The New Clinton administration and the Caribbean: Trade, security and regional politics.

Bryan, Anthony T.

Journal of Interamerican Studies & World Affairs; Spring97, Vol. 39 Issue 1, p101, 20p

Abstract: Discusses the United States relations with countries in the Caribbean area. Problems with integrating the region with the North American Free Trade Agreement; Controversy in Latin America over the European Union's preferential treatment of Caribbean bananas; Security challenges posed by drug trafficking; US-relations with Cuba and Haiti.

Faced with rapid changes in the global system, most Caribbean countries may seem to be doing everything right. The English-speaking Caribbean countries, in particular, have been exemplary in their practice of democracy and political stability. Others, such as Suriname and Haiti, are nurturing new democratic regimes. Economically, the region has followed the neoliberal reform rule book and implemented policies mandated by the International Monetary Fund (IMF) and the World Bank. They have trimmed fiscal deficits, privatized state-owned commercial enterprises that were losing money, and liberalized their trading regimes. These measures have been implemented either by reform-minded governments or governments which have seen no alternative. Only Cuba continues to labor under a discredited, ideological model that does not encourage democracy, while its economy mirrors some version of "a carte capitalism" in the face of an accelerated US embargo.

The first administration of US President Bill Clinton was characterized by concentration on a domestic political agenda with limited time and/or commitment given over to international matters or global strategy. Often the line drawn by the administration between foreign and domestic issues was quite blurred. Initially, any concern for Caribbean or Hemispheric matters was limited to fashioning solutions for critical issues inherited from the Bush administration, i.e., the political transition in Haiti and negotiating the North American Free Trade Agreement (NAFTA). The Clinton administration's actions to force constitutional government in Haiti, and to secure

passage of the NAFTA, were policy successes. The initiative to convene the Summit of the Americas in Miami in December 1994 and to agree to implement a Free Trade Area of the Americas (FTAA) by 2005 must also be seen as a notable success. However, as Robert A. Pastor has recently pointed out, the administration initially treated Haiti and NAFTA as specific, and distinct, issues rather than as opportunities by which to grasp a

"regionalist option," construct a democratic community, or design a post-Cold War foreign policy strategy for the entire Hemisphere. The administration did not adopt a strategic approach toward Latin America and the Caribbean because the motives that drove the policy were domestic interests and interest groups, fear of refugees, drugs, terrorism, and the desire to please groups of hyphenated Americans (Pastor, 1996: 122).[1]

As President Clinton prepares to visit countries in Latin America and the Caribbean during 1997, the new administration should have a clear idea of the policy challenges it faces in the Caribbean, which are twofold: First, how, and in what manner, should the United States ensure that countries in the Caribbean are not completely disadvantaged by the new trading arrangements? Second, what are the matters of a political and security

nature in which the United States should seek cooperation with the Caribbean?

CARIBBEAN CHALLENGES: THE FREE TRADE DILEMMA

Today, prospects for free trade in the Americas are hopeful. In the last few years, most Latin American and Caribbean nations have advanced toward market economies and liberalized trade. Implementation of the (NAFTA) plus the decision, taken at the Summit of the Americas, to move towards a Free Trade Area of the Americas by 2005 have made the long-term objective of achieving trade and economic integration in the Western Hemisphere a real possibility. A functioning Free Trade Area of the Americas is a long term undertaking, and subregional free trade agreements (FTAs) can help to promote the objective.

The expansion, deepening, and strengthening of subregional movements among Latin American and Caribbean countries is moving rapidly, while the outlook for steady economic growth in the region between 1996 and 2005 is more positive now than in the recent past. Nevertheless, in the meantime, the United States has lost the momentum for guiding the FTAA process. Furthermore, the US administration still lacks the "fast track"

authority (an essential step to FTAA 2005) needed to facilitate the accession to NAFTA of Chile and other nations. Also stalled is the extension of NAFTA parity to Caribbean and Central American countries.

While there is a strong rationale for Caribbean countries to enter the NAFTA, either individually, via the 14-member Caribbean Community (CARICOM) grouping, or collectively, as nations of the Caribbean Basin Initiative (CBI), interim arrangements are necessary for those countries that are unable to undertake even the present NAFTA discipline. The statistical estimates of the impact of NAFTA on Caribbean countries indicates that, without interim parity, it will have a strong impact on those countries whose exports are concentrated on the North American market (Bryan, 1994a and 1994b; ECLAC/CDCC, 1994).[2] Ideally, member countries of the CBI, through subregional action, would proceed to join NAFTA, or to negotiate separate free trade agreements (FTAs) with the United States, by expanding the scope of the CBI and gradually accepting obligations to make the program reciprocal. Obviously, passage of an interim trade parity program in the US Congress, with provisions for the eventual access of CBI countries to NAFTA, would facilitate the process.

