RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/85/LCA
7 May 2001
(01-2232)
Trade Policy Review Body Original:  English
TRADE POLICY REVIEW
SAINT LUCIA
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of Saint Lucia is
attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Saint Lucia.Saint Lucia WT/TPR/G/85/LCA
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CONTENTS
Page
I. INTRODUCTION 5
II. ECONOMIC AND TRADE ENVIRONMENT 5III. TRADE POLICY 6
IV. REGIONAL INTEGRATION 14
V. PARTICIPATION IN THE WTO 14
VI. CO-ORDINATION OF WTO RELATED TECHNICAL ASSISTANCE 15VII. RESOURCE CONSTRAINTS 16VIII. MANDATED NEGOTIATONS 17IX. THE TRADE POLICY REVIEW EXERCISE 17
X. CONCLUSION 18Saint Lucia WT/TPR/G/85/LCA
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I. INTRODUCTION
1. Saint Lucia is a member of the Organization of Eastern Caribbean States (OECS) and is
located between Martinique and St. Vincent.  The island has a population of 150,000 and an area of
616 sq. km.  The island’s topography consists of steep mountains intersected by valleys and short
rivers.  There are two major airports, a regional airport in the north and an international airport in the
south.
2. As a small country, Saint Lucia’s growth and its ability to compete effectively in the
liberalized trading system are impeded by critical economic characteristics.  St. Lucia has a small
domestic market with relatively low levels of economic activity.  Because of its small size the country
faces structural disadvantages relative to larger economics since it is unable to benefit from
economies of scale which would be essential if it is to be internationally competitive in the productionof goods and services.
3. The absence of a natural resource base further compounds the economic difficulties, as
economic diversification efforts are stymied and the country is forced to continue to rely on a few
economic sectors.
4. The size of the labour force is also constrained by the small population. The inadequate level
of labour supply contributes in large measure to the relatively undiversified structure of the economy.
This problem is compounded by the paucity of educational opportunities and facilities, the fact that
overseas training is expensive and the brain drain of skilled workers from the country.
II. ECONOMIC AND TRADE ENVIRONMENT
Recent Economic Performance
5. Saint Lucia’s main economic sectors are services, agriculture, and manufacturing. Primary
exports consist of bananas, services, paperboard products, electronic/electrical products and processedfoods, while its main imports are manufactured goods, foodstuffs, capital goods, fuels and chemicals.
Major trading partners are as follows: exports - the United Kingdom, other European countries, the
United States and CARICOM;  imports – United  States, CARICOM, United Kingdom, Japan, other
European countries and Canada.
6. There was a noticeable deceleration in the rate of growth in the economy from 3.5% in 1999
to an estimated 0.7% in 2000.  This was consistent  with a slowdown in economic activity in the main
trading partners of the OECS countries during the latter part of 2000, together with a decline in
banana earnings, high and generally rising oil prices, and depreciation of the pound sterling.  The
minimal positive economic growth attained in 2000 was due mainly to the strong and prudent fiscal
discipline exercised by the Government in the management of the economy in the face of turbulentexternal conditions.
7. The economy experienced a reduction in the rate of unemployment from 21.5% in 1998 to
15.5% in 2000.  In addition, Saint Lucia has managed to maintain a relatively stable rate of inflation
of 3.5% in 2000, despite sharp and persistent increases in the price of fuel.  This represents a major
policy success for the country.  Whilst the containment of inflation will remain a key policy priorityof the Government, the attainment of this objective in the context of rapidly rising fuel costs, is
extremely expensive.  At present the market price of oil is relatively stable. Its future path is
uncertain, however, due to the high levels of price volatility.WT/TPR/G/85/LCA Trade Policy Review
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Patterns of Trade
8. Historically, bananas have been the main export earner, accounting for approximately 56% of
total export earnings.  However, production constraints in the agricultural sector, coupled with
adverse international trade developments - most notably the WTO Dispute Settlement Body’s
unfavourable ruling on bananas and the consequent revision of the EU’s preferential arrangements –
have led to a considerable downturn in the performance of the sector.  Given the pivotal role ofbanana production in the country, any continuation of this adverse trend could destroy Saint Lucia’s
economy.
9. Saint Lucia participates in three main preferential trading arrangements: CARIBCAN, the
Caribbean Basin Initiative (CBI/CBTPA) and the ACP-EU Agreement (Cotonou Agreement).
10. Under the CARIBCAN agreement Saint Lucia enjoys duty free treatment on eligible products
exported to Canada, which is one of Saint Lucia’s main trading partners.  In order to qualify, products
must be 60% complete ex-factory in Saint Lucia or any other CARIBCAN sign atory country.  Certain
products are excluded from coverage under this agreement, viz., textiles, clothing, footwear,
methanol, lubricating oils, luggage and other leather goods.  Saint Lucia has participated in
preparatory meetings for negotiations of a more mature trade relationship between Canada and theCARICOM member states. CARICOM is Cana da’s fourth largest trading partner.
