Country Report Belize October 1996 Main report

Regional review: Trade & security issues move to the fore--

The Caribbean Community (Caricom) leaders are turning their attention to the future of economic relations between the region and its international partners, as well as the challenge to security represented by drug-trafficking. The group's prime ministerial subcommittee on external affairs, which met in Jamaica on September 17-18, agreed to set up a series of working groups aimed at establishing a common regional position on these issues. The groups are to be supported by a broader consultative body, consisting of both government and non-governmental organisation (NGO) officials, and representatives of regional private- sector organisations, which have for some time been pressing Caribbean governments to pay more attention to the impending changes in trade relationships.

Among the major questions to be examined by the groups are the following.

Plans for the Free Trade Area of the Americas (FTAA, which it is hoped will be established by the year 2005) as well as the future of the Caribbean Basin Initiative and the North American Free Trade Agreement (NAFTA).

The consequences of the expiry of the fourth Lome Convention in 2000 for economic relations with the EU.

Relations with other countries in the Western hemisphere and with regional groupings such as Mercosur, the association of Argentina, Brazil, Paraguay and Uruguay.

The USA's increasing involvement in Caribbean security matters (in particular drug-trafficking), its opposition to the EU's preferential banana regime, and its efforts to impose economic isolation on Cuba.

Sir Harold St John, who was prime minister of Barbados in 1985-86, has been put forward as a candidate for the post of chief negotiator of the working groups. Vishnu Persaud, formerly of the Commonwealth Secretariat and currently director of the Centre for Environment and Development at the University of the West Indies, has been nominated for chief coordinator.

--as new anti-drug agreements are signed with the USA--

The USA has signed agreements with several Caribbean countries aimed at increasing cooperation in counter-narcotics operations, of which the most recent was an accord signed with Barbados on September 27. Previous agreements with Antigua and Barbuda, Belize, the Dominican Republic, St Kitts-Nevis, the four Windward Islands and Trinidad and Tobago have given US coastguard personnel the right to operate in the signatories' territorial waters. At the end of September Jamaica was reported to be close to signing an agreement which would give the USA right of pursuit in Jamaica's economic exclusion zone, but not within its territorial waters as such a move would be considered a threat to national sovereignty. The agreements came after State Department warnings that drug-traffickers had penetrated the highest levels of society and government in Antigua, Trinidad and Tobago, St Kitts and Nevis, Aruba, Jamaica and the Dominican Republic.

Earlier in the year, a regional conference on efforts to counter drug- trafficking had endorsed an EU initiative promoting cooperation in several areas, including coastguard operations, communications, the combat of money-laundering through improved legislation and prosecution procedures, and liaison with Latin American governments.

--but the banana issue remains unresolved

A dispute panel of the World Trade Organization (WTO) held an initial hearing in September on a complaint brought by the USA and four Latin American countries (Ecuador, Guatemala, Honduras and Mexico) against the EU banana import regime. The hearing on September 10-12 was expected to be followed by a further session in October, with judgment to be delivered in March 1997. Caribbean banana producers were allowed, after an initial refusal, to take part with third-party status.

The complaint challenges the EU's banana quota and licensing system, as well as its 1994 accord with Colombia, Costa Rica, Nicaragua and Venezuela, under which these countries agreed to accept the import quota system. Caribbean producers and governments argue that the outlawing of the EU banana regime--under which a group of African, Caribbean and Pacific (ACP) countries enjoy a preferential duty-free quota for bananas exported to the EU--would destroy the industry in the region and increase the vulnerability of Caribbean countries to drug-traffickers. The EU is at present the only market for Caribbean banana exports, and countries such as St Lucia, St Vincent and Dominica depend on the product for 50-60% of their export earnings.

© 1996 The Economist lntelligence Unit Ltd. All rights reserved
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