VZCZCXYZ0000
PP RUEHWEB

DE RUEHKG #0514/01 1811624
ZNR UUUUU ZZH
P 301624Z JUN 09
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC PRIORITY 7790
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUEHSP/AMEMBASSY PORT OF SPAIN 5199
RUEHWN/AMEMBASSY BRIDGETOWN 7490
RUEHGE/AMEMBASSY GEORGETOWN 2393
RUEHBE/AMEMBASSY BELMOPAN 0008
RUEHPU/AMEMBASSY PORT AU PRINCE 3144
RUEHCV/AMEMBASSY CARACAS 0565
RUEHLO/AMEMBASSY LONDON 0580
RUEHOT/AMEMBASSY OTTAWA 2390
RUMIAAA/CDR USSOUTHCOM MIAMI FL
RUEHDG/AMEMBASSY SANTO DOMINGO 6035

UNCLAS KINGSTON 000514 
 
SIPDIS 
 
SENSITIVE 
 
DEPT PASS TO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS FOR INFO 
 
DEPT PASS TO EC CARICOM COLLECTIVE FOR INFO 
 
DEPT ALSO PASS TO WHA CENTRAL AMERICA COLLECTIVE FOR INFO 
 
STATE FOR WHA/CAR (DHOFFMANN) (BALVARADO) (VDEPIRRO) (WSMITH) 
WHA/EPSC (MROONEY) (FCORNEILLE) 
EEB/ESC/IEC/EPC (MCMANUS) 
INR/RES (RWARNER) 
SANTO DOMINGO FOR FCS AND FAS 
TREASURY FOR ERIN NEPHEW 
USTDA FOR NATHAN YOUNG AND PATRICIA ARRIAGADA 
OPIC FOR ALISON GERMAK 
 
E.O. 12958: N/A 
TAGS: ECIN ECON EIND PBTS PREL EINV EPET ETRD SMIG MIC
AORC, JM, XL 
SUBJECT: JAMAICA: FRUSTRATION GROWS OVER FREEDOM OF MOVEMENT, 
NON-TARIFF TRADE 
BARRIERS IN CARICOM, GROWTH OF ALBA AND OECS 
 
REF: KINGSTON 508 
 
Summary 
------- 
 
¶1. (U) As the Caribbean Community (CARICOM) prepares for its July 2 
summit in 
Guyana, the Government of Jamaica (GOJ) finds itself increasingly 
frustrated 
and at odds with its partners in the 36 year old organization, 
especially the 
regional economic powerhouse of Trinidad and Tobago.  Particularly 
rankling 
has been the Government of Trinidad and Tobago (GOTT)?s efforts to 
join with 
the Organization of Eastern Caribbean States (OECS) to create an 
economic 
union by 2011 and to achieve full political integration by 2013. 
The GOJ is 
concerned that these goals suggest that the GOTT and other member 
states are 
not fully committed to the future success of CARICOM.  Similarly, 
GOJ 
perceives the participation of CARICOM members Dominica, St. Vincent 
and the 
Grenadines, and Antigua and Barbuda in the Venezuela-led Bolivarian 
 
Alternative for the People of our America (ALBA) as evidence of a 
lack of 
faith in CARICOM.  Finally, efforts on the part of Barbados to expel 
 
undocumented immigrants and GOTT?s non-tariff barriers to Jamaican 
imports 
have also irritated the GOJ and exacerbated its sense of economic 
frustration 
during the current global downturn.  End Summary. 
 
¶2. (U) Many in GOJ appear increasingly skeptical as to whether 
CARICOM 
membership has been beneficial to Jamaica?s economic interests. 
Recent 
developments suggest an absence within CARICOM of a shared vision of 
the 
future, of a region splintering into new interregional 
relationships, driven 
by differing levels of development among CARICOM states and a 
growing sense of 
protectionism and insularity in response to the global economic 
crisis.  In 
particular, Jamaica?s frustration with its own economic travails 
appears to be 
boiling over into finger-pointing at its CARICOM partners. 
 
