Caricom trade negotiator, Ambassador Richard Bernal. - File

The 15-member Caribbean Community (Caricom) is considering approaching the United States for a bilateral trade pact, but it is months before the Community decides on whether it will go ahead, according to its top trade negotiator, Richard Bernal.

At the same time, Bernal yesterday told Jamaican business leaders that U.S. mid-term elections - which gave the Democrats both houses of Congress will do nothing to unblock global trade negotiations, stalled by differences between the United States and the European Union (EU) over farm subsidies.

Bernal's disclosure that Caricom is mulling a bilateral trade deal with Washington came as the leaders of Colombia and Peru lobbied U.S. law-makers in Washington for a skittish Democrat-controlled Congress to approve the agreements.

"We are in the process of deciding whether we should approach the United States for negotiations on a bilateral trade deal," Bernal told Wednesday Business after an address to business officials at a breakfast meeting hosted by the Private Sector Organisation of Jamaica (PSOJ).

Regional leaders would not make a decision before next year, he said.

Trade negotiations

Bernal, a former Jamaican diplomat, is head of the Caribbean Regional Negotiating Machinery (CRNM) which oversees Caricom's inter-national trade negotiations, including the Doha Round of trade talks, which have largely been mired in a trans-Atlantic squabble over agricultural subsidies.

He had earlier urged business leaders to be more involved in global trade negotiations, the problematic talks at the World Trade Organisation (WTO) on the stalled Doha Round of trade negotiations, and the unlikely propects for the legislative power shift in Washington to ease the log-jam.

The CRNM boss told his audience that neither the Democrats nor the Republicans they replaced are likely to be in a mood to significantly cut farm subsidies at this time. He suggested that any potential compromise on the matter, would hardly come before the U.S. presidential election, due in November 2008.

"I don't see either party willing to reduce subsidies before the next presidential election," he told the private sector bosses.

He afterwards told Wednesday Business: "Nothing is going to happen. The major sticking point at the World Trade Organisation is agricultural subsidies.... The Doha development agenda will go on and make incremental progress without a major breakthrough."

President George W. Bush's fast-track authorisation to negotiate a trade deal runs out next year, and

Bernal was sceptical that the Democrats-dominated Congress would give him a new one.

"I don't see any trade eligibility passing Congress right now," Bernal said. "The Democrats are going to want to see labour protection arrangements in the agreements and may even want to renegotiate some deals which have not yet been approved."

However, current US ticklishness over trade arrangement would not stop Caricom from exploring the pros and cons of a bilateral pact with Washington.

One possible attraction of a bilateral trade agreement, explained Bernal, is that while the Caribbean Basin Initiative (CBI), which provides preferential access to the American market for most regional goods is permanent, they require waivers from the WTO. "These waivers are increasingly difficult to get," he said.

Additionally, the CBI agreement covers only goods and does not include services and investment, which could be beneficial to Caricom.

"Many countries have gotten better market access than we have under the CBI," Bernal said. "CAFTA (Central American Free Trade Area) has better access. A bilateral agreement would permit to be more competitive."

However, Caricom countries, in determining whether they go for a bilateral trade pact with the Americans, would have to consider what they will be asked to give up Ñ and not just the opening of their markets.

For instance, Bernal noted, for some of the Caricom's smaller and less development members, such as Belize and of members of the sub-group, the Organisation of East Caribbean States (OECS) import tariff accounts for up to 50 per cent of government revenues. A trade pact that leads to a removal of tariffs could hurt these countries.

"When these countries sometimes seem reluctant (to lower tariffs) it not necessarily because they are protectionist," Bernal told Wednesday Business. "They have fiscal concerns. So, a decision on a bilateral trade agreement with the United States will be fully considered."

business@gleanerjm.com