Jamaica and its CARICOM Partners, coordinated by the Caribbean Regional Negotiating Machinery (CRNM), have been participating in the negotiations of the FTAA.

It should be noted that the CARICOM countries were instrumental in having established the Consultative Group on Small Economies (CGSE).

How will an FTAA affect Jamaica?

Benefits include:

1. Expansion of ‘domestic’ market to 800 million potential consumers especially in the areas of services and investment
2. Efficient companies can form a local platform and project themselves and their products throughout the region relatively free of trade barriers.
3. Investment flows within the region can be enhanced as companies take advantage of the free movement of capital and rights of establishment, as well as the simplification of cross -border investment and commercial activity. Since investment is the main engine for the growth in the Hemisphere, it is important to encourage investment by cooperating to build more open, transparent and integrated markets. This can only be achieved by strengthening the mechanisms that will protect the flow of productive investment in the Hemisphere and promote the development and progressive integration of capital markets.

Possible Challenges:

1. In terms of labour conditions, like the NAFTA, the FTAA could give corporations the power to drive wages down by moving factories to countries where workers do not have the right to form unions and where working conditions are hazardous
2. In addition, smaller countries such as Jamaica may be unable to compete in the area of market access and agriculture, as a result of the size of some of the other countries, especially those in South and Central America with larger territories and greater population size. There are also existing technical barriers to trade (registration process mechanism, unforeseen taxes, business laws such as Law 173 practiced by the Dominican Republic) implemented by these countries which make entry of goods either difficult or impossible into these markets.
3. The persistent use of non-tariff barriers and the proliferation of common external tariffs (CET) by some countries within the Hemisphere is also a challenge to deeper integration.
4. Jamaica’s ability to compete in the FTAA depends not only on the economic policies of the Government, but also on the readiness and ability of the private sector to compete effectively, especially in the manufacturing, agriculture and services sectors. Although Jamaican products have a comparative advantage, this has in the past been negated by the lack of a competitive advantage by locally owned firms.
5. It should be recalled that Caribbean countries including Jamaica are more dependent on foreign trade for their fiscal revenues than some of their larger Latin American neighbours. They also maintain a lower percentage of international trade reserves. Consequently, a strong dependence on external financing, a more liberalised trade system and a vulnerable export structure does pose greater external risks for them. 

The importance of Private Sector participation in the FTAA

The private sector’s crucial role in economic development is now fully appreciated. It should be recalled that it is not he government that trades, but the private sector. In order to assume this responsibility fully, the private sector must be aware of the nature of the challenges faced in today's globalise world, be able to evaluate its strengths and possibilities, and make a psychological leap that would shift it to engage in more competitive trade at the level of the firm.

It is importance that Jamaica modernise its economy in order to cope with the increasing pressures of international competition. Access to and the use of information and the development of a strong work force are critical factors in this undertaking. The private sector must be prepared to abandon activities that stand little chance of competitive survival.  For the private sector to be competitive within the global environment, it will need to retool and modernise its plants and equipment by the introduction of modern production techniques within the factories and farms, and by applying science and technology to innovation in products and production processes.

We must prepare our workforce to successfully meet the demands of the new era of knowledge-intensive work processes and an information-driven society. This should be done while fostering an economic environment, which is, stable and supported by firm and sound economic management

To provide and make full use of export opportunities there is also the need to provide an environment in which all Jamaica-based firms are in a position to operate competitively at the international level. To provide competitive advantage, this would take into account the ability to compete across many different dimensions of the product; price, quality, design, packaging, delivery, output time, range and variety of products, and innovation in new products. It is rooted in a flexible and dynamic structure of production that produces a changing mix of goods and services, which may win for themselves a niche in the international market in competition against rivals. Creating a niche would be through a strategy of product differentiation (in terms of quality, name recognition, image, and other distinctive characteristics.)

In this regard, an effective partnership must be forged with government in devising appropriate national policies and strategies to enhance the business environment, and in tackling the wide range of external issues that must be addressed, such as trade in goods and services. The revised trade policy implemented by the Government of Jamaica has sought to shift Jamaica’s approach from one focused largely on market access with emphasis on the preservation of preferences to one which seeks to strengthen and diversify export performance with an emphasis on market penetration, displacement of imports, and increased returns from overseas assets.