Background 
---------- 
 
¶3. (U) Following the collapse of the West Indies Federation in 1962 
as a 
result of Jamaica?s withdrawal, the Caribbean Free Trade Association 
(CARIFTA) 
was established in 1965 to provide for a continued economic 
relationship among 
 
 
 
the countries of the English-speaking Caribbean.  The 1972 Treaty of 
 
Chaguaramas transformed CARIFTA into CARICOM and committed the 
organization to 
promoting economic integration and cooperation among the 
organization?s 
members, dispersing economic benefits equitably, and coordinating 
foreign 
policy.  The Grand Anse Declaration, negotiated in Grenada in 1989, 
committed 
the organization to the establishment of a Caribbean Single Market 
and Economy 
(CSME).  In 2001, a revised Treaty of Chaguaramas established a 
Caribbean 
Court of Justice to mediate disputes and established 2006 as the 
year the CSME 
would go into effect, although as of 2009 most of the now 15 member 
states 
have yet to realize these goals.  Jamaica, as the GOJ is quick to 
point out, 
is one of the few CARICOM states to have met all CSME requirements. 
 
Petty Over Patties 
------------------ 
 
¶4. (U) GOJ?s frustrations toward CARICOM have become palpable in 
recent weeks. 
As Jamaica?s economy stalls and the ruling Jamaica Labour Party 
(JLP)?s 
budgetary and anti-crime measures remain mired in Parliament, 
government 
leaders and media commentators alike have targeted their 
frustrations at 
CARICOM in general and the GOTT in particular.  A recent spat 
between GOJ and 
GOTT over non-tariff barriers came to a head in May when a 
refrigerated 
container full of Jamaican patties was detained in Trinidad and 
Tobago for 
several weeks while GOTT customs officials inspected the Jamaican 
production 
facilities before allowing the meat-filled pastries into the 
country. (Reftel) 
 
¶5. (U) The imbroglio was finally settled through behind-the-scenes 
negotiations between Jamaican and Trinidadian ministers, but Karl 
Samuda, 
GOJ?s Minister of Industry, Investment and Commerce, decried the 
incident, 
maintaining that intraregional trade should be conducted through 
established 
CARICOM standards and regulations, not through the personal 
interventions of 
ministers.  Although GOTT maintained that non-tariff barriers such 
as health 
and safety requirements were legitimate under CARICOM agreements, 
Samuda 
implied that the GOJ would consider trade retaliation if the issue 
recurred. 
In a newspaper interview several days later, Samuda reiterated his 
threat: 
?Make no mistake about it.  I have signaled that reciprocal or 
 
 
 
appropriate 
action to protect the interests of the Jamaican manufacturing 
community will 
be taken immediately,? should GOTT continue to impose non-tariff 
barriers on 
Jamaican exports. 
 
Freedom of Movement Threatened? 
------------------------------- 
 
¶6. (U) Under the revised Treaty of Chaguaramas, CARICOM member 
states were to 
have allowed freedom of movement within the community by 2008, 
although the 
deadline was later postponed until 2009.  The organization adopted a 
common 
passport in 2005 to facilitate intra-regional and interstate travel, 
and as of 
2009, 12 of the 15 states had introduced the new machine-readable 
design. 
However, few member states have implemented the legislation and 
regulations 
necessary to realize the organization's freedom of movement goals, 
although 
the GOJ is quick to point out that they are among the few to have 
done so. 
Prime Minister Golding has gone so far as to suggest that the other 
CARICOM 
states are deliberately dragging their feet in implementing the 
agreement; 
"if that is the case," he has said, "let us revisit the treaty." 
 
¶7. (U) The immigration and deportation policies of Barbados have 
drawn most of 
the GOJ's ire.  The Government of Barbados (GOB) recently ordered 
CARICOM 
nationals living in the country to regularize their status within 
six months 
or face deportation, a policy widely seen as targeted toward 
nationals of 
Jamaica, Guyana, and St. Vincent and the Grenadines.  Antigua, with 
42,000 
noncitizens among its 70,000 residents, has a similar policy.  GOJ 
has also 
expressed concern over reports of rude and/or harsh treatment by 
Barbadian 
authorities toward Jamaicans visiting or living in that country. 
 
