2006 Speeches

Speech to Greater Chaguanas Chamber of Industry and Commerce

November 25, 2006

Dr. Roy L. Austin
United States Ambassador
Annual Christmas Dinner and Awards Function

Good evening!  My wife and I are pleased to join you for your Annual Christmas Dinner and Awards Function.  This event gives me an opportunity to become better acquainted with the citizens of this thriving community.

You have invited me to speak about trade between the United States and Trinidad and Tobago, including what the United States does to promote trade, even as we take measures to enhance border security, and the ways that we at the U.S. Embassy can help businesses in Trinidad and Tobago connect with U.S. companies.  I will start by talking about the U.S.-Trinidad and Tobago trade relationship in general terms, as well as some of the programs my government has established with the aim of expanding our trade with Caribbean countries. 

You know as well as I do that trade is an important part of the United States' relationship with Trinidad and Tobago and the other countries in the Caribbean.  In 2005, total U.S. trade with CARICOM amounted to over US$17 billion.  Last year, also, the United States exported nearly as much to CARICOM as to India.  At the same time, the U.S. is an important market for CARICOM exports.  In 2004 and 2005, Trinidad and Tobago sold around 60% of its exports to the U.S.

While our trading relationship with the Caribbean is already strong, the United States is always looking for ways to deepen and improve that relationship, not only as a matter of mutual economic benefit but also as a matter of foreign policy.  We encourage free trade as a primary vehicle to create jobs and fight poverty in the region.  We want our Caribbean neighbors to be prosperous, because we understand that prosperity in the region promotes political stability, and that benefits us all. 

The U.S. facilitates the realization of greater Caribbean prosperity through a number of trade initiatives that will be discussed shortly.  As a result, some 85 to 90 percent of goods from Latin America and the Caribbean to the United States enter duty-free.  Some of the trade initiatives are familiar to you and some may present new opportunities for you to do business with the United States. I start my discussion of these programs that promote trade and competitiveness next.

Caribbean Basin Initiative
For Trinidad and Tobago, CBI affords duty free treatment for over 30 percent of your exports to the United States.  This category includes methanol and naptha from Point Lisas, products which get a competitive advantage in the U.S. market thanks to CBI.  What about liquefied natural gas, Trinidad's largest export?  LNG enters the U.S. duty-free because the normal U.S. tariff rate for this product is zero.  This is also the case for T&T's exports of ammonia to the United States.

But Trinidad and Tobago's participation in the Caribbean Basin Initiative is not limited to LNG and petrochemicals.  Caribbean Safety Products is one example of a Trinidadian company that is exporting manufactured goods to the U.S. through the CBI.  As you may know Caribbean Safety Products manufactures protective wear such as hats, gloves, coveralls and eyewear for U.S. safety companies, and its products enter the U.S. duty free.  Meanwhile, Angostura has also taken advantage of CBI provisions that facilitate joint venture partnerships between the U.S. and Trinidad and Tobago.  You may not be aware that Angostura bottles the rum for a major U.S. spirits distiller and then exports it duty free into the United States.  This benefit can be enjoyed by other sugar-based products.  Trinidad Bulk Traders, an Angostura subsidiary, produces fuel ethanol for the U.S. market, taking advantage of CBI provisions that allow Caribbean countries to export ethanol to the U.S. duty free.

CBI is a one-way trade preference program, meaning Trinidad and Tobago does not have to open its market to U.S. goods and services in order to qualify for duty-free access.  Still, CBI does offer incentives for the countries of the Caribbean Basin to position themselves to participate more fully in the global economy.  For example, CBI permits U.S. taxpayers to deduct the cost of attending a business meeting or convention in Trinidad and Tobago without having to meet the more stringent tax rules that usually apply to foreign convention expenses.

Recently I have been hearing concerns expressed that CBI will expire soon.  I shall comment on this because sometimes these concerns are based on incomplete information. 

