Latin Caribbean and regional cooperation: A Survey of challenges and opportunities, The

Lewis, David E

THE central thesis of this paper is that the resources and conditions, both external and regional, for the continuation of traditional Caribbean subregionalized cooperation and integration processes no longer exist. Whereas in the past there existed a number of rationalizations and justifications for restricting and limiting the scope of regional initiatives, the scenario of the 1990s -- regional, Hemispheric, and global -- is one in which neither regional actors nor external hegemons can afford not to cooperate beyond the limitations of the past.

Moreover, the impetus for this change of direction is not only regional but sectoral: it includes civil society business, labor, non-governmental organizations or NGOs) in a way never seen before. By the same token, this impetus is both Hemispheric and global in the sense that external factors -- such as the proposed Single European Market (SEM), North American Free Trade Agreement (NAA), and Western Hemisphere Free Trade Area (WHFTA) -- all testify to the increased obsolescence of those schemes for regional cooperation and integration that are exclusive in nature.

The issue of regional cooperation and economic integration has not been understudied in the Caribbean. A great diversity of studies exist on the subject, most of which concentrate on the experience of the Caribbean Community and Common Market (CARICOM), such as those of Bourne (1988), Brewster and Thomas (1967), CARICOM (1984), Chernick (1978), Derni et. al. (1992), Group of Caribbean Experts (1981), Harker (1989), Manigat (1991), Samuel (1989 and 1990), Will (1991) among others. Of this sampling, only the Samuel and Harker references have gone beyond the central CARICOM experience to encompass a truly regional perspective. This is only to be expected since the Samuel studies emerged out of research developed by the Association of Caribbean Economists (ACE), incorporating researchers from territories throughout the area. However, almost all of these studies are evaluative in focus, fail to incorporate prospective analyses, and are already quite dated.

Others have begun to explore, identify, and develop the initial format of what I have termed a "beyond CARICOM" agenda for the region, one that incorporates cooperation and integration with the non-CARICOM Caribbean -- Central America, Latin America, and even the State of Florida -- on matters that range from joint trade and investment policies to common negotiating positions vis-a-vis NAFTA and trade liberalization throughout the Hemisphere. Some of these studies would include: Bernal (1993), Blake (1993), Bryan (1989 and 1991), Bryan and Serbin (1390), CAIC (1993), CBTAG (1992), C/LAA (1993), FEDEPRICAP (1992), Gill (1992), Lewis (1992, 1993b and 1993a), Rosenberg and Hiskey (1393), Segal (1992), Serbin (1994), the West India Committee (1991) and the West Indian Commission (1992). It is my belief that it is in this area that the future strategies and policies of a competitive Caribbean will originate and develop.

Within the Caribbean, especially at the national level, it is important to review the major trends and initiatives that have been developing in the area of cooperation and integration. From the potential impact of economic liberalization in Cuba to the collaboration with Central America, and the special role which the Dominican Republic can play as a "bridge" between the subregions, it is important to grasp fully the realm of action and commitment that now exists in support of such proposals. The role of private sector groups, regional government organizations, as well as nongovernmental actors has also been important and merits a separate analysis, or it is only by understanding the intertwining of these initiatives that it is possible to gauge the degree of strategic thinking and planning that is indeed taking place and, moreover, be able to define the specific policy actions and initiatives needed if cooperation is going to see the best needs and interests of the region.

II. CUBA:

THE CHALLENGES AND OPPORTUNITIES OF ECONOMIC LIBERALIZATION AND POLITICAL DEMOCRATIZATION

A market-oriented Cuba reintegrated into the Caribbean economy will substantially impact others in the region primarily the Dominican Republic, Jamaica, and the smaller CARICOM states of the Eastern Caribbean -- in such areas as tourism, nontraditional agriculture, and some of the assembly industries. A reintegrated Cuba will have both "trade-creating" and "trade-diverting" effects on its neighbors as Cuban growth in trade and investment will either add to, or displace, trade and investment elsewhere in the region. Trade-creating effects are more likely for tourism, while trade-diverting effects may impact the assembly industry; nontraditional agricultural exports will doubtless fall somewhere between these two stools. In some cases (such as Puerto Rico), the potential for servicing the new Cuban market economy in areas such as investment, financial services, construction, technical assistance and so forth would be formidable. It is probable that such opportunities would face stiff competition from US-based businesses as well, especially those in Florida.

The economic and political reforms leading to an open economy, along with normalization of relations with the United States, would give Cuba immediate access to the benefits of the Caribbean Basin Initiative (CBI) and the North American Free Trade Agreement (NAFTA). It would also open Cuba to direct economic assistance and increase its access to the US market in such sectors as textiles, agricultural products, and some manufactures while improving, at the same time, its climate for investment. Under an open market economy, Cuban participation in the Caribbean would result not only in the eventual transformation of the region's present patterns of trade and investment, but it would also imply a process of adjustment that would surely culminate in greater Cuban and regional interdependence with the US economy.

Lastly, the human and financial resources of Cuban expatriates plus the growing interest of US multinational corporations are critical factors which would facilitate Cuba's economic restructuring and offer positive assistance in developing its new competitiveness, both regionally and in the Hemisphere. No Caribbean country, not even Puerto Rico, has the resources with which to counter, or even balance off, such support. In sum, the region should look to Cuba as an economic complement and not as a zero-sum competitor.

