Years before the North American Free
Trade Agreement (NAFTA) became the law of the land, when Canada,
Mexico and the United States were still in early negotiations,
many Caribbean Basin countries feared that NAFTA would result
in a lowering of their exports to the United States. These countries
believed that the effect of such a sweeping trilateral agreement
would see a decrease in overall trade with the US and a general
decrease in investment flow in the region.
The US imports mostly agricultural
products from Caribbean Basin countries. These include but are
not limited to sugar cane, coffee, cocoa, and bananas. Other
major exports to the US include petroleum and aluminum ore products.
There was much statistical evidence to suggest that following
NAFTA implementation, such decreases in trade activity would take
place. The extent to which it would affect the Caribbean economies
was not known.
The US understood and agreed with
such concerns. In 1984, a full decade before NAFTA passage by
Congress, the US developed and implemented a trade and investment
policy referred to as the Caribbean Basin Initiative (CBI), written
into law as the Caribbean Basin Economic Recovery Act (CBERA).
CBERA granted duty-free status to certain exports from the region.
While popular, 24 nations take advantage of such preferences
for their products, the program is perceived as limited in nature
because of its limited scope. The law does not cover every vital
sector of the region's economy.
Concern over trade issues, especially
in the Caribbean, was heightened again as NAFTA neared completion
and began to make its way through Congress. On March 18, 1993
Representative Sam Gibbons introduced a bill to provide "NAFTA
Parity". The bill was to prevent the erosion of the CBERA
following NAFTA implementation. The bill granted NAFTA-like privileges
to Caribbean Basin countries. A similar bill was introduced
in the Senate. President Clinton joined House Ways and Means
Chairman Bill Archer in supporting relief for the region, but
agreement has yet to be reached on the appropriate legislative
strategy to remedy the situation.
NAFTA Parity remains a contentious
issue. For its part, the International Trade Commission (ITC)
set out to analyze the effects of NAFTA on the Caribbean Basin.
An examination of US imports since NAFTA implementation showed
an increase in Mexico's import share, but a relatively stagnant
share for the Caribbean region. When the analysis is focused
solely on trade directly related to NAFTA and CBERA, the effects
are more pronounced. Shares for the Caribbean region declined
while Mexico shares increased significantly. However, NAFTA Parity
is not the only issue impacting trade flows. The value of the
peso dropped considerably, causing the cost of goods from Mexico
to decrease. The Commission looked at the apparel sector specifically
to get a snapshot of the problem. It found that Mexican imports
are growing 3-6 times as fast as imports from CBERA partners.
For more information on the issue
of NAFTA Parity for the Caribbean Basin, contact the International
Trade Commission for publications on the issue, (202) 205-1809,
or visit their Internet site, www.usitc.gov.
"IN THE NEWS"
The National Association of Manufacturers
has a new publication that may be of interest to AWPA members.
The first, called the "Employment-Labor Law Audit,"
is a comprehensive audit of business practices covered by federal
employment laws. The book costs $119.00 for NAM members. For
those who wish to tackle the intricacies of employment law from
their desktop PC, the software version is available for $195.00.
The book can cut research time in
half, reduce exposure to litigation, and allow you as a manager
to take corrective action to improve employee relations, and provide
many other benefits. To order by credit card, call the NAM Publications
Office at 1-800-637-3005, note that your trade association, AWPA,
is a NAM Associations Council member which entitles you to the
NAM member rate.
Grant Thornton, a management consulting
firm, has recently published its eighth annual Survey of American
Manufacturers. This year's report focuses on Managing Growth.
The report tackles the complex issue of managing growth in five
different sections; supply-chain integration, international expansion,
technology and the Internet, corporate governance, and that all-important
strategic planning.
For more information on the results
of the Grant Thornton survey of management practices, visit Grant
Thornton on-line at www.gt.com. If you would like a copy of the
Eighth Annual Report entitled "Managing Growth", you
can write to complimentary copies: Grant Thornton LLP, Market
Research Department, 605 Third Avenue, New York, NY 10158 or
fax a request to (212) 557-2764. Please keep in mind that quantities
are limited.
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