Various interregional trade agreements have been established in the Caribbean in modern history, but especially after World War II. The following are the most important interregional trade agreements that arose during that era:


Caribbean Development and Cooperation Committee (CDCC). The CDCC is a subsidiary of the Economic Commission for Latin America and the Caribbean (ECLAC), which is one of the five regional committees of the United Nations Economic and Social Council (ECOSOC). This includes all of the members of the ACS plus seven dependent territories in the insular Caribbean that are “associate members.” The three French dependencies attend the CDCC meetings as observers. The ECLAC was created in 1948, while the CDCC was created later in 1975.

Caribbean Community (CARICOM). Originally called the Caribbean Community and Common Market (CARICOM). The first important efforts to create common economic markets in the insular Caribbean took place among the English-speaking islands, beginning with the creation of the West Indies Federation (WIF) in 1958. The WIF was dissolved in 1962 and during its brief existence (1958-1962) it paid little attention to economic unification in the region, concentrating instead on political aspects of integration. During the years following the dissolution of the WIF, between 1962 and 1983, many of the territories in the extinct WIF gained their independence from the British Empire: Jamaica (1962), Trinidad and Tobago (1962), Barbados (1966), the Bahamas (1973), Grenada (1974), Dominica (1978), St. Lucia (1979), St. Vincent (1979), Antigua and Barbuda (1981), St. Kitts and Nevis (1983), Belize (1981), Guyana (1966), and Suriname (1975). In light of this decolonization, a new effort at unification (this time, exclusively economic) arose in 1965 with the creation of the Caribbean Free Trade Association (CARIFTA). In 1973, the heads of state and member territories of CARIFTA decided to broaden the union and they created the Caribbean Community, which replaced CARIFTA. Aimed at promoting cooperation in broad areas such as trade, education, sports and culture, the Caribbean Community play a key role in economic integration in the region through the CARICOM Single Market and Economy (SCME). CARICOM was established by the Treaty of Chaguaramas (which took effect on August 1, 1973) and was originally signed by the leaders of four countries: Barbados, Jamaica, Guyana, and Trinidad and Tobago. Eight other countries joined later. The Bahamas became the thirteenth member state of the Community on July 4, 1983, although it never joined the Common Market. In July, 1991, the British Virgin Islands and the Turks and Caicos Islands joined CARICOM, followed by Suriname in 1995, the island of Anguilla in 1999, the Cayman Islands in 2002, and Bermuda in 2003. Haiti joined CARICOM in 2002, becoming the only French-speaking country to join the organization. CARICOM currently consists of 15 countries: 13 independent countries among the English-speaking islands, including all of the former British colonies (including Guyana), as well as Suriname and Haiti. Two dependent British territories are “associate members.” CARICOM also has two “observer members”: Cuba and the Dominican Republic.

Lomé Convention. This treaty between the European Economic Community and the ACP (Africa,Caribbean and Pacific) countries was in effect from l976 to l980. It established an economic cooperation and aid agreement between Europe and the former French, Belgian and British colonies (Commonwealth), not only in Africa but also in the Caribbean and Oceania. Since the first summit, Lomé I in 1976, there have been five more summits, and at the latest one, the Lomé Convention of 2000, the treaty included 71 member countries, including 46 in Africa, 8 island territories in the Pacific Ocean and various Caribbean countries (the Bahamas, Barbados, Jamaica, Trinidad and Tobago, Dominica, St. Lucia, Antigua and Barbuda, the Dominican Republic, St. Kitts and Nevis, St. Vincent and the Grenadines, Haiti, Guyana, Suriname and Belize). The treaty allows export of main agricultural and mining products from the ACP to the European Union free of tariffs. The Lomé Convention was replaced by the Cotonou Agreement in 2000.

Caribbean Basin Initiative (CBI). CBI was the name given to a collection of U.S. legislative acts that allowed the creation of a preferential trade agreement with Central American and Caribbean nations for the purpose of alleviating poverty in the region and, as a result, combating communism. The specific legislation included the Caribbean Basin Economic Recovery Act of 1983 (CBERA), the Caribbean Basin Economic Recovery Expansion Act of 1990 (commonly known as the Expansion Act), the Caribbean Basin Trade Partnership Act of 2000 (CBTPA), the Trade Act of 2002, the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006 (HOPE) and the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II). To take advantage of the customs benefits under CBERA, countries had to meet certain conditions: countries with de facto communist governments or the appearance of one and countries that had expropriated property belonging to the United States or to U.S. corporations were excluded from potential benefits.
The original CBERA was a temporary agreement in nature, set to expire on August 5, 1990, and allowed free trade with preferential tariffs on agricultural and manufactured goods among the member countries of the CBI and the United States. When CBERA expired in 1990, the preferential tariffs were extended permanently and indefinitely to all of the CBI countries through the Expansion Act. In 2000, then-President of the United States Bill Clinton created the Caribbean Basin Trade Partnership Act(CBTPA). Under CBTPA, the CBI member countries received equal treatment to Mexico and Canadaunder NAFTA on any product. While CBERA was made permanent and indefinite, CBTPA was temporary and was set to expire on September 30, 2010, or when the Free Trade Area of the Americas (FTAA), or any other free trade agreement between the United States and the CBI beneficiary countries began operations, whichever occurred first. On August 5, 2004, the United States signed the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), a pact that included the Dominican Republic and five Central American countries: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. At the time that CAFTA-DR took effect, these six countries automatically ceased to be part of the CBI. Finally, HOPE I and II extended the CBI benefits to Haiti. In 1984 (a year after the original creation of CBERA), twenty countries had requested membership as beneficiary countries under CBI. By 2000, the number of members had risen to 24. Anguilla, the Cayman Islands, Suriname and the Turks and Caicos never requested membership. With the implementation of CAFTA-DR in 2004, the number of members fell to 18.
Association of Caribbean States (ACS). The ACS was created by CARICOM in 1994. The treaties that created the ACS were signed on July 24, 1994, in Cartagena de Indias, Colombia, and the association currently includes 28 states and territories, including all of the Central and South American countries that border the Caribbean Sea, as well as nearly all of the independent islands in the insular Caribbean. The ACS includes 16 independent member states from the insular Caribbean along with 9 continental Caribbean countries and three French dependencies as “associate members.” As a result, the ACS is the broadest unit of CARICOM and includes continental Caribbean countries.

