Imperial Power and Regional Trade: The Caribbean Basin Initiative

277 Pages·1993·14.99 MB·English

by  Abigail B. Bakan

IMPERIAL
P@WER
AND REGIONAL TRADE
-«* =*-
THE CARIBBEAN BASIN INITIATIVE
ABIGAIL B. BAKAN
DAVID COX
COLIN LEYS
EDITORS
Wilfrid Laurier University Press
Canadian Cataloguing in Publication Data
Main entry under title:
Imperial power and regional trade : the Caribbean
Basin Initiative
Includes bibliographical references and index.
ISBN 0-88920-220-6
1. United States - Relations - Caribbean Area.
2. Caribbean Area - Relations - United States.
I. Bakan, Abigail B. (Abigail Bess), 1954- .
II. Cox, David, 1937- . III. Leys, Colin, 1931- .
HF1456.5.C27I56 1993 337.73-0729 C92-094902-9
Copyright © 1993
Wilfrid Laurier University Press
Waterloo, Ontario, Canada
N2L 3C5
Cover design by Connolly Design Inc.
Cover illustration by Jack Lefcourt
(s)
Printed in Canada
Imperial Power and Regional Trade: The Caribbean Basin Initiative has been pro-
duced from a manuscript supplied in electronic form by the editors.
All rights reserved. No part of this work covered by the copyrights hereon may
be reproduced or used in any form or by any means — graphic, electronic, or
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Ml, Toronto, Ontario M5V 1S5.
Contents
List of Tables vi
Preface vii
1 The CBI: An Overview 1
1 Introduction 1
2 The CBI: Its Fundamental Features 2
3 The CBI Package 2
4 United States Hegemony and the Caribbean Basin 5
5 Subsequent Developments in the CBTTTTTTTTI 6 6
2 The Political Logic of the CBI 11
Devanand J. Ramnarine
1 Introduction 11
2 The Reagan Doctrine and the Caribbean Basin 12
3 The CBI in the Context of the Legitimacy Crisis 20
4 The Political Realities of the CBI 29
5 Conclusions 43
3 Britain, the Caribbean Basin, and the
Caribbean Basin Initiative 45
Colin Leys
1 Introduction 45
2 Britain and the Caribbean Basin before the CBI 46
3 Britain and the CBI — Economic Aspects 48
4 1992-The Single European Market 51
5 The Political and Military Aspects of the CBI 52
6 The British Response after Grenada 56
7 Conclusion 57
4 Caribcan: Canada's Response to the
Caribbean Basin Initiative 59
Catherine Hyett
1 Introduction 59
2 Background to the Caribcan Program 60
3 Principal Features 64
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iv / Imperial Power and Regional Trade
4 Linked Programs 66
5 Trends in Canadian Trade with the
English-speaking Caribbean 66
6 Trends in Canadian International Trade 71
7 Responses to Caribcan 73
8 Concluding Remarks 77
5 The Philosophy and Developmental
Prospects of the CBI 79
Devanand J. Ramnarine
1 Introduction 79
2 The Economic Crisis of the Caribbean Basin 79
3 Official Explanation of the Caribbean
Basin's Economic Crisis 82
4 Solutions to the Caribbean Basin Economic
Crisis: The Developmental Assumptions
of the Caribbean Basin Initiative 83
5 Overview of the Performance of the CBI 87
6 Official Evaluation of the Progress of the CBI 96
7 Critical Evaluation of the CBI 100
8 The Role of Factors Beyond the CBI 106
9 The CBI and US Economic Interests 109
6 The Impact of the CBI on Barbados, Jamaica,
and Grenada: An Assessment 117
Catherine Hyett
1 Introduction 117
2 Barbados 118
3 Jamaica 130
4 Grenada 152
5 Conclusion 174
7 The CBI and Industrial Development
in Trinidad and Tobago 177
Godwin Friday
1 Introduction 177
2 Overview of the CBI 177
3 Development Strategy, Labour Struggles,
and Economic Nationalism 178
4 Current Economic Conditions 181
5 Investment Policies and Priorities 183
6 Overview of Industrialization in Trinidad and Tobago 185
7 The CBI: Actual Performance 189
8 Conclusion 201
Contents / v
8 The CBI and the Caribbean Community:
The Implications of the CBI for the
Regional Integration Movement 205
Fauzya Moore
1 Introduction 205
2 The Emerging Regional Crisis, CARICOM 206
3 The Impact of the CBI 208
4 Preliminary Considerations 210
5 The Heads of Government Conferences 212
6 The Post-Nassau Environment 214
7 Conclusion 215
Notes 217
Selected Bibliography 261
Index 265
List of Tables
Table
2-1 Balance of Payments Position (1983), Major Recipients
of CBI Assistance 35
3-1 UK Trade with the Caribbean, 1983-88 50
3-2 Commonwealth Caribbean Military Personnel Trained
under the US IMET Program 55
4-1 Canada-Commonwealth Caribbean Trade, 1980-90 61
4-2 Canadian Trade with Major Trading Partners and
Country Groupings 72
4-3 Canadian Balance of Trade, 1985-90 73
5-1 Changes, Real GDP, and Real Per Capita Income,
Selected Countries 80
5-2 Balance of Payments Position of 12 Major
Caribbean Basin Economies 81
5-3 Long-term External Debt of Major Caribbean
Basin Countries, 1983 82
5-4 Country Comparisons of Wages in the Caribbean Basin 85
5-5 Leading Exports of CBI Goods, Ranked by Calculated
Duties Collected in 1983 90
5-6 Leading Duty-free CBI Exports to US, 1986 91
5-7 Exports from CB, 1983: Value of Products Excluded from CBI 97
5-8 US Tariff Treatment of Leading CB Exports to the US, 1982-83 99
5-9 Estimated Effects of the CBI Tariff-eliminations Beneficiaries 102
5-10 Value of Sugar Quota and Effects of 1985 Cuts 103
5-11 Response of Total Earnings to 1 Per Cent Increase
in GDP, Foreign Markets 108
5-12 Relative Export Prices of Major Non-fuel Exports 109