GOTT's Energy Subsidies 
----------------------- 
 
¶8. (U) GOJ's perception of GOTT's de facto subsidization of its 
industries 
through cheap energy has raised hackles as well.  With its own 
energy costs at 
around USD0.31 per kWh, GOJ has described the US$0.03-4 per kWh 
energy costs 
enjoyed by manufacturing interests in oil-rich Trinidad and Tobago 
as a 
subsidy prohibited by CARICOM?s National Treatment clause.  To level 
the 
playing field, GOJ has called on GOTT to provide Jamaica with 
 
 
 
Liquified 
Natural Gas (LNG) at the same prices enjoyed by Trinidadian 
producers.  GOTT, 
on the other hand, has balked at the transportation and 
liquification costs 
that this would entail, and contends that its domestic energy costs 
are shared 
with all domestic consumers, not simply the commercial sector, and 
as such do 
not constitute a subsidy. 
 
OECS 
------- 
 
¶9. (U) Established in 1981, the six eastern Caribbean island states 
that are 
full members of the OECS present themselves as a microgroup within 
CARICOM and 
the CSME.  In August 2008, GOTT, Grenada, St. Lucia, and St. Vincent 
and the 
Grenadines announced their intention to establish an economic union 
within 
CARICOM by 2011 and full political union by 2013, goals later 
endorsed by the 
full OECS membership.  Should OECS succeed in this political 
transformation, 
the petroleum-rich GOTT would certainly dominate the new political 
entity. 
While CARICOM?s membership could conceivably be reduced from 15 to 
eight 
states were political union to take place, the GOTT-led OECS would 
wield even 
greater economic leverage than is the case currently.  While the new 
entity 
would comprise just over ten percent of CARICOM?s population, it 
would 
constitute more than one-third of its collective GDP.  GOTT PM 
Patrick Manning 
has said the initiative would allow for the Caribbean to ?rekindle 
the spirit? 
of the West Indian Federation that collapsed in 1962.  Given that it 
was 
Jamaica's withdrawal in 1962 that destroyed the federation, GOJ?s 
ambivalence 
toward GOTT?s rapprochement with OECS is understandable. 
 
ALBA 
---- 
 
¶10. (U) With the U.S.-proposed Free Trade Area of the Americas 
(FTAA) 
currently moribund, the Government of Venezuela (GOV) proposed the 
creation of 
ALBA as an international organization committed to social, political 
and 
economic integration in Latin America and the Caribbean.  From its 
inception 
as a bilateral agreement between Venezuela and Cuba in 2004, ALBA 
has expanded 
to include several leftist Latin American states as well as CARICOM 
member 
Dominica.  On June 24, Antigua and Barbuda, and St. Vincent and the 
 
 
 
Grenadines 
announced that they would be joining ALBA as well, while Grenada has 
also 
expressed interest in joining.  Unlike most other economic 
associations, ALBA 
describes itself as committed not simply to trade liberalization but 
to 
"social welfare and mutual economic aid." 
 
"Trying to swim in this Caribbean Sea on our own" 
--------------------------------------------- ---- 
 
¶11. (U) Against this backdrop, CARICOM leaders will meet in Guyana 
beginning 
July 2 to discuss the organization's future.  Although Guyanese 
President 
Bharrat Jagdeo, who will take over as chairman at the conference, 
has called 
for a "reaffirmation of commitment" to CARICOM, PM Golding has 
warned that the 
organization?s future was "at risk" due to what GOJ sees as repeated 
failures 
on the parts of some members to comply with the letter and spirit of 
the 
Treaty of Chaguaramas 
. 
¶12. (U) Historically, the JLP has been more skeptical of CARICOM and 
the 
benefits of regional integration than has the opposition People?s 
National 
Party (PNP), and this has been reflected in the PMs comments in the 
days 
leading up to the conference.  "I do not believe that we are going 
to be 
better off trying to swim in this Caribbean Sea on our own," Golding 
remarked 
during the launch of Jamaica's Export Week.  "But it is time for us 
to stop 
playing games, for us to stop mouthing integration and professing 
our 
commitment to this process when the pragmatic demonstration of that 
commitment 
is so often not being brought to the fore." 
 