11. The CBI agreement facilitates duty free access to the United States for a range of exports
from Saint Lucia.  This agreement has similar restrictions as the CARIBCAN agreement, and also
excludes canned tuna, petroleum and petroleum products.  Rules of origin are strictly applied under
this agreement.  In 2000 Saint Lucia was designated a beneficiary country under the CBTPA
agreement arising out of the United States Caribbean Basin Trade Partnership Act, which extended
preferences to grant NAFTA parity to certain textil e and apparel articles made from fabrics from the
Unites States and the Caribbean.
12. Cotonou, the successor agreement to the Lomé Conventions, contains elements of trade,
finance, technical and economic co-operation, as well as general provisions for landlocked, least
developed and island ACP states.  Chapter 2 of the agreement provides for the negotiation of new
WTO compatible economic partnership agreements between the EU and ACP member states. A JointACP-EC Ministerial Trade Committee, established under Article 38 of the Cotonou Agreement, is
mandated to pay special attention to current multilateral trade negotiations, examine the impact of
wider liberalisation initiatives on ACP-EC trade and on the development of ACP economies with a
view to making recommendations on how the bene fits of the ACP-EC trading arrangements may be
preserved.  Saint Lucia currently serves on this Committee and, consequently, is expected to play acritical role in the upcoming negotiations.
III. TRADE POLICY
13. Saint Lucia takes very seriously its obligations as a member of the WTO.  The country faces
major challenges, however, in the liberalized trading environment.  Saint Lucia believes that
notwithstanding the commitment by the Government to  make the necessary internal adjustments, the
peculiarities of small island developing states must be high on the agenda of the WTO as the
organisation moves beyond the Uruguay Round.
14. Saint Lucia’s economy is small, the island geographically disadvantaged and highly
vulnerable to natural disasters.  With limited na tural resource endowments Saint Lucia relies heavily
on a few economic sectors. The small internal market and small size of firms makes it difficult to
realise economies of scale. In addition, economic diversification is challenging and there is a highSaint Lucia WT/TPR/G/85/LCA
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degree of product and market concentration in exports.  Moreover, the country suffers from
administrative, institutional and human resource limitations that impact its ability to effectively
participate in the WTO.
15. In general, globalization and the liberalization of international trade have given rise to
traumatic change in some economic sectors. The gove rnment has therefore been forced to rethink its
economic growth strategies and pursue the deve lopment of alternative sources of growth.
Adjustments, particularly in the retail trades, manufacturing and agriculture, will be unavoidable if
Saint Lucia is to survive the global pressures impacting on economies.
STRENGTHENING, MODERNISING AND REPOSITIONING THE ECONOMY
16. Saint  Lucia has made a commitment to reposition itself, forge new economic and financial
partnerships and diversify its options.  Further diversification and enhancements to internationalcompetitiveness are needed to permanently rais e long-term growth and to reduce the external
vulnerability of the economy, particularly in light of the market uncertainties facing the crucial banana
industry.
17. In its endeavour to re-orient and restructure the economy, the Government of Saint Lucia has
taken initiatives to bolster the agricultural sector while managing a gradual transformation into a moreservices oriented economy.  The Government of Saint Lucia has also taken measures to strengthen
institutions, reform existing laws and ensure support for and integration of the private sector.
DEVELOPMENT BY SECTOR
• Agriculture
18. Agricultural production in Saint Lucia faces numerous challenges.  Production is based on
small farms, with producers working on steep and difficult terrain.  The management of land and
water is consequently, extremely difficult.  The country is vulnerable to natural disasters, including
hurricanes, floods and landslides.  As a net food importing country, St. Lucia needs to strive toovercome the myriad of obstacles which impede the development of the agricultural sector.
19. The sector is being gradually transformed, with the dominance of bananas offset to some
minimal extent by growth in the other agricult ural sub-sectors, viz, livestock, fishing and non-
traditional crops.
Bananas20. Banana exports are critical to the economies of the OECS in general.  In Saint Lucia, the
banana industry employs an estimated 13,836 persons or approximately 30% of the labour force.
Banana production is undertaken in rural areas which account for 63% of the total population.
21. Saint Lucia has traditionally exported bananas to the European market on a preferential basis.
In the face of fierce competition, the special provisions of the European regime have facilitated thesurvival and growth of the industry.  This regime has been challenged by the United States and
Ecuador, however, on the basis that it is WTO incompatible.  The European Union has therefore  been
required to change its regime to conform to the WTO ruling of 1999.
22. St. Lucia welcomes the recent Agreement which the European Commission reached with the
United States over the longstanding banana dispute.  The Agreement is comforting since the originallyproposed “First Come, First Served System” whic h would have devastated Caribbean bananas hasWT/TPR/G/85/LCA Trade Policy Review
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been replaced by a preferred tariff rate quota system through the use of a historical basis for managing
the quota.  This arrangement will be operational until the end of 2005.  While the new measures will
permit some breathing space, it is not certain that they will enable the continued marketing of
St. Lucia bananas on a viable basis.  St. Lucia is also concerned that the allotted time will beinadequate to ensure the completion of extensive restructuring in the local banana industry.
