The imperative is felt equally by the private sector as by governments, as shown by the preparations of the business community in Central America for negotiations with the United States for a US-CA free trade agreement.

Private sector organisations in the five Central American countries have formed a new umbrella grouping called the Central American Business Council (known as CECA, the Spanish acronym). CECA will serve as a channel of communication with Governments in the preparations for and conduct of negotiations with US representatives.

CECA recently met with Vice Ministers of Trade of Central America to provide inputs into the preparatory work of the Trade Ministers meeting held on August 23. At that meeting, the Trade Ministers approved broad consensus issues as the basis for the next round of talks with the United States.

The Trade Ministers would like formal negotiations to commence before the end of 2002, probably between October and November. The negotiations should provide juridical assurance and should follow a format that responds to the diversity of Central American exports and economic structure.

According to the proposals table at the meeting, specific negotiating objectives should be established for each product or product groups. There would be 18 negotiating groups in all, and 10 rounds of negotiations, starting in Washington.

Some business leaders would like to see negotiations completed by this time next year. But this depends not only on the priority given to the process by the United States, but also on how successfully the Central Americans resolve within themselves the complex issues of market access and tariff levels.

CECA's strategy is designed to dovetail into this negotiating structure. It is preparing a Work Programme providing for the conduct of studies on the impact on specific industries of free trade with the United States. The studies will be the basis for the preparation of sector-by-sector negotiating briefs to be submitted to and discussed with government negotiators.

CECA also plans to establish a regional network of negotiating offices for the private sector that will serve as points of contact for the conduct of the impact studies and strengthen the link with government negotiators at the national level.

All this will require funding and CECA is examining the financing requirements and developing a resource mobilisation strategy.

CECA's studies and network will be utilised to service other key negotiations. The Central American economic integration process has picked up steam with the decision to complete the Customs Union and unify customs administrations by the end of 2003. The European Union (EU) has signalled its willingness to negotiate a trade agreement with Central America as soon as its proposed partnership agreement is in place, perhaps as early as 2004.

Business leaders in the rest of the Greater Caribbean, notably in CARICOM, may need to see what they can learn from the recent initiatives of their Central Americas counterparts. The rum producers, through the West Indian Rum and Spirits Producers Association, have already taken a significant initiative in opening a dialogue on a common definition of rum within the Free Trade Area of the Americas. Other key sectoral issues arise in agriculture, manufacturing and services within the FTAA, the Regional Economic Partnership Agreements (REPA) and the WTO.

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.

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August 31, 2002