In what for many pollsters and poll watchers was an astounding turn of events reminiscent of the June 23rd Brexit vote decision in the United Kingdom (UK), the American people have chosen the Republican presidential nominee, Mr. Donald J. Trump, to become their 45th president. Mr. Trump, a billionaire real estate developer who has never held elective office, beat veteran campaigner and Washington establishment favourite, former Secretary of State, Mrs. Hillary Clinton despite late polls predicting a slim victory for Mrs. Clinton. In addition to winning the White House, the Republicans have also retained control of both houses of Congress.
The merits and demerits of a Trump presidency will dominate news headlines for the next few days and perhaps years. However, we in the Caribbean must now pivot from our fascination with what was a surprising conclusion to the US Presidential Election campaign of 2016, to consider what will be the possible implications of a Trump presidency for future US-Caribbean relations.
Many may wonder why we in the Caribbean, like other parts of the world, so keenly follow the US presidential elections. After all, unlike Mexico, Syria, Russia and Iran, Caribbean countries did not feature in any of the major foreign or economic policy discussions, and the region has lost much of its geostrategic importance to Washington since the end of the Cold War.
The reasons why the US elections matter to us are simple. Firstly, the US is a major trading partner for many Caribbean countries, a provider of foreign aid and a foreign policy ally. Secondly, for several Caribbean countries, the US is also the largest source market for tourist arrivals. Thirdly, the US is home to the largest population of persons of Caribbean descent living outside of the Caribbean. As such, any change in US foreign, economic and commercial policy will have implications for the small open economies of the Caribbean region.
A central plank of now President-elect Trump’s campaign to “Make America Great Again” is to “negotiate fair trade deals that create American jobs, increase American wages, and reduce America’s trade deficit”.It is expected that there will be dramatic changes to US trade policy under a Trump Presidency towards a more zero-sum, protectionist approach. This will have implications for US-Caribbean trade relations, which have not always been smooth.
Outside of the Dominican Republic which is a party to the US-Central America and Dominican Republic Free Trade Agreement (CAFTA-DR), Caribbean States do not have a free trade agreement with the US. Most Anglophone Caribbean countries, however, benefit from unilateral access to the US market for most goods under the Caribbean Basin Initiative, a legacy from the Reagan era. The preferences extended under CBERA are non-reciprocal; Caribbean countries do not have to confer reciprocal access to US originating goods. They are also unilateral which means preferences can also be unilaterally revoked by the US. Some Caribbean countries also benefit from the United States’ Generalised System of Preferences (GSP), another unilateral, non-reciprocal regime.
It is unclear what would be the future of these unilateral non-reciprocal preference schemes under a Trump presidency. Perhaps one saving grace is that these programmes are generally seen to be a benefit to US manufacturing and jobs, 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”.
On a more sober note, US-Caribbean trade relations have encountered many bumps over the years, including the famous bananas wars in which the US and Latin American countries successfully challenged the European Union’s preference regime for bananas from African, Caribbean & Pacific (ACP) countries in the World Trade Organisation (WTO).
More recently, Antigua & Barbuda challenged the US’ restriction on the cross-border supply of online gambling services from Antigua & Barbuda in the World Trade Organisation’s dispute settlement mechanism. After the US lost its appeal and failed to comply with the Appellate Body’s ruling, Antigua & Barbuda was authorised to retaliate through the suspension of concessions and obligations to the United States in respect of intellectual property rights. However, to this day Antigua & Barbuda has not received any compensation from the US following the rulings.
There has been little progress on either the US-Antigua gambling dispute or on the rum dispute which Caribbean states have been hesitant to take to the WTO. It remains to be seen whether any progress will be made under a President Trump whose only stated concern in regards to trade relations is for “American jobs, wages and trade deficit” and who has hinted at withdrawing the US from the WTO.
Immigration and Race Relations
Much of Mr. Trump’s anti-immigrant rhetoric has been against Mexicans, as exemplified by his promise to build a wall along the US’ border with Mexico. The Caribbean diaspora in the US, however, may be impacted by his immigration policies as well. In an interesting article on Caribbean migration to the US, Zong and Batalova noted that “the United States is the top destination for Caribbean emigrants, accounting for more than 60 percent of the 6 million Caribbean emigrants worldwide”.
Immigration has for quite some time been a touchy subject in US-Caribbean relations, mainly in regards to the mass deportation of those Caribbean nationals who have committed crimes in the US. The main argument advanced by Caribbean governments is that many of the deportees were socialised in the US and are sent back to the Caribbean after serving time in US prisons as hardened criminals. They also argue that these deportees have little to no cultural or familial ties to the Caribbean which makes their integration into Caribbean society difficult. Such deportations have been blamed by regional politicians for the increase in criminality in the region.
Mr. Trump’s 10-point plan for immigration, includes not only increasing the deportation of criminals, but establishing immigration controls, ensuring that open jobs are offered to American workers first, banning immigration from certain countries, ending sanctuary cities and reforming legal migration. Not only will those living illegally be affected, but there may be implications for that vast majority of Caribbean immigrants living legally and making a solid contribution to US society. He has spoken of a “complete and total shutdown of Muslims entering the US”. What does that mean for the Muslim minority in some Caribbean countries who may wish to visit or migrate to the US?
A less discussed issue is that of Trump’s possible impact on race relations in the United States. Most Caribbean immigrants are either mainly black or Latino so this dovetails with the immigration issue. Mr. Trump has had a checkered past on race issues, including, inter alia, calling Mexican immigrants “rapists”, supporting the Birther Movement which sought to discredit America’s first African-American president (President Obama) as a foreigner, and being prosecuted by the US Justice Department along with his father for refusing to rent to black tenants during his early years. To what extent can a Trump presidency, whose open endorsement by the KKK and other white nationalists raised concerns, begin to mend race relations? For instance, what will be his future policies on stop and frisk and on police brutality against minorities, particularly against African-American males?
