[NYTr] COHA: A New Chapter in US-Caribbean Relations?

[All the News That Doesn't Fit]

Council on Hemispheric Affairs - Jul 27, 2007
http://www.coha.org/2007/07/27/caricom-and-washington-commission-a-new-chapter-in-us-caribbean-relations/


CARICOM, Washington Commission a New Chapter in U.S.-Caribbean Relations

by Andrew Carmona 
COHA Research Associate

For the first time in ten years, heads of state from the fifteen-nation
Caribbean Community (CARICOM) and the United States came together at
the “Conference on the Caribbean: A 20/20 Vision” held in Washington,
D.C., from June 19 - 21, 2007. The agenda for the conference included
various forums to facilitate dialogue and an exchange of ideas.

Discourse between heads of government took place as Caribbean leaders
met with President Bush and Secretary of State Condoleezza Rice;
communication between government bodies and the citizenry was
facilitated by several expert and private sector forums which addressed
trade and development issues as well as investment opportunities; and
interaction between islanders and fellow countrymen who had migrated to
the U.S. was made possible through a Diaspora forum that highlighted
the role of Caribbean nationals living abroad.

The conference brought together policymakers, the International Finance
Agency, the academic community, private sector representatives, and
private citizens of the Caribbean and the U.S. to examine the growth
and development of CARICOM from a regional perspective, and to mark the
beginning of a new, more dynamic chapter in the relationship between
the U.S. and CARICOM. Some key topics included: small business
stimulation, job creation, and economic diversification, as well as
combating illegal drug trafficking, international organized crime and
HIV/AIDS. Additionally, having declared June 2007 as the official
“Caribbean-American Heritage Month,” President Bush said that the
Caribbean Basin Initiative (CBI) would be renewed as a key economic and
trade program, and specified a series of benefits and concessions
especially for Caribbean countries based on commercial ties between the
U.S. and that region. The Conference on the Caribbean provided the
first occasion since the Clinton Administration left office for
Caribbean leaders and their American counterparts to focus solely on
issues crucial to the region; that being said, there was much to talk
about.

Caribbean Integration to Bolster Regional Development

According to a recent World Bank study, “unemployment, particularly of
youth, is increasing, inequities are emerging, productivity is
falling—all of which are contributing to stagnant or declining economic
activity in the Caribbean region.” Furthermore, several of the CARICOM
countries rank among the most highly indebted emerging economies in the
world; without debt relief, poverty is sure to increase. The June
summit called upon the international financial community to help the
Caribbean islands to diversify and transform their economies in order
to meet regional goals and global standards. Also, Caribbean tourism,
competitiveness, and investment were stressed as important areas where
progress was necessary in order for local quality of life indicators to
improve.

The conference took place within the context of the Caribbean Single
Market Economy (CSME), which came into being in 2006. Not unlike the
Single Market of the European Union, the CSME will eliminate all
intra-regional tariffs and trade barriers. According to U.S. Secretary
of Commerce Carlos Gutierrez, the new economic entity will make
progress toward “increasing regional competitiveness, growing
economies, and creating jobs in the region.” The CSME will further
provide opportunities for manufactured Caribbean products and services
to be sold in foreign markets while simultaneously attracting
investment to the region. A noteworthy aspiration of the CSME is to
develop a Caribbean regional ferry service and airline. CARICOM’s new
CSME is an important medium through which member states will be able to
achieve long term development goals; it is a necessary innovation in a
global setting where small Caribbean island nations have a disadvantage
over much larger economic conglomerations which are able to achieve
economies of scale. With CARICOM’s total population numbering only 15
million, the CSME will help the Caribbean region to better integrate
and achieve its place in the global market. Likewise, by 2008, the
introduction of a single regional currency will assist economic
development, much like the role of the euro in the European Union. Akin
to the euro implementation process, a common currency in the Caribbean
may take several years to be fully and successfully adapted to daily
use on all of the islands; however, drawing on the EU’s economic
performance and practical set of experiences, tangible results of a
positive nature are likely to follow.

