US/Caribbean Relations – US/Caribbean Relations – Today and TomorrowToday and Tomorrow Throughout history, the political,

economic and diplomatic relationships between the USA and various Caribbean states have been marked by long periods of benign neglect and sharp periods of intervention and direct ostracism.

One scholar likened the relationship to that of a fire brigade coming in every now and then to put out fires with feverish activity then leaving with essentially un-repaired ruins behind. This view, while having a fair degree of validity ignores or underplays many positive aspects of the relationship, beyond the military and strategic interventions.

From the US perspective, its top decision makers, if and when they consider the Caribbean, find it hard to imagine why there is not instantaneity in Caribbean support for several US policies given the presumed quiet but good relationships with their close neighbours in the Caribbean area.

The US has admitted many Caribbean citizens to her shores, and has given them advanced education, jobs, residency and citizenships. US citizens, in return, freely visit the region with nothing more than a passport in the various tourism centers, putting much-needed US dollars in several economies.

US investors have been active in a variety of economic sectors, and so too US government funds have been transmitted for developmental purposes. Through the Caribbean Basin Initiative (CBI) and World Trade Organisation (WTO) agreements, Caribbean producers have nearly full access to the US markets.

Hopefully, through the Free Trade Area of the Americas (FTAA) negotiations, an agreement may be reached in this Hemisphere will make the USA market more accessible (especially in textiles, agricultural products, etc.) to Caribbean suppliers.

Hopefully, through the Free Trade Area of the Americas (FTAA) negotiations an agreement may be reached in this Hemisphere will make the USA market more accessible (especially in textiles, agricultural products, etc.) to Caribbean suppliers.

From the Caribbean perspective it is argued that because we are small, weak and vulnerable, this does not mean that we should not be protective of the right to self-determination, sovereignty, and flexibility in external relations according to needs for self-sustaining growth and cultural integrity.

Therefore, there could not be automaticity in support for US policies towards, for examples, the Iraq invasion, Cuba’s persisting ostracism, and several international agreements of interest to weaker states.

The Caribbean concedes the positive aspects of the relationship but not, within them, the self-regarding, non-altruistic, quid pro quo, attitudes of the US. There is hardly room for the US to display an attitude of noblesse oblige.

The very expectation of instantaneity of support for all the major US policies illustrates these features.

We are vulnerable states along many dimensions of vulnerability, and our sovereignty is much more juridical than de facto but we do deeply believe in the right of micro states to exist and therefore we strongly support and participate in multinational institutions and treaties which seek to order the world along lines of justice, equity, fairness, and are concerned with equitable shares of the world’s resources.

By the same token, we become exceedingly uncomprehending when the world’s richest democratic state, so often, in practice, ignores or bypasses these processes. And, remember, it is not that many of these global institutions and processes are democratically controlled, transparent and participatory! The Security Council of the UN is not. The WTO is not. The IMF and the World Bank are not, and so on.

Nevertheless, even as these institutions and processes are, they are infinitely preferable to a situation in which powerful countries exclusively decide and dominate, and then seek for automatic support from the previously ignored.

Something is fundamentally wrong with this expectation. Unless the US is is claiming sainthood and has a direct claiming sainthood and has a direct line to perfect truthline to perfect truth that others do not have, all it should reasonably expect is critical support on several important global issues. The Caribbean has been responding positively as it is able, consistent with its dignity.

Current Caribbean/USA Relations

Current relations with the USA are conditioned by a normally favourable attitude of Caribbean peoples to US materialist culture, its reflexive democratic impulses, and by the large Caribbean population living there. However, for the official and intellectual classes, the Caribbean is deeply worried by the new radical foreign policy doctrine of the US government.

This is the first-strike doctrine which basically ignores international law, dismisses the precepts and procedures of collective security established by the UN Charter, and establishes the USA as the global enforcer (acting together as police persons, judge and jury, and executioner).

Small states are bound to be disturbed by this development, even if we could trust the US to be right all the time, because this gives an excuse for extra-territorial operations by other nations and non-state actors!

