US-Caribbean ties need work

The United States (US) is the main trading partner of Barbados and some other Caribbean countries. With 2024 an election year in the US, there are questions about what whoever occupies the White House as the next American President will mean for Barbados and its neighbours. Wazim Mowla is associate director and fellow, Caribbean, at American think tank The Atlantic Council’s Adrienne Arsht Latin America Center, which focus on Latin America and Caribbean issues. He examines the present and future of US-Caribbean economic relations.

HOW WOULD you describe the current relationship, especially economically, between the US and the Caribbean?

The US-Caribbean relationship holds strong economic ties. The US is the main trading partner for the region and US policy design over the past few years is increasingly focused on directing more financing and investment to the Caribbean. US companies, particularly small ones, still show an appetite to engage with Caribbean countries across the health, agriculture and energy sectors. Of course, no one country is the same, with Guyana, Jamaica, and Trinidad and Tobago, among a few others that enjoy a greater share of the investment. However, there’s still more to be done. It’s safe to say that the US overwhelmingly benefits more than the region from its economic relationship.

What do you see as the key areas in which these relations can be enhanced?

Where there are shared objectives between the US and the Caribbean is where we’ll see greater enhancement and cooperation. At the moment, we see better alignment on climate issues and increasingly on food security and traditional security. But there’s still a gap in energy security and the energy transition. At the same time, private sector growth, gender equality, debt restructuring and access to concessional financing are all areas that need more collective US-Caribbean support.

How is the US-Caribbean Partnership to Address the Climate Crisis 2030 (PACC 2030) helping in this regard?

PACC 2030 might be one of the better US policies for the Caribbean in the past few decades. This is for two reasons. First, PACC 2030 was significantly informed by Caribbean stakeholders. Through the creation of PACC 2030 and immediately after its announcement, US policymakers were in “listening” mode. Second, PACC 2030 is a framework for engagement rather than a policy itself. It has created parameters for how and what topics US policymakers will use to address their counterparts in the region, making engagement more flexible and less rigid. But the jury is still out on what PACC 2030 will deliver. Financing its different pillars has been difficult, and there hasn’t yet been a role carved out for the private sector. Either way, PACC 2030 has all the potential to be transformative for regional development and US-Caribbean relations.

Is there any progress in solving the correspondent banking challenges the Caribbean is facing?

We haven’t yet seen the type of movement we’d want on addressing financial de-risking. Regulatory uncertainties and anti-money laundering/combating the financing of terrorism systems are improving across the Caribbean, which should ease the rate of de-risking. But issues of scale persist, which is a challenge for some of the larger correspondent banks to bank the region’s indigenous institutions.

What’s clear is that this cannot be an issue cast aside. Accessing the global financial system is a lifeline for the Caribbean.

With the US in an election year, is the outcome of the election likely to impact US-Caribbean economic relations in the near to medium term?

There are two main scenarios that might come into play. If President Joe Biden wins re-election, we’ll likely see a continuity of PACC 2030’s efforts. Where there is policy continuity, there is likely to be progress and impact, especially regarding climate adaptation, the energy transition, and food security. And we’d likely see the US have a big push to provide some funding to the Caribbean. If former President Donald Trump is in office once again, I don’t think there will be a big drop-off in engagement. We might not see the same level of diplomatic activity as we have over the past few years but there’s a national security interest angle to play for the Caribbean in a Trump administration. We’ll see more China-related conversations and support for oil and gas projects.

Still, while directives are given from the top, there are individuals at the staff level across the US government that have grown to be real champions for the Caribbean. I’d expect that they’d continue to push for Caribbean-