5-13 US Trade with CB Countries, 1982-86 116
6-1 United States Merchandise Trade with Barbados, 1981-87 124
6-2 United States Merchandise Trade with Jamaica, 1981-87 141
7-1 Investment in Major Gas-based Industries 186
7-2 The Manufacturing Sector 187
7-3 Indices of Average Weekly Earnings and Productivity
for Production Workers, 1978-87 189
7-4 The Sectoral Composition of Real GDP 190
7-5 US Imports from Selected CBI Countries 191
7-6 Hourly Compensation Costs for Semi-skilled
Production Workers in Export Manufacturing
Industries, Selected Countries, 1987 199
vi
Preface
The research reported in this volume was car-
ried out between 1984 and 1989 under the auspices of the Programme
(now Group) for the Study of National and International Development
(SNID) of Queen's University, Kingston, Ontario, as part of a larger
project on "Sovereignty and Security," funded by the Conner Canadian
Foundation and directed by David Cox and Colin Leys. The larger proj-
ect sought to explore the implications for the other countries of the
hemisphere, and not least Canada, of the assertion of US hegemony by
the Reagan administration from 1980 onwards. The Caribbean Basin
Initiative was an eminent example of this assertion of US power. It was
a policy that directly affected the Caribbean nations and their hard-
won and still precarious regional organization, and indirectly affected
other industrial powers with significant interests in the Caribbean,
notably Canada and Britain.
Abigail Bakan joined the project in 1986. With the assistance of
Godwin Friday she was chiefly responsible for reducing the individual
research reports (not all of which are included in this volume) to a
publishable form and recruited an additional paper (Chapter 8, by
Fauzya Moore) on the impact of the CBI on Caribbean regional inte-
gration.
When the research reports were in draft, they were presented to a
group of Caribbean and Canadian diplomats, and Caribbean, Cana-
dian, American, and British academic specialists at a workshop held in
Kingston, Ontario, in May 1989. The editors and authors would like to
express their appreciation of the valuable contributions made by the
participants at that workshop, although responsibility for errors of fact
and for the judgments contained in the book naturally belongs to the
authors alone. Here it might be noted that the economic report card on
the CBI has changed very little from the time of the completion of the
main research in mid-1989.
Thanks are also due to a series of SNID research assistants, espe-
cially Usha Thakur and Judith Scares, and to Mrs. Bernice Gallagher
and Mrs. Shirley Fraser of the Department of Political Studies at
Queen's, for invaluable practical help at various stages of the project.
vii
viii / Imperial Power and Regional Trade
This book has been published with the help of a grant from the
Social Science Federation of Canada, using funds provided by the
Social Sciences and Humanities Research Council of Canada.
1
The CBI: An Overview
1 Introduction
The election of Ronald Reagan as president of the United States in
November 1980 opened a new chapter in international relations, albeit
one which had many familiar features to the small states of the Carib-
bean. Under Reagan the US shifted towards a more overt use of its
immense economic and military power and increasingly tended to dis-
count alliance-based, consensual politics, confronting adversaries and
allies alike with stark choices. In spite of dramatic apparent successes,
such as the collapse of the Eastern Bloc communist regimes at the end
of the 1980s, the long-run ability of even a sole superpower to achieve
its foreign policy goals remains limited, as the Persian Gulf crisis has
painfully demonstrated. It is also evident that new centres of economic
power are rapidly emerging in Europe and South East Asia which
could increasingly call into question the economic foundation of the
US's unique military superiority. Nonetheless, the Reagan years threw
into sharp relief the absolute and growing disparity of power between
the US and even its larger allies. As for its smaller neighbours, allied or
not, the effects of the US's decision to use its power decisively to assert
its hegemony in the Western hemisphere were immediate and far-
reaching. Their sovereignty was called in question, not simply in terms
of their ability to protect their domain, but even in terms of their for-
mal legal equality.
The Caribbean Basin Initiative was one of the earliest expressions
of the "new reality" in American foreign policy-making. Presented as
an Economic Recovery Act, and indeed forcefully pressing the small
Caribbean island states to reorient their trade towards the US, the CBI
was nonetheless a building block in the construction of a new North
American trade bloc under US hegemony. From the standpoint of the
US, the 1989 free trade agreement with Canada, the soon-to-be-con-
cluded agreement with Mexico, and the continental free trade system
urged on the South American states by President Bush in December
1990 are logical extensions of the policy which began with the CBI.
Notes for Chapter 1 are on pp. 217-18.
1