Editorial | CARICOM’s urgency

It is sensible that the Caribbean Community (CARICOM) has begun to assess the likely impact of Donald Trump’s trade policies on the region.

What is surprising, assuming this newspaper correctly interpreted the post-summit statement by Jamaica’s prime minister, Dr Andrew Holness – who has oversight for trade negotiations in the community – is that it did not start months ago, in the immediate aftermath of Mr Trump’s election for a new stint as America’s president.

But CARICOM’s evaluation of Mr Trump’s agenda, and its implications for the Caribbean, cannot just be about trade, or the fallout of funding to regional institutions because of the US president’s move to close the spigot on America’s foreign aid. It has to include, too, a deep analysis of US foreign policy more broadly, the uncertainty that it is creating in the global environment, and what small states like those in the Caribbean can do to insulate themselves from the worst of its effects.

Which is why The Gleaner appreciates CARICOM’s intention to undertake the umpteenth review of its governance arrangements, to add political oomph to the operations of its secretariat, and bring urgency to and strengthen its response to global challenges. However, with the leaders remaining firm against ceding any sovereign authority to the secretariat, they need not have wasted time on calling in experts to review old reports and to tell them what to do.

LEADS FROM THE FRONT

All that is necessary, in the circumstances, is to ensure, as this newspaper has suggested before, that there is an activist, risk-taking secretary general who leads from the front, and the empowerment of the deputy secretaries general and divisional heads to engage with subject counterparts globally on the issues in their portfolios. These politically empowered technocrats would have a dotted-line reporting arrangement, via the secretary general, to the prime minister, who is the subject lead in the community’s quasi cabinet.

In that regard, Jamaica, which has responsibility for international trade negotiations, would probably be asked to add foreign policy to its portfolio, although this newspaper would prefer if that subject matter fell to Barbados Prime Minister Mia Mottley, notwithstanding her already-hefty obligations for the single market and economy.

Judging from their actions and statements at the meeting in Barbados last week, CARICOM’s leaders are in a scurry to find answers to Mr Trump’s presidency, in the face of his announced review of all of America’s trade agreements, with an intention to ensure reciprocity in the deals; his effective dismantling of the aid agency, USAID; and his foreign policy shifts that have rattled partners and have the potential to take the world back to the era of great power politics.

With respect to trade, Mr Trump’s action, should he follow through, could upend the Caribbean Basin Initiative (CBI), a suite of non-reciprocal trade deals that allow the region to export a wide range of products to the US duty-free.

EXPORTS

In 2022, CARICOM, including its associate members, exported US$1.93-billion worth of goods to the United States under the various CBI schemes, plus another US$736.3 million under other preference schemes. However, another US$2.78-billion worth of goods, which might have qualified for preferences, were exported without the exporters utilising the benefits. Jamaica’s contribution to the preferential exports was US$136.16 million.

The US exported US$14.93 billion to CARICOM.

“CARICOM’s use of CBI for exports to the United States continues to be uneven,” said the US Trade Representative’s 2023 report on the CBI. “Some factors contributing to limited use of CBI preferences include trade preferences available to competing suppliers, available productive resources, and the ability to attract investment, knowledge of the programme, and flexibility of CBI programme rules of origin and other US import requirements.”

While the region’s preferential exports to the United States are not massive, the loss would be a significant blow to CARICOM.

“I believe that the posture of CARICOM is that we must be prepared,” Prime Minister Holness said in Bridgetown. “We can’t approach this with any panic … . We should accept that, with these changes, the concern shouldn’t only be that there should be disruptions in the normal routine of trade, but there could also be great opportunities for the region.”

It was in that context that Dr Holness reported that CARICOM’s trade negotiations unit is “to study the challenges … to provide us with guidance … as to how we should structure our trade policy, to both navigate any fallout and to take advantage of the opportunities”.

The findings of this review should not be available “in another three to four months”, if the secretariat were proactive and under the leadership of an empowered and activist secretary general.

Mr Trump signalled his policy intent before his election and re-emphasised it on his victory. Indeed, last November, a week after Mr Trump’s election, this newspaper said: “As much of the world waits with trepidation for the second coming of Donald Trump, Jamaica and the Caribbean should not be passive bystanders, preparing to be overtaken by events ... . The Caribbean must, as best as it can, anticipate what is coming, and, insofar as possible, put itself in a position to influence those of Mr Trump’s policies with which it is likely to have concerns.”

Those answers should by now be clear.

Regarding the governance question, the region does not have the luxury of puttering about on another look at the Rose Hall Declaration and any report therefrom. It just has to get on with it.