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MINISTRY OF FOREIGN TRADE &INTERNATIONAL COOPERATION

Department of Foreign Trade

REVIEW

OF

GUYANA’S

FOREIGN

TRADE

2002 - 2003

2

3

PRODUCED BY: Yojna C. HernándezForeign Trade OfficerMinistry of Foreign Trade & International

Cooperation

COMPLIMENTS: Bank of GuyanaBureau of StatisticsMinistry of AgricultureGuyana Rice Development BoardNew Guyana Marketing Corporation

SPECIAL THANKS: Ms. Rajdai JagernauthSenior Foreign Trade OfficerMinistry of Foreign Trade & International

Cooperation

CONTENTS

Foreword from Hon. Clement J. Rohee, Minister of Foreign Trade & International Cooperation 4

Chapter OneOverview of Global Trade - 2002, 2003 5

Chapter TwoOverview of Guyana’s External Trade 7

Chapter ThreeAnnual Imports and Exports - 2002, 2003 9

Chapter FourA Closer Look at Exports 12

Chapter FiveA Closer Look at Imports 20

Chapter SixDirection of Trade 26

Chapter SevenForeign Direct Investment 37

Chapter EightExternal Trading Relations 39

Chapter NineOutlook for 2004 47

4

FOREWORD

The Ministry of Foreign Trade & International Cooperation is pleased to make available the second publication of its annual review – the Review of Guyana’s Foreign Trade 2002-2003.

Though the national economy contracted in real terms in 2003 by 0.6%, Guyana experienced positive growth in the level of merchandise exports, earning 3.5% more than in 2002. Total exports were 80.8% of Gross Domestic Product, as against 80.7% in the preceding year. The value of total imports increased by 1.5%.

Trade continues to be of great importance to Guyana, with this country being exceptional for its high degree of dependence on the external sector. A study by the International Monetary Fund (IMF) revealed that in the average CARICOM member state, export and import of goods and non-factor services accounted for 116.9% of GDP during 1994-1998. Guyana was the outlier at 211.3%. This clearly demonstrates that Guyana can ill afford to overlook the opportunities or the risks presented by the external sector.

Guyana continues to pursue sound macroeconomic policies and sector policies that encourage the production of export products. With projections for improved performance by sugar, rice, fisheries, and forestry, Guyana can see growth in its GDP, exports, and revenues, in 2004.

As the Ministry of Foreign Trade and International Cooperation continues in its effort to provide information on Guyana’s external trade activities, it is hoped that this issue of the Review of Guyana’s Foreign Trade will be beneficial to the business community, the private sector, students and the public as a whole.

We welcome your feedback on how this publication may be improved, to better serve your needs.

Clement J. Rohee,Minister of Foreign Trade and International Cooperation

5

Chapter One

OVERVIEW OF GLOBAL TRADE

The World Trade Organisation (WTO) reported that a 2.5% increase in global output in 2003, spurred world trade to recover by 4.5%. While this growth was stronger than expected a year ago after the outbreak of the Severe Acute Respiratory Syndrome (SARS) and the build-up of tensions in the Middle East, trade and output expansion in real terms in 2003 remained below the average rates recorded since 1995.1

World merchandise exports rose by 16.0% to a new record level of US$7.3 trillion and commercial services exports by 12.0% to US$1.8 trillion. More than two thirds of this increase was, however, due to dollar price changes.

Asia and the transition economies were the regions recording the most dynamic trade performance in 2003. Their merchandise exports and imports expanded in real terms between 10.0% and 12.0%.

North America’s import growth was somewhat faster than world trade and much stronger than its own export growth. United States merchandise imports increased by 5.7%, while exports increased by less than 3.0%, as a result of continued contraction of export volumes. Linked to its nearly stagnating economy, Western Europe had a trade growth of 1.0%.

One of the outstanding developments of 2003 was the sharp rise of China’s trade. As imports expanded by 40.0%, China became the third largest merchandise importer in the world, ahead of Japan and only behind the European Union and the United States.

Gains in the ranking of the leading commercial services traders in 2003 were principally recorded by Western European countries at the expense of American and Asian countries. This observation is true for both export and import rankings. It is estimated that in 2003, China became the largest exporter of commercial services among the developing countries.2

Chemicals emerged as the product group with the strongest trade growth over the last two years. Driven by pharmaceutical trade among the developed countries, its share in world merchandise exports rose above 10.0%, exceeding in value not only world trade in automotive products, but also that of agricultural products.3

In Latin America and the Caribbean, oil producing countries, especially Venezuela and Trinidad and Tobago, earned increased revenues from high oil prices. However, the effects of negative

1 WTO Press Release: Stronger Than Expected Growth Rate Spurs Modest Trade Recovery, April 5, 20042 WTO Press Release: Stronger Than Expected Growth Rate Spurs Modest Trade Recovery, April 5, 20043 WTO Press Release: Supachai: Sluggish Trade Growth Calls for Urgent Pick Up of Stalled Trade Talks, November 5, 2003

7

multiplier growth in the economy was experienced by the rest of the region, notably Brazil’s economy, which having grown by 1.9% in 2002, contracted by 0.2% in 2003.

The tourism industry of the Caribbean benefitted from the growth in the global economy and the appreciation of the euro against the dollar, which helped to make the Caribbean destination cheaper for European visitors. On the other hand, although some countries experienced increased production, output in critical agricultural and manufacturing sectors declined.4

According to WTO economists, world economic growth experienced in the second half of 2003 is expected to maintain its momentum in 2004. Global Gross Domestic Product (GDP) growth is estimated to reach 3.7% in 2004, up from 2.5% in 2003.

It is projected that global trade, in keeping with the predicted economic recovery, could expand by 7.5% in 2004. There are, however, a number of risks associated with these projections, including the possibility of slower than expected import growth in the United States and a faltering in demand recovery in Western Europe.

Projections for World economic growth assume a fall in average oil prices in 2004. However, oil markets are known for defying forecasts.

According to WTO Director-General Supachai Panitchpakdi, “clearly, the improved economic situation in the United States and Asia has given an important boost to world trade. But when you look around the world, the pace of trade growth remains uneven and there remain many barriers to trade, globally.

“Greater expansion of trade would provide support for sustained economic growth and job creation. If this potential is to be realized, the many trade distortions that exist must be addressed, and the best way to do that is to bring about a successful conclusion to the Doha Development Agenda.”

4 Budget Speech: Sessional Paper No.1 of 2004 Eighth Parliament of Guyana, Page 4

8

Chapter Two

OVERVIEW OF GUYANA’S EXTERNAL TRADE

Table ISELECTED SOCIO-ECONOMIC AND

TRADE INDICATORSIndicators 2002 2003

Population (mid-year) 749,000 751,000Gross Domestic Product (GDP) at Factor Cost (US$M) 614.1 634.5Growth Rate of Real Gross Domestic Product (GDP) 1.1% (0.6%)Gross Domestic Product (GDP)per capita (US$) 829.2 840.2Rate of Inflation(% Change in Urban CPI) 6.2% 4.9%Average Exchange Rate:GY$/US$ 190.5 194.25

Total Exports (US$M) 495.5 512.8

Total Exports (% GDP) 80.7% 80.8%

Total Imports (US$M) 563.1 571.7

Total Imports (% GDP) 91.7% 90.1%

Trade Balance (US$M) (67.7) (58.9)Number One Export Market (non-CARICOM) USA UKNumber One Import Market (non-CARICOM) USA USANumber One Export Market (CARICOM) Jamaica Jamaica Number One Import Market (CARICOM)

Trinidad & Tobago

Trinidad & Tobago

Top Exported Commodity(by value) Gold GoldSources: Bank of Guyana and the 2004 National Budget

9

In 2003, Guyana experienced positive growth in the level of merchandise exports, earning US$512.8 million. This was 3.5% above the 2002 level. Total exports amounted to 80.8% of Gross Domestic Product (GDP), in comparison to 80.7% in 2002. Imports during the same period increased by 1.5%, reaching US$571.7 million.

