By Noel Watson Ph.D A-Z Information Jamaica Limited November 12, 2013

1. Perspectives on the French Caribbean Outermost Regions (FCORS) - Macroeconomic / Cultural / Doing Business/Opportunities By Noel Watson Ph.D A-Z Information Jamaica Limited November 12, 2013

2. Structure of Presentation • Background • Potential and Opportunities Based on • Market Characteristics of the FCORs • Fact that TT and CARICOM Exporters and Importers are already Doing Business with the FCORs • The EPA • Joint Ventures and Strategic Alliances • Competitive Advantages of TT and CARICOM Markets • Being ready • Early Successes by TT Firms after exporTT-led Trade Missions • Challenges and Constraints • Conclusions

3. Background • In 2009-10 • A-Z Information conducted a study on Opportunities for Doing Business between CARIFORUM States and the FCORs • Funded by EU • In 2012-13 • A-Z Information conducted Missions to FCORs with TT exporters • Funded by CART Fund

4. What Do CARIFORUM and FCORs have in Common? • Geography • Caribbean – same region, marine resources • Typically small (island) states • Weather/climate • Beautiful beaches • Demography • Relatively small populations • Heritage/History/Sport • African, European, Indian heritage • World famous sports persons and artistes • Vulnerability • Natural disasters • Limited exports products • High import dependence

5. What are Some of Main Differences Between FCORs and CARICOM • Economic • Per capita income • Wage rates • Expertise and technology • Political system/structure • Department of France • Independent (with British, Dutch, Spanish systems) • Relationship with EU • Part of EU versus Independent but linked through EPA • Language • Interpreter might be needed • Culture • Music • French Influence

6. POTENTIAL AND OPPORTUNITIES BASED ON MARKET CHARACTERISTICS OF THE FCORS

7. Market Characteristics

8. FCORs – Market Characteristics • Monopsonistic market tendencies • Relatively few large buyers – easier to make large market penetration • Buyers have more power but TT is lower cost producer • 90% of products in FCORs originate in France • Cost advantage • Example Conch • FCORs becoming more Caribbean oriented • Shipping service between TT and FCORs is well established although the available loads are minimal at the moment

9. Potential and opportunitiesbased on fact tt and caricom exporters and are already doing business in FCOR

10. Trade in Goods between CARICOM and FCORs • Trade data show that all CARICOM countries export to and import from the FCOR • Trade span all categories • There are export opportunities across a broad cross section of goods

11. CARICOM Exports to the FCORs

12. CARICOM Imports from FCORs

13. Export of Goods from CARIFORUM to FCORs by Category in US$ (2006-2008)

14. T&T Companies Exporting to Martinique Source: CSO • MARITIME PRESERVATION LIMITED • MEILING • MESSER TRINIDAD & TOBAGO LTD • NAT FLOUR MILLS LTD • PCS NITROGEN TRINIDAD LIMITED • PEPSI-COLA TRINIDAD BOTTLING • PETROLEUM COMPANY OF T & T LTD • PHOENIX PARK GAS PROCESSORS • PIARCO AIR SERVICES LTD • RADICAL DESIGNS LIMITED • SOLOMON YUFE & CO LTD • STUART BROTHERS (W I) LTD • TASTE MAKER MANUF CO LTD • TDAD AGGREGATE PRODUCTS LTD • THE TEXTILE KING • TRINIDAD & TOBAGO TIRES LIMITED • WEST INDIAN TOBACCO CO LTD • ABRAHAM SHIPPING CO LTD • AG'S GARMENTS • ANGOSTURA BITTERS LTD • ASSOC BRANDS INDUSTRIES LTD • C G A LIMITED • CARIBBEAN BOTTLERS T & T LTD • CARIBBEAN DEVEL CO LTD • CARIBBEAN ISPAT LTD • CHAI'S EXOTICS • COLLEGE HEALTH FOODS • F A AGOSTINI ESTATES LTD • FORMULA I I I MARINE LIMITED • GENERAL PACKAGING LIMITED • HUMMINGBIRD GRAINS LTD • INDUSTRIAL GASES LTD • K C CONFECTIONERY LTD • KHAN'S ALUMINIUM PRODUCTS LTD