Renewal of the Caribbean Basin Initiative Goes Beyond Trade

At the June 20 meeting with the CARICOM heads of state, President Bush
made a commitment to engage with the Caribbean on a more regular basis.
Upon conclusion of the meeting, President Bush renewed the CBI,
symbolizing a positive step in the direction of relaxing trade
restrictions between the U.S. and the Caribbean. The CBI arrangement,
having sat in limbo for the last seven years, was set to expire in
2008. According to the Office of the United States Trade
Representative, the CBI is intended to facilitate the economic
development and export-oriented diversification and expansion of the
Caribbean Basin economies. The CBI also includes the Caribbean Basin
Economic Recovery Act (CBERA) and the U.S.-Caribbean Basin Trade
Partnership Act (CBTPA), which currently provide 24 beneficiary
countries with duty-free access to the U.S. market for most goods. The
CBI is essentially an informal free trade agreement between the U.S.
and its Caribbean beneficiaries until formal Free Trade Association
agreements can be negotiated with individual countries. Prior to 2000,
the CBI allowed duty and quota-free preferential treatment for various
goods; however such commerce was contingent upon a slew of special
stipulations attached by Washington. These mainly applied to apparel
goods including clauses specifying that all apparel exported to the
U.S. be made from 100 percent content of U.S.-made fabrics. Other
specific amendments to the CBI included a safeguard whereby the U.S.
president could, at his discretion, suspend all duty-free aspects of
CBI programs if he felt domestic products were being adversely affected
by the competition. Since 2000, however, these rules have been relaxed.
The Trade Act of 2002 allowed for the export of apparel made from a
hybrid of U.S. and Caribbean components, and it also recognized the
CARICOM countries’ positive cooperation and enforcement with
transshipping rules and child labor laws.

Most importantly, the renewal of the CBI at the recently concluded
Conference on the Caribbean has transformed the program into one that
goes beyond the trade sector. CBI beneficiary designation now rests
upon criterion in the fields of labor law, corruption, government
transparency, and anti-narcotics. Additionally, CBI beneficiaries are
encouraged to be “good neighbors” as well as to actively promote the
advancement of their own economies—regional revitalization as well as
“self-help” economic development prerequisites now play large roles in
CBI beneficiary matters. By renewing the CBI, President Bush
underscored the commitment Congress made in 2000 when the lawmaking
body highlighted the U.S. interest of promoting growth in the Caribbean
Basin. Furthermore, by transforming the CBI into an agreement that goes
beyond trade, the U.S. has shown that it wishes to maintain a strong
interest in ensuring that the Caribbean states practice sound economic
policy within their respective societies and with regard to the
interests of their neighbors.

Following negotiation of the Central America-Dominican Republic Free
Trade Agreement (CAFTA-DR) in August 2005, the U.S. established a free
trade zone extending to the five Central American nations and partially
into the Caribbean region by way of the Dominican Republic. The
CAFTA-DR agreement affords the region a comprehensive trade plan that,
like the CBI, goes well beyond simple tariff reductions. Speaking at
the 37th annual Washington Conference on the Americas in May 2007, U.S.
Deputy Secretary of State John Negroponte stated that CAFTA-DR will
assist area nations in “building their capacity to export, expanding
and improving their business operations, attracting significant new
investment, creating new jobs and business opportunities, raising labor
and environmental protection standards, and increasing global
competitiveness.” He also stressed the pact’s emphasis on the issue of
energy security, proclaiming that CAFTA-DR would help to “diversify
energy suppliers and energy types by promoting alternative fuels and
new technologies, promote energy efficiency and conservation, and
expand the international use of strategic oil stocks.” It is expected
that CAFTA-DR will expand into the Caribbean, and as more nations in
that region adhere to it over time, the CBI programs will no longer be
necessary. Nevertheless, the U.S. has shown that its involvement will
be robust in the promotion of economic development in the Caribbean
region in years to come. Currently, the CBI programs remain a
fundamental element of the U.S.-Caribbean economic relationship.

