Caribbean & Central America - 17 February 2004

The Organization of Eastern Caribbean States (OECS) held its annual summit in Castries, St Lucia from 22-23 January. One of the main agenda items was the Free Trade Area of the Americas (FTAA), and the heads of government considered a paper on the implications of the FTAA for the OECS drawn up by the UN Economic Commission for Latin America and the Caribbean (UN-Eclac).  

The summit noted in particular the point made by the report that about 90% of OECS exports to the main hemispheric markets (US, Caricom, Canada) already enter duty-free, with the balance of OECS exports entering the US through the Caribbean Basin Initiative (CBI) - in other words, there would be little positive benefit for merchandise exports. The Eclac paper also suggested that the FTAA would have 'a significant negative impact' on OECS intra-regional trade within Caricom.

On the positive side, the Eclac report says that the OECS could derive greatest benefits from the FTAA in the area of services, but only if it is prepared to negotiate these benefits. As it happens, the 17th round of negotiations to create the FTAA ended without any agreements on 6 February. Peter Allgeier, the US co-chairman of the negotiating committee, denied that this represented a failure, but given the conciliatory noises coming from Brazil and the Mercosul trading bloc when the negotiations opened in Puebla, Mexico on 3 February, the result was widely seen as a setback. The FTAA is scheduled to come into force on 1 January 2005.

Cost/benefit analysis  
The OECS summit concluded that more work was required 'with respect to assisting the OECS member states to determine the cost versus the benefits of engagement in the FTAA'. St Lucia's Prime Minister Dr Kenny Anthony told the meeting that the current economic circumstances of the OECS 'underscore the need for a higher and deeper form of integration'.

The final communiqué included commitments 'to develop and activate a plan of action for the subregion's tourism sector'; to reactivate a technical committee on Economic Union (the summit was presented with a case study of the institutional and governance structures of the European Union); to develop a policy framework 'for the revitalization of agriculture'; and to advance such initiatives as common OECS citizenship and common passports.  

A commitment to implement the Caricom Single Market and Economy (CSME) by the end of this year also featured prominently in the final communiqué.