15. T&T Companies Exporting to Guadeloupe Source: CSO • CARIB BREWERY LTD • CARIBBEAN DEVEL CO LTD • CARIBBEAN ISPAT LTD • COLLEGE HEALTH FOODS • ECHO MARINE LIMITED • GLOBAL M'KETING ENT CO LTD • INDUSTRIAL GASES LTD • JANOURAS FASHION HEADWEAR LTD • K C CONFECTIONERY LTD • MEILING • NAT FLOUR MILLS LTD • PEAKE INDUSTRIES LTD • PETROLEUM COMPANY OF T & T LTD • PHOENIX PARK GAS PROCESSORS • PRINT-A-PAK LIMITED • PROTECTOR'S SECURITY SERV • REGAL PRODUCTS LTD • SKYLINE FREIGHT LTD • SOLO BEVERAGES LIMITED • SOLOMON YUFE & CO LTD • TEXACO TDAD LUBE & SERVICE LTD • THE TEXTILE KING • THREE STAR SPORTSWEAR LTD

16. T&T Companies Exporting to French Guiana Source: CSO • AGOSTINI INDUSTRIES LTD • ANSA MC AL LIMITED • CAMACHO BROS LTD • CARIBBEAN DEVEL CO LTD • D H L DATA FORMS • D S MAHARAJ FURN & APPL LTD • INDUSTRIAL GASES LTD • METHANOL HOLDINGS (TRINIDAD) • PETROLEUM COMPANY OF T & T LTD • PHOENIX PARK GAS PROCESSORS • ROTO PLASTICS TDAD LTD • TASTE MAKER MANUF CO LTD • TEXACO TDAD LUBE & SERVICE LTD • THE TEXTILE KING

17. Trinidad & Tobago – Summary Findings • T&T has a history of exports to the FCORs, across all categories of commodities. • T&T’s mineral exports (petro-chemical based products) to the FCORs not only dominate T&T’s exports to the FCORs but accounts for over 90% of the value of CARICOM exports to the FCORs.

18. Opportunities: Services Exports From CARIFORUM to FCORs(Based on being identified in five or more CARIFORUM countries)

19. Potential and Opportunities Due to EU-CARIFORUM EPA • EPA signed in October 2008 • Offers a new deal to the CARIFORUM states in terms of a new WTO-compatible trading relationship with the EU based on reciprocity. • EPA removes barriers to most Caribbean exports in goods and services to the EU and includes improved ‘rules of origin’ allowing for intermediate products from outside the region. • EU products are to become increasingly more accessible to Caribbean consumers, following a liberalization process over 25 years, specific to each country and industry concerned. • It is also the case that the French Caribbean Outermost Regions, as part of the EU are covered by EPA, are thus directly concerned by the regional opening of trade and economic development objectives. Spoken about this morning

20. POTENTIAL AND OPPORTUNITIES BASED ON STRATEGIC ALLIANCES

21. Strategic Alliances Joint Ventures • Benefit from technology transfer from France / FCOR • Leverage FCOR expertise in meeting standards • Penetrate market by working with distributors that are already in the FCORs market and in mainland France FCOR importers have to pay return freight to the EU given the lack of backhaul. We need to have TT/CARIFORUM products going back in empty containers win – win)

22. Strategic Alliances Importance of the Chamber of Commerce • The Chambers of Commerce are important entities in regulation of businesses and commerce. • All Businesses must be registered with Chamber of Commerce. • Until recently, Chamber of Commerce formerly managed ports. Importance of Agent on the Ground • Having an Agent in FCOR can be a major part of the export company’s success. • One Agent may be able to operate effectively in all FCOR countries.

