ECONOMY: Jamaicans Symbolise Debate on New Trade Initiatives

By Zadie Neufville Reprint | | Print |

Zadie Neufville

KINGSTON, Jul 30 2001 (IPS) - John Maxwell warns against the perils of free trade. Jimmy Moss-Solomon extols its promise of bounty. The Jamaican antagonists mirror fateful debates at the global level and within the Western Hemisphere.

The World Trade Organisation (WTO) began talks Monday on whether to launch a new round of global market-opening negotiations in November, when ministers from its 142 member states meet in Doha, Qatar. At the same time, Caribbean and other officials are working to establish a Free Trade Area of the Americas (FTAA).

Maxwell, a veteran journalist and environmentalist, scores the WTO as the embodiment of rules that enable wealthy states and their corporations to “plunder” the Caribbean, and he excoriates the FTAA as “a hyped-up WTO where we lose our rights to defend our borders.”

His followers – including environmentalists, academics, economic nationalists – are incensed by, among other things, a recent European Union (EU) decision to ban imports of Jamaican conch on the basis of a WTO complaint that remains shrouded in secrecy. Nothing about the complaint – who lodged it, what it says – has been revealed to Jamaicans, he complains.

Known as MESHED – the Movement for Environmental Sustainability and Human Development – the group believes that free trade hampers local development and is detrimental to local environments because it gives multinationals power to sue governments and disregard local environmental laws.

Maxwell points to aspects of the North American Free Trade Agreement (NAFTA) that allow companies to sue governments over local health and environmental laws considered impediments to market access. He says similar practises under the FTAA, which will, in essence, extend NAFTA to the rest of the hemisphere, will leave the Caribbean region unable to protect itself.

Yet, he adds, the promised benefits of participation in multilateral trading systems have yet to be realised. Echoing recent statements by regional trade officials, he notes that depressed commodity prices have badly affected regional economies that have lost safety mechanisms previously offered under the Lome Convention and by the International Monetary Fund.

In short, Maxwell says, “free trade is piracy, the new colonialism.”

Moss-Solomon disagrees. “If we carefully craft our strategy, there will be more benefits than drawbacks,” says the trade spokesman of the Private Sector Organisation of Jamaica (PSOJ).

Moss-Solomon, who is a director at Grace Kennedy, one of the region’s largest manufacturers, says he can’t wait for the opportunities the FTAA will bring when it takes effect in 2005.

The Netherlands-based Transnational Institute explains, “Trade rules play a crucial role in the capacity of a company or corporation to gain or lose in the market, and to serve its aim of achieving higher profits.”

Official figures show that global trade has increased 12-fold since 1948. IN the past two decades, however, developing countries’ share of the total has fallen by half.

For Moss-Solomon, the challenge is to devise rules that benefit businesses such as his. Maxwell sees little chance of that.

The environmental activist says banana-producing African, Caribbean, and Pacific (ACP) nations were never part of banana talks that scrapped longstanding trade agreements between the nations and their former colonial masters in Europe, even as half their income was wiped out.

For their part, trade officials from the Caribbean Community (CARICOM) appear to hold the middle ground between aversion and enthusiasm and are seeking special status in WTO negotiations. Anthony Hylton, Jamaica’s trade minister, is among them.

Citing the Conch issue as an example, Hylton told a recent WTO/CARICOM meeting in Montego Bay, Jamaica: “We need to look carefully at this duality of function within the EU and its member states. It sends a signal that if we are not careful in engaging in the WTO and creating mechanisms we may be simply giving another weapon to countries who are determined to use these mechanisms as barriers or protectionist measures.”

Protectionism among rich countries imposes costs on developing countries that exceed aid flows and represents one of the greatest single impediments to prosperity, according to the World Bank. Poor nations’ most dynamic exports in particular have been targeted. These include textiles and clothing, agriculture, footwear, steel, consumer electronics and processed raw materials.

WTO statistics show that transnational corporations account for 70 per cent of world trade and 80 per cent of all foreign investment.

All the more reason CARICOM should qualify for special consideration when the WTO meets in Qatar, officials here say.

That is easier said than done, as even Miguel Rodriguez Mendoza, WTO deputy director general, acknowledges.

“Politically it is not easy to set (apart) a different group of countries and try to deal with their concerns in isolation,” he told the recent WTO/CARICOM meeting.

As an alternative, Mendoza suggests examining existing WTO agreements for specific provisions which, when included, could “give some comfort to small economies.”

This is a route regional private sector and government groups are already taking and a strategy they intend to use in the FTAA negotiations, Moss-Solomon says.

Alan Dunn, a U.S.-based lawyer and trade consultant, agrees with the basic premise. “There are comprehensive rules to protect industry, guard against unfair practises, resolve disputes and safeguard agreements within NAFTA and WTO. Any new trade agreements should be stronger and better,” he says.

But Guyanese columnist Ian McDonald points out that the region is at a severe disadvantage in trade negotiations. Caribbean governments are simply overstretched, he says, by the demands of fielding delegates to simultaneous negotiations over the WTO, FTAA, CARICOM, and EU. Events overlap, agendas often seem contradictory, documents must be translated, technical assessments must be made, and experts must be found.

In addition, regional policy makers and technocrats are concerned that the United Nations Conference of Trade and Development (UNCTAD) has gradually been stripped of its autonomy and power. UNCTAD, set up in the 1960s, was regarded as a champion of developing countries’ interests.

Clarence Clarke, president of the Jamaica Manufacturers’ Association, says he worries about the fall-out for labour. Skilled and professional workers, he notes, are able to seek employment opportunities abroad when trouble strikes at home but those with little skill and education are left behind, adding to local economic imbalances and providing the tinder for civil unrest.

Clarke was among local business leaders who toured the largely poor and violence-torn ganglands of West Kingston earlier this month and saw communities where poverty, politics, and crime intersect with devastating effect. This month alone, at least 29 people died in running gun battles.

Moss-Solomon, however, says the increased competition that will come with greater trade liberalisation can only lead to more innovation, better skilled workers, and stronger economies.

Maxwell remains unconvinced. “This free trade idea is buccaneering politics, it’s robbery,” he insists.