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  • Race for the White House and US-Caribbean Relations

    Race for the White House and US-Caribbean Relations

    Alicia Nicholls

    US presidential election campaigns are keenly followed in the Caribbean not just for the riveting debates and endless intrigue, but for the important consequences which any change in US domestic and foreign policy will portend for the region. The US is not just the largest trading partner for many Caribbean countries and a valued ally. It is a major tourism source market and is also home to a large and growing Caribbean diaspora.

    As of writing, the US presidential race has narrowed down to billionaire business mogul Donald Trump as the presumptive nominee for the Republicans. Former Secretary of State, Hillary Clinton, appears to be mathematically on track to securing the Democratic nomination, despite a continued spirited fight by Vermont senator, Bernie Sanders.

    More so  than in any other election season in recent memory, trade policy has been a hot button topic in both the Democratic and Republican presidential primaries. Echoing sentiments long held by some Americans who are fed up with what they see as America getting a raw deal from free trade, the talking points of the presidential candidates have adopted a more protectionist and anti-trade tone than has been seen in recent election cycles. Strong criticisms are being leveled at the recently signed but not yet ratified Trans-Pacific Partnership Agreement with Pacific-Rim countries, as well as the longstanding tri-nation North American Free Trade Area (NAFTA) with Canada and Mexico.

    Feeding into the populist, anti-establishment anger, candidates of both major parties have raised concern about the US’ large trade deficits with Mexico and China, the offshoring of US companies to countries with lower labour and production costs, and the consequential loss of American manufacturing jobs. The presumptive Republican nominee, known for his hardline positions on immigration and trade, colourfully equated the US’ deficit with China to rape.

    As small island developing states, Caribbean countries have long posited that trade must be fair, foster sustainable development, and not be to the detriment of the local jobs and industries. However, the current tone of the US presidential campaign equates fair trade with trade which supports only US interests. It is maybe fortunate for the region that the Caribbean has not featured in any of the foreign policy discussions or debates during either the Democratic or Republican Primaries, although discussions around tax havens in light of the Panama Papers will have implications for the offshore financial centres in the Region. Anti-immigration rhetoric on the Republic side, while aimed primarily at the anti-immigration lobby’s favourite “villains” like Mexican and Muslim immigrants, could have implications for Caribbean migration to the US as well.

    It would be naïve to think that any country would put another’s ahead of the needs of its own people. However, the current “America first” rhetoric raises issues of the future of unilateral preferential arrangements like the Caribbean Basin Initiative which provide beneficiary countries duty-free access to the US market for most originating goods, without the beneficiary country having to confer reciprocal access to US originating goods. Seventeen Caribbean countries and dependencies currently benefit from such status. Perhaps one saving grace is that the programme is seen to be a benefit to the US and the region has a trade deficit with the US. According to the Report to Congress released in December 2015, “[t]he value of U.S. exports to CBERA beneficiary countries grew 2.5 percent in 2014, exceeding the growth rate for total global U.S. exports, which grew 2.1 percent”.

    The anti-trade, “America first” message which pervades the current US presidential election campaign brings into question whether there will be any resolution in sight to the long-running US-Caribbean rum dispute. Caribbean rum producing countries have long raised concerns about subsidies given by the US federal government to rum producers in its territories, namely Puerto Rico and the US Virgin Islands. The cover-over programme allows tax revenues raised by the Federal Government from the excise tax on both local and foreign produced rums to be transferred to the “location of production”, that is, the Puerto Rico and US Virgin Islands. The treasuries of both territories depend heavily on these subsidies for revenue to support investments in infrastructure, education and health and it is no surprise that both territories have increased rum production in order to increase their share of these revenues.

    However, Caribbean rum producers like Barbados have argued these subsidies amount to unfair competition, by making Caribbean rums less competitive in the US market. The loss of market share not only means the loss of foreign exchange flows to cash-strapped Caribbean countries and a weaker current account position, but it also threatens jobs in the rum sector in Caribbean countries. So far there has not been any real progress on this issue and it is not pessimistic to think that this may very well go the same way as the US-Antigua Gambling case went after the US failed to comply with the World Trade Organisation’s rulings – nowhere.

    An issue which is not directly trade-related but which would also have an impact on US-Caribbean trade, investment and remittance flows is that of the loss of correspondent banking relationships due to de-risking practices by US-based banks. Fears of harsh sanctions by US regulators has led several US banks to abandon the risk-based approach by avoiding risk altogether and terminate correspondent banking relationships with banks and money transfer providers in the region. It is an issue which CARICOM, in conjunction with the Caribbean Association of Banks, has been raising at the bilateral, and increasingly the hemispheric and multilateral level. Last week, St. Kitts & Nevis Prime Minister Dr. Timothy Harris led a delegation which raised the issue again with officials from the US State and Treasury Departments at a consultation in Washington DC.

