dear members

Sorry for the delay in getting these out to you. I have been in the
Caribbean.

Amanda



The Week in Europe
By David Jessop

On February 14, Caribbean leaders will meet for two days in Barbados. There
they will consider issues critical to the region's future. Among them will
be proposals for a tourism summit in October of this year, the future of the
Caribbean Regional Negotiating Machinery and the many complex trade policy
challenges the region faces.

It may not be apparent, but these issues are interrelated.

The survival of almost all Caribbean economies depend on their ability to
continue to trade outside of the region, principally with Europe and North
America. However the nature of 'trade' is no longer what many imagine.
Statistics show that services (tourism, financial services and information
technology related industries) are now immensely more valuable for most
Caribbean nations than the export of commodities, manufactured goods or
bauxite. So much so that figures suggest that 71 per cent of Caribbean
earnings are now derived from trade in services, 22 per cent from industry
and just eight per cent from agriculture. However, this is problematic as
despite this the majority of the workforce is still in older industries and
in preference supported agriculture in particular.

At the same time the world is rapidly moving towards something close to free
trade, most probably on a global basis. This requires that whatever the
Caribbean sells, it must do so in a competitive way. While it may be
possible to argue for special treatment for small vulnerable states, the
truth is that in some nations, older Caribbean industries, protected by
years of special arrangements with Europe, are nearing their sell-by date.
This may seem harsh, but it is reality. It suggests that if the region is to
grow and support its population it will in future have to migrate its
workforce to competitive agriculture and services that have an edge over
similar activities offered elsewhere in the world.

For the Caribbean a central part of this process means having to come to
terms with tourism. Rather than allowing it to be seen as something apart
from the real economy or a painless way to levy taxes, governments need to
think about its future with greater subtlety. That is to say, there is a
real need to address creatively the wide range of problems this key, but
private sector dominated industry now faces. This is why a tourism summit is
being proposed. The event would bring together regional leaders and possibly
observers from outside the region, to consider the steps necessary to make
the industry globally competitive. The event might also consider the ways in
which public education could help awareness of the industry's importance as
well as the many infrastructure-related problems tourism faces if it is to
experience growth. These include the need for training, the attraction of
new investment, the problems of air transport, the challenge posed by the
cruise ship industry and the need to look again at the types of fiscal
regimes under which the industry operates.

To enable the tourism industry and others to restructure success will also
be required in international trade negotiations.

In totality, the range of such negotiations is challenging. They include:
the Free Trade Area of the Americas negotiations which are likely to
accelerate after April; a new free trade agreement with Canada; post 2002
negotiations with the EU which will end the region's preferential trade
relationship; services negotiations in Geneva which may change the way in
the region's tourism and financial services sector operate; a hardening of
the position taken by the OECD against offshore tax regimes in the region;
the revision of the EU's banana, rice and sugar regimes; a review of the
Generalised Scheme of Preferences; the effects of EU enlargement on
industries such as rum and sugar; and of course, a possible new WTO trade
round.

That is why, when they meet, Caribbean leaders will be addressing how to
face what is, in effect, a war on three fronts: in the Americas; in Europe;
and with the international community in Geneva. And that is why another
aspect of their deliberations will be to begin a review of the work of the
Caribbean's internationally respected Regional Negotiating Machinery (RNM)
to decide on whether to extend its mandate until the present complex round
of negotiations is concluded.

Almost exactly four years ago, Caribbean Heads of Government established the
RNM under the leadership of Sir Shridath Ramphal. Despite its meagre human
and financial resources it has enabled the region to build up a number of
solid achievements, both during negotiations and in preparation for those
that lie ahead.  This holds true of the Post Lomé negotiations where its was
the RNM's intellectual authorship of the ACP negotiating position and
proposed strategy that led to a result far better result than anyone could
have expected. Moreover, in the preparations for the FTAA negotiations and
for the mind-boggling array of issues with which the region is engaged at
the World Trade Organisation, it has been the RNM that has assisted Heads of
Government and ministers understand the steps necessary to obtain the
region's objectives.

As a result, the RNM is regarded in Europe and the US and even in other
parts of the ACP with respect, a degree of envy and admiration. It does not
have the hundreds of specialist negotiators that nations like Mexico bring
to the table, but it has consistently achieved more than any one could
expect for a relatively small and disadvantaged region. Yet despite this, in
some nations there appears to be little understanding of why the RNM, the
individuals involved, its ability to think strategically across all trade
negotiations, and its complex network of international contacts is so
important. The reality is that it has become and will be for the next five
years a critical element in the region's only chance to obtain the best
possible result out of international trade negotiations.

But there is a bigger issue here that goes beyond governments to sectors and
companies most at risk and that is a failure in to understand that trade
negotiations have a real cost that must be met by the region itself.

Earnings from services and trade net the Caribbean region excluding Cuba
about US$28 billion per annum. Loss of markets as a result of negotiating
failure will bring poverty to parts of the region. It is in this light that
the cost of success in international trade negotiations should be seen.

David Jessop is the Executive Director of the Caribbean Council for Europe
and can be contacted at [log in to unmask]
February 8th, 2001


Dr. Amanda Sives
Postdoctoral Research Fellow
Commonwealth Policy Studies Unit
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/