As I mentioned previously, CBI has been around since 1984.  Over the years it has been amended and enhanced a number of times.  One of the more recent enhancements came in the year 2000 when the U.S. Congress passed the Caribbean Basin Trade Partnership Act, known as the CBTPA.  This legislation extended duty-free treatment to a number of manufactured products not previously covered, such as apparel and footwear produced in CBI countries, as well as crude oil.  But the CBTPA has a sunset clause under which it is set to expire in 2008, unless Congress takes action to extend it. 

However, all other CBI trade preferences are permanent, thanks to the Caribbean Basin Economic Recovery Act of 1990, known as CBERA.  That legislation has no sunset clause, meaning it will remain in effect unless the U.S. Congress passes new legislation to replace it. 

One reason that CBTPA was written with an expiration date was that the United States sought to encourage an agreement by 2005 to establish a Free Trade Area of the Americas, or FTAA.  That did not happen, and prospects for moving forward on the FTAA in the near future are uncertain.  So we are waiting to see whether Congress will renew the CBTPA in 2008.  But it is important to note that the United States is moving forward to negotiate free trade agreements with smaller groupings of countries.  One of these is a regional free trade agreement with five countries in Central America plus the Dominican Republic, countries which have all benefited from CBI.  In effect, these countries will "graduate" from the CBI as they take on reciprocal commitments to liberalize trade with the United States.

I shall also point out that even if Congress does not renew the CBTPA in 2008, Trinidad and Tobago and the other Caribbean countries have an opportunity to increase exports to the U.S. by taking better advantage of the trade preferences that will not expire, whether under CBI or the Generalized System of Preferences (GSP).  For example, I mentioned a moment ago that T&T is shipping fuel ethanol to the U.S. duty-free under CBI.  There is no limit to the amount of ethanol that can enter the U.S. market duty-free under CBI if the producer uses raw ethanol from within the region.  Even using raw ethanol from outside the region, as Angostura does with raw ethanol from Brazil, CBI-eligible countries can provide up to seven percent of U.S. demand for fuel ethanol.   At present Caribbean countries are providing only half that quota, while U.S. demand for fuel ethanol is expanding faster than anyone had predicted even a year ago.  This creates a continuing opportunity for Trinidad and Tobago, an opportunity that is currently taking the form of a second ethanol plant that is being constructed next to the Petrotrin refinery at Pointe-a-Pierre to produce for the U.S. market.

USG Trade and Investment Agencies
Several specialized agencies of the U.S. government offer targeted support for foreign trade and investment.

The U.S. Trade and Development Agency (USTDA) provides technical assistance and feasibility studies for modern projects in developing and middle income countries.  In 2005 the USTDA provided a total of US$10.9 million in grant funding to support more than 55 new projects in Latin America and the Caribbean.  In Trinidad and Tobago, USTDA financed a feasibility study for the first LNG train at Point Fortin.

The Overseas Private Investment Corporation (OPIC) is an independent U.S. government agency that seeks to mobilize U.S. private capital and skills for investment in developing countries to support economic and social development.  At the last Summit of the Americas in Mar del Plata, President Bush announced that OPIC would invite proposals from private sector fund managers to create private equity funds in Central America and the Caribbean.  On April 27, OPIC’s board approved up to US$80 million in financing to support the establishment of the Advantage Investment Counsel (AIC). The AIC Caribbean Fund will make investments in businesses located in CARICOM countries, with an emphasis on Jamaica, Barbados and Trinidad and Tobago.  The fund will focus on the tourism, telecommunications, health care, energy and financial services sectors, and has a target capitalization of $250 million.

U.S.-CARICOM Trade and Investment Council (TIC)
Another sign of increasing attention to regional trade is the recent revitalization by U.S. and CARICOM trade officials of their Trade and Investment Council (TIC) which met on October 13 for the first time since 1999.  The TIC gathers trade officials from both sides to monitor trade and investment relations and look for ways to expand the relationship at a government-to-government level.  The TIC provides a venue for trade officials to consult on specific trade and investment matters and to identify and resolve problems affecting trade and investment flows.  At the most recent meeting, CARICOM officials pledged their commitment to make tangible and significant progress in the CARICOM Single Market and Economy, which they will be able to showcase at the upcoming Caribbean 2020 Conference, planned for June 2007.  CARICOM and U.S. trade officials also voiced their commitment to update and expand the existing bilateral trade and investment framework agreement between CARICOM and the United States.

