The Caricom-EU Economic Partnership Agree-ment negotiations have come to a de facto end, though not without a certain amount of disputation in the Region about its potential advantages and disadvantages.
In the face of some post-facto objections from the Government of Guyana in particular with which some academic and non-governmental critics have agreed, and on which they have expanded, Caricom governments have remained cohesive in their support for the Agreement; indeed, Prime Minister Golding of Jamaica has been fiercely condemnatory of the critics. And while the new Barbados Government will, we suppose, quickly review the Agreement, and although its new Foreign Minister, Mr Chris Sinckler has been head of a leading NGO for some years, we doubt whether the Government will raise any objection to what has been agreed.
In any case, hot on the conclusion of the EPA, we are being brusquely reminded that time is not on our side, and we will soon have to be deciding on the nature of our trade and economic relations with the United States of America as the Caribbean Basin Trade Partnership Act (CBTPA) will expire in September 2008. This Act was passed by the US Government in 2004, in response to our entreaties in 1994 that the North American Free Trade Agreement (NAFTA) would negate many of the advantages that we had gained with the passage of the Caribbean Basin Initiative (CBI). The CBTPA was long in attaining passage, and the evidence shows that in the ten years that it took, Jamaica in particular saw its free zone exports to the US substantially diminish.
Now the President of the US consultancy group, Manchester Trade, Stephen Lande, in evidence to the United States International Trade Commision (USITC) on January 29th, reminds us that the wheels of the machinery of the US Government are beginning to turn in respect of the future of US-Caricom trade relations.
The USITC has now begun hearings on Caribbean Region Economic Growth and Development. Lande’s institution is reminding us that a result of those Hearings when reported to the House Ways and Means Committee, will in fact be an input into decisions that Caricom and the US Government will soon be required to make on what kind of trade agreement will replace the CBI-CBTPA. The context is the US desire to maintain some consistency in its search for revised trade and economic relations with its Hemispheric neighbours – consistency in the context of the WTO, and increasing global economic competition in an increasingly multipolar economic world.
There is now general consensus that the FTAA will not see the light of day in a hurry, if ever, and that the US is pursuing alternatives to it. From our perspective, the US-Dominican Republic-CAFTA agreement is the alternative of significance to us for three reasons. First, it has split the CBI grouping with the slicing away of the Central American countries; secondly, it includes the Dominican Republic, a member of CARIFORUM whose membership has just initialed the EPA and presumably, will proceed to sign in March; and thirdly a question will surely arise as to whether the US-DR-CAFTA Agreement should constitute a template for the US’s offer of an agreement with Caricom.
In approaching these issues, it is useful to remind ourselves of some past responses to US initiatives. In respect of NAFTA, it will be recalled that the Governments of both Jamaica and Trinidad and Tobago showed a decided eagerness to join NAFTA, and took steps to influence the US Congress in that regard. Jamaica was anxious to secure its free zone exports in NAFTA after Mexico’s adherence; and Trinidad was anxious to secure its markets for natural gas and natural gas derivatives. The difficulties which the then newly-elected President Clinton had in facing the Congress with new trade legislation after the difficulties in attaining passage of NAFTA put paid to any meaningful response to these initiatives.
All the signs are that there are now, after a relative decline of Mexican exports to the US after the US opening to China, new efforts by East Asian entrepreneurs to take advantage of Mexico’s geographical proximity to the US to make new investments in that country for easier penetration of its market. So it would be no surprise that Jamaica, whose Jamaica Labour Party government under Edward Seaga was the main protagonist of the CBI, would want to seize the time again, and urge Cari-com to get a move on. This is particularly so in the new environment, which includes the rapid agreement by the US of free trade agreements with many South American countries.
Similarly, the Trinidad Government, with its 20-20 Vision for attaining “developed country status” including expansion of its energy-based industrial exports and accompanying acquisition of US investment, will most likely adopt the same attitude as Jamaica. It will be recalled that some years ago, Trinidad attempted to run ahead of the Caricom pack by signing free trade agreements with Costa Rica and the DR, both of which are now members of the US-DR-CAFTA. It is widely believed that Trinidad has continued to believe that it was “held back” by what it deemed Caricom’s lethargic attitude to these matters.
In addition, it would appear that for some time Trinidad has seen the signing of trade agreements as one of a piece with achieving consensus with the US on related political areas. She was one of the first to sign the Shiprider Agreement; and for some time now, has been calling for a greater United States interest in arrangements for Caricom security that take into account the Caricom perspective. That call can be seen in the context of the need for proper security arrangements for her energy resources and production in this “age of terrorism”.
Stephen Lande, in his recent contribution to the USITC Hearings, is reminding us of the possible options (obviously from his and an American perspective) for a possible free trade arrangement with Caricom which does not disadvantage the US in relation to the EU-Caricom REPA. Interestingly, he perceives the EPA as broadly beneficial to Caricom; and we can have no doubt that this view will have a certain influence in US policy-making and congressional circles. Lande, in the past, worked on the CBI as an Assistant United States Trade Representative and has been involved as a consultant in respect of the US-DR-CAFTA.
The lessons for us in dealing with what is before us, in the context of the recent past are clear:
There can be no delay in hastening our preparations for some form of negotiation with the US;
An appropriate structure for the negotiation must be established, taking into account the experiences of the Caricom Regional Negotiating Machinery in the EPA negotiations, and increasing calls for a more holistic institutional approach to negotiations that ties the political or policy perspective to the negotiating mandate, so as to assure the effective presence of the relevant Caricom Ministerial Committees in the negotiations;
An adequate involvement of private sector and non-governmental organizations in the preparatory process;
A meaningful consultation among governments, especially since recent discussions among governments – on air transport, on energy, on wider regional relations, suggest a lack of harmony and frank inter-governmental discussion;
Open discussion on the options being considered as time goes on; and
Stronger pressure on the Caricom private sector for financially supporting preparatory work by themselves and others.
We are somewhat at a disadvantage at this time as the United States has arrived at settlements with a number of other governments in the Region. We therefore need to urgently turn the collective minds of Caricom to the question of our relations with the dominant hemispheric country. We cannot expect that with a new President due in the White House, his or her mind will be focused on our part of the Hemisphere. We must, small as we are, institutionally and conceptually prepare, in order
to assert ourselves and our position with a greater visibility and certainty of our negotiating position, than we have in the recent past.
