FTAA BALL IN US COURT

Was Trade Minister Ken Valley’s statement on Thursday that Caricom was putting a trade network in place so that should the Free Trade Area of the Americas (FTAA) not materialise there would be a free trade area involving Latin America and the Caribbean, meant as a hint that the FTAA may be stillborn?  Or was it instead a covert suggestion to the US that it should seek to accommodate the views of a majority of the other countries on protection, for example, with respect to agriculture and agricultural products? Should talks on the establishment of the FTAA, a free trade area embracing the Americas, North and South, and the Caribbean, with the exception of Cuba and the Overseas Caribbean Departments of France, falter it was envisaged that the Association of Caribbean States, headquartered in Port-of- Spain would act as a joint Secretariat for the area’s various trading blocs. 

These include in addition to Caricom (the Caribbean Community of Nations), the Andean Group and the Central American Common Market. This would mean an expansion of the role of the Secretariat of the Association of Caribbean States which would, in Valley’s words, act as a Secretariat of Secretariats. But Valley, even as he handled the question of the future of the FTAA with tact nonetheless, was constrained to point out that: “Whether FTAA materialises or not, we will see free trade between Latin America and the Caribbean.”  Should discussions on the FTAA end without the setting up of the body, Trinidad and Tobago and the other Caricom member states are not likely to be at the losing end, as a United States dominated NAFTA component of the FTAA would increase its market penetration of Caricom without corresponding benefits for the region’s non- energy and energy-based products.

Valley is clearly optimistic that the opposite would apply in expanded free trade agreements involving, but not restricted to, Spanish speaking and English speaking countries of Latin America and the Caribbean.  Instead, at the post-Cabinet news conference on Thursday, he pointed out that the benefits of a free trade agreement with Mercosur, a South American trading alliance, would embrace a wider market within Caricom for this country’s manufacturers. He called for greater economies of scale in production, which would, in turn, increase regional competitiveness. Caricom and Mercosur are holding exploratory discussions for a free trade agreement.  A Mercosur delegation, headed by Paraguay’s Foreign Affairs Minister, Leila Rachel de Cowles, is in Trinidad meeting with a Caricom team, led by Richard Bernell, head of the Regional Negotiating Machinery. 

Trinidad and Tobago, or to be more exact Port-of-Spain, has long been the front runner in the race for the siting of the headquarters of the FTAA, with Miami, of Florida in the United States, a distant second place. This clearly has made the George W Bush administration, with its preference for Miami, uncomfortable. There is the indication, however, that Latin American countries, particularly Brazil and Venezuela, are not keen on the FTAA being dominated by the United States. Meanwhile, Valley’s strong hint that the Free Trade Area of the Americas may not materialise does not necessarily mean any such position is set in concrete. What may happen is that the establishment of the FTAA may be setback for several years, or at least until the United States of America shifts its position on, say, agriculture, which in the US is heavily subsidised by Government, nearer to that of Brazil’s. The FTAA ball, as they say, is in the USA’s court.