Fisheries
23. Fish landings increased by 8.47% as a result of sustained investment in the sector, particularly
in the development of fisheries infrastructure.  Having completed the Vieux Fort fisheries complex
early in 2000, the Government of Saint Lucia has secured financing for the construction of additional
complexes in the towns of Soufriere and Choiseul.  This construction will begin in November 2001and is expected to take 18 months.
Non traditional crops
24. In the area of non-traditional crops, increases were recorded in the production of grapefruit,
sweet potato, yam and oranges.  Purchases of ag ricultural products by hotels increased by 14.3%,
reflecting accelerated integration of the agricultural and tourism sectors.
Agricultural Diversification25. Improvements in agriculture are attributable in large measure to continued efforts to diversify
the sector, reduce dependence on bananas and mitigate the impact of the reduction in banana
production.  This diversification thrust is one critical element of a Five-Year Agricultural SectorPolicy developed by the Government of Saint Lucia for the 2000-2005 period.  The Policy establishes
the framework to facilitate the rehabilitation and re-ene rgising of the sector to enable it to effectively
underpin national social and economic development.
26. The Policy is expected to lead to the radical restructuring of the agricultural sector. It seeks to
(1) reduce the dependence on a mono crop agricultural economy by reinvigorating the agriculturaldiversification process;  (2) foster the emergence of an investment and fiscal climate conducive to the
re-capitalization of the sector and the expansion of agricultural income earnings;  (3) enhance human
resource capabilities at all levels within the sector;  (4) advance the technological base for improved
agricultural productivity, while fostering optimal utilization of the factors of production and increased
agricultural output;  (5) facilitate rationalization of land use for agriculture;  (6) strengthen thenational agricultural marketing system, with emphasis on product promotion and infrastructure
development and, (7) sustain the country’s national resource base and bio-diversity, through the
adoption of a Systems Approach to the conservation of terrestrial and marine eco-systems.
• Services
Tourism
27. In the face of uncertainty as to the continued viability of the banana industry and the failure of
the non-traditional crops to offset the decrease in earnings from bananas, Saint Lucia is making
increased efforts to diversify the economy.  Due primarily to its broad linkages with other economic
sectors, the tourism sector is at present the single largest contributor to economic activity in St. Lucia.
28.  The success of tourism is predicated, however upon the continued viability of domestic
agriculture.  Apart from the fact that the latter supplies a portion of the food and beverages consumed
by the hotels, it is also the basis for Saint Lucia’s new focus on heritage/cultural as the country
attempts to diversify its tourism product.  Agriculture is now at the very heart of sustainable tourism
development.Saint Lucia WT/TPR/G/85/LCA
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29. Activity in the tourism Sector, based on value- added in the restaurant and hotel sector, the
largest component of GDP, grew by 2.5% in 2000.  The cruise ship segment remained extremely
buoyant with recorded growth of 26.3%.
30. The United States and Europe continue to be the largest market for Saint Lucia’s tourism
product.  In 2000, approximately 73% of stay-over tourists came from the United States and Europe
with some 27% originating from the United Kingdom alone.  Further, the number of stay-over touristsfrom the United States increased by 16.8% to 97,532 in 2000 and from the United Kingdom by 0.5%
percent to 73,433 persons.  In order that these trends are strengthened and not reversed, and mindful
of the economic slowdown in the United States, United Kingdom, and Europe, St. Lucia is taking
positive steps to increase our share of these markets.  Investment in the tourism industry continues to
be buoyant and several new developments are anticipated in the years ahead.
Financial Services
31. Although the offshore financial sector has been performing well, its long-term viability is not
assured.  The industry has to be adequately regulated and well managed throughout the region.  It is
therefore, no accident that Saint Lucia has taken all the fundamental steps to ensure that the
jurisdiction is properly managed.  In a unique private sector/ government partnership, Saint Luciacombines the most efficient and advanced information technology and business practices with strong
core legislation and regulations.  The Government of Saint Lucia is concerned with preserving the
country’s reputation and, consequently, will ensure the continued enhancement of infrastructure,
education and legislation. Saint Lucia is pursuing proper management as part of a regional effort, and
in this regard, the country is expected to benefit from technical assistance from international
organizations.
Telecommunications32. Saint Lucia recognises the vital role of telecommunications in facilitating international trade
in both goods and services.  Consequently, since October 1999, Saint Lucia, together with five other
countries of the Eastern Caribbean States which at present constitute the Eastern Caribbean
Telecommunications Authority (ECTEL) group, began negotiations with Cable and Wireless, the
incumbent provider, with a view to liberalisation of the industry by the year 2001.  Between 1999 and
February 2001, negotiations proceeded relatively slowly, and at the latter date the two parties renewed
their commitment to resolve outstanding issues. By  virtue of the Telecommunications Act No. 27 of
2000 the sector was liberalised from April 1, 2001.
