Caribbean uncertainty over US policy

Sunday, March 18, 2018

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Last week, while returning from a trip to Kenya, US Secretary of State Rex Tillerson heard that President Donald Trump had announced on Twitter that he was fired. When Mr Tillerson returned to Washington, DC he calmly, and with as much dignity as the circumstances would permit, stated that he wanted an orderly transition.

His approach and style differed from that of Mr Trump, whom he is reported to have called a “moron” and criticised Russia. Many in the State Department were not sorry to see him ousted but were apprehensive because the president has nominated Mr Mike Pompeo, who was director of the Central Intelligence Agency, to replace Mr Tillerson. Mr Pompeo, assuming he is approved by Congress, will bring a more strident approach to a number of issues, notably North Korea and Syria. His thinking is closer to that of President Trump's than that of Mr Tillerson's.

The question we in Jamaica have to ask is, does anything Mr Tillerson said to Prime Minister Holness during their meeting here still mean anything? Ascertaining what US foreign policy towards the Caribbean Community (Caricom) is, is not an easy task. Apart from Mr Tillerson's exit there has been a massive exodus of career diplomats from the State Department and persistent rumours that the national security advisor may soon be gone.

A realistic understanding of US policy towards Caricom must start from the following facts.

First, Caricom is not a priority for the US today because the countries of the region have the characteristics of middle-income, democratic, small markets and are of little strategic value. This means that the US may not have a clearly thought out strategy, despite the mandate of the bill sponsored by Congressman Engels.

Second, the speculative panic reaction to everything the US does is not constructive. For example, Washington's imposition of tariffs on aluminium and steel have no significant, direct negative effect on us. Indeed, increased US aluminium production could increase the demand for bauxite and alumina. Whether the Chinese build an aluminium plant in Jamaica depends on many factors, in particular the cost of energy, and, in any case, China is a fast-growing market for aluminium.

Third, the Caribbean will continue to receive less US aid, except for crime and national security. This started long before Mr Trump became president and it points to greater reliance on private sector investment, both domestic and foreign.

Fourth, non-Caricom countries will get more attention than Caricom. The Dominican Republic is a large enough market to be of interest to US investors and exporters. Haiti is a concern because of American fear of migrants, and Cuba is an ideological throwback to pre-Obama policy.

Fifth, the existential issue of the impact of climate change and the frequency and damage of natural disasters will elicit humanitarian aid, but climate change is not high on the US agenda so there is no point looking in the direction of Washington.

Sixth, the de-risking by US banks has had a serious, adverse impact on the international financing of small Caribbean economies. It needs a more empathetic approach from the US and is an issue on which the Caribbean has to seek collaboration and technical assistance, rather than just complaining.

The governments in the region need to carefully monitor events and developments in the US and, given the unpredictable nature of President Trump, they should not rush to judgement or make statements prematurely, because nobody knows exactly what to expect.

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