Bolivarian Alliance for the People of Our Americas — Peoples Trade Agreement (ALBA-TCP for its Spanish acronym): ALBA-TCP is a treaty that includes eight continental countries of the Americas and the Caribbean. Its reach extends to the Atlantic, Pacific and the Caribbean, as the majority of the members are Caribbean countries (Venezuela, Nicaragua, Cuba, Dominica, Saint Vincent and the Grenadines and Antigua and Barbuda), but it also includes South American countries on the Pacific coast, such as Bolivia and Ecuador. The proposal to create ALBA was formulated by Bolivarian Republic of Venezuela President Hugo Chávez at the Third Summit of Heads of State and the Association of Caribbean States at Margarita Island on December 11 and 12, 2001. On December 14, 2004, the first ALBA Summit was held in Havana; Venezuelan President Hugo Chávez and Cuban State Council President Fidel Castro signed the Joint Declaration creating the treaty. Other members joined later, with the latest to join being Ecuador, Saint Vincent and the Grenadines and Antigua and Barbuda, all on June 24, 2009. From the beginning, ALBA was conceived as a way to counteract the neoliberal model and U.S. domination in the region, particularly as an alternative to CBI and other free trade agreements arranged by the United States in the region. It also includes an important element of integration that was, in fact, conceived as a mechanism to continue the historical project of Simon Bolivar for unity. All together, the member countries have a population of more than 75 million people. The intergovernmental projects (which are called “gran-nacionales” in the treaty in reference to Bolivar’s “Gran Nación“) include such varied areas as finance, education, infrastructure, science and technology, agriculture, energy, environment, health, mining, tourism, culture and telecommunications. But the most outstanding projects are those of literacy (the region is the only one in the world with no illiteracy) and energy. The ALBA countries, as a group, have the world’s largest reserves of petroleum and lithium and are also the first in the Americas and eighth in the world in natural gas reserves. ALBA-TCP has an ALBA Bank (since 2008) and includes among its goals the creation of a common currency among member countries, called the sucre, based on its Spanish acronym for “sistema unitario de compensación regional” (unitary regional compensation system).

Acuerdo Petrocaribe. Petrocaribe is an energy cooperation agreement between Venezuela and 14 countries in the Caribbean basin that was originally signed in 2005. Under the terms, Venezuela allows the member countries to buy up to 185,000 barrels of oil per day under preferential financing terms. In general terms, the grace period for long-term financing is extended from one to two years, the payment period is extended from 17 to 25 years, interest is reduced to 1% if the price of the oil is above $40 per barrel and short-term payments are extended from 30 to 90 days. Petrocaribe’s purpose is to counter the abusive practices of foreign shippers toward Caribbean countries in terms of petroleum sales, which lead to higher prices, and to eliminate intermediaries in crude oil sales and to make Latin American and Caribbean societies more just, cultured, participatory and unified. The agreement includes the following Caribbean countries: Venezuela, Cuba, the Dominican Republic, Antigua and Barbuda, the Bahamas, Belize, Dominica, Grenada, Guyana, Jamaica, Suriname, St. Lucia, Guatemala, St. Kitts and Nevis, Saint Vincent and the Grenadines, and Haiti. The only countries that did not sign were Barbados and Trinidad and Tobago, perhaps responding to pressure from the United States, which has tense diplomatic relations with Venezuela.

In the continental Caribbean, in Central America, important trade agreements have been established during the first decade of the 21st century to develop infrastructure at the intraregional level. Among the most notable intraregional initiatives are the expansion of the Panama Canal and multiple subregional infrastructure projects such as the Mesoamerica Project (PM for its Spanish acronym) and the South American Regional Infrastructure Integration Initiative (IIRSA for its Spanish acronym). The Mesoamerica Project involves ten countries on the Central American isthmus and in the Caribbean basin (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Colombia, Mexico and the Dominican Republic) and is intended to coordinate subregional infrastructure projects. Among these projects are the Mesoamerican International Highways Network (RICAM for its Spanish acronym) and the Mesoamerican Information Superhighway (AMI for its Spanish acronym). In the insular Caribbean, subregional physical infrastructure development agreements have also been undertaken within the framework of CARICOM, particularly in terms of air and maritime transportation, which is one of the most lacking infrastructure elements in the region.


Author: Luis Galanes
Published: May 16, 2012.

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