TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS - AUGUST PART 1

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000891 SIPDIS SIPDIS SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE E.O. 12958: N/A TAGS: EFIN ELAB ENGR ETRD TD SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS - AUGUST PART 1 The following were notable economic issues in Trinidad & Tobago during the first half of August. ¶1. Offers of more food suppliers for T&T ¶2. Weak US dollar ... businessman worried! ¶3. T&T/Barbados fishing talks begin ¶4. Tobago's Development - US$500 million to be spent ¶5. Global warming fears prompt desalination projects ¶6. Call for local content policy ¶7. T&T chambers seek trade with Latin America ¶8. CARICOM/Central America trade talks ¶9. Government considers extending "Sea Bridge" ¶1. Offers of more food suppliers for T&T -------------- Costa Rica is offering to export beef to T&T at a competitive price. According to Juan Carlos Martinez-Piva, director of the foreign trade corporation of Costa Rica (Procomer),Costa Rica is waiting for the GOTT Ministry of Agricultural to approve a report completed by a CARICOM team in 2006, before it can begin exporting beef to T&T. There was no indication as to when the ministry is expected to grant approval. El Salvador is also offering to supply food products to T&T. Minister of the Economy Yolanda Mayora de Gavidia said that her country can sell food to T&T and buy its oil and petrochemicals. During his visit for Emancipation Day celebrations, Ugandan President Yoweri Museveni also offered the help of his country's agricultural sector to reduce rising prices by exporting food to T&T, noting that the retail price of beef in T&T was some seven times higher than in Uganda. ¶2. Weak US dollar - businessman worried! -------------- T&T business leaders voiced concern over the continued weakening of the US dollar against other major currencies, since the TT dollar has been stable for a number of years at roughly TT$6.30 to US$1.00. Downtown Owners and Merchants Association president Gregory Aboud attributed recent increases in local dairy prices to the weakening of the US dollar not just against the pound sterling, but also against the Euro, Chinese RMB, Japanese Yen, and Canadian, Australian and New Zealand dollars. He said the effect of this weakening will arise in commodity products that are quoted weekly and whose prices change almost daily. T&T Manufacturing Association president Karen DeMontbrun predicted the strengthening of other currencies against the US dollar will increase the cost of imported manufacturing inputs. ¶3. T&T/Barbados fishing talks begin -------------- Negotiating teams from the Tobago House of Assembly (THA) and Barbados met recently in Tobago to begin discussions on a fishing agreement, pursuant to an April 2006 ruling by the Permanent Court of Arbitration in The Hague, when a single maritime boundary between T&T and Barbados was fixed on the principle of equidistance. Discussions centered on a fish stock assessment, primarily flying fish, which Tobago House of Assembly (THA) Secretary of Agriculture Hilton Sandy emphasized must be a precursor to any further discussions on an agreement. It was agreed that an assessment in the waters between the islands would be undertaken on a priority basis by the Food and Agricultural Organization (FAO) and that the FAO would be asked to reconvene the Flying Fish Working Group to review available data. The Barbados delegation was led by former Attorney General and Foreign Affairs Minister Sir Henry Forde, while the THA team was led by Sandy. ¶4. Tobago's Development - US$500 million to be spent -------------- -------------- Following a special cabinet meeting held in Tobago, Prime Minister Patrick Manning announced the establishment of the Tobago Development Company to handle proposed government projects on the island worth over US$500 million. Projects include completion of the controversial 100-bed Scarborough Regional Hospital. According to the PM, companies with known capabilities to finish partially completed hospital projects would be invited to tender for the project. Also on PM Manning's list for Tobago are completion of the Crown Point International Airport, construction of a cultural complex, an administrative complex, an indoor sporting complex and an aquatic center. The Claude Noel Highway is to be extended to link one end of the island to the other, with additional links connecting other areas. ¶5. Global warming fears prompt desalination projects -------------- -------------- In an effort to reduce T&T's heavy dependence on its surface water PORT OF SP 00000891 002 OF 002 stock, PM Manning announced August 4 that his government was moving to construct more desalination plants. Manning voiced concern that climate change would affect rainfall in T&T, and he observed that surface stock accounts for 65-70 percent of T&T's water supply. A Task Force headed by Professor Ken Julien, Chairman of the University of Trinidad and Tobago (UTT),and the Standing Committee on Energy, has been set up to look into and report on this matter. Recalling that T&T had experienced water riots in 1903, Manning noted that 2007 saw the country's deepest drought in years and expressed concern that another drought in 2008 would severely affect food prices. ¶6. Call for local content policy -------------- The T&T Manufacturers Association and South Trinidad Chamber of Industry and Commerce both called on the GOTT to adopt local content policies as a way to ensure more local contractors and locally-produced goods and services are used in T&T's booming energy sector and numerous large-scale construction projects. Focusing on the construction sector, TTMA announced it has put forward a Local Content and Participation Policy Framework that calls on the GOTT "to ensure that domestic procurement practices are in compliance with international best practices" and emphasizes that imported goods and services should only be used "where domestic suppliers are unable to meet the requirements of the procuring agencies." Separately, the South Chamber renewed its call for new regulations to support an existing GOTT policy promoting local content in the oil and gas services sector. Responding to the TTMA, Trade Minister Valley said the GOTT's procurement white paper calls for a 15% price preference for domestic suppliers. Prime Minister Manning had downplayed prospects for procurement reform legislation several weeks earlier, asserting that draft legislation in its current form would slow the pace of T&T's development. More recently, Acting Planning and Development Minister Christine Sahadeo said the Cabinet is currently fine-tuning legislation on public sector procurement reform. However, Manning did not mention procurement reform legislation in his August 20 presentation of the FY-2008 budget. ¶7. T&T chambers seek trade with Latin America -------------- Three business chambers in T&T are collaborating on a trade mission to El Salvador and Costa Rica from October 21 to 26. The Trinidad and Tobago Chamber of Industry and Commerce, the American Chamber of Commerce and the South Trinidad Chamber of Industry and Commerce held a seminar on July 31 to sensitize locals about service sector trade and investment opportunities in these two countries. One objective of the trade mission is to help develop T&T's non-energy sector by facilitating new business for local firms. ¶8. CARICOM/Central America trade talks -------------- At the August 8 launch of trade negotiations between CARICOM and Central American nations in Port of Spain, GOTT Minister of Trade and Industry Ken Valley said he is optimistic that a free trade agreement will be in place by early 2008. Valley predicted that negotiations would be completed by December. Building on the existing trade agreement between CARICOM and Costa Rica, the new accord would deepen trade and investment among twenty economies including CARICOM members, Costa Rica, Honduras, Guatemala, Nicaragua, Panama and El Salvador. ¶9. GOTT considers extending "Sea Bridge" -------------- During a rally of the ruling People's National Movement (PNM) in Tobago, PM Manning announced that the GOTT was seriously considering extending the domestic "sea bridge" ferry service between Trinidad & Tobago to include Grenada, St. Vincent and St. Lucia. A fast ferry between these countries would facilitate regional trade, especially in agricultural products, as well as inter-island tourism and overall regional integration. Manning also disclosed that T&T Minister of Works and Transport Colm Imbert is to chair a CARICOM committee to consider the idea. AUSTIN