Bali, Indonesia was the venue for the signing of the historic trade deal on the 23rd July, which it is said could increase trade by more than a trillion dollars a year, globally.
The deal struck with all 161 member states comprising a number of Caribbean states including St. Kitts and Nevis, was heralded as ground breaking by the WTO Chief Roberto Azevedo as the first tariff cutting deal for the WTO in 17 years. Azevedo said, “For the first time in our history, the WTO has truly delivered.”
The WTO Chief went on to state some of the benefits, which initially, would be lower prices for consumers and for manufacturers in other sectors that use some of the components covered by the deal. The components which now have no tariffs such as touch screens, micro processors and GPS are used in the auto and health industries for example.
The types of devices and parts consumers should expect to see price reductions when the deal is finalised are; Computers, tablets, video game consoles, printers and ink/toner cartridges.
But what will the impact be for the Caribbean and St. Kitts and Nevis in particular when this deal is finalised, at the WTO Ministerial Conference in December?
Well, that is when consumers and the private sector across the region may have to do their work, to ensure that the savings promised by the removal of duties and tariffs actually materialise in our respective countries. We are all too aware of the parlous state of government coffers around the region. Many of our countries are receiving “support” from the IMF, and so the prospect of a government eagerly forgoing revenues that could be gained through their Customs Departments is like turkeys voting for Christmas. So what is to be done?
Progressive administrations would realise that less can actually be more! For us in St. Kitts and Nevis, we only need to look at the impact of VAT reduction days at Christmas to see the effect reducing VAT has on sales. By forgoing the duties consumers may be encouraged by the lower prices to buy more equipment and more often. Businesses may be encouraged and indeed be better able to afford to make investments in technology upgrades. The removal of these duties could result in a sizeable growth opportunity for the Tech sector.
The other opportunity presented by the removal of import duties on these goods, is that because of the reduced costs, creative and innovative businesses and individuals are motivated to buy these goods to experiment and perhaps develop new products and services around them. This may lead to the formation of new businesses or increased profits for existing businesses. It encourages and supports the goal of moving our people into the knowledge and creative economies, which is where the higher paying jobs are and where developing economies are making their money.
The WTO deal in and of itself will not bring significant benefits to the Caribbean, but if we’re smart this could be a pivotal moment for the region to really make a shift and improve our economies not just in the short term, but by systematically exposing our youth to the potential and use of these technologies, our economies could be changed forever. But we have some work to do, convincing our governments and finding ways to engage our youth to become creators and not just users.
An IT Professional for more than 20 years and an entrepreneur for more than a decade, Russell Williams has extensive experience as an IT Trainer and facilitator and is happy to answer your questions. E-mail them to email@example.com or follow him on Twitter @RwilliamsKN, G+ google.com/+RussellWilliamsKN