Caribbean Trade Law and Development

Category: United States

  • Caribbean Community (CARICOM) congratulates US President-elect Biden and VP-elect Harris

    Caribbean Community (CARICOM) congratulates US President-elect Biden and VP-elect Harris

    The 15-Member Caribbean Community (CARICOM) has extended its congratulations to President-elect Joe Biden and Vice President-elect Kamala Harris. The congratulatory message was sent by the current chairman under the grouping’s rotating chairmanship system, Dr. The Hon. Ralph Gonsalves, Prime Minister of St. Vincent and the Grenadines.

    The full statement may be viewed below:

    Heads of Government of the Caribbean Community (CARICOM) congratulate the President-elect of the United States, Mr Joseph Biden, on his victory in the elections of 2 November.

    The historic nature of this victory is exemplified by the election of Vice-President-elect Kamala Harris, a person of Caribbean and South Asian descent, as the first woman to achieve that position.

    Mr Biden will assume office during one of the most challenging periods of recent history and his vast experience will be of great value to the global community at this time.

    The President-elect has been a friend to CARICOM and the Community looks forward to working with the new administration of the United States, in pursuing our common goal of advancing the wellbeing of our people. It is a country with which the Community is inextricably linked through geography, shared values, familial ties, and economic and security relations.

    The Community wishes President-elect Biden and Vice President-elect Harris every success in their tenure.

  • Biden/Harris Victory: What might it mean for US-Caribbean Relations?

    Biden/Harris Victory: What might it mean for US-Caribbean Relations?

    Photo credit: Image by heblo from Pixabay

    Alicia Nicholls

    Caribbean leaders have joined with those around the world to warmly congratulate US President-elect, Joe Biden, on winning the US presidential election of November 3, 2020. Of particular pride for the region is that his second-in-command, Senator Kamala Harris, who has both Jamaican and Indian parentage, is not just the first woman Vice President-elect, but first person of colour and first person of Caribbean descent to ascend to such high office in the US.

    As of the time of this article’s writing, incumbent Republican president, Donald Trump, who has now lost the popular vote twice, has not yet conceded defeat and has launched several legal challenges, calling the election ‘fraudulent’.

    Beyond the symbolism of the Biden/Harris win, and assuming a peaceful transfer of power come January 20, 2021 (the date set for Biden’s inauguration), what does the Biden/Harris victory portend for the future of US-Caribbean relations?

    Who are Joe Biden and Kamala Harris?

    Joe Biden, who is 77 and will be 78 when inaugurated, will be the oldest US president to assume office. This was Mr. Biden’s third run for the White House. However, he brings a wealth of experience and skills as a former long-standing Senator for the US state of Delaware where he was a member and eventually chair of the Senate Foreign Relations committee. He was also Vice President under the Obama Administration. This experience will be invaluable for the long slog ahead of him.

    His much younger Vice President, Senator Harris, is an accomplished attorney-at-law, who was the District Attorney of the City and County of San Francisco, the Attorney-General of California and currently serves as a US senator for California. Ms. Harris, who is the daughter of an Indian-born mother and Jamaican-born father, had also been a candidate for president in the Democratic primaries this election cycle.

    The long, hard task ahead

    As noted in his victory speech delivered last night in Wilmington, Delaware, President-elect Biden acknowledged the monumental task ahead of healing a politically divided nation, rescuing an economy on the brink and a country plagued by the COVID-19 pandemic and civil unrest.

    Biden’s consistent message of unity and racial equity should bring some comfort to persons of the Caribbean diaspora negatively impacted by the racially charged rhetoric and divisiveness that marked the past four years of the Trump administration. Biden has also repeatedly promised to repair and rebuild relationships with traditional American allies strained under President Trump, such as with the European Union (EU).

    Biden’s win will occasion a pivotal turning point in the US’ approach to the COVID-19 pandemic which the Trump administration epically mishandled. Trump, notably, suspended US funding to the World Health Organization (WHO) and consistently downplayed the seriousness of the virus, even after he himself and many of his White House staffers became infected. In contrast, one of Biden’s first acts will be to announce a 12-person COVID-19 taskforce evincing a more robust response to the virus which has so far infected over 9.5 million Americans and killed 234,000.

    The frequent saying “when America sneezes, the Caribbean catches a cold”, is not an exaggeration given that the US is the region’s largest trading partner, tourism source market and home to the Caribbean’s largest diaspora. Many Caribbean countries, dependent on US tourist arrivals, have had to classify the US as a ‘high risk’ country because of the Trump administration’s bungling of the pandemic.  A better coordinated federal approach to stem the US’ currently high coronavirus infection and death rate should benefit Caribbean countries whose tourism sectors have been particularly hard hit by the economic fall-out from the virus globally.

    On the issue of trade, it is likely that Biden will be less embracing of free trade than under the Obama/Biden administration. This is because there is growing sentiment in the US, especially in the so-called ‘Rustbelt’ states which were key to Biden’s win, that trade has not been a net positive for American workers. That being said,  a more multilateral approach and some semblance of stability and consistency should appear in US trade policy under the incoming Biden administration.