33. On April 7, 2001, the ECTEL countries and Cable & Wireless signed an agreement which
embodied specific undertakings which would guide liberalisation from that date onwards.  The partiesagreed to the following:
• there will be a phased approach to liberalisation;
• during the first phase  licences would only be issued to new entrants;
• for the provision of certain specified networks and services;
• full competition and liberalisation of the sector will commence not less than twelve months
and not more than eighteen months from the commencement date of April, 2001;WT/TPR/G/85/LCA Trade Policy Review
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• the governments would use their best endeavours to prevent by-pass of the Cable & Wireless
network;
• the principle of re-balancing local against international rates will be based on full disclosure
of underlying cost data and its derivation;
• the governments and Cable & Wireless will meet periodically during phase  one within the
framework of three Joint Working Groups namely: Legal and Regulatory, Tariff and Re-
balancing and Communications.
34. Domestic mobile/cellular infrastructure and services competition will begin in phase one with
domestic providers operating independently.  The provision of customer premises equipment  hasbeen fully liberalised as of  April 1, 2001 for both single and multiple lines.  The re-sale of
international minutes was partially liberalised from  that date while Very Small Aperture Terminals
(VSAT) licences will be issued during phase one.  This will serve private networks such as call
centres, telemarketing agencies and data entry businesses, all of which are critical in the development
of telecommunications services and the pr ovision of employment at various levels.
35. These developments signal the reshaping of the telecommunications landscape in the interest
of consumers. In particular, it offers novel opportunities for businesses, telecommunication
professionals,  technicians and investors.
• Construction
36. The construction sector was one of the most significant contributors to growth in 1998 and
1999.  However, in 2000, there was a 4.6% contraction in construction activity.  This development isnot surprising as this is wholly consistent with project cycle trends, where periods of heightened
activity in the sector are followed by a slight lull due to a lag between the completion of ongoing
major projects and the intensification of works on newly implemented projects.
• Air and Sea Ports
37. The Government of Saint Lucia intends to contin ue improvements to most of the systems and
services at the Hewanorra International Airport.  These will include further efficiency-orientedenhancements to the passenger lounges, the airport administration offices, the airline offices and other
areas of the terminal.  The increased aircraft and passenger activities at the Hewanorra Airport, along
with the inefficient design and layout of the terminal building have resulted in serious congestion
problems in all areas of the airport during peak  periods.
38. The Government of Saint Lucia has identified the need to conduct a comprehensive study on
the rationalisation of ports in St. Lucia to determine future infrastructural and service requirements.
This study will be undertaken during  2001-2002.
• Manufacturing
39. The manufacturing sector continued to face difficulties in 2000.  The expansion experienced
in the previous year was reversed as value added in the sector contracted by 4.0% and its
relative share of GDP declined.  The major impact of the contraction was felt in the food and beverage
sub-sectors, wearing apparel and textiles, paper products, wood and wood products.  The sector was
unable to effectively compete within Caricom and, by extension, within the liberalized trading system.Saint Lucia WT/TPR/G/85/LCA
Page 11
40. It is anticipated that the recent formation of the Saint Lucia Manufacturing Association will
allow for more focus and dialogue on the challenges and opportunities for the manufacturing sector.
Among other things, the government plans to simplify the fiscal concessions procedures and make
them more automatic.
FREE ZONES
41. By virtue of the enactment of the Free Zone Act No. 10 of 1990 Saint Lucia has positioned
itself to benefit from the operations of free trade zones.  The main Goods Distribution Free Trade
Zone (GDFZ), which began operations in October 2000, operates as a regional free zone area
exclusively on a trading base. The GDFZ is the only one of its kind in the Eastern Caribbean and is
well poised to become the leader in the free zone business in the Eastern and South-eastern Caribbean
markets, providing high value added consumer g oods and supplying goods to the growing tourism
market of the region.  It will attract regional traders who will be able to purchase general merchandise
for exports.  Over the short to medium term GDFZ operators are expected to trade at least 80% of
their goods within the region.
42. The GDFZ has a medium to long term regionally oriented strategy and to this end will
approach sound and reputable companies to operate in the Zone, with preference being given to thosewhose objectives, goals and strategies are consistent with the goals of the GDFZ.  These companies
may be involved in trading, handling of products, freight forwarding, or may choose to use the GDFZ
as a regional trading platform or hub to serve regional markets.  Once about 80% of space in the Zone
has been rented, the Free Zone Management Authority intends to encourage companies to visit the
Zone, create and maintain a sufficient number of buyers and increase awareness of the GDFZ in
regional markets.
FOREIGN DIRECT INVESTMENT
43. Saint Lucia recognizes that a country’s economic strength and its capacity to generate
internationally competitive rates of return on investments are crucial determinants of its ability to
attract foreign direct investment (FDI).  Moreover, new investment is invaluable for improving
domestic technologies, modernizing production, marketing and distribution methods, as well as
developing the human resource base.  At present, Saint Lucia offers a very favourable investmentclimate.  While there exists a list of areas of investment reserved for nationals, trade licences may be
granted to non-nationals in cases where local investment is not sufficiently forthcoming or where the
appropriate technology is not locally available.  In practice, therefore, there are no major impediments
to FDI in Saint Lucia.
