This Week in Europe, 23 March 2000
Executive Director of the Caribbean Council for Europe
A major row may be brewing between the Caribbean and the United States. The issue, which presently relates to the still unresolved transatlantic dispute over bananas has broader implications for Caribbean and may bring to a head simmering resentment against US trade policy towards much of the region.
On March 30, Caricom Foreign Ministers will meet in New Orleans with the US Secretary of State, Madeleine Albright. The meeting, which follows from a commitment made by the US President when he met Caribbean leaders in Barbados in 1997, is intended to enhance US dialogue with the region on a wide range of issues and improve relations generally.
Central to the discussions at the New Orleans meeting will be the question of whether the US will support the World Trade Organisation (WTO) waiver that is required for the recently negotiated Suva Convention between the European Union (EU) and the 71 African, Caribbean and Pacific (ACP) nations.
The new arrangement, the successor to the Lomé Convention, includes special provisions on trade. These aim to achieve, over time, the integration of the Caribbean into the world trading system in accordance with WTO rules.
Under the terms of the new convention, which will be signed in Fiji in June, the ACP and EU have agreed to establish a basis on which in future, their existing trade arrangements will, in most cases, be harmonised with global trade rules and cease to be preferential to the ACP alone.
So central has this issue been to the region's economic survival that Caribbean trade negotiators have spent the better part of two years in dialogue with the EU to ensure that the existing special trade arrangements are not swept away in a precipitate manner.
Now that agreement has been reached between the EU and ACP on how this should be achieved, the next critical step is to achieve agreement among all WTO members that the new Convention's trade provisions are acceptable. That is to say acceptance by all parties that the proposed new ACP/EU convention offers a satisfactory basis for a gradual movement towards and EU/ACP system of trade that will meet global trade rules.
To accomplish this a waiver is required: that is to say an exception for an agreed period from the rules normally applied to World Trade Organisation members. The EU has formally requested this in Geneva, but it is beginning to run into trouble with the possibility that the agreement may now be held hostage to a growing range of other issues.
Panama has let it be known that it can not countenance a waiver being granted unless the outstanding banana dispute between the EU and US is settled satisfactorily. This position it seems is supported to a greater or lesser extent by nations such as Guatemala and Ecuador. But there is a strong suspicion that others may also be involved. Jamaica's Prime Minister, P J Patterson, has questioned whether Panama was acting out of its own interest or as he put it, "a proxy for the rich and powerful".
While the region is already engaged in vigorous diplomatic offensive to influence Panama and others not to pursue this unfriendly act, the banana issue plus other highly political objections to granting a waiver for the Suva Convention may well come to dominate the New Orleans meeting with the US. This would be regrettable as the US and the region have many important issues to discuss requiring urgent resolution.
Over the last two years the number of issues that divide the Caribbean and the US has continued to grow. The banana dispute remains unresolved. The best estimates suggest that over the next five years the US led WTO compatible solution presently being promoted will result in large-scale unemployment as uncompetitive banana farmers go out of business. Cuba and it deepening relationship with the ACP Caribbean and Caricom remains a matter of fundamental disagreement. The US too is at odds with the region over the question of offshore tax regimes in the Caribbean and the opportunity it believes this offers US nationals to avoid taxation. Equally as contentious remains the US approach in the region on narcotics issues, while somewhere not far over the horizon there are possible problems relating to sugar.
None of this need be so. The problem is that few in Washington take the trouble to consider the practical problems facing neighbours in the Caribbean. There is a reluctance to recognise the problems of vulnerability and smallness. All too frequently officials in Washington fall back on unrealistic comparisons with Central America. Policy seems driven by concerns about the danger of large-scale economic migration caused by economic instability in those Western Caribbean nations nearest to the US. Otherwise the only issues that seem to matter to the US relate to trade policy and the need to counter organised crime and narcotics trafficking through the region. Rarely is there any willingness to see the region as a development opportunity.
No other nation or bloc has anything to match the EU's integrated trade, aid and good governance provisions now on offer to the Caribbean and contained in the Suva Convention. Any suggestion that the WTO waiver to the Suva Convention be halted or held up for political or economic reasons has to be a very serious issue for the Caribbean. The trade aspects of the new Convention are a central part of the region's strategy for survival. Objections by the US or anyone else pose a threat to both sovereignty and future economic viability.
The Caribbean and the US have much in common and much they should be able to agree upon. Unless the administration and more so the Congress is prepared to see the region with fresh eyes then relations will continue to deteriorate. This would not be good news for the region, the ACP or for Europe.