The CARIFORUM-UK EPA, a tool for improved business between the UK and 14 Caribbean countries.

A fortnight ago, I had the pleasure of making my first in-person visit to the Caribbean since taking up this role ten months ago. My focus was the newly minted CARIFORUM-UK Economic Partnership Agreement (the ‘EPA’), which came into effect at the start of this year, as the UK took up its own independent trade policy for the first time in 50 years.

The EPA has huge potential for boosting trade and investment between the UK and the Caribbean – a relationship that was already worth around ￡3bn last year. For businesses in the 14 CARIFORUM countries who have signed up to the EPA, all goods exported to the UK (except arms and ammunition) receive immediate tariff and quota-free access. For UK businesses, tariffs are gradually being reduced on around 80% of goods into CARIFORUM markets over the next 11 years, up to the year 2033.

In both directions, this means cheaper, easier access to each other’s markets and, importantly, a cost advantage over exporters from other countries, which don’t have such a trade deal in place. Moreover, the EPA’s requirements for accessing these lower tariffs (otherwise known as ‘rules of origin’) are generous – goods can include content from other CARIFORUM countries, from EU countries, and from countries in Africa and the Pacific.

But the CARIFORUM-UK EPA is also what we call a ‘comprehensive’ free trade agreement – it goes beyond goods and provides important market access and protections for services providers. This is especially important given the majority of UK-Caribbean trade is in service sectors, whether that’s the traditional growth drivers of tourism and financial services, or other burgeoning sectors such as outsourcing and creative services. Among other things, the EPA also provides protections for intellectual property, encourages open and transparent Government procurement and removes other non-tariff barriers to trade.

These are fantastic opportunities for businesses. But the full potential is yet to be realised. Too many companies are unaware of these benefits or how, in practice, they can access them. Our most recent analysis shows that while 77% of CARIFORUM exports to the UK used the preferences available under the EPA, the figure is largely skewed by certain goods, particularly traditional agricultural ones, from certain countries. A large proportion of smaller companies could be missing out on benefits they’re entitled to. While we don’t yet have the data on UK exporters, our anecdotal evidence from discussions with business and with stakeholders in the region is that the utilisation gap is even bigger for British businesses.

We hear that this is often because the EPA and its related services can be confusing and hard to navigate, especially for SMEs who don’t have trade policy or public affairs functions like big companies do.

So, this was the backdrop for my visit to the region, which involved legs in Barbados and Trinidad & Tobago. On 24 November, we co-hosted with Caribbean Export a virtual Summit on the EPA. There I spoke alongside Trade Ministers from the UK and the Caribbean, and other regional stakeholders, in what was an excellent, engaging event, with over 500 registered attendees from business and Government alike. I was particularly glad to be part of a business roundtable, alongside the British Prime Minister’s Trade Envoy to the Caribbean, with a group of UK and Caribbean companies that gave practical insights into UK-Caribbean trade including how we can strengthen these ties, with the EPA at its centre. If you missed the Summit, you can watch it here.

I also met a range of Ministers in both countries, including Barbadian Prime Minister Mia Mottley. These discussions were extremely encouraging, showing a huge appetite for more business with the UK and, importantly, identifying a range of sectors of mutual interest which could help drive that increase in business – from logistics to life sciences, food and beverages to offshore wind farming (on which, please see my piece last week on renewables in the Caribbean).

Above all, one clear message shone through from those meetings and the EPA Summit – that more needs to be done to put the EPA into practice. The work does not stop with the signing of this agreement – in fact, that’s just the end of the beginning, to quote a famous man. The EPA won’t reach its full potential if commitments are not implemented – that is what gives confidence and predictability to businesses. For this reason, we are working with our CARIFORUM partners to implement all the rules governing our trading relationship and to ratify the EPA as soon as possible, sending a positive signal to our traders and investors.

But more than this, we must turn the EPA into a living agreement that is meaningful and useable for businesses. It was timely, then, that the EPA Summit came just days after the launch of the UK’s new Export Strategy. As part of its overall ambition to boost UK exports to ￡1 trillion by 2030, the Strategy commits to supporting business to capitalise on the UK’s global network of new trade agreements. As Secretary of State for International Trade, Anne-Marie Trevelyan, said when launching the Export Strategy “Free trade agreements are the lifeblood of my department. But they won’t mean anything if…businesses don’t take advantage of them”.

So this is our promise to businesses in both the Caribbean and the UK: a step-change in our engagement to make it practical and useable, in turn helping you trade more easily – and at lower cost – with markets in the Caribbean and the UK.

We have already developed online tools to support this work – if you’re a British business thinking about exporting to the Caribbean and you want to know what the benefits are for you and how to access them, please see the CARIFORUM-UK EPA page and Check how to export goods (CHEG) tool. Trade with the UK (TWUK) provides Caribbean and other overseas businesses with information on UK tariffs, regulations and other key processes to help them trade with the UK effectively. And through our development programmes in the region, such as the UK Trade Partnerships programme, we are further improving the online offer for Caribbean businesses –improving the data and market intelligence through the Caribbean Export and OECS websites. But we will also be more hands on – engaging directly with chambers, associations and businesses to increase knowledge and the ability to navigate and use the fantastic new CARIFORUM-UK EPA.

When I’m next in the Caribbean, which I hope will be very soon, I will be doing more of this work myself. In the meantime, our team in the region will be on hand to support you so please don’t hesitate to reach out to Regional Trade Policy Adviser,?Dan Hart,?or Trade Policy Manager, Caribbean,?D’Jamila Ward.