The balance of trade continued to fluctuate. The balance of trade deficit increased by 13.0% in 2003.

Merchandise export earnings came largely from export of gold, sugar, fish and shrimp, rice, bauxite, and timber. Together, these products accounted for 83.9% of Guyana’s total export earnings.

Of these commodities, sugar, bauxite, and fish and shrimp recorded increased earnings. Receipts from sugar were 8.1% above the 2002 level. The performance of the bauxite sector improved appreciably, resulting in increased earnings by 14.8%, while growth in fish and shrimp production led to a 2.4% growth in earnings, compared to the previous year.

The other exports all recorded

lower earnings, compared to what was earned in the preceding year. Despite the shortfall in sugar production and gold declaration, these commodities were the top revenue earners in 2003, together accounting for 50.7% of Guyana’s total export earnings.

Overall, Guyana’s non-traditional agricultural exports decreased marginally in 2003, both in value (by 2.6%) and volume (by 0.9%) exported. However, the volume of exports of these commodities to regional markets increased to 52.0%, from 45.0% in 2002. Earnings from non-traditional agricultural exports represented 0.7% of total export earnings in 2003.

With respect to merchandise imports, there was an overall 5.1% decline in Consumption Goods imported in 2003, when compared to 2002 levels. However, increases in the import of Intermediate Goods and Capital Goods were recorded at 5.0% and 2.0%, respectively. Food for Final Consumption, and Fuel and Lubricants, remained Guyana’s major categories of imports.

The United Kingdom emerged as Guyana’s largest export market in the European Union (EU), in 2003. Canada retained its position as Guyana’s second largest export market, while the United States of America ranked third.

In 2003, North America (Canada and the United States of America) accounted for approximately 40.0% of Guyana’s export earnings, the EU markets accounted for 35.0%, and CARICOM markets 19.0%. The principal export markets were Canada in North America, the United Kingdom in the EU and Jamaica in the CARICOM region.

With regard to sources of imports, the USA retained its position as the leading source of imports in 2003, followed by Trinidad and Tobago and the Netherlands Antilles. Imports from CARICOM expanded to 30.0%, with Trinidad and Tobago accounting for 90.0% of total imports from CARICOM. Imports from the EU declined to 12.0%, from 13.2% in 2002, while imports from the United States of America slipped to 31.7%, from 34.6% in the preceding year. The UK continued to be Guyana’s major source of imports in the EU, although the actual value was slightly less than that of 2002.

The Guyanese economy contracted in real terms by 0.6%, during the review period. This negative growth is attributed to the fall in sugar production and gold declaration. However, with the projections for 2004, Real Gross Domestic Product (GDP) could expand by 2.5%, as a result of improved performance by sugar (projected to grow by 8.6%), rice (projected to increase by 1.4%), fisheries (expected to grow by 0.5%), and forestry (with growth projected at 0.5%). It is anticipated that the services sector will also make a significant contribution to GDP.

10

Chapter Three

ANNUAL IMPORTS AND EXPORTS

This section analyses annual exports and imports for 2003. According to Table II, Guyana’s exports improved during 2003, earning 3.5% more than in the preceding year, while imports increased by 1.5%. This performance resulted in a higher balance of trade, which continues to be negative. Monthly exports, on average, amounted to approximately US$43 million in 2003, compared to US$41 million in 2002, while average monthly imports amounted to US$48 million in 2003, a slight increase from the previous year.

Total exports were 80.8% of Gross Domestic Product (GDP) in 2003, compared to 80.7% in 2002. Total imports amounted to 90.1% of GDP in 2003, compared to 91.7% in the previous year.

Table IIMONTHLY IMPORTS, EXPORTS AND TRADE BALANCES

($US MILLION)2002 2003

Exports Imports Balance of Trade

Exports Imports Balance of Trade

January 31.0 47.6 (16.6) 28.7 57.8 (29.1)February 37.8 39.9 (2.1) 47.6 42.9 4.7March 53.1 44.7 8.4 37.6 39.5 (1.9)April 34.4 48.7 (14.3) 39.7 53.2 (13.5)May 37.9 48.5 (10.6) 36.2 45.6 (9.4)June 45.1 48.5 (3.4) 41.2 46.5 (5.3)July 31.9 47.4 (15.5) 40.5 48.6 (8.1)August 31.4 44.3 (12.9) 31.7 42.1 (10.4)September 56.8 45.7 11.1 55.3 47.0 8.3October 51.7 56.0 (4.3) 45.5 52.5 (7)November 45.2 43.5 1.7 51.9 47.9 4December 39.3 48.5 (9.2) 56.8 48.1 8.7TOTAL (US$M) 495.5 563.1 (67.7) 512.8 571.7 (58.9)Monthly Average (US$M) 41.3 46.9 (5.6) 42.7 47.6 (4.9)Source: Bank of Guyana

11

COMPARISON OF MONTHLY EXPORTS – 2002 AND 2003

Figure 1 Source: Bank of Guyana

COMPARISON OF MONTHLY IMPORTS – 2002 AND 2003


12

COMPARISON OF TOTAL EXPORTS AND TOTAL IMPORTS


COMPARISON OF CONTRIBUTION OF EXTERNAL TRADE TO GDP


13

Chapter Four

A CLOSER LOOK AT EXPORTS

Guyana’s main foreign exchange earners in 2003 were gold, sugar, fish and shrimp, rice, bauxite and timber. Earnings from these products, as a percentage of Gross Domestic Product (GDP), did not vary significantly from the previous year, totalling 68.0% in 2003, as against 69.0% in 2002 (see Table III).

As reflected in Table III, of the top export commodities in 2003, earnings from sugar and bauxite increased significantly, while there was a small increase in earnings from fish and shrimp, when compared to 2002 levels. Lower earnings came from gold, rice and timber (see also Table VI).

Table IIIGUYANA’S TOP EXPORT COMMODITIES’ CONTRIBUTION TOTOTAL EXPORTS AND EXPORTS AS PERCENTAGE OF GDP

ExportProduct

2002 2003Value

(GY$M)Value

(US$M)

%Contribution

to Total Exports

Exports as % of

GDPValue

(GY$M)Value

(US$M)

%Contribution

to Total Exports

Exports as % of

GDP

Gold 25,963.70 136.2 27.5 22.2 25,563.90 130.9 25.5 20.6

Sugar 22,788.40 119.5 24.1 19.5 25,231.90 129.2 25.2 20.4Fish and Shrimp 10,027.60 52.6 10.6 8.6 10,524.90 53.9 10.5 8.5

Rice 8,666.80 45.5 9.2 7.4 8,841.10 45.3 8.8 7.1

Bauxite 6,714.70 35.2 7.1 5.7 7,898.

60 40.4 7.9 6.4

Timber 6,763.10 35.5 7.2 5.8 5,995.30 30.7 6.0 4.8

TOTAL 80,924.30 424.4 85.7 69.2 84,055.7 434.6 83.9 67.8Source: Bank of Guyana

GOLD

Gold remained the top foreign exchange earner for Guyana during 2003, despite a 3.9% fall in revenue generated, amounting to US$130.9 million. This downturn could be attributed to the 13.7% decrease in gold declaration. The average export price in 2003 was US$355.7 per ounce,

14

compared to US$302 in 2002. Revenue earned from gold exports in 2003 accounted for 25.5% of total exports and 21.0% of GDP (see Tables III and VI).

SUGAR

Earnings from sugar in 2003 were 8.1% above 2002 earnings, totalling US$129.2 million. This is despite a 9.0% shortfall in sugar production during 2003 (as a consequence of poor weather conditions), but which was compensated for by a large carry over stock from 2002. Increased exports to CARICOM markets, resulted in an overall improvement in export levels by 10.7%, compared to 2002 levels (see Tables III and VI).

