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World Trade Indicators 2009/10
St. Vincent and the Grenadines Trade Brief
Trade Policy External Environment
As a member of the Caribbean Community and The simple average of the overall rest of the world
Common Market (CARICOM), St. Vincent and the tariff (including preferences) faced by the country’s
Grenadines applies the group’s Common External exports is 9.5 percent. But when its trade flows are
Tariff (CET). With a simple average MFN tariff of 9.9 taken into consideration, it is apparent that St. Vincent
percent, St. Vincent and the Grenadines’ trade regime and the Grenadines’ exports have good access to
is slightly more restrictive than that of an average Latin international markets, especially in comparison to its
America and Caribbean (LAC) or upper-middle- region and income group. Its weighted rest of the
income country (with average tariffs of 9.3 and 9.0 world tariff (including preferences) is 1.0 percent,
percent, respectively). Much the same as the majority lower than the regional and income group averages of
of other countries in its comparator groups, St. 3.2 and 3.1 percent, respectively. The weighted rest of
Vincent and the Grenadines is more protective of its the world tariff faced by agricultural goods is 0.02
agricultural products (16.0 percent) than of its non- percent (down from 4.2 percent in 2007) and by non-
agricultural ones (8.9 percent). Based on the latest agricultural goods it is 1.3 percent. A member of the
MFN applied tariff, it ranks 102nd out of 181 countries Organization of Eastern Caribbean States (OECS), St.
(where 1st is least restrictive). The 40 percent Vincent and the Grenadines uses the East Caribbean
maximum MFN applied tariff, excluding alcohol and dollar, which appreciated by 3.7 percent in real terms
tobacco, is relatively low. The government’s trade in 2008, making exporters less competitive abroad.
policy space, as measured by the wedge between
bound and applied tariffs (the overhang), was 52.7 A comprehensive Economic Partnership Agreement
percent in 2008. Although the country has liberalized (EPA) between the EU and 15 Caribbean states in the
its telecom sector, St. Vincent and the Grenadines CARIFORUM EPA group, including St. Vincent and
continues to have a low overall GATS commitments the Grenadines, was signed in 2008. This replaced the
index where it is ranked 119th out of 148 countries. expired preferences given under the Africa, Caribbean,
and Pacific (ACP)-EU Cotonou Agreement. The EU
In response to the food crisis, CARICOM heads of committed to immediately removing all tariffs and
state agreed in March 2008 to a two-year suspension quotas on Caribbean exports with the exception of
of the CET so that member governments can drop sugar and rice, which will get full duty-free and quota-
duties as needed to counteract rising food prices.1 The free access by the end of 2009. The Caribbean
CET on a range of infant juices was also suspended countries, on the other hand, committed to an
for a period of 6 months up to September 2008. asymmetric and gradual opening of their economy to
EU imports.2
Behind the Border Constraints
In terms of the conduciveness of its institutional
environment to business, St. Vincent and the
Grenadines ranked 70th out of 183 countries in the
Unless otherwise indicated, all data are as of August 2009 2010 Ease of Doing Business index. It ranked 52nd in
and are drawn from the World Trade Indicators 2009/10 the Trading Across Borders category, which is a
Database. The database, Country Trade Briefs and measure of the extent of trade facilitation in the
Trade-at-a-Glance Tables, are available at country. The number of procedural steps necessary as
http://www.worldbank.org/wti. well as the amount of time and money required to
If using information from this brief, please provide the import or export goods into or out of St. Vincent and
following source citation: World Bank. 2010. “St. Vincent the Grenadines are lower than the average for the
and the Grenadines Trade Brief.� World Trade Indicators LAC region.
2009/10: Country Trade Briefs. Washington, DC: World Bank.
Available at http://www.worldbank.org/wti.
World Trade Indicators 2009/10 St. Vincent and the Grenadines Trade Brief
Trade Outcomes 2009.4 However, the current account deficit is
projected to narrow as the fall in imports, in nominal
In real terms (in constant 2000 US dollars), the growth terms, should be steeper than the fall in exports. In
rate of St. Vincent and the Grenadines’ exports 2007, FDI inflows as percentage of GDP were 16.5
decelerated in 2008 to an estimated 6.6 percent from percent.
an average rate of 7.4 percent over the 2005–07
period. However, this was offset by acceleration in the
real growth rate of imports from an average rate of 3.6 Notes
percent to an estimated 5.9 percent over the same 1. FAO, 2009.
periods. Thus, the country’s trade of services and
2. Bridges, November 2008.
goods grew by an estimated 6.2 percent in 2008 as
3. WTO, October 1, 2007, p. 2.
compared to the 5.3 percent in the 2005–07 period.
4. IMF, June 2009, p. 5.
But this is expected to turn negative, with trade falling
by 0.2 percent in 2009.
In nominal terms, St. Vincent and the Grenadine’s
References
imports accelerated in 2008, growing by an estimated Bridges. November 2008. “EU, Former Colonies Sign
21.7 percent as compared to the growth rate of 14.2 First New Generation Trade Pact�. Bridges 12(5).
percent in 2007. Its nominal exports also increased by International Centre for Trade and Sustainable
an estimated 20.7 percent in 2008, as compared to 9.4 Development. July 20, 2009. .
country’s main exports are foodstuffs (fruit/nuts, Food and Agriculture Association of the United Nations
flour/meslin, rice, and vegetables are in the top five (FAO). 2009. “Policy Measures Taken by
exports) and, as such, the country has benefited from Governments to Reduce the Impact of Soaring
the high food prices for the first half of 2008. Prices (As of 15 December 2008).� FAO. June 26,
However, the biggest increase was found for the 2009. .
percent in 2008, more than three times its growth rate International Monetary Fund (IMF). June 2009. “IMF
of 6.1 percent in 2007. The services sector, and in Country Report No. 09/181.� IMF, Washington,
particular tourism, is the main component of DC.
economic activity in the island.3 However, it has been
World Trade Organization (WTO). October 1, 2007.
adversely affected by the global economic downturn,
“Trade Policy Review—St. Vincent and the
and declining receipts from this sector, as well as lower
Grenadines.� WTO, Geneva.
remittances, are expected to have a negative effect on
the country’s exports. FDI is also expected to slow in