Use deals to make Caricom stronger

At the end of the day, the deal being brokered between Prime Minister Patrick Manning and Jamaican counterpart Portia Simpson Miller could point a new way forward for Caricom as a whole.

The deal has been in the works for a few years and was advanced earlier this week when Ms Simpson Miller visited T&T. The partnership it entails goes beyond the buy-now, pay-some-later benefit of PetroCaribe.

Price and pricing arrangements still have to be worked out and, in truth, one solution could be to offer Jamaica a deal similar to PetroCaribe in that Jamaica could be able to access a soft loan if natural gas prices exceed a certain amount.

Some may argue that Jamaica should pay market prices for LNG, but by agreeing to a special pricing arrangement T&T is demonstrating that there is a value to our relationship with our neighbours and the strength of Caricom as a whole.

Jamaica, like the rest of Caricom, is an important market for local manufacturers and T&T cannot deny that its neighbours are feeling the pain of ever-increasing oil prices. If those countries are unable to buy T&T’s goods because their economies are suffering, then it will be to our detriment.

PetroCaribe offers Caricom countries some breathing room, allowing them to at least delay part of the payment.

In fact, Jamaica has already signed on to PetroCaribe and Ms Simpson Miller’s predecessor, PJ Patterson, took pains to explain why PetroCaribe was so important to the Jamaican economy.

The LNG agreement, while it may end up being similar to PetroCaribe, has the ability to help develop industry and trade between Jamaica and T&T. The Jamaica PM said the LNG agreement will help to ease that country’s energy burden which includes the need for vast amounts of power to convert bauxite into alumina. That alumina will then make its way to T&T for smelting, creating another market in the Caribbean and earning foreign exchange for Jamaica. It will also help to create downstream opportunities in T&T for aluminium products.

It is important to note that Ms Simpson Miller’s visit came at a time when OECS countries are still considering their entry into the Caribbean Single Market. Their concern about the CSM lies with the possible erosion of their industries by firms coming out of energy-rich T&T. They would also be aware that high oil prices are stymieing their economic growth, hence the reason for signing on to the PetroCaribe deal.

Perhaps the OECS and T&T need to sit down and come up with arrangements, similar to the Jamaica/T&T LNG deal, which would provide a buffer against high energy prices but at the same time offer opportunities to increase trade within Caricom.

High oil prices are a reality but any deal to protect our neighbours against price hikes must be used to strengthen Caricom, otherwise the region would have missed another opportunity to emerge stronger from the trials that now exist.