Earnings from sugar represented approximately 25.2% of total exports in 2003, as against 24.1% in 2002, and accounted for 20.4% of GDP, compared to 19.5% in the previous year (see Tables III and VI).

Sugar exports to the European Union (EU) under the Sugar Protocol of the Lome Convention amounted to 54.1%, compared to 57.0% in 2002, and earned approximately US$509.2 per tonne. The average world market price during 2003 was US$278.3 per tonne.

FISH AND SHRIMP

Revenue earned from fish and shrimp exports increased by 2.4% during 2003, amounting to US$53.9 million. This improved performance was as a result of an 18.0% increase in overall production, making this category of exports the third largest revenue earner in 2003. These commodities represented 10.5% of total exports, slightly less than the 2002 level. Earnings from fish and shrimp were 8.5% of GDP, compared to 8.6% in 2002 (see Tables III and VI).

RICE

Despite an increase in export volume by 3.6%, earnings from rice amounted to US$45.3 million in 2003, slightly less than that earned in 2002. This could be attributed to an increase in exports of cargo rice, which has a lower value than polished rice, as well as, the overall reduction in price. The unit price received in 2003 was US$225.9 per tonne, compared to US$234.9 per tonne in the previous year.

Earnings from rice exports constituted 8.8% of total exports in 2003, down from 9.2% in 2002. In relation to GDP, rice exports contributed 7.1%, as against 7.4% in 2002 (see Tables III and VI).

15

The European Union (EU) remained Guyana’s main export market for rice during 2003, importing approximately 108,006 metric tonnes. This represented 54.0% of total rice exports, a decline from 62.3% in the previous year. Portugal and Holland remained the top importers in the EU, purchasing 43,848 metric tonnes (compared to 56,000 metric tonnes in 2002) and 31,962 metric tonnes (up from 25,000 metric tonnes in 2002), respectively.

Other importers of Guyana’s rice in 2003 included CARICOM countries – 26.0% of total rice exports (51,165 metric tonnes); Overseas Countries and Territories (OCTs)5 – 13.0% of total rice exports (25,962 metric tonnes); and Other Countries – 7.0% of total rice exports (15,299 metric tonnes).

The main CARICOM markets for rice continued to be Jamaica (27,695 metric tonnes) and Trinidad & Tobago (20,415 metric tonnes). Jamaica’s rice imports for 2003 declined by 10,205 metric tonnes, while Trinidad & Tobago’s rice imports increased by 3,915 metric tonnes.

BAUXITE

Bauxite earnings in 2003 increased by 14.8%, with growth in export volume by 9.6% and a 15.7% increase in the average price. Revenue earned from bauxite increased to US$40.4 million, from US$35.2 million in 2002. This commodity accounted for 7.9% of total exports and amounted to 6.4% of GDP in 2003, an improvement from 7.1% of total exports and 5.7% of GDP, in the previous year (see Tables III and VI).

TIMBER

Having grown by 7.6% in the previous year, receipts from timber exports declined by 13.5%, earning US$30.7 million in 2003, compared to US$35.5 million generated in 2002. Timber exports represented 6.0% of total export earnings in 2003, compared to 7.2% in the previous year. In terms of contribution to GDP, timber accounted for 4.8% in 2003, compared to 5.8% in 2002 (see Tables III and VI).

Despite an increase in unit value by 7.0%, receipts from Other Timber Exports were US$19.7 million, 19% below 2002 receipts (see Table VI).

The turnaround in the performance of timber could be attributed to a number of difficulties experienced by local exporters, during 2003.

EARNINGS OF TOP EXPORT COMMODITIES AS PERCENTAGE OF GDP5 The Overseas Countries and Territories (OCTs) are countries that have a special relationship with one of the Member States of the European Community. They have been associated with the EC, since the beginning and the founding Treaty - the 1957 Treaty of Rome - provides for the associate status of these countries or territories. The OCTs are constitutionally linked to four of the Member States (Denmark, France, the Netherlands and the United Kingdom) and they are not independent states. Examples of OCTs are Anguilla, Aruba, Bonaire, Curacao, Montserrat, etc.

16


NON-TRADITIONAL AGRICULTURAL EXPORTS

Compared to the growth experienced in 2002, the volume of Guyana’s non-traditional agricultural commodities exported in 2003, declined marginally by 0.9%. This performance resulted in reduced earnings of US$3.7 million in 2003, from $US$3.8 million in 2002 (see Table IV). These exports accounted for 0.7% of total export earnings in 2003.

Table IV shows that the major exports of non-traditional agricultural commodities in 2003 were heart of palm, coconut crude oil, plantain, copra meal, and copra.

Exports to CARICOM markets rose to 52.0% of total volume of non-traditional agricultural products exported in 2003, compared to 45.0% in 2002. Barbados and Trinidad and Tobago were the main importers of these commodities, with imports amounting to 48.0% and 49.0% of total volume exported to the CARICOM region, respectively (see Table V).

Exports to extra-regional markets, mainly to Canada and the United States of America combined, accounted for 15.0% of total volume, 3.0% above the 2002 level. The European Union accounted for 31.0% of total volume in 2003, a drop from 42.0% in the previous year. France has been the largest importer of Guyana’s non-traditional agricultural produce, mainly heart of palm.

Table IV

17

0

5

10

15

20

25

Gold Sugar Shrimps Rice Bauxite Timber

Exports as Percentage of GDP (2002) Exports as Percentage of GDP (2003)

% G

DP

VOLUME OF MAJOR NON-TRADITIONAL AGRICULTURAL EXPORTS

MAJOR COMMODITY 2002(tonnes)

% Total(2002)

2003(tonnes)

% Total(2003)

%Change

Heart of Palm 1381.5 33.6 1507.03 37.0 9.0

Coconut Crude Oil 742.00 18.0 587.27 14.4 (21.0)

Plantain 371.67 9.0 393.94 9.7 6.0

Copra Meal 0.00 0.0 234.27 5.8 -

Copra 741.65 18.0 218.13 5.4 (71.0)

Mango 222.61 5.4 185.19 4.5 (17.0)

Pineapple 143.66 3.5 176.10 4.3 23.0

Watermelon 90.36 2.2 151.81 3.7 68.0

Pumpkin 41.91 1.0 114.18 2.8 172.0

Lime 63.47 1.5 91.23 2.2 44.0

Pepper (hot) 46.00 1.1 30.80 0.8 (33.0)

Pepper (wiri-wiri) 10.08 0.2 24.64 0.6 144.0

Others 256.11 6.2 357.41 8.8 40.0Total Non-Traditional Agriculture Exports (Tonnes) 4111 100 4072 100 (0.9)Total Non-Traditional Agriculture Exports (US$ ‘000) 3,805 - 3,754 - (2.6)

Source: The New Guyana Marketing Corporation

18

Table VVOLUME OF NON-TRADITIONAL AGRICULTURAL EXPORTS, BY COUNTRY

(Tonnes)Country 2002 2003

Regional MarketsAntigua and Barbuda 5.10 13.79

Barbados 663.08 1,025.27

Dominica 0.28 14.55

St. Vincent & the Grenadines 9.00 0.07

St. Lucia 10.00 0.00

St. Kitts & Nevis 0.11 0.03

Suriname 0.37 33.95

Trinidad & Tobago 1,174.20 1,046.15

Others 0.00 0.19

Sub-Total 1,862.14 2,133.98Extra-Regional MarketsAnguilla 0.05 0.00

Canada 388.50 304.53

Finland 0.30 0.00

France 1,321.50 1,247.78

Italy 0.00 17.74

Lebanon 20.00 18.60

Netherlands 378.46 0.00

St. Marteen 0.30 1.45

Switzerland 20.00 18.60

United Kingdom 2.22 5.32

United States 117.52 323.67

Sub-Total 2,248.85 1,937.68TOTAL (Tonnes) 4,111 4,072

Source: The New Guyana Marketing Corporation

19

Table VIEXPORTS BY COMMODITY (VOLUME AND VALUE)

