I. Objectives

1. To complement the second Trade Policy Review of the OECS, the Special Session had three objectives:

• To improve the knowledge and understanding of participants on the specific challenges faced by the OECS members;
• To examine potential sectoral competitive advantages for the OECS members; and
• To identify concrete Aid for Trade (AFT) opportunities for OECS members with an emphasis on trade facilitation.

II. Issues Discussed

2. The main topics under discussion were:

• Special and differential treatment for small and vulnerable economies (SVEs) in the WTO negotiations;
• High potential export sectors and bottlenecks in the OECS;
• Sub-regional AFT priorities; and
• Challenges to the improvement of inter-island transport.

3. OECS members have many similarities. In particular, they are at the mercy of the sea and natural disasters which can wipe out entirely their infrastructure. Their population is small. This renders economies of scale almost impossible. Doing business in the region almost invariably involves high transportation costs. Tourism seems to be the only sector where they have an advantage. There will not be any level playing field in the multilateral trading system until WTO members realise that the special situation of these SVEs requires a special and differential treatment (S&D). Absent such S&D, trade liberalisation has not been a win-win process for OECS members thus far.

4. Recent studies have shown that services were the sector with the highest export potential. Maximising the OECS added-value required, however, to move further to knowledge-based services. The following sectors were mentioned: professional services (health and wellness), education, information and communication technology, construction and creative industries. Many challenges remained, however, due to the poor level of development of the local legal framework and the reliance on small suppliers facing high financing costs

5. A table charting AFT needs for each OECS WTO member is attached in Annex I. It classifies OECS members’ AFT needs in four areas: policy support, infrastructural financing and support, trade adjustment assistance and supply side support. Overall, there is a need to strengthen the institutional capacity of the OECS Secretariat in order to stimulate the trade policy-making process in the region. Improving governance at the sub-regional level should help mainstreaming trade into national development policies. Producing low cost energy would make the OECS economies more competitive. Launching a trade facilitation needs assessment at the national level could also help identify precise and feasible project proposals. Donors should ensure proper follow-up on the projects they finance,

6. A core challenge for the OECS is to improve inter-island transport. Chapter 6 of the CARICOM treaty deals with transport. This policy framework should be translated into concrete projects, such as AITIC’s proposal for quick ferries. This requires an appropriate combination of infrastructures, services, skilled personnel, etc. Private investors are interested. Air transport also needed urgent attention: ministers have decided to create a single airspace in the region to replace the existing seven. The unification of the regulatory framework should have a positive impact on tourism and the rest of the economy.

7. The representative from ITC insisted on the need to identify priority sectors at the OECS level, and called for concrete project proposals. ITC would soon open a regional office dedicated to Latin America and the Caribbean. The representative from UNEP explained how trade priorities relate to the environmental challenges and how trade can stimulate technology transfers in the energy sector. He described the joint UNEP-UNCTAD Capacity Building Task Force (CBTF) on Trade, Environment and Development. The representative from UNCTAD described several programmes of interest to the OECS: TrainForTrade to train port officials and facilitate knowledge sharing between ports; the Virtual Institute on Trade and Development which is a network of academics; and a programme promoting tourism, the E-Tourism Initiative.