Address by Norman Girvan, Secretary General of the Association of Caribbean States (ACS)


First I want to pose the question whether the ACS is a true regional integration process. I think there was some ambiguity on this question at the time the ACS was formed. If you look carefully at the ACS Convention it declares the Association to be an organisation of "consultation, cooperation and concerted action"(7). At the same time it lists among the stated objectives "integration, including economic integration"(8). Initial expectations and media reports may have suggested that the ACS would establish a free trade area or an economic bloc(9).

But there were a number of problems with this. One was that the FTAA process was launched soon after the ACS was formed (July 1994, ACS; December 1994, FTAA). The FTAA process effectively trumped the possibility of an ACS FTA. The FTAA counts with the participation of 24 of the 25 ACS member states, as well as with the United States and Canada, which are two of the region's most important trading partners. As Insanally (1998:12) observed, "The reality of the situation is that the liberalisation of trade in the ACS has been placed on the back burner as ACS Member States have become embroiled in FTAA negotiations."(10) The onerous demands of the FTAA negotiating process and the strong political and institutional support provided to it by powerful ACS and non-ACS members meant that the majority of ACS membership were to opt to pursue the objective of trade and investment liberalisation among themselves within this wider hemispheric context.

Another major issue in the ACS becoming an economic bloc is structural. 22 of the 25 ACS member states already belong to four existing economic integration groupings: NAFTA, CARICOM, the Central American Economic Integration System (SIECA) and the Andean Community (CAN). This means that the primary integration commitment for the majority of ACS members lies with integration groupings rather than with the ACS itself.

Now there is a question whether these groupings could not converge into an ACS integration grouping or bloc. But if you look a little more closely you will see where this is hardly feasible. The largest countries in the ACS are the Group of 3, with nearly three-quarters of the foreign trade of the ACS. All three belong to integration groupings that lie outside of the ACS: Mexico with NAFTA and Colombia and Venezuela with CAN. They each have their own integration agenda, in the case of NAFTA you could say that the agenda is to extend to the FTAA.

If you then look at SIECA and CARICOM you would see that they are on different integration tracks: for example CARICOM has a CET since 1992 and CA is aiming to haveit in place by January 2004. CARICOM has been coordinating their external negotiations for some time and now has an RNM while CA has only recently started this for the US FTA. CARICOM has a privileged relationship of market access with the EU which has been a source of friction with the CA. The current time-table is also different.

Another was the failed attempt to secure agreement on a Caribbean Preferential Tariff (CPT) within the framework of the ACS as the alternative to an ACS FTA. The CPT would be compatible with existing and proposed trade agreements and would respect differences in the levels of development of ACS members, with a special regime for the CARICOM LDCs. Under Article XX(13) of the ACS Convention, the CPT could be implemented by those ACS countries willing to participate in the absence of unanimous agreement among the ACS membership.

Technical meetings on the CPT went on over a 2-year period resulting in agreed draft approved by the ACS Trade Committee. But at the end of 2000 the CPT proposal was abandoned in the face of lack of interest from the majority of the ACS membership. Mexico had always indicated it would not be part of the CPT, preferring to give priority to the FTAA process, its negotiations with the EU, and a series of bilateral negotiations with Central American countries. Central America failed to confirm its participation in the CPT because of the demands of the FTAA negotiations and of a number of bilateral negotiations as well of its own integration process. In the face of the non-participation of Mexico and Central America Caricom decided that the value added from the CPT would not be worth the effort. CARICOM already had trade agreements with Venezuela, Colombia, The Dominican Republic and Cuba, the principal CPT protagonists; and was also preoccupied with negotiations with the EU, the FTAA, bilateral negotiations and the requirements of the CARICOM Single Market and Economy (CSME). In effect, the majority of ACS countries indicated that there were more pressing and urgent priorities on their trade negotiating agenda than the ACS CPT.

