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News
AP  
December 5, 2005

Caribbean leaders call on industry to support free trade

MIAMI (AP) – Finding their region winning growing international attention and eager to keep up with the free-trade momentum, Caribbean civic and industry leaders are expected to push for business, environmental and political reforms during an annual meeting here this week.

The private Caribbean-Central American Action group, which sponsors the conference, is calling on industry to take an active role in making the Central American Free Trade Agreement more than a paper deal when it takes effect next year. It is also calling on the private sector to support a single regional economy for the mostly English-speaking Caribbean islands excluded from the treaty.

So far only a handful of those 15 countries have said they would join a single market, considered a likely precursor to a free trade agreement. CAA president Federico Sacasa, a former senior Bank of America executive and Nicaraguan native, said Caribbean nations can no longer afford to ignore globalisation if they hope to reduce poverty in their struggling nations.

“Sometimes we’re our own worst enemies,” Sacasa said. “The private sector, which has been the enemy of change, needs to reach out together with civil society to be advocates for government changes.”

Towards that end, poverty and political instability, most notably in Haiti, are also on the list of topics for the conference, which ends tomorrow.

While in recent years the region has been on the back burner of US foreign policy, the Caribbean or so-called “Third Border” is increasingly drawing US attention. That change is due in part to its growing relationship with China, whose trade surplus with the United States has raised concerns for the Bush administration, as well as with Venezuela, whose president Hugo Chavez has become one of the hemisphere’s most outspoken critics of the US president.

“This has reawakened US interest in Latin America in general and the Caribbean in particular,” said Florida International University Economics Professor Antonio Jorge.

And with the recent failure to create a hemisphere-wide Free Trade Area of the Americas, the United States is also eager to sign smaller trade agreements, such as the Central American treaty.

Still the Caribbean has an uphill battle in becoming a significant trade partner for the United States. The combined economy of its 22 major players, including the Central American countries, is equivalent to only about one per cent of the US economy.

The Caribbean Basin countries have signed regional trade agreements with the United States since 1983, but many quotas remain and the treaties must be renewed every few years.

Sacasa noted that each of the islands has a different set of customs procedures, further complicating trade.

“We need to make ourselves more attractive for investment.”

Many of the region’s fragile economies face threats amid looming European sugar price cuts, and even their booming tourist industry may be reaching its limits, said Daniel Erikson, a Caribbean analyst for the Inter-American Dialogue policy institute.

“As a percentage of the economy, it will be very important, but how much can they really rely on that for growth?” Erkison said.

The growing influence of China and Venezuela in the region increases the value of trade with these countries as much for political reasons as economic ones, Erikson aid.

Venezuela’s Chavez has offered preferential financing for Caribbean countries interested in buying petroleum. Meanwhile, China has courted the Caribbean countries in its effort to reduce Taiwan’s international allies.

China recently added a number of Caribbean countries to its approved travel destinations, including Antigua, the Bahamas, Barbados, Dominica, Jamaica and St Lucia.

The Caribbean countries have another key feature going for them when it comes to trade with the United States – geography.

“It’s easier to get from New York City to the Caribbean than from New York to Los Angeles,” Sacasa said. “That’s what makes us different from anywhere else in the world.”

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