Trade facilitation enhancing interregional and intraregional trade
The Government of Jamaica is placing significant emphasis on enhancing trade on both an interregional and intraregional basis to make this a priority.Traditionally, Caribbean economies have been dependent on a narrow range of goods exports, but as global production has shifted towards Asia, Caribbean countries have experienced significant challenges in maintaining their competitive edge in goods production, particularly as certain trade preferences have expired. Fortunately, as a close examination of the economies of the region reveals, its competitive advantage lies in the services sectors. In addition to growth in the tourism sector, the Caribbean’s main export, some Caribbean countries have diversified their services sectors to include areas such as financial services and information and communications technologies.
However, real challenges remain. According to the International Monetary Fund, Jamaica's current account deficit averaged 11.5% in 2010 and 11.7% in 2011. To overcome this economic challenge, the Government of Jamaica is working to improve Jamaica’s competitiveness in interregional and intraregional trade by minimizing friction and other impediments in its export process through enhanced trade facilitation. These efforts are central to Jamaica’s progress, particularly as it relates to the country’s primary economic growth initiative to position the country as the premier shipping and logistics hub in the Americas. This would allow Jamaica to capitalize on the global growth of the shipping and logistics industry, and facilitate the explosion of new service industries in the country and region.
Jamaica’s commitment to enhanced trade facilitation
The Government of Jamaica believes trade facilitation is a key component in improving Jamaica’s competitiveness. Easing trade and minimizing impediments to exports not only maximizes current exports, but also attracts new trade opportunities. Jamaica is working towards its goals using trade facilitation initiatives and future plans such as:
• Development of a fast track facility: In 2011, Jamaica put in place a ‘fast track facility’ that streamlines the process for exporters to conduct export-related transactions by bringing many export-related public services under one roof. The facility significantly decreases the time and effort involved in exporting as an exporter can obtain the required export registrations, licences, certifications and advisory services in one location.
• Customs improvements: Recognizing that the efficient operation of the country’s customs systems is paramount to an export-driven economy, Jamaica has prioritized the modernization of its customs agency to reduce the time and expenses involved in the customs process. Initiatives include the introduction of online payment of duties, simplified export documents, increased automation and modernized border-crossing administration.
• Development of a port community system and a single electronic window: In May 2012, Jamaica introduced a two-stage tender process for a port community system that will electronically centralize commercial and logistics activities among companies involved in the export and import process. Jamaica also intends to move to a single electronic window, a virtual one-stop-shop that allows the business community to conduct business with the government through a seamless interface. The goal is to use technology to provide faster customs clearance, reduce costs and increase efficiency among the entities involved in the movement of goods.
• Expansion of the Port of Kingston: Jamaica is also expanding the Port of Kingston. This is one element of Jamaica’s broader strategy to develop Jamaica as a global shipping and logistics hub for the Americas. The initiative is timely as it positions Jamaica to take advantage of the completion of the Panama Canal expansion scheduled for 2015. This is expected to shift global trade from the Pacific Rim to the Atlantic region and cause an explosion in regional trade opportunities. The hub represents a major thrust towards trade facilitation as it will include significant measures to simplify trade processes and reduce impediments to trade in the region and globally. These measures include the incorporation of state-of-the-art technology and implementation of incentive and regulatory frameworks to facilitate an enabling business environment. The Government of Jamaica believes the region, likewise, must place emphasis on improving the efficiency of regional ports and the development of other efficiencies related to trade.
Positioning Jamaica in the global supply chain
The centerpiece of the country’s growth strategy is its positioning as the shipping and logistics hub of the Americas, on par with industry leaders Singapore, Rotterdam and Dubai. This effort recognizes the prime opportunity offered to improve Jamaica’s economic standing by enhancing interregional and intraregional trade. Strategically located on major air and sea routes between North America, Europe and South America, Jamaica’s geographic position and its natural resource endowments, including two of the deepest natural harbours in the world, provide the country with the competitive advantage to become a premier logistics hub. Jamaica is perfectly positioned to capitalize on increased trade volume and demand for trade-related services in the region as the size of the Panama Canal is set to double.
To make the hub a reality, Jamaica’s planned infrastructure improvements include:
- The establishment of a new economic zone in close proximity to the Port of Kingston;
- The establishment of dry-dock facilities;
- Commodity port development for storage and trans-shipment;
- Upgrading of cargo and maintenance, repair and operations facilities.
The impact of the hub on interregional and intraregional trade is expected to be enormous. The addition of shipping and logistics capabilities will increase customers’ ability to channel more cargo through the Caribbean, positioning Jamaica as a major trans-shipment port. Additionally, the logistics hub will connect most industries in Jamaica and in the Caribbean, enabling the country to better integrate traditional industries into the global value chain and facilitate the development of new and innovative commercial ventures. For example, the Government of Jamaica expects the development of new service industries and the enhancement of existing ones, including ship repair, stevedoring, the provision of third-party logistics and financial services, and value-added manufacturing.
Jamaica recognizes that export-led growth is the primary means by which it can turn its economy around. To achieve this growth, the Government of Jamaica is focused on trade facilitation to increase connectivity, reduce trade costs and integrate the country’s exports of both goods and services into the global value chain. Jamaica is also capitalizing on a prime opportunity to become the global shipping and logistics hub of the Americas. This will not only improve trade, but also enhance the volume of interregional and intraregional trade, furthering Jamaica’s economic standing in the medium and long term.