Free and Fair Trade is a Prerequisite for Integration
In what was his last official public speaking engagement
before his death, Dr. Cheddi
Jagan, on February 13,1997, addressed the Sixth Meeting of the Free Trade Area of the
Americas Working Group on Smaller Economies. Following is the full text of the address delivered at the Pegasus
Hotel, Georgetown, Guyana.
On behalf of the Government and people of Guyana, I extend to you a
warm welcome to our country, and wish you every success in your
deliberations during this Sixth Meeting of the FTAA Working Group on
Smaller Economies.
I do hope that, in spite of your busy schedule you will take the
opportunity to have a glimpse of our small but beautiful country and
enjoy the traditional Guyanese hospitality.
Permit me to pay tribute to the outstanding work which has been
accomplished so far by the Working Group on Smaller Economies. We are
indebted to Ambassador Richard Bernal of Jamaica for his dedicated,
astute and efficient chairmanship.
I am convinced that with continued hard work by this Group, the
growth and development of the Smaller Economies can only redound to
the benefit of the entire hemisphere .
Mr. Chairman, Distinguished Delegates, like the other Small
Economies in the hemisphere, Guyana is grappling with the cosmic
trends of globalisation and trade liberalization. At the same time we
are making every effort to adjust in a rapidly changing economic and
political process to avoid marginaliation.
As I see it, given current global trends, there is no alternative
but to combine our human and other resources as we seek to achieve a
friction-free harmonious and collectively beneficial Free Trade Area,
that will be characterized by the removal of tariff and non-tariff
barriers. As I have said on more than one occasion, as regards the
Smaller Economies, we either swim together or sink together in the
rising tide of free trade and the sea levels.
Mr. Chairman, I am on record at various fora, as having expressed
serious concern about the plights of Smaller Economies, not only in
our Hemisphere, but in the entire global system. Many of our countries
are experiencing onerous debt problems, grinding poverty, high
unemployment and increasing social disintegration. Our countries are
seeking debt relief from commercial creditors and other multilateral
financial institutions in order to advance the development process for
the benefit of our peoples.
A definite solution must be found for the Third World’s crushing
external debt problem. It has now reached unmanageable levels. Its net
present value is more than 200 per cent of annual exports. In Latin
America and the Caribbean, with 181 million out of 441 million people
living below the poverty line in the mire of destitution, how can
human development take place when, despite onerous debt payments, the
stock of debt grows. Between 1981 and 1990 the region’s foreign debt
payments were US$503 billion, of which interest was US$313 billion.
“At the same time, the region’s consolidated external debt rose from
US$297 billion in 1981 to US$428 billion in 1990. The mechanism
whereby the more you pay the more you owe is perverse and must be
stopped,” noted the 1992 UNICEF publication Children of the Americas.
The present mechanism whereby “the more you pay, the more you
owe” is in need of urgent review. It is some consolation that the IMF
and World Bank leaders are now recognizing the need for urgent
solutions to these problems. The IMF seems willing now to sell part of
its gold reserves to assist poorer countries with their debt problems,
an idea which was mooted many years ago but is still being opposed by
some members of the G7 nations. Debt relief in the form of debt
cancellation, grants, soft loans and rescheduling is urgent, if the
developing countries are to eradicate poverty, protect the
environment, play their meaningful role in expanding world trade and
help end stagnation and recession in the industrially-developed
countries. Debt relief must be seen as an investment not only in the
development of poor countries but also in the security of the rich
nations.
Because of the debt trap, we are unable to urgently address and
find solutions to help alleviate the suffering of the working people
and to provide them with the basic needs for their survival. I have
never been associated with “Prophets of Doom.” Rather, I have always
been and will always be a supreme optimist. I must say, however, that
given recent and current social and political upheavals in several
countries in our hemisphere, I am convinced that time is running out.
We have to move quickly to solve the mounting social and economic
problems occurring in our countries.
At the Summit of the Americas Meeting in Miami in December 1994,
I reiterated the urgent need for a New Global Human Order within the
framework of a “New Agenda for Development.” I expressed the view that
while we embrace the practice of good governance and participatory
democracy in the hemisphere, there is also a need to give full
attention to the gaps between the rich and the poor, the
techno-skilled and the techno-unskilled, and between the North and the
South.
In this regard, given existing social and economic realities in
our hemisphere, as manifested in the wide disparities between and
among us, it is only logical that there should be special and
preferential treatment for the less fortunate, in order to facilitate
their active and productive participation in the integration process
and to increase their levels of development. Free and fair trade is a
basic prerequisite for any successful integration of the Americas.
As we move inexorably towards the establishment of a hemispheric
free trade area, it is becoming increasingly evident that a special
facility should be created to help the weaker economies play a real
partnership role in such a collective endeavour. My rationale for
calling for the establishment of such a facility is to be found in the
fact that there are in our hemisphere larger economies which obviously
stand to benefit more than those that can be described as Smaller
Economies.