The Caribbean, it must be said, is equally disturbed by the dangerous threats facing us and the world – the global reach of terrorists; the pandemic of HIV/AIDs; the spread of weapons of mass destruction; unprecedented global environmental crises; and a global economy and related governance system generating greater instability and inequality, as well as a global financial system which is equally deleterious.

US unilateralism, supremacy and exceptionalism, most certainly, even with its military, economic and technological power, will not, without world states’ participation and contribution be able to address these issues successfully, alone.

This is why it is disturbing to Caribbean nations that on a number of issues recently the US Government has been back-tracking on commitments, refusing to sign on to agreements, and going its own way on several others.

Let us list some of these. The US has rejected global scientific consensus and withdrawn from efforts to curb global warming. For us in the Caribbean global warming is absolutely serious. One major consequence is sea level rise. In a few short years our reefs and our beaches could be totally destroyed and so would the on-land tourism and our off-shore fisheries industry.

The renunciation of the US signature on the Treaty to create an International Criminal Court and the vigorous campaign to exempt all US personnel from its jurisdiction, even threatening to veto UN peacekeeping operations if its wishes were not attained, struck a major blow to multilateralism and an orderly world in which powerful countries would also respect and honour such obligations.

Small states like ours need such international institutions if we are to achieve a measure of justice not dependent on the largesse and mercy of powerful countries.

The US agreed to the Test Ban treaty while declaring an intention to test new nuclear weapons and refusing, itself, to rule out first strike against non-nuclear nations. Caribbean countries, especially after the Cuban Missile crisis, will never be in the nuclear race and so, perhaps, should not bother about these issues except to see a systematic destruction of existing ones.

However, it is the message about exceptionalism (international rules and treaties, yes but they do not apply to the USA – the self-appointed guardian of freedom), that bothers us and the consequential delegitimisation of rules and treaties.

The USA has not come on board to mobilize a global offensive against the spread of HIV/AIDS, although it must be said that President Bush recently announced the allocation of major sums of money for this fight. Nevertheless, the perception is that its dominant concern is in privileging the financial interests of pharmaceutical companies over the need for affordable life-saving medicines.

Caribbean women and their families were not pleased when the US suspended its support for the Family Planning programme undertaken by the UN and has so far refused to support the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW). This suggests a weaker commitment to social development issues.

It is still a major concern that the US undermined the Oslo peace process, condoned the Israeli re-occupation of Palestinian territory, and rejected UN Security Council resolutions, supported by previous US administrations that provide a framework for conflict resolution containing strict security guarantees for both the Israelis and the Palestinians.

These are just some of the instances which caused Caribbean states to wonder about the USA’s commitment to global institutions and processes and dampened any proclivity which may have existed to automatically support US policies as they manifest

There were other more direct issues such as the “Shiprider” dispute, US policy on Off-shore financial institutions in the Caribbean, US selectivity in determining which Caribbean Heads to invite to meetings with the President.

There are issues on the trade in small arms which has fuelled an upsurge of murders and crime in the Caribbean aligned to the Illegal transshipment of Drugs interdiction policy and the US reaction to countries which were deemed as not having done enough to stem the flow into the USA.

Many Caribbean Governments saw these “returnees/deportees” with their sophisticated weaponry as responsible for a major upsurge in murders and other criminal activity in several countries. The security forces in the region have not been able to contain this massive upsurge in criminal activity. This is probably the number one concern in the Region now!

The banana issue where the USA supported the position of its multinationals which dominate the food industry globally over Caribbean producers’ continuation in the business through special market privileges with the European Union and for the less than 6 per cent of the global share of the market that the Caribbean had, was, and still is, a source of great irritation for Caribbean banana producing countries.

These and others are examples of irritants, sometimes of major proportions, which have led to an extremely wary attitude of Caribbean leaders to the US President and official agencies. The transshipment of nuclear wastes through the Caribbean also caused diplomatic difficulties.

In response to these concerns, the US has increased military assistance to the region, especially through training, joint military and security exercises.

The FTAA, still some way off for realization, is the arena within which the US hopes to incorporate the entire Latin America and Caribbean regions into a kind of prosperity zone. This has been long in the making but there are serious splits in conceptualisation of the final product, to be hopefully completed in 2,005. This hope about completion time is looking bleaker even after the outcome of the meeting in Miami this week.

