The Week in Europe
By David Jessop

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.

David Jessop is the Executive Director of the Caribbean Council for Europe.
March20th, 2000



  

Dr. Amanda Sives
Postdoctoral Research Fellow in Caribbean and Caribbean Diaspora Studies
Institute of Commonwealth Studies
28 Russell Square
London, WC1B 5DS

Tel: +44 0207-862-8865
Fax: +44 0207-862-8820
Website: http://www.sas.ac.uk/commonwealthstudies/



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