Raphael John-Lall

Econ­o­mists and oth­er ex­perts have agreed that T&T’s busi­ness re­la­tion­ship with the Unit­ed States, its clos­est trade part­ner could be neg­a­tive­ly af­fect­ed based on the poli­cies that Pres­i­dent-elect Don­ald Trump’s new Gov­ern­ment takes.

Trump, the can­di­date of the Re­pub­li­can Par­ty, con­vinc­ing­ly won last week Tues­day’s pres­i­den­tial elec­tions in the Unit­ed States.

Trump has tak­en a na­tion­al­ist stance on the type of eco­nom­ic poli­cies he in­tends to im­ple­ment by promis­ing to raise tar­iffs on im­port­ed goods, in­crease US oil pro­duc­tion and keep to US man­u­fac­tur­ers at home.

CBS News in an ar­ti­cle on Thurs­day gave sta­tis­tics which show that dur­ing Trump’s first term in of­fice, his ad­min­is­tra­tion im­posed tar­iffs of up to 25 per cent on more than $360 bil­lion in prod­ucts from Chi­na.

Now, Trump has said he plans to im­pose a 60 per cent tax on goods from Chi­na and a 10 per cent to 20 per cent levy on all of the US$3 tril­lion in for­eign goods the US im­ports an­nu­al­ly.

Econ­o­mist Dr Vanus James told the Busi­ness Guardian that these de­vel­op­ments will all im­pact on T&T.

“The re­la­tion­ship might change if Trump keeps his promise to im­pose stiff tar­iffs on all im­ports in­to the US. It might al­so change if the ide­o­logues in Trump’s or­bit take their usu­al ag­gres­sive, ide­o­log­i­cal stance on Venezuela, es­pe­cial­ly to man­age their im­mi­gra­tion chal­lenges. If that re­la­tion­ship sours, our cross-bor­der gas deals ap­proved by Biden will not be im­mune,” he said.

Giv­en T&T’s and the Caribbean’s small size, some an­a­lysts have ar­gued that the re­gion has not played an im­por­tant role in the Unit­ed States’ eco­nom­ic and for­eign poli­cies over the last few years.

James ar­gued that this is so be­cause it all comes down to the Unit­ed States’ eco­nom­ic in­ter­ests and the ir­rel­e­vance of Caribbean coun­tries like T&T with economies that are not di­ver­si­fied.

“The rea­son the US fo­cuss­es on the Mid­dle East is that it is in both their geopo­lit­i­cal and eco­nom­ic in­ter­est. The Caribbean’s eco­nom­ic at­trac­tion to the world has waned sharply since the days of sug­ar, main­ly be­cause we have not done enough to trans­form our economies and our un­de­mo­c­ra­t­ic po­lit­i­cal sys­tems. Keep their re­la­tion­ships with Is­rael and Iran in mind, along with the com­pe­ti­tion for in­flu­ence there with Rus­sia and Chi­na. Brazil is piv­ot­ing to Rus­sia and Chi­na but I do not see Trump’s ad­vi­sors find­ing enough com­pelling rea­sons than in the past to shift fo­cus to the Caribbean and Latin Amer­i­ca.”

Bharath: joined at the hip

In an in­ter­view with the Busi­ness Guardian, for­mer Trade Min­is­ter Vas­ant Bharath spoke about the im­por­tance of the Unit­ed States as T&T’s main busi­ness and trade part­ner.

“T&T has a long-stand­ing re­la­tion­ship with the Caribbean Basin Ini­tia­tive (CBI). It is an open-end­ed re­la­tion­ship with no ex­piry date on it where­by cer­tain prod­ucts are al­lowed to go in­to the Unit­ed States, free of du­ties. We are not sure of Pres­i­dent Trump’s po­si­tion on Cari­com, we know what his po­si­tion is on Chi­na. Maybe it could well be that Cari­com is too small for him to have to wor­ry about. We all know his pub­lic po­si­tion on tar­iffs and on prod­ucts com­ing in­to the Unit­ed States par­tic­u­lar­ly where they threat­en US man­u­fac­tur­ers. I do not think that we are in that cat­e­go­ry as a small group of coun­tries. It’s not just T&T but the Caribbean basin. I do not think that we are large enough to trou­ble US man­u­fac­tur­ers at this point in time.”

He al­so spoke about oth­er ini­tia­tives that the US has with T&T such as the Caribbean Basin Se­cu­ri­ty Ini­tia­tive (CB­SI) where the US Gov­ern­ment has been fund­ing a lot of an­ti-ter­ror­ist ac­tiv­i­ties, an­ti-drug traf­fick­ing, an­ti-hu­man traf­fick­ing and oth­er re­lat­ed ar­eas. Bharath said that it is left to be seen if Trump’s new ad­min­is­tra­tion will con­tin­ue to keep a fo­cus on these ar­eas.

He said prob­a­bly the “most con­tentious” is­sue as far as Trump is con­cerned is an ini­tia­tive with re­gards to cli­mate change.

“Mr Trump’s pub­lic po­si­tion has been that cli­mate change has been a hoax. And that I think he said at one time it is the great­est scam per­pe­trat­ed on hu­man be­ings. The ques­tion is they may con­sid­er that pro­gramme to be not im­por­tant. Of course, that pro­gramme funds is­sues with re­gards to re­new­able en­er­gy in the Caribbean. So, we need to be cog­nizant about how they will treat with their po­si­tion on that.”

Bharath al­so spoke about the Drag­on gas agree­ment, which the Gov­ern­ment is look­ing to for fu­ture growth.

