By Joel K. Richards
In a previous article, I addressed the broad implications of Brexit for the United Kingdom (UK) and the European Union (EU) and my overwhelming sentiment was that both parties will be worse off, particularly in a no-deal scenario. On this occasion, I am addressing the trade, economic and political implications of Brexit for the Caribbean, particularly the members of the Caribbean Forum (CARIFORUM), a configuration of countries comprised of CARICOM Member States and the Dominican Republic. I want to focus on the Caribbean because I believe that in a post-Brexit world, there are opportunities for us to build an effective and mutually beneficial relationship with the UK.
First, I will address the trade implications of Brexit for CARIFORUM (the Caribbean Community plus Cuba and the Dominican Republic). For many decades, CARIFORUM countries have enjoyed access to the EU market, including the UK, on preferential terms. This has meant that the majority of goods exported to the EU and the UK have attracted zero customs duties. More recently, with the coming into force of the CARIFORUM-EU Economic Partnership Agreement (EPA), which was signed in 2008, CARIFORUM countries have also enjoyed additional preferential access to both the EU and the UK for services as well as investments. Should the UK leave the EU as widely expected, whether in the context of a deal or no-deal between the two parties, the trade implications for CARIFORUM will likely be negligible for the most part. This is because both CARIFORUM and the UK have already concluded informal talks on a CARIFORUM-UK EPA which guarantees that the status quo would remain in place as far as trade between them is concerned.
If there is a deal between the EU and the UK that provides for a period of transition before the latter’s final exit, then the CARIFORUM-UK EPA would take effect at the end of that transition period. However, if there is no deal and the UK’s exit is immediate as of Oct. 31, then the CARIFORUM-UK EPA will take effect immediately. Already, all CARIFORUM members and the UK have either signed or approved the trade deal in principle. Therefore, irrespective of what happens between the EU and the UK, CARIFORUM countries will continue to enjoy preferential access to the UK market for trade in goods, services and investment.
This is particularly important for the private sector, especially those currently trading with the UK because it guarantees continuity and predictability in market access. However, the challenge could arise for those companies that use the UK as a base for their wider access to the EU market. Here, if there is no deal between the UK and the EU, there could be disruptions in logistics, supply and value chains and this would necessitate that those firms reorient their EU entry strategy away from the UK to elsewhere in the EU, which could prove to be a fairly disruptive exercise.
Regarding the broader economic implications of Brexit for CARIFORUM, it does provide an opportunity for CARIFORUM and the UK to strengthen their bilateral economic relations. For the period 2018/19, the UK Department for International Development (DFID) indicated that its top three planned spending programmes for Caribbean countries in the areas of infrastructure, healthcare and renewable energy and energy efficiency will amount to over 100 million pounds sterling. Post-Brexit, DFID has already signalled its intention to strengthen bonds with the Commonwealth Caribbean in particular. Therefore, after the UK leaves the EU, we can expect more, and not less economic cooperation between the UK and the Caribbean.
I have refrained from using the term aid because this is often associated with begging on the part of the recipient. Instead, I am focusing on economic cooperation to convey the idea that what is required going forward is a real partnership where both sides focus on addressing areas that will lead to sustainable socio-economic growth and development for the Caribbean region. In a nutshell, I would imagine that the Caribbean would have an interest in economic cooperation programmes in the areas of climate change mitigation, poverty reduction, building productive capacity to enhance exports, and increasing access to new and innovative technologies to bridge the digital divide between ourselves and our developed country partners.
As it relates to the political implications, I also believe that the prospects are largely positive. First, the independent nations of the English-speaking Caribbean are all members of the Commonwealth of which the UK is a founding and leading member. Over the years, there has been a perception that enthusiasm for the Commonwealth has waned among British elites. However, post-Brexit, the Commonwealth can serve as a platform for the UK to play a greater role on the world stage and if the UK sees it this way, then in all likelihood, it will dedicate the required resources to the Commonwealth for this to happen. In such a scenario, a stronger Commonwealth will be better for all of its members, including its Caribbean members.
Apart from the Commonwealth, the UK also has an opportunity to step up its engagement in multilateral institutions post-Brexit. As the EU has evolved, we have grown accustomed to its active work on the global stage to such an extent that it seems as if its member states are overshadowed. Post-Brexit, the UK will be stepping out of the EU’s shadow to navigate its way in the world. In this regard, the UK will likely be seeking to win new friends and strengthen its relationship with traditional allies as it attempts to strengthen its hand within multilateral institutions. Among CARICOM countries in particular, a voting bloc of 15 countries, which are treaty-bound to coordinate their foreign policies, there is a real opportunity to extract more tangible benefits from the UK because in international politics, votes do matter.
Finally, while I believe that there are many opportunities for Caribbean countries to forge a stronger and even more meaningful relationship with the UK post-Brexit, I will not be naïve on this point because of the unpredictable nature of global affairs, particularly over the past five years. We cannot take as given that the UK will see us as a priority and the onus is therefore on us to expend the political and diplomatic capital that is required to ensure that we extract maximum value from the relationship.
Joel K. Richards is a national of St. Vincent and the Grenadines. He previously worked as an advisor to the CARICOM Secretariat, and the principal trade consultant to the Barbados Private Sector Association. He is currently based in Europe where he works in the field of international trade and development.
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to email@example.com.