    Another key issue is that of climate change. Climate change is a threat to the world, but is an existential threat to the small island developing states of the Caribbean which bear the brunt of the adverse impacts. President Obama’s stance and support for tackling climate change may not be replicated by his successor. As one of the world’s largest emitters of greenhouse gases (GHG), US emission cuts and whether it ratifies the Paris Agreement will have important implications for whether the target of temperature increases of no more than 1.5 degrees or 2 degrees above pre-industrial levels is met.

    Historically seen as the US’ backyard, the Caribbean has lost much of its geostrategic importance to US administrations in recent years. Conflicts in the Middle East, Africa, as well as tensions with Russia and China have occupied US foreign engagement. It has opened the door for greater engagement by the Caribbean with China which has expanded its influence in the region. However, there are issues on which the US and Caribbean still share common concerns, including issues of security, energy, combating drug and human trafficking, to name a few. At the U.S.-Caribbean-Central American Energy Summit in Washington DC, chaired by Vice President Joe Biden, the US reaffirmed its commitment to regional energy integration with the Caribbean and Central America.

    There does appear to be another nugget of hope. On April 20th, H.R. 4939 – United States-Caribbean Strategic Engagement Act of 2016, a bi-partisan bill sponsored by New York Representative Eliot Engel (Democrat)  won the unanimous consent of the House Foreign Committee. The objective of the bill is “to increase engagement with the governments of the Caribbean region, the Caribbean diaspora community in the United States, and the private sector and civil society in both the United States and the Caribbean, and for other purposes”.

    Though still in need of debate and approval by both Houses of Congress, the bill could be a catalyst for constructive re-engagement of US-Caribbean relations. Some of the objectives include increasing US-Caribbean diplomatic relations and economic cooperation, supporting regional economic, political and security integration efforts in the Caribbean, encouraging sustainable economic development , reducing crime and improving energy security, inter alia. Section 3 of the draft Bill provides that a multi-year strategy for US engagement with the Caribbean must be submitted no later than 180 days after the Act’s enactment. Whether this new re-engagement with the Caribbean will fit within the foreign policy agenda of the next president will have to be seen.

    The US relationship with the Caribbean is a valued relationship with ties which go beyond trade. Despite these bonds, there is indeed need for deeper constructive dialogue, engagement and cooperation with the US on a number of pressing issues which have sustainable development and macroeconomic implications for the Caribbean. The Caribbean region does have supporters in the DC Beltway. These include members of the Caribbean diaspora who have ascended to positions of influence in Congress and which have been instrumental in lobbying the US government on issues of concern to the region. However, like everything else, the future tone of US-Caribbean trade relations, will depend heavily on who takes the presidential oath of office in January 2017.

    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. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • Over 170 Countries Sign the Paris Agreement: What next for SIDS?

    Alicia Nicholls

    Earth Day 2016 was extra symbolic this year. On this day (April 22nd), 174 countries plus the European Union signed the Paris Agreement at a High-Level Signature Ceremony at the United Nations’ Headquarters in New York. Among the signatories were small island developing states (SIDS) from the Caribbean, the Pacific and the Indian Ocean, for whom climate change is a serious matter of survival.

    The Paris Agreement, which will replace the Kyoto Protocol when it comes into force, is a landmark climate change agreement which aims to strengthen the global response to climate change. Many years in the making, the Paris Agreement was concluded and adopted at the end of intense negotiations during the United Nations Framework Convention on Climate Change’s (UNFCCC) 21st annual Conference of the Parties (COP21) held in Paris last December.

    Climate change is a global problem with implications for us all. According to the United States’ National Oceanic and Atmospheric Administration (NOAA) and NASA, 2015 was the hottest year on record since the start of record keeping in 1880. If these first few months of 2016 are anything to go by, this year may shatter that record handily.

    SIDS which are responsible for less than 1% of global GHG emissions, are the most vulnerable to its adverse effects. Besides sea level rise, extreme weather events have caused tremendous economic devastation and loss of human life. The Rapid Impact Assessment showed that Tropical Storm Erika cost Dominica 90% of its gross domestic product (GDP). Earlier this year, the Category 5 Severe Tropical Cyclone Winston ravaged the Pacific SIDS of Fiji, Vanuatu, Tonga and Niue. In Fiji the storm left 44 dead, destroyed over 31,000 homes and caused 1 billion USD in damage.

    For SIDS, climate change is an existential threat to our economies, societies and survival, which led our states to push the “1.5 to stay alive” campaign. To keep the temperature increase to just 1.5 percent above pre-industrial levels or even 2 percent, signature of the Paris Agreement is just one step.