While the emerging Hemispheric trade policy toward the FTAA is a positive one, it presents special problems for some countries in the Caribbean. Although absolute reciprocity may be the ultimate goal of free trade throughout the Hemisphere, some of the smaller Caribbean-economies simply cannot compete with those countries who have more developed productive structures and a range of technologies available. They cannot

offer absolute reciprocity to industrialized countries, at least in the short run, and some compromise on the part of the developed trade partners is essential. In addition, most individual countries in the wider Caribbean region are not yet prepared to subscribe to the trade disciplines that are required.

Another reality is that the countries of the wider Caribbean are not all at the same stages of development, and it is probable that their paths will diverge even further in the future. Each country will reserve the option to decide whether its free-trade objectives are served best by pursuing a subregional, or an individual country, approach.[3] Countries of the Caribbean will also continue to be pro-active in overcoming their disadvantages of size by pursuing wider schemes for subregional trade and integration, such as the newly formed (1994) 25-nation Association of Caribbean States (Gill, 1995).

Governments and business entities in the smaller CARICOM countries have mixed feelings about the trend toward freer trade. Most of these countries, members of the subregional Organization of Eastern Caribbean States (OECS), have undiversified economies that are based on just a few primary commodities or services (such as tourism).

Similarly, some manufacturers fear that their products will be overwhelmed by an influx of global imports. Clearly, these smaller economies are more dependent on foreign trade for their fiscal revenues than are some of their larger neighbors in Latin America or the Caribbean. Because they also maintain a lower percentage of international reserves, a strong dependence on external financing, a more liberalized trade system, and a concentrated and vulnerable export structure would consequently pose greater external risks for them. It can be argued that, even though the high costs of adjustment for the FTAA will be immediate, rewards will be realized in the longer term. However, some countries may not be able to survive the wait.

Despite the very valid concerns of the smaller economies, the arguments supportive of eventual free trade are extremely persuasive. Prevailing logic suggests that the Caribbean countries, in attempting to meet the demands imposed by the FTAA process, will also meet the criteria for global integration, which include such factors as long-term strategic planning, market diversification, stronger institutional capacity, and efficient marketing. The preparations for free trade throughout the Hemisphere should be viewed as part of a larger process for creating a framework by which the countries of the Caribbean can be moved away from their protected, inward-looking arrangements and toward a system that will improve their chances to participate in dynamic global markets --whether in the Western Hemisphere, Western Europe, Asia, or elsewhere. Unfortunately, some countries may be moving too slowly to prepare themselves for the FTAA (Bryan, 1996).

YES, WE HAVE No MORE BANANAS

One of the more contentious trade issues facing some of the Caribbean countries brings them into direct conflict with the United States. Bananas have always been a major export crop in the Caribbean. In the Windward Islands, bananas account for 50-60% of the export earnings; in Dominica and Saint Lucia, the percentages are even higher: almost 90% of all agricultural earnings come from bananas, which keeps almost 50% of the

work force employed. The survival of entire islands depends on their banana exports continuing to have access to the European market.

Nevertheless, the preferential treatment which the European Union (EU) grants to Caribbean bananas has come under strong legal challenge from growers in Latin America, in collusion with the United States. Latin American growers, backed by multinational enterprises based in the United States, are able to produce bananas of high quality, but low cost, for sale to the EU. The financial investment and technical expertise of these US multinationals allow the Latin growers to reap the benefits of large economics of scale that are not possible in the smaller confines of Caribbean banana cultivation. Although the European Union limits the import of Latin American bananas (sometimes called "dollar bananas") by quota and taxes their entry into the European market, these "dollar bananas" still dominate the European banana market -- with at least 60% of market share -- and are already the leading producers in the industry.

Despite this dominance of the European market, the Latin banana-producing countries (Ecuador, Honduras, Mexico and Guatemala) have filed a complaint with the World Trade Organization (WTO) charging the EU with unfair and discriminatory practices against them. This complaint, sponsored and spearheaded by the US government, charges that the EU-CARICOM banana Framework Agreement discriminates against those US firms that market "dollar bananas" from Latin America. The Framework Agreement is based on the Lome Conventions, which allocate 8-10% of the entire European banana market to bananas from the French and English territories in the Caribbean. To further this protection, the Framework Agreement established a quota which limits the number of "dollar bananas" that can be imported into Europe.

Although the EU has increased the number of "dollar bananas" allowed in under the quota (from 2.2 million tons to 2.55 million tons), this has made no difference to the United States. It still maintains its complaint, made, specifically, on behalf of Chiquita Brands International, a US multinational company that is allegedly a heavy contributor to both the Democratic and Republican parties. The Caribbean countries view this action by the United States as insensitive to their plight and inimical to their needs -- and initiated primarily to satisfy domestic special interests at home. Unfortunately, the United States risks alienating a number of CARICOM governments through pursuit of this WTO action. There seems to be little rationale for the US to pursue an action on behalf of a few US-based multinationals that will have such an adverse, if not actively detrimental, effect

upon the basic social and economic well-being of its smallest neighbors.

