as well as other types of services exports

Assisting in educational exchanges between Canada and the CARICOM region aimed at educating the CARICOM counterparts on the design and implementation of global templates and standards

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The mutual interest between Canada and the English speaking Caribbean are becoming

increasingly more apparent, and the old habit of Canada and the Commonwealth Caribbean

working together has new urgency, utility and importance. The challenge is to renew it in

forward thinking ways and the Canada-CARICOM Trade and Development Agreement

is a step in the right direction

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Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime.

CARICOM can learn from Canada

Canada can learn from CARICOM

THANK YOU!

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