44. The Government of Saint Lucia plans to tackle the issue of FDI through two major initiatives.
First, the National Development Corporation (NDC) will be re-configured to focus principally on
investment promotion.  Under the NDC Act No. 9 of 1971, the Corporation’s main function was to
stimulate, facilitate and undertake the economic development of Saint Lucia, including the
development of land and industry.  It is evident that, for the most part, the Corporation has not
achieved these objectives.  As a result, the Government intends to create a Southern DevelopmentCorporation, which will take over the development of real estate in the south of the country, while
leaving only certain lands of strategic value under NDC control.  The NDC will then be transformed
into a ‘one-stop shop’ for investors, with the enac tment of requisite legislation for the restructuring
and re-focus of the Corporation.
45. Secondly, as regards the vital tourism sector, the Government intends to create greater
transparency and predictability by standardizing the eligibility criteria for the grant of incentives.WT/TPR/G/85/LCA Trade Policy Review
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ELECTRONIC COMMERCE
46. The Government of Saint Lucia recognizes that e-commerce has redefined the way business is
conducted in every corner of the globe.  However, e-commerce also has the capacity to undermine the
revenue base of the country as traditional taxation concepts and mechanisms are easily circumvented.
47. The Ministry of Commerce has taken the lead in the development of an e-commerce industry
and a broad-based committee has been formed, co mprising the National Development Corporation,
Chamber of Commerce, OECS Reform Unit, Ministry of Communications and other relevant parties.
Cable & Wireless, St. Lucia’s main telecommunica tions provider is actively involved in this
committee and has already promised to assist in the setting up of an e-commerce incubator where e-
commerce transactions can be generated.
PARTNERING WITH THE PRIVATE SECTOR
48. The government recognises the invaluable role of the private sector in the development and
implementation of trade policy.  Under the Private Sector Development Strategy, the Office of Private
Sector Relations (OPSR) which was established in 1998 has committed approximately EC$2.4 million
to interventions directed at improving the busine ss environment and enhancing the competitiveness of
St. Lucian businesses and products in the global economy.  Of this amount approximatelyEC$1.9 million was allocated directly to private sector firms and institutions.  Further, the Office of
Private Sector Relations has dedicated some EC $2.7 million to a National Technology Training Fund
which has already approved its first disbursement of some EC$0.5 million dollars.
49. The St. Lucia Chamber of Commerce, Industry and Agriculture has pledged to engage in
activities which are designed to improve public awareness and understanding of the global trading
environment.   To this end, the following initiatives have been identified:
• Planning of workshops and conferences on a sectoral basis; focus on critical issues relating to
General Agreement on Trade in Services;
• Spearheading a National Trade Policy Coordination Mechanism Conference for greater
integration of the trade policy process;
• Weekly publications on trade issues and trade development to keep the business sector
informed of the matters that may affect them;
• Executive luncheons  that focus on trade and business issues; and attendance and participation
in trade conferences.
LEGISLATIVE REFORM
50. The Government of Saint Lucia believes that legislative reform underpins the strategy for
modernization, restructuring and re-orientation of the economy and the society.  As such, a
comprehensive programme for legal reform has been proposed.  The reform will include a
consultative and participatory review process involving contributions from the private sector and civil
society as a whole. In addition, the Government of  Saint Lucia is in the process of concluding a
contract with a private firm for the revision of the entire body of laws of Saint Lucia and for theproduction of annual supplements to the revised laws for a period of seven (7) years following the
completion of the revision exercise.  The Government envisages that the contract will be signed by the
end of April 2001 so that this vital revision process may commence  early in June 2001.  Apart from
general initiatives in this regard, the Government also proposes certain specific legislative
interventions.Saint Lucia WT/TPR/G/85/LCA
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• TRIPS
51. During 2000 and 2001 seven new pieces of legislation were enacted which provide for the
protection and promotion of intellectual property rights.  The WTO review of Saint Lucia’s TRIPS
legislation was conducted in April 2001.  Preliminary reports indicate that the response of the WTO
membership was very positive and Saint Lucia’s implementation of the TRIPS agreement thus far
considered an impressive achievement.  The Government continues its efforts to bring the country
into full compliance with its legislative obligations under the TRIPS agreement.  A new Patents Act,2001 is about to receive the royal assent.  A Plant Varieties Bill, which is under consideration at
present, will be enacted later in 2001.
• Tourism
52. Saint Lucia is concerned to create the kind of legislative environment that will permit speedy
and flexible decision-making in the tourism sector, and provide potential investors sufficient certainty
to make informed investment decisions.  All existing laws relating to the sector, including the existingTourism Incentives Act No. 7 of 1996 will be reviewed , with a view to enhancing efficiency of the
legal regime.