Some Caribbean countries depend upon the earnings from banana production for their very economic survival and, consequently, their political stability. Not only would the death of the banana industry lead to high rates of unemployment, but it might also propel diversification into other less desirable types of crops, like marijuana -- the only cash crop that could be cultivated on the hilly, non-arable land present in most of the Eastern

Caribbean with relative ease.

SECURITY CHALLENGES: DRUG TRAFFICKING

The most conspicuous threat to internal law and order in the Caribbean comes from the traffic in narcotics and the strong possibility that it might lead to the emergence of "narco-democracies" in the region. The corruption and domestic violence connected with the trade is expected to increase beyond the ability of some Caribbean states to control it. Some countries in the Eastern Caribbean and along the northern tier of South America have now become key transshipment points along the routes that South American cocaine travels on its way to markets in both the United States and Europe. By some estimates, 40% of all South American cocaine and heroin destined for the United States moves through the Caribbean. The Clinton administration has heaped blame on Aruba, the Netherlands Antilles, The Bahamas, Belize, the Dominican Republic, Haiti and Jamaica as major drug-transit countries (Sun-Sentinel, 1996). Most Caribbean countries cooperate with the United States in counter-narcotics efforts as much as they are able. However, more recently, some anti-drug actions taken by the United States have transgressed the limits of extraterritorial jurisdiction, provoking hostility, on the part of both government and general public, in those Caribbean countries where the US is perceived as having breached national sovereignty. A case in point is the United States Maritime and Overflight (shipriders) Agreement, which is intended to stem the intra-regional flow of drugs. The Agreement permits land and sea patrols by vessels of both the US Coast Guard and Navy, maritime searches, as well as seizures and arrests by US law enforcement authorities within the national boundaries of Caribbean countries. It also allows US aircraft to overtly Caribbean countries and order suspect aircraft to land there. By November 1996, at least 10 Caribbean countries had signed on to some version of the Agreement.[4]

Given the controversy within the region over the shiprider agreement and faced with intense pressure from the US to join its war on drugs, the leaders of the 14 member nations of CARICOM convened an emergency summit in Barbados on 16 December 1996 and devised their own collective strategy to combat the problem. While recognizing the right of sovereign Caribbean countries to enter into mutually acceptable agreements

(such as the "shiprider") they also acknowledged the need for "comprehensive cooperation and technical assistance" in counter-narcotics operations given their own limited resources. This involves, primarily, consolidation of the numerous bilateral cooperation agreements in maritime interdiction into a "regional agreement" within the context of the CARICOM Treaty's provision for coordination of foreign policies. Rejecting any suggestions or threats by the US of coercive measures, unfounded allegations, innuendos or the threat of punitive measures, they called for closer consultation between CARICOM countries and the US on a range of "pressing issues," including regional economic development, narco-trafficking, gun-smuggling and deportation of criminals by the US to Caribbean countries. The leaders also identified priority issues for discussion with the US: parity concessions for CBI countries under NAFTA, special arrangements for the smaller economies in the emerging FTAA, and the legitimate concerns of the banana-producing Caribbean countries which face a US challenge to their preferential arrangements in the EU. The leaders have requested a meeting with President Clinton early in 1997 to discuss these matters (CANA News, 1996; Trinidad Guardian, 1996).

Most Caribbean leaders are quite upset at the manner in which the United States is attempting to stem the flow of drugs through the region. They do not dispute the urgency of controlling the illegal traffic but resent US pressure over how to fight the trade. They see it as unacceptable for the US to bully weaker countries of limited resources into treaties and concessions without providing anything in return. Caribbean leaders are

concerned that the US is obsessed with the drug war but pays scant attention to other urgent regional issues. They want some concessions from the US, which trimmed aid to the region from $225 million in 1985 to $26 million in 1996. Because they have little capacity to deal with drug smugglers, they feel very maligned by the United States. So the policy dilemma for small Caribbean countries is that while, even collectively, they cannot stem the drug trade, the current anti-drug strategies of the United States threatens to impinge on the national sovereignty and the independent legal systems of those countries.

The drug traffic and the production of illegal narcotics is a security problem for Caribbean nations; however, it is also a symptom of profound economic crisis. The failure of economic development strategies, and the lack of viable economic alternatives, have made illegal narcotics the most profitable business in the informal sector of Caribbean economies. Today, the domestic abuse and consumption of marijuana, heroin and crack cocaine is a serious threat to both human development and social well-being in these nations. The collateral damage that the drug trade produces domestically represents a danger to democracy as well.

