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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