This is the final of a three-part commentary discussing the relevance and state of US-Caribbean relations against the backdrop of a publication by the Washington-based Centre for Strategic and International Studies (CSIS), entitled The Relevance of US-Caribbean Relations – Three Views.
CSIS deserves the Caribbean’s thanks for addressing the issue which has been ignored for decades by US agencies, except in the context of their preoccupation with drug trafficking and refugees.
The withdrawal of correspondent banking relations was identified by the CSIS publication as a serious issue in US-Caribbean relations. It is not the only one in the financial services sector. The imposition by the US of its laws on other countries has long been a problem. The US, under President Barack Obama, continued this practice by requiring jurisdictions around the world to become policemen for the US Internal Revenue Service (IRS) under the Foreign Account Tax Compliance Act (FATCA).
This requirement is particularly burdensome for small Caribbean jurisdictions which have to bear all the associated costs of reporting to the IRS on the assets of any US companies or persons. Their failure to do so would result in “substantial financial sanctions” – a description by two senior members of the US Congress, Senator Rand Paul and Representative Mark Meadows.
The two Congressmen want FATCA repealed. They also state categorically that the Inter-Governmental Agreements (IGAs), that the Obama administration compelled many jurisdictions to sign so as to give effect to FATCA, are illegal in the US. Truth be told, the IGAs are probably unconstitutional in every Caribbean jurisdiction, but no government resisted it because they are well aware that they would be black-listed as ‘non-cooperative’.
Paul and Meadows have taken-up this issue with the US Treasury and the White House, because, they say, FATCA harms American tax payers and has led to a “spiking rate in US citizenship renunciations”. Whether FATCA will be repealed or implementation of the IGAs suspended is left to be seen. But the action of the two congressmen illustrates that what could cause change in US-Caribbean relations for the better is not Caribbean interests, but concerns from US interest groups on which the region could piggy-back.
In his ‘view’ offered in the CSIS publication, Anthony Bryan masterfully and authoritatively describes and analyses the energy sector in the Caribbean. It should be read by all Caribbean decision-makers on energy. But, it offers little in terms of US-Caribbean relations except to observe that “the future of these (energy) initiatives (started under the Obama administration) is still unclear with the new US administration”.
Significantly, the US State Department, in a strategy paper presented to a hearing of the Western Hemisphere Sub-Committee of the House Foreign Affairs Committee on implementing the US-Caribbean Strategic Engagement Act on July 19, mentions energy as one of six areas priorities for US engagement with the region. The other five are: security, diplomacy, prosperity, education and health.
If Caribbean representatives are asked, they would offer different matters for priority, such as economic development including infrastructure; climate change (completely absent from the State Department list) that threatens the survival of many of them; an end to the assault on their financial services sector which imperils their participation in the global trade and finance system; access to financial resources of the international financial institutions on concessionary terms so as create jobs in the productive sector; and security concerns such as effects on rising criminality of the deportation of criminals fashioned in the US.
Two experienced observers of US-Caribbean relations, US attorneys, Dr Bruce Zagaris and Farhad Mirzadeh, who attended the Congressional hearing at which the State Department presented its strategy, remarked, “during the hearing it was revealed how little the Administration planned on committing to co-operation with Caribbean countries”.
And, we should be clear. This lack of commitment did not start with President Donald Trump. It was very much in evidence under President Obama, and his predecessors George W Bush and Bill Clinton. Indeed, since the administration of George E. Bush, the region has been largely neglected with only fire-fighting resources being allocated to Haiti and Cuba in furtherance of what was perceived as US security interests.
Zagaris and Mirzadeh have publicly observed that “it became apparent (during the Congressional hearing) that the Budget did not allot the necessary funding to achieve the seemingly modest goals” set out in the State Department’s paper. For instance, it was revealed that funding for the Caribbean Basin Security Initiative would be slashed by 37 per cent. That figure assumes greater significance when measured against the fact that the original allocation was small by any objective standard, and is used mostly to fight the trafficking of drugs destined to satisfy demand in the US.
In its strategy paper, the State Department lists a set of “highlights” of its strategy for the Caribbean, the first of which is: “Creation of a US-Caribbean Dialogue which will be an annual State Department consultative meeting with Caribbean leaders”. Pointedly, the proposal is not for an annual meeting between the US President and Caribbean Heads of Government, or at the very least, between the US Secretary of State and Caribbean Foreign Ministers. That is a miscalculation. Caribbean leaders want to talk with decision-makers like themselves; persons who understand the reality of politics and of delivering expectations to people who elected them to office. US leaders understand the importance of leaders talking to each other. That’s why US Presidents invite their counterparts to Washington or travel to foreign capitals. To shunt Caribbean leaders to an “annual State Department consultative meeting” will not reset the US-Caribbean relationship in the meaningful way for which it is crying-out.
The relationship needs resetting. Jeff Duncan, the Chairman of the House sub-committee that took evidence on July 19 said that: “The Caribbean region is a vibrant community that is vital to US interests and I believe that we need to expand US engagement and strengthen our relationships in the region”. Every Caribbean leader would agree with Chairman Duncan. Regional leaders, as much as the region’s people, want a strong, mutually beneficial relationship with the US. But they want that relationship to be based on respect for their sovereignty and independence and on recognition of their capacity to contribute to global good through their intellect, their creativity and their commitment to values that they have traditionally shared with the US. They want dialogue not dictation; they want a hand-up, not a hand-out; they want a symbiotic, mutually beneficial relationship with the US.
The first step should be a well-planned conversation of Heads of Government at which they close the doors to all but one or two chief advisers to reset the relationship with an agenda that has concrete plans, guaranteed resources, agreed objectives, effective implementation machinery and a mechanism to monitor and review outcomes annually.
A conversation leading to a reinvigorated relationship with the Caribbean will not dislodge the region’s now established links with China and other countries, but it would be in the US-Caribbean interest to let that conversation begin.