The transnational nature of the drug trade makes it difficult to combat. The narcotics traffic is unlikely to stop any time soon given the demand in the developed countries, the ease of electronic money-laundering, offshore bank secrecy, the network of official protection enjoyed by traffickers, not to mention the "corporate" structure of the drug trade. Victory in the struggle against drugs remains unlikely unless, and until, those who run the criminal organizations and cartels are put out of business. Otherwise, drugs seized and revenues lost are simply figured into the cost of doing business. Given the limited resources that the nations of the Caribbean can bring to bear upon this situation, the drug trade, as it affects the region, will not be halted any time soon. In the meantime, corruption and violence will probably increase even more, while valuable resources, both national and regional, will continue to be diverted away from the pressing needs of developing infrastructure and providing education and health care to fighting the drug scourge (Griffith and Munroe, 1995).

One important goal in the international fight against drugs should be to support democratic institutions and to combat efforts by drug cartels, or other organized criminal groups, to corrupt and to penetrate democratic governments. The United States -- together with Canada, Great Britain, France and Spain (other nations which have a stake in the future of the Caribbean) -- must commit even more resources to the campaign against the

narcotics industry: to reduce production, transhipment, and use of drugs in the region. For any such effort to be effective, it will be essential to act in closer cooperation with such key Caribbean nations as Trinidad and Tobago, Jamaica, Barbados, and the Dominican Republic.

POLITICAL CHALLENGES: CUBA, A FOR REASSESSMENT?

In contrast to the countries of the English-speaking Caribbean, which are still strongly democratic, Cuba is laboring under a discredited ideological model which does not encourage democracy. Both the US embargo of Cuba and the outdated communist regime of Fidel Castro are post-Cold War relics. Relations between Cuba and the United States have deteriorated ever since 12 March 1996, when President Clinton signed into law the

"Cuban Liberty and Democracy Act" (popularly known as the Helms-Burton Act), designed to extend and tighten the US embargo against Cuba and, hopefully, bring about the downfall of the Cuban regime at the same time.

Faced with strong criticism from some of the US closest allies, particularly Canada and the European Union (EU), President Clinton postponed, for six months, exercising one of the clauses of the Act (Title III) that would have enabled the US (beginning in November 1996) to file suits against foreign companies who were considered to be "trafficking" in assets confiscated by the Cuban government after the 1959 Revolution. President Clinton also appointed a special envoy charged with the task of (1) winning support for this legislation from Canada and the EU and (2) urging them to take measures that would speed Cuba's transition to a democratic, market-oriented economy. As of mid-November 1996, the envoy's efforts had not only proved fruitless, but the EU itself had approved legislation allowing European companies to retaliate against any legal action taken by the US with respect to their Cuban ventures. In addition, the EU went so far as to prepare a "watch list" of US companies (and individuals) who threatened to initiate action, in US courts, against European companies with Cuban interests (Latin American Monitor, 1996a). Both Canada and Mexico have drawn up legislation of their own as an "antidote" to the Helms-Burton measure and were considering ways to contest that legislation under

the provisions laid down in NAFTA. Helms-Burton had also been condemned by the Organization of American States (OAS), the Rio Group and the Caribbean Community (CARICOM). By the end of December 1996, even Cuba itself had prepared "antidote" legislation against the law.

Initially, it appeared that the trading partners of the United States were prepared to hold their ground in defiance of Washington and in support of Cuba. On January 3rd, 1997, President Clinton once more suspended implementation of Title III of the Helms-Burton law for another six months. In announcing the suspension, the President cited the "international momentum" that the law had created for promoting democracy in Cuba. He

suggested that he would continue the suspensions indefinitely as long as "America's friends and allies" continue to work for democratic transition in Cuba (Miami Herald, 1997). While it is certain that the friends and allies of the US have not been converted to the dubious "wisdom" of Helms-Burton (which places objectionable extraterritorial trade restrictions on foreign governments), some of them may have been persuaded of the need to press for political reforms in Cuba. The most concrete indication is the EU's decision in December 1996 to make economic aid to, and trade with, Cuba contingent on such reform.

By mid-November 1996, the Cuban economy began to show signs of an upturn. Economic growth was forecast to average 6-7% for 1996, based on continued improvement in the sugar, tourism and mining sectors. The peso had appreciated against the US dollar, job loss appeared to have stabilized, and there were hopes of reducing the budget deficit down to 3% of GDP by the end of 1996. Officially, capital formation was reported to have grown by 13% in the first half of the year and productivity by 34% (Latin American Monitor, 1996b; Fidler, 1995). On the other hand, energy costs were rising, and the external debt was put at USS 11 billion, with little hope of any renegotiation of the debt with the Paris Club. Serious macro-economic problems existed due to the distortions produced by consumer subsidies and rationing on the one hand, and the gap between black market currency exchange rates and official rates on the other. However, as a result of Helms-Burton, the prospect of engaging in costly US legislation appeared likely to deter at least some potential foreign investors and to exacerbate Cuba's rating for political risk even further. [5]

