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CARICOM Moots Bilateral Trade Deal With The USA

by Mike Godfrey,, Washington

11 July 2006

A CARICOM summit meeting held last week in St Kitts and Nevis discussed abandonment of the Free Trade Area of the Americas (FTAA) in favour of a regional bilateral free trade agreement with the USA.

The meeting also saw six OECS member states sign up to the CARICOM Single Market - Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines.

Director General of CARIOM's Regional Negotiating Machinery, Ambassador Richard Bernal, said after the meeting that the FTAA was unlikely to come into effect before 2010, and that it would be possible to gain similar benefits from bilateral agreements with the North American states.

Ambassador Bernal said that the formation of closer ties with Venezuela (which was strongly represented at the meeting) should not impede trade agreements with the US.

The proposal to pursue a bilateral deal with the US and Canada was made formally by a ministerial sub-committee chaired by Jamaican Prime Minister Portia Simpson-Miller.

Recent months have seen a number of South American states, influenced by the outright opposition of Venezuela, begin to waver over the proposed FTAA. Venezuelan leader Hugo Chavez arrived at the 34-nation Americas summit in Argentina last November promising to 'bury' the idea of a Free Trade Area of the Americas (FTAA), although 29 of the nations present wanted to set a date for renewed FTAA negotiations in 2006.

Many of these nations, however, see progress on the FTAA as dependent on a successful outcome to the WTO's Doha Round - something which seems far from certain at this point.

"Anything we do now, before the WTO meeting, could confuse the facts and we'd be creating an impediment to the WTO," said Brazilian President Luiz Inacio Lula da Silva.

Last June, President George W. Bush said Washington would continue to push for the FTAA, saying that free trade would strengthen democracy in the Americas, and that a pan-American trade pact would unite the region in prosperity and reduce the risk of "false ideologies".

The effort to unite the economies of the Americas into a single free trade area began at the Summit of the Americas, which was held in December 1994 in Miami. The Heads of State and Government of the 34 democracies in the region agreed to construct a Free Trade Area in which barriers to trade and investment will be progressively eliminated.

Last year, Ambassador Bernal declared that the region is "actively positioning itself to re-shape the 'vision' of the FTAA, in accordance with Regional development goals and priorities."

At the time, a CARICOM statement explained: "The FTAA is an integral part of the strategic trade options being explored by the Region, in order to create sustained economic development in highly open economies. As such, CARICOM Countries continue to attach importance to the FTAA process and its objectives, despite the eighteen month hiatus and mounting expressions of doubt over the successful conclusion of negotiations.

"While the Miami Ministerial Declaration altered the original 'vision' of the FTAA, the objectives and philosophy which underpinned the vision of the thirty-four Heads of Government during the first Summit of the Americas in 1994 remain unchanged, and relevant to CARICOM Countries and their hemispheric partners.

"The establishment of a single economic space through the implementation of the CARICOM Single Market and Economy (CSME) remains an essential part of the Region's preparatory process for the FTAA. CARICOM Countries view the FTAA as forming the broad platform for their trade integration in the Hemisphere, and therefore are keen on the expeditious resumption of formal negotiations."

Now, says Dr Bernal, the United States has shifted its attention to the Doha Round, and some putative members of the FTAA have entered CAFTA, which reduces their interest in the FTAA.

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