• Aliens Licensing Regime
53. The current Aliens Licensing Act No.9 of 1999 regulates, inter alia, the acquisition of land or
interest in land, the acquisition of shares and directorships in local companies by persons who fall
within the definition of ‘alien’.  The Government of Saint Lucia recognises that in light of the newrealities of globalization and the critical role of investment flows into the country (primarily through
the medium of joint ventures) in the present comp etitive commercial environment, the existing regime
may well restrict positive business developments.  With a view to facilitating greater foreign
participation in local business ventures, the Government will initiate consultations on various aspects
of the regime.  It is envisaged that the consultations, as well as the legislative changes, will occurbefore the end of 2001.
• Work Permits
54. The Government of Saint Lucia will review and modernize the work permit legislation in its
entirety.  This has become necessary primarily with the advent of the CARICOM Single Market and
Economy, but more importantly, it is a crucial first step in managing freedom of movement within
broader economic boundaries.  While the right of Saint Lucians to employment in their own country
will be protected, there is a need to simplify procedures and improve the efficiency of the work permit
mechanism.
• National Development Corporation (NDC)
55. The NDC was established in 1971 as a specialised investment agency.  Over the years,
however, the Corporation has expended considerable resources on other aspects of its portfolio to the
detriment of its investment mandate.  Consequently, the Government of Saint Lucia will be preparing
the necessary legal instruments to facilitate the transformation of the NDC as the front door to
investment in the country.  The new NDC is expected  to operate with greater speed and efficiency as a
one-stop agency in which an investor can bring the entire investment cycle to fruition.WT/TPR/G/85/LCA Trade Policy Review
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REVIEW AND STRENGTHENING OF TRADE LEGISLATION
56. The Government of Saint Lucia is cognizant of the importance of reviewing and, where
necessary, revising the existing legislative framework to ensure compliance with our international
trading obligations.  While this exercise was undertaken single-handedly in the case of TRIPS, local
capacity is inadequate for the kind of extensive review of trade and trade-related legislation demanded
particularly by the 1995 Uruguay Round Agreement.  Consequently, Saint Lucia is preparing toparticipate in a project undertaken by the Secretariat of the Organisation of Eastern Caribbean
(OECS) States to strengthen trade legislation in OECS States.  This project will include, inter alia, a
review of existing trade legislation, as well as international and regional trade conventions currently
applicable to member states; dispute settlement mechanisms in international trade; legislation
governing the international sale and transport of g oods; trade in services and international payments.
In addition, the project is expected to present recommendations to member states on strategies and
mechanisms for the harmonisation of trade-related legislation in the region.
IV. REGIONAL INTEGRATION
57. Saint Lucia is a member of the CARICOM grouping which has as its main focus the creation
of a single market and economy and the facilitation of functional cooperation in agriculture,education, tourism, disaster preparedness inter alia.  Saint Lucia has signed all of the Protocols
amending the 1973 Treaty which established the Caribbean Community.
58. The Caribbean Single Market and Economy (CSME) represents a joint market area of the
fourteen (14) CARICOM Member countries and is intended to facilitate the unrestricted movement of
goods, services and factors of production.  One of the primary objectives of the CSME is to ensure the
effective and competitive integration of the Region with the rest of the global economy through the
efficient consolidation and utilisation of the Region’s resources.
59. Saint Lucia, together with the other CARICOM member states is party to free trade
agreements with Venezuela and Colombia.  St. Lucia has also participated in the negotiation of a free
trade agreement with the Dominican Republic, which the latter recently ratified.
60. In July 2000, members of CARICOM and Cuba si gned a trade pact, designed to solidify
economic relations between Havana and the Community members.  The signing of the agreement wasyet another step in a continuing process that is deepening the bonds of cooperation between Havana
and the English-speaking Caribbean.  In the past, those ties were cemented bilaterally, but this move
elevated the effort to the multilateral or regional sphere.  CARICOM is aware that Cuba is a fact of
everyday economic, diplomatic and cultural life in and out of the Western Hemisphere.
V. PARTICIPATION IN THE WTO
61. Saint Lucia’s participation in, and co-ordination of WTO activities are undertaken at the local,
sub-regional and regional levels.
SAINT LUCIA COUNCIL ON EXTERNAL TRADE
62. The rapid pace of globalisation and trade liberalisation has highlighted the need for on-going
review and consultations at the national level on the various trade issues which impact on SaintLucia’s economy.
63. To this end, the Ministry of Foreign Affairs and International Trade has established the
St. Lucia Council on External Trade “ to assist in the advancement and protection of St. Lucia’sSaint Lucia WT/TPR/G/85/LCA
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economic interest by developing national positions and strategies on international trade issues facing
St. Lucia.”  The Council functions as St. Lucia’s trade advisory body and comprises representatives
from private and public sector  organisations.
64. Due to severe resource constraints within the Ministry of Foreign Affairs and International
Trade, a commitment has been made to collaborate w ith the private sector to ensure that the Council
succeeds in fulfilling its mandate.
