JAMAICA: TIC FOLLOW UP RESPONSE

UNCLAS SECTION 01 OF 03 KINGSTON 000051

SIPDIS

SIPDIS

DEPARTMENT PLEASE PASS FOR WHA/CAR (MFORTIN, RBUDDEN),
EB/TPP/MTA (KOCH),EB/TPP/BTA/EWH (LAMPRON)
STATE PLEASE PASS TO USTR FOR BRUCE HIRSH

E.O. 12958: N/A
TAGS: ECON ETRD XL JM
SUBJECT: JAMAICA: TIC FOLLOW UP RESPONSE

REF: A. 06 STATE 201767


B. 01/05 FORTIN/MORGAN E-MAIL


1. Summary: Post engaged GOJ and private sector contacts per
instructions in ref. A. There was broad support for the
concept of USG assistance, whatever form it might take,
although some believed that DVCs may prove unwieldy and
inefficient, as CARICOM member states must reach consensus on
any positions taken. Representatives from the Caribbean
Regional Negotiating Machinery (CRNM) sent a strong message
that the first priority should be finalizing the update to
the 1991 Trade and Investment Framework Agreement (TIFA).
Nevertheless, there was agreement that the most fruitful
areas to target USG expertise would be in public outreach and
harmonization of legal frameworks. CRNM Lead Negotiator,
Ambassador Richard Bernal, expressed a strong desire to see a
senior USG official come to Kingston February 1-2 to meet
with the Trade Ministers from CARICOM when they meet for the
Council on Trade and Economic Development (COTED). End
summary.

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The Will and the Way
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2. Econoff met with various stakeholders to discuss possible
avenues for follow up to the Trade and Investment Council
(TIC) meeting in October 2006. Both GOJ officials and
private sector individuals alike expressed a strong
commitment to moving the process forward. They noted that if
the Caribbean does not strengthen its regional integration,
it risks being left behind in the global economy, as its
members' economies are too small to compete on their own.
Furthermore, according to Winton Dyer at the Ministry of
Foreign Affairs and Foreign Trade (MFAFT),the GOJ has the
technical capabilities to participate in Digital Video
Conferences (DVCs) as asked in ref. A.

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Finalize the TIFA
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3. Econoff met with Michelle Lowe of the Caribbean Regional
Negotiating Machinery (CRNM) on January 4 (NOTE: Lowe
attended the TIC in October. ENDNOTE). Lowe said that the
top priority for CARICOM was text finalization of the Trade
and Investment Framework Agreement (TIFA),and the region may
be hesitant to proceed with DVCs until such time as the TIFA
was updated. She placed particular emphasis on the Immediate
Action Agenda (IAA). Lowe also noted that the initial phases
of negotiation sometimes benefit from "face-to-face"
interaction, although she conceded that financial constraints
would make this difficult for the CARICOM member states.


4. Lowe also stated that the proposal to split into groups
for the DVCs, no matter what the lines of division were,
would be problematic given CARICOM's requirement that the
member states coordinate their positions prior to
negotiation. She did express hope, however, that the USG
could provide technical expertise that would help the region
with, in particular: trade facilitation, services, and
protection of Intellectual Property Rights (IPR).

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Ambassador Bernal Blusters
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5. At this point, the lead negotiator for the CRNM -
Ambassador Richard Bernal - entered and changed course
somewhat. He told econoff that the USG should forget about
strengthening regional integration, and should concentrate
instead on helping the region with capacity-building for
external trade. He noted that CARICOM had come a long way
since the stalled negotiations for the Free Trade Area for
the Americas (FTAA). Back then, he said, the region could
not even understand the concept of Government Transparency in
Procurement, much less agree to it. Now, he noted, it is an
accepted practice in theory, even if they need further
technical assistance.


6. With this in mind, Bernal outlined a "wishlist" of five
areas in which the USG could offer practical expertise that
would bring the region closer to the ability to negotiate a
meaningful Free Trade Agreement at some point in the future:

-- Government Procurement: approaches and modalities for
transparency and market access;


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-- Standards and Technical Barriers to Trade: a
collaboration, for example, with USG standards-setting
agencies to build institutional capacity and to facilitate
information exchange;

-- Technical expertise on sanitary and phytosanitary measures;

-- Intellectual Property Rights protection: expanding,
perhaps, on the training currently offered by the U.S. Patent
and Trademark Office (USPTO); and,

-- Labor and the Environment: technical support that would
bring the Caribbean into line with the USG approach.


7. Bernal closed by noting that the Trade Ministers of the
region would be meeting in Kingston February 1-2. He
observed that this would be a perfect opportunity for the USG
to send a message about the depth of its commitment to
exploring trade possibilities with the region. He expressed
his strong desire (ref. B) to see a "very senior member" of
the USG (NOTE: He specified USTR Schwab. ENDNOTE) come to
Jamaica to attend a brief session of the Council on Trade and
Economic Development (COTED),and to interact directly with
the Ministers who must be "on board" if the TIC is to have
any real, lasting effect.

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A View from the MFAFT
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8. On 8 January, econoff met with Robert Miller, the Head of
the CSME Unit at the Ministry of Foreign Affairs and Foreign
Trade. Miller was especially keen to highlight the two areas
that he considered the most important by far: the need for
greater public outreach and education, and the harmonization
of legislation throughout the region.


9. Miller noted that there were many misperceptions among the
public about the CSME. As noted elsewhere in the region, the
perception seems to be that the free movement of labor will
merely mean the loss of Jamaican jobs to cheaper labor from
elsewhere. He lamented that there was, thus far, little
dialogue among the entrepreneurs in the region in an attempt
to "carve up" niche markets and relative comparative
advantages, something he believes to be essential to the
success of the CSME. He conceded that the USG (through
USAID) had been of some assistance with regard to public
outreach, but lamented that there was often little lead time,
and thus turnouts were small for public fora and discussions.
He hoped that - whatever form our assistance takes - the USG
will give enough time to "do it properly." He also strongly
recommended that the USG coordinate any efforts to this end
with Ivor Caryll, who heads the regional unit in Bridgetown.


10. Regarding harmonizing legislation, Miller noted that
Jamaica has passed all the legislation required of it to be
compliant. He felt, however, that some of the smaller
economies may not have the legal expertise that they require.
He further stated that he felt that the CARICOM Secretariat
might need legal assistance.


11. In general, private sector stakeholders agreed with these
assessments. Douglas Orane, the Chairman and CEO of the
Grace Kennedy Group (a diverse network of companies engaged
in the food processing, distribution, financial, and
remittance sectors),told econoff that regionally, only a few
companies were making the most of the opportunities
available. He felt that a public education campaign would
sensitize businesspeople, as well as assuaging the fears of
small farmers and the urban working class that their jobs
were not at risk.

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Comment
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12. The CSME is often cited as a political triumph, but its
buzzwords outshine its achievements. Many interlocutors
privately concede that the CSME has not drastically altered
any of the realities that existed before the words "regional
integration" became so prevalent. Virtually no one,
furthermore, sincerely believes that there will be any
significant level of economic harmonization on the policy
front by 2008, the supposed deadline for full CSME
implementation. With that in mind, the USG may do well to
heed the words of Ambassador Bernal, and focus our efforts on
trade capacity-building. Institution-building in the region
may be a quagmire best avoided. End comment.

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