Little has been done in the region to assess the potential implications of such changes in Cuba. While CARICOM has established a CARICOM-Cuba Joint Council (circa July 1993 with an official signing in December 1993), there has been little activity between governments, with most consideration of the impact of change taking place at the level of the private sectors. Since March 1993, however, Prime Minister Charles of Dominica has called for an end to the US embargo on Cuba and the need for CARICOM states to engage actively in business in Cuba or fear of being left out of that market once it begins to open up.

However, the interests of political democratization and economic liberalization in Cuba are contradictory for CARICOM in one sense for, if and when the United States ends its embargo of the island, then it is probable that US multinational corporations would be able to challenge, and displace, any CARICOM business then going on in Cuba. Clearly, it is only under the present situation, in which major US business interests are excluded from entry into the Cuban market, that CARICOM and other Caribbean entrepreneurs can take full advantage of the opportunities that economic liberalization may offer in Cuba. It is anticipated that the Joint CARICOM-Cuba Technical Cooperation Agreement (signed and ratified at the CARICOM Summit of July 1993 in the Bahamas) will strengthen these processes further, helping to guarantee and safeguard the interest of both sides during this period of uncertainty.

III. THE DOMINICAN REPUBLIC: POTENTIAL "BRIDGE" BETWEEN THE CARIBBEAN AND CENTRAL AMERICA

IN a sense, the same issues that were at the forefront of the 1974 study on the implications surrounding the entry of the Dominican Republic into CARICOM (Vega, 1378) still dominate the discussion of Dominican-CARICOM relations today. The debate concerning the advantages/disadvantages and costs/benefits of the Dominican Republic's full participation in CARICOM remains as relevant now as it was back then.

Throughout 1992 and 1993, the Dominican Republic embarked on an unprecedented initiative aimed at establishing trade linkages with both the members of CARICOM and the countries of the Central American Common Market (CACM). At the CARICOM level, the Dominican Republic emphasized political, cultural, and geographic factors as grounds for cementing a relationship which has historically experienced many ups and downs. Since its entry into CARICOM as an Observer (1982) and subsequent request for full membership, presented at the CARICOM Summit in St. Kitts (1931), "haphazard" best describes the Dominican Republic's interest in CARICOM. Nevertheless, ever since the first Ministerial Summit meeting between the countries of CARICOM and those of Central America took place in Honduras in 1991, the Dominican Republic has pursued an aggressive strategy towards both these subregions, seeing itself as uniquely capable of being a full partner in both groups.

At the Central American level, the Dominican initiative has been equally active and impressive. During the summit meeting of Central American presidents in Panama (December 1992), Vice-President Carlos Morales Troncoso laid the political foundation for a Dominican entry into the Central American integration process by emphasizing its cultural-linguistic heritage and the very important commonality of trade and economic liberalization reforms now taking place. The country is now poised to take full advantage of all opportunities for trade with Central America.(1)

At the level of the "wider Caribbean," the Dominican Republic is the country that has adopted the most assertive and dynamic position towards the Association of Caribbean States (ACS); indeed, it has suggested itself as the "ideal" and "most central" location for a future ACS Secretariat. Its hosting of the second ACS Technical Meeting in Santo Domingo (on 9-10 May 1994, just a week before the national elections) is a clear indication of its commitment to maximizing regional links. Two major points, one negative and one positive, must form part of this strategic summary. On the one hand, it remains a negative that the Dominican Republic's commitment to a bonafide relationship within CARICOM is still questioned by many in the Community. It is no secret that CARICOM's lack of action on the Dominican request for full membership (presented in 1991 and to which no official response has yet been made) is based on a pervasive lack of trust in the Dominican commitment to abiding -- both formally and informally - by a "CARICOM position" in regional and international matters.

The positive side is that, for the first time in its history of relations with the rest of the Caribbean, a public-private sector consensus appears to be developing in the Dominican Republic regarding the strategic importance of establishing these linkages with its neighbors, in both CARICOM and Central America. While participation in both entities may seem contradictory at first glance, this is no reason, in and of itself, for the Dominican Republic not to pursue its two-track approach to regional integration. After all, the opportunity arises from its unique situation in the region. The more important matter, however, is that the initiative be balanced, coherent, well-directed, and continuous. In this sense, it is important that the Dominican Republic follow up on these initiatives while, at the same time, receiving the necessary political "nurturing" and reinforcement from within CARICOM and the rest of the region.(2)

Finally, it is important to mention not only the long history of controversy regarding the preferential trade regime for Caribbean bananas in Europe, but also the Dominican Republic's use of its new status under the Lome Convention to compete in this market (in direct contradiction of the agreement with CARICOM prior to the December 189 accession).(3) This issue alone has probably accounted for most of the obstacles that have marred the CARICOM-Dominican Republic relationship. Institutionalization of the Lome Regional Indicative Program under the CARIFORUM, and the special role of the Dominican Republic in the drive of the European Community (EC) to utilize Lom programs to strengthen the process of Caribbean integration, should form the basis for qualitative improvement in CARICOM-Dominican relations.(4) If this cooperative process is not only strengthened at the technical level but complemented by a similar process at the higher levels of Dominican foreign policy towards the region at the same time, the potential or the Dominican Republic to function as a bonafide "bridge" in the area of regional cooperation is very strong indeed.

If this initiative is strengthened at the public policy level, it would certainly serve to complement certain initiatives taken by the Dominican private sector (which has traditionally emphasized its ties to the United States and is not known for a commitment to integration) to mobilize resources for similar ventures involving trade, investment, capital markets, and that serve to stimulate the country's entry into both CARICOM and the Central American Common Market.(5) In the final analysis, the success of its "bridging" role will depend upon the support and participation of the Dominican private sector.

