FTAA cannot be abandoned

Bahamas must join CSME, says Archer, Mitchell

By VANESSA C ROLLE,Guardian Staff Reporter

Too much money has been expended on negotiations regarding the Free Trade Agreement of the Americas (FTAA) for them to be abandoned, advised Ambassador to Caricom A. Leonard Archer.

He was addressing the luncheon of the Bahamas Chamber of Commerce held at the British Colonial Hilton on Thursday.

Mr Archer said that even though the FTAA will not be realised in 2005, the Caribbean has decided to maintain the 2005 deadline for the completion of the arrangements of the CSME. He said The Bahamas must determine whether it will join the CSME. However, it is the best interest of the country to join "and do so without delay."

"Although the negotiations for the FTAA are presently stalled, I believe that far too much time, energy and money has been expended on negotiations for them to be abandoned. The CSME was therefore intended to be the Caribbean's response to the changes (of the economy). It was decided that for a single market and economy to be established, the founding treaty of CARICOM, the 1973 Treaty of Chaguaramas, had to be substantially revised."

He explained that The Bahamas did not sign the revised Treaty in 2000 because of a fundamental change. The original treaty had the community and the common market as two separate entities, and countries were able to join the community and not the common market, he said.

There was significant consultation with the private sector and the wider community at large on the CSME as promised by Prime Minister Perry Christie. The consultation included a visit by Barbados Prime Minister Owen Arthur to deepen discussion with Government and civil society regarding the CSME.

"The governments of the CARICOM Member States decided some time ago that in order to get the maximum benefits from the establishment of the CSME that all membership arrangements should be completed by 2005," Mr Archer said. "2005 was also the predicted date for the launch of the FTAA, and in order to benefit from special and differential treatment that was to be afforded to small countries who were members of an economic grouping it would have been necessary for the CARICOM members to join the FTAA with a single market already complete."

Underscoring the importance of trade, he expressed that world trade has not been sympathetic.

"The decision on bananas was not against the Caribbean. It was simply a question of licences and trading and how the trade was handled. But the effect of that decimate the industries in a number of Caribbean countries. We have to protect ourselves as far as possible from those effects. To do that, we have to be a part of some organisation. And to me, the organisation that is best for us to introduce ourselves into the international trading arrangement is the CSME. We are dealing with countries approximately our size who have similar experiences, who would understand the difficulties that we have. It means that we will be able to trade and develop our skills in these areas among persons whose skills are not very different from ours. We need to do that in order to engage the larger world in the matter of trade."

In the keynote address Minister of Foreign Affairs Fred Mitchell said that there is presently sufficient deliberation, but while it is occurring, everyone else is "moving light years ahead of us. It is just really time to decide and get moving on this. The fact is, decision making in banking and insurance takes place in the sector largely in the Southern Caribbean. So we ought to be in a position to keep and to attract those decision making centers here in Nassau. But if you keep rules and laws that are a disincentive to that happening, you are going to lose out many times."

Mr Mitchell explained that the negotiations on CSME are influenced by the domestic-political considerations and what the Bahamian public at this time is willing to accept.

"To a certain extent, we have to exercise some leadership on this, and this is why this appeal is being made to those leadership group which is gathered here, because no government wants to get too far out in front of where the people of the country are. These are real live decisions that we have to take and that we have to take soon, having regard to the realities of 2005 - and not what we were trying to protect and correct in 1960 or 1965."

Mr Archer gave a historical overview of the evolution of the CSME and the FTAA.

In 1989, the Caribbean Heads of Government decided to establish the CSME as the region's response to the economic and political changes that were taking place or predicted to occur in the near future.

Such changes, Mr Archer said, would have a profound effect on the existing political and economic relationships internationally. It was necessary for the region to prepare for them before being "swept away" by them.

In 1992, the single European market was established and today the European Union with 25 members "is set to achieve the kind of Europe that European kings and armies fought for centuries to accomplish. This new Europe is already beginning to look differently at the relationships that existed between colony and the coloniser. And already the Caribbean is beginning to see changes in the way their traditional crops of bananas, sugar and rice are marketed in the new Europe."

In April 1994, the major trading agencies of the world agreed to establish the World Trade Organisation (WTO) - which is still an "infant organisation" but with much power to possibly restructure the trading practices of the entire universe.

Also in 1994, the North American Free Trade Area (NAFTA) was established as a response to the European Union. The opening up of the borders between Canada, the U.S. and Mexico had a profound effect on trade between those countries. And although some opposed NAFTA, evidence suggests that the unprecedented growth of the North American economy from 1995 - 2005 has been caused by NAFTA.

In December 1994, talks began on the Free Trade Agreement of the Americas (FTAA), a trading arrangement which will include NAFTA and all countries in the Caribbean, Central America and South America with the exception of Cuba, Mr. Archer explained. He added that when negotiations are completed, the FTAA will be the world's largest trading block, and permit the free movement of goods and services throughout the Americas.

He continued to advocate that the CSME is The Bahamas best bet to trade with the world.

"When you build a barrier around yourself, it is true that you keep other people out but you also keep yourself in. You cannot wall yourself in and expect to go into the rest of the world; and there is a big wide world out there with many opportunities for The Bahamas. We have done well up to this point, but I think we can do better. And how do we do better? By engaging the rest of the world and I think the entry point of that engagement is the CSME," Mr Archer said.