There were a number of other issues that came up in the early years of the ACS that showed these contradictions. By 2000 the ACS was engaged in a process of self-evaluation and two schools of thought crystallized. One assumed that the ACS would continue to try to behave as if it were an integration organisation by continuing on a programme embracing a very wide area. The other was that the ACS would focus on a limited number well-defined areas of cooperation in trade, transport and sustainable tourism; seeking to collaborate with and complement, the activities of existing regional organisations. We characterise these as the maximalist vs. the niche or value added conception of the ACS role.

The consensus emerged around the niche or value added conception, and was the basis of decisions on rationalisation and prioritisation of the work programme taken in December 2000; endorsed at the 3rd ACS Summit in December 2001. This reaffirmed consultation, cooperation and concerted action as the defining character of the ACS as a regional organisation; and adopted establishment of the Greater Caribbean Zone of Cooperation as its principal mission. By these decisions, the ACS accepted a self-definition as an organisation of functional cooperation rather than as an economic integration grouping per se.

A Zone of Cooperation-is a group of countries that share a common geographic space, in this case the Caribbean Sea-- and agree to develop cooperation in the pursuit of common interests. To the extent that such cooperation is successful, the ACS stands to produce benefits from intra-regional economic integration and from functional cooperation in extra-regional relations, similar to those derived from an economic integration grouping. The potential benefits are synergistic, i.e. they would be yielded to the extent Greater Caribbean-wide functional cooperation complements existing integration processes. An example of this would be the improvement of transport facilities within the Greater Caribbean that complements trade liberalisation agreements among and between sub-groups in the region.


Table 1: Main Indicators of the Size of Economies, Economic and Social Development of ACS Countries.   

Sources: ECLAC, based on official figures                                
Johannes Heirman, The Main Trends in Trade, Trade Policy and Integration Agreements in the Countries of the Association    
of Caribbean States (ACS). Santiago, Chile: ECLAC, Division of International Trade and Integration, November 2001.       
Association of Caribbean States (ACS): ACS Trade Database: http:www.acs-aec.org/Trade/Dbase/Dbase-eng/dbaseindex_eng.htm   
                                       
Notes: (a) corrsponds to the year 1998; (b) corresponds to the year 1997.                       



Table 2
INTEGRATION AND TRADE AGREEMENTS OF ACS MEMBER STATES, CIRCA 2001*
*Includes agreements under negotiation

Notes:
    Fc: functional co-operation in non economic areas.
a Became a Free Trade Agreement on 1/8/1999.
b Protocol to the General Treaty on Central American Economic Integration, Guatemala City.
c Still pending the negotiation of some bilateral lists for the removal of tariffs
d The timetable for joining the customs union is being studied.
e Supply of oil with preferential financing.
f Caribbean Basin Trade Partnership Act (CBTPA) granting to these countries treatment comparable to that granted by the US to mexico. This is in addition to the CBI.
g Lomé IV Convention
h Protocol Modifying the Andean Sub-regional Integration Agreement, Trujillo, Perú
I Andean Trade Preference Act (ATPA) granted in support of efforts by these countries to fight the illegal production and trafficking in drugs
j The Andean countries are beneficiaries of the European Union's Generalised System of Preferences. granted in support of efforts by these countries to fight the illegal production and trafficking in drugs

Source: based on Johannes Heirman, The Main Trends In Trade, Trade Policy And Integration Agreements In The Countries Of The Association Of Caribbean States (Acs). Santiago de Chile: United Nations, Economic Commission for Latin America and the Caribbean (ECLAC), Division of International Trade and Integration, November 2001; Table 10.


TABLE 3. ACS EXPORTS BY SUBGROUPS AND MAIN DESTINATIONS, 1994,1999

Johannes Heirman, The Main Trends In Trade, Trade Policy And Integration Agreements In The Countries Of The Association Of Caribbean States (Acs). Santiago de Chile: United Nations, Economic Commission for Latin America and the Caribbean (ECLAC), Division of International Trade and Integration, November 2001.

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