However, if the Dominican Republic does not change its image in CARICOM and CARIFORUM of seeking to take advantage of potential business, financial, and commercial schemes, then the relationship is bound to remain in crisis and in flux. Unless recent private sector initiatives are complemented by the government's institutionalization of a Caribbean policy (especially in the Ministry of Foreign Affairs and the National Palace) then there will be no real commitment to Caribbean cooperation beyond that of certain leading individuals.

In this regard, it may be necessary to add a qualifier concerning CARICOM's relations with the Dominican Republic: if we can accept that, in many ways and instances, the Dominican move to establish ties with CARICOM has been marked by uncertainty and doubt on its part, then it must also be said that the attitude and actions of CARICOM vis-a-vis the Dominicans has been one of nonchalance at the very least, if not of outright neglect and disinterest.

More than at any other point in the modern history of the Caribbean, it is imperative that the potential for collaboration materialize in a productive manner if the region as a whole is to deal effectively with the new global trading environment. Given its size, production structures, and unique participation in both the CBI and Lom, etc., the Dominican Republic's potential contribution to regional integration and cooperation could be great indeed. The opportunity and the responsibility now rests with both camps.

IV. PUERTO RICO:

BEYOND 936 AND THE FUTURE OF THE "CARIBBEANIZATION" PROCESS(6)

FOR the next few years, the central issue involving Puerto 1 Rico will be the extent to which that country is committed to cooperation with the region above and beyond the financial-technical specifics of the 936 Caribbean Development Program. As Edwin Carrington declared in San Juan in July 1992, just prior to taking office as Secretary-General of CARICOM: "The Caribbean expects much more than 936 from Puerto Rico." This has been the historic crux of Puerto Rico-Caribbean relations over the past 40 years. During the 1980s and 1990s, to what degree has Puerto Rico merely used 936 as a linkage with the region? To what degree is there a commitment to go beyond this and ensure the institutionalization of the relations with the rest of the Caribbean? (Lewis, 1992b; Rivera Ortiz, 1992).

Not only have these collaborative initiatives seed both the United States and Puerto Rico well, but, moreover, they have also seed the region as a whole. They have been developed on the basis of a collusion between the private and public sectors in Puerto Rico in seeing that their involvement in the Caribbean Basin -- politically, economically, socially, culturally -- is a positive one. In developing this economic collaboration, Puerto Rico has been at center stage of the region's development, serving as a major force in transferring technology and resources throughout the Caribbean Basin. Many sectors have benefited from this involvement: transportation, tourism, and manufacturing among them. Efforts to promote investment have also served to strengthen regional trade. For example, Puerto Rico's exports to the Caribbean Basin increased by 63% between 1985 and 1992 (up from $518 million to $812 million), while exports from the Caribbean to Puerto Rico went up by 64% during the same period (i.e., from $616 million to $960 million).

Since 1991-92, there has been another important initiative, which developed under the loose coordination of the Government of Puerto Rico's Department of State. The Caribbean Basin Technical Advisory Group (CBTAG) was an informal attempt on the part of Puerto Rico to establish a technical-level forum for representatives from the Caribbean and Central America, as well as from the non-independent territories. These representatives came from every strata of society (including the private sector, government, academia, NGOs and civil society, among others) for the purpose of producing technical analyses of, and policy recommendations regarding, the economic impact of the proposed NAFTA and SEM on the economies of the region.(7)

The CBTAG viewed its primary role as one of providing the technical foundation that would buttress the continuing strategic collaboration of the Caribbean-Central American countries. The rationale behind this effort was based on the notion that the Caribbean Basin constituted a "critical economic mass" of 50 million people, representing a gross national product (GNP) of $50 billion, that could work together as a negotiating bloc vis-a-vis the various trade and free market schemes then being developed, not only the NAFTA and Enterprise of the Americas Initiative (EAI), but also other similar arrangements being organized throughout the Hemisphere. By cooperating for this purpose, it was hoped that the countries of the Caribbean Basin would increase their ability to produce efficiently and compete effectively in the new global economy. During its existence,(8) the CBTAG sought to coordinate efforts and prepare regional briefings concerning economic policy in relation to the NAFTA and SEM and, in particular, to implement specific public policy initiatives.

The CARICOM governments have always exhibited varying degrees of skepticism towards Puerto Rico regarding its commitment to the Caribbean linkage; historically, this skepticism has usually been justified. Unless Puerto Rico can prove that its self-interest in developing Caribbean ties as a way to save the 936 program is also matched by a bonafide commitment to the region as a whole, then it is clear that, under this prostatehood, New Progressive Party (NPP) administration, Puerto Rico's role in regional cooperation will be limited indeed.

In this sense, then, the fact that the CBTAG has become dormant under the NPP administration certainly does not send a positive message regarding Puerto Rico's commitment to regional or Hemispheric schemes, whether of trade, cooperation, and/or integration. Similarly, news reports that the government has been engaged in ending its membership in a number of international and regional organizations does not bode well or its future response to, or support of, cooperative initiatives of this type. As a matter of fact, Secretary of State Corrada del Rio has stated that, in future, Puerto Rico intends to participate in international fora as part of the US delegations.(9)

It is both curious and interesting to note that, within the framework of the US union, those Puerto Rican advocates of statehood have never looked to the examples of some of the present states of that union -- Florida and the southwestern states of Texas, Arizona, New Mexico and California come to mind -- in their respective linkages with the countries of the Caribbean and Central America on the one hand, and Mexico on the other. Florida, in particular, really does have a Caribbean policy which not only engages both the public and private sectors, but which also seeks to safeguard the value of the relationship with the Caribbean Basin.

