Elizabeth Morgan | Understanding Jamaica’s trade with the EU 27 and the UK

My article this week follows on from my article last week titled ‘A CARIFORUM Update: building an economic partnership with the EU’. I am also taking account of the article in this Sunday’s Gleaner titled ‘Unfulfilled trade potential: In parting shot, outgoing Ambassador says EU-Jamaica deal failing to deliver’. We all agree that “the deal”, which must be the European Union (EU)/CARIFORUM Economic Partnership Agreement (EPA), has not delivered, so far.

I found some of the comments in Sunday’s article quite interesting, indicating that our journalists and members of the private sector, including the agricultural representative, still do not fully understand the trade arrangements which currently exist with the EU (the 27) and the United Kingdom (UK).

Prior to 2020, the UK was a member of the EU and thus was a party to the 2008 EU/CARIFORUM EPA which resulted from trade disputes in the World Trade Organization (WTO) which the EU lost. The EU could no longer offer non-reciprocal trade preferences to Jamaica and other CARIFORUM members.

Under the EPA, Jamaica and other CARIFORUM members still had preferential, duty-free, quota-free access to the EU markets, but were also required to open their markets, on a phased basis, to goods from the EU members. Thus, the EPA is a preferential free trade agreement. It also covers trade in services.

To this point, in trade with the EU, a main market for Jamaica, in both goods and services, in the EU was the UK. Alumina was a primary product sold to other EU members and Germany was a strong market for tourist arrivals.

From 2020, with Brexit taking effect, the UK is no longer a member of the EU. There are now two separate EPA agreements, one with the EU27 and another with the UK. Jamaica can export goods duty-free and quota-free into both markets. The fact is that Jamaica is exporting very little and is failing to find new opportunities in these markets, including the building of partnerships.

JAMAICA’S EXPORTS TO THE EU 27

In 2023, using the ITC’s Trade Map, Jamaica’s exports to the EU member states were as follows in US dollars:

Latvia – $131,000,000; The Netherlands – $56,000,000; France – $16,000,000; Italy – $4,000,000; Germany – $3,000,000; Greece – $1,500,000; Belgium – $741,000; Denmark – $403,000; Spain – $307,000; Ireland – $67,000; Poland – $16,000; Portugal – $16,000; and Bulgaria – $7,000.

Products Jamaica exported were mainly alumina, refined petroleum, alcoholic beverages, and some agricultural and fisheries products. Note that Jamaica did not export sugar and bananas into the markets of the EU 27.

Jamaica exported nothing in 2023 to Austria, Cyprus, Czech Republic, Croatia, Estonia, Finland, Hungary, Luxembourg, Lithuania, Malta, Romania, Slovakia and Slovenia.

Jamaica has a significant trade deficit in goods with the EU27. On August 3, 2022, in my Gleaner article titled ‘CARICOM-Ireland relations: Weak connection, despite history’, I had enquired whether Jamaica and CARICOM members could explore increasing trade and investments with the Republic of Ireland. Cyprus and Malta are members of the Commonwealth like Jamaica. Could we explore increasing trade with these countries?

In trade in services, this would mainly be tourism, and from the EU27, arrivals are mainly from Germany, Netherlands, France and Italy, with most arrivals from Germany. During the Paris Olympics, the Jamaica Tourist Board did stage Jamaica House as a promotional event, as there is room to improve visitor arrivals from the EU.

The outgoing EU Ambassador, Marianne Van Steen, indicated that some work was being undertaken in the effort to promote trade.

JAMAICA’S EXPORTS TO THE UK

In 2019, CARIFORUM and the UK concluded and signed an EPA. The first meeting of the UK/CARIFORUM EPA Trade and Development Committee was held in 2021.

Through the years, given the history, Jamaica’s traditional agricultural exports had primarily gone to the UK. I have written several articles in this column about the state of Jamaica’s traditional agricultural exports, including that of August 11, 2021 titled ‘Where have our traditional agricultural exports gone?’

It should be recalled that Jamaica stopped exporting bananas to the UK/EU in 2008/2009 after a series of hurricanes impacted the crop. Efforts to resume the trade have not been very successful. Belize, St Lucia and the Dominican Republic still export bananas to the UK.

On sugar, Jamaica no longer exports to the UK due to lack of supply and low prices in that market. Jamaica primarily exports sugar to the USA and within the CARICOM region. Belize, Dominican Republic and Guyana still export sugar to the UK.

In 2023, Jamaica exported US$60 million in goods to the UK, which seemed to be mainly beverages and spirits. Jamaica’s exports of goods to the UK have declined considerably. The country used to have a surplus with the UK and now it has a deficit, importing US$102 million in 2023.

For trade in services, there have been a fairly significant number of arrivals from the UK – 229,000 in 2022. Jamaica had targeted increasing tourist arrivals from the UK and Ireland in 2023. It is assumed that this target, at least for the UK, was met as Jamaica had record arrivals of over four million visitors in 2023.

Jamaica has to look seriously at improving its exports in goods and services with both the EU and UK.

Elizabeth Morgan is a specialist in international trade policy and international politics. Email feedback to columns@gleanerjm.com