Question: CASE: Regional trade policy, whether internally or externally guided, has traditionally focussed on removing tariff and non-tariff barriers. This has long been espoused as the
CASE:
Regional trade policy, whether internally or externally guided, has traditionally focussed on removing tariff and non-tariff barriers.
This has long been espoused as the catalyst that would enhance regional trade and its effect on the economy. Trade facilitation however and in particular that which is related to transport costs has largely been ignored in the regional trade agenda.
The last few years have seen significant and dynamic development in international trade, and with the opening up of economies to the expansion of supply chains, the thrust towards globalisation has shown itself to be transport-intensive. Nowhere has this been more evident than in the development and changes in global freight movement systems.
Internationally, this change drives modifications to and changes in public policies; however, the policymaking frameworks in the region are typically lethargic, moving at a glacial pace and sometimes countercyclical to international actions.
The freight logistics sector poses many challenges and presents a complex agenda that requires action and coordination across several government and private sectors.
Transportation is recognised to be an inherently crucial component in supporting economic activities as well as providing opportunities for economic development. The provision of transport infrastructure has long been a common priority for governments, as the region has long been considered to be lacking in this area.
In recent years, the Greater Caribbean has seen remarkable growth in the containerized traffic handled, driven in part by the development and expansion of port infrastructure.
Within this new environment, and in anticipation of additional traffic growth resulting from the expansion of the Panama Canal, development of logistics services must now be seen as a critical endeavour.
Despite its importance, the region has not yet placed logistics at the centre of national and corporate competitiveness policies. Improving logistics performance should be a crucial policy objective with improved customs clearance, enhanced transport infrastructure through ports, internal connections, and the availability of advanced logistics services constituting some of the key objectives for the region.
The goal should look well beyond infrastructure and the ports and focus on the development of regulatory aspects of trade and the development of local logistics competencies through partnerships with overseas investors. The approach to production, trade and transportation has evolved, and the challenge now facing the Caribbean is how to connect to global supply chains and maximise the opportunities from global trans-shipment hubs.
Much past analysis of shipping has been from a merely quantitative perspective, looking at how much growth has occurred in the region; however, there are qualitative aspects that merit further analysis. For most countries of the Greater Caribbean, transport costs are significantly higher than tariffs for both imports and exports, and more so for intra-regional trade.
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