Our Own Backyard is Important

The aforementioned Conference on the Caribbean set forth many important
issues that had been ignored while U.S. policy in the last seven years
focused on other regions of the world. John Negroponte declared 2007 to
be the “Year of This Hemisphere” and acknowledged that the Caribbean is
“an extremely important part of the world… it’s the part of the world
in which we happen to live in, and we neglect this hemisphere at our
own peril.” U.S. involvement in the region is key; one must not forget
that the recently foiled terrorist plot against JFK Airport in New York
was orchestrated in part by three Caribbean nationals. During that
crisis situation, both Trinidad and Tobago and Guyana cooperated with
U.S. authorities in coordinating the arrests and arranging for the
extradition process.

In response to growing hemispheric security threats, the U.S.
established the “Third Border Initiative,” which, during the Special
Summit of the Americas in January 2007, was welcomed as “a valuable
framework for structuring [U.S.] engagement across the broad spectrum
of matters that affect the prosperity and well-being of the region and
its peoples.” The Third Border Initiative is a comprehensive program
that targets a wide range of sectors in which constructive
U.S.-Caribbean engagement is deemed beneficial. These include the
diplomatic, security, economic, environment, health, and education
sectors. Although the Third Border Initiative was originally formulated
in 2001, it is a vital program that largely has been put on the
backburner by the Bush Administration. This neglect is wrong-headed
since it is a necessary component in defining an optimal relationship
between the U.S. and its Caribbean neighbors, and critical to the
establishment of effective counter-terrorism measures to ensure
security on the southeastern border of the U.S.

Another important issue raised during the conference was that of the
deportation of criminals. The U.S. has a one-strike policy concerning
criminal offenders of foreign nationality—immediate deportation to
their native countries. It is necessary to note that in a global
setting, combating organized international crime requires responsible
behavior by all parties involved. Immediate transferal of criminals
back to their home countries only leaves the door open for the creation
of organized crime networks at home; many Caribbean nations have
complained of such results as their nationals, who, having become
hardened criminals, return after spending years in the U.S., bringing
their skills and connections back to their home islands. In fact,
rising crime rates on Caribbean islands have often been directly linked
to criminal deportees from the U.S. If the deportation policy is to
remain active in the U.S., there must be specific programs of
rehabilitation and reintegration of deportees into the societies to
which they are returned. To complement this, effective monitoring
systems must also be put in place to ensure against the resurgence of
criminal activity. At the conference it was agreed that Caribbean
deportees remain the single most vexing issue for Caribbean-Americans.

A series of disputes between the U.S. and various Caribbean countries
are in dire need of being resolved. The controversial Shiprider
Agreement, which the U.S. aggressively has attempted to negotiate with
many Caribbean nations, is one example. According to the Institute for
Policy Studies, the 1996 agreements were “intended to advance
international drug cooperation between the U.S. and the Caribbean.”
They stipulated that, in accordance with anti-narcotic measures, any
U.S. Coast Guard vessel be permitted to enter national waters of a
Caribbean country once a local law enforcement official was aboard. In
the late 1990s, the Shiprider Agreements led to severe criticism from
many Caribbean nations, who preferred to work within a framework of
cooperation based on democratic principles and respect for sovereignty.
Although some nations signed the agreement, there has been strong
opposition to it from others. Jamaica and Guyana, for instance, have
refused to implement the agreements or have imposed stricter limits on
them, subsequently feeling the consequences of their actions. The U.S.
has threatened economic sanctions in the past for failure to implement
the measures, as well as refused assistance to its neighbors in the
form of drug interdiction training and equipment. UN figures show that
40 percent of the 200,000 tons of cocaine shipped to the U.S. every
year pass through the Caribbean and Central America; thus, a solution
to these disputes is vital.

Similarly, a recent decision by the court of the WTO ruled in favor of
the Caribbean island nation of Antigua-Barbuda and against the U.S. in
a dispute over online gaming. Nevertheless, the U.S. remains
non-compliant with the ruling, denying the island nation of 70,000 the
right to provide online gaming to U.S. Internet customers. The decision
of the WTO must be respected so this bothersome quarrel, which only
reflects poorly upon the U.S., can be properly remedied. President
Bush’s pledge of closer cooperation with the region at the Conference
on the Caribbean presents a chance for both parties to find solutions
to these issues and begin to establish more productive, mutually
beneficial relations.