“T&T has pinned the coun­try’s eco­nom­ic hopes on the Drag­on gas. Even in the lat­est bud­get, you would have heard Mr Im­bert talk­ing about hold­ing strain for the next two years. How­ev­er, the re­la­tion­ship be­tween Venezuela and the new Pres­i­dent is a very rocky re­la­tion­ship. It is a very un­sta­ble re­la­tion­ship. So there­fore we are not cer­tain here in T&T if the li­cences that have been grant­ed to us by the Unit­ed States are go­ing to be re­newed. That would put a spoke in the wheels for us in terms of gen­er­a­tion of any forms of en­er­gy or new forms of rev­enue.

“Al­so, Pres­i­dent Trump has been on the cam­paign trail and has spo­ken about ‘drill. Ba­by, drill.’ They will be drilling more oil to make them­selves more self suf­fi­cient and what that means is that there will be a larg­er sup­ply of oil on the world mar­ket which will even­tu­al­ly low­er in­ter­na­tion­al prices.”

Giv­en these fac­tors, Bharath urged the Gov­ern­ment to re­flect on the fu­ture of the coun­try’s eco­nom­ic poli­cies as T&T’s eco­nom­ic for­tunes are tied to the Unit­ed States.

“Rough­ly 40 per cent of our ex­ports are to the Unit­ed States and an­oth­er 40 per cent of T&T’s im­ports are from the Unit­ed States. We are al­most joined at the hip of the US. Our eco­nom­ic for­tunes go­ing for­ward at this point in time is tied to the eco­nom­ic pol­i­cy com­ing out of the U.S. It is one of the dan­gers with­out hav­ing di­ver­si­fied the econ­o­my away from oil and gas. It has now come home to haunt us where the Gov­ern­ment has been left in a place where they have very lit­tle room to ma­noeu­vre and very lit­tle op­tions avail­able to them.”

Cau­tion urge

For­mer fi­nance min­is­ter who was al­so a for­mer for­eign af­fairs min­is­ter in the Peo­ple’s Part­ner­ship Gov­ern­ment, Win­ston Dook­er­an told the Busi­ness Guardian that he does not ex­pect any sig­nif­i­cant changes in the eco­nom­ic or diplo­mat­ic re­la­tion­ship with the Unit­ed States.

“Al­though Pres­i­dent-elect Trump, in his ‘Amer­i­ca First’ stance is like­ly to be more ‘trans­ac­tion­al’ in his for­eign eco­nom­ic re­la­tions, I would not ex­pect any change in busi­ness and trade mat­ters be­tween T&T and the USA. Apart from the ‘hot spots’ in the re­gion and se­cu­ri­ty con­cerns, the strate­gic val­ue of a high pri­or­i­ty for U.S. fo­cus on the Caribbean is small, so I will not an­tic­i­pate a change in fo­cus of U.S. for­eign pol­i­cy.”

De­spite this, he urged T&T to be cau­tious as in pur­suit of its own in­ter­ests, the US could im­ple­ment eco­nom­ic poli­cies that do not align with T&T.

“How­ev­er, the wider glob­al is­sues - cli­mate fi­nance, glob­al tax jus­tice, and re­source flows and im­mi­gra­tion, if pur­sued in an Amer­i­can-first man­ner, could ad­verse­ly im­pact the Caribbean. As such, new chan­nels of diplo­ma­cy in US/Caribbean re­la­tions and a stronger fo­cus on a mul­ti aligned - no hege­mo­ny, no bi­na­ry choice- for­eign pol­i­cy of T&T must be on the front burn­er.”

BI­LAT­ER­AL ECO­NOM­IC RE­LA­TIONS

Ac­cord­ing to the U.S. State De­part­ment’s web­site on re­la­tions with T&T, the Unit­ed States is T&T’s largest trad­ing part­ner. In 2022, T&T ex­port­ed US$5.4 bil­lion of goods to the Unit­ed States and im­port­ed US$3.5 bil­lion of goods from the Unit­ed States.

Eco­nom­ic agree­ments be­tween the Unit­ed States and T&T in­clude a Bi­lat­er­al In­vest­ment Treaty (1996), a Mem­o­ran­dum of Un­der­stand­ing Con­cern­ing Pro­tec­tion of In­tel­lec­tu­al Prop­er­ty Rights (1994), and a Con­ven­tion for the Avoid­ance of Dou­ble Tax­a­tion (1970). T&T’s lead­ing ex­ports to the Unit­ed States are iron, crude oil, liq­ue­fied nat­ur­al gas, and down­stream en­er­gy prod­ucts such as methanol and urea. Top im­port­ed prod­ucts from the Unit­ed States in­clude food prod­ucts, chem­i­cal prod­ucts, re­fined pe­tro­le­um, and ma­chin­ery.

The US State De­part­ment’s in­for­ma­tion page al­so showed that the Unit­ed States and T&T en­joy cor­dial re­la­tions, based on a shared com­mit­ment to democ­ra­cy, mu­tu­al­ly ben­e­fi­cial trade, en­er­gy se­cu­ri­ty, and close se­cu­ri­ty co­op­er­a­tion such as the CB­SI, the U.S. Gov­ern­ment’s re­gion­al cit­i­zen se­cu­ri­ty and de­vel­op­ment pro­gramme.

It fur­ther stat­ed that the two coun­tries have an ex­tra­di­tion and mu­tu­al le­gal as­sis­tance treaty as well as agree­ments on mar­itime co­op­er­a­tion and tax in­for­ma­tion ex­change. the Unit­ed States and T&T are part­ners un­der the U.S.-Caribbean Part­ner­ship to Ad­dress the Cli­mate Cri­sis (PACC 2030), which el­e­vates U.S. co­op­er­a­tion with Caribbean coun­tries to sup­port cli­mate adap­ta­tion and strength­en en­er­gy se­cu­ri­ty, while build­ing the re­silience of crit­i­cal in­fra­struc­ture and lo­cal economies to the cli­mate cri­sis.