In contrast to its relations with the United States, Cuba appears to be moving closer to its Caribbean neighbors, continuing to strengthen its economic ties in the Caribbean despite Helms-Burton. Fidel Castro played a leading role at the first meeting of heads of government of the 25-nation Association of Caribbean States (ACS), held in Port-of-Spain (Trinidad) in August 1995, and Cuba hosted the second meeting in December 1996. By November 1996, Cuba had established an embassy in Port-of-Spain, and Trinidad and Tobago had begun to pursue a bilateral agreement for free trade with Cuba, as well as agreements on protecting and promoting investment, fighting the drug traffic, and pursuing accords on scientific and technological cooperation (Miami Herald, 1996a). Meanwhile, Grenada and Cuba announced the reestablishment of diplomatic relations (13 years after the US invasion of Grenada). Although the CARICOM Heads of Government have been outspoken in their criticism of the Helms-Burton legislation, they denied Cuba's request for an FTA with the 14-nation bloc, citing the risk of antagonizing the US in a sensitive election year (Miami Herald, 1996b).

At the present time, Cuba's centralized economy, production costs for certain export commodities, expensive port charges, and a lack of regular transportation links to the southern Caribbean have been identified as impediments to an increase in Cuba's overall trade with its free-market Caribbean neighbors (Becker, 1996). However, a restructured Cuba will produce short-term shifts in existing trade and investment patterns that will result in a revised set of comparative advantages in the region (Mesa-Lago, 1994; Preeg, 1994). Economic and political reforms in Cuba, leading to an open economy and normalization of relations with the US, will result in a massive increase in US-Cuban trade, possible economic assistance from the United States, and a vast improvement in the climate for investment and tourism in Cuba. It would also mean greater interdependence, both Cuban and regional, with the US economy. In anticipation of an eventual free market and regionally competitive Cuba, other Caribbean countries are capitalizing on their niche advantages and positioning themselves as players with a substantial stake in the Cuban economy. The current rationale for increasing ties with Cuba, on the part of Caribbean governments and regional private sector alike, is based more on the commercial possibilities envisioned and less on the government and/or politics of the Castro regime.

HAITI: HOLDING THE COURSE

Neither the political transition in, nor the full economic recovery of, Haiti are imminent or certain. The road map for a democratic transition in Haiti is by no means precise. Haiti still lacks the strong political and institutional bases needed to maintain a democratic state. Elements of the old, corrupt, traditional political culture have not disappeared. Social justice and economic equality have yet to become major elements in the political and economic equations. The transition will be complete only when a majority of the Haitian people can discern that a clean break from the historic systems of social and political injustice is apparent and has been made.

In the meantime, violence is again on the rise. Former supporters of the coup (against Aristide) are killing police officers, while judges are releasing criminals without having investigated their crimes. Even the newly created National Police Force, which totals 5,300 members and now replaces the Haitian army, has been criticized for employing violence against the Haitian people. The police have themselves suffered as well: 9 police

officers have been murdered since March 1996. President Preval blames former soldiers for the attacks on the police.

As a result of evidence involving assassination plots against President Preval, approximately 250 US combat troops from the 82nd Airborne Division were deployed to Haiti on a week-long mission in late July (1996). Described by the Pentagon as a routine training mission, the troops patrolled the capital and area surrounding the Presidential Palace. This deployment followed the withdrawal of most US soldiers early in 1996, at which time they were replaced by 1,500 United Nations peacekeeping forces.

Haiti also faces a number of challenges in its plans for economic development over the long term. While the international plan for emergency assistance and the incentives offered to investors may provide an economic kick start, the daunting task of rebuilding the Haitian economy will depend not just on maintaining political stability, but also on the country's ability to make long-term improvements in its depressed infrastructure, both

social and physical. Haiti also faces stiff competition for international trade and foreign investment from other Caribbean countries, such as Trinidad/Tobago and Jamaica, which have liberalized their economics and are much better able to compete in global markets. At present, and despite the democratic electoral transition in December 1995,[6] the Haitian people remain restless, seeing little improvement and expecting miracles. Even

in the best of times, they have always lived in some variation of an authoritarian state. Democracy is both a new, and untested, condition (Bryan, 1995).[7]

A NEW CARRIBBEAN-US AGENDA

President Clinton has the opportunity to make this second term a memorable one in defining US policy toward the Caribbean. The challenges faced by Caribbean countries certainly suggest as much. Will there be any difference this time around?

The political and economic diversity of the Caribbean does not now provide the United States with any possibility of devising a single comprehensive foreign policy appropriate for the entire region. Nevertheless, there are agendas of opportunity. The most immediate of these lie in the areas of trade and development where the regional objectives of the Caribbean converge with the domestic concerns of the United States.

