Elizabeth Morgan | CARICOM-US relations: What of CBI?
You will recall from previous articles that the Caribbean Basin Initiative (CBI) comprises the Caribbean Basin Economic Recovery Act (CBERA) and the Caribbean Basin Trade Partnership Act (CBPTA). CBERA’s duration is indefinite, but CBPTA, which amends provisions of CBERA, will expire on September 30, 2020 and would need to be extended.
CBERA/CBPTA, which are US legislation, allow the now mainly Caribbean beneficiary countries, including Jamaica, to export goods to the US duty-free. The USA is the principal trading partner of all Caribbean Community (CARICOM) member states and has a significant merchandise trade surplus with the region, which was US$7.1 billion in 2018 from US census statistics. Of CARICOM’s total exports to the USA in 2018, valuing US$6.2 billion, US$1.5 billion entered under CBERA/CBPTA.
As CBERA/CBPTA provide non-reciprocal market access to a limited number of countries, in the World Trade Organization (WTO), it requires a waiver from the Most Favoured Nation (MFN) principle. The current waiver sought by the USA in 2014 will expire on December 31, 2019.
US ITC BIENNIAL REPORT
Note that regular reports are required on performance and compliance under CBERA/CBPTA; under the WTO waiver decision, by the US Trade Representative (USTR) under CBERA Section 212, and by the US International Trade Commission (ITC) under CBERA Section 215. The US ITC’s 24th biennial report to the Congress and president on the impact of CBERA on US industries and consumers and the economies of beneficiary states is now due by September 30, 2019. A public hearing, in which the ambassador of Antigua and Barbuda to the USA, Sir Ronald Sanders, participated, was held on May 14 and written submissions are to be provided by June 3.
I would expect the CARICOM Secretariat, other CARICOM member states, including Jamaica, and interested parties, such as Caribbean private sector bodies, to make written submissions to ensure that their views on the benefits are filed supporting their advocacy for the extension of the CBPTA and a new MFN waiver at the WTO.
THE CBERA/CBTPA EXTENSION BILL
You will also recall that a bipartisan bill to extend the CBTPA and its provisions to September 2030 was introduced in the US Congress in February. It was referred to the House Ways and Means Committee where it remains. It does not appear to be high on the Congress’ agenda.
I would hope that consideration of the CBERA/CBTPA extension bill in Congress could be completed by September. This would mean that it has to pass the House and Senate and be signed into law by the president. Should this happen, the US would then be able to present a request in the WTO for a new MFN waiver.
This could be considered at a scheduled meeting of the Council for Trade in Goods in October or November and, if adopted, would go to the December meeting of the General Council for adoption. September is only four months away.
CARIBBEAN-AMERICAN HERITAGE MONTH
June in the USA is designated Caribbean-American Heritage Month. It was first proclaimed in 2006 under President George W. Bush. President Trump signed the 2019 Proclamation. During this month, Americans of Caribbean heritage and permanent residents from the Caribbean are recognised for their contribution to the country. It also provides an opportunity to highlight issues of interest to the region, the US’s third border.
Caribbean American Legislative Week will be held June 3-7 and on June 5, the focus should be on CBERA/CBPTA and the US/Caribbean Strategic Engagement Act and its Strategy when legislative briefings will be held at the Congress on Capitol Hill. The Washington-based Institute of Caribbean Studies is providing valuable support. The support of Caribbean Central America Action (CCAA), which has closed, will be missed.
Hopefully, the Caribbean is taking the opportunity of this month to accelerate its lobbying efforts in Washington DC in support of the extension of the CBERA/CBPTA. The regional private sector should be actively involved.
This will provide further support to work already being done by the CARICOM Caucus of Ambassadors in Washington, DC. I believe trade issues were mentioned when a group of CARICOM heads met with President Trump in March.
I understand that the US/CARICOM Trade and Investment Council (TIC), operating under the 2013 US/CARICOM Trade and Investment Framework Agreement (TIFA), will be meeting, June 6-7, in Miami, Florida. CBERA/CBPTA and the US/Caribbean Strategic Engagement Act and Strategy should be on the agenda.
I noted that the 2019 US/Caribbean Business Conference organised by the US Commercial Services and Florida bodies will also be held in Miami, June 5-6. It was sold out. CARICOM is a lucrative market for US goods exports which were valued at US$13.3 billion in 2018. CBTPA extension should also be raised at this conference. It seems the TIC was organised to coincide with it.
If the CBPTA extension bill cannot be adopted by September, the Caribbean will be hoping that the USTR is amenable to seeking an MFN waiver at the WTO for the existing CBERA/CBPTA, bearing in mind that it expires in September 2020. This CBI regime, at this point, remains of benefit to Caribbean exporters into the US market.
Evidently, there is a significant imbalance in US/CARICOM trade.
Elizabeth Morgan is a specialist in international trade policy and international politics. Email feedback to firstname.lastname@example.org