23. Potential and Opportunities Based on Competitive Advantage • Labour and other costs are lower in TT/CARIFORUM • FCORs desire to be more Caribbean • In strategic alliances • Production taking place in TT/CARIFORUM where advantages in production costs can be achieved over the FCORs. • Increased demand for TT/CARIFORUM • Goods • Services

24. Potential and Opportunities by being READY • Company Profile • Suitably designed company profiles showing the manufacturing plant, catalogue of the products being offered with specifications and quality standards and having price information • Labels • Labels should be in French and the labels should be vetted. Either the Agent or commercial distributor can assist with the vetting of labels. • In the FCORs 8 OR 13 character Bar Codes may be used. • Responsibility for Certification • Exporters’ products must meet EU standards • Assistance from local Bureau of Standards may be required • Make sure your plant is in order • Company Readiness is more than brochures and websites • Companies should be open to visits to their production facilities • FCOR business partners may request plant visit

25. POTENTIAL AND OPPORTUNITIES BASED ON EARLY SUCCESSES BY TT FIRMS AFTER EXPORTT-LED TRADE MISSIONS • Started of with 22 companies • Assessed them • Trained and coached them • Accompanied companies to market (14 companies) • Surveyed companies after Exploratory Mission • Accompanied them again to market (7 companies) • Surveyed companies after Market Penetration Mission

26. Summary of Results for Missions

27. Opportunities in Certain Products • There are distinct possibilities for a number of the targeted items from Trinidad and Tobago including • Cosmetics • Detergents • Electrical products • Furniture products • Safety products • Confectionery • Aggregate products • Packaging material • Labels • Garbage bags Include Senior Managers on Trade Missions for the simple reason that they can make decisions on the spot which may be pivotal in striking deals

28. Relationships built • With (potential) buyers • Chambers of Commerce • Potential for doing business with mainland France/EU Successes • Companies have either • Confirmed orders • Six (6) companies have had orders already as a result • Three (3) companies are awaiting confirmation • Identified new exciting prospects • Advanced discussions and arrangements to supply the market • Developed pricing strategy to be adopted for their products • Relationships with potential buyers and Chambers of Commerce • Identified the regulatory requirements for their products • Potential for doing business with mainland France/EU

29. Importance of Missions • Market visit is very important: Our visits facilitated the assessment of the market, standards and competition that lies therein. • Show and Retain Interest: Potential Buyers in the FCOR are impressed with the seriousness demonstrated through the trade missions as well as with the aggressive follow- up of interests with telephone calls and emails and the fact that the decision makers are able to visit in person.

30. Cultural Idiosyncrasies • Slow or non-response to emails does not necessarily mean “lack of interest”. • The territories are small and interconnected hence there is a discussion and cross referencing before coming to a conclusion • Exporters should pay attention to the terms of payment as oftentimes very long periods are required. • Exclusive distribution of the product is required by some buyers given the small size of the market.

31. Constraints and Challenges Remember YELLOW FEVER shot when going to French Guiana Potential Barriers to Trade • Language • Transport costs • Knowledge of French regulations, culture and bureaucracy • Lack of representation or distributors on the ground. • High duties when entering the FCORs • Octroi de Mer • French culture and perceptions that French products are the best • Visa requirements – especially for some CARICOM countries • The need for market intelligence – data not always easy to obtain

32. Important Requirements Identified in Trinidad & Tobago Focus Groups • Need for a Facilitation Office in the FCOR which just facilitates trade opportunities • A Central information portal should be available where potential exporters will go for general information • Supporting Trade Missions

33. Model for Doing Business with FCORs – CARICOM Perspective • Opportunity • Commodities • Wide range of goods • Mineral products • Services • Tourism, etc. • Critical Success Factors • Market research • Joint ventures and partnerships • FCOR expertise in meeting standards • Distributor/promoter on the ground • Trade links • Barriers • Language • Transport • Few distributors on ground • EU Standards • visa • CARIFORUM Suppliers • Have capacity • Meet quality • Cost competitive • Understand regulations & EPA • FCOR Purchasers • Demand based on trends (past and expected) • Have income • Have population • Like CARICOM products

34. Merci Beaucoup La Fin! Au revoir