WRONG_WOEID WRONG_WOEID

The US – Caribbean’s Friend or Unintentional Foe

The US – Caribbean’s Friend or Unintentional FoeIn what has to rate as one of the most insensitive and outrageous demands on a Caribbean country, US government representatives have told the Bahamas government that it must drop “all duties” on US products entering the country as a condition of being admitted to membership of the World Trade Organisation (WTO).

Should the Bahamas agree to do so, the country would lose the larger part of US$700 million that it earns from duties on imports, the vast majority of which comes from the US for obvious reasons of proximity. In effect, agreement to what amounts to a preposterous request from the US would create such a large hole in the government’s revenues that it would be impossible for it to provide the goods and services that the Bahamian people have a right to expect of their government. Incidentally, that includes fighting drug trafficking and curbing the inflow of refugees on which the US places great emphasis.

What is more, surrender to the US demands would have a wholly decimating effect on such manufacturing that occurs in the Bahamas or that may be introduced in the future as part of a chain of operations that adds value in the course of multi-country production.  If there is a phased approach to the reduction or elimination of duties on US products that compete with theirs, the present manufacturers would have the time to make adjustments to their production and marketing, and thus may survive.



Not unreasonably, the Bahamas Minister for Financial Services, Ryan Pinder, told his country’s Chamber of Commerce and Employers’ Confederation that his government rejected the US request on the basis that it would virtually wipe out the domestic economy.

Who are the advisers to the US government on its relations with the Caribbean?  Whoever these persons are, they could not possibly be the US diplomatic staff in the region who would understand, at the very least, the difficult international trade and financial environment in which Caribbean countries are operating.  In that connection, it would be a fair expectation that they would advise the US Trade Representative’s Office that to demand immediate removal of duties on all US products would harm any Caribbean country in whose economic development and social progress they should have a vested interest. The US, as a good friend, should be helping its small neighbours to enter and function in the WTO, not making entry tough for them.

If the US government is surprised when Caribbean governments do not vote with it on resolutions in United Nations bodies and in the Organisation of American States, its officials should understand that US government’s insensitivity to the development challenges of Caribbean nations plays a large part in determining how they vote.

In this context, the US does not help itself and it should not be distressed when Caribbean countries hail China as a better friend to Caribbean development than the US.  That salutation may not yet be entirely true – the US is still the largest market for Caribbean exports, the second largest home for its diaspora, and the largest source of tourists.  But, the scenario is changing as China provides grants, low-cost loans for infrastructural projects, hundreds of scholarships and technical assistance in agriculture and renewable energy projects.

The US government should not take the region for granted, and assume that because of their shared hemispheric location, Caribbean nations will automatically bend to the will of the US.  When Vice President Joe Biden met the leaders of the Caribbean Community (CARICOM) in May 2013, he pledged that US support for Caribbean economic growth and development. In turn, CARICOM leaders insisted that the US should back its words with actions, and, particularly, in the delivery of a definite framework for any "partnership for sustainable economic growth," and the conduct of trade "on a level playing field”. The Bahamas experience makes it look like the US right hand knows not what the left hand is doing in relation to the Caribbean.

Of course, the existing provisions for admission to the WTO are entirely disproportionate, disadvantageous and wrong for small economies.  They result in demands on applicant countries that are onerous and bear little relation to their size, significance or development status.  The US is making its current demands of the Bahamas based on the current provisions that were fashioned in large part by powerful nations. Under the system, existing WTO members review the trading practices of applicant countries, acting as judge and jury on the applicant’s trade regimes and making demands to which many of the developed countries do not adhere. Indeed, small applicant countries have been pressured to accept requirements that are not in the WTO agreements.

The provisions should have been changed long ago, but the developed nations won’t do so because those provisions suit them, and, regrettably developing countries have not used their combined weight in organisations, such as the 53-nation Commonwealth, the 79-nation Africa, Caribbean and Pacific States and the Organisation of American States, to press for urgent reform of the WTO procedures.

Even within the WTO itself, independent Caribbean countries have not used their votes and their intellect to build strong enough alliances to advocate for change.  Truth be told, only a few Caribbean countries have resident representation at the WTO and even those are poorly-resourced.  In this sense, Caribbean countries play into the hands of bigger countries.

The Bahamas Finance Minister has rightly warned that the US demands may arise when the Caribbean has to renegotiate the present trade agreement with the US that runs out next year.  In this connection, the Caribbean should long have been assembling the arguments for those negotiations with intellectual rigour.  They should also have begun to work out how far they are willing to accommodate the US and what alternatives are available to them.