    Signature is not the same as ratification

    The turnout for the signature of the Paris Agreement is reported to be a record number for a new treaty. However, signature does not make a treaty legally binding on a signatory party unless the Treaty specifically provides for this. In the case of most treaties, like the Paris Agreement, it is only after a party has deposited its instrument of ratification (or accession, approval or accession) that it has consented to be bound by the treaty.

    The ease of the domestic ratification process depends on the legal system and domestic political processes in each state. In the US, the type of international agreement determines the process. Article II, section 2 of the US Constitution requires approval of two-thirds of the US Senate for a treaty to be approved. Executive type agreements do not require congressional approval. Given the strong objection to the Paris Agreement in the Republican-controlled Congress, the US negotiators were careful to avoid any language or provisions, such as mandatory emission reduction targets, which would require Congressional approval of the agreement. However, the US has not yet ratified the Agreement and the upcoming US Presidential election this November could lead to a dramatic reversal in US policy on climate change depending on whom is elected president. No one wants a repeat of the Kyoto Protocol; the US had signed it but did not ratify and was therefore not bound by the Agreement.

    According to Article 21, the Paris Agreement will enter into force 30 days after at least fifty-five parties which account for at least fifty-five percent of total global greenhouse gas emissions (GHG) have deposited instruments of ratification. As at the time of writing this article, 177 parties have signed the agreement, which represents the vast majority but not all the 195 countries which negotiated the agreement in December. Conspicuously absent from the  signatures are several major oil producing states, namely Nigeria, Saudi Arabia and Iraq. Signature will be open for one year until April 2017 so there is still time for more states to sign.

    Fifteen countries have so far ratified the Agreement, three of which with declarations. It is no surprise that SIDS led the way in the number of ratifications. Those countries which ratified already are the Marshall Islands, Nauru, Tuvalu, Palau, Somalia, Palestine, Barbados, Fiji, Grenada, St. Kitts & Nevis, Samoa, Maldives, St. Lucia, Mauritius and Belize.

    Scaling Up of Climate Action

    Even before the entry into force of the Agreement, countries will need to scale up their climate actions to reduce emissions. Prior to the conclusion of the Paris Agreement, most countries submitted their Intended Nationally Determined Contributions (INDCs) which set out their policies, targets and actions for contributing to the reduction of GHG emissions. In Barbados’ INDC, for example, the country intends to achieve an economy-wide reduction in GHG emissions of 44 percent compared to its business as usual (BAU) scenario by 2030. In absolute terms, this means an intended reduction of 23 percent compared to 2008 levels.

    However, the just released updated UN synthesis report of all INDCs communicated by Parties by 4 April 2016, a total of 189 Parties (96% of all Parties to the UNFCCC), found that the level of ambition is still not enough to lead to an increase of less than 2 degrees above pre-industrial levels. There is the need to deepen ambitions and convert intention to concrete actions and achievements. This will require planning, political will, cooperation among all stakeholders, the implementation of legislative frameworks and systems for monitoring progress, implementation and reporting.

    Of critical importance will be the level of reduction of GHG emissions  by countries, such as the US, China, India and in Europe, which account for over 50 percent of global GHG emissions. However, domestic politics within these countries could be an issue for meeting their goals. As an example, in August 2015, US President Obama and the US Environmental Protection Agency (EPA) announced the Clean Power Plan to lower US emissions by curbing carbon dioxide emissions from power plants through shifting from coal-fired power to renewable power. Some major fossil fuel producing states like West Virginia and Texas have challenged the administration’s plan and by a 5-4 decision the US Supreme Court issued a stay of the Clean Power Plan pending judicial review. Additionally, there is no guarantee that the next US president will be as committed to the climate change mitigation goals set out by the Obama administration to reduce emissions between 26 to 28 percent by 2025, which already is a modest target.

    Climate Finance for Adaptation and Mitigation

    SIDS require financing not just to build climate-resilient infrastructure but to transition to climate-resilient economies. One of the stated goals in the preamble of the Paris Agreement is to jointly provide USD 100 billion annually by 2020 for mitigation and adaptation, and to provide appropriate technology and capacity-building support.

    Many Caribbean States have been graduated from accessing grants and concessionary loans due to their relatively high gross domestic product per capita (GDP per capita), while their high levels of indebtedness also make borrowing on international markets difficult. While several climate change finance streams are available, including funding from Multilateral Development Banks, official development assistance and dedicated funds, some SIDS Governments have raised concern  that the red tape for accessing funds is often cumbersome.

    What next for SIDS?

