FTAA: Clear and present danger

The Insurance Association of the Caribbean (IAC) held its 23rd conference last week in the beautiful resort of Punta Cana in the Dominican Republic. This resort is approximately three  hours from the capital, Santo Domingo but there is an airport only 20 minutes away that services this tourist area. Within a two mile strip, there are five hotels — one being 5 star and the four others 4 stars — operated by the Barcelo chain providing just over 2,000 rooms with a Convention Centre and an 18 hole golf course. The Dominican Republic has a population of eight  million which is more than the sum total of the English speaking Caribbean. In terms of the tourism plant, it is clear that a single resort with 2,000 high quality rooms probably exceeds the total room capacity available in all of Trinidad and Tobago and any plan that this country has in terms of the tourism product and a thrust into tourism must be viewed in the context that we simply do not have the capacity and capability of our Caribbean neighbours to be a serious competitor. This is not to say that there might not be some niches that we could explore but to offer the traditional tourism product would find us severely wanting. The Organising Committee decided that they would take the opportunity at this Conference to focus the region’s attention to the FTAA, GATS, and the CSME and one full session was devoted to the current negotiations. What emerged demonstrated clearly that Trinidad and Tobago had a continuing leadership role to play in the region since the Trinidad and Tobago private sector had been actively following the negotiations for almost two and a half years  years and had in fact been a participant in trying to get its views known and heard. It is somewhat unfortunate that many of the key players in the region had only a superficial knowledge and a passing interest and knew very little of what was going on in the negotiations and worse how they were likely to be affected.

Discussions and negotiations are carried out by governments but governments do not trade — it is industry and business that trade. The developed countries have the resources — both human and capital — whereas developing countries continue to struggle to cope with all the world issues that are taking place and therefore they are always in a better position to win out in these negotiations. For instance, even in Trinidad and Tobago the insurance companies have been putting forward their position while other elements of the insurance industry (eg insurance brokers, intermediaries, adjusters etc) seem to have little or no interest whatever and it is very possible that decisions could be taken which are inimical to their interests. The developed countries, more specifically the USA, have been fully briefed by their private sector industries to request issues of market access, cross border trade, open market conditions etc and the government negotiators are articulating in the negotiations what their private sectors want. These are not the government negotiators’ views but industry and private sector and that is what the negotiators are trying to win for their people. In Trinidad and Tobago in particular, the private sector has been at the forefront of putting their position to the negotiators in the FTAA and GATS but it is still limited to only some industries although initiatives have been taken to include a much wider interest group and over time more businesses will be involved. However, the risk is that it could all come too late as the timetable for the conclusion of negotiations draws nearer. Too often, negotiations are concluded, positions adopted and the people who would ultimately be affected find out when the “ink has dried” and thereafter they have to make the necessary adjustments and live with the consequences. Of even greater concern is that, many of the persons involved in the insurance business in the Caribbean, have little understanding of what is taking place in the FTAA and GATS. In this regard, the Insurance Association of the Caribbean (IAC) as an umbrella body that can speak on behalf of the region at the level of Caricom has decided that it will obtain feedback from its member territories and then formulate a common position for the region which can then form the basis for a regional approach at the Regional Negotiating Machinery (RNM). It is my understanding that the IAC will convene a meeting no later than mid-September to consider all the views as a follow up to what emerged from the conference.

However, time is of the essence as we are only 18 months away from the coming into being of the FTAA. Meanwhile, developed countries have already made requests of individual territories in the region for greater commitments to a more liberalised trading environment that will further expose domestic companies to the possibility of increased foreign competition. While the Heads of governments have a structure for achieving a degree of uniformity and commonality in the RNM, it must be remembered that individual countries sign the agreements and requests and offers are decided at a bi-lateral level. Importantly, it came out very forcefully that as the region moves towards negotiating the FTAA and GATS, there is a realisation that it is imperative for the much — talked about Caribbean Single Market and Economy (CSME) to be fully operational in the shortest possible time. It is urgent that a single market and economic space is created that will treat with six  million people without borders as a priority even before the coming into being of the FTAA but it seems most unlikely that the CSME will be a reality any time soon as much work has to be done. The lesson learnt from the Conference is that the region is largely inadequately prepared for the FTAA. There remains insufficient preparation to face the negotiations and many sub groupings within the private sector are simply uninformed and disinterested and will only find out the impact when it is too late. Nonetheless the work must go on and the negotiators will be better served if they can be provided with positions that they can take to the negotiating table.
e-mail: daquing@cablenett.net