The fact that the Florida legislative proposals to establish parity between the Caribbean Basin Initiative (CBI) and the North American Free Trade Agreement (NAFTA) -- HR 1403 and S 1155, respectively -- began under the former government of then-Resident Commissioner Antonio J. Colorado, back in August 1992, gives a clear indication of how deeply Puerto Rico had become involved in, and committed to, matters concerning the economic development of the region. For example, there is already a very active Gulf States Association and Southern Governors Association which see as vehicles for establishing linkages and promoting collaboration between states of the union and Mexico on matters such as the NAFTA, immigration, management of the environment, and regional economic development.

All in all, however, the matter at stake is not, and will not be, so much the issue of 936 availability, which is only the most visible manifestation of the problem. The larger question, which the San Juan administration has effectively avoided and CARICOM chosen not to challenge (at least for the time being), is what kind of linkage should Puerto Rico have with the rest of the Caribbean? With or without 936, it is to the region's advantage to have Puerto Rico remain an active participant in those matters that pertain to economic development and regional collaboration. It behooves the region to convey to Puerto Rico, as forcefully as possible, the message that regional cooperation will serve its own best interests as much as that of the "wider Caribbean." Even should Puerto Rico eventually become a state of the union, there is much that could benefit all parties if present linkages are maintained and strengthened.

Both CARICOM and Puerto Rico need to examine this issue from the point of view of their own enlightened self interest and avoid being caught up in the perennial ups and downs of Puerto Rican politics involving its status. Regional collaboration is not incompatible with closer ties to the United States, or even with statehood for that matter. Similarly, a strategy of external economic linkages into the 21st century must be the sine qua non of Puerto Rico's future economic development under any status: whether statehood, commonwealth, or independence.

The economic and strategic need to participate in the North America Free Trade Agreement (NAFTA) and in the impending Western Hemisphere Free Trade Area (WHFTA) must be acknowledged by every economy in the region, whether that of a sovereign and independent state, some form of dependent colonial state, or any other constitutional format. If one thing is clear from the vote on Puerto Rico's status (14 November 1993), in which no option won a majority,(10) it is that its regional agenda cannot, and should not, depend upon resolution of the status issue.

Thus far, Puerto Rico has been able to take part in regional efforts not so much on the basis of its desire to transfer its own model of economic development to the rest of the Caribbean Basin but, rather, on the basis of (a) its ability to understand the needs and interests of the different countries in the region and b) its search for ways in which Puerto Rico's resources (human, financial, social, political) could help to complement the resources of the region as a whole, to the mutual benefit of all concerned.

What the countries of the Caribbean Basin -- and CARICOM in particular -- have learned is that Puerto Rico's potential commitment in 1985 has now become concrete, a very real material commitment to economic collaboration. What Puerto Rico must confirm to the rest of the Caribbean is that it has learned that regionalism can indeed be profitable, both politically and economically, and that in a world of global trading blocs and regional groupings, supporting and assisting Caribbean Basin economic cooperation and integration is indeed a viable, logical public policy that can have positive results for Puerto Rico, the rest of the Caribbean, and the United States as well.(11)

V. CENTRAL AMERICA: BETWEEN BANANAS AND COOPERATION...

WHILE the controversy over the future of Europe's preferential regime for Caribbean bananas and the challenges posed by the so-called "dollar banana" producers of Central and South America remain stumbling blocks in subregional relations, certain advances in this area have been impressive insofar as they have created a foundation upon which future cooperation can develop. Institutionalization of the CARICOM/Central America Ministerial Forum via the Secretariats of both CARICOM and the Sisterna de Integracion Economicapara Centralamerica (SIECA) provide an opportunity for collaborative efforts at the technical level which should help in developing policy initiatives at the ministerial level, thus serving to bridge the gap and strengthen linkages between both subregions, from the bottom as well as from the top.

Particular attention must also be given to the CARICOM/Central America Ministerial Forum, established January 1992 in San Pedro Sula (Honduras), which has now become a permanent forum for CARICOM/Central American collaboration. A second meeting took place in Kingston (Jamaica) in May 1933, and a third meeting was scheduled for Costa Rica in mid-1994 (CARICOM, 1992 and 1993).12 In its early stages, the Ministerial Forum served not only as an instrument by which to convene regional discussions on items of common interest, but it also became a critical institutional arena or developing proposals for collaboration in a wide variety of areas: such as trade and investment, tourism, transportation, services, agriculture, drug and narcotics trafficking, environmental management, education, science and technology, among others.

Moreover, the Forum has also provided a mechanism for addressing various sensitive subjects of Caribbean/Central American relations (like the European banana preference regime), thus strengthening the arguments for a truly regional agenda. It is anticipated that the Ministerial Forum may also help in forging a common stance towards the NAFTA. In the latter regard, the commitment and support of CARICOM member states and of the Secretariat have been of particular importance. Nevertheless, this commitment and support on the one hand must be balanced by functional cooperation on the other. Here, the role of the non-CARICOM member states -such as the Dominican Republic, Puerto Rico, the French and Dutch Antilles, and even Cuba in some instances -- is of critical importance, insofar as their involvement will help to determine the extent to which a truly integrationist agenda can be established on behalf of these initiatives.