At this TIC meeting, the U.S. International Trade Commission (USITC) reported that the Caribbean region is not taking full advantage of existing preference programs.  The Commission concluded that a more targeted strategy and effort can help.  For example, St. Kitts was lauded as an example of a small country that has become a regional leader in the electronic assembly sector.

In addition to discussions about the overall trade framework, CARICOM and American representatives' future plans include bringing the Caribbean and American private sectors together to discuss trade and investment issues.  I encourage you to be alert for opportunities to participate in such discussions.  If U.S. and Caribbean business people can agree on how our economic relationship should move forward, it will have a powerful impact on officials' thinking.

Business people understand the need to improve competitiveness, whether in the United States or in Trinidad and Tobago, in order to attract private capital.  All countries are competing for capital in a global market, so everyone needs to raise the bar.  President Bush understands the importance of improving competitiveness.  That is why he has asked U.S. Secretary of Commerce Carlos Gutierrez to convene the first-ever Western Hemisphere Competitiveness Forum.  The forum will be held next spring in the United States and will explore ways for this region to better compete in the global marketplace.

Embassy's Role
I shall now address the U.S. Embassy’s role in promoting trade and investment.  It may surprise you that the Embassy does not promote exports of Trinidadian products to the U.S.  I hasten to add that we are not opposed to the entry of T&T products into the U.S. – it is just that the Embassy’s role does not include promoting trade in that direction. Rather, our role involves finding companies from T&T that are interested in buying American goods and services, or in partnering with American companies that will sell their products here. 

One of the ways we do this is via reverse-trade missions – inviting and escorting Trinidadian business people to trade shows in the U.S.  The hope is that those business people may purchase American products or find companies in the U.S. with which they want to do business.  The Embassy also offers support to U.S. trade missions to Trinidad and Tobago.  Within the last three months we have hosted one trade mission from Houston and another from Puerto Rico.  Whether facilitating trips by state and local officials interested in increasing trade with Trinidad and Tobago or advising American businesspersons on how to invest in Trinidad and Tobago or find a local partner, the U.S. Embassy is always prepared to assist in such circumstances.  

We also provide information to U.S. companies seeking to do business in Trinidad and Tobago.  Every year we issue a Country Commercial Guide to Trinidad and Tobago, available on the Embassy's website.  We also prepare targeted research on the T&T market to U.S. companies on request through the U.S. Department of Commerce.

Exporting to the U.S.
Our Embassy frequently receives questions from companies in T&T interested in finding American customers or looking for a market in the U.S.  Others have questions about U.S. customs procedures or about how to gain access to the U.S. market under the Caribbean Basin Initiative.  Often we do assist in making relevant connections – for example, a good resource for learning more about American customs and the Caribbean Basin Initiative is the U.S. Customs and Border Protection website.  But in other cases, answers are not easily obtained.  Please know, however, that we are constantly examining ways to accommodate foreign business activity in the U.S. market, and the Embassy is willing to work closely with business organizations like this Chamber to improve the business climate for both American and local companies in Trinidad. 

In seeking to do business with the United States, it is best to think local.  The fifty states compete fiercely for trade and investments from overseas.  The reason: jobs for people in those states.  There are countless small and medium-sized businesses – and large ones as well – that resell imported items.  While many large foreign companies have established operations in the United States, few small foreign firms have a physical presence in the U.S.  They work instead through distributors and other sales arrangements with American partners.  This is the typical model that most companies from Trinidad & Tobago follow. 

