T&T Trade Ministry Gauging U.S. Interest in Trade

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000336 SIPDIS SENSITIVE STATE FOR WHA/CAR, WHA/EPSC, INR/IAA AND EEB/TPP/BTA PASS USTR FOR E.EISSENSTAT AND K.SHIGETOMI NSC FOR V. ALVARADO USDOC/ITA/LATIN AMERICA & CARIBBEAN - G.WORD, M.BROOKS E.O. 12958: N/A TAGS: ETRD PREL ECON TD SUBJECT: T&T Trade Ministry Gauging U.S. Interest in Trade Consultation Ref: POS 297 ¶1. (SBU) SUMMARY: Senior officials from T&T's Ministry of Trade and Industry reiterated their government's interest in exploring possibilities for a more "sustainable" framework for bilateral trade after 2010. They do not expect CARICOM as a whole will be prepared to negotiate in the near term, so T&T would need a formula that allows the willing to move forward while assuring smaller islands do not feel left out. Post reiterates reftel recommendation that State and USTR consider reengaging T&T on trade. END SUMMARY. ¶2. (SBU) ECON Chief met with Ministry of Trade and Industry (MTI) Permanent Secretary (PS) Margaret Parillon, Deputy PS Roslyn Khan Cummings and Trade Specialist Randall Karim on July 21 to follow up informally on recent meetings (reftel) in which top GOTT officials have signaled interest in developing a framework for their nation's trade with the U.S. after 2010, when the Caribbean Basin Trade Partnership Act is scheduled to expire and T&T will no longer be eligible for the U.S. Generalized System of Preferences (GSP). ¶3. (SBU) The MTI officials thanked the Embassy for assistance in clarifying to local media and business organizations the minimal trade impact of T&T's GSP graduation. In the aftermath of the GSP announcement, Prime Minister Manning had raised the issue of trade with the U.S. at the recent CARICOM summit in Antigua, underscoring the need to develop a more "predictable" framework for U.S.-CARICOM trade (ref). The immediate outcome of that discussion was a mandate for the CARICOM Chair to write a letter to the U.S. House Ways and Means Committee Chair. The Caribbean Regional Negotiating Machinery (CRNM) also was looking at the "technical merits" of opening a trade negotiation with the United States. For its part, T&T as the ministerial chair for CARICOM bilateral trade was in a position to pursue the idea in CARICOM's Council on Trade and Economic Development (COTED). ¶4. (SBU) Noting the reference to a "more predictable framework," ECON Chief asked if that means a free trade agreement (FTA). Karim responded there are differing views in T&T on whether this is the right time to consider an FTA with the United States, but he affirmed interest is growing as a result of T&T's graduation from GSP and the limited duration of the CBTPA renewal. Deputy PS Cummings reported that the T&T Manufacturers Association's initial FTA enthusiasm following the GSP announcement had cooled with the realization that most manufactured goods produced in T&T would continue to enjoy duty-free access to the U.S. market even without GSP or CBTPA. Nevertheless, others see a clear need to secure preferential access for both the 20 to 30 percent of T&T's exports to the U.S. that have entered under CBTPA in recent years and the new export products expected from a series of natural gas-based industrial and petrochemical projects currently in the works. ¶5. (SBU) Alluding to past GOTT requests for a "partial scope" trade agreement covering energy-based products, Karim asked whether the U.S. has any free trade agreements covering certain sectors only that could serve as a precedent. ECON Chief replied that he was not aware of the U.S. negotiating any such agreements in recent years, adding that the U.S. has consistently taken a strict view of the WTO standard that FTAs must cover "substantially all" trade. ¶6. (SBU) PS Parillon said T&T would be interested in consulting with the U.S. to identify practical steps that could pave the way for future U.S.-CARICOM trade negotiations. MTI officials were not optimistic that CARICOM as a whole would be in a position to engage meaningfully with the U.S. anytime soon. Karim conveyed low expectations for the process of revising the US-CARICOM Trade and Investment Framework Agreement (TIFA),which he characterized as "unambitious." At the same time, T&T would need CARICOM's consent to move toward a trade negotiation with the U.S., whether on its own or as part of a small group of leading economies. The U.S. is too important a trading partner for CARICOM to let T&T "get away" with the strategy it had used to lead CARICOM into a negotiation with Central American countries by first striking out on its own to negotiate an FTA with Costa Rica. Karim suggested that a formula is needed that would allow the willing members to move forward while assuring smaller islands in particular that they would not be left behind. T&T could put the idea on the agenda of the COTED, which next meets in October. ¶7. (SBU) Karim asked whether and how the U.S. might be willing to frame trade consultations. Noting that he had no instructions from Washington, ECON Chief underscored that in an election year and with Trade Promotion Authority having expired, the U.S. would not be in a position to discuss market access, but other elements of an FTA PORT OF SP 00000336 002 OF 002 might provide substance for constructive dialogue. ECON Chief undertook to seek Washington's views. ¶8. (SBU) COMMENT: T&T's Ministry of Trade and Industry had high expectations going into the October 2006 meeting of the U.S.-CARICOM Trade and Investment Council. When those expectations were not met, MTI moved the U.S. down its list of negotiating priorities. GSP graduation and the two-year renewal of CBTPA now have T&T trade officials asking whether it is time to reconsider priorities. MTI officials made clear that they have more thinking to do, but they also seek some indication of interest from the U.S. Post continues to believe this presents an opportunity to engage T&T on trade, within political and resource constraints. KUSNITZ