Wednesday 27th April, 2005

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Caricom cannot wait on FTAA

The recent announcement by Brazilian President Lula da Silva that negotiations for the Free Trade Area of the Americas have all but fallen off his government’s negotiating agenda is indicative of the state of the FTAA.

In the wake of that announcement, the planned restart of the talks at a March ministerial meeting was postponed to May 12.

Dismay over the FTAA negotiations has reached the US Government Account Report, a congressional document which indicts the co-chairs, Brazil and the US, for failing to bridge what seems an unbridgeable gap between the two countries.

The US is not prepared to negotiate away subsidies and protection for its farmers. Brazil says until those non-tariff barriers are removed, it will not negotiate the so-called Singapore Issues requiring Brazil and others to liberalise financial markets and the procurement of government services.

The FTAA has seriously fallen behind the 2005 schedule to have the hemispheric free trade market function to the benefit of all members, from the US and Brazil to Antigua/Barbuda and El Salvador.

The international community and international trade are breaking up into regional and now, with the FTAA, hemispheric blocs. To be outside those blocs would be to be without the possibility of developing trade in goods and services.

It is therefore not to the benefit of any country, especially a group of small, relatively underdeveloped countries such as Caricom, to be without a broader trading base than the one amongst member states.

The Brazilian President made that point quite clearly by indicating that his government would now spend its time attempting to broaden Mercosur, the trading bloc of the southern cone of South America. Moreover, he says his government will invest time and effort in attempting to give real life to the South American Community of Nations.

At the moment, T&T businessmen predominate in the Caricom trade group, and many have reached saturation point, with the regional market offering no more than a possible six million consumers. Expansion outside of Caricom is therefore vital for the local business community; it is going to be even more vital for a large external market as the Single Market and Economy begins to take on life and regional businessmen are combining their resources to produce for markets of hundreds of millions of consumers.

The deadlocked talks on the FTAA are therefore bad news for all countries of the hemisphere.

In the circumstances, Caricom must follow the example of Brazil and the other South American giants that are going ahead with alternatives, at least in the short term. Indeed, the United States has entered into a series of bilateral trade arrangements with Central American countries to ensure itself a trading base.

Caricom has a number of bilateral arrangements in various stages of implementation with countries such as Venezuela, Colombia, Costa Rica, the Dominican Republic and Cuba. In many ways, those markets are far more compatible with production levels and capacity in Caricom compared with the high-technology production of the more sophisticated North American markets.

The Association of Caribbean States has not fulfilled its potential. But T&T and the region must quicken the process in order to survive in international trade.





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