ORGANIZATION OF EASTERN CARIBBEAN STATES (OECS)
65. At the sub-regional level, the OECS coordinates WTO and other international trade matters
and is actively involved in creating an awareness of and interest in WTO issues.  The Secretariat also
engaged in activities for the effective co-ordinatio n of the region’s first ever trade policy review.
OECS TRADE POLICY PROJECT
66. The OECS Project, which is funded by the Canadian International Development Agency
(CIDA) seeks to strengthen aspects of trade policy management in the OECS and the Secretariat.  The
project focuses on policy formulation and co-ordination and building international negotiating
capacity.  It also seeks to facilitate the development of international trade agreements.  The project
provides technical assistance at the national and sub-regional levels and benefits both the private andpublic sector.  To date, the project has sponsored Seminars/Workshops in OECS Member countries on
various trade topics including the WTO GATS and the Agreement on Agriculture.  The Project
recently convened a High Level Retreat in St. Lucia to brief senior OECS Trade officials on the status
of trade issues.
CARIBBEAN COMMUNITY (CARICOM) AND CARIBBEAN NEGOTIATING
MACHINERY (CRNM)
67. At the regional level, the CARICOM Secretariat and the Caribbean Regional Negotiating
Machinery have been charged with responsibility for co-ordinating Saint Lucia’s participation in
WTO activities.  The CRNM was created in April 1997 by CARICOM Governments to formulate
trade-related negotiating strategies and conduct negotiations on behalf of Member countries.
VI. CO-ORDINATION OF WTO RELATED TECHNICAL ASSISTANCE
ORGANIZATION OF EASTERN CARIBBEAN STATES (OECS)
68. At the sub-regional level, the OECS is the prim ary co-ordinating agency with respect to WTO
related technical assistance.
CARIBBEAN COMMUNITY (CARICOM) AND CARIBBEAN REGIONAL NEGOTIATING
MACHINERY (CRNM)
69. In October, 2000 the CARICOM Secretariat and the Secretariat of the WTO signed a
Memorandum of Understanding to implement a joint programme of technical assistance for
CARICOM Member States.  The programme is expected  to focus on issues relating to implementation
of WTO Agreements as well as those arising from new negotiations. Saint Lucia stands to benefit
from this programme.
70. The CRNM is also charged with the responsibility of responding to the technical requirements
of current negotiations.WT/TPR/G/85/LCA Trade Policy Review
Page 16
VII. RESOURCE CONSTRAINTS
INSTITUTIONAL STRENGTHENING
71. Acute resource constraints continue to impede St. Lucia’s attempts to implement its
obligations under the WTO.  The “Report on Organisation and Functionality Assessment” (July 2000)
sponsored by OECS Trade Policy Project has highlighted fundamental organisational and functional
deficiencies which retard the development and progress of trade policy and impede meaningfulparticipation by St. Lucia in international trade matters.
72. The need for co-ordination at the national level, that is, improved co-ordination among the
lead Ministries and between the public and private sector agencies, was cited as a major prerequisite
for effective performance.  Other challenges id entified include the need for education and
sensitisation of stakeholders to motivate them to work as a national team; the need for trainingattachments, workshops and simulation exercises in WTO and related trade policies; and the need for
a dedicated Secretariat or Facilitator to expedite decisions taken at the level of national co-ordination.
73. The findings of the study referred to above speak to the urgent need for initiatives to create an
environment which is conducive to the development of and adherence to efficient and effective trade
practices and policies.
TECHNICAL CAPACITY
74. Technical assistance is required to strengthen Saint Lucia’s capacity to meet its WTO
obligations.  This assistance is significant since it is one important mechanism by which developing
countries like Saint Lucia participate in WTO activities.
75. Within recent years, Saint Lucia has benefited from WTO technical assistance in areas such
as the establishment of a Reference Centre in June 1999.  Saint Lucia has also participated in
workshops/seminars on market access (Trinidad and Tobago, July, 1998), dispute settlementprocedures (Barbados, November 1998) and the Trade Policy Review mechanism (Saint Lucia,
June 2000).
76. Two government officials have attended the twelve-week Trade Policy Course in Geneva. In
addition, in 1999 and 2000, Saint Lucia was represented at “Geneva Week”, which was organised for
non-resident delegations, and exposed government representatives to the organisation and functioningof the WTO.
77. Notwithstanding the assistance granted to date, St. Lucia needs further technical assistance
particularly with respect to Customs valuation, antidumping, subsidies and countervailing measures,
import licensing, agriculture issues, Sanitary and Phytosanitary measures and Technical Barriers to
Trade.
HUMAN RESOURCES
78. The Ministry of Foreign Affairs and International Trade experiences tremendous difficulty in
carrying out its mandate in the area of international trade.  The Trade and Legal Division comprises
two officers who are charged with the responsibility of undertaking overall international trade matters.
