David Jessop, ContributorIN THE coming months, the English-speaking Caribbean may face a new trade challenge. It will be every bit as complicated to resolve as that presented by the negotiations at the World Trade Organisation (WTO) or with Europe.
The region's 5.5 million English speakers will have to determine how to incorporate into CARICOM, the Dominican Republic, a nation of 8.9 million people and a country that is quietly regarded within the Anglophone Caribbean as a competitor and an economic threat.
In a region beset with difficulties relating to the incorporation of the smaller, but culturally homogenous states of the Eastern Caribbean into the single market, the economic integration of a nation that is significantly larger than any other in the region, save Haiti and Cuba, presents unique problems.
Difficulties that will be added to by the need to now accommodate the Dominican Republic's participation in the Central American Free Trade Area (CAFTA) an arrangement that brings it together with the United States, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
Despite this, the Dominican Republic has sound economic development and trade reasons to want to be within CARICOM.
CARIB FREE TRADE AREA
On July 14, the Dominican Foreign Minister, Carlos Morales Troncoso, made a speech in which he made it clear that it was his government's intention to, as he put it, consolidate regional integration. The Dominican Republic sought to do so, he said, in the context of the commercial opportunity offered by the completion of an economic partnership agreement (EPA) with Europe.
He suggested that in order to achieve an EPA, the region as a whole "should put in place a free trade area in the Caribbean," in order "to negotiate with the European Union as a truly unified bloc, solidly grounded in common rules." Such an approach, he said, would bring benefits. The region would be "represented by the best negotiating teams," organised in institutions to which the Dominican Republic "would belong on equal terms".
To achieve this, the Dominican Foreign Minister suggested that common rules were required.
The 1998 Free Trade Agreement between the CARICOM and the Dominican Republic needed, he said, to be translated into a set of rights and obligations that would ensure the free circulation of goods, services and capital in the region.
CSME ACCESSION
Amendment was not a viable option in the short term. A better, but challenging, option might be the Dominican Republic's accession to the Caribbean Single Market and Economy (CSME).
In order to achieve this, the republic's Foreign Minister suggested serious consideration needed to be given to a detailed schedule and work programme.
The Dominican Republic's interest in a closer relationship with CARICOM reflects to a significant extent, its desire to maximise its trade and aid relationship with Europe.
The republic is a major recipient of EU development assistance and its desire for closer integration reflects the possible merger of Cariforum - which facilitates EU aid programmes for the Dominican Republic - into the CARICOM Secretariat.
But more importantly, from a trade perspective, the Dominican Republic is in a better position than most other regional nations to make use of the opportunities that an EPA with Europe will offer. If the republic is to take full advantage of new trade arrangements with the EU, it will need a seat within CARICOM, its interests fully taken into account by the Caribbean Regional Negotiating Machinery and the rapid identification of the ways in which its new CAFTA arrangement can be integrated into the CSME.
Seen from a European perspective, Dominican Republic membership of CARICOM has long been perceived to have political, economic and functional advantage. Thinking within the European Commission and EU member states close to Santo Domingo is that its economic and political weight, its culture, its security and stability, as well as that of the region, would be enhanced by a closer relationship with CARICOM and would add value to the region's relationship with Europe.
However, this in not necessarily the view in the English-speaking Caribbean.
Although the Dominican Republic and CARICOM signed a free trade agreement in 1998 that covers 400 products, both sides have avoided full integration because of fear the republic's economy might damage the economies of many of the region's smaller states. While the Dominican Republic has established close trade ties with Trinidad and, to a lesser extent, with Jamaica, there is a real fear that economies of scale and low wage rates will result in manufactured goods, as well as Dominican commodities, such as sugar and bananas profiting within the region and in Europe at the expense of traditional suppliers in the Anglophone Caribbean.
POLITICAL WILL
While these issues are not insurmountable and it is quite possible for the Caribbean Regional Negotiating Machinery to begin to flesh out a differential or asymmetrical agreement and achieve understandings in sensitive areas relating to sugar, bananas and rice, the bigger issue is whether there is any political will in CARICOM to integrate the Dominican Republic.
Although beset with uncertainties and, most recently, the preposterous suggestion from an influential U.S. policy think tank that the republic is potentially one of the world's failed states, the Dominican Republic's economy is recovering rapidly. Under the guidance of its President, Leonel Fernandez, it is making significant progress and is likely to be able to take full advantage of the CAFTA arrangements once they come into force.
However, the Dominican Republic has not yet done enough to assure its smaller Caribbean neighbours that it truly understands their problems, fragility and natural concern about a vastly larger neighbour with a different culture, political system and, at times, alternative business norms.
A vital step towards achieving a closer relationship between CARICOM and the Dominican Republic would be for its president to set out in detail, his vision of how a closer relationship with CARICOM may bring value to the English-speaking part of the region, as well as to his own country.
David Jessop is the director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org
