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Caribbean Ministers Lobby for Small Economies

  By Dionne Jackson Miller 

MONTEGO BAY, Jamaica, Jul 1 (IPS) - Caribbean trade ministers are          intensifying efforts to win special recognition for the region's small economies in advance of November's World Trade Organization (WTO) ministerial meeting in Doha, Qatar.

Fresh from talks with senior WTO officials in this resort town last week, trade ministers from the 15-member Caribbean Community (CARICOM) are pressing the global trade body to create a special grouping of smaller economies to more effectively address their special concerns.

These include the Caribbean's high dependence on international trade, susceptibility to natural and environmental disasters, dependence on volatile earnings from a limited number of exports, limited scope for economic diversification, and limited human and technical capacity to implement an increasingly complex and cutthroat global trade regime.

WTO Deputy Director General Miguel Rodriguez Mendoza says the organization now has a "much better appreciation of the realities of the CARICOM countries, of their particular concerns, of the issues of interest to them, and of the challenges that CARICOM countries face in increasing their participation in the world economy." But the real test will be in translating this appreciation into concrete actions.

"This is not going to be easy, to create new categories of countries in the multilateral trading system, not only because of the definitional problems but because politically it is not easy to set (apart) a different group of countries and try to deal with their concerns in isolation," Mendoza says.

"The other approach that may perhaps lead us to better and quicker results is to look at the various WTO agreements and look at how they impact on small economies and in doing so to identify the specific provisions that may need to be included in those areements to really give some comfort to small economies.  That's work that has not been done yet but it's an approach that may be worth exploring, and will, perhaps, help us to move in the direction sought by most small economies," he adds.

It remains to be seen whether his argument will win Caribbean support for a new round of comprehensive global trade talks at Doha. The region's delegates were vociferous among opponents of a new trade round at the last WTO ministerial, in the US city of Seattle in 1999.

Jamaican Foreign Trade Minister Anthony Hylton says CARICOM is "not  unalterably opposed to a new round" but has yet to see critical concessions from Canada, the European Union (EU), Japan, and the United States that would indicate that developing countries can confidently participate in a new round of talks.

"I think the environment for a new round has improved somewhat, but there are some very important concerns that still remain," says Hylton, who is the spokesman for CARICOM as well as African, Caribbean and Pacific (ACP) trade ministers. "Chiefly, we have pointed out that the concerns having to do with the implementation issues that we pointed out before and during Seattle and since the Seattle round are still not yet addressed sufficiently."

Like other smaller developing countries, Caribbean states fear that import barriers in industrialized countries are falling too fast. CARICOM has called for measures to protect its vulnerable exports from larger competitors and binding commitments on technical and financial assistance to help its members to participate in and adjust to the new trade rules.

CARICOM fears, for example, that EU moves to grant so-called least developed countries quota- and duty-free access to the European market, however laudable, constitute an imminent threat to Caribbean commodity producers.

In addition, CARICOM members say WTO market-opening regulations could, in effect, dismantle intra-regional trade arrangements that provide unrestricted access to each others' markets for goods originating within the community.

Trade among CARICOM members accounts for roughly 23 percent of the community's total exports but for smaller members, the intra-regional arrangement is a lifeline: St Vincent and the Grenadines earns 49.1 percent of its export earnings by selling goods to fellow community members. Dominica relies on intra-regional trade for 78.3 percent of its export earnings, according to a CARICOM  report.

WTO Director General Mike Moore says that with 1.2 billion people subsisting on less than one dollar per day worldwide, and 1.6 billion eking out a living on less than two dollars per day, poor countries' best hopes of raising living standards lie in a new trade round. Research findings, he says, "show what this could do for the world economy."

"If you cut trade barriers by a third, you've added, in real terms, a new Canada to the world economy. Think of the jobs. If you do away with the lot, researchers show, that would be like adding two more Chinas to the world economy. Think of  that as an implication," Moore urged the Caribbean ministers.

Billie Miller, deputy prime minister and foreign minister of Barbados, sees it quite differently. Trade and economic liberalization is said to have unleashed robust economic growth, she says, but the results have not accrued evenly to all countries.

"The truth is that some have regressed. The number of countries classified as least developed countries is increasing, it is not decreasing," Miller says. "The gap between developed countries and the vast number of developing countries is growing wider despite the varying reforms being implemented at the domestic level.  This situation is unhealthy, it is unacceptable."

Miller adds that although the WTO is committed to the principle of reciprocity, the gap between rich and poor countries will continue to widen unless specific measures are introduced to bring about equity.

Indeed, CARICOM officials say the region so far has not seen the promised benefits of participation in the multilateral trading system. Prices for many of its commodities have fallen, yet traditional safety-net mechanisms to protect producers from volatility under the former Lomé Conventions and under the International Monetary Fund have been removed.

In addition, governments' withdrawal from the commodity sector has exposed the domestic private sector to competition from larger foreign firms with relatively easy access to finance.

The EU and United States are pressing hard for a new WTO round to be launched in November but CARICOM has yet to make a definitive statement regarding its participation in any such round.

By the end of the month, the WTO expects to complete drafting the declaration to be adopted at the November ministerial in Doha. Intense negotiations are sure to follow, officials say, adding that the CARICOM and ACP positions will solidify in response to the draft.

Hylton says, however, that a new CARICOM position is unlikely to emerge from this      week's meeting of regional heads of government in The Bahamas.

"We have until November," he says. "Even if we had settled a point of view, it may  not be tactical or wise to say it now."

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July 15, 2001

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