# EXPORT COMMODITY2002 2003 %

CHANGEJanuary – December

January – December

1. Gold Volume (ounces) Value (US$M)

451,250.8136.2

367,934.8 130.9

(18.5)(3.9)

2. Sugar Volume (metric tonnes) Value (US$M)

281,659.0119.5

311,847.0 129.2

10.7 8.1

3. Rice Volume (metric tonnes) Value (US$M)

193,415.345.5

200,431.4 45.3

3.6 (0.4)

4. Timber Volume (cubic metres) Value ((US$M)

184,919.935.5

150,572.2 30.7

(18.6)(13.5)

Plywood Volume (cubic metres) Value (US$M)

47,767.511.1

46,689.0 11.0

(2.3)(1.5)

Other Timber Exports Volume (cubic metres) Value (US$M)

137,152.624.3

103,883.2 19.7

(24.3)(19.0)

5. Bauxite Volume (metric tonnes) Value (US$M)

1,514,743.035.2

1,659,787.0 40.4

9.6 14.8

6. Fish and Shrimp (US$M) 52.6 53.9 2.4

7. Non-Traditional Agricultural Exports Volume (Tonnes) Value (US$M)

4,1113.8

4,0723.7

(0.9)(2.6)

Sources: Bank of Guyana and the New Guyana Marketing Corporation

20

DISTRIBUTION OF EXPORTS BY PRODUCTS


DISTRIBUTION OF EXPORTS BY PRODUCTS


21

Chapter Five

A CLOSER LOOK AT IMPORTS

Guyana’s overall merchandise imports during 2003 rose by 1.5%, reflecting an increase in spending from US$563.1 million in the previous year to US$571.7 million in 2003 (see Table XIII for Guyana’s major sources of imports).

Of the three categories of merchandise imports, Intermediate Goods continue to rank as the top category of imports, amounting to US$305.5 million or 53.4% of total imports, as against US$291.1 million or 52.0% of total imports in 2002. The value of Consumption Goods imported contracted by 5.1% amounting to US$149.3 million, while Capital Goods imported increased by 2.5% in 2003, totalling US$116.1 million, as against US$113.9 in 2002 (see Tables VII, VIII, and IX).

Fuel and Lubricants remained Guyana’s largest imports. These products amounted to 26.0% of total imports in 2003, compared to 22.0% in 2002. Food for Final Consumption continued to represent Guyana’s second largest imports, totalling 9.0% of total imports in 2003, slightly less than in 2002 when this category of imports accounted for 10.0% of total imports (see Tables VII, VIII, and IX).

Other notable imports in 2003 were Food for Intermediate Use; Chemicals; Parts & Accessories; Agricultural Machines; and Building Machines (see Tables VII, VIII and IX).

COMPARISON OF IMPORT VALUE BY ECONOMIC END USE - 2002 AND 2003


23

Table VIIMERCHANDISE IMPORTS BY ECONOMIC END USE (US$M)

2002ITEMS Jan. -

Mar.Apr. – Jun.

Jul. – Sept.

Oct. – Dec.

TOTAL

Consumption GoodsFood for Final ConsumptionBeverages & TobaccoOther Non-DurablesClothing & FootwearOther Semi-DurablesMotor CarsOther Durables

13.52.46.23.81.53.14.9

12.92.68.43.32.23.35.1

13.53.07.74.71.93.24.9

14.83.48.14.23.12.39.5

54.711.430.416.0

8.811.824.3

Sub-Total 35.3 37.6 38.9 45.5 157.3Intermediate GoodsFuel & LubricantsFood for Intermediate UseChemicalsTextiles & FabricsParts & AccessoriesOther Intermediate Goods

28.42.86.91.77.0

17.9

30.33.98.02.4

16.419.0

29.74.17.83.47.4

18.7

37.46.56.92.06.2

16.4

125.817.329.5

9.537.072.0

Sub-Total 64.7 80.0 71.0 75.3 291.1Capital GoodsAgricultural MachineryIndustrial MachineryTransport MachineryMining MachineryBuilding MachineryOther Capital Goods

8.03.26.00.46.77.9

5.22.25.80.67.66.3

6.71.43.40.59.25.9

7.22.43.30.37.95.6

27.19.3

18.51.9

31.525.6

Sub-Total 31.1 27.8 27.2 26.8 113.9Miscellaneous 0.1 0.2 0.2 0.3 0.8TOTAL IMPORTS 132.2 145.6 137.3 148.0 563.1Source: Bank of Guyana

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Table VIIIMERCHANDISE IMPORTS BY ECONOMIC END USE (US$M)

2003ITEMS Jan. -

Mar.Apr. – Jun.

Jul. – Sept.

Oct. – Dec.

TOTAL


10.4 2.2 7.9 2.2 1.4 2.3 3.0

12.9 3.1 8.4 3.3 1.9 3.2 4.1

13.3 3.2

14.1 2.9 2.0 2.7 4.6

13.5 3.4 8.4 3.0 2.7 3.2 5.8

50.1 12.0 38.9 11.5

8.0 11.3 17.6

Sub-Total 29.4 37.0 42.9 40.0 149.3 Intermediate GoodsFuel & LubricantsFood for Intermediate UseChemicalsTextiles & FabricsParts & AccessoriesOther Intermediate Goods

39.8 6.7 6.5 1.6 7.0

16.4

32.2 3.3 7.1 1.9 7.2

21.8

32.3 5.8 5.8 1.8 8.4

16.5

42.9 5.4 5.9 1.4

10.5 17.4

147.2 21.2 25.3

6.7 33.0 72.1

Sub-Total 78.0 73.5 70.5 83.6 305.5 Capital GoodsAgricultural MachineryIndustrial MachineryTransport MachineryMining MachineryBuilding MachineryOther Capital Goods

8.3 1.6 8.0 1.3 6.6 6.7

6.9 1.8 8.5 0.7 8.5 8.3

4.9 2.2 3.0 0.6 8.2 5.1

5.2 1.8 3.9 0.3 8.1 5.5

25.4 7.4

23.3 2.9

31.5 25.6

Sub-Total 32.5 34.8 24.1 24.8 116.1Miscellaneous 0.3 0.2 0.2 0.1 0.7TOTAL IMPORTS 140.2 145.3 137.7 148.5 571.7 Source: Bank of Guyana

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Table IXSUMMARY OF CHANGE IN IMPORTS BY PRODUCT

(US$M)

ITEMS 2002 2003 %CHANGE


54.7 11.4 30.4 16.0

8.8 11.8 24.3

50.1 12.0 38.9 11.5

8.0 11.3 17.6

(8.4)5.6

28.0(28.2)

(9.2)(3.9)

(27.7)Sub-Total 157.8 149.3 (5.1)Intermediate GoodsFuel & LubricantsFood for Intermediate UseChemicalsTextiles & FabricsParts & AccessoriesOther Intermediate Goods

125.817.329.5

9.537.072.0

147.2 21.2 25.3

6.7 33.0 72.1

17.022.3

(14.3)(30.2)(10.6)

0.2Sub-Total 291.1 305.5 4.9Capital GoodsAgricultural MachineryIndustrial MachineryTransport MachineryMining MachineryBuilding MachineryOther Capital Goods

27.19.3

18.51.9

31.525.6

25.4 7.4

23.3 2.9

31.5 25.6

(6.3)(20.3)

26.056.3(0.0)(0.2)

Sub-Total 113.9 116.1 2.0MISCELLANEOUS 0.8 0.7 (13.3)TOTAL IMPORTS 563.1 571.7 1.5Source: Bank of Guyana

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RELATIVE DISTRIBUTION OF IMPORTS BY ECONOMIC END USE - 2002


RELATIVE DISTRIBUTION OF IMPORTS BY ECONOMIC END USE - 2003


27

SUMMARY OF IMPORTS (US$M)


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Chapter Six

DIRECTION OF TRADE6

Guyana’s Major Trading Partners

THE EUROPEAN UNION

Exports to the European Union (EU) in 2003, accounted for 34.9% of total exports, compared to 28.4% in 2002. The United Kingdom (UK) emerged as Guyana’s number one export market in the EU, with exports to that country amounting to 66.9% of total exports to the EU, as against 60.4% 2002, when the UK was Guyana’s third largest export market. France, Belgium, the Netherlands, and Portugal were the other significant export markets in the EU during 2003 (see Tables X and XVII).

