JAMAICA: MEETING WITH CRNM DIRECTOR GENERAL

C O N F I D E N T I A L KINGSTON 000544

SIPDIS

SIPDIS

STATE FOR WHA/CAR (BUDDEN, FORTIN),EB/TPP/BTA/EWH (LAMPRON)
STATE PLEASE PASS FOR USTR (VIONDETTE LOPEZ)

E.O. 12958: DECL: 04/12/2017
TAGS: ECIN ECON PREL ETRD USTR JM
SUBJECT: JAMAICA: MEETING WITH CRNM DIRECTOR GENERAL
AMBASSADOR RICHARD BERNAL

REF: A. SECSTATE 43123

B. 06 KINGSTON 1500

Classified By: Ambassador Brenda L. Johnson, reasons 1.4 (b) and (d)

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Summary
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1. (C) On April 11, DCM and Econ met with Ambassador Richard
Bernal, Director General of the Caribbean Regional
Negotiating Machinery (CRNM). Bernal said that regional
leaders recognized that the upcoming Conference on the
Caribbean presented an "historic opportunity," that can put
the region on Washington's radar. He noted, however, that
the region must "make up its mind" whether it wants a Free
Trade Agreement (FTA) with the United States. He argued that
the USG needed to take a more flexible approach in its
negotiations with CARICOM, being mindful of the fragility of
their economies, the vulnerability of their goods sectors,
and the resource constraints of their governments. Although
he saw the current visit of WTO Director General Pascal Lamy
as merely a housekeeping stopover, he firmly rejected any
suggestion that CARICOM might consider Chavez's ALBA an
alternative, either to continuing Doha Round discussions, or
to the FTAA. Relations with the USG were still strong, he
noted, and he hoped that the Conference would be a reflection
of this. End summary.

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Conference on the Caribbean
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2. (C) DCM and Econ met with Ambassador Richard Bernal,
Director General of the Caribbean Regional Negotiating
Machinery (CRNM) on April 11 (Note: Bernal was recently
reappointed to his position for a two-year term. Endnote).
Bernal said that regional leaders recognized that the
upcoming Conference on the Caribbean (ref. A) presented an
"historic opportunity," that can put the region on
Washington's radar, if only for a brief time. He lamented
that some had been slow to appreciate the significance of it,
a fact that he attributed to "regional pride." He said that
he has had to point out repeatedly that with the relative
size of the United States and Europe, the Caribbean must
force themselves onto the agenda, rather than waiting to be
approached. The Conference, he said, was their chance.


3. (C) Bernal was frank about the dilemma facing the
Caribbean: wanting to reap the benefits of free trade while
fearful that dismantling protectionist policies would wreak
havoc on their fragile, often one-dimensional, economies.
Although it was not explicit, Bernal hinted at a point made
in prior meetings with CRNM officials (ref. B): that the
smaller Eastern Caribbean states oppose an FTA with the
United States due to the loss of tariff revenue to sustain
their tiny manufacturing sectors. "Fiscal revenue is what is
holding up liberalization," he said, although he felt that
moves toward value-added taxation frameworks were mitigating
this in certain countries.


4. (SBU) He urged the USG to remember the exceedingly local
nature of politics in the region. It is much harder, he
explained, to realign one's economy to adapt to the global
marketplace when the affected industries may be run by your
close family or friends.


5. (SBU) He also opined that the USG "can afford" more
flexibility in their trade negotiations. He preemptively
dismissed concerns that this would set a precedent, noting
that in certain cases ) he cited Paraguay's opposition to
CBERA ) the USG has no difficulty making exceptions. The
Economic Partnership Agreements (EPAs) being negotiated with
the European Union have "trade with aid" built into them. He
felt that any FTA discussions could have the same.


6. (SBU) He asked how the USG saw the upcoming Conference.
DCM noted that there were concerns that the region was not
sufficiently engaged, and that there needed to be more
commitment to the planning process. Bernal expressed
confidence that this would be seen in the near future, and
said that he would remind CARICOM trade ministers at upcoming
meetings of the importance of a successful event.

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WTO Director Lamy

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7. (C) DCM asked about the current visit of WTO Director
General Pascal Lamy to speak to Caribbean trade ministers.
Bernal characterized the visit as a generic "greasing the
wheels" stopover. He noted that Doha Round negotiations had
stalled, at least in part because the smaller economies felt
that the development goals of the round were in danger of
being overlooked. He said that he expected to hear nothing
to convince him that the talks could be resurrected in any
meaningful sense. That being said, he hoped that he might be
mistaken: "We're here to listen, and to reiterate our
concerns," he said.

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ALBA vs. FTAA?
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8. (C) Bernal laughed at any mention that the region might
consider ALBA a viable alternative, however. "ALBA will
never leave the shores of Venezuela," he said. He agreed
with DCM that the Summit of the Americas meeting in Port of
Spain, scheduled for 2009, might present an opportunity to
reenergize FTAA talks, but noted that the current USG policy
of negotiating "one by one" will eventually bear fruit, as
countries see those around them reaping the benefits, and
asking to come aboard.


9. (C) Bernal went a step further in discussing PetroCaribe.
He noted that cash-strapped economies with a high dependence
on imported oil had little choice but to accept the deal, but
stated that he saw "no evidence" that Venezuelan influence in
the region was deepening.


10. (SBU) DCM noted that perhaps it was an opportune time for
Jamaica to explore deeper relations with the Mexican
government of Felipe Calderon. A vast potential alternative
source of energy exists, if it can be unlocked. Bernal noted
that Jamaica used to have very strong relations with Mexico,
but said that Mexican-CARICOM engagement was "nonexistent" at
the present time. He agreed that there may be value to
reopening lines of communication.

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Deepening engagement?
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11. (SBU) Characterizing CARICOM-USG relations as "still
warm," he nevertheless felt that operationally there was room
for improvement. He expressed his opinion that CARICOM does
not expend enough effort utilizing the mechanisms available
in Washington to lobby for their needs (Note: Bernal worked
in Washington for eleven years, most recently as Jamaican
Ambassador to the United States and Permanent Representative
to the OAS, from 1991 to 2001. Endnote).


12. (C) In a specifically Jamaican context, Bernal worried
that there was little vision for the medium and long-term.
While he noted that Finance Minister Omar Davies had been the
stabilizing force that the country needed in the wake of the
financial crises of the mid-1990s, he said that now was the
time to move from stabilization to growth. The potential was
there to attract continued and extensive investment, but
excessively high interest rates were acting as a damper on
local entrepreneurs and prohibiting higher growth levels. He
saw Davies as an "accountant" with little appetite for risk,
at a time when Jamaica needs to move away from its flat, safe
policies.

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Comment
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13. (C) Bernal is a candid and forthright interlocutor, who
also has much experience in dealing with the USG. In private
discussions in the past, Bernal has hinted that he favors an
FTA with the United States, but he is hindered by the
regional scope of his position. In our meeting, he noted
several times that CARICOM has been slow to embrace
globalization, and that in his role "sometimes you have to
wait to let your stakeholders catch up, or else they will
think you do not represent them." Bernal's point seemed to
be that the region was not quite ready for an FTA, but that
the movement was decidedly in that direction. If Caribbean
Basin Initiative (CBI) benefits were extended, it would give
CARICOM time to put the structures in place that would allow

for fruitful FTA discussions. Indeed, he noted, the EPAs
with Europe were helping in this way.
JOHNSON