The signing of a cooperative agreement between SIECA and CARICOM (May 1993) bodes well for the development of a number of positive initiatives: (1) for drawing up a common policy agenda in light of the NAFTA-EAI free trade initiatives and of the General Agreement on Tariffs and Trade (GATT); (2) for devising joint strategies to promote trade and investment and identifying appropriate areas for functional cooperation (like health, education, culture and language, sports, environmental management, disaster preparedness, drug trafficking); as well as (3) for creating institutional mechanisms within each subregion that will advance and strengthen cooperative ventures.(13) All these efforts have served as a complement to the work of the Association of Caribbean States (ACS), whose success hinges on the effective participation and commitment of three major regional groupings; CARICOM, Central America, and the Group of 3. Whatever the form taken by the ACS or CARICOM's policy on this matter, the act remains that CARICOM will eventually have to (1) reach out and establish formal linkages beyond CARICOM as part of a region-wide effort to avoid marginalization, and (2) create broad strategic alliances (both regional and Hemispheric) in support of economic and political viability.

Moreover, given the recent private sector initiatives to forge closer links between the two subregions, plus the commitment to establish a common regional agenda vis-a-vis the NAFTA in order to further regional competitiveness, it behooves the CARICOM governments not only to offer a positive response to the Central American initiatives but to draw up, and present, a cooperative vision of their own to the Central Americans as well (FEDEPRTCAP, 1992; CAIC, 1993; C/LAA, 1993).(14) It is to be hoped that the CARICOM governments did not undermine these advances in regional understanding by the failure to support fully the Central American candidate for Secretary-General of the Organization of American States (OAS) -- Foreign Minister Bernd Niehaus -- when that election took place (27 March 1994). This kind of "voting strategy fiasco" has no place in the building of institutional cooperation, such as that envisioned by the ACS, or in advancing the cause of bilateral cooperation between Central America and CARICOM.

Finally, it is important to bear in mind the "bridging" process that the Dominican Republic has instituted with Central America. Not only should this be viewed as a sign of forging strategic alliances at the public policy level, but also, and more importantly, at other levels as well: such as that of export production complementarity, market penetration initiatives, CBI and General System of Preferences (GSP) trade benefits, coordination of not only free trade zone strategies but of trade and production with industries on the US mainland as well, in addition to the above-mentioned lobbying efforts with regard to specific industries.

In the last analysis, and with the exception of Jamaica, it is the countries of Central America, together with the Dominican Republic, which have most at stake regarding the NAFTA and WHFTA and who will doubtless be able to take more effective advantage of these new Hemispheric schemes. Clearly, the potential value of making such alliances part of an ACS or CARICOM regional and/or Hemispheric strategy cannot be underestimated and should be evaluated carefully within the CARICOM/ACS realm.

VI. PLAYING THE LATIN AMERICAN CARD: THE RISE OF ECONOMIC INTERESTS

OR most of the past two decades, Latin America's interest 1 in the Caribbean -- primarily via policy initiatives from the Group of 3 (Mexico, Venezuela, and Colombia) -- was based on a concern for the strategic and security aspects of the region, particularly its potential for political instability. This concern found expression either by means of actively trying to bring the Caribbean states into the forefront of the external debt movement or by serving as a "strategic buffer" vis-d-vis the US Cold War policies in the region. In any event, the dominant focus of Latin America's relations with the Caribbean derived from its concern for the region's security.

Moreover, as Caribbean participation in international fora and organizations increased, Mexico and Venezuela, in particular, viewed this as an opportunity to strengthen their own ties with the Caribbean in order to secure greater Latin American -- and Caribbean -- voting power in those associations. Despite such proactive policy initiatives, however, most of the countries in the Caribbean, and especially the CARICOM member states, interpreted these moves as having ulterior "subimperialist" motivations and consistently shied away from developing closer ties, political and/or economic, with the countries of Latin America.

It is only during the past few years, and as a direct result of the major changes taking place throughout the world's political economy (i.e., trade liberalization, integration initiatives, global trading blocs, and so forth), that efforts have been made to establish closer Caribbean-Latin American relations, that collaboration has intensified, and that both subregions have given a certain priority to strengthening the relations between them. Curiously enough, though, and despite Venezuela's active Caribbean policy of "shared responsibility," adopted in the late 1980s (Serbin, 1991 and 1992), or Mexico's new regional commitments to CARICOM and the Caribbean Development Bank (CDB), the Latin American countries always looked upon the Caribbean as a small, rather unimportant -- though necessary -- player in the Hemispheric configuration of politics and economics.

During the 1990s, the perception changed. Both the Caribbean and Latin America witnessed (and are still witnessing) an acceleration of the movement toward integration, including the revitalization of previous schemes (such as the Andean Pact and the Central American Common Market) as well as the creation of new ones, like the G-3 and the Mercado del Sur (MERCOSUR), not to mention an increase of bilateral initiatives for trade liberalization and commercial expansion. The trade and investment agreement between CARICOM and Venezuela January 1993), plus the possibility of a similar scheme with Colombia, has signalled a major watershed: it is the first instance to reflect a previously nonexistent economic interest as justification for closer Caribbean/Latin American relations.

The emphasis which the West Indian Commission placed on the need for CARICOM to establish linkages not only with the wider Caribbean but also with Latin America, coupled with the G-3 initiatives to (1) become observer members in CARICOM and (2) advance non-reciprocal trade agreements, opened a new door in this relationship. The concern for regional stability (amidst the decreasing strategic interest in the region by external actors) is now balanced by an interest in economic gains and opportunities. The free trade agreement that was proposed between the G-3 and Central America, as well as the agenda for political and economic cooperation that characterized the CARICOM/G3 Summit held in Trinidad-Tobago (October 1993), signal the new importance that has begun to be accorded to economic opportunities(15) Similarly, Mexico's overtures aimed at promoting manufacturing investments in the countries of Central America and the Caribbean must be viewed in the light of a need to expand its sphere of economic activity in order to preserve and protect its own competitiveness within the NAFTA. As Mexico's production costs rise under the influence of the NAFTA, sourcing production in more labor-competitive countries (like E1 Salvador, Guatemala or the Dominican Republic) may well become increasingly attractive to Mexican firms threatened with displacement under the free trade arrangement.

