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The British joining the EU did no good turn to Commonwealth members. They were told they would have had a bigger market in which to sell their goods. But it destroyed some of those Commonwealth producers who traditionally supplied the UK.
Before Britain joined the European Union Common Market they relied on the Commonwealth more as trading partners. They gave special deals to Commonwealth countries — special low and, in some case, no tariffs, such as bananas. SVG had a low tariff on bananas with the UK, which predominantly took all of our bananas. When they joined the EU, the low tariff was gradually phased out until it eventually disappeared altogether, thus the demise of our banana industry, as we knew it.
We have tried for years to get our fish accepted by the EU. Perhaps now the British will be buyers again. If we can get the Taiwanese and Japanese out of our Atlantic fishing waters we may well have a billion dollars worth of fish for sale each year. Even a third of that would make SVG great again — never mind Britain.
The same thing happened to New Zealand who sent all their lambs to the UK, which more or less took their whole production with little or no tariff. The EU wanted to protect the European sheep production, so again they were eased out of the market, which caused a lot of heartache at the time.
If the UK could pick up where they were before they dumped their traditional suppliers and traditional export markets at the same time, they and we may be better off. But I doubt that will happen with most of those who were dumped because they have had to create new markets; it was sink or swim. It may well benefit our banana industry, though.
Large countries such as Russia and China have sat outside the union buying surpluses. Huge surpluses of food, fruit and wine are purchased by the EU, stored and sold. It is called intervention buying. The EU intervention surpluses of beef, butter, and wine are sold off to non-member countries at knock down prices to keep the farm prices artificially high in the EU.
The UK will have to reapply to join the World Trade Organisation (WTO) in order to ensure its bindings, tariff levels and other WTO-related agreements remain in place as its present membership is in the context of the EU. Or perhaps they will need to renegotiate here also.
Britain will probably go it alone as a member of the World Trade Organization. This will give the UK more sovereignty, perhaps, at the price of less trade and a bigger fall in income, even if the UK were to abolish tariffs completely. Thus, Brexit will allow the UK to negotiate its own trade deals with non-EU countries once again.
The Commonwealth is a natural trading partner for Britain and if they can make a comeback on that front, SVG, I am sure, will benefit.
As for scrounging and begging which is the main state industry for SVG, now the comrade will be able to try and beg and scrounge both from the EU and the UK, a kind of joint super scrounge.
We should also be talking as soon as possible with the Brits to see if we can get our bananas back with no tariff (import duty). It may be difficult because the US has become aggressive over the last 30 years in promoting their bananas and fruit (the Dole Company) in the UK and Europe. They were also partially to blame for the demise of our banana industry in demanding that the unfair practice of lower tariffs for some than others should stop because it hurt American producers.
So I can see a long protracted set of negotiations with commonwealth producers beginning sometime soon. Let’s hope that our current Vincentian regime and family dynasty of dunces get off their butts and get us some privileges reinstated. I am not sure they will be able to because the Brits have got used to being second or third to Venezuela and Cuba and I am sure they do not want to compete with ALBA.
Talking of lies some of you may remember when we were told Gaddafi was going to buy all the bananas we could grow. What a lie that was and most Vincentians, especially those in the Diaspora believed it.
I recommend that the comrade read this.
Remember that Britain was great before they joined Europe and they will be great again after Europe. So let’s try and make the best of that situation in the Caribbean.
Peter Binose
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A fine read. As to whether GOSVG will have the focus is quite another story. There is always a chance that someone at the Caricom level might show some proactivity.
I’m afraid you’ve got our banana issue wrong in this, Peter. The UK had a favourable regime for our bananas because of an agreement between the EU and the African, Caribbean and Pacific (ACP) countries under the Lome Agreement. The Lome Agreement was supported be the UK and France, both of whom had ex-colonies in those regions.
The preferential treatment for our bananas came to an end not because the EU wanted to end it (Preferential treatment for Caribbean bananas doesn’t conflict with protection for EU farmers – they don’t grow bananas). It was the World Trade Organisation that you are now suggesting that the UK will re-enter as an independent country, which decreed that the preferential treatment had to end. And the WTO was pressured by the USA, whose government was pressured by American producers in Central America, like Chiquita. Central American bananas are grown on large commercial farms, not the small family farms we have. And on flat lands where mechanization can lower production costs. There is no way we could compete on price with American bananas. The only way we could compete was if Chiquita paid a higher tariff than we did. Once that preference ended we tried to hold on to the higher end niche market for organically produced bananas. Black sigatoka put an end to that. So I very much doubt that Brexit will enable the UK to reintroduce preferential tariffs or, even worse from Chiquita’s point of view, no tariffs on bananas; or for that matter anything else we produce.
Unless, that is, the no tariff rule applies to everybody.
You are quite right on all this, Ms. Pat. For people like me who strongly believe that free trade raises nearly all boats, a notion going back to Adam Smith, if not earlier, tiny mountainous peasant-farming countries like ours are very worrisome because they cannot survive, at least lin the competive international tropical agriculture market is concerned, without the protection of subsidies, quotas on others, and other preferential measures.
But knowing what the problem is does not mean knowing how to solve it. This is why the Comrade and others have rightly said that export agriculture is dead in SVG.
But the other even bigger problem is that tourism on the mainland could never replace the foreign earnings from bananas.
So what is the solution? I have no idea.
How about trying to become a high end financial center like Singapore? Of course we don’t have a leader like the late Mr Lee Kuan Yew, Nor do we have the skills or the discipline of the Singaporeans. But we might surprise ourselves yet!
Of course, trying to become another Siingapore today just might be a bit more difficult, given the concerns of the developed world about tax avoidance by multinational companies – and this even though tax avoidance, unlike tax evasion, is still legal. Just look at the case of the EU Commission and Apple. Of course Apple and the Irish government say they have done nothing illegal (tax evasion, as I said is not illegal; but on this scale immoral perhaps?). And of course they argue that this is another case of the EU Commission overriding democratically elected governments. (“Democratically elected” is always a good term when one objects to something) But it’s not just the Commission that objects to a firm like Apple paying just 0.005% tax on its sales in the EU. The Chancellor of Austria has just praised the Commission and criticized low tax regimes in Ireland, Malta, Luxembourg and the Netherlands as undermining the Union. It seems that Apple set up a corporate system where sales anywhere in the EU are registered as sales by the company registered in Ireland. And moreover there is a holding company with no geographical address, to which profits ate transferred – with the agreement of the Irish Government. Hence that 0.005% tax paid by Apple on all sales in the EU. It’s those arrangements that the Commission says are illegal. The Austrian Chancellor says that multinationals like Amazon and Starbucks pay less tax in Austria than a Viennese cafe or a sausage stall!
Ever since the days when the developed countries were attacking countries like SVG about “money laundering” and insisting on all the regulations that we now have to go through to open a bank account or to send money from one Caribbean country to another, I looked at their arguments and decided that it was tax avoidance that they were really concerned about, whatever they might say about criminals laundering money. Far more money is laindered daily through banks in the US (Delaware? Florida?) and London than would ever have passed through SVG.
So I don’t think we would be allowed to become a new Singapore, even if we had the wherewithal to try. Like you, I don’t really know what the answer is for small island states like SVG; nor, which is even more depressing, do our political leaders.