Tapping into the Oil Well that is the Caribbean Diaspora

One major goal of the Conference on the Caribbean was “the
strengthening of the relationship among the Caribbean Diaspora in the
United States as well as the energizing of the Diaspora and friends of
the Caribbean in support of the Region’s Development.” The U.S. is home
to the largest number of Caribbean migrants. The conference stressed
that the Caribbean Diaspora in the U.S. is underutilized; it emphasized
that the Diaspora can and must play a larger role in assisting
development of their homeland. It may be worthwhile for Caribbean
governments to take advantage of recent U.S. outsourcing; Caribbean
nations can attract some of the most educated and skilled members of
the Diaspora back to their home countries to support innovative
business growth.

It is also important that Caribbean governments be able to better reach
out to overseas communities by strengthening and overseeing their
consular and embassy services. Diaspora organizations located in the
U.S. must be strengthened, and the pool of highly skilled
Caribbean-American nationals might develop a sense of duty about
investing in the betterment of the image of the Caribbean region. There
exists a reservoir of talent and ingenuity in the Diaspora which can be
better used to promote the Caribbean as a place of both business and
leisure. One example of this are sports players: it is estimated that
close to six hundred baseball players from the Dominican Republic play
in North American leagues, as well as a large number of track and field
athletes and coaches from the English-speaking Caribbean islands. These
two groups could use their wealth and social position to invest
financially in the region and promote a positive image of the Caribbean.

Remittances are possibly the most important issue involving the
Caribbean Diaspora. The Caribbean communities living in the U.S.
collectively send billions of dollars home each year, directly
influencing CARICOM economies. In 2006, remittances to Jamaica and
Haiti totaled $1.7 billion and $1.65 billion, respectively. It is
undeniable that remittances represent the most dominant factor in the
economic relationship between the U.S. and the Caribbean, and along
with a heavy stream of consumer goods exported to Caribbean nations by
relatives living in the U.S., remittances account for the largest
portion of the GDP in most Caribbean nations. Thus, the challenge in
this sector is to translate these remittances into positive societal
investments so that CARICOM populations can benefit from them as a
whole.

The Big Picture

The strong tradition of democracy and respect for human rights in the
Caribbean has long advanced a fruitful relationship with the U.S. The
recent Conference on the Caribbean has successfully allowed CARICOM to
deepen its relationship with the U.S. through the tackling of
trade-related issues and the establishment of institutionalized
dialogue. However, many challenges to the region still remain. CARICOM
countries must seek out avenues in which the abundant resources and
apparent potential can be translated into real benefits for Caribbean
society. Certain issues, such as anti-narcotics enforcement and
deportees, require intensive discourse and cooperation on both sides.
Furthermore, questions such as HIV/AIDS, which require large amounts of
financial assistance for a variety of treatment and prevention
programs, can be assisted with help from outside countries, such as the
U.S. In fact, some Caribbean nations are now benefiting from the Bush
Administration’s $5 billion package to the developing region aimed at
curbing the global HIV/Aids pandemic.

The Caribbean region is geopolitically strategic in terms of security,
and cooperation with CARICOM is essential in combating organized crime,
drug trafficking, and terrorism. In this respect, the Caribbean and the
U.S. must be able to support and maintain healthy relations into the
future. CARICOM is wise to take advantage of the opportunity of
high-level meetings with the U.S. After all, the U.S. is the
Caribbean’s closest developed neighbor, its most significant trading
partner, and the home of the largest number of emigrants from the
region.

With a population at barely 5 percent of that of the U.S., Caribbean
integration vis á vis CSME will better prepare the CARICOM nations to
find their niche in the global market; however, a good rapport with the
region’s major global partners is necessary in the pursuit of overall
Caribbean development goals. Conversely, one would hope that President
Bush’s renewal of the CBI and the recent Conference on the Caribbean
signifies a revitalization of the U.S.-Caribbean relationship that has
been characteristically absent during his two terms in office.
Considering the Bush Administration’s consistent preoccupation with
other regions of the globe and America’s increasingly tattered image
around the world, such a conclusion might be refreshing not only for
otherwise fragile Caribbean economies but for a battered U.S. regime
policy as well.