This new economic interest does not necessarily indicate the demise of strategic interests, especially since the collective interests of the G-3 and Latin America are increasingly focussed upon the possibility of a political transition in Cuba, Haiti's democratization, Surinamese stability, and curtailing the drug traffic. Nevertheless, it is clear that economic concerns have become part and parcel of defining a Caribbean policy. Still, as the countries of both Latin America and the Caribbean move towards endorsing a stronger role for the OAS and United Nations as safeguards for their collective security, so too will the emphasis on strengthening Caribbean regionalization, through economic initiatives, also gain strength.

The role of the Latin American countries in participating in an ACS proposal, led by CARICOM, will be a critical determinant of the degree of future political and economic attention given to the Caribbean. In the final analysis, insofar as Caribbean trade liberalization and regionalization processes result in greater economic growth and competitiveness, then to that degree countries like Mexico, Venezuela, and Colombia will seek to draw the region into complementary economic agreements.

VII. FLORIDA: MAKING GEOGRAPHY DESTINY?

THE State of Florida has called for the development of a strategic consensus regarding the Caribbean Basin, which was exemplified by legislative proposals in the US Congress (HR 1403 and S 1155: i.e., "The Caribbean Basin Free Trade Agreements Act") in order to provide the region parity with NAFTA. In reality, this is the most advanced initiative for securing the stability of trade and investment in the region. In essence, both the state government and the private sector(16) in Florida have begun to act as the benign hegemon needed if effective cooperation is to take place. Moreover, Florida's notion of the need for a strategic alliance finds its parallel in similar initiatives in Central America and, to a lesser extent, in the Caribbean.

As Florida continues to assume this kind of leadership, in terms of strategic planning and proactive initiatives (mostly via this government-private sector collaboration),(17) the onus will be on its partners in the Caribbean Basin to determine how to respond, to collaborate, and to match the Florida effort. While Florida is clearly looking to its own self-interest (in 1992, a $4 billion export trade to the Basin represented 30% of its total exports and is credited with creating 80,000 jobs in the state (Rosenberg and Hiskey, 1993: 2-4), it is close to impossible to disaggregate where its own interest ends and where that of the Caribbean Basin begins. As such, the region would be well advised not to raise this issue as a potential point of contention but, rather, to establish those institutional links (with both governments and the private sector) that will help strengthen this very important partnership. As has been cogently pointed out:

Florida is as much a part of the Caribbean as it is of the Southeastern United States. As the social bonds between Florida and the Caribbean proliferate and deepen, the economies of the two areas are showing greater complementarity. Any complete economic development strategy crafted by either misses a critical component of the geographic and commercial contiguity of the other if ignored. However, given the rapid emergence of trade blocs and the historic trade and integration-oriented efforts of Mexico, Canada, and the United States, the development of greater pan-Caribbean cooperation is not just farsighted but a strategic necessity as a means to maintain and expand the Caribbean Basin standard of living (Rosenberg and Hiskey, 1993: 1).

Curiously enough, though, neither the West Indian Commission Report, nor any of the other region-based studies, reports, or meetings of CARICOM have even raised the issue of Florida's role in regional schemes for integration and cooperation. Moreover, as in the case of the absence of any official CARICOM position on NAFTA, there is similarly no official CARICOM response to the Florida initiative regarding the so-called "CBI NAFT Parity Bill" or, for that matter, regarding Florida's interest in safeguarding the economic interests of the Caribbean Basin. It is ironic that, despite the part played by Florida and Miami in serving as trade, transportation, finance, and human resource hubs for the region, there is still no Caribbean initiative which seeks to incorporate these other efforts into a Caribbean strategy for regional cooperation and integration.

In the final analysis, the region must come to understand that, in the political economy of the 1990s, the route to integration and cooperation cannot help but pass through Florida and Miami. If CARICOM, or any other body within the Caribbean Basin, cannot yet realize this fact, then it calls into question the degree of seriousness with which we can refer to, and apply, the concept of a "wider Caribbean." Just as there are a number of Caribbean-based strategies and initiatives for cooperation and integration in existence, so must the countries of the Basin embark on a detailed, systematic analysis of the ways in which Florida is linked to the rest of the Caribbean, and just how that linkage can help the region strengthen its competitive position in the Hemisphere.

Moreover, in the event that economic and political liberalization comes to Cuba, it will be the link with Florida and Miami (geographic, financial, commercial, human and demographic) that will ensure that the island nations of the Caribbean do not become economically marginalized as a result of the new attraction offered by the larger, yet-unpenetrated Cuban market. It is due to these factors, as mentioned earlier, that it would be prudent to develop a strategic alliance between the region and Florida early, rather than later.

VIII. CONCLUSIONS: BEYOND CARICOM OR THE COST OF NOT COOPERATING...

WHILE it is clear that the economic winds of change that re now sweeping across the Caribbean Basin as it prepares to enter the 21st century relate to economic liberalization and competitiveness, this does not negate the reality that most of those small regional economies lack the resources they need to confront these challenges successfully. If small size has historically been viewed as an impediment to Caribbean development, this alone should not be seen as the major obstacle which prevents those countries from competing effectively in a free trade area. It is, rather, the recent, rapid development of trading blocs throughout the world and in this Hemisphere, together with the increasing decline of protectionist tenets in the international trading system, which have cast the region into a veritable situation of survival of the fittest.

