Caribbean leaders appeals industry to support free trade

Finding their region winning growing international attention and eager to keep up with the free-trade momentum, Caribbean civic and industry leaders are expected to push for business, environmental and political reforms during an annual meeting here this week. The private Caribbean-Central American Action group, which sponsors the conference, is calling on industry to take an active role in making the Central American Free Trade Agreement more than a paper deal when it takes effect next year.

Nicaraguan President Enrique Bolanos predicted the agreement would become an example for the rest of Latin America. Speaking to the press shortly before the event's inaugural dinner on Monday, he criticized countries such as Argentina and Venezuela that rejected a hemispheric trade agreement last month during the Summit of the Americas.

"There are countries that don't want it, they are committing a mistake for their people," he said Monday night. "But you can't force someone to drink water who is not thirsty ... The opportune moment will arrive when they see the great success of Central America, and they are going to become convinced."

Organizers of the event are also calling on the private sector to support a single regional economy for the mostly English-speaking Caribbean nations not included in CAFTA.

So far only a handful of those 15 countries have said they would join a single market, considered a likely precursor to a free trade agreement. CAA president Federico Sacasa, a former senior Bank of America executive and Nicaraguan native, said Caribbean nations can no longer afford to ignore globalization if they hope to reduce poverty in their struggling nations.

"Sometimes we're our own worst enemies," Sacasa said. "The private sector, which has been the enemy of change, needs to reach out together with civil society to be advocates for government changes." Toward that end, poverty and political instability, most notably in Haiti, are also on the list of topics for the conference, which ends Wednesday.

While in recent years the region has been on the back burner of U.S. foreign policy, the Caribbean or so-called "Third Border" is increasingly drawing U.S. attention. That change is due in part to its growing relationship with China, whose trade surplus with the United States has raised concerns for the Bush administration, as well as with Venezuela, whose president Hugo Chavez has become one of the hemisphere's most outspoken critics of the president.

"This has reawakened U.S. interest in Latin America in general and the Caribbean in particular," said Florida International University Economics Professor Antonio Jorge.

And with the recent failure to create a hemisphere-wide Free Trade Area of the Americas, the United States is also eager to sign in smaller trade agreements, such as the Central American treaty.

Still the Caribbean has an uphill battle in becoming a significant trade partner for the United States. The combined economy of its 22 major players, including the Central American countries, is equivalent to only about 1 percent of the U.S. economy.

The Caribbean Basin countries have signed regional trade agreements with the United States since 1983, but many quotas remain and the treaties must be renewed every few years. Sacasa noted that each of the islands has a different set of customs procedures, further complicating trade.

"We need to make ourselves more attractive for investment." Many of the region's fragile economies face threats amid looming European sugar price cuts, and even their booming tourist industry may be reaching its limits, said Daniel Erikson, a Caribbean analyst for the Inter-American Dialogue policy institute.

"As a percentage of the economy it will be very important, but how much can they really rely on that for growth?" Erkison said. The growing influence of China and Venezuela in the region increases the value of trade with these countries as much for political reasons as economic ones, Erikson aid.

Venezuela's Chavez has offered preferential financing for Caribbean countries interested in buying petroleum. Meanwhile China has courted the Caribbean countries in its effort to reduce Taiwan's international allies, reports the AP. I.L.