The fact that a few states in our hemisphere, developed and
developing, are producing similar products utilizing processes and
technology, which are decades apart, is a reality that should be taken
into consideration. This does not augur well for fair competition and,
moreover, confirms to the dictum that there should be equality among
equals and proportionality among unequals.
In this regard, we should take a leaf from the European and
South-East Asian experiences. In the EEC mega-bloc, the leaders were
more perceptive and understood the inherent problems in liberalizing
trade between countries of varying levels of economic and social
development. The integration of Europe provides for the free movement,
not only of capital, services and goods, but also of people. For the
lesser developed countries, like Greece, Spain, Portugal and Ireland,
a special Development Fund has been established to raise per capita
income to at least the level of seventy-five percent of the
Community’s average income. Under NAFTA, there is no such provision
even though the disparities in development and income levels are far
wider in the Western Hemisphere than in Western Europe.
In the Far East APE integration movement, agreed to at the same
time as NAFTA, a realistic differential time-frame for the attainment
of free trade has been instituted, 10 years for the more developed
countries and 20 years for the lesser developed countries.
Mr. Chairman, Distinguished Delegates, you are aware that Guyana
has been promoting the concept of the Regional Development Fund, now
called the Regional Integration Fund. In June 1995, consultations were
held in Georgetown and recommendations were unanimously adopted,
calling for further consultations on the proposal with the Working
Group on Smaller Economies itself, the Caribbean Community and other
hemispheric organizations.
The response to this initiative is most encouraging. Studies done
by the Organization of American States, the Inter-American Development
Bank, the Latin American Economic System, the Economic Commission for
Latin American and the Caribbean, and the Caribbean Development Bank
were basically supportive of special measures to assist the Smaller
Economies within the context of the Free Trade Area of the Americas.
In many respects, many of the conclusions arrived at in these studies
coincided with the thrust of the proposal for a Regional Integration
Fund.
As part of the preparations for the Fifth Meeting of this Working
Group, which took place in Caracas, Guyana hosted a second round of
consultations on the Regional Integration Fund proposal. These
consultations benefited from the full support of the Caribbean
Community Secretariat, SELA and ECLAC and several countries of this
hemisphere. Indeed, Bolivia and Honduras have formulated proposals
which are not dissimilar from the RIF proposal.
Subsequent to the Caracas Meeting, the Government of Guyana in
collaboration with the Caribbean Community Secretariat, prepared a
consolidated working paper on the subject which I understand, is a key
Working Document of this Sixth Session of the Working Group on Smaller
Economies.
As witnessed by the Second Hemispheric Trade Ministerial Meeting,
which was held in Cartagena, Colombia, in March 1996, and the
Caribbean Community/Central America Foreign Ministers Meeting which
was held in San Jose, Costa Rica in December last year, it is also my
understanding that there is an emerging hemispheric consensus on the
necessity for the establishment of the Fund.
I hope too that a consensus will emerge on the burdensome foreign
debt, which inhibits the development of our countries. They should not
have to make debt payments exceeding ten per cent of export income.
Also, that the APEC time frame should be adopted for the FTAA.
The Government of Canada has expressed its willingness to discuss
the RIF as a Caricom Initiative with other interested parties. I look
forward to the Government of the United States giving the Proposal the
support it deserves.
Mr. Chairman, I am convinced that arising from your deliberations
in Georgetown, concrete and positive recommendations will emerge as
regards the objectives, financing and management of the Fund.
This will ensure that, as we move from the Second Trade
Vice-Ministers’ Meeting later this month in Brazil, to the Third Trade
Ministerial Meeting in May, also to be held in Brazil, there would be
tangible progress with regard to support for the establishment of a
Regional Integration Fund, and consequently placing the proposal
firmly in the mainstream of the process leading up to the realization
of the FTAA.
Let me add that of immediate need to our Smaller Economies is the
provision of technical assistance to facilitate, during this
preparatory process, our countries’ greater participation in the FTAA
and the eleven specialized Working Groups and the actual negotiating
process.
Mr. Chairman, Distinguished Delegates, Ministers of Government,
Ladies and Gentlemen, it pleases me to know that Guyana is playing
host to this Sixth Meeting of the FTAA Working Group on Smaller
Economies.
It gives me great satisfaction to know that Guyana is making a
modest contribution to laying the basis for free and fair trade
practices in this hemisphere.
I am also proud of the fact that Guyana is making a modest
contribution to the process leading up to the negotiations of the FTAA.
I am convinced that, as long as we view this process, not only as a
partnership, but as the forging of our collective destiny aimed at
serving the interests of our people, we can together, create in this
hemisphere the world’s most important and vibrant free trade area.
I thank you.
© Nadira Jagan-Brancier, 1999
This speech is published in Cheddi Jagan -A New Global Human Order.
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