|
 Two-way
free trade has commenced between the Dominican Republic (D.R.) and the 14-member
Caribbean Community (CARICOM) and initially the principal partner in the new
relationship is the twin-island nation of Trinidad & Tobago (T&T),
according to Fernando Gonzalez-Nicolas, the president of the T&T Chamber of
the Commerce in the D.R.
“The two-way trade between
the D.R. and T&T last year reached $125 million, making that country the
largest trading partner of the D.R. in the Caribbean and Central America,”
said Gonzalez, pointing out that the trade is not balanced because at present
$90 million of the total is imports into the D.R. from T&T while exports in
the other direction represent only the balance of $35 million.
While the gross domestic
products (GDPs) of the two countries are about $20 billion each, that’s where
the comparison ends. T&T combined have a population of
 1.3 million in a land
mass of 1,980 square miles. The D.R., on the other hand has 8.5 million
inhabitants in a land mass of 19,000 square miles. These economic differences
result in pronounced different per capita (PC) incomes with the D.R. hovering at
$2,000 while T&T is above $5,000.
Accounting for the disparity
in GDP and PC figures is the fact that T&T is rich is oil and natural gas
deposits which have resulted in the country becoming the economic powerhouse in
CARICOM.
“A closer relationship has
developed between the private sectors of the two countries in recent years as
each discovered the increased benefits of doing business with one other,” said
Gonzalez.
The principal products from
T&T being imported into the D.R. are natural gas derivatives and
petrochemical byproducts led by butane gas cylinders and urea (a necessary
ingredient in fertilizer). But exports from T&T to the D.R. are increasingly
diversifying as D.R. manufacturers and wholesale distributors discover new
sources of supplies that are more economical than those previously used in the
U.S.
Some of the other items being
imported into the D.R. from T&T include steel, glass bottles, diapers,
cookies, candy, snacks and soft drinks. “While the trade is rather small in
quantity now, it is growing steadily as companies in the D.R. come to know the
quality of T&T products better and the savings that they represent,” said
Gonzalez.
What is the D.R. sending to
T&T? At present the principal items are tiles, limestone, fertilizer, fresh
citrus products, canned fruits and vegetables,, corn meal, furniture and
furniture parts, ice cream and transformed metal products like nails and rods.
LNG
shipments to D.R. to start in October
 All of this is set to more
than double later this year when the D.R. commences receiving liquefied natural
gas (LNG) under an agreement between BP, the British petroleum giant, and
electrical energy supplier AES which operates two power plants in the D.R. The
LNG shipments are estimated at $150 million a year initially and is expected to
increase and be supplied to other firms in the country, according to Gonzalez.
“This will also be cleaner as well as more economical and should reduce the
price of energy,” he added. The LNG will be transported to the D.R. and Puerto
Rico is a $300 million new vessel which BP is putting into the service.
The trade between the D.R.
and T&T is expected to continue growing as a result of the Trade Agreement
signed between the D.R. and CARICOM in 1998. It was ratified by the D.R.,
T&T, Jamaica and Barbados in 2001 and implementation commenced Dec. 1, 2001
between those countries that had already ratified it. Ratifications are pending
with Belize, Guyana and the Eastern Caribbean States.
 Recently government officials
and representatives of the private sectors of the D.R. and CARICOM states met in
Santo Domingo to discuss the opportunities and challenges under the new
agreement. While there were some problems with certain items in some countries,
the atmosphere in the two-day conference was described as cordial with both
co-chairs, CARICOM Secretary General Edwin Carrington and economist Miguel Ceara-Hatton
leading the D.R. negotiating team.
What both seasoned
negotiators commented on was the presence of the private sector representatives
who participated in the discussion addressing their ideas and concerns. The
changes that the new free trade between neighboring developing countries came up
repeatedly but there was no acrimony even when issues were discussed forcefully.
Problems had already emerged
over Dominican citrus exports to Jamaica which have Jamaican producers nervous
because the D.R.’s massive potential and lower prices.
Belize appeared at the discussions to express its concern over D.R.
exports to Jamaica. Even though Belize and the D.R. have no trade, 25% of
Belize citrus exports to Jamaica represent $7.4 million annually.
Snacks, candies and soft
drinks are sensitive items for both the D.R. and T&T but the export of air
conditioners and refrigeration units from T&T to the D.R. were approved.
There are mechanisms in the agreement to review and arbitrate differences
between the partners and they are expected to be utilized until any problems are
cleared up.
Greater
balance, diversification goals
“While the trade is
concentrated between the D.R. and T&T at present and lopsided in favor of
T&T, the challenge to the D.R. private sector is to strive for greater
balance and diversification,” said Gonzalez. “When Jamaica and Barbados see
what’s going on, they’ll get into it too and it’ll only be a matter of
time before Guyana and then Suriname follow.”
March
10, 2002
Revista INTER-FORUM is affiliated with (ICCAP) Any reproduction in part or whole is strictly forbidden without the authors written authorization
Top
1)
Other articles by the well known Caribbean author John collins can be read
at:
www.pymesdominicanas.com
| 