The task, then, is to determine where to do business in the U.S.  Given that individual states compete with one another for business from abroad, it is a good idea to consider niche markets and locate the best corner of the U.S. for that product or service.  As a starting point, you can look at what different state economic development agencies say about doing business in their states.  They may offer investment incentives to foreign companies, such as tax holidays, assistance in land acquisition and so forth.  They often highlight key sectors that they are most interested in promoting.  The U.S. Department of Commerce has a publication with contact information for all of these agencies across all fifty United States as well as the District of Columbia and Puerto Rico.  The list is downloadable from the Internet.  The Economic Section in the Embassy can assist you in getting a copy of that directory if necessary. 

Visas, Cargo Security, and Business Facilitation
I cannot speak about encouraging trade and developing business in the region without touching on the always important subject of visas and travel to the U.S.  While the attacks of September 11 necessitated reexamination of our border security policies, the United States understands that we still need a free flow of goods and ideas into our country.  The Embassy’s Consular Section has a number of programs in place to accommodate business travelers, including reviewing and granting many early appointment requests every week to business people who truly need to travel to the U.S. on short notice for legitimate business.  Furthermore, we are constantly examining ways of improving the visa process, for example with the recent introduction of an Electronic Visa Application Form.  At the same time, businesses need to understand that we remain committed to upholding the security and safety of the borders of the United States, and sometimes this results in inconveniences to us all, including U.S. citizens.

These, then, are some of the ways the United States supports expanding and promoting bilateral and regional trade.  Trinidad and Tobago is experiencing unprecedented prosperity, thanks to record energy prices.  Though not without its challenges, your country’s future holds the promise of raising the standard of living for its citizens.  The U.S. Embassy welcomes the opportunity to facilitate links between companies here and in the United States. 

Likewise for the movement of goods, the United States strengthened rules and programs addressing cargo security in the wake of the September 11 terrorist attacks, and it continues to look for ways to improve both the security and efficiency of trade.  Even though the overall rate of inspections of cargo entering the United States has doubled in that time, the U.S. Bureau of Customs and Border Protection has developed ways of ensuring that inspections are targeted on high-risk cargo, so that low-risk cargo keeps moving with minimal delay.  For example, under the Customs-Trade Partnership Against Terrorism (C-TPAT), certified shippers receive fewer container inspections by U.S. Customs based on their commitment and active participation in the program.  So even though inspection rates have doubled overall, inspection rates for C-TPAT participants are only one-sixth that of non-C-TPAT participants. 

Another way in which the United States works to target inspections on high-risk cargo is the Container Security Initiative (CSI).  The idea behind CSI is to identify and inspect containers that pose a risk for terrorism before they leave foreign ports on vessels destined for the United States.  Starting in January 2002, the United States reached agreements to station U.S. customs officials in fifty foreign ports accounting for about ninety percent of the containers destined for the United States.  These officials work closely with host customs administrations to identify high-risk containers, pre-screen and evaluate these containers using advanced technology that allows screening to be done rapidly without slowing down trade, and use more secure containers that allow customs officers at U.S. ports of arrival to identify containers that have been tampered with during transit.

The fifty operational CSI ports around the world include four Caribbean ports: Puerto Cortes, Honduras; Caucedo in the Dominican Republic; Kingston, Jamaica; and Freeport in the Bahamas.  While Trinidad does not yet have a CSI port, I can tell you that the United States and Trinidad do have a history of close cooperation on customs matters that goes back to 1994.  In that year a U.S. Customs Advisory Team came to Trinidad & Tobago, and it has been working with T&T Customs and Excise ever since then, with a focus on customs modernization and reform.  That cooperation puts us in a very good position to launch CSI in Trinidad in the future.

I appreciate the opportunity to deliver these remarks to you this evening, and I thank you for having invited my wife and me to join you in celebrating the beginning of this holiday season. During the remainder of this year, may you prosper in whatever may be your line of endeavor; and, although we seem to be a long way removed from Christmas, a Christmas dinner is an appropriate place to wish you a joyous holiday season and a 2007 in which all of your important dreams are realized.