A Caribbean Perspective – Caribbean Trade Law and Development

Alicia Nicholls

On July 27-28, 2023, sixteen countries from Latin America and the Caribbean (LAC) participated in a historic LAC Ministerial Summit for a more “Inclusive, Sustainable and Equitable Global Tax Order” held in Cartagena, Colombia. It was jointly hosted by the Governments of Colombia, Brazil and Chile and was the first occasion on which finance ministers and other officials of these countries have met to discuss tax issues as a regional grouping at this high-level.  As an academic, I had the fortune of participating in the civil society meetings held in Panama City (Panama) and Cartagena de Indias (Colombia) in the lead up to the Summit, respectively.  In this article, I share my initial reflections on this initiative for greater LAC cooperation on national and international tax matters.


Countries of the global South, including LAC countries, are predominantly rule-takers in the global financial system. In recognition of the need for LAC countries to come together to fight for a more equitable and inclusive global tax order, Jose Antonio Ocampo, Colombia’s then Minister of Finance and Public Credit, announced in January 2023 the Colombia government’s intention to host this high-level summit. Colombia’s efforts were later supported by the Governments of Brazil and Chile, and the UN Economic Commission for Latin America and the Caribbean (UN ECLAC). An invitation to participate in the summit was extended to all LAC countries, while African and other G24 leaders were invited as observers.

Hosting this meeting in the port city of Cartagena de Indias, Colombia’s fifth largest city, was symbolic for at least three main reasons. First, the city bears the nickname ‘La Heroica’ as on November 11, 1811, it was the first Colombian territory and the second in the whole of Latin American to declare independence from the Spanish Empire.  Second, in 1815, the city also valiantly resisted Spanish forces for 105 days in what is known as the Siege of Cartagena. Third, it is also one of the most ‘Caribbean-esque’ of Colombia’s major cities and with a large noticeable Afro-Colombian population.  As both a Barbadian and Caribbean national, there were many aspects of Cartagena that felt familiar in terms of the warmth and friendliness of the people, the colorful buildings and the food, in particular. Now in 2023, this beautiful city was the setting for what is hoped to be the dawn of an era of south-south cooperation among LAC countries on tax matters.

Summit Outcomes

First, the summit outcome included a joint declaration signed by the delegates from the 16 participating countries establishing the Regional Platform for Tax Cooperation for Latin America and the Caribbean. This proposed platform would promote dialogue and knowledge exchange to develop national and global tax policies that help the region to more adequately confront the mounting crises faced.  

Second, it was also agreed that Colombia would hold the Pro Tempore Presidency of this Regional Platform for the next twelve months and that ECLAC will be the technical secretariat of the platform. Third, the Pro Tempore Presidency is tasked with creating an Annual Work Plan, with ECLAC support, and prioritizing the most pressing themes regarding an inclusive, equitable and sustainable taxation agenda within a period of 6 months.

A positive aspect of this LAC initiative is that development is a central component of this effort, acknowledging that countries’ tax policy must support, advance and not undermine their development imperatives and that international tax initiatives must do likewise. Many LAC countries do not feel that the current OECD-led tax discussions, including the BEPs two-pillar solution, will redound to their benefit and have argued that a unified LAC voice is needed to ensure global tax rule-making takes into account the region’s interests and not simply those of the world’s richest countries.

Civil society had a critical role to play in the discussions, and the effort has received tremendous support from civil society groups and think tanks globally as well as from the United Nations. As such, there was explicit mention of the link between tax and gender and women’s empowerment, the environment, education and public health, for example. To this end, there was a strong argument made that the growing shift in LAC countries towards largely regressive taxes was anti-developmental as they shifted the tax burden away from the wealthy towards the most vulnerable segments of society.

Limited Caribbean Participation

The initiative appears to be a good faith attempt to build a LAC coalition not only for regional coordination on tax issues but one that would also help to strengthen the region’s impact on global tax policy making, recognizing that the global South remains on the periphery of global financial rule-making. However, attendance at the summit was quite muted as only 16 countries of the 33 countries which are CELAC members attended. Moreover, despite being hailed as a ‘LAC’ summit, only two Caribbean countries (Haiti and Dominican Republic) participated in the Summit. None of the English-speaking Caribbean governments participated in the Summit although representatives of civil society groups from some Caribbean countries were present at the civil society meetings in Panama City and Cartagena. It is not publicly known why this is the case as the Summit has barely received any media coverage in the English-speaking Caribbean nor is it clear whether it was discussed at the CARICOM Heads of Governments meeting in early July. However, I can speculate on a few possible reasons for the lack of any widespread Caribbean appetite so far for the initiative.

One reason could be that tax is an area of policy-making which countries guard closely. The right to tax has always been linked to the exercise of a State’s sovereignty. As small open economies with limited natural resources in most cases, many Caribbean countries have developed international business and financial sectors as a diversification strategy to grow their economies and provide for their people. Among other things, they use their favourable tax rates and offer sophisticated corporate tools and tax incentives as central planks of their investment attraction strategies to promote sustainable economic growth and to create jobs for their workers. Their ability to do this is being increasingly circumscribed by the need to meet global regulatory demands and they might see this still nebulous LAC platform as yet another fetter on their sovereign right to set their own tax policies for their development purposes.