It is necessary to distinguish between countries and regions in Latin America and the Caribbean. Logically, the importance of the Caribbean for the United States resides in a broad swath of concerns which the former have been voicing for several years: small size, threats to democracy, diversion of trade and investment, environmental concerns, food security, drug trafficking, corruption, money laundering, and demographic pressures.

The United States should seek to strengthen its existing bonds with the Caribbean because it is in the interest of the superpower to have stable democratic and prosperous states in its neighborhood, if only to ensure the cooperation which would be necessary in order to resolve some of the major mutual security issues. Regional collaboration between the US and colleagues in the Hemisphere should be conducted in a climate of mutual respect for the sovereignty and integrity of the states concerned, even if the latter are small, because that is the only basis on which a regional approach can be created that is capable of coping with either present concerns (security or otherwise) or those that have yet to emerge.

Although the countries of the Caribbean will not drop off into a kind of policy oblivion, this vision of a US-Caribbean relationship is not without its detractors. The question is no longer whether the issues identified above should command the attention of Washington, as did protection of investments and issues of military security in the past. The real question is: are these issues likely to be perceived as sufficiently important to engage the

economic resources, or the political energies, of policymakers in the United States?

In the area of trade, the Caribbean remains important to the United States. In 1995, US/Caribbean trade was $14.4 billion. US exports increased by 15% to $8 billion, while imports increased by 1% to $6.4 billion. However, on a per capita basis, the Caribbean consumes a higher dollar value of US exports than does either Central America or South America. Exports to Haiti increased by more than 160% in 1995. The US also had a trade surplus with almost every country in the region, excepting only Trinidad and Tobago, Aruba, and the Dominican Republic.

Further export gains by the US will depend more on the region's economic growth, which would influence its external consumption (Jainaran, 1996:37-41).

In the broad political arena, the character of the US/Caribbean relationship has changed although the major "hot-button" issues for the US -- immigration, economic development and trade, and drug trafficking -- are the same for the Caribbean. Moreover, the issues important to the Caribbean are a mirror image of those faced by the rest of the world. It is almost a return to "normalcy." The issues have changed, and they are global, not simply regional. The problem is that, while the issues may have changed, the manner in which the US approaches (or manages) the relationship has not changed.

Today, the US policy objectives in the region require strong partners and respect for those partners. No matter how small the country, the US cannot resolve the problems inherent to the drug traffic without the help of Caribbean countries which have efficient law enforcement capabilities and are willing to cooperate fully, even to the point of sacrificing some of their own sovereignty. Similarly, illegal immigration into the United States from the Caribbean can be controlled only when the US helps its Caribbean partners in working toward (a) successful policies of economic development and (b) a mutual reduction of trade barriers which will facilitate such development. The accelerated Caribbean movement toward regional economic and, at some levels, political integration is pushing the United States to adopt a new posture in the region. It is important for the United States never to allow any marginalization of the Caribbean to take place in its policy parameters. Too much is at stake.

The reality is that there is no single concept or issue on the horizon -- like the Cold War and its competing ideologies -- that will force the United States to redefine its agenda for the Hemisphere. Even as some of the issues of that era have developed new dynamics, recent global transformations have altered both the economic and the security environment in profound ways. While the present liberalization of economies and evolving financial markets in the Caribbean may be a welcome, and legitimate, development, there is also an enormous "down side" to this process of trade and financial liberalization. The increased mobility of foreign direct investment and multinational corporations imposes very real, severe constraints on workers, communities, and states. In the absence of effective controls and safeguards, these small-state economies are susceptible to a whole range of new vulnerabilities (Bryan, 1995b; Epstein, Crotty, and Kelly, 1996). Similarly, as yet there is no catalyst that will transform the ample, but amorphous, dialogue over security issues in the Hemisphere into a lasting consensus on security mechanisms and institutions that will endure (Downes, 1996).

POLICY PRESCRIPTIONS

First, the new Clinton administration must confront this linkage between domestic and international concerns. Accordingly, the US should construct a foreign policy toward the Caribbean that not only takes into consideration its own domestic concerns, but which also displays a realistic awareness that some of the items on its domestic agenda find their reflection in, and are of integral importance to, the Caribbean countries as well.

Second, the United States should respect the fact that the small countries of the Caribbean also face domestic constraints. The surge toward instituting free market economies does not come unaccompanied by mixed reactions. For many countries in the Caribbean, this sudden explosion, in which the magic of the market is supposed to create a panacea for all economic ailments, is producing, instead, a series of economic and social dysfunctions which may render the region more unstable, at least for a time. US policy should reflect an understanding, and toleration of these dislocations.

