Trade relations begin with Caribbean Community

(September 8, 1992).- During an official visit to Trinidad and Tobago on the 8 and 9 of this month, CAF President & CEO Enrique García signed an agreement to initiate a series of activities to promote trade between the Andean countries and the countries of the Caribbean Community (CARICOM).

The agreement covered a US$5 million line of credit granted to Royal Bank of Trinidad and Tobago Ltd to finance foreign trade operations between the Caribbean country and Andean nations, and with third countries; in the latter case provided the exported product contains at least 50% of inputs from member countries of the Andean Group.

During the signing ceremony - which took place in Port of Spain on September 7 – the CAF president said the agreement was the outcome of several studies done by the Corporation to analyze potential of trade between the two regions, which total 18 countries and 100 million people.

He said Caribbean exports and imports had been generally linked to their traditional trading partners in North America and Europe. "However now businessmen and investors from Caribbean countries can form ties with the Andean and Latin American region with evident benefits for all, given the new economic model being implemented by all the region and the predominant role assigned to the market and the private sector."

"This is only a first step - García said - because we are expecting to sign a similar agreement with Jamaica very soon."

One of the obstacles to trade between the two regions is lack of information on alternative sources of supply, and difficulties of access to credit.

In this respect, CAF is preparing detailed up-to-date information on markets, products, customers, availability of transport and distribution channels, and on the legal provisions which govern the export trade of both areas.

For credit, CAF provides the Andean Trade Financing System (SAFICO) and the Letter of Credit Confirmation and Financing Mechanism for Imports from Third Countries (MECOFIN).

These closely interrelated elements are a broad base for continuing work on trade development.

With closer relations with the Caribbean Community, combined with the recent entry of Chile into CAF capital - which joins Mexico as extra-subregional partner of the Corporation, CAF will be able to broaden its base and field of action in Latin America and the Caribbean.