BACKGROUND INFORMATION FOR CARICOM-USTR MEETING:

UNCLAS SECTION 01 OF 02 GEORGETOWN 000327 SIPDIS STATE PASS TO USTR SIPDIS E.O. 12598: N/A TAGS: ETRD EAGR PREL GY SUBJECT: BACKGROUND INFORMATION FOR CARICOM-USTR MEETING: GUYANA REF: (A) GEORGETOWN 40, (B) 05 GEORGETOWN 1309 ¶1. Minister of Foreign Trade and International Commerce, Clement Rohee, will represent Guyana at the USTR-CARICOM meeting April 12. Below is a brief overview of Guyana's economy and Rohee's bio. -------------- -------------- An Agricultural Economy With Heavy U.S. Market Reliance -------------- -------------- ¶2. A Heavily Indebted Poor Country, Guyana's $717 million official economy is heavily dependent on commodity exports and vulnerable to price fluctuations and macroeconomic shocks. Following devastating floods in January 2005 that contributed to a 30% decline in sugar production in the first half of 2005, GDP contracted 3% for the year. A series of challenges to Guyana's terms of trade, including the European Union's 36% reduction in sugar price supports over the next four years and the closure of the country's largest gold mine, are pressing Guyana to look toward non- traditional exports, greater development of the services sector (including tourism and IT-enabled "back office" support) and value-added production as agents of growth. ¶3. Guyana's staple exports are primary products, including sugar, rice and shrimp, as well as products of extractive industries, including gold, timber, and diamonds. Agriculture accounts for around a third of GDP. The U.S. is Guyana's leading source of imports and number two export market. In 2004, bilateral trade amounted to $273 million, with heavy machinery, eggs, auto parts, and milk being the leading U.S. products exported to Guyana. A few firms export textiles to the U.S. under Caribbean Basin Initiative preferences. -------------- REGIONAL/MULTILATERAL TRADE POSTURE -------------- ¶4. Guyana was one of the first six signatories when the Caribbean Single Market Economy took effect on January 1, and the National Assembly passed two bills--one recognizing the revised Treaty of Chaguaramas that established the CSME and another authorizing the free movement of skilled labor, services and capital as provided by the Revised Treaty--in early March. Privately, many business leaders contend that Guyana is not ready to compete in the single market, and many observers predict the CSME will exacerbate the ongoing exodus of skilled labor. ¶5. Following a decade of gradual liberalization of protectionist measures, Guyana's average tariff rate is around 12%. Within this, an average tariff of 22% on agricultural products suggests that Guyana's tariff systems blends revenue collection with protection of its primary products. Taxes on international trade accounted for 9% of tax revenue in 2005. Within CARICOM, Guyana has strongly advocated enforcement of the Common External Tariff with regard to extra-regional rice imports. Following the February Council on Economic Trade and Development (COTED) meeting in Georgetown, the GOG threatened to make a case before the Caribbean Court of Justice against several CARICOM members for allegedly failing to apply the CET to rice imports from the U.S. In multilateral fora, including the WTO, Guyana has strongly advocated special and differential treatment in the context of trade liberalization. -------------- Background on Minister Rohee -------------- ¶6. Rohee was named Foreign Minister when the PPP came to power in 1992. He has held the Minister of Foreign Trade and International Cooperation (MOFTIC) portfolio since May 2002 when the Ministry was created as a mechanism to remove him from the MFA. In this context he serves as CARICOM's spokesman at the WTO (having served as a Friend of the Chair at the Cancun Ministerial) and a lead spokesman on CARICOM sugar issues. ¶7. Rohee is often outspoken in his criticism of developed countries' commitment to trade and development, declaring, for instance, at the Hong Kong ministerial in December that the Doha Development Agenda was "selfish and unrealistic" (Ref B). He has also recently cited a "selfish populism" in the U.S. and Europe that, he argues, demonstrates that advocates of trade liberalization are wont to adopt protectionist measures. Nevertheless, in his public GEORGETOWN 00000327 002 OF 002 statements he has stopped short of condemning trade liberalization outright, as media reports quoted him as saying in Hong Kong that "trade-based solution rather than handouts must be the way forward". ¶8. Rohee, who is of mixed African and Indo-Guyanese descent, began his political career in 1968 as a member of the People's Progressive Party's (PPP) youth organization. He holds a certificate in education from the National Evening College of Guyana and studied at the Institute of Social Sciences in Moscow. During 1979-83 he was the party representative on the editorial board of the Marxist political journal Problems of Peace and Progress in Prague, where he also served as the party's liaison with East European Communist parties. Rohee also served as the PPP's international relations secretary. Rohee speaks Spanish and Czech fluently in addition to his native English. He is married and has two daughters from a previous marriage. ¶9. Also in the CARICOM delegation will be David Hales, Program Manager for External Economic and Trade Relations. A very competent career Guyana FSO, Hales was Permanent Secretary at the Ministry of Foreign Affairs when Rohee SIPDIS became Minister in 1992. Rohee forced Hales out. BULLEN