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