An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

Re­pub­lic Bank econ­o­mist, Garvin Joe­field, is warn­ing of far-reach­ing im­pli­ca­tions for the do­mes­tic econ­o­my of the rev­e­la­tion that T&T stands to lose US$291.9 mil­lion in po­ten­tial an­nu­al ex­port rev­enue fol­low­ing the im­po­si­tion of a 15 per cent tar­iff on its ex­ports to the Unit­ed States.

The rev­e­la­tion came in a Busi­ness Guardian ex­clu­sive re­port of analy­sis con­duct­ed by the Cari­com Pri­vate Sec­tor Or­ga­ni­za­tion (CP­SO).

Joe­field said that be­yond the im­me­di­ate fig­ure lies a host of deep­er con­se­quences for the coun­try.

“Be­hind those fig­ures US$291 mil­lion is the loss of for­eign ex­change earn­ings, a po­ten­tial de­cline in gov­ern­ment tax rev­enue, and sad­ly, job loss­es and in­come re­duc­tions for many house­holds,” he not­ed.

“The broad­er im­pact could be a tight­en­ing of the al­ready con­strained for­eign ex­change mar­ket, which would have a knock-on ef­fect on over­all busi­ness ac­tiv­i­ty in Trinidad and To­ba­go,” Joe­field added.

While key com­modi­ties such as crude oil and liq­ue­fied nat­ur­al gas (LNG), are cur­rent­ly ex­empt from the tar­iff, the new mea­sure is ex­pect­ed to re­duce de­mand for oth­er lo­cal ex­ports, plac­ing pres­sure on man­u­fac­tur­ers and ex­porters to re­assess their strate­gies.

Joe­field, though cau­tious, sug­gest­ed that the coun­try could treat this set­back as an op­por­tu­ni­ty to re-eval­u­ate and piv­ot.

“I al­ways say ad­ver­si­ty comes with op­por­tu­ni­ty,” he said, adding, “This is a chance for com­pa­nies at the mi­cro lev­el and for the Gov­ern­ment and broad­er sec­tors at the macro lev­el to re­think how we’ve been ap­proach­ing ex­port mar­kets.”

He em­pha­sised the im­por­tance of di­ver­si­fy­ing ex­port des­ti­na­tions, some­thing that has long been on the na­tion­al agen­da.

“Yes, look­ing for new ex­port mar­kets is crit­i­cal. It has been crit­i­cal for years, and hope­ful­ly, this de­vel­op­ment will ac­cel­er­ate the push. We need to deep­en our trade re­la­tion­ships with­in Cari­com, in­clud­ing mar­kets we haven’t ful­ly pen­e­trat­ed. Latin Amer­i­ca of­fers promis­ing av­enues, as does Africa where we al­ready have ties with coun­tries like Ghana. There is al­so Asia, par­tic­u­lar­ly In­dia.”

Joe­field urged stake­hold­ers across sec­tors to see this as a turn­ing point.

“If there was ever a time to act on di­ver­si­fy­ing our ex­port base, it is now. The chal­lenge is clear, but so too is the op­por­tu­ni­ty.”

For in­ter­na­tion­al re­la­tions ex­pert Dr An­tho­ny Gon­za­les, the es­ti­mate of the al­most US$300 mil­lion loss re­mains spec­u­la­tive with­out a de­tailed break­down of trade flows and tar­iff struc­tures. What is clear, he said, is that the sec­tors like­ly to be hard­est hit in­clude chem­i­cals, met­al ex­ports, and non-en­er­gy man­u­fac­tured goods.

“We’ve ben­e­fit­ed sig­nif­i­cant­ly from the Caribbean Basin Ini­tia­tive, which grant­ed many of our prod­ucts du­ty-free ac­cess to the US. If that win­dow is nar­row­ing, then the ad­just­ment could be painful, es­pe­cial­ly for small­er ex­porters.”

Gon­za­les not­ed that small and medi­um-sized man­u­fac­tur­ers in the food and bev­er­age space, par­tic­u­lar­ly those ser­vic­ing di­as­po­ra mar­kets in the US, could face a steep climb to re­main com­pet­i­tive.

He said these busi­ness­es re­ly heav­i­ly on pre­dictable ac­cess to US buy­ers and a 15 per cent in­crease in land­ed costs could be the dif­fer­ence be­tween main­tain­ing con­tracts or be­ing priced out.”

The is­sue, Gon­za­les stat­ed, is com­pound­ed by un­cer­tain­ty over whether the tar­iff changes are uni­form­ly ap­plied, as in the case of Rus­sia, for in­stance, tar­iffs have re­port­ed­ly been raised to less than 15 per cent on cer­tain ex­ports.

“The struc­ture is not con­sis­tent across all coun­tries. That makes it even hard­er to plan,” he ex­plained.

The in­ter­na­tion­al ex­pert in­di­cat­ed that one of the few vi­able short-term re­spons­es avail­able to ex­porters may be the ex­plo­ration of al­ter­na­tive mar­kets.

“We need to act swift­ly to iden­ti­fy re­gion­al op­por­tu­ni­ties, pos­si­bly in Guyana or Suri­name, where de­mand is ris­ing,” the source said. “That would soft­en the blow, but such piv­ots take time, lo­gis­tics and gov­ern­ment sup­port.”

Gon­za­les took note of the cur­rent lack of con­crete da­ta on which to build a pre­cise fore­cast.

“I haven’t had the time to dig in­to the gran­u­lar trade and tar­iff sta­tis­tics, and with­out that work, it’s dif­fi­cult to con­firm or dis­pute the US$300 mil­lion loss fig­ure. But what’s un­de­ni­able is that we face a sig­nif­i­cant chal­lenge.”