An extract from Guyana’s 2nd WTO trade policy review
Trade is very important for Guyana. With imports and exports accounting for around 170% of Gross Domestic Product (GDP), the importance of trade and trade policy cannot be overemphasised.

As a member of the Caribbean Community (CARICOM), Guyana’s trade policy is underpinned by the country’s rights and obligations under the Revised Treaty of Chaguaramas. In this regard also, Guyana’s external trade policy is widely coordinated within CARICOM, including external trade negotiations with third countries.

Coordination of Guyana’s trade policy is the responsibility of the Ministry of Foreign Affairs, Foreign Trade and International Cooperation.

Despite budgetary constraints and a limited number of trade staff, the Ministry has proven its capability to deal with complex trade policy matters, such as the recently concluded Economic Partnership Agreement with the European Union.

The Ministry leads a National Advisory Committee for External Negotiations (NACEN) which involves major public-private stakeholders and ensures their participation in trade policy matters. NACEN is chaired by the Minister.

Trade taxes are not a major source of revenue for the Government’s budget, which reflects Guyana’s commitment to an open, market-based trade regime. Internal reforms such as the introduction of the Value Added Tax (VAT) in 2007 have helped Guyana to significantly streamline tax administration, strengthen the tax base and reduce the reliance on border taxes.

Trade performance
Guyana has seen strong export growth during the period under review. Expanded production of traditional and non-traditional products and favourable world market prices for key commodities are largely responsible for this performance. Imports have grown as well, and Guyana continues to have a significant trade deficit.

Some diversification of export destinations has occurred in the last five years, with increased exports to non-traditional markets, such as China. In the same way, more and more imports are sourced in new markets, notably China, India and Brazil.

Expanding exports to new markets is a key priority for Guyana. Currently, most exports still go to a small number of countries and are often driven by preferential market access, as is the case for sugar and rice.

There is still relatively little trade with Guyana’s neighbouring countries, with the exception of oil imports from Venezuela. Further investments in physical infrastructure have to be made to enable trade on a larger scale.

Preferential market access and free trade agreements
Guyana is a founding member of CARICOM and an active supporter of regional integration. Tariff-barriers for trade in goods within CARICOM have been widely abolished, to the benefit of regional production. A significant share of Guyana’s imports and exports are with CARICOM states. The completion of the CARICOM Single Market and Economy (CSME) is a priority for both Government and its regional partners.

Market access is a key trade policy objective for Guyana, in view of the small domestic market size. As such, since the last review, Guyana has sought to strengthen its trade relationships with long-standing partners, as well as to explore new relationships.

Guyana receives preferential market access in a number of markets, mainly in the European Union, the USA and Canada. A significant share of its exports does indeed depend on such preferences. Together with CARICOM, these countries are also Guyana’s major trading partners.

The EU’s preferential market for Guyana’s exports of sugar, rice and rum has been crucial for the development of these sectors.

As is widely known, the trade relationship with the EU is undergoing substantial changes. Trade relations with the EU entered a new phase with the conclusion of the CARIFORUM-EU Economic Partnership Agreement at the end of 2007. The agreement provides for asymmetric reciprocity. Implementation of the commitments in the EPA will undoubtedly be challenging, especially given Guyana’s limited resources.

As such, Guyana places great emphasis on the timely and predictable delivery of resources to ensure seamless implementation.

The United States grants duty-free access for a wide range of products under the Caribbean Basin Initiative (CBI). The CBI has recently been extended by the U.S. Congress and WTO members renewed a waiver until 2014. The United States is also the major source of non-oil imports for Guyana.

Canada extends to Guyana and other CARICOM countries non-reciprocal preferential access to the Canadian market for a wide range of products under the CARIBCAN Agreement. Gold and diamonds account for a significant share of Guyana’s exports to Canada.

CARICOM and Canada are currently preparing for negotiations for an enhanced Trade & Development Agreement that will further strengthen the trade and economic relationship between the parties.

CARICOM has signed FTAs with a number of Latin American countries, namely Cuba, the Dominican Republic, Costa Rica, Colombia and Venezuela. Guyana has also signed a bilateral Partial-Scope Agreement with Brazil.

However, despite the geographic proximity, trade between Guyana and these countries has until now been rather limited. One contributing factor is the limited transportation infrastructure between the parties.

A further expansion of trade relations through new or improved trade agreements is foreseen over the next few years. Tariff barriers in potential export markets will become less important in the future, especially once the Doha round (the ongoing trade liberalization talks) is successfully concluded.

An increased effort will have to be made both by exporters to explore opportunities in new markets and by Government in providing an enabling environment for the increased production and export of non-traditional exports and in improving trade infrastructure. The latter will be of major importance in facilitating Guyana’s trade with Brazil and other countries on the South American mainland.

New and emerging sectors
Historically, the growth pillars of the Guyanese economy depended on the traditional industries – sugar, rice and bauxite.

However, the traditional economic industries alone cannot provide a sufficient number of jobs and rapidly increase per capita income, which will be necessary for Guyana to achieve the Millennium Development Goals (MDGs) and reduce poverty significantly. Nor will they be sufficient to reduce the country’s vulnerability to external shocks.

While the traditional industries continue to grow and show great resilience, Government places high priority on actively promoting accelerated diversification of the economy. In this regard, non-traditional agricultural sub-sectors – tourism, alternative energy and information technology – are among future growth poles.

In the area of agriculture, several emerging sub-sectors continue to show formidable prospects for investment and growth, including fruits and vegetables, livestock and aquaculture.

Special emphasis is placed on institutional strengthening, training, research and development, and increasing levels of production. The Agriculture Export Diversification Programme will provide institutional support to the National Dairy Development Programme (NDDP) and the National Agricultural Research Institute (NARI), and through the construction of new laboratories at NDDP and rehabilitation of the seed facility at NARI.

Government is pursuing private investments in alternative energy in the areas of bio-fuels, hydropower, and solar power.

In the area of hydropower, a major project is planned at Amalia Falls which, once completed, would lead to a significant improvement of electricity supply in Guyana. Petroleum exploration is currently ongoing on both offshore and onshore locations.

Also, in relation to non-traditional minerals, seismic surveys have indicated that prospecting for uranium is promising and may hold potential in the future. The Government will continue to facilitate and promote the activities of this sector, with a view to successful exploration and timely advancement into production. (GINA)