An Insincere Offering? US Commitment to Free Trade in the Caribbean Basin
In recent weeks, the Caribbean Community (CARICOM) and the United States have agreed to resuscitate a long-dormant Trade and Investment Council (TIC) between the trading partners. Caribbean media sources have described this development as a boost for Caribbean-US trade relations as it is hoped that the council will facilitate trade and investment related issues between the two sides. But while the TIC forms another forum for trade discussion between CARICOM and the US, it is unlikely to prove fruitful in reaching any major trade agreement.
This skepticism was intimated by US Trade Representative Rob Portman soon after reaching the agreement with CARICOM Trade Ministers. In subsequent comments, Congressman Portman indicated that while the US is committed to arriving at free trade agreement with CARICOM, advancement in trade negotiations is dependent on the progress of troubled talks at the WTO level. In short, revitalization of the TIC means little without a US commitment to negotiations at the WTO Level.
However, WTO free trade negotiations have remained mired at the contentious issue of agriculture. While CARICOM counts itself among the developing nations who would like to see developed countries make more concessions in an agriculture free trade agreement, such is unlikely to result given the general trend such negotiations have taken. Since the inception of the Doha Round of WTO talks, it seems that developing nations have been the ones at the short end of the stick in agriculture free trade negotiations. While several developing countries have already lost preferential market arrangements and have been thrown into competition with large-scale agricultural producers, developed nations have been dragging their feet in abandoning the agricultural subsidies enjoyed by their producers. Such is the case with the EU’s Common Agricultural Policy(CAP) which though in the process of a lethargic phasing out, still represents a gross disadvantage to developing agricultural producers who receive little to no subsidy.
It is ironic that developing nations have been the first to make a sacrifice in the progression of a universal free trade policy. One of the stated ambitions of the 2001 Doha meeting of the WTO was that developing nations should get a trade round for free. This was to ensure that developing nations would not be the first to make concessions in order to secure the benefits of free trade. Five years later, we can see that it is the opposite that has happened. While developing nations have born the brunt of the initial sacrifices necessary for free trade, developed nations are holding on obstinately to their agricultural subsidies.
What does all of this spell for the newly agreed upon CARICOM-US TIC. It means that without a willingness to make sacrifices at the WTO level, a US commitment to advancing free trade with CARICOM at a regional level is not likely to result in much progress. Given the US track record of making such sacrifices, I wouldn’t advise CARICOM trade negotiators to hold their breath.