The major products traded with the EU were rice, sugar and heart of palm.

As in the previous year, the UK was Guyana’s fourth largest source of imports in 2003. However, the value of imports dropped to 6.0% of total imports, compared to 7.4% in 2002. Another significant source of imports in the EU in 2003 was the Netherlands, although there was a decline by 18.0% in the value of imports (see Tables XIII and XVII).

CANADA

Canada retained its position as Guyana’s second largest export market in 2003, despite a drop to 21.8% of total exports, from 24.5% in 2002. Regarding imports, Canada became the ninth largest source of Guyana’s imports, with the value of imports declining by 16.0%, compared to the 2002 level (see Tables X and XIII).

The major products sold to Canada were gold, sugar, rice, and fish and shrimp.

UNITED STATES OF AMERICA

The United States of America became Guyana’s third largest export market in 2003, having been the number one export market in 2002. During 2003, exports to the USA declined to 18.1% of total exports, compared to 28.0% in 2002. On the other hand, the USA continued to rank as Guyana’s number one source of imports, although there was a 7.8% drop in the value of imports (see Tables X and XIII).

6 All computations in this section for 2003 were done using Preliminary Data from the Bureau of Statistics, which may be subject to revision. The analysis is, therefore, undertaken to provide a broad view of the trends in Guyana’s external trade.Note: Figures for 2002 were revised by the Bureau of Statistics.

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The main products purchased by the USA were rice, sugar, timber, calcined bauxite and other aluminium ores.

CARICOM

The value of Guyana’s exports to the CARICOM region increased in 2003. Of Guyana’s total exports, CARICOM accounted for 18.9%, compared to 15.9% in 2002 (see Tables XI and XII).

Guyana’s main export markets within CARICOM were, in descending order, Jamaica (ranked as Guyana’s fourth largest export market), Trinidad & Tobago (ranked as Guyana’s fifth largest export market), Barbados (ranked as Guyana’s eighth largest export market), and Antigua and Barbuda (ranked as Guyana’s tenth largest export market). The accumulated value of exports to these countries in 2003 was 83.9% of total exports to CARICOM (see Tables X and XVI).

On the import side, 29.9% of Guyana’s total imports in 2003 were sourced from CARICOM, an increase from 18.6% in 2002. This sharp increase was, in part, a result of a 71.0% increase in imports from Trinidad and Tobago, over the 2002 level (see Tables XIV, XV AND XVI).

Of the top ten countries from which Guyana sourced its imports in 2003, Trinidad and Tobago emerged as the major source of imports in CARICOM. Overall, this country remained Guyana’s second largest source of imports, after the USA (see Table XIII).

Table XGUYANA’S TOP 10 EXPORT MARKETS - BY COUNTRY

# DESTINATION 2002(G$ ‘000) DESTINATION 2003

(G$ ‘000)1 United States 27,513,030 United Kingdom 19,717,579

2 Canada 19,960,238 Canada 18,339,611

3 United Kingdom 17,381,116 United States 15,246,627

4 Jamaica 5,158,932 Jamaica 5,025,900

5 Trinidad & Tobago 4,260,642 Trinidad & Tobago 4,741,630

6 Portugal 3,846,910 Belgium 3,812,111

7 Belgium 2,532,164 Netherlands 2,418,485

8 Barbados 2,472,684 Barbados 2,298,826

9 Netherlands 2,067,595 Portugal 1,858,373

10 France 1,118,317 Antigua & Barbuda 1,326,698Source: Bureau of Statistics Source: Bureau of Statistics

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Table XIMAJOR EXPORT DESTINATIONS – BY REGION

REGION2002

Exports (GY $‘000)

% of Total Exports

North America (USA and Canada) 47,473,268 49

European Union 28,763,325 29.6

CARICOM 15,445,756 15.9

Sub-Total 91,682,349 94.5

Other Countries 5,333,638 5.5

Total Exports 97,015,987 100Source: Bureau of Statistics

Table XIIMAJOR EXPORT DESTINATIONS - BY REGION

REGION2003

Exports (GY $‘000)

% of Total Exports

North America (USA and Canada) 33,586,238 39.9


CARICOM 15,969,982 18.9

Sub-Total 79,029,206 93.7


Total Exports 84,306,699 100Source: Bureau of Statistics

SHARE OF EXPORTS TO CARICOM AND Non-CARICOM MARKETS

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Figure 12 Source: Bureau of Statistics

MAJOR EXPORT MARKETS


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Table XIIIGUYANA’S TOP TEN IMPORT MARKETS

COUNTRY 2002(G$‘000) COUNTRY 2003

(G$‘000)

1 USA 37,067,811 USA 34,163,130

2 Trinidad and Tobago 16,890,752 Trinidad & Tobago 28,885,403

3 Netherlands Antilles 12,802,792 Netherlands Antilles 7,562,954

4 UK 7,893,131 UK 6,461,283

5 Venezuela 4,372,266 Japan 4,012,638

6 China 3,665,129 China 3,707,114

7 Netherlands 3,340,864 Netherlands 2,741,241

8 Canada 1,880,937 British Virgin Islands 1,806,153

9 Barbados 1,198,071 Canada 1,573,479

10 Brazil 1,195,955 Brazil 1,358,788Source: Bureau of Statistics Source: Bureau of Statistics

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Table XIVMAJOR IMPORT MARKETS

MARKET2002

Imports (GY$ ‘000)

% of Total Imports

USA 37,067,811 34.6

CARICOM 19,989,970 18.6


Netherlands Antilles 12,802,792 9.5

Sub-Total 83,975,335 78.3


Total Imports 107,268,237 100Source: Bureau of Statistics

Table XVMAJOR IMPORT MARKETS

MARKET2003

Imports (GY$ ‘000)

% of Total Imports

USA 34,163,130 31.7

CARICOM 32,246,571 29.9


Netherlands Antilles 7,562,954 7.0

Sub-Total 86,326,006 80.1


Total Imports 107,803,478 100Source: Bureau of Statistics

SHARE OF IMPORTS FROM CARICOM AND Non-CARICOM MARKETS

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MAJOR SOURCES OF IMPORTS


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Table XVIINTRA-REGIONAL TRADE

(G$ ‘000)

CARICOM MEMBER EXPORTS2002

IMPORTS2002

TRADE BALANCE

EXPORTS2003

IMPORTS2003

TRADEBALANCE

ANTIGUA & BARBUDA 410,062 226,650 1,294,552 1,326,697 63,611 1,263,086

BARBADOS 2,472,684 1,198,071 1,265,356 2,298,826 1,231,212 1,067,614

BELIZE 178,493 254,011 (75,518) 88,638 188,029 (99,391)

COMMONWEALTH OF THE BAHAMAS 1,570 28,518 (25,730) 2,342 1,799 552

COMMONWEALTH OF DOMINICA 236,678 514,613 (332,467) 124,200 661,493 (537,292)

GRENADA 465,363 48,154 474,604 359,039 70,603 288,436

JAMAICA 5,158,932 628,242 4,779,977 5,025,900 846,584 4,179,316

MONTSERRAT 1,019 0 1,019 6,750 0 6,750

REPUBLIC OF SURINAME 1,203,203 67,728 1,069,507 1,026,830 157,737 869,093

REPUBLIC OF TRINIDAD & TOBAGO 4,260,642 16,890,752 (12,742,657) 4,741,630 28,885,403 (24,143,772)

