CARICOM Bilateral Trade Agreements

	CARICOM - US
	CARICOM - Costa Rica
	CARICOM - Dominican Republic
	CARICOM - Colombia
	CARICOM - Venezuela

CARICOM's trade relations with the Western hemisphere have undergone significant changes over the last decade.  During this period CARICOM's trade with its hemispheric partners noticeably increased as a percentage of its trade with the world as a whole.

In 1996 Heads of Government of CARICOM agreed to give priority to negotiating free trade agreements with selected countries in the Western Hemisphere.

CARICOM-US

Securing non-reciprocal preferential market access to the US

The Caribbean Basin Initiative (CBI), initially launched in 1983 through the Caribbean Basin Economic Recovery Act (CBERA), was expanded in 2000 through the US-Caribbean Basin Trade Partnership Act (CBTPA).  However, under US legislation the termination of the effect of CBTPA was scheduled 30 September 2008.

To operate legally under the World Trade Organisation (WTO), the CBERA and CBTPA require a waiver approved by all other WTO Members. The waiver on CBERA expired on 31 December 2005 and the request by the US for the continuation of the waiver is still not being agreed to by Paraguay.  The US is therefore unilaterally implementing CBERA in the absence of the waiver, which also covers CBTPA procedures.

On 8 February 2008, Congressman Rangel introduced a Bill for the extension of the CBTPA and other US unilateral preferential trade arrangements, namely, the Andean Trade Preference Act (ATPA) and the Generalised System of Preferences (GSP). The proposed extension was to 30 September 2010 for all three arrangements. The ATPA was due to expire on 29 February 2008. The CBTPA expiration was scheduled 30 September 2008 and the GSP on 31 December 2008.

On 14 February 2008 however, the Committee on Ways on Means approved an extension for the Andean Trade Preferences Act (ATPA) only; and only until 31 December 2008, instead of 30 September 2010 as had been proposed by Congressman Rangel. It is understood that Congressman Rangel had agreed to drop from his Bill an extension and modification of the GSP and CBTPA, under pressure from Republican Members. An extension of the ATPA to 31 December 2008 was signed by President Bush on 29 February 2008. This benefits Bolivia, Colombia, Ecuador and Peru.

However, without the approval of an extension of the CBTPA by 30 September 2008, it was unclear whether beyond that date, the Region’s exports to the US would continue to benefit from the same preferential access by an administrative arrangement.

In April 2008 Congressman Rangel indicated that he was not in a position to promise that an expansion would take place this year. In addition, he indicated that in this election year, there would be problems in advancing an extended CBTPA as the Republicans were seeking Democratic support for a Free Trade Agreement with Colombia, an issue with which many Democratic members had difficulty.

However, US President George Bush, during his March 2008 meeting with the Prime Ministers of The Bahamas, Barbados and Belize, gave reassurances that the CBTPA would be extended.

On April 25 2008, U.S. House and Senate negotiators reached agreement on a new five-year Farm Bill after a final round of negotiations on spending cuts and approving tax cuts and new customs fees, to meet budget rules and win over Republicans in the Senate. As part of the bargaining, Congressman Rangel was able to win inclusion in the Farm Bill of a two-year extension of the CBTPA. To get the deal on the Farm Bill, concessions were made to Chairman Rangel on his own trade priorities.  Attaching it to the Farm Bill was considered an easy way to fast-track the extension.

It should be noted that while Congressman Rangel was able to win inclusion in the Farm Bill for a two-year extension, there was no guarantee that the two-year extension of the CBTPA would be approved. President Bush, though supportive of the CBTPA extension was not in favor of the Farm Bill as it was disposed and was expected to veto the bill.  Furthermore it was unclear whether there was sufficient bi-partisan support to secure the passing of the bill and override the effects of the President’s likely decision to veto.

However, the US House on May 7 and later, the US Senate on May 8, voted overwhelmingly to approve the five-year, $307 billion farm bill and the attached farm bill. The 81-to-15 Senate vote, like the 318-to-106 House vote attracted broad bipartisan support in excess of the two-thirds majority which was required to override the President’s veto.

Free Trade Agreement with the US

The Prime Minister of Trinidad and Tobago has expressed interest in the Region negotiating a free trade agreement with the United States, with the aim of safeguarding access to that market for specified products of interest to Trinidad and Tobago, including Methanol, Ammonia and Liquefied Natural Gas (LNG) and to improve the prospects of attracting US investment into CARICOM. It is expected that an impact assessment on Member States in the event of the negotiation of a free trade agreement with the United States will be conducted.

Further development on CARICOM-US trade negotiations has been deferred until after the completion of the negotiation of a Trade and Development Agreement with Canada.

CARICOM-Costa Rica:

The most recently concluded bilateral agreement between CARICOM and a third country in the wider Caribbean is the CARICOM-Costa Rica trade pact that was initialed on March 15, 2003, by the two sides.  The Agreement provides for free trade or preferential access for a wide range of products.  Some sensitive products have been excluded. A special list of products will be granted differentiated market access between Costa Rica and each of the CARICOM MDCs.

CARICOM-Dominican Republic:  

The CARICOM-Dominican Republic Agreement  provisionally entered into force in December 2001.  The Agreement between CARICOM and the Dominican Republic is based on reciprocity with the five CARICOM MDCs and non-reciprocity with the LDCs until the year 2005.   It provides for the asymmetrical application of the reciprocity principle as CARICOM LDCs are not required to reciprocate treatment.

In August 2005, it was decided by the CARICOM – DR Joint Council in August 2005 that negotiating groups on Intellectual Property Rights and Services would be established with a view to implementing the built-in agenda component CARICOM- DR FTA.

Further development on these trade negotiations has been deferred until after the completion of the negotiation of a Trade and Development Agreement between CARICOM and Canada.

CARICOM-Colombia:

CARICOM has also negotiated some reciprocity in the trade elements of the Agreement on Trade and Technical Cooperation with the Government of the Republic of Colombia, through a Protocol amending the original Agreement, ratified in May 1998.  The first bilateral agreement between CARICOM and Colombia was secured in July 1994.  The CARICOM/Colombia Agreement began as a non-reciprocal agreement but had to provide for a level of reciprocity to Colombia after a period – four years.

CARICOM-Venezuela:

CARICOM also has a bilateral trade agreement with Venezuela. Secured in October 1992. The CARICOM-Venezuela Trade and Investment Agreement was signed in October 1992 and became effective on 1 January.