Second, there might be some discomfort among Caribbean governments with creating a new platform for tax issues outside of an existing and familiar architecture like the Community of Latin American and Caribbean States (CELAC). On that front, it is curious why CELAC was not the chosen venue for this discussion.

Third, it is unclear to what extent this new platform takes into account existing sub-regional cooperation mechanisms. CARICOM countries usually approach foreign policy matters as a bloc as the Revised Treaty of Chaguaramas calls for coordination of foreign policy. Moreover, CARICOM countries discuss tax and other finance matters in their Council for Finance and Planning (COFAP). Another fear among Caribbean countries could be that their voice in this regional space might still be drowned out by more powerful LAC countries. This fear is not unfounded. While there is much to be gained from greater LAC cooperation and there are, of course, similarities, there are also important differences which any proposed LAC-wide regional cooperation must take into account. These differences include size, economic structure, social structure and tax structure. Among Latin American countries, only Panama could really be considered an international financial centre (IFC), while IFCs are more predominant in Caribbean countries.

Additionally, many Caribbean countries face accusations of being tax havens, including by some Latin American countries despite the fact that Caribbean countries are often among the first adopters of global tax initiatives despite their capacity constraints. Therefore, while blacklisting for tax and AML/CFT/PF issues is not a major issue for Latin American countries, for Caribbean countries it is. It is for this very reason that Caribbean representatives present at both the Panama and Cartagena civil society meetings were insistent that the final civil society outcome document handed over to the Ministers at the Summit needed to include some reference to this issue. Indeed, recommendation nine of the final civil society document calls for decolonialization of the global tax order and specifically condemns biased blacklisting which unfairly targets Caribbean countries while ignoring large countries of the Global North where most of the tax evasion occurs.

I am sure many persons reading this article are probably hearing about this summit for the first time. Indeed, the Summit received very little media coverage in the anglophone Caribbean, compared to the press coverage in well-known newspapers like Colombia’s El Espectador. This is just a symptom of a longstanding problem facing us in the LAC region, that is, that in many ways, we in LAC often know more about what is happening in the countries of the Global North than what is happening in our own sub-region or neighbouring regions. 

A major reason for this is, of course, the language barrier. Even though technologies such as simultaneous interpretation during meetings, Google translate and the like may mitigate these barriers somewhat, they do not replace the utility of learning another language, learning about the culture in order to foster understanding and meaningful exchange.  In many ways, and despite existing (mainly partial scope) trade agreements between CARICOM and some Latin American countries, and increased airlift between Caribbean and Latin American countries, there is still much we need to learn about it each other. As someone who speaks several language including Spanish, I know that it is only when we truly get to know each other that we can be build that trust needed to turn the LAC as a cohesive negotiating bloc on these issues on a global scale.

Concluding Thoughts

I am thankful to the organisers, Latindadd and Public Services International (PSI) and to the rest of the Caribbean contingent who attended, for the opportunity to have participated in these meetings not just for the opportunity to have presented a Caribbean perspective on the discussions as an academic, but to build links with some truly amazing people in LAC who are working on these and other global economic issues.

In theory, south-south cooperation among LAC countries on tax justice matters could be mutually beneficial. After all, in much the same way that G7 and G20 countries use their collective might to set the rules of global finance, LAC countries could leverage their collective voices to press for a fairer global financial system which takes into account their development imperatives. It could provide opportunities for sharing best practices and providing technical assistance on these matters.

It is commendable that this initiative is seeking to incorporate a Caribbean voice as many Caribbean countries often feel that LAC discussions usually are limited to the experiences of Latin American countries without acknowledging Caribbean realities which in some cases could be quite different. LAC cooperation must bear in mind the region’s heterogeneity and as such, Caribbean issues should be given the same weight as issues affecting other LAC countries.

Additionally, this cooperation should seek to use already existing regional cooperation structures such as CELAC and also respect and bear in mind that CARICOM already has its own processes for functional cooperation on this issue. In other words, any LAC cooperation should complement not seek to replace CARICOM’s own structures. It is also time for LAC countries to leverage their collective voices to support the African Group proposal for a UN Tax Convention and for the UN to be the official forum for the development of global tax rules as opposed to the status quo where the OECD, a club for the world’s wealthiest countries, has sought to arrogate on to itself this power. If done on the basis of mutual respect and communication, south-south cooperation among LAC countries, including possibly on tax justice issues, could be beneficial to Caribbean countries but this is something which Caribbean countries would need to carefully consider.    

Alicia D. Nicholls, B.Sc., M.Sc., LL.B is an international trade specialist and founder of the Caribbeantradelaw.com Blog. She attended and participated in the civil society meetings in Panama and Cartagena as an academic and thanks the organizers for the opportunity.

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