However, rather than focusing mainly on the threats and challenges of free trade in general (and of NAFTA in particular), the region needs to concentrate on creating the opportunities for economic reform and restructuring, so amply provided by the current economic climate, in a way which will facilitate the region's competitiveness. Such an approach should focus not only on the traditional preferential trade markets of the United States (viz., the CBI), Canada (CARIBCAN) and Europe (Lome Convention), but should also assign a high priority to the markets for trade and investment in Latin America. For all intents and purposes, the countries of Mexico, Venezuela, and Colombia would appear to be the most important, at least initially, but the region should seek to develop and exploit a comparative advantage vis-a-vis these other economies as well. The countries of Central America and CARICOM have already entered into nonreciprocal free trade agreements with Mexico and Venezuela, respectively, but have advanced very little on their own strategic alliance in trade and investment matters.

Efforts are being intensified to remove the remaining obstacles to integration while the region is, at the same time, engaging in the process of truly regional and Hemispheric-wide cooperation. The CARICOM countries are fully aware that not only must they work together to consolidate past gains in integration and resolve internal differences, but that they must also reach out to other countries, lest they be overtaken by the tide of global economic change. In addition to the actual physical difficulties which an island region poses to integration, the region must now address, as well, ways to foster coordination in fiscal, trade and monetary policies, in addition to devising specific measures by which to achieve a more outward (extra-regional) orientation.

It is apparent that the joint arrangements proposed by CARICOM will continue to run into difficulties unless more progress can be made in the areas of reconciling their diverse systems and economic policies and in that of trade policy reform. The member countries must give particular attention to such vital subjects as the accelerated reduction of tariffs, harmonization of investment incentives, and the coordination of economic policies (trade, financial, and monetary) if they, as a group, are to take full advantage of the benefits which may accrue from other trading arrangements and the opportunity for collaboration with other regional and Hemispheric ventures.

Moreover, within CARICOM, and particularly within the smaller economies, there is considerable concern over the issue of how larger countries - like Mexico, Venezuela, or even the Dominican Republic -- can be integrated into a community of smaller countries, like CARICOM or the ACS, without overwhelming the nascent economies and small populations of their present members. This kind of dilemma could well prove to be the Achilles heel of these initiatives because for as long as the efforts towards "widening" are relegated to the ACS (whose mandate, functions, resources, etc. are completely undetermined and undefined), there is no clear indication that such proposals will advance.

The degree of action (or inaction) taken on the many initiatives (national, sectorial, and regional) discussed here will, by necessity and definition, affect and impact the prospects (both positive and negative) for regional economic development and competitiveness which could strengthen cooperation and integration efforts. It is in this sense that an aggregation and synthesis of these various proposals and initiatives needs to take place in order for an effective, practical, and implementable option to develop.

Given the public-private sector mandate currently enjoyed by the CARICOM proposal for an ACS, coupled with the various sectoral and national initiatives underway, the region would be well seed to consider establishing a joint ACS Secretariat, which could be staffed by representatives of the various subregional groupings, from both the public and private sectors. As a pan-regional initiative, the Secretariat would need to incorporate, first and foremost, a highly developed communications capacity that would blend public policy needs with entrepreneurial criteria and speed while, at the same time, it could expedite and implement those various mandates and proposals already in existence.(18)

With the proper support, such an infrastructure could not only complement current regional needs and interests but would also be able to tackle many issues and initiatives now pending that go unattended by present institutional mechanisms. The advisory and executive capabilities of such a structure would have to be defined a priori by the proper national and regional bodies. Nevertheless, and suffice to say, its physical location and administrative mandate would have to respond to the strategic and tactical political need of serving the interests of both subregions as a "bridge" institution.

In much the same way as the NAFTA negotiations have brought to the forefront the need to establish a North American Development Bank, so too will these diverse cooperation experiences have to consider establishing an institutional mechanism by which the various policy initiatives, both interregional and intra-regional, can be effectively channelled and implemented accordingly. Only by institutionalizing these initiatives, in a manner which complements, supports, and strengthens existing forms of regional cooperation and integration, will there be the ability, capacity, and commitment to advance these ideas into policy actions.

NOTES

1. Both groups have lowered their external tariffs to a 0-20% structure and have argued vehemently for immediate inclusion into the NAFTA and a complete willingness to abide by the NAFTA eligibility criteria established by the US Trade Representative (USTR) in 1991.

2. It is important to note that the Consejo Nacional de Hombres de Empresa (CNHE) has commissioned a study of the integration options available to the Dominican Republic within both CARICOM and Central America (see Vega and Despradel, 1994).

3. As early as January 1990 the Dominican Republic was in violation of this accord with CARICOM, as bananas were being shipped and marketed from Manzanillo to England by the British conglomerate Fyffes. Moreover, despite the 3-year banana conflict with CARICOM, Roberto Martinez Villanueva (the Dominican Republic's minister to the Lome Convention) announced that, by the end of the 1993 calendar year, the country would have shipped 2 million tons of bananas to the European market, paying the 20% tariff which applies to exports beyond its 175,000 ton quota.

4. Curiously, the Director and Deputy Director of the CARIFORUM Programming Unit in Guyana, Percival Marie and Rensa Herrera- Franco, respectively, are from Dominica and the Dominican Republic. The rapid success of their collaboration in the first year of CARIFORUM should be seen as an indicator of future relations.

