Interview: Cecilia Álvarez-Correa
How can the economic links between Colombia and the countries of CARICOM be strengthened?
CECILIA ÁLVAREZ-CORREA: The 15 members of CARICOM are characterised by dynamic economies and high incomes relative to the averages for Latin America. The economic and political relations that these countries enjoy with Colombia are excellent. However, strengthening the current legal framework for trade and investment and adapting these regulations to the reality of our modern economies is now a priority for the Colombian government.
The trade relations between CARICOM and Colombia are currently regulated by a 1995 agreement that allows some products to circulate free of tariffs. Among others, the agreement grants duty-free concessions to merchandise originating from CARICOM countries and exported to Colombia.
The development of production capacity in the Caribbean economies, their greater openness to the world economy, our geographical proximity and the more advanced integration models that Caribbean countries have pursued with other regions have all opened the way for a deepening of our relations.
We believe that the moment has come to carefully analyse other means of expanding trade preferences and introducing new disciplines that match the current requirements of our economies. This will further boost the mutual exchange of trade, investment and tourism flows.
What initiatives are being applied in oil- and gas-based economies in the region to achieve better terms of trade?
ÁLVAREZ-CORREA: In Colombia we are developing and elaborating a strategy to identify the products and services outside of the mining and hydrocarbons sectors that have the greatest export potential. At the same time, we are identifying the export barriers that these products and services are currently facing. These include Colombia’s cost-competiveness, low productivity, tariff and non-tariff measures, as well as the necessity of improving the promotion of our export offer abroad. The initial focus of our work will be managing and eliminating such identified barriers. With the right incentives, we aim to achieve a greater diversification of our export offer and mitigate the impact of low oil and gas prices.
In parallel, a deepening of our regional integration can help us to achieve this objective. Our strategy needs to be directly complemented by better use of the trade agreements that we currently have with our key partners. This way, regional value chains can be more effectively pursued and can generate mutual benefits for the region. Latin America needs to take a more dynamic position in the international trade of intermediate goods.
However, we are conscious that the integration and opening of markets needs to be supported by national policies that promote productivity and competitiveness. This must not be a policy that only pertains to the current economic situation, but rather a permanent effort by the regional economies.
What effect do you think the opening of the Cuban economy will have on the region?
ÁLVAREZ-CORREA: The eventual opening of the Cuban economy is likely to result in increased trade flows between that country and the CARICOM region. This will be spurred on by an enhanced dynamism of its productive capacity and higher aggregate demand. Initiatives such as the newly approved Cuban investment law will serve to bolster the development of new business segments that had not yet been explored by the Cuban government. This legislation will also create a more favourable legal and economic environment for establishing foreign firms on the island. Just like T&T, Colombia has the benefits of a trade agreement in place with Cuba since 2000. We are hoping to further increase bilateral trade and also introduce new products to the island.
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