Third, regional organizations -- such as the Caribbean Development Bank, the Inter-American Development Bank (IDB), the CARICOM Secretariat, and the Organization of American States (OAS) -- are institutions that should be encouraged and provided with the necessary financial resources to help promote levels of Hemispheric, economic, and even political subregional integration.

Thus, for the United States, the importance of the Caribbean resides in both the mix and the management of all the elements that make up these broader concerns under discussion. If Caribbean societies are not to break down into conflict, or sink into violence, repression or, as some predict, generate insurgencies, then the United States may find it in its "national interest" to help formulate, rather than to impose, an agenda acceptable to all parties. At a minimum, this mix should contain the following elements:

1.The promotion of liberalized economies and free trade, including renewal of fast track authority, NAFTA parity for Caribbean countries, and the admission of those Caribbean countries which are "NAFTA ready."

2.The provision of technical assistance to implement economic reforms (particularly in the smaller economies), to counter the narcotics trade, combat political corruption, control money laundering, stem immigration flows, help enforce the rule of law, and provide for "cooperative security" mechanisms, the strengthening of democracy and basic human rights.

3.Closer cooperation with key Caribbean countries, not only in major security matters, but also in broader "grey area" security areas such as the prevention of environmental degradation, and the provision of food security.

4.The continued involvement of other nations, such as Great Britain, Canada, France and the EU, as resource factors in the resolution of certain regional issues.

5.Continued dialogue between the nations of the Caribbean and the United States to assure peaceful political transitions in Haiti and Cuba, and cooperation on other regional economic issues.

CONCLUSION

Ultimately, the Caribbean countries are responsible for their own welfare and sovereignty. It should not be otherwise. But the United States, even in its new era of triumphalism, should not remain unresponsive to the creative ideas of even small islands in its own Hemisphere, or impose further constraints on their capacity for decision-making or independent action.

The most vulnerable areas in international relations remain those of the debility of political institutions, and the persistent inability of the majority of the countries of the world to achieve the objectives of socio-economic development. With few exceptions, Caribbean nations are well advanced in the thought, and the dialogue, regarding the new processes of globalization and the dangers these pose to survival if they are ignored.

This brief look at some of the immediate challenges facing the Caribbean countries suggests that there is scope for the United States to construct a policy of mutual benefit to itself and to the region. The challenge for the United States is to decide on the nature, and extent, of the relationship it wishes to have with a group of countries in its immediate neighborhood who, though small, can play an important role in its future and exhibit a

strong potential for success.

NOTES

1. Pastor sees the issues of Haiti, NAFTA, the Miami Summit, and the resolution of the Mexican peso crisis as the defining elements of Clinton's policy toward the Americas.

2. Both Jamaica and the Dominican Republic have already lost a large number of jobs in the textile industry by relocation of garment assembly plants to Mexico.

3. A case in point is Trinidad and Tobago, which has declared itself "NAFTA ready" and in mid-1996 filed an application for accession to NAFTA.

4. The scope of the drug-trafficking trade is discussed in the following: Andelman (1995); Booth (1996); de Albuquerque (1996).

5. With few exceptions (a Mexican cement company, two Spanish hotel chains and a Dutch bank), existing foreign investors in Cuba were holding their own. However, some foreign banks which finance the sugar harvest or

sell Cuban sugar were backing out of deals in order to avoid sanctions under Helms-Burton (see Marquis, 1996).

6. As Howard J. Wiarda has warned, elections are but only one source of democratic legitimacy and one of several routes to power. Elections may simply convey tentative democratic legitimacy (see Wiarda, 1995).

7. For analyses of the Haitian situation, see also Maguire (1995); Preeg (1996)); and Maguire et al.(1996).

REFERENCES

de ALBUQUERQUE, K. (1996) "Drugs in the Caribbean: A Five-Part Series." Caribbean Week [Barbados] (January-March).

ANDELMAN, D. (1995) "The Economics of the Drug Trade." US/Latin Trade: The Magazine of Trade and Investment in the Americas 3, 9 (September): 42-49.

BECKER, M. (1996) "Study Says Caribbean-Cuba Trade Unlikely to Grow." Caribbean Week (6-19January): 56.

BOOTH, C. (1996) "Caribbean Blizzard." Time Magazine (26 February): 46-48.

BRYAN, A. (1996) "Going Global Cautiously: CARICOM and the OECS Face Free Trade." CARICOM Perspective 66 (June): 29-31.

----- (1995a) "Haiti: Kick Starting the Economy." Current History 94, 589 (February): 65-70.

----- (1995b) "Coping with the New Dynamics," pp. 239-252 in Anthony T. Bryan (ed.) The Caribbean: New Dynamics in Trade and Political Economy. Coral Gables, FL: North-South Center Press; and New Brunswick, NJ:

Transaction Publishers.

----- (1994a) "The Caribbean Community in a Post-NAFTA World: Facing the Trade Dilemma." North-South Focus III, 1.