5. See, for example, the seminar "The Dominican Republic and the Challenge of Regional Integration," organized by the Santo Domingo Chamber of Commerce and Industry and the government's Commission on Integration Schemes, and headed by Vice-President Morales Troncoso, which was convened in Santo Domingo on 28 July 1933 (Listin Diario, 1993; Hoy, 1993). Also note the importance of the convening of the Sixth Europe/Caribbean Conference of the Caribbean Council for Europe in Santo Domingo (10-12 November 1993), with the full support of the Dominican government and private sector.

6. For an in-depth analysis of this issue and its linkage to the Puerto Rican identity and status problems, see Garcia-Passalacqua (1993 and 1994).

7. This proposal -- "Proposal to Establish the Caribbean Basin Technical Advisory Group-CBTAG" (mimeo.) -- was first circulated at the Fourth Point Four Conference, held in San Juan (Puerto Rico), from 23 April to 1 May 1991. Subsequently, technical briefings on these matters were prepared and circulated regionally on 23 August and 24 September 1391, as well as in January and September 1992.

8. Ever since its inauguration (January 1993), the Puerto Rican government has suspended all CBTAG activities and its mandate, much to the chagrin of regional government and business leaders who came to value and support the work of the CBTAG and saw it as a potential "bridge" not only for US-Caribbean relations but for Caribbean-Central American relations as well. Moreover, Puerto Rico opted not to participate in the convening meetings of the ACS held in 1994: on 18-20 March (Jamaica), 9-10 May (Dominican Republic), and 3-5 June. More curiously, it offered to host a meeting of the Southern Governor's Association (2 June) with the countries of Central America and the Caribbean.

9. The government is currently seeking to end its membership in the World Tourism Organization (WTO), the UN Food and Agriculture Organization (FAO), and the UN Economic Commission on Latin American and the Caribbean (ECLAC), in which the US Virgin Islands have held membership since 2976 (El Nuevo Dia, 1993: 4). Membership will apparently be maintained in the World Health Organization (WHO) and the Pan American Health Organization (PAHO). Observer status in CARICOM will be maintained, which could be interpreted as an indication of the Rossel(16) administration's short-term 936 commitment vis-a-vis CARICOM.

10. The final tally of votes gave no real majority to either status option, resulting in various anticolonial, anti-Commonwealth, antiStatehood interpretations: Commonwealth--48.4%, Statehood 46.2%, Independence--4.4%. The argument was that adding the vote for independence to either of the remaining major status options would result in either an anti-statehood vote (of 52.4%) or an anticommonweal/colony vote (of 50.2%). While there was no commanding majority, most observers in the region viewed the vote as a short-term victory against statehood, with the caveat that the Puerto Rican electorate is clearly split on this issue: 50-50. Since the vote took place, neither the US Congress nor President Clinton have indicated any willingness to take up the question of Puerto Rico's status.

11. The case of the State of Florida and its initiatives towards the Caribbean Basin and Latin America should constitute an important point of reference for the administration in Puerto Rico, given its obvious zero-sum vision of statehood and regionalism.

12. A basic 5-point agreement for cooperation was signed by the Secretary-General of CARICOM, Edwin Carrington, and the Secretary-General of the Sistema de Integracion Economica para Centralamerica (SIECA), Rafael Rodriguez Loucel, in Kingston (Jamaica) on 28 May 1993, the final day of the Second CARICOM-Central America Ministerial Conference. An important part of the agreement was the establishment of an interinstitutional program of cooperation, aimed at promoting increased linkages between the regions.

13. Unfortunately, during the Ministerial Forum meeting, the Central American representatives sought to leave the issue of bananas off the agenda, whereas CARICOM wanted to discuss the matter. The result was a l-day standoff and its non-inclusion in the Final Communique, with the release of a separate CARICOM statement on bananas. Clearly the banana issue has the potential to become a critical stumbling block and political obstacle to any future collaboration.

14. For example, the June 1993 decision by the Caribbean and Central American Textile and Apparel Council to retain the lobbying services of the Miami-based law firm of Greenberg, Traurig indicates that the regional textile industry realizes the need to develop firm, and institutional, joint positions on matters pertaining to trade, investment, and production. By the same token, both the Federacion de Empresas Privadas de Centroamerica y Panama (FEDEPRICAP) and the Caribbean Association of Industry and Commerce (CAIC) met in Miami (December 1993) under the auspices of the OAS, which resulted in a new strategy for collaboration entitled "Prospects for Cross-Caribbean Business Relationships and Trade."

15. These initiatives have formed the foundation of the G-3's early commitment to the ACS proposal, spelled out in the October 1993 Port-of-Spain Declaration.

16. The agenda of the Florida International Affairs Commission (FIAC, circa 1992) constitutes the most advanced and progressive initiative on the Caribbean (and internationally) by any government so far. The Florida-Caribbean Institute is but one of a dozen international programs coordinated by FIAC.

17. See Florida's recent success in having Miami selected by President Clinton as the site for the "Hemispheric Summit" (December 1994).

18. For example, it is no secret that the regional communications gap is getting worse, and that the timely collection and dissemination of information -- both internal and external to the region must be a top priority for any cooperation/integration agenda.

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David E. Lewis is Chief of Party for the Caribbean Policy Project (CPP) of the Organization of Eastern Caribbean States (OECS), in Antigua (West Indies). He is former Assistant Secretary of State For Caribbean Development of the Commonwealth of Puerto Rico and has also been Trade and Business Consultant with both The Colorado Group in San Juan and Manchester Trade, Ltd., in Washington (DC).

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