DoBusiness Jamaica Virtual Conference: From Vulnerability to Antifragility Remarks

Excellencies, The Most Honourable Andrew Holness, Prime Minister of Jamaica,

Senator Don Wehby, Chairman of JAMPRO,

Ms Diane Edwards, President of JAMPRO,

Ms Patricia Francis, Chair, Trade Facilitation Task Force 

Ladies and gentlemen, friends, and participants.

Allow me to start by thanking JAMPRO and the Government of Jamaica for the kind invitation. It is indeed a pleasure to be with you today although it would have been better to be in Jamaica with you in person.

Permit me also to commend JAMPRO for its leadership in the promotion of business opportunities through trade and investment. JAMPRO’s advocacy for reforms aimed at improving the business climate has made Jamaica a standout performer in attracting foreign investment. This Conference is yet another example of leadership that seeks to look beyond crisis to new opportunities.

The impact of the Covid-19 pandemic cannot be overstated. Authorities across Latin America and the Caribbean are seeking to improve access to vaccines and therapeutics and are at the same time dealing with high levels of hesitancy that can dampen economic recovery. While the scars of the health and economic crises will subside over time, in years to come, this period will be seen as a major inflection point in how we work, buy, sell, invest, and trade across borders.  

The pandemic has permanently impacted the commercial and trade landscape and has turbocharged the trend towards digitisation and decentralisation of production in a distributed economy. Production has moved from being modular, to dynamic. Work is no longer defined by an office or a factory. A software or biotech engineer in Negril or Bangalore can work for Google, as if she was in Silicon Valley.

For this trend to be made sustainable, the pipelines of the digital economy must be laid down to empower connectivity.Equally, rules regulating this emerging landscape must be fit-for-purpose. Reforms that protect the consumer, in areas such as data protection must be enacted in a manner that also harnesses the talent and creative potential of, in particular, the youth.

Almost two years on, looking at the disruptive impacts of the pandemic, one can argue that COVID-19 marked a line between the old and the new economy – between the future of commerce and the past.

The seismic movements being witnessed on the global commercial landscape are also opportunities, particularly for developing countries, including small economies like Jamaica. Digitisation has democratised access to commercial and trade opportunities, as small businesses now have access to a global marketplace in ways that would not have been possible in the past.

Suppliers of intermediate and finished products can now more easily slot into global value chains through a combination of digital transmissions, electronic payments and other FinTech solutions, eCommerce platforms, and more intergraded and robust trade logistics. And in the case of Jamaica, with its out-sized exports in cultural services, the move on-line can help content creators and creatives access new customers and clients on a scale not previously possible.

To illustrate the magnitude of the opportunity in the online space, the value of the global e-commerce market in 2018 was estimated at USD25.6 trillion dollars, representing the equivalent of 30 percent of aggregate global GDP. This figure is certain to have increased substantially since the onset of the pandemic in 2019.

To sustainably access these opportunities, technological and regulatory infrastructure must keep pace with increasingly complex technical and regulatory requirements. I am pleased to say that the WTO is playing its part in this regard. I will address our efforts in support of eCommerce shortly.    

A recent publication by the United Nations Conference on Trade and Development on the impact of the pandemic illustrates the strong uptake of e-commerce across all regions since the onset of the pandemic.

For example, the Latin American online marketplace Mercado Libre, sold twice as many items per day in the second quarter of 2020 compared with the same period the previous year. And the African e-commerce platform Jumia reported a 50% jump in transactions during the first six months of 2020.

Similar trends have been observed across the Caribbean.  There are however constraints to harnessing the full potential of the digital and distributed economy.

Standards are required and must be applied in areas such as: electronic payment infrastructure, financing infrastructure, trade facilitation, and rules on data protection, consumer protection and cyber security.

Role of the WTO

To support Jamaica’s efforts aimed at a more competitive climate for investment and trade, the WTO can play a critical role. Your country is an important voice at the WTO with your Mission providing strong leadership to the ACP Group over the past number of months. This offers a unique opportunity for Jamaica to provide leadership at a global level that can help strengthen the multilateral trading system in a manner that is aligned with your development thesis and aspirations. 