ST. LUCIA 580,458 109,664 526,839 406,430 118,293 288,137

ST. VINCENT & THE GRENADINES 405,673 23,502 380,203 510,840 18,854 491,985

ST. KITTS & NEVIS 70,978 63 7,474 51,853 2,953 48,900

TOTAL 15,445,756 19,989,970 (3,376,841) 15,969,982 32,246,571 (16,276,589)Source: Bureau of Statistics

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MAIN CARICOM EXPORT MARKETS - 2002


MAIN CARICOM EXPORT MARKETS - 2003


37

MAIN SOURCE OF IMPORTS IN CARICOM - 2002


MAIN SOURCE OF IMPORTS IN CARICOM - 2003


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Table XVIIGUYANA’S TRADE WITH THE EUROPEAN UNION

COUNTRYEXPORTS (G$M) IMPORTS (G$M)

2002 2003 2002 2003

Austria 0 0 14,488 39,413

Belgium 2,532,164 3,812,111 840,312 1,081,423

Denmark 2,377 85,333 117,041 144,694

Finland 867,434 0 11,494 920

France 1,118,317 478,441 265,185 330,086

Germany 158,421 623,984 735,470 982,186

Greece 4,670 142,137 122 5,024

Ireland 200 3,842 50,303 38,864

Italy 273,992 212,904 647,378 284,064

Luxembourg 24,571 0 0 0

Netherlands 2,067,595 2,418,485 3,340,864 2,741,241

Portugal 3,846,910 1,858,373 6,170 11,277

Spain 485,560 111,532 150,781 175,528

Sweden 0 6,262 42,012 55,345

UK 17,381,116 19,717,579 7,893,131 6,461,283

TOTAL 28,763,325 29,472,986 14,114,762 12,353,351Source: Bureau of Statistics

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Chapter Seven

FOREIGN DIRECT INVESTMENT

Since 2000, domestic investment in Guyana continued to expand at a much faster rate than Foreign Direct Investment (FDI). Nonetheless, efforts are continuing to create an environment conducive to investment. To Guyana’s credit, the country ranked 17th out of 140 countries on the Foreign Direct Investment Index. According to the World Investment Report, this compares with 58th during 1988-1990. Guyana is among five countries in Latin America and the Caribbean Region to be in the top 44 countries.7

Table XVIII

INVESTMENT FLOWS (G$ MILLIONS)

Total Investment

2000 2001 2002 2003

50,065 51,37

5 52,666 50,473

Foreign Direct Investment 12,397 10,61

2 8,360 n/a

Domestic Investment 37,668 40,76

3 44,306 n/aSource: Bank of Guyana

FDI FLOWS INTO LATIN AMERICA AND THE CARIBBEAN

Latin America appears to be losing some appeal for foreign investors. Foreign direct investment (FDI) in the region has declined steadily since 1999. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) reported that the regions turned in the worst performance when compared to the other regions in the world. The poor performance is associated with the near completion of a number of privatization programmes. Also, regulatory uncertainty appears to be putting off many investors, with the effect being felt most acutely in the Mercosur region, particularly Brazil.

7 Budget Speech: Sessional Paper No.1 of 2004 Eighth Parliament of Guyana, Page 29

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In 2003, FDI in all of Latin America and the Caribbean was US$36.5 billion, down 19% from the previous year’s total, according to ECLAC’s Foreign Investment in Latin America 2003 Report.

For a second consecutive year, Mexico maintained its lead over Brazil as the recipient of the greatest amount of FDI, taking in US$10.7 billion. Still, this was 25.6% below the level of the previous year. Brazil registered just US$10.1 billion in FDI in 2003, a 63.3% fall from its 2002 total.

The services sector brought in almost 58% of total FDI from 1996 to 2002, followed by manufacturing with 28% and the primary sector with 15%. Most of the rise in FDI in services resulted from privatizations, although that sector started to fall in 2001, and saw a dramatic decline in 2002 and once again in 2003.

Six of the region’s ten major transnational companies, by consolidated sales, belong to the car industry – General Motors, Delphi, Volkswagen, Daimler-Chrysler, Ford and Nissan. In this sense, the car industry is the main attraction for FDI in Latin America, with Brazil and Mexico being the main centers for the regional production of this industry, which grew at a rate of over 5% from 1990 to 2003.

According to ECLAC’s report 2003, despite the large amount of about US$50 billion in investment over the past decade, there are indications that this once successful strategy for attracting FDI is beginning to wear out. The report warns that unless more is done to attract new investment in the automobile sector, FDI will continue its downward trend.

The World Bank report, Global Development Finance 2004, reports that regardless of the decrease of FDI in Latin America and the Caribbean, five Latin American countries are still among the top 10 recipients of FDI – China, Brazil, Mexico, Argentina, Poland, the Czech Republic, Chile, Venezuela, Thailand and India.

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http://www.worldbank.org/prospects/2004

Chapter Eight

EXTERNAL TRADING RELATIONS

This section details the major developments in 2003 in the four major negotiations that Guyana is currently engaged in.

THE CARICOM SINGLE MARKET AND ECONOMY (CSME)

During 2003, the Ministry of Foreign Trade & International Cooperation dealt with several institutional matters and undertook activities critical to ensuring that Guyana becomes ready for the successful implementation of the CARICOM Single Market and Economy (CSME), in 2005.

National One-Day Summit on the CSME

On December 1, the Ministry convened a national one-day summit on the CSME, under the theme ‘Realizing the CSME: Prospects for National Development’. Participants were drawn from the Public and Private Sectors, Labour and the NGOs community.

The primary objective of the Summit was to provide public awareness on the basic tenets of the CSME. This was done by way of presentations on the following topics:

Basic Instruments, Institutional and Regional Arrangements under the CSME The Judiciary and Legal System under the CSME Positioning the Agricultural, Mining and Manufacturing Sectors to face the Challenges and

Opportunities in the CSME Exploring the potential of the Services Sector under the CSME The Banking and Financial Institutions under the CSME Challenges and Opportunities to Health, Labour and Education Sectors and the Movement of

CARICOM Nationals under the CSME Security considerations with the advent of the CSME

A number of recommendations were presented by the Summit, which it was expected would be incorporated into the work programme of the various ministries, in order that the right environment is created to ensure that Guyanese nationals derive maximum benefit from the CSME.

Manual on Administrative Procedures for the Implementation of the CSME

In April, a Manual of Administrative Procedures for the Implementation of the CSME was adopted. The Manual was developed in an effort to strengthen national public service capacity to serve the requirements of the CSME, as well as, to introduce and operate essential systems and

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procedures at the national and regional levels, for the efficient and effective operation of the CSME. It is expected that the Manual will be a working guide for public service officials who are engaged in discharging duties that will give effect to the CSME.

Establishment of the Inter-Ministerial Advisory Committee on the CSME

An Inter-Ministerial Consultative Committee (IMCC) on the CSME was established and launched in May. It is expected that this Committee will provide the forum for networking, collaboration and information dissemination among public officers, since its membership comprises of representatives from all Government Ministries/Departments/Agencies.

Meeting of National CSME Focal Points

In October, the first meeting between National Focal Points on the CSME and the CSME Unit was convened in Barbados. The Meeting focused on issues pertaining to the organisation within each Member State for the implementation of the CSME, an overview of their obligations, commitments and undertakings, as well as, the overall CSME implementation work programme.

It was decided that future meetings of the National CSME Focal Points will be convened by the CARICOM Secretariat at the end of each quarter. This is to ensure that implementation of the CSME is on target and moving apace.

AFRICA, CARIBBEAN AND PACIFIC –THE EUROPEAN UNION

Sugar

Guyana has been proactive in the ACP Consultative Group on Sugar at the ACP level, and has been influential in organizing and coordinating meetings at the CARICOM level on a number of issues of interest to Guyana and CARICOM, including CARICOM’s policy on preserving the regional sugar quota at the EU in face of the EPA Negotiations with the EU, and the production difficulties that key producers like Barbados and St. Kitts are facing in the region.

