BEHIND THE HEADLINES: Brexit: nightmare for the Caribbean?
AS HEAD OF the Caribbean’s trade and investment negotiating team, Dr Richard Bernal often sat across the table from British and other European Union (EU) officials they worked out an economic partnership agreement.
It was a pact that if speedily and successfully implemented by both CARICOM and Europe could have accelerated the economic transformation of the region’s island nations and coastal states.
In his role as the former CARICOM Regional Negotiating Machinery’s director general, Bernal, a former Jamaica ambassador to the United States (US), was ably assisted during the EU talks around the turn of the century by Errol Humphrey, Barbados’ ambassador in Brussels who served as vice dean of CARICOM’s negotiators. It was an interesting and productive era as CARICOM inched closer to regional economic integration.
That’s part of the backdrop to Bernal’s and Humphrey’s reaction to last month’s disastrous Brexit vote in the United Kingdom (UK) where a slim majority of the electorate insisted the UK should cut its economic ties with the EU and seek another route to prosperity by retrieving its independence.
As both Bernal, the University of the West Indies (UWI) new Pro-Vice Chancellor for Global Affairs serving under Sir Hilary Beckles, the Vice Chancellor, and Humphrey, now a trade and investment adviser, see it, the calamitous vote could have a profound economic impact on CARICOM.
The vote was like a shot heard around the world. It sent global markets reeling; is forcing David Cameron, Britain’s prime minister, to step down once his successor was chosen by the ruling Conservative Party; and it is threatening the long established security order led by the US and other Western countries. The impact on Barbados and its neighbours could be costly at least in the short run.
For instance, the dramatic plunge in the value of the British pound sterling against the US dollar can put a vacation to Barbados, the Bahamas, Antigua and other tourism dependent destinations out of the reach of millions of middle income and working class Britons. And depending on the exit package Britain and the EU negotiate, the West Indies may have to bat on a sticky economic wicket.
That’s not all. Future British investment in CARICOM and the Dominican Republic may encounter major hurdles. As if those factors weren’t bad enough, the absence of British officials in the councils of Europe would deprive Caribbean diplomats in Brussels of an ally in tune with our economic and social development aspirations.
Little wonder, then, that Bernal and Humphrey think the Caribbean must act sooner rather than later in preparing a response to Brexit.
“The Caribbean will be adversely affected [economically and diplomatically] by the vote and from any departure of Britain from the EU,” warned Bernal. “The more quickly we can move to devise a strategy to counteract those negative implications the less harmful it would be for the Caribbean.”
In a conversation with BARBADOS BUSINESS AUTHORITY, the former Jamaica envoy, who is leaving his position as a senior economic counsellor at the Inter-American Development Bank in Washington to take up his position at the UWI Mona campus, said that the region’s response must draw on the expertise of some of the region’s leading thinkers and decisionmakers.
“The Caribbean should get together a group of experts to prepare a report and call a special meeting of foreign ministers and heads of government so we can begin to define our response to the situation,” he said.
“It can’t happen overnight because we have to wait and see [the outcome] of the discussions [in London and Brussels] and to know how quickly and to what extent we can move along.”
For his part, Humphrey worries about the uncertainty which surrounds Britain’s next step in the wake of Cameron’s decision to step down .
“The uncertainty which surrounds what would actually be negotiated by the EU and the new British leader and his or her government once Cameron leaves will have a negative impact” on CARICOM, said Humphrey.
“The business community likes certainty and the uncertainty is not knowing what is going to happen.
“That fact will affect the Caribbean. Tourism is a big business for us. Some people in the UK may look at the reaction of the markets, specifically, the fall in the value of the British Pound and say maybe we can’t afford a vacation at this time.”
In the end, though, much will depend on what’s negotiated by Britain and the EU, he said.
“At the moment, we don’t know when the UK will start the negotiations and that makes people very nervous,” added Humphrey.
“Right now, broadly speaking, we have negotiated agreements with the EU and that’s not going to change. It’s a legally binding agreement and that is not going to change.
The UK coming out of that arrangement will mean we have to wait and see what we, Barbados and the rest of CARICOM, can negotiate with the UK. We will have to negotiate separately with the UK.”
As former British colonies, the English-speaking Caricom states can expect, at the very least, as good a deal with London as they achieved with Brussels when Britain was very much part of the EU arrangement.
Over the long haul, the EU may take a different stance towards the island nations and coastal states that form CARICOM.
“The absence of the UK from the European table might have an impact on the way the EU looks at the Caribbean islands,” said Humphrey.
With Europe under severe economic stress triggered by the flood of refugees from the Middle East and by worries over terrorist attacks by the Islamic State in Belgium, France and Turkey, the Brexit negotiations can drag on for as long as three years. In the meantime, CARICOM must get its act together by preparing for whatever comes down the pike.
“It’s going to affect us and we should take whatever steps are in our best interest to limit the damage,” advised Humphrey. “I do agree with Dr. Bernal that our leaders should meet as soon as possible to consider what happens next.”