The Case for NAFTA Parity for CBI Countries

Abstract

In 1995, the Caribbean  Basin is faced with two fundamental, yet conflicting trade trends. On one hand, as it stands now, NAFTA has emerged as an immediate challenge to the viability of the US/Caribbean trading relationship. In providing preferential access to a number of Mexican products, which form an important base of the Caribbean export  portfolio, NAFTA will cause substantial erosion of the Caribbean competitive position vis-a-vis the  US market. On  the other hand, NAFTA represents a building block in the establishment of a hemispheric free trade area, a goal that has been enthusiastically endorsed by Jamaica  as part of the Free Trade Area of the Americas (FTTAA) process.

The Caribbean  Basin Trade Security Act S.529/HR 553)-which has attracted widespread bi-partisan support and the backing of the Clinton administration - creates a mechanism to address and reconcile these diverging trends. First, the Caribbean Basin Trade Security Act will provide a short term remedy to the trade and investment balances caused by NAFTA. Second, this measure will create a transitional framework through which Caribbean countries like Jamaica can attain the long term goal of integration into hemispheric free trade. Quick passage and enactment of this important measure, therefore, is vitally important to sustain the US/Caribbean economic and trade partnership.