• by IPS Correspondents (washington)
• Tuesday, December 20, 1994
• Inter Press Service

WASHINGTON, Dic 20 (IPS) - The western hemisphere's smallest members are uneasy about competing on equal terms with their larger neighbours as they face the challenge of forming a single continent-wide free trade area as agreed upon in the recent Miami summit.

"When the water rises too fast, small boats can capsize," warned Cthur Owens, the Prime Minister of Barbados, in the closing ceremony of the Summit of the Americas.

Caribbean and Central American countries attempted to make their concerns heard regarding the procedures by which a free trade area stretching gom Alaska to Argentina would be implemented by the year 2005, as agreed upon by 34 heads of state and government.

"We had to fight hard to get our concerns included in (summit) discussions," said Joseph Edmunds, Santa Lucia's Ambassador to the United States.

Commercial attache to the Costa Rican Embassy in Washington, Carlos Silva, also said "we want to be good partners, but to do so we will need help."

Silva pointed out that if small countries are to lose the preferential access they currently enjoy in the U.S. market, the process must be gradual.

Edmunds warned that small Caribbean producers, many of whom work on a craft industry level, will be hard-pressed to deal with a flow of U.S. goods produced with lowcosts on a large-scale that could overrun local production.

Such concerns led to the inclusion in the summit plan of action of clauses that provide for technical assistance to go to the hemisphere's weakest economies, in order to improve compeitivity and reduce the social impact of the adjustments the economies will suffer.

Both Central America and the Caribbean currently enjoy preferential access to the U.S. market provided by the Caribbean Basin Initiative (CBI), also designed to make the sub-region more attractive to investors.

But Edmunds and Silva protested that benefits provided to Mexico by the North American Free Trade Agreement (NAFTA), which joins the Latin American country with Canada and the United States in a free trade area, virtually cancel out concessions provided by the CBI.

"What we (Central Americans) want is immediate access to NAFTA, and to become full members in the not too distant future," said Silva. He added that there is "a prke that must be paid" in order to become part of a free trade bloc, referring to the elimination of measures designed to protect local industry.

Despite the fact that all nations are to compete on an equal basis in the the American Free Trade!greement (AFTA), Central America and the Caribbean hope to maintain preferential access to the U.S. market, their main buyer of goods and services.

A study by the Institute on International Economics indicates that both Central America and the Caribbean find themselves in relatively poor condition for being incorporated into a free trade area with the United States.

Central America was given 2.7 points on a scale of five in terms of its preparation for joining a free trade agreement, while the Caribbean received 3.7 points.

The ranking was based on variables such as price and monetary stability, fiscal discipline, foreign debt, market and taxation policies and the strength of democratic institutions.

However, the Cribbean average is affected by the performance of its largest countries - such as Trinidad and Tobago, Jamaica and the Bahamas - which according to the ranking are among the hemisphere's best-prepared nations, while the sub-region's smallest counuies were placed near the bottom of the list.

In the Caribbean, the situation varies greatly from country to country. For example, while Barbados has an annual per capita income of 11,000 dollars, the figure for Guyana is a mere 1,525 dollars.

According to the study, Central America's most serious shortcomings are a dependence on import tariffs and the slow pace at which economic reforms are being implemented.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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