Let us examine this a bit more because the future relations with the USA will be heavily coloured by the WTO and FTAA negotiations. There continues to be a titanic struggle within the WTO by member countries on a variety of issues.

The scuttling of the negotiation process at Seattle, the unsatisfactory outturn at Doha and blatant powerful country manipulation of weaker states along with the deadlock at CANCUN suggest that countries, that are not G7, have to come together on selected issues and hold firm, in order to have influence. Out of this “power-play” action may come the transparency, equity and inclusiveness that weaker economies would wish to see.

It did not take long for Caribbean states to discover that even apparent gains at Doha re better prices for HIV/AIDs pharmaceuticals turned out to be more apparent than real. So too was the offer of sufficient technical assistance to governments to take adequate part in subsequent post Doha activities.

Attitudes of resistance were manifested in the formation of two new groupings, for the Cancun Ministerial meeting, with several Caribbean countries’ participation, which may be effective in future WTO negotiations.

They are the group of 21 countries chaired by Brazil wanting effective treatment of agricultural subsidies; and the group of 23, chaired by Indonesia (formed an alliance for Strategic Products (SP) and Special Safeguard Mechanism (SSM) to fight for the interests of "small vulnerable resource-poor farmers from developing countries" through strong SP and SSM mechanisms in the Cancun outcome on agriculture.

Caribbean countries were united in what they wanted out of the WTO and never deviated at Cancun. This “ability” to hold a line needs to be converted into mutually beneficial outcomes for all. At least, many weaker and middle power states recognized that there is hope for a significantly improved governance system within the WTO. On these issues, the Caribbean came up directly against key issues for the USA and the European Union.

The continuing struggles over implementation issues for developing countries and over not proceeding with the “Singapore issues” before settling these suggest that rich countries are not prepared to act in good faith unless pressured into fair and equitable actions.

These issues have been continuously downgraded and sidelined by powerful countries in the WTO. Caribbean complaints on implementation issues relate to the non-realisation of anticipated benefits (as in textiles and agriculture), imbalances and asymmetries to be corrected (TRIPS, subsidies, etc.) and the non-operational and non-binding provisions (to be made operational).

In all of these issues, the US approach to Caribbean needs seemed unfeeling and unsympathetic.

For the Caribbean, achieving fairness and equity in the global tourism industry is really of vital importance. The UN Commission on Sustainable Development organized a dialogue in April 2002 (7th Session) that brought together national and local governments, the tourism industry, trade unions and activist groups and considered how to make tourism sustainable all over the world.

The concern arose because tourism developers, usually foreign, and tourists with lots of money to spend, believe they are capable of managing and conserving land and natural resources; and in cooperation with the tourist industry can properly manage and conserve 'nature' under a national eco-tourism plan.

What was especially important for the Caribbean,arising out of this discussion, was the strong commitment to the democratic control of the industry. The UN General Assembly (UNGA) adopted a resolution on 'Sustainable Tourism' as part of its “Programme for the further implementation of Agenda 21” -- the action programme adopted at the Rio Earth Summit.

This resolution acknowledges the need to consider further the importance of tourism in the context of Agenda 21. Among other things, it states:

For sustainable patterns of consumption and production in the tourism sector, it is essential to strengthen national policy development and enhance capacity in the areas of physical planning, impact assessment, and the use of economic and regulatory instruments, as well as in the areas of information, education and marketing.

The problem is that the current structure of international business and trade is hostile to benefit sharing. Travel and tourism have emerged as one of the world's most centralised and competitive industries. Many markets for services are dominated by a few large firms from developed countries.

As a result, in most service sectors, the larger operators face little effective competition as the size of the next tier of competitors is so small.  For example, 80 per cent of the market in tourism belongs to Thomson, Airtours, First Choice and Thomas Cook. 

Service providers from developing countries are mainly small- and medium-sized, and they face competition from large service multinationals with massive financial strength, access to the latest technology, worldwide networks and a sophisticated information technology infrastructure.