----- (1994b) "Mas alla del tratado de libre comercio de America del norte: el dilema de CARICOM." Integracion Latino americana 19, 202: 35-42.

CANA News [Barbados] (1996). "CARICOM: Decisions From Special Summit." (17 December).

DOWNES, R. (1996) "Emerging Patterns of Security Cooperation in the Western Hemisphere." North-South Issues V, 1.

EPSTEIN, G., J. CROTTY, and P. KELLY (1996) "Winners and Losers in the Global Economics Game." Current History 95,604 (November): 377-381.

FIDLER, S. (1995) "Budget Deficit Cut More Than 70%." Financial Times (26 September): 3.

GILL, H. (1995) "The Association of Caribbean States: Prospects for a Quantum Leap?" (North-South Agenda Paper 11). Coral Gables, FL: University of Miami, North-South Center Press.

GRIFFITH, I. and T. MUNROE (1995) "Drugs and Democracy in the Caribbean." The Journal of Commonwealth and Comparative Politics XXXIII, 3 (November): 357-376.

JAINARAIN, C. (1996) Annual Report on Trade 1995/1996: US, Florida, Latin America and the Caribbean. Miami, FL: Florida International University, Summit of the Americas Center.

Latin American Monitor-Caribbean [London] (1996a) "Peso appreciates as Economy Improves." (October): 5.

----- (1996b) "On Target for Spring Growth." (September): 5.

MAGUIRE, R. (1995) "Demilitarizing Public Order in a Predatory State: The Case of Haiti" (North-South Agenda Paper 17). Coral Gables, FL: University of Miami, North-South Center Press.

MAGUIRE, R., E. BALUTANSKY, J. FOMERAND, L. MINEAR, W.G. O'NEILL, T. WEISS, and S. ZAIDI (1996) "Haiti Held Hostage: International Responses to the Quest for Nationhood, 1986 to 1996" (Occasional Paper 23).

Providence, RI: Brown University's Thomas J. Watson Jr. Institute for International Studies and the United Nations University.

MARQUIS, C. (1996) "Cuban Economy Feels Blow of US Law." Miami Herald (28 November): A-1, 24.

MESA-LAGO, C. (1994) Are Economic Reforms Propelling Cuba to the Market? Coral Gables, FL: University of Miami, North-South Center.

(The) Miami Herald (1997) "Clinton Rewards Allies." (4 January): A-20.

----- (1996a) "Trade Pact with Cuba Under Consideration" (7 November): A-22.

----- (1996b) "Regional Group Rebuffs Cuba's Trade Overture." (8 August): A-22.

(The) Sun-Sentinel (1996) "Caribbean, US Rift Over Drugs Widening" (17 December): A-1, 19.

PASTOR, R. (1996) "The Clinton Administration and the Americas: The Postwar Rhythm and Blues." Journal of Interamerican Studies and World Affairs, 38, 4 (Winter): 99-128.

PREEG, E. (1996) The Haitian Dilemma: A Case Study in Demographics, Development, and US Foreign Policy. Washington, DC: Center for Strategic and International Studies (CSIS).

----- (1994) Cuba and the New Caribbean Economic Order. Washington, DC: The Center for Strategic and International Studies (CSIS).

Trinidad Guardian [Internet Edition] (1996) "Editorial: What Price Sovereignity?" (18 December).

United Nations Commission for Latin America and the Caribbean (ECLAC) and Caribbean Development and Cooperation Committee (CDCC) (1994) "The North American Free Trade Area and the Question of Eligibility of

Caribbean Countries" (LC/CAR//G.415; May). Port-of-Spain, Trinidad and Tobago: Subregional Headquarters for the Caribbean.

WIARDA, H. (1995) "US Policy and Democracy in the Caribbean and Latin America" (Policy Papers on the Americas VI, Study 7; 21 July). Washington, DC: Center for Strategic and International Studies (CSIS).

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Anthony T. Bryan is Director of the Caribbean Program at the North-South Center of the University of Miami (FL) and a Senior Associate at the Center for Strategic and International Studies (CSIS) in Washington (DC).

Previously he was a Senior Associate at the Carnegie Endowment for International Peace, a Fellow at the Woodrow Wilson International Center for Scholars of the Smithsonian Institution, and served for a decade as the Professor/Director of the Institute of International Relations at the University of the West Indies in Trinidad. He has written extensively on Caribbean and Latin American affairs; more recently, he edited THE CARIBBEAN: NEW DYNAMICS IN TRADE AND POLITICAL ECONOMY (Transaction Publishers for the North-South Center, 1995) and is co-editor (with Andres Serbin) of DISTANT COUSINS: THE CARIBBEAN-LATIN AMERICAN RELATIONSHIP (Lynne Rienner Publications for the North-South Center, 1996).