World Trade News: Neighbours line up at the door of Nafta - Caribbean basin nations hope for help to ease the pain
Central American and Caribbean governments are awaiting with more than passing interest an imminent US statement on measures to cushion the economic dislocation which the region expects from the North American Free Trade Agreement. However, Washington's proposals, promised by Mr Alexander Watson, assistant secretary of state for inter-American affairs, are likely to disappoint Caribbean basin governments which have been seeking a comprehensive package to allow free access to the US and Canadian markets. The US proposals could also be 'at a cost' to the region, say some Caribbean officials. Claiming that a more competitive Mexico, with free access to the US and Canada, will capture markets which Caribbean basin countries have developed under current trade agreements, the region has asked for 'parity' with Mexico in exporting to Nafta signatories. Some regional government officials and US legislators supportive of the Caribbean's concerns - which include the possible diversion of investments to Mexico - have now concluded that what would amount to a de facto extension of Nafta is unlikely. They believe that the US administration would not again willingly confront the coalition of opposition which fought the implementing legislation last November. The measures to be announced by the US are a result of discussions last year between President Bill Clinton and leaders from the Caribbean and Central America. Mr Clinton and his Mexican counterpart, Mr Carlos Salinas, assured the Caribbean basin countries that they would not be adversely affected by the implementation of Nafta, and that efforts would be made to protect their markets in the US and Canada. What the Caribbean basin countries want is quick action by legislators in Washington, and then in Ottawa and Mexico City, to ratify proposals by some US congressmen to put all the region's exports to the US and Canada on a par with Mexico's. The parity proposals are aimed at giving Caribbean basin countries an open door to the Nafta market for three years. During this time they would have the opportunity of negotiating their future trade relationship with the Nafta signatories, with the option of seeking membership either as individual states or as a group. 'President Clinton has said his administration will ensure that the benefits of Nafta are felt by the Caribbean countries,' said Mr Manuel Esquivel, prime minister of Belize. 'We are heartened by President Salinas' assurances that it is not Mexico's intention to take investments away from the Caribbean. But we remain apprehensive.' There is yet no indication of what the US administration will propose for the Caribbean basin. Mr Edwin Carrington, secretary-general of the Caribbean Community (Caricom), said he expected parity to be given to 'only a few' of the region's exports, including textiles. 'The parity issue, which is the first step we are seeking, is becoming a case of limited benefits for a very great price,' he said. While willing to give parity to a few products, the US wanted the Caribbean basin countries to meet new conditions, including bilateral investment treaties, intellectual property rights agreements, workers' rights and environmental legislation, democracy, good governance and accountability, Mr Carrington said. 'The costs of parity are much higher than we anticipated and any thoughts of full membership of Nafta are as far down the road as they ever were.' In presenting their case for parity, Caribbean leaders have argued that the US and Canada will also be the losers if there is extensive economic dislocation in the region caused by a loss of markets to Mexico. Mr P J Patterson, Jamaica's prime minister, claimed that many jobs in the US depended on trade flows between that country and the Caribbean region. 'Each Dollars 1bn of US exports to the region creates 20,000 new jobs in the US,' he said. 'In the past 10 years US exports to the Caribbean basin have doubled, making the region the tenth largest market for US exporters. As Caribbean economies grow our ability to absorb US exports will also increase. 'Currently 60 cents of every dollar earned by the Caribbean returns to the US through the purchase of US goods, compared with only 10 cents for each dollar spent by Asia. This is why we must pursue efforts to ensure that the question of the granting of parity be given early and positive consideration.' Without improved access to the US and Canadian markets to counter Mexico's benefits under Nafta, the Caribbean basin countries will have to continue depending on their current trade preference agreements with the US and Canada. The benefits from these were diminishing, said Mr Carrington, as the region's exports became less competitive and Mexican products enjoyed the benefits of the market. 'The Nafta playing field will never be level for the region,' he said. 'Nobody is going to give us an even playing field, but we have to work to make it less uneven.'
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