Identifier
Created
Classification
Origin
07PORTOFSPAIN891
2007-09-07 19:49:00
UNCLASSIFIED
Embassy Port Of Spain
Cable title:  

TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS - AUGUST PART 1

Tags:  EFIN ELAB ENGR ETRD TD 
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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.

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

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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