Climate change is an existential issue for the world, and particularly for small island developing states in the Caribbean, which, despite their negligible contribution to global greenhouse gas emissions, have been the most vulnerable to the adverse and deadly effects of climate change. As I indicated in a previous article on this subject, the election of Mr. Trump, a climate change sceptic, will be weighing on the minds of officials at the climate talks in Marrakech, Morroco over the next weeks.
Mr. Trump, has famously called climate change a “Chinese hoax” and has gone as far as threatened to cancel the Paris Agreement. Although it would take about four years before the US can formally withdraw from the Paris Agreement, in the intervening time President Trump can still undo the US’ progress on climate change action by overturning the executive actions President Obama has implemented to fight climate change, cancelling funding for clean energy initiatives, and reducing and eliminating aid to developing countries for climate change adaptation and mitigation.
It also means that there may be little to no US support for global climate change action, a frightening prospect if the international community is to meet the Paris Agreement’s goal of “holding the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius”.
According to a 2016 report “US Foreign Assistance to Latin America and the Caribbean: Recent Trends and FY2016 Appropriations”, since 1946, the LAC region has received more than $160 billion of assistance (in constant 2013 dollars. This aid has included assistance in fighting crime and drugs trafficking, as well as for climate change mitigation and adaptation. However, foreign aid saw spending cuts under President Obama as the US sought to rein in its budget deficits.
Mr. Trump has not said much in his campaign plans on his views towards foreign aid, though one can conclude that his more inward looking policies would suggest that he will probably be in favour of less aid for the region if this is not in sync with his wider foreign policy goals. It will be left to be seen the extent to which the LAC region will continue to receive aid under a Trump presidency and what would be the aid priorities.
Withdrawal of Correspondent Banking
Indigenous banks in the Caribbean have been seeing the restriction or termination of correspondent banking relationships by international banks, many of which are US-based. Caribbean governments have been engaging in high-level advocacy and have targeted relevant US departments. There has so far been limited success. To what extent will Mr. Trump and his future Secretary State and Treasury Secretary be concerned with the problems of Caribbean economies which face exclusion from the global trade and financial system if this issue goes on unabated?
President Obama’s presidency saw a rapprochement in US-Cuba relations. Since the early 1960s, successive US governments have imposed an illegal economic, commercial and financial embargo on Cuba which is not only contrary to international law but has hindered the country’s economy development. In December 2014 US Mr. Obama outlined a new direction to normalise Cuba-US relations. Efforts at normalisation since 2014 have included, inter alia, the removal of Cuba from the US State Sponsors of Terrorism List in May 2015, the re-opening of embassies in July 2015 and the progressive relaxation of some sanctions.
The prospect of normalisation of US-Cuba relations appears bleak now as President-elect Trump has consistently supported the embargo against Cuba. However, it remains to be seen whether he will reverse some of the executive actions President Obama has made and whether he will impose additional sanctions.
So what does this mean for future US-Caribbean relations?
The American people have made their choice and while it may not have been an internationally popular one, what is done is done. What Caribbean leaders need to consider going forward is what will be the priorities for them in regards to their relations with the Trump White House. And how will they create constructive dialogue and meaningful action on issues such as the on-going gambling and rum trade disputes, security, deportations, correspondent banking and climate change?
It is no secret that since the end of the Cold War the Caribbean has lost much of its geostrategic significance to Washington. However, the geographic proximity of the Caribbean as the US’ “backyard” means that US-Caribbean cooperation remains crucial to US national security on issues of mutual interest such as drug enforcement, transnational organised crime, money laundering and terrorist financing. In June 2016 H.R. 4939 – United States-Caribbean Strategic Engagement Act of 2016, a bi-partisan bill sponsored by New York Representative Eliot Engel (Democrat) passed without objection in the House and was referred to the Senate Committee on Foreign Relations. The objective of the law 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”. What will be the future of this initiative?
What is clear is that there needs to be constructive dialogue and re-engagement with the US. How successful will this be under a Trump presidency is anyone’s guess. His campaign rhetoric appears to foreshadow a future US foreign policy that will be a lot more isolationist, inward-looking and protectionist than seen in recent times. With a Republican majority in Congress, Mr. Trump will likely have unfettered power to push through his agenda, however good or bad.
On the flip side, it is entirely possible that Mr. Trump may soften his stance on some of his most contentious issues. For instance, in his victory speech he adopted a more conciliatory tone both towards to his opponent Mrs. Clinton and towards the international community, stating “All people and all other nations. We will seek common ground, not hostility; partnership, not conflict.” Another thing is that Mr. Trump’s policy proposals have been generally vague on specifics. There are many unknowns at this stage. We also have no idea as yet, besides speculation, on who will be the members of his cabinet, including key posts such as Secretary of State and Treasury Secretary. It is also unclear where Mr. Trump stands on some issues with importance to the region, including on offshore financial centres and the withdrawal of correspondent banking.
While President-elect Trump’s campaign proposals and rhetoric give us much food for thought, there remains much uncertainty about what a Trump presidency may actually portend for the region. What is certain, however, is that there will likely be a new tone set for US-Caribbean relations going forward. Caribbean leaders will need to be pro-active, united and strategic as they seek to engage constructively with what will be at least a four-year Trump administration when Mr. Trump assumes 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.