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Caribbean Nations Lobby For Extension Of The Caribbean Basin Initiative Acts To Allow Jurisdictions Continued Trade Preferences
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Caribbean Holds Pressure:
By Tameka Lundy -
Nassau, Bahamas:



This week, Caribbean lobbyists were back on Capitol Hill in the United States telling an investigative panel how absolutely imperative it remains to have the Caribbean Basin Initiative acts extended to allow jurisdictions in this region continued trade preferences.

They were giving testimony at a public hearing of the United States International Trade Commission, a move that was suggested by U.S. Congressman Charles Rangel of the Ways and Means Committee as a means of properly identifying the ways that U.S. trade and aid policy can most help the Caribbean Basin.

“The OAS would support the renewal and extension of the CBTPA in order to lock in the continued benefits to those countries presently reaping strategic economic and political benefits within the present construct,” said Secretary General José Miguel Insulza.

He was one of several Caribbean officials who gave testimony before the panel and argued that ending the benefits would have an extremely deleterious effect on the region.

Last June, at the Conference on the Caribbean, CARICOM said its trade relationship with the United States was in a state of flux and the commitment it secured from U.S. President George Bush to review and expand two Caribbean Basin Initiative acts was viewed as a step in the right direction towards normalizing the predicament.

At the end of September the Caribbean Basin Trade Partnership Act [CBTPA] will expire, ending temporary trade preferences for imports of apparel, petroleum and petroleum products, and several other products not otherwise eligible for preferences under the Caribbean Basin Economic Recovery Act [CBERA].

Those two CBI related acts require waivers from the World Trade Organization [WTO]. One of them expired in 2005 and the US has sought a renewal of that waiver from the WTO in order for countries in the region to retain their preferential status. Paraguay has been opposing the effort.
There has been no resolution before the WTO of the status of the CBI related trade relationship with the US.

The economic relationship with the US is vital to Caribbean development since the US, by far, constitutes the region’s largest market, source of technology and source of capital.
In 2006, there was $19 billion in two-way trade between the two and the US imported $2.4 billion worth of goods from CARICOM countries.

“The issue therefore is will those acts be renewed and if they are renewed, outside of the time when President Bush’s fast tracked trade authority runs out in June of [2007], can we depend on the US Congress, which would then have to approve trade pacts for the renewal of those CBI related agreements and that is the fundamental matter before us,” Former CARICOM Chairman Owen Arthur said on the fringes of talks held in Washington, D.C. last year.

On Tuesday, Caribbean officials were back at it, seeking to convince U.S. decision makers of the region’s economic vulnerabilities and other constraints many of the countries face.

The arguments have been almost centrally focused on an expansion of the trade laws that favour trade in services.

The OAS secretary general said financial services provisions should be included as well, given the important role of remittances.

“An expanded CBTPA could provide for the establishment of local banks within the US, which is the main gateway for these transmissions, to accept deposits and make the transfers back to their home countries,” he said.

“This mechanism would strengthen the capital base of these banks and also expand the ability of local banking institutions to provide sorely needed funding for investment and entrepreneurial development.”

Several other ambassadors and Caribbean officials testified at the hearing including the Caribbean Community’s Assistant Secretary General for Trade and Economic Integration Irwin LaRocque. He tried to show why trade relations between the U.S. and CARICOM should be placed on a permanent and predictable footing.

The investigation that the committee is carrying out is a review of the economic growth and development of the Caribbean region.

The Ways and Means Committee requested that the International Trade Commission institute a fact-finding investigation to provide a report containing information that will assist the Committee in identifying the ways that U.S. trade and aid policy can most help the Caribbean Basin.

The committee expressed a need, in deciding on the best policy moving forward, to examine past successes and failures of the region’s economic growth.

Meantime, CARICOM has also said that an Economic Partnership Agreement with the US is what Heads of Government desperately want as tangible proof of a more mature relationship with the northern superpower.

U.S. President George Bush has committed to working with Congress to extend and update the CBI and the Trade and Investment Framework Agreement. Both sides have vowed to harmonize the customs procedures consistent with global standards and the advancement of technical trade cooperation.

31 January 2007

January 31, 2008 | 6:44 PM Comments  0 comments

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