How might such an approach work for the countries of the Greater Caribbean region? Looking at the human development picture, one notes the wide diversity of achievement (see table). Six countries have attained high human development category, 17 are in the medium category and one has low human development.

But several of those with high human development are small, service-oriented economies that are particularly vulnerable to the impact of trade liberalisation. The smallest economies in the region have heavy reliance on import duties for fiscal revenues, which finance basic social services for human development in these countries. Tariff liberalisation obligations for these economies should take into account the reliance of human development levels on trade taxes.

The majority of regional countries have shown indifferent performance in improving economic and human development levels in the past 25 years; a period of widespread trade liberalisation.

For 1975-2000, only six countries managed to sustain a rate of growth of real per capita income of more than 2 percent per annum. Seven countries had a positive rate of less than 1 percent and five registered negative growth. In the 1990s, growth appears to have picked up, but only marginally.

Manufacturing is significant in many of the larger countries in the region, but meeting the challenges of international competitiveness often requires state supports of a kind used widely by the developed countries and the Asian countries at earlier stages of industrial development, but are now proscribed by the WTO. SDT would restore the flexibility to deploy such policies under agreed circumstances.

In many countries agriculture is still a major source of employment and income. High tariffs and subsidies in the developed countries coupled with import liberalisation in the poorer countries and elimination of traditional export preferences could spell disaster for the latter. Special and differential treatment would recognise the social and economic role of agriculture in the light of the Millennium Development Goals of poverty reduction.

Professor Norman Girvan is Secretary General of the Association of Caribbean States. The views expressed are not necessarily the official views of the ACS. Feedback can be sent to mail@acs-aec.org.

June 1, 2003