Mr. Trevor Harker, Regional Economic Adviser, United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC), Port of Spain

"Small States and the Free Trade Area of the Americas (FTAA)."

Comments

Dr. Gonzales recognised the need to pay attention to internal measures such as macroeconomic policies but questioned what we should do above and beyond that in relation to our "smallness". He pointed to Mr. Bush's Multilateral Investment Fund and Sector Adjustment Policy and wondered what special problems small countries suffered from sector adjustment.

Mr. Harker responded that small countries didn't need a unique economic approach. However, as small countries that were forced into the international market, they needed to pursue policies, such as efficient specialisation, that would allow them to function effectively. Also, small sectors had to make a rapid yet smooth transition to FTAA because its graduated preferences would now disappear. They needed to ensure that mechanisms such as banana subsidies would not distort the market signals.

Mr. Noguera spoke of the need for a "lead team" to address problems and make recommendations regarding the market for bananas in order to deal with the vested interests in the exporting as well as buying countries. Mr. Noguera then asked what could be done to ensure that the next trade summit did not ignore small economies in its agenda.

Mr. Harker replied that the working groups of the small economies were making progress toward the inclusion of small economies' concerns in the international trade agenda. A set of proposals, meant to address the plight of small economies, was expected to be put forward at the next trade summit.

Dr. McIntyre commented that economic relationships such as those affecting the banana trade could not be adjusted within a short space of time. Our territories had to come to some understanding regarding a number of issues before they could project a position. Mr. Mc Intyre gave the example of our macro-economic policies, noting that while many had accepted the principle of economic liberalisation, assuming that such a move would result in greater revenue, the case of Barbados had proven that this was not necessarily so.

Mr. Harker , referring to banana adjustment , stated that although the idea of transferring quantum might be complex and was certainly not the best approach, it seemed to be the only alternative. Regarding the Barbados/ OECS model and Structural Adjustment Policy, he emphasised that though there might be no agreement on methods, consensus did exist on the need for and the type of adjustments necessary. Barbados had always had a more stable economy than Trinidad and Tobago, Jamaica or Guyana. The Barbados society had decided to circumvent state policy when the government's judgement had come into question. Thus, adjustment in Barbados had managed to achieve a certain degree of balance, though there were those who would argue that the exchange rate was still overvalued.

Dr. McIntyre argued that Barbados attracted investment because investors had more confidence in the Barbados economy than in the Trinidad and Tobago, Guyana or Jamaica economies.

Mr. Clarke wondered whether there were interests which were coterminous with the state itself and how these interests were being dealt with.

Dr. Lewis said that small countries were being integrated into the working groups for the wrong reasons. Their small size should not be the focus. They should learn from the experience of other small countries in the Hemisphere, for example those in Central America. Smallness was not only about physical size.

Mr. Harker ended by emphasising that the issue of smallness rose to prominence because of the benefits to be gained through this type of focus.