¶13. (U) Prime Minister (PM) Bruce Golding has said he would seek to 
address 
the future of CARICOM and the "destabilizing effects" of both ALBA 
and GOTT's 
proposed political union with OECS.  In his June 10 remarks to an 
export 
group, Golding described the recent developments as "destabilizing 
and 
threatening the existence of CARICOM," and said that while "[t]he 
political 
integration (of Trinidad and OECS) may very well be commendable, I 
believe that 
is at the detriment to the deepening and strengthening of CARICOM." 
 
Similarly, the PM characterized the growth of ALBA as having a 
"destabilizing 
effect" that is "going to distract (and) going to divert." 
 
 
 
Concerns From Nongovernmental Actors 
------------------------------------ 
 
¶14. (U) Nongovernmental actors have expressed concerns over 
CARICOM?s future 
as well.  In his June 13 public address before the Caribbean 
Association of 
Industry and Commerce (CAIC) in Kingston, Douglas Orane, Chief 
Executive 
Officer of the respected Jamaican food conglomerate GraceKennedy, 
warned that 
"centrifugal forces are at work which could blow us off course from 
our vision 
of an integrated region."  One year into the global economic 
recession, Orane 
lamented CARICOM?s failure to "articulate a cohesive strategy for us 
to work 
our way through this crisis."  Orane identified the organization?s 
primary 
weaknesses as an outdated decision-making structure "mired in a 
culture of 
long meetings and longer speeches," an inability to use current 
information to 
assess situations and predict the future, and the failure of most 
CARICOM 
states to meet the implementation of CSME deadlines.  To reverse 
these trends, 
Orane called on CARICOM to establish a single Caribbean stock 
exchange and 
regulatory framework to facilitate the movement of capital and allow 
the 
Caribbean market to function as a single economic space, as well as 
"the free 
movement of qualified persons within the region." 
 
¶15. (U) Echoing these concerns, Sir Shridath Ramphal of Guyana, 
former 
Commonwealth Secretary General and one of the key players in the 
establishment 
of CARICOM in the early 1970s, described the organization as "at 
risk" and 
called for "inspired leadership" in his remarks to the Conference of 
the 
Association of Judicial Officers at the CARICOM Court of Justice in 
Port of 
Spain.  Singling out PM Golding for praise, Ramphal called for the 
region's 
political leaders "to be less casual about CARICOM; less minimalist 
in their 
ambition for it; less negative in their vision of it." 
 
Conclusion 
---------- 
 
¶16. (U) Taken together, these events suggest an absence within 
CARICOM of a 
shared vision of the future, of a region splintering into new 
interregional 
relationships, driven by differing levels of development among 
CARICOM states 
and a growing sense of protectionism and insularity in response to 
the global 
 
 
economic crisis.  In particular, Jamaica's frustration with its own 
economic 
travails, one of the highest debt-to-GDP ratios in the region, 
rampant 
inflation, uncompetitive industries, and swelling trade deficits, 
appears to 
be boiling over into finger-pointing at its CARICOM partners. 
Furthermore, 
the increasing popularity of ALBA and OECS among several member 
states appears 
to be leading GOJ to speculate as to the strength of their 
commitments to 
CARICOM. 
 
¶17. (U) Many in GOJ are increasingly skeptical as to whether CARICOM 
 
membership has been beneficial to Jamaica?s interests.  Jamaican 
imports from 
its CARICOM partners in 2008 totaled USD 1.68 billion, with 
reciprocal exports 
of just USD 66 million.  Although trading partners such as Trinidad 
and 
Tobago, Barbados, and Belize maintain that the primary reason for 
Jamaica?s 
trade deficit is the lack of industrial competitiveness, many in the 
GOJ are 
quick to blame non-tariff trade barriers to Jamaican goods and 
GOTT?s 
subsidization of its industries through cheap energy. 
 
MOSS