    Unlike his predecessor, Biden has expressed support for the World Trade Organization (WTO) whose relevance and operations have been undermined over the past four years.  One of the Trump administration’s latest acts has been to delay the selection of Nigeria’s Dr. Ngozi Okonjo-Iweala, the candidate deemed most likely to achieve consensus to be the next WTO Director-General. It remains to be seen whether the Biden administration will support her candidacy.  

    Biden’s victory also means that the Caribbean and the world have regained an ally in the fight against climate change, an ally which is in fact the second largest emitter of carbon dioxide (CO2) emissions. Biden has promised that the US will rejoin the Paris Climate Agreement, which the US negotiated and joined under the Obama/Biden administration and from which his predecessor withdrew just this week. Additionally, he will seek to implement his Plan for Climate Change and Environmental justice which will include measures to limit the US’ greenhouse gas (GHG) emissions.

    Biden has also indicated a more humane approach to immigration than the Trump administration which curtailed legal pathways to immigration, implemented the infamous Muslim ban and the equally inhumane family separation policy resulting in some 545 migrant children separated from their parents at the border still to be reunited with their parents.

    The Trump administration also saw US aid cuts to charities and NGOs world-wide, including in the Caribbean. This included a prohibition on aid to those which include abortion advice in the reproductive health services they provide to women. Biden is pro-choice and it is likely this policy will be reversed.

    The less certain…

    There are, of course, several unknowns. On the issue of Cuba, Biden has criticized Trump’s hard-lined approach. While we can assume Biden might take a more conciliatory approach and loosen restrictions similar to what was done under the Obama/Biden administration, it is unknown to what extent he is willing to go the extra step to finally end the US’ decades-old illegal embargo on that island nation.

    Less certain will be Biden’s approach to US-China relations which had always had its ebbs and flows, but escalated into an outright trade war under the Trump administration until the signing of the Phase 1 Trade Deal. Although not all Caribbean countries recognise the People’s Republic of China, that country’s growing economic presence in the Caribbean has been a source of some tension in US-Caribbean relations.

    Venezuela is another ally of the Caribbean which has had strained relations with the US. While it is unclear what would be Biden’s approach to the humanitarian crisis in Venezuela, he is likely to take a more multilateral and cooperative approach than the unilateral approach currently taken by the current administration.   

    Another unknown is where Biden stands on the issue of offshore international financial centres. The Obama/Biden administration had taken a particular harsh stance against Caribbean IFCs, branding them as ‘tax havens’. As I noted in a previous article, while it is hoped that VP Harris’ Caribbean ancestry might have a modulating influence on the administration’s engagement with the Caribbean, it is important for the region to remember first of all that she is an American first.

    Conclusion

    It should also be cautioned that the extent to which Biden will be successful in his legislative agenda will be dependent on whether the Democrats or Republicans control the Senate which is still undecided. That said, the Biden/Harris  presidency will mean a steadier hand at the US ship of state – a marked departure from the erraticism, unilateralism and volatility of the past four years. Like the rest of the world, the Caribbean could at the very least look forward to a more traditional US foreign policy, a more stable if more inward-looking trade policy, and a return to multilateral cooperation on some of the world’s greatest challenges, such as climate change and the COVID-19 pandemic.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. All views herein expressed are her personal views and should not be attributed to any institution with which she may from time to time be affiliated. You can read more of her commentaries and follow her on Twitter @LicyLaw.

  • WTO Reform High on US President’s Trade Policy Agenda for 2020

    WTO Reform High on US President’s Trade Policy Agenda for 2020

    Alicia Nicholls

    Reform of the World Trade Organization (WTO) remains a high priority on United States (US) President Donald Trump’s ‘America-First’ Trade Agenda. This was confirmed in the recently released 2020 Trade Policy Agenda and 2019 Annual Report of the President of the United States on the Trade Agreements Program by the Office of the United States Trade Representative (USTR).

    Among the priorities listed for the President’s 2020 trade agenda is that the Administration “will push for a WTO that reflects current economic realities and strengthens free-market economies”. Readers would recall, for example, that last year the US stepped up its campaign advocating the introduction of criteria-based eligibility requirements, as opposed to the current and longstanding practice of self-selection as a developing country. In early February of this year, the US revised its list of developing and least-developed countries for purposes of US countervailing duties law.

    In December last year, the WTO’s Appellate Body became defunct following some two years of US blocking of appointments and reappointments to the once seven-member body over allegations of judicial overreach by the WTO’s highest arbiter of trade disputes. Earlier this month, the USTR released a report reiterating some of its criticisms of the Appellate Body’s operation.

    Consistent with the Administration’s stance, this present report has argued that “a number of features at the WTO reflect out-of-date assumptions and do not reflect current realities”.

    So what are the US priorities for WTO reform this year? The report notes that in addition to addressing the Appellate Body, the US will seek a new fisheries agreement, a digital commerce agreement, enforcing notifications obligations, and seeking reform of “special and differential treatment” for “developing” countries. It will also advocate for “other changes at the WTO that will have the WTO working for its Members.”

