In the last few weeks there has been significant media interest in Europe in the influence that a small group of neo-conservative advisers and officials in the upper reaches of the US Administration now have over American foreign relations.
The suggestion is that at the heart of the White House is a belief, driven by religious convictions and supported by economic success and military power, that Washington’s actions are morally correct or superior to those of other nations.
Wrapped up with this is a sense that US foreign trade policy too must be driven from conviction: that is to say that free trade, irrespective of national circumstance has a moral value in its own right. Put bluntly it is a view that suggests that if free trade is beneficial for the 290m people living in the United States then it must also be good for the 70,000 who live in Dominica’s failing economy.
On June 17 Sir Shridath Ramphal, the Chancellor of the University of the West Indies, the past Chief Negotiator for external trade negotiations and a former Commonwealth Secretary General, took an unusual step. Instead of following his customary style of enveloping his views within a speech or formal paper, he sent to the Caribbean media a four-page document for possible publication. This set out his view that a fundamentalist US-led trade agenda was endangering the future of the Caribbean by leading it precipitously into a decision on the Free Trade Area of the Americas (FTAA).
In his article, Sir Shridath argued that the Caribbean should call ‘time out’ from the forward rush to incorporate the Caribbean into the FTAA. The region, he argued, needs to create a space so that it can assess whether any decisions taken now on the FTAA may lessen the benefits that can be achieved in the other trade negotiations in which the region is involved.
Sir Shridath pointed out that alone in the world, the Caribbean is engaged in three parallel trade negotiations. That is: to enter into a FTAA agreement by 2005; to negotiate multilaterally tariff reductions and other trade liberalisation measures at the World Trade Organisation (WTO); and to achieve by 2008 an economic partnership agreement with Europe that will create a free trade area between the Caribbean and the EU.
The main thrust of his argument is that up to the 1999 WTO ministerial meeting in Seattle, the global free trade agenda had been dominated by a messianic belief in the value of free trade. However, since then the world has moved on and the sequencing the Caribbean agreed for trade negotiations – completion of a Caribbean single market, FTAA, WTO, EU – Sir Shridath believes, may be no longer best for the region.
This is because, he suggests, there has been a change in the basic assumptions prevalent when global negotiations to liberalise trade began.
Citing evidence from a United Nations study, Sir Shridath points out that developing countries are no longer prepared to accept a number of principles that are meant to govern trade though the rules and disciplines of the WTO. Governments are less prepared to accept single agreements that compel them to accept a trade package that applies to every type of system and economy. The concept of special and differential treatment has become of fundamental importance to smaller nations and is being extended beyond the realm of trade in order to defend national identity and needs. Small countries are becoming increasingly vocal about their inequality in relation to the ability of large wealthy nations to negotiate and participate in world trade structures. Dispute settlement procedures are lacking in credibility when small nations are unable to retaliate in trade disputes involving vastly larger neighbours or partners. And the WTO agenda is out of control for small nations who have not the capacity to deal the rapidly expanding number of issues seeking resolution at the WTO.
His view is that these developments point to the pressing need to establish new benchmarks at the WTO before concluding any Caribbean involvement in the FTAA. ‘The validity of developing country arguments against free trade fundamentalism (are becoming) more and more irresistible’ he notes.
Sir Shridath is correct. Developing countries have found a voice. They are now able to demonstrate that globalisation and freer trade does not spread benefit equally and may damage terminally very small economies. Europe too is just coming to recognise that the resulting economic and social instability in regions such as the Caribbean would not be in its interests.
The result is that positions are likely to change further. Academic studies on who benefits from liberalisation, the trade-offs required to achieve consensus at the WTO, the arrival of powerful alternative voices from Brazil, India, South Africa and China to say nothing of the voices on the streets all serve to lessen the ability of neo-conservative free traders in the US and elsewhere to impose their views.
If confirmation was needed about why the Caribbean must take stock, one only has to look at what the Presidents of Brazil and the US are discussing as this is being written. Reports from Brazil suggest that the present impasse between Mercosur and the US in relation to the FTAA may be overcome. Brazil (on behalf of Mercosur) will agree with the US to transfer the topics that both consider most sensitive in the FTAA negotiations to the WTO. According to the Brazilian Foreign Minister this now means that there will be an FTAA ‘lite’. Discussions on agricultural subsidies and anti-dumping rules, the chapters on services, government purchases, investments and intellectual property will be all left for resolution at the WTO. In other words the FTAA is turning into something akin to a Caribbean Basin Initiative for Mercosur.
Sir Shridath’s call for pause for thought is a reminder to Governments and negotiators that trade negotiations and politics are not some arcane practice, taking place in a vacuum. Trade negotiations are about employment and the lives and livelihoods of every day people and their ability to live free from confrontation and instability. Politics and the way the world thinks are in constant flux. Sir Shridath’s call for a careful review is timely.
David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.com June 20th, 2003
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