Another difficulty that Guyana and the other traditional sugar exporting states faced during the year was the reallocation of quotas under the Sugar Protocol to non-quota holders that are also beneficiaries under the EU-EBA Initiative.

WTO Challenge to the EU Sugar Regime

Brazil, Australia and Thailand are challenging the EU sugar regime, from which Guyana and other sugar producing and exporting countries of the ACP are benefitting, tremendously. Guyana coordinated a lobby mission to Brazil in February 2003, in keeping with the ACP decision to lobby countries involved in the challenge.

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The WTO Dispute Settlement Body, based on a request by the countries, agreed to establish a panel to consider the claims made by the countries. Guyana and twelve other ACP countries have requested third party status in the challenge and are considering requesting enhanced third party status in the process. This would allow Guyana the right to attend the proceedings, make statements and receive documentation.

Rice

Guyana raised the issue of the implications of the EU’s Reform of the Common Agriculture Policy on Rice – 50% cut in the EU intervention price and the simultaneous increase in the domestic support to EU farmers – at the regional and ACP levels. This matter was also brought to the attention of the EU Commission and deliberated on by the ACP Council of Ministers, as well as, by the Joint ACP-EU Council.

EU/CARIFORUM Project

In September, the EDF Committee approved euros 24 million as support for the CARIFORUM rice industry. Guyana will benefit from euros 11.7 million under this project, which is aimed at enhancing the competitiveness of the CARIFORUM rice industry.

The Ministry of Foreign Trade and International Cooperation (MOFTIC) is working closely with the Ministry of Agriculture and the rice industry to ensure timely preparations for the implementation of the project in Guyana.

ACP/EC Joint Working Party

The Joint Working Party on rice was convened in October. Guyana served as co-chair for the meeting, which called on the EU to ensure speedy implementation of the rice sector support programme and for the consideration of compensatory measures to cushion the adverse effects rice exporters will face as a consequence of reforms to be undertaken in the EU rice industry.

FREE TRADE AREA OF THE AMERICAS (FTAA)

8th Ministerial Meeting of the FTAA

Guyana was represented by the Minister of Foreign Trade and International Cooperation at the Eighth Ministerial Meeting of the Free Trade Area of the Americas (FTAA), which was held in Miami, USA, in November, 2003. That meeting marked the commencement of the final year of the FTAA negotiations, scheduled to be completed in January 2005.

At the meeting, Trade Ministers assessed the current state of play in the FTAA Negotiations and agreed on modalities for the final phase of the negotiations. In this regard, the Ministers discussed the overall scope or vision of the negotiations in the context of the hemispheric Summit of the Americas process (Vision of the FTAA); the integration of the smaller economies

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in the hemispheric arrangements (including technical assistance and financing mechanisms), and the location of the permanent site for the FTAA Secretariat.

Leading up to the Miami Ministerial, and especially following the failure of the WTO Cancun Ministerial Conference in September, the general sense among FTAA countries was that the FTAA process would not be able to achieve the January 2005 completion date.

Guyana has always considered it to be in CARICOM’s best interest to maintain the stated deadline but with a trimmed agenda common to all countries, since delaying conclusion of the FTAA key market access issues well beyond 2005 could likely complicate matters for the region in the other external negotiations. Any delay could also affect likely benefits from adjustment assistance, which could accrue to the region under the hemispheric and sub-regional processes.

It was against this background that CARICOM reaffirmed its support for the January 2005 deadline, but argued that “the agreement must have a balance of ambition, accommodating capabilities and need” and include a comprehensive package of special and differential measures in each negotiating area.

The Ministers agreed on an FTAA Vision, which would be realized through a two-tiered approach. At the first level, all countries will accede to a common set of rights and obligations. At the second level, countries on their own determination, may agree to additional rights and obligations on a plurilateral basis. FTAA National Trade Capacity Building Strategy (TCBS)

Guyana’s Trade Capacity Building Strategy (TCBS) was completed in October, in response to the mandate of FTAA Trade Ministers for the development of the Hemispheric Cooperation Programme (HCP) under the Free Trade Area of the Americas (FTAA). The TCBS emphasizes the critical importance of trade to Guyana and the country’s high level of dependence on the external sector. As such, the general and specific capacity-building needs that are documented in the strategy, groups Guyana’s key and critical needs into three areas: negotiating capacity, implementation capacity, and adjustment (to integration) capacity.

The Ministry of Foreign Trade and International Cooperation, with the technical and financial support of the USAID, coordinated the preparation of the TCBS which involved indepth consultations with a wide cross-section of trade-related agencies in the public and private sectors.

In identifying Guyana’s priorities for action, a careful attempt has been made to ensure policy coherence with respect to the country’s participation in the regional integration arrangements in the Caribbean Community (CARICOM), as well as, with other trade-related projects already being implemented at the national level.

Also in fulfillment of the Trade Ministers mandate, the first financing meeting (roundtable) of the Hemispheric Cooperation Programme (HCP) was held in Washington DC on October 14-15, to introduce the HCP to the international donor community, and to facilitate an initial exchange between countries/sub-regional groupings seeking assistance and potential donors, about the

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capacity building needs articulated in the National and Sub-regional Strategies. Like most CARICOM Member States, Guyana was able to present its draft TCBS at this initial meeting.

In December, the Tripartite Committee (ECLAC), in collaboration with the FTAA Secretariat, commenced translation of the Guyana TCBS document in the four official languages of the FTAA (English, Spanish, French and Portuguese).

Regional Integration Fund

Immediately following the 7th Ministerial Meeting in Quito, Ecuador in November 2002, Guyana advanced the case for CARICOM to seek specific language in the Miami Declaration on the proposal for a Regional Integration Fund in the FTAA, and elicit a specific ministerial mandate for technical work to be conducted in the last phase of the negotiations on the establishment of such a financing facility.

The idea of a Regional Integration Fund or a similar mechanism to finance adjustment in the FTAA had, since the Quito Ministerial meeting, garnered the support of a large number of FTAA countries.

CARICOM’s strategy, as recommended by Guyana, was to elicit a specific ministerial mandate in the Miami Declaration for the technical work to be undertaken by both the Consultative Group on Smaller Economies (CGSE) and the Tripartite Committee. In this regard, CARICOM found useful alliances with Mercosur and the Andean Community.

Although some countries remained non-committal a priori on the establishment of a fund or financing facility, a compromise was reached in Miami to first acknowledge that smaller economies will need financial resources, in addition to the technical assistance support of the Hemispheric Cooperation Programme (HCP), to effectively undertake the adjustment requirements that would result from hemispheric trade integration; and secondly, to mandate the CGSE to commence the technical work on the proposal to establish a financing facility for this purpose.

Market Access Negotiations – Tariff Offers

The Trade Negotiations Committee (TNC) had set a timeline of February 15, 2003 for the exchange of initial market access offers (tariff offers) in the area of goods and February 16 – June 15, 2003 for improvements to be made to the initial offers.

In the context of CARICOM’s regional approach to the negotiations, Guyana presented its Initial Offer (CARICOM’s Offer) to the FTAA in February 2003. The CARICOM Offer contemplates tariff liberalization in only two phases - ‘A’ (immediate – upon entry into force of the agreement), and ‘D’ - (longer than 10 years). The offer also includes a list of sensitive products (“Exclusions”) for which Member States do not contemplate tariff liberalization at this time, or negotiation of which will be subject to special conditions.

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Trade Statistics – Hemispheric Database (HDB)

During the Miami Ministerial Meeting in November, Guyana’s trade data for 2000 and 2001 were submitted to the Tripartite Committee (IDB) for inclusion in the Hemispheric Database (HDB). Following verification of the data by the IDB in early December, the HDB was updated to reflect Guyana’s data up to the end of 2001. The HDB is accessible on the FTAA public website at http://www.ftaa-alca.org.

