The Caribbean Basin and the Free Trade Area of the Americas: Strategic Regionalism or Reactive Regionalism?*

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I. INTRODUCTION

Latin American and Caribbean integration was conceived in the 1950s and 1960s as a regional strategy to promote industrialization and economic development. Under the influence of Prebisch's ideas about economic integration, the creation of a Latin American Common Market was essentially considered a project to further regional industrialization and economic and political autonomy of the region vis-à-vis the rest of the world (see ECLAC 1959; Prebisch 1949 [1996]). The control of both foreign investment and multinational corporations were also included in the integration initiatives but these were contributions of the so-called "dependency school". The United States was not considered a possible partner in this strategy. Conversely, the new wave of integration in Latin American and the Caribbean initiated in the late 1980s is progressing simultaneously with hemispheric integration, expression of which are the current negotiations to set up a Free Trade of the Americas (FTAA). This implies a remarkably transformation of the strategy of integration that Latin American and Caribbean countries encouraged in the 1960s and 1970s.

Both the United States and the Latin American and Caribbean countries are currently committed to promoting their mutual economic integration. This wave of hemispheric regionalism began in 1991 when the Unites States, Mexico and Canada launched negotiations to set up a North American Free Trade Agreement (NAFTA). The process continued in June 1991 with the Enterprise of the Americas Initiative (EAI), a comprehensive project to regulate factors such as trade, debt and investments. The EAI's aims were the creation of a Western Hemisphere Free Trade Area from "Alaska to Tierra del Fuego", to promote foreign investments and to reduce the public debt various Latin American countries owed to the US government. The following action in the process of hemispheric integration was the Summit of Miami (December 1994) where the leaders in Western Hemisphere decided to set up a FTAA by the year 2005 (see Feinberg 1997). Negotiations for the establishing of the FTAA were initiated in the second Summit of the Americas held in Santiago, Chile, in April 1998.

This paper analyzes the impact of these proposals of hemispheric integration on the emergence of the new Caribbean Regionalism. Herein, it is argued that the new wave of integration in the Caribbean has been to a large extent a reactive response NAFTA and FTAA. Certainly, the new Caribbean regionalism is a complex process that can be explained by multiple factors such as the process of globalization, the re-negotiation of the Lomé Convention, the new economic strategy implemented in the region since the middle of the 1980s, the decreasing geopolitical importance of the Caribbean after the end of the Cold War, etc. However, this paper is only concerned with the Central American and CARICOM countries' approach to the new Caribbean regionalism, which is closely related to NAFTA and FTAA. The creation of NAFTA and the scenario of a possible FTAA could affect the commercial preferences these countries have received from the USA through the Caribbean Basin Initiative (CBI). This situation has led the CBI countries (Central America and CARICOM members) to promote a strategy of integration and cooperation in order to defend such preferences and to prepare their economies for an eventual FTAA. The "United States-Caribbean Basin Trade Partnership Act" passed by the US Congress in May 2000 was the first result of such a strategy. This legislation provides NAFTA parity to the production of textiles in the CBI countries - which constituted a regional claim from the time that the NAFTA came into force in 1994. However, the parity is granted until September 2008 or until the implementation of the FTAA. Hence, NAFTA and FTAA must be considered as variables to explain the emergenceof the new Caribbean regionalism.

The evolution from the old to the new Caribbean regionalism is examined in the first section of the paper. …