Globalization limiting Caribbean integration

Jul 03, 2009 Letters

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Dear Editor,
The World Trade Organisation (WTO) exploits globalization solely to the advantage of the developed world; globalization has fast become the principal ‘exploitation’ instrument of the WTO.
And of course, we can speak of globalization as an external shock, bringing the following: increasing pressures to liberalize multilateral trade; the economic stranglehold that the WTO has on poor, small, and vulnerable economies; constant migration of skilled professionals; and the liberalization of the European sugar regime with drastic sugar price cuts, effectively general erosion of long-standing trade preferences of the European Union (EU). For Guyana, this drastic price cut will produce a yearly loss corresponding to 5.1 percent of GDP and 5.4 of merchandize exports.
And so, the WTO, in the name of trade liberalization, really, is the chief culprit behind the termination of the preferential access to sugar from 20 Africa, Caribbean and Pacific (ACP) countries.
We may recall that the preferential European Union (EU) market access started life in 1975 whereby that access really was for agreed quantities of sugar at guaranteed prices, negotiated annually. The preferential quota had an equivalence of some 1.3 million tonnes per year.
The Economic Partnership Agreement (EPA) in a large way represents the replacement for the ‘trade’ chapters of the Cotonou Agreement; the expectation during the negotiations process was that the EPA would be WTO-compatible, but the EPA evolved into a WTO-plus document; not necessary.
This EPA, however, is not a solid agreement in the interests of Caribbean people, as it carries no appropriate development pillar; the EPA will induce loss of import duties; and the EU’s market access in the Caribbean, while creating competition, is a competition that mainly would be to the advantage of the EU. Loss of critical import revenues and rising prices of essential imports will adversely impact the balance of payments’ deficit of Caribbean nations.
The Caribbean already is reeling from a high food import bill, and food prices are expected to soar even further. Food security has to be the watchword; whereby the Jagdeo Initiative in Agriculture now carries greater meaning for all Caribbeanists.
And so we must know that all developed countries always act in their own interest first. Globalization is the developed countries’ political tool to sustain dominance and limit development among the poor.
Two major changes in ‘globalization’ logistics have hit the deck. Globalization has become a fashion contest; and to be in it is to be ‘hip’. Globalization is no longer a standalone operation; Globalization has become wedded to economic integration, not political and social integration.
Clearly, the wind of economic integration has stalked this Hemisphere. Evidence the following: The North American Free Trade Agreement (NAFTA), The Mercosur group, the Central American Free Trade Agreement (CAFTA) with the United States, the Dominican Republic’s trade talks with the United States and Central American countries, and Free Trade Area of the Americas (FTAA).
The Caribbean region, not to be outdone, has its own historical mark on integration, involving the 10-member British West Indies Federation with volatile beginnings, temporarily housed in 1958 and disintegrated in 1962; but disintegration with a consensus, a consensus that Caribbean nations need to cherish for self-sustaining development.
The Caribbean Free Trade Association (CARIFTA) in 1968 and the Caribbean Community and Common Market (CARICOM) in1973 demonstrated the resilience of Caribbean people to cooperate in sectors of agriculture, industry, education, health, culture, and sports; and the Caribbean Single Market and Economy (CSME), the most recent offspring, has now become the talking point after a long but understandable sojourn in hibernation since 1989. But it was a forced sojourn, beyond the control of Caribbean nations. Consider the global externalities’ impact.
How has Caribbean integration fared so far? Pattnayak (2004) evaluated Caribbean integration efforts through comparing the More Developed Group (MDG) with the Less Developed Group (LDG) in 2000; MDG: Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad & Tobago; LDG: Antigua and Barbuda, Belize, Dominica, Grenada, Haiti, Montserrat, St. Lucia, St. Kitts and Nevis, and St. Vincent and the Grenadines. Pattnayak found: 1) The MDG had a higher annual growth rate of GDP per capita; 2) The MDG had a greater Human Development Index score; 3) The LDG had higher poverty rates, 4) The urban population had increased in both groups; 5) Exports as a share of GDP declined for LDG, not so for MDG; and 6) The MDG attracted more net foreign direct investment.
Uneven economic performances are glaring between the two groups, the MDG and the LDG; but the unevenness is even more conspicuous among individual member countries.
Extra regional forces, internal politics, and incompatibilities have reduced the effectiveness of Caribbean integration. Pattnayak (2004) believes external factors as the Cold War, the major oil crises, the liberation of Eastern and Central Europe, the US Administration’s changing political worldview of the Caribbean, have significantly impacted the regional policy framework of Caribbean integration.
As an example, Reagan’s Caribbean Basin Initiative (CBI) in 1983, and its two expanding pieces of legislation in 1990 and 2000, devastated CARICOM’s integration policy framework. Due to the distinction between the CBI and NAFTA, CBI nations are facing some disinvestment and slower export growth to the US than in the pre-NAFTA period (before 1994). Anthony Payne notes that the Reagan Administration ensured that “the USA steadily succeeded in reshaping the agenda of Caribbean politics and economics to the point where, in almost every arena, it was able to lay down the parameters of what could be done and even what could be thought.”
The CSME’s first few years of life suffered high morbidity. The CSME was born at the time of the end of the Cold War when the Caribbean became less significant in US Foreign Policy vernacular; and the Caribbean was reduced to the diktat of substitutes as the International Monetary Fund (IMF) (Boxill, 1999), and indeed the World Bank, with the USAID, IDB, etc., as the other stand-ins. Globalization has begun to take its toll on Caribbean integration.
The WTO Treaty, insisting on multilateral and reciprocal trade liberalization, functioned to undermine some Caribbean nations’ one-way preferential trading arrangements with both the European Union (EU) under the Lome Convention, and the US under the CBI. And the US as the chief agent of globalization has not truly addressed NAFTA’s emasculation of Caribbean exporters’ preferential advantages under the CBI.
Notwithstanding globalization’s positive impact for many poor nations, these nations cannot afford to be complacent; countries in the periphery have to refine and broaden their regional integration to get even close to a competitive advantage with developed countries in the world system. And so, Latin America today is turning out to be an important ally.
Prem Misir

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