U.S.-Caribbean Relations.

U.S.-Caribbean economic relations since 1950 divide into two periods: 1) the cold war era, when security concerns about communism shaped U.S. policy, and 2) the post-cold war period, when the importance of the Caribbean to U.S. strategic interests has diminished, and U.S. policy is driven by a new set of concerns.

The Cuba trade embargo and the 1984 Caribbean Basin Initiative (CBI) were two economic initiatives that emerged due to U.S. security considerations. The CBI was a unilateral program of economic assistance and trade measures for Central America and the Caribbean that President Reagan established to counteract the perceived spread of communism. The CBI, which excluded Cuba, extended its programs to the Caribbean Community (Caricom), an economic grouping comprising the English-speaking Caribbean, Haiti, and Suriname. Reaction to the CBI was mixed in both the Caribbean and the United States. Although Caribbean countries welcomed both the infusion of economic aid and the trade openings to U.S. markets, the CBI's unilateral approach was criticized as "gunboat economics" and reminded the region's residents of the 200-year history of U.S. military intervention. Under the CBI, U.S. corporations increased their operations in the region beyond their longstanding and significant interest in bauxite and oil.

Among the CBI shortcomings was the exclusion of textiles and apparel from duty-free treatment--a reflection of successful lobbying by U.S. business and labor. Although the CBI did spur export production, investment, and job creation in the Caribbean, U.S. commercial interests were the primary beneficiaries. The CBI turned a U.S. trade deficit with the beneficiary countries of the Caribbean into a sustained surplus.

Following the cold war, U.S. economic initiatives tapered off, and three issues--narcotics, immigration, and, most recently, concerns about preferential tax regimes--have replaced the traditional concerns topping the U.S. security agenda. These new issues have engendered a confrontational relationship.

The U.S. has a certification policy that imposes financial sanctions against governments Washington deems uncooperative with its antidrug campaign. In 1996 the Clinton administration was apparently preparing to decertify Jamaica, although the threat was not enforced. The dispute, however, did precipitate the U.S.-Caribbean Summit in Barbados in 1997.

But security issues do not follow a one-way street. Caribbean countries also have security concerns about relations with the United States. Caricom, for example, has voiced its concerns about gun smuggling from the U.S. and about the U.S. deportation of criminals of Caribbean origin back to the region. More fundamentally, Caribbean states contend that the security and stability problems in the region are rooted in economic development and thus cannot effectively be addressed in isolation from strategies to improve economic conditions. Accordingly, the Bridgetown Accord, the statement produced by the 1997 summit, "recognise[d] the inextricable links between trade, economic development, security and prosperity in [these] societies."

Although the new security interests play a part in defining the second period of U.S.-Caribbean relations, the changes occurring in the international arena are an even more significant factor. One is the demand by governments of developed countries for reciprocal (nonpreferential) trade to be globalized within the World Trade Organization (WTO)--meaning that the same trade rules would apply to all countries, regardless of their state of economic development. U.S. expectations that Caricom countries would comply with this demand were reflected in Washington's complaint to the WTO that the European Union (EU) arrangement for the preferential access of Caribbean bananas to the European market discriminates against U.S. corporate banana producers in Latin America.

The other major development was the establishment of the North American Free Trade Agreement (NAFTA), which the U.S. envisioned would expand into a hemispheric free trade zone. Caricom countries fear that both CBI benefits and those of other U.S. preferential arrangements (such as the Generalized System of Preferences and the Harmonized Tariff Schedules) will be undermined. A similar concern is that the international trade rules that give preferential access to poorer nations (as a means to address the asymmetries of the global economy) might be lost in the name of free trade.

In 1993, Caribbean countries began to lobby Congress and the administration to grant them NAFTA parity by offering the same market access conditions available to Mexico, until Caribbean economies become better prepared to embrace full reciprocity. In addition, the Caribbean nations hope to maintain or increase market access to the U.S. either by acceding to NAFTA or (more realistically) by becoming part of the proposed Free Trade Area of the Americas (FTAA), a hemispheric free trade agreement that is to be negotiated by 2005.

Key Points

* The CBI provided nonreciprocal duty treatment to a wide range of U.S. imports from the Caribbean.

* Consistent with the global trend toward trade liberalization, the U.S. is replacing preferential arrangements with reciprocity as the basis of its relations with the Caribbean.

* The U.S. has unilaterally determined the frameworks within which U.S.-Caribbean relations have developed.

Cedric Grant, ([e-mail]) is a professor of international and Caribbean affairs at Clark Atlanta University, and former Guyanese ambassador to the U.S.