Navigating the new dynamic

LAST week was a significant development in the relations between the United States and the small island nations of the Caribbean Community. Trinidad and Tobago hosted an official visit to the region by United States Vice President Joe Biden. Caribbean leaders, including our own Prime Minister, Dr. Keith Mitchell, held meetings with Mr. Biden and his delegation. It was in those meetings that both sides would have exchanged views on the current state of relations between the USA and CARICOM and explored opportunities on how to improve their ties in this changing global economic and political environment. CARICOM’s Chairman, Michel Martelly, who is also President of Haiti, summed up the discussions with Mr. Biden as very fruitful and insisted that they further strengthened the relations between the two sides.

One of the high points of the meetings was the renewal of a Trade and Investment Framework Agreement which, according to reports following the deliberations in Port-of-Spain, should benefit the Caribbean as countries look for ways to improve their economic situation. The view is that this arrangement will allow for more trade and investment, the latter being of immense importance to the economic revival of this region.

Still feeling the effects of the global economic recession, the Caribbean states are looking to tap into every opportunity which can contribute to growth. Once there is growth this would most likely bring about the benefits such as job creation and reduce the likelihood of Caribbean states falling into crisis.

Naturally, the Caribbean leaders are quite aware that apart from investment, the United States is an important source for many of the other factors that drive economic growth. It is a market for our goods and services, especially tourism, which is the lifeblood of all but a few of the economies in this region. In Barbados alone, the United States is the number two market for long-stay visitors to this country. For Trinidad and Tobago and others whose economies are based on natural resources, the USA is also important in those areas.

Since the 1980s the Caribbean Basin Initiative (CBI), created by the then Ronald Reagan Administration, has served to provide duty-free market access for Caribbean goods to the vast North American market. More Caribbean nationals reside in the United States than anywhere else and therefore remittances from around the USA to this region are a vital source of capital injections. For their part, Caribbean countries also absorb a considerable amount of US exports. All of these factors therefore underline the importance which both sides attach to each other.

There was a time – more so during the Cold War – when political stability in this region ranked as a cornerstone of American foreign policy. America’s preoccupation back then was to keep external influences out of the region. But that is the past and fresh issues have emerged that will continue to form the core of relations between the United States and the Caribbean, namely free trade, (the US) Foreign Account Tax Compliance Act (FATCA), money laundering and security.

With the changing world order where free trade and non-reciprocity are coming to the fore, the Caribbean has to paddle its own economic canoe. In the meantime, the region would be seeking every ounce of assistance it can get to guide its continuing development. It will therefore look to the recent trip by Mr. Biden to realise more meaningful co-operation in the future.