At the same time, the US should be mindful that the trade of countries like the Bahamas – and indeed the Caribbean collectively – is less than 2 per cent of global trade in goods and is too small to pose any threat to US exports even with the duties that now exist.  Why, therefore, make demands that would harm countries who have been traditional friends and which have no desire to be anything else?

Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat.

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9 Comments In This Article   

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USA and US

#9 JD » 2014-04-21 10:45

This is how the USA treats everyone - even their own 'poor'. It's all about keeping people/countries in their 'places' so they can carry on pretending.

http://talkingpointsmemo.com/livewire/princeton-experts-say-us-no-longer-democracy
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RE: The US – Caribbean’s Friend or Unintentional Foe

#8 WING WANG » 2014-04-20 18:44

Black Obama killing black countries.
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WING WANG

stanges approach vs all at once

#7 tenman » 2014-04-20 12:33

My take on the issue after also reading caribbeannewsnow.com/topstory-Bahamas-rejects-US-trade-demand-20677.html is that the Bahamas wants to do it in a staged manner while the US wants it done all at once. The Bahamas plans to get the moneys lost from Duty reduction and removal via VAT. The problem they face is that local manufacturers are able to survive because existing duties make their goods more competitive. What will happen to persons who work in that industry when removal of duties ends up possibly destroying the local manufacturing sector? Will the US help provide local investments which will provide jobs for those displaced? At a time where job creation in the Caribbean is at a all time low, it would be suicidal for the Bahamas to accede to the US wishes
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tenman

...wrong...wrong...w rong....

#6 Jumbee Picknee » 2014-04-20 12:20

@wrong...wrong...wrong...
We in the Caribbean cannot compete with the manufactures from cars to fertilizers in the USA who are subsidized by the Federal Government with loans, grants and bail-outs. Most of Our Manufactures in the Caribbean are considered to be 'light manufacturing,' and are never subsidized except from their own pockets.
What the US wants, is to be like China and have Our markets become the dumping ground for most of their cheap goods and products which the consumers in the Caribbean usually end up paying high, ridiculous prices for.
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Jumbee Picknee

Wrong Wrong Wrong

#5 tenman » 2014-04-20 12:14

Wrong Wrong Wrong, please provide some examples of a sid which has reduced import taxes and it has been great for their economy?
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tenman

RE: The US – Caribbean’s Friend or Unintentional Foe

#4 Wrong Wrong Wrong » 2014-04-20 11:04

Mr Sander's like many Caribbean islands has a mentality of imposing ridiculously high duties on goods entering the country, which in turn stifles growth.

If these duties were reduced there would be a greater demand for these goods and growth within the country which in return would generate revenue from other taxes like sales tax and PIT. Other small countries have grasped this idea but the Caribbean still adhere's to this failed policy of taxing imports.

Also quite contrary to Mr Sanders assertion that decreasing duty would have decimating effect on such manufacturing, it is quite clear it would have the opposite effect since goods required for manufacturing would become cheaper and as a result the end product would become cheaper making the goods more competitive.

On a similar point how would the Bahamas feel if the U.S. was to level the same degree of taxes on their goods entering the country? Demand would soon drop to zero and the Bahamas would soon be complaining bitterly.
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Wrong Wrong Wrong

...milk from stone...

#3 Jumbee Picknee » 2014-04-20 10:58

As far as the USA is concerned, the People of the Caribbean Islands are a bunch of misfits, monkeys and apes who deserves to be caged and fed bananas while they allow Our Lands to be taken away from US and given to their own. The Europeans are no different. They (USA/Europeans/Asian s) still view US as 'food for fodder.' So, why are we so surprised that they would make such a ridiculous demand? They want us to squeeze rocks with our hands and produce milk.
Marcus Garvey was so right...
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RE: The US – Caribbean’s Friend or Unintentional Foe

#2 carvaa » 2014-04-20 04:55

USA says do this to get in the WTO. Is this the same WTO that gave us the rights to go after the USA for the ills they have done on our gaming industry? and here we are 108 talking about sanctioning the great power house of the world. We run to the IMF for assistance and I wonder who really control the IMF. The sad thing about this we spending big money hiring all type of professional for nothing cause until the US is good and ready we may as well stand at attention. Some of the biggest most wealthiest countries in this world have had to bow down to the number one world power, we here making noise yet we still look to the US for assistance in many other areas. Reparations is another waste of time as I see it but good luck.
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carvaa

OBAMA

#1 joe grind » 2014-04-20 04:37

Those Dummycrats again.
OBAMA administration?
Must I say more.
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joe grind

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Sir Ronald Sanders

Sir Ronald Sanders is a business executive and former Caribbean diplomat who publishes widely on Small States in the global community.

 

 

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