    The signature of the Paris Agreement is just but one step. Though SIDS account for less than one percent of GHG emissions, we all have our part to play in lowering emissions and contributing to a climate-friendly future. Domestically, our governments need to focus on implementing our INDC commitments and encourage the use of climate friendly technologies, including in buildings, transportation and the agriculture, tourism and manufacturing sectors. This is not a task for governments alone, but will require continued cooperation with civil society, the business community and ordinary citizens.

    It also requires the continued encouragement of a shift from fossil fuels to renewable energy. In Barbados’ INDC, it was noted that energy consumption accounted for 72% of our GHG emissions in 2008, followed by the waste sector (16%). Disconcertingly, major players in the island’s solar energy industry have complained that falling oil prices have led to a decrease in solar installations. Barbados has been a leader in the solar industry, with a high level of solar water heater use which  saved the country a reported US$100 million on its fuel import bill in 2002. We cannot allow the drop in oil prices to allow us to lose sight of the necessity of shifting from fossil fuels for achieving our climate goals and preserving an environmentally-sustainable future for the next generations.

    On the multilateral level, continued participation and advocacy in climate change talks are a must for SIDS governments. As I had indicated in my previous article, the Paris Agreement is an important step but its efficacy will depend on its ratification and implementation and subsequent follow-up, especially by those countries which contribute the most to GHG emissions. The future of our states, and the world, depends on it.

    The full text of the Paris Agreement may be found here. Barbados’ statement at the High-level signing ceremony may be found here.

    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. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • ACP 103rd Council of Ministers Meeting Concludes in Dakar, Senegal

    Alicia Nicholls

    The Council of Ministers of the 79-member African, Caribbean and Pacific (ACP) Group concluded its 103rd meeting in Dakar, Senegal yesterday. Both the ACP and the European Union are currently in a period of reflection on the future of ACP-EU relations post 2020 when the Cotonou Partnership Agreement expires. A twin issue for ACP member states is how to transform the tri-continental grouping into a modern global actor. In this regard, ACP member states welcomed the much-anticipated report of the ACP Eminent Persons Group. The EPG was launched in March 2013.

    Charged with the mandate of reviewing the ACP as an international organisation, the EPG is headed by former Nigerian President Chief Olusegun Obasanjo and comprised of former high level government officials, academics and business leaders from across the ACP’s six regions, including former President of Guyana, Bharrat Jagdeo.  The EPG’s report entitled “A New Vision for our Future –  A 21st century African, Caribbean and Pacific Group delivering for its Peoples” will be on the agenda at the 8th Summit of ACP Heads of Government which will take place in Papua New Guinea this May 30th-June 1st.

    According to the official ACP Secretariat press release following the meeting, ACP Ministers also discussed and took decisions on a wide range of other trade and development related topics, including Zika, trade for development, fisheries, sugar, inter alia.Importantly, the Council has called on the EU to exercise greater flexibility in the outstanding EPA negotiations with ACP regions which have not yet concluded EPA negotiations with the EU; Central Africa, Eastern and Southern Africa (ESA) and the Pacific. So far CARIFORUM is the only ACP sub-grouping which has ratified a full EPA with the EU, while the West Africa, East African Community, and the Southern Africa Development Community (SADC) EPA group have signed more limited agreements.

    At the meeting, CARIFORUM states Guyana and Belize requested ACP assistance with their long-running border disputes with Venezuela and Guatemala, respectively. Both disputes have seen escalation in tensions in recent months. The latest flare up involves the fatal shooting of a Guatemalan teenager by Belizean forces in a border community between the two countries  last week and charges by Belize that Guatemala is amassing troops along the border, prompting a visit by head of the Organisation of American States (OAS), Luis Almagro, to both countries.

    The final texts of the decisions and resolutions of this meeting will soon be available on the ACP’s website.

    The full press release on meeting is available on the ACP website here.

    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. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

     

  • African, Caribbean, Pacific Young Professional Network

    Great interview Yentyl!

    angiepops11's avatarCommonwealthYouthCouncil

    CYC interview with Yentyl Williams, Founder ACP YPN

    1. Why did you decide to start ACP YPN?

    I founded the African, Caribbean and Pacific Young Professionals Network (ACP YPN) in December 2014 to advocate for the utilisation of Article 26 on ‘youth issues’ of the joint and legally binding agreement between the European Union (EU) and the ACP group of states, called the Cotonou Partnership Agreement. Through my academic and professionals experiences working on EU-ACP trade, but most importantly, my own experience as a young professional, I became aware that there was a gap that formed between the technical cooperation at the EU and ACP levels, and youth. For example, having come to Brussels, as both British and Trinidadian/Tobagonian, I completed my first internship with the European Commission’s Directorate-General for Trade, working on EU trade with ACP countries, but I was disappointed to find out that there were no internships at the…

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