The Ministry will continue to work closely with the Bureau of Statistics to ensure the annual update of Guyana’s trade data in the Hemispheric Database (HDB).

Impact Assessment Studies

All the key external trade negotiations in which Guyana is currently engaged will involve some level of tariff reductions in the trade liberalization process. These tariff reductions could result in significant fiscal loss of revenues on which the country’s national budget depends. It is, therefore, necessary to study potential alternative sources of revenue generated by customs tariff.

In 2003, Guyana benefited from funding from the European Union to undertake impact assessment studies. These studies are aimed at providing recommendations on Guyana’s trade policy, in light of the entry into force of alternative trade agreements that will replace the LOME preferential arrangements in 2008, as well as, further trade liberalization under the FTAA and WTO.

The assessment, so far, is directed at the trade in goods and services and capacity-building. Two consultants have commenced work in the goods and services sectors and have presented inception reports.

WORLD TRADE ORGANIZATION (WTO)

WTO DG Caribbean Mission

In November, the Government of Guyana hosted the WTO Director-General, Dr. Supachai Panitchpakdi, and the Mexican Foreign Minister, Dr. Luis Ernesto Derbez, in his capacity as Chairman of the 5th Ministerial Conference, during their visit to the Caribbean to meet with Trade Ministers from CARICOM, Cuba and the Dominican Republic.

The Director-General’s visit to the Caribbean Community (CARICOM) was part of his post-Cancun consensus-building mission to revive trade talks at the WTO.

During their visit, the WTO Director-General and the Mexican Minister paid a courtesy call on the President and met with the Cabinet. The Director-General was accompanied by Mr. Willy Alfaro, Deputy Director-General and Mr. Stuart Harbinson, Director of the Office of the Director-General and Chairman of the Committee on Agriculture.

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http://www.ftaa-alca.org/

The Ministry coordinated the arrangements for the visiting dignitaries during their stay in Guyana.

5th Ministerial Conference

Following the 4th WTO Ministerial Conference in Doha, Qatar in November, 2002, WTO Trade Ministers convened for their 5th Conference in Mexico in September, 2003, for a stock-taking of the negotiations and to issue fresh mandates with a view to concluding these negotiations in 2005. Guyana was represented by a delegation led by the Minister of Foreign Trade and International Cooperation.

The Chairman of the Conference, in keeping with traditional practice under the GATT/WTO, organized the negotiations in the following Working Groups, under the coordination of Ministerial Facilitators:

i. Agriculture Facilitator: Singaporeii. Development Facilitator: Kenyaiii. Non-Agriculture Market Access (NAMA) Facilitator: Hong Kong Chinaiv. Singapore Issues Facilitator: Canadav. Other Issues Facilitator: Guyana

At the invitation of the Chair, the Minister of Foreign Trade and International Cooperation served as Facilitator (“Friend of the Chair”) of the Working Group on “Other Issues”.

The Caribbean delegations were coordinated by Guyana’s Ministerial representative, in his capacity as the Region’s Ministerial Spokesperson on WTO matters. Prior to and throughout the Conference, the Caribbean Group consulted and maintained useful alliances with other countries and groups, such as the ACP, the African Union, the LDCs and the G-21.

WTO Trade Policy Review of Guyana (TPR)

On October 29-31, 2003 the World Trade Organization (WTO), in keeping with its mandate to conduct trade policy reviews of its members, concluded a Trade Policy Review (TPR) of Guyana. The review process commenced in September 2002, and culminated with a meeting of the WTO Trade Policy Review Body (TPRB) at the WTO Secretariat in Geneva. The Minister of Foreign Trade and International Cooperation led Guyana’s delegation to the review session.

To facilitate the review, the Ministry, having responsibility for WTO matters and focal point for the exercise, consulted widely with public and private sector agencies. A small technical committee, chaired by the NACEN Coordinator, was established in the Ministry to coordinate the process. In addition to the work of the Committee, the Ministry held a number of inter-agency consultations, including two technical missions to Guyana by the WTO TPR team in January and June, respectively.

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In its submission to the TPRB the Government of Guyana articulated several key concerns, in particular the fact that Guyana is a small developing economy that is committed to economic and trade liberalization but which requires the continued support of the international community to pursue successful integration into the global economy. The Government representative also articulated a case for Guyana, a HIPC designated country, to be accorded benefits and trade concessions that are no less favourable than those extended to countries which are designated as Least Developed Countries (LDCs).

The TPRB was also told that while there is no initiative in the WTO that would extend special treatment to HIPC members, the Government of Guyana remains strongly convinced that, in extending its support for greater liberalisation in small developing economies and in its drive towards policy coherence, the international trading community should extend without delay LDC parity status to HIPC-designated countries.

The report prepared by the WTO Secretariat and other related documents on Guyana’s Trade Policy Review can be accessed on the WTO website at http://www.wto.org).

WTO Notifications

Guyana made considerable progress in fulfilling its notification requirements at the WTO, some of which have been outstanding since the country joined the organization in 1995. These notifications enable information on Guyana’s laws on trade to be readily accessible to other WTO members, through WTO databases.

Notifications are now up to date in the areas of Agriculture, Market Access, Trade and the Environment, and Import Licensing. The notifications submitted cover WTO Agreements, such as the Decision on Notification Procedures for Quantitative Restrictions, Agreement on Pre-Shipment Inspections, Agreement on the Implementation of the Customs Valuation Agreement, Agreement on Rules of Origin, the Integrated Data Base for Personal Computers and the Agreement on Technical Barriers to Trade. Partial notifications have also been made for the General Agreement on Trade in Services, and for Anti-Dumping in the area of Rules.

Services

During 2003, the Ministry of Foreign Trade and International Cooperation coordinated and facilitated the work of various agencies involved in the services sector, particularly the work of the interim Task Force on the Coalition of Service Providers. The Ministry developed a draft proposal on the formation of the National Coalition of Service Providers, and provided technical support to the Task Force. A sensitization programme was initiated during the later part of 2003 to promote the role of the services sector in Guyana’s trade and economic development.

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Chapter Nine

GUYANA: OUTLOOK FOR 2004

The macroeconomic prospects for 2004 are encouraging, with real GDP expected to grow by 2.5%, as a result of improved performance by the various sectors.

With the continued implementation of GUYSUCO’s strategic plan, which is geared to increase the company’s competitiveness, sugar production is expected to increase by 8.6% to 328,383 tonnes.

The performance of the rice industry is expected to improve with the disbursement of the 11.7 million euros to be utilized for the enhancement of the competitiveness of the industry. Consequently, it is projected that rice production would increase by 1.4% to 360,000 tonnes.

Fisheries and Forestry are both projected to grow by 0.5%.

The anticipated mixed performance of the mining and quarrying sector can see a decline by 3.0% in overall output. Gold declaration is projected to fall by 5.5% to 369,737 ounces; diamonds is projected to increase by 1.8%, to 420,000 carats, while bauxite is expected to fall by 10.5% to 1,535,000 tonnes.

The services sector is also expected to make a sizeable contribution to GDP, with projected growth in this sector being 3.0%.

Merchandise exports are projected to increase by 6.9% to US$552.7 million, while merchandise imports are expected to increase by 12.9% to US$645.4 million. The increase in merchandise imports for 2004 is premised partly on the rapid implementation of key public sector projects and increased imports of consumer and capital goods.8

8 Budget Speech: Sessional Paper No.1 of 2004 Eighth Parliament of Guyana, Pages 22 and 50

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A PUBLICATION OF THE

MINISTRY OF FOREIGN TRADE & INTERNATIONAL COOPERATION,TAKUBA LODGE, 254 SOUTH ROAD, GEORGETOWN, GUYANA

Tel: (592) 226-5064, 226-1607-9Fax: (592) 226-8426

Email: [email protected]: www.moftic.gov.gy

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monthly imports, exports and trade …ctrc.sice.oas.org/trc/articles/guyana/review_trade_02… ·...

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