Permit me to offer a few points on how the WTO can support a pro-investment environment.

Trade Facilitation

Jamaica was fast to ratify the Trade Facilitation Agreement (TFA) in January 2016 and took commitments in areas that can really help in making business and trade more efficient. Some of these measures will improve access to information required by investors in making capital allocation decisions, ensure consistency in the application of formalities, improve cooperation between government agencies, sets standards in the operation of customs and other border agencies, and support the automation and digitisation of trade transactions through commitments on electronic payments and the establishment of a Single Window.

However, to unlock the full benefits of the Agreement, national authorities may want to consider accelerating implementation of the WTO Trade Facilitation Agreement, making full use of the available capacity building support at the same time.

Based on notifications received from Jamaica and captured on the WTO Trade Facilitation Database, the current rate of implementation commitments as notified stands at below 40 (35.3) percent. I would also encourage you to provide outstanding transparency notifications as this would give an important signal of your ongoing commitment to implement trade facilitation reforms. The WTO Secretariat stands ready to assist in this regard.

Timely implementation of the TFA can support a more efficient climate for doing business particularly as we exit the crisis and grapple with the disruptive effects of the pandemic on global supply chains.

E-Commerce

Another area where the WTO can support your efforts at improving the competitive environment is through support for a future outcome on Electronic Commerce. At the Second WTO Ministerial Conference in May 1998, Ministers called for the establishment of a work programme on e-commerce. These discussions have been ongoing over the past twenty years but have not produced meaningful results.

In the run-up to the Eleventh WTO Ministerial Conference in Buenos Aires, a sub-group of WTO members started negotiations on eCommerce in what is termed in Geneva as the Joint Statement Initiative on Electronic Commerce.  

These discussions have made substantial progress. Some of the main themes include, facilitating electronic transactions, digital trade and logistics; data protection, cyber security, market access and promoting trust in electronic commerce.

It is important that the WTO as a whole make progress on some of these issues to ensure that the rules governing the digital economy support the expansion of economic opportunities, particularly for Micro, Small and Medium Sized Enterprises (MISMEs).

Supporting the eCommerce negotiations can can provide an opportunity for you, the business community to contribute to the formation of the rules that will govern the digital economy.

Moving from Vulnerable to Antifragile

It is important to acknowledge that while trade rules can support a more efficient economy, there are peculiarities uniquely associated with small island developing states, particularly those in the Caribbean and Pacific.

These relate to vulnerability to external shocks, particularly the frequent impacts of hurricanes and tropical storms. Natural hazards caused by the lottery of geography cannot be changed by trade rules, the WTO can however, play an important role in helping small island states move from being vulnerable to becoming anti-fragile.  

To my mind, vulnerability is about exposure to hazards, and resilience, a response to risks, however, anti-fragile systems anticipate risk, and thrive despite their vulnerability.

Policymakers, investors, and traders can ask and respond to a few questions that can help inform the future direction of travel for some economies.

• How can trends towards near-shoring and shorter supply chains accelerated by the pandemic support inward investment and increased trade opportunities?
• How can trade and investment stimulate technology transfer in a way that incubates new technologies such as Greentech and low carbon technologies??
• What are the opportunities through climate financing to build redundances into telecommunication and digital networks? 
• How can engagement at the multilateral level support and empower female and youth entrepreneurship?

Trade is critical to addressing the needs to the economy of the future. But equally, trade is vital to solving the current problems of the Global Commons that confront us today.

Yet trade is often seen as part of the problem, not part of the solution.

In a tangible way, trade can be a force for good that can help address the multi-dimensional vulnerability of many countries, including small island developing states. Trade, but more precisely, trade rules: can support the establishment of good regulatory practices and standards; Trade should prepare us for a post-covid economic recovery; Trade rules must help us prepare for future health crises; and Trade rules must help in solving the scourge of the unsustainable depletion of global fish stocks.

In closing, while the multilateral trading system cannot solve all the challenges that confront small island developing states, it can and must play an important role in addressing sustainability and the key economic challenges of our time.

I thank you.