Several trade agreements and treaties, as well as the creation of common markets and free trade zones, have been signed by Caribbean countries in the post-World War II era. Among the most prominent of these are the Lome Treaty between the European Community (EC) and the ACP (Africa, Caribbean and Pacific) countries in l976-l980, the Caribbean Free Trade Association (CARIFTA) in 1968, the Caribbean Community and Common Market (CARICOM) in 1973, and the Caribbean Development and Cooperation Committee (CDCC).

But without question the most important impact on the Caribbean in terms of free trade zones was the Caribbean Basin Initiative (CBI) between the United States and 24 countries in the Caribbean Basin between 1983 and today. The CBI created a free trade zone with customs benefits that equal those of Mexico and Canada under the North American Free Trade Agreement (NAFTA) and have had a significant impact on the development of the Caribbean region’s economy and the formal labor market. Over the course of its history, 24 Caribbean countries have benefited from the CBI.

Venezuela’s influence in the region has also been felt more strongly since the rise of President Hugo Chávez, who has been a counterweight to U.S. influence in the region. This is reflected in trade agreements with Petrocaribe, an energy cooperation agreement between Venezuela and 14 countries in the Caribbean Basin that was originally signed in 2005 and through which Venezuela allows the signing countries to buy up to 185,000 barrels of petroleum per day with preferential financing terms. In general terms, it provides a grace period of one to two years for long-term financing, an extension of the payment period of 17 to 25 years, an interest rate reduction of 1% if the price of petroleum exceeds $40 per barrel, and extension of short-term payments from 30 to 90 days. Petrocaribe’s explicit objective is to combat the abuses of foreign shippers selling petroleum to Caribbean countries that lead to excessive prices. The program eliminates intermediaries in the sale of crude oil and aims to make Latin American and Caribbean societies more fair, educated, participatory and unified. The agreement includes the following Caribbean countries, among others: Venezuela, Cuba, the Dominican Republic, Antigua and Barbuda, the Bahamas, Belize, Dominica, Grenada, Guyana, Jamaica, Suriname, St. Lucia, Guatemala, St. Kitts and Nevis, St. Vincent and the Grenadines, and Haiti. The only countries that did not sign were Barbados and Trinidad and Tobago, perhaps because of pressure from the United States, which has tense diplomatic relations with Venezuela.

Author: Luis Galanes
Published: March 20, 2012.

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