    The report further states that “the United States will also explore a broader reset at the WTO”. It notes, for example, that “the WTO currently locks-in outdated tariff determinations that no longer reflect deliberate policy choices and economic realities. ” As a result, it argues, “countries that have large economies that have developed significantly over the past two decades continue to maintain very high bound tariff rates, far in excess of the rates applied by the United States or to which the United States is bound”. It will also seek more plurilateral agreements.

    Other trade policy priorities outlined in the 300-plus page document are: pursuing trade agreements that benefit all Americans and enforcing US trade agreements and trade laws vigorously.

    Bearing in mind that this is a presidential election year in the US, it is likely the Trump Administration will use its ‘progress’ on WTO reform and other ‘wins’ like the recently updated NAFTA (renamed to the USMCA) and the Phase One trade deal with China as examples of a trade policy that puts Americans first in its bid to support the President’s re-election. This will definitely be a space to closely watch in coming months.

    The full USTR report may be accessed here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

    DISCLAIMER: All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may be affiliated from time to time.

  • US Request for CBERA Waiver Extension Approved by WTO General Council

    US Request for CBERA Waiver Extension Approved by WTO General Council

    Alicia Nicholls

    The World Trade Organization (WTO)’s General Council on October 16, 2019 approved the request by the United States (US) for a further extension of the waiver for the trade preferences it extends to certain Caribbean countries pursuant to the Caribbean Basin Economic Recovery Act (CBERA) of 1983 and its subsequent amendments.

    The CBERA is a major legislative component of the Caribbean Basin Initiative, a unilateral preferential programme operated by the US since the 1980s which extends duty-free treatment for most goods from beneficiary countries entering the US with the view to promoting economic development in the beneficiary countries. The programme is non-reciprocal as these countries are not required to extend similar treatment to US goods.

    Initially, the programme also included the Dominican Republic and several Central American countries as well, but these ceased being beneficiaries after entering into free trade agreements (FTAs) with the US.

    Seventeen Caribbean countries and territories currently benefit from the programme. These are: Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, Curaçao, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago, and the British Virgin Islands. Haiti also enjoys additional benefits under the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008, and the Haitian Economic Lift Program Act of 2010.

    Because the US only extends this preferential treatment to a select group of countries, the programme would be in violation of the non-discrimination principles undergirding the WTO, most specifically, paragraph 1 of Article I of the WTO’s General Agreement on Tariffs and Trade (GATT) which speaks to Most Favoured Nation treatment. The US has, therefore, had to request waivers of its obligations under paragraph 1 of Article I of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and paragraphs 1 and 2 of Article XIII of the GATT 1994 in order to maintain the programme.

    The US first obtained a waiver under the GATT (precursor to the WTO) in 1985 and obtained subsequent waivers under the WTO. The previous waiver decision of May 5 2015 would have expired on December 31, 2019 . The current WTO waiver decision extends the waiver until September 2025.

    In the preamble to its decision, the General Council listed several factors it took into consideration. Among these were:

    • the exceptional situation of the CBERA and CBTPA beneficiary countries, and the stated objective of the CBERA as amended to assist the trade and economic development and recovery of Caribbean Basin countries by encouraging the expansion of productive capacity in those countries in response to more liberal access and to new trading opportunities;
    • the preferential treatment provided under the CBERA as amended will not alter benefits provided under the US Generalized System of Preferences to other developing countries; that the duty-free treatment provided under CBERA should not prejudice the interests of other Members not benefiting from such treatment, and that it is expected that the extension of such duty-free treatment will not cause a significant diversion of United States imports of products eligible under CBERA originating in Members who are not beneficiary countries;
    • assurances given by the United States that it will promptly enter into consultations, on request, with any interested Member with respect to any difficulty or matter that may arise as a result of the preferential treatment provided under the CBERA as amended.

    Under the waiver, the US is required to submit to the General Council an annual report on the implementation of the trade-related provisions of the CBERA with a view to facilitating the annual review provided for in paragraph 4 of Article IX of the WTO Agreement. It is also required to promptly notify the General Council of any trade-related measure taken under CBERA, in particular, any changes in the designation of beneficiary countries, as well as any modification being considered in the list of eligible products and the duty-free treatment provided. The US is also required to give the General Council all the information it may deem appropriate relating to such action. The United States is additionally required to consult with regard to any modification being considered in the list of eligible products

    In September, the US International Trade Commission recently released its biennial report on the programme’s operation. The report found that overall, the US’ total imports from CBERA countries grew from $5.8 billion in 2017 to $6.1 billion in 2018. This translates to an increase of 4.7 percent. Turning specifically to US imports under the CBERA programme, those grew from $1.5 billion in 2017 to $1.7 billion in 2018, an increase of 9.1 percent. US imports under CBERA accounted for 27.8 percent of all imports from CBERA beneficiaries.

    The waiver decision may be found on the WTO’s document’s portal.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

    DISCLAIMER: All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may be affiliated from time to time.