Preparations for this first Trade Policy Review proved to be a mammoth task, particularly as regardsthe compilation of data from various Ministries and agencies and adherence to strict deadlines.  A
graduate research officer was seconded to the Mini stry of Foreign Affairs and International Trade
from the OECS Trade Policy Project to assist in the collection, compilation and analysis of trade data.Saint Lucia WT/TPR/G/85/LCA
Page 17
79. Preparations for the TRIPS Review also taxed the very limited resources of the registry of
Companies and Intellectual Property.  The initial 2000 review date was therefore changed to April
2001 to allow sufficient time for the necessary legislative review and revision.
80. St. Lucia has not been able to comply fully with its WTO commitments in the area of timely
notifications due primarily to the lack of resources.  The responsible agencies have however, given a
commitment to attempt to complete th eir notifications with minimum delay.
REPRESENTATION IN GENEVA
81. St. Lucia is one of twenty-eight WTO members which does not have a representational
mission in Geneva.
82. Although OECS countries are members of the WTO, the region does not yet have an office in
Geneva and is therefore unable to participate effectively in the work of the WTO.  Due to the smallsize and vulnerability of OECS countries it is most important that strategies be developed for active
participation in the WTO.
83. A proposal has been circulated on behalf of the Caribbean and Pacific to develop a facility
that would provide assistance for the representation to developing non-resident WTO members in
partnership with organisations such as WTO, Commonwealth Secretariat and CRNM has been
circulated as a non-paper.  St. Lucia fully supports this initiative, as it would enhance considerably theparticipation of developing countries in the WTO.
VIII.  MANDATED NEGOTIATONS
84. St. Lucia, together with the other OECS countries has started preparations for negotiations in
the areas of services and agriculture.  Some of the major concerns in the area of agriculture are with
regard to the simultaneous opening up of market access opportunities and the provision of technical
and financial means by which these economies may benefit from such access.  With regard toservices, negotiating guidelines and procedures were submitted to the WTO.
IX. THE TRADE POLICY REVIEW EXERCISE
85. The first Trade Policy Review of Saint Lucia and the OECS demanded co-ordination and
collaboration at all levels within the public and private sectors.  In the initial stages, it was difficult to
get all the relevant parties to co-operate in the exer cise.  This may have been due to the lack of prior
understanding of the WTO in general and of the demands of the review process in particular.  It was
also the first time that such co-operation had ever been required among so many agencies in the
context of international trade.  By October 2000, however, the meetings with WTO officials gave a
much-needed impetus to the collaborative effort.  The Meetings were well attended and participants
were forthcoming with required information.  The same was true of the two-day NationalConsultation held March 5-6, 2001 on the Draft WTO report.  The Ministry of Finance, which was at
the time preparing the national budget, made a concerted effort to attend the meetings and to provide
additional data.
86. A major concern emerging out of the exercise is the sourcing of data otherwise than from
national governments.  In certain instances, the da ta utilized in the Secretariat report  (in this case
COMTRADE) was at variance with national statis tics.  Countries were informed during the OECS
level meeting with WTO officials (March 12-16, 2001) that it is a policy of the WTO to use such data
when there are inconsistencies, since it is provided  in a standardized format that is more readily
assimilated into the WTO report and facilitates cross-referencing.  It is the view of Saint Lucia that
this practice should be reviewed as a matter of urgency as it could distort a country’s true economic
profile.WT/TPR/G/85/LCA Trade Policy Review
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X. CONCLUSION
87. Saint Lucia is committed to the liberalization of international trade since the country
appreciates that this impacts economic growth and, consequently, development.  Moreover, Saint
Lucia recognizes the direct link between the economic endowment of a country and its social
wellbeing.  Saint Lucia believes, however, that liberalization must be treated as a means to the end
that is economic growth and development, rather than as an end within itself.
88. While Saint Lucia will continue efforts to come into full compliance with its obligations as a
member of the WTO and to improve participation in WTO deliberations, it must be appreciated that
as a small island developing state the country does this in the face of tremendous challenges, both
internal and external.
89. Small size has several implications for growth and development. Small vulnerable economies
like St. Lucia experience higher levels of volatility in their pursuit of economic growth than larger
economies. Critical economic considerations - in the form scarce resources, a limited supply of
domestic human capital, inability to achieve economies of scale, limited means of attaining economic
diversification - hinder attempts at developing comparative advantage and achieving  sustainable
economic development.
90. Saint Lucia is making a considerable effort to diversify away from agriculture into services
and has earmarked tourism as a main growth sector.  This thrust is not without its challenges,
however. The development of the existing tourism base and the enhancement of the tourism product
both presuppose the existence of a viable agricultural sector.  Given the vulnerability of the country to
natural disasters, this aspect of diversification offers only a partial solution to the problem of
sustainable economic growth.
91. The aforementioned challenges must be factored in to the process of evaluation of Saint
Lucia’s current achievements in the WTO system, but more importantly, perhaps they must be
Paramount in the WTO as the organization determines what the future international trading system
can reasonably demand from small developing states.
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