The OCT Decision (LGO Besluit) and Curaçao: A questionable performance

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The long-standing Overseas Countries and Territories (OCT) Decision will again be renewed in 2020. In accordance with the Treaty on the Functioning of the EU, the 27 British, Danish, Dutch and French OCT are associated with the EU. The core of this Decision is to promote preferential access of the OCT to the EU market and participation in global trade. Has the OCT Decision accomplished its objectives? I’ll discuss this relevant question in a series of articles. 

During a recent foreign trade mission, a Curaçao Minister stated that Curaçao -because of its OCT status and beneficiary of the OCT Decision- is “an interesting export hub to the EU”.  He’s neither the first nor the last person to (mis)use our EU associate status as a sales pitch. The reality is however that currently only 7 companies in Curaçao (including the oil Refinery) make use of the OCT-Decision. These are hardly figures that are going to excite potential investors out there. The relevant question should be: “why is this the case?”

Disconcerting is that at the Ministries of General Affairs and Economic Development there is practically no information and no qualified personnel to guide entrepreneurs who are interested in using the OCT Decision to export. In the private sector the situation is not much better. Support for our business community is critical as the rules, regulations and prerequisites for using the OCT Decision are rather intricate. Lack of knowledge and information no doubt contributes to the low use of the EU preferential program for OCT.

Many OCT Decisions ago, it was decided that our priority should be improving our competitiveness. It makes sense because what good is it to have a nice preferential facility to export goods and services, if you don’t have a competitive good or service that consumers want in the EU? As far as I know, no government has ever taken on the reforms and changes needed to make us more competitive within the context of the OCT Decision. Logically because reforming outdated economic structures (labor regulations, productivity, migration policies and the education system) is taboo for most politicians. Additionally nothing has been done to remedy our noncompliance with WTO which makes it impossible to have trade agreements with other countries, exactly the opposite of what the OCT Decisions have been stressing for years. This is the crux of the problem.

In Parliament, as Curaçao was getting ready for the renewal of the OCT Decision in 2014, I warned that we are not going to accomplish much lest we brought about changes. With the exception of the Fair Trade Authority legislation in 2016, no necessary structural changes were made. Hopefully our Ministers will realize, especially when they are giving flashy powerpoint presentations on foreign trade missions, that the dream of making our island an export powerhouse -with or without the OCT Decision- will remain an illusion if we don’t take the necessary steps to be more competitive and WTO compliant.

Willemstad, Curaçao

 

Author: alexdavidrosaria

Alex Rosaria is from Curaçao. He has a MBA from University of Iowa. He was Member of Parliament, Minister of Economic Affairs, State Secretary of Finance and United Nations Development Programme Officer in Africa and Central America. He is an independent consultant active in Asia and the Pacific.

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