San­dra Chouthi

Com­ing out of the Cari­com Sin­gle Mar­ket and Econ­o­my (CSME), the pri­vate sec­tor ei­ther doesn't com­plete­ly un­der­stand the Eu­ro­pean Part­ner­ship Agree­ment (EPA) or the out­come to be de­rived from it.

So said Chris Per­saud, ex­ec­u­tive di­rec­tor of the St Lu­cia-based Baron Foods, which plans to set up shop in Trinidad by the end of 2013 to make condi­ments, food items and bev­er­ages.

"We all know it – the EPA – serves to es­tab­lish reci­procity with trade. Ide­al­ly, it should be re­mov­ing the bar­ri­ers, the hin­drances to trade. In the pri­vate sec­tor, we're ad­vo­cates of free trade, but I think con­fu­sion comes about when we con­fuse mar­ket ac­cess with mar­ket en­try," said Per­saud.

He was speak­ing on Tues­day at a two-day re­gion­al me­dia work­shop on the Car­i­fo­rum-Eu­ro­pean Union (EU) EPA.

Per­saud said mar­ket ac­cess has nev­er been an is­sue.

"Be­fore the im­ple­men­ta­tion of the EPA, we had the ad­di­tion­al ben­e­fit of pref­er­en­tial ac­cess."

There were no bar­ri­ers to ge­o­graph­i­cal lo­ca­tion or com­mu­ni­ca­tion.

"We made strides from steam ships. We're now in the era of e-mail. We're still at the lo­cal stage of re­gion­al in­te­gra­tion of CSME."

Per­saud, who is Guyanese, de­scribed him­self as tes­ta­ment to no hin­drance to free move­ment.

"I'm com­mit­ted to live, work and play through­out the re­gion."

Baron Foods is based in St Lu­cia, op­er­ates in Grena­da and is in­vest­ing in what he called a "satel­lite plant" in Trinidad at the Bil­jah Road in­dus­tri­al es­tate, Ch­agua­nas. The plant will oc­cu­py two acres op­po­site the Ch­agua­nas Fire Sta­tion.

"If we can't achieve the out­comes of our own re­gion­al in­te­gra­tion, then the glob­al op­por­tu­ni­ties pro­vid­ed by the EPA will make it more dif­fi­cult to re­al­ize," Per­saud said. "We're still in the era of pro­tect­ing our own. If we're go­ing to be pro­tect­ing our own, there would be no lib­er­al­i­sa­tion of trade."

Per­saud said the re­gion is still query­ing cer­tifi­cates of ori­gin of prod­ucts.

He spoke of a Grena­da-made Baron Foods prod­uct, for which the tar­iff codes were "el­e­vat­ed," but its ex­port po­ten­tial was ques­tioned at the port of ori­gin, not the des­ti­na­tion port.

"So we still have some tech­ni­cal bar­ri­ers to trade to bat­tle on our own," Per­saud said.

Cari­com as a 'sexy' des­ti­na­tion

Per­saud said the EPA touts en­hanced trade in ser­vices, which means ser­vice providers have an in­cen­tive to now mar­ket "our des­ti­na­tion" in the EU as a sexy des­ti­na­tion.

On the flip side, Per­saud said, the air­line pas­sen­ger du­ty (APD) im­posed by the Unit­ed King­dom is a clas­sic ex­am­ple of a tech­ni­cal bar­ri­er to trade.

"Un­for­tu­nate­ly for us in the Caribbean, we're in ex­cess of 4,000 miles from the UK. If you equate that math­e­mat­i­cal­ly, that is 81 pounds ster­ling ad­di­tion­al to every tick­et. There is no in­cen­tive for the Eng­lish tourist to come spend any mon­ey and help de­vel­op our economies," Per­saud said.

Economies of scale

He said an­oth­er con­tentious is­sue to im­ple­men­ta­tion of the EPA for small economies in the Caribbean is small states do not have the ben­e­fit of economies of scale, which he de­scribed as an im­bal­ance for the man­u­fac­tur­ing sec­tor.

"The ships leav­ing the Eu­ro­pean ports are laden and they are wide and they are var­ied. There is a pletho­ra of ships leav­ing that con­ti­nent. Com­pare that to the amount of re­sources we have leav­ing the Caribbean. We're very lim­it­ed. The costs are enor­mous.

Per­saud gave the ex­am­ple of a man­u­fac­tur­er like Baron Foods fedex-ing to Ger­many a five-pound spare part from one of its ma­chines at a cost of US$100, but it would cost the com­pa­ny US$200-plus to send a one-pound sam­ple of one of its prod­ucts to a prospec­tive dis­trib­u­tor in Ger­many.

"So there is an im­bal­ance of trade. There are economies of scale that need to be dis­cussed," Per­saud said.

Baron Foods

Baron Foods, which was es­tab­lished in 1991, ex­hib­it­ed at the 2012 Trade and In­vest­ment Con­ven­tion.

Fifty-five of its prod­ucts – condi­ments, sauces, bev­er­ages – are ex­port­ed. The re­main­ing 45 per cent is sup­plied to the re­gion­al mar­ket.

Per­saud said Baron Foods is in Grena­da as part of its ex­pan­sion dri­ve to es­tab­lish it­self as a Caribbean-owned Caribbean brand.

He said he sees in­vest­ment prospects for Baron Foods through Eu­rope through the EPA.

The com­pa­ny, which has an­nu­al sales of US$55 mil­lion, is look­ing at en­ter­ing the Trinidad mar­ket as an ex­port hub to the world.

"Trinidad has the ad­van­tage of economies of scale. The cost of pro­duc­tion is ex­pect­ed to be low­er in the long term. There are more ship­ping lines call­ing, more op­por­tu­ni­ties for ex­port."

Per­saud said Baron Foods is an ex­port-ori­ent­ed econ­o­my.

"With­out ex­ports, we can't sur­vive."

Baron Foods has es­tab­lished dis­trib­u­tor­ships in cen­tral Lon­don, Ger­many, France and Slo­va­kia.