CBERA BIENNIAL SURVEY -- EASTERN CARIBBEAN

UNCLAS BRIDGETOWN 000446

SIPDIS

DEPT PLEASE PASS TO USITC

E.O. 12958: N/A
TAGS: ECON OTRA ETRD XL
SUBJECT: CBERA BIENNIAL SURVEY -- EASTERN CARIBBEAN

REF: STATE 60543


1. (U) Embassy Bridgetown provides below its responses to
reftel request for information on CBERA-related investment in
the Eastern Caribbean and the economic impact of CBI on these
countries. Please note this response covers the following
countries: Antigua and Barbuda, Barbados, Dominica, Grenada,
St. Kitts and Nevis, St. Lucia, and St. Vincent and the
Grenadines.


2. (U) Investments: There have been no significant
CBERA-related investments in these countries during calendar
year 2008. Virtually all investment into these countries has
been in the services sectors, primarily tourism and finance.


3. (U) Impact: The actual economic impact of CBERA on the
economies of the Eastern Caribbean has been modest. Most of
these economies are services-dominated, with tourism and
financial services representing the bulk of foreign business
here. Relatively few products are exported from the Eastern
Caribbean (imports outpace exports almost 10:1 in most
countries),and even within the export sector, CBERA-related
exports represent a small fraction of total exports. Primary
exports for these countries are agricultural products and
alcoholic beverages, which have not benefited from CBERA.


4. (U) Nevertheless, CBERA remains an important political
and psychological benefit for the Eastern Caribbean. While
few companies utilize the trade preference program or do not
export products that benefit from it, having even symbolic
preferential access to the U.S. market is an important sign
of commitment to the region. The loss of the Eastern
Caribbean's preferential access to European markets for
agricultural products (chiefly bananas) has led to a rise in
anti-globalization sentiment in some circles, casting the
Small Island Developing Countries as victims of big-economy
market domination. Keeping the Eastern Caribbean tethered to
the U.S. via CBERA is psychologically important for them and
politically meaningful to us as an indicator of our
commitment. Loss of CBERA access, while only modestly
significant economically, could have markedly negative
political ramifications.
HARDT