Caribbean perception is that the USA favours the interests of the few transnational corporations which dominate the industry over the weaker players’ interest in equitable benefit sharing

The trend in mergers and acquisitions and strategic alliances has exacerbated this concentration. UNCTAD studies on health, tourism, air transport and construction have highlighted the possible anti-competitive impact of these new business techniques. For example, vertical integration between tour operators and travel agents creates considerable market power that puts competitors at a disadvantage. 

The structure of distribution channels and information networks in several service sectors has also shut out competition.  For example, in tourism and air transport, strategic global alliances and global distribution systems have restricted competition and present major barriers to market entry by developing countries (UNCTAD studies on health, tourism, air transport and construction:  6-8).

The striking paradox is that the institutions for liberal trade in tourism and travel services are themselves illiberal! These transnational corporations have increasingly pressured governments around the world to liberalise trade and investment in services and are likely to benefit tremendously from the General Agreement on Trade in Services (GATS).

Under GATS an objective is to abolish restrictions on foreign ownership and other measures which have so far protected the services sector in individual countries. Already, in the hotel sector, GATS facilitates franchising, management contracts and licensing.

Under national treatment rules, foreign tourism companies will be entitled to the same benefits as local companies, in addition to being allowed to move staff across borders at will, open branch offices in foreign countries, and make international payments without restrictive regulations.

Whatever remaining national control Caribbean countries may envisage, signing on to GATS, as is and is to be, means ceding all remaining national powers of regulation.

Furthermore, foreign investment is increasingly being deregulated under the GATT/WTO system. Trade-Related Investment Measures (TRIMs) will ensure that foreign companies will no longer be obliged to use local input.

It is also true that although the attempt by the Organisation for Cooperation and Development (OECD) to establish a Multilateral Agreement on Investment (MAI) was stalled, efforts to resuscitate the process continue. The agreement would have included unrestricted entry and establishment of foreign firms, national treatment, automatic repatriation of profits, technology transfer, etc.

The World Tourism and Travel Council (WTTC) has presented its “Millennium Vision” on travel and tourism. This vision includes the following key areas:

         Get governments to accept travel and tourism as a strategic economic development and employment priority;

Move towards open and competitive markets by supporting the implementation of GATS, liberalise air transport and deregulate telecommunications in international markets; and

         Eliminate barriers to tourism growth, which involves the expansion and improvement of infrastructure -- e.g. the increase of airport capacity, construction and modernisation of airports, roads and tourist facilities.

Presumably, bi- and multilateral aid agencies will begin transferring their development resources into these activities, away from other developmental activities since the financial pool, in real terms, has sharply declined.

Caribbean concerns are manifold. Among them is the high likelihood of loss of independence by scores of small and medium size enterprises, including hotels and tour operators, because most Caribbean enterprises will hardly be able to compete with foreign companies.

Already, only a small portion of tourism revenues reaches the Caribbean because of the high foreign exchange leakages. It seems quite obvious that the balance sheet may even worsen because the profits and other income repatriated by foreign companies are likely to grow larger than the inflow of capital.

For these two reasons tourism will not bring wealth, progress, social achievements and improved environmental standards heralded for it to the Caribbean in the now enveloping global liberalization processes. In all of these concerns not one iota of support has been expressed by the USA, as it was also the case on the banana issue.

Furthermore, the resolution calls for participation of all concerned parties in policy development and implementation of sustainable tourism programmes.

The drive for this comes from two main sources:

1.      countries such as Jamaica, facing serious debt burdens and worsening trade terms, turn to tourism promotion in order to obtain foreign exchange and investment, and

2. from leading international agencies such as the World Bank, United Nations agencies and business organisations (like the World Travel & Tourism Council (WTTC) which hope to make tourism a truly global but sustainable industry.

A similar process has taken shape in relation to the Free Trade Area of the Americas (FTAA) negotiations. On the one hand, there is a vision of the FTAA, led by the USA, which anticipates an agreement to be completed by 2005, which is comprehensive and multilateral based on completely free trade by each and every partner country. This is the view of 13 countries.

This all inclusive approach, whether the country is weak or strong economically or otherwise would mean even greater freedom for non-Caribbean corporations to rise above national concerns and regulation; for non-Caribbean corporations to freely source agricultural products, furniture and building materials, for examples, from outside Jamaica and the region; and for value-chain issues in most goods and services not to be seriously considered.

Maybe, one day, apart from some Caribbean businesses, which have wisely spread out their operations into and outside the region, the rest of the Caribbean operations, if they survive the openness, may gain the strength to take on the multinational corporations.

To be sure, there will be still several niche markets possibilities, especially in ancillary services. In nearly all issues, the USA has been firm in support of its US based multinational corporations, in spite of deleterious social, economic, environmental and political fallouts in Caribbean countries.

The other 20 countries, led by Brazil, envision a more “realistic” process in which member states seek to achieve conciliation re their “offensive” interests and balance these against “defensive” interests. Indeed, this perspective is real in the sense that many of the negotiating committees are deadlocked and there is need for more conciliatory attitudes to prevail.

Caribbean countries are, understandably, reluctant to pursue a multilateral agreement within a single undertaking; reluctant to pursue an ambitious and comprehensive negotiating agenda on all issues by 2005; are anxious for tourism issues to achieve special treatment and are reluctant to include labour and environment issues in the negotiations.

On all these issues, the US and its allies are most aggressive in denying their primary importance for small and developing states.

Caribbean countries are favouring an approach which pursues flexibility in negotiating at bilateral or multilateral levels without obliging countries each country to the same commitment; favour a reduction or reshaping of the negotiating agenda; support compensations mechanisms to balance out socio-economic differences, as well as would wish to negotiate agricultural subsidies in the interest of food security.

Nevertheless, after conciliatory dialogue with the United States Trade Representative (USTR), Robert Zoellick, in 2002, a compromise was reached at the meeting of the FTAA Trade Negotiating Committee in Santo Domingo that allows CARICOM to start negotiations on the basis of higher tariffs for a limited number of agricultural products, still to be defined.

Doubtful as it stands, this may nonetheless prove to be a prelude (?) to the achievement of a comprehensive package of special and differential treatment for the smaller economies in the FTAA.

The US, on the other hand is puzzled by the Caribbean support for Cuba’s participation in the OAS and in discussions on the FTAA, which explicitly excludes Cuba. The Caribbean has also incorporated Cuba in some of its councils and has even allowed investment in and travel to Cuba. Caribbean relationship with Cuba has, for a long time, been a major irritant to the USA.

The Caribbean Basin Initiative was a President Reagan initiative for the entire region. However, it delivered far less than was expected. The US probably over-estimated what could have been accomplished through the CBI, assuming that much more was intended.

The reduction of some Caribbean debt for environmental action was a positive action on the part of the US but not the downscaling of USAID offices and financial and technical aid to the region, although critical interventions still continue through this source in the Region.

The problem which the Caribbean has, in an overall sense, is the benign neglect for countries which desire a much more productive relationship with the US in all dimensions of inter-state relationships.

The Future of US/Caribbean Relationship In many ways the Caribbean has lost its

strategic and military importance to the USA. Only Cuba, and maybe, in a different way, Haiti, remain of selective interests in these two aspects. The US actually believes that the FTAA will be equally beneficial for all countries in the region and that the best thing they could do is to completely liberalise trade and access in all aspects of economic activity.

With this deep belief, notwithstanding who is the President, the Caribbean will have to continue to insist on flexibility in its participation in trading and economic groupings, strengthen significantly the regional integration movement and even reach for a form of political union as both a protective mechanism and as a way of acquiring the ability to collectively compete in open markets.

The Caribbean countries cannot withdraw from participation in multilateral trading arrangements so they have to strive with all their might to improve the quality and responsiveness of the governance structures in these global and regional organizations.

The Caribbean needs rules based systems guaranteed by international collective action which can induce reasonable constraints from highly exploitative companies and countries operating at the global level.

It is not at all certain, if deadlocks become a feature of global trade, economic and financial negotiations, that rich countries will still support multilateralism. They may actually retreat back into national protectionism and bilateral and regional clout.

Either of these possibilities would deny the weak states of the Caribbean in the international system an assurance of equity and fairness.

May good sense prevail because there is much that can be mutually beneficial to the USA and the Caribbean alike in improving the governance of global and regional institutions and ensuring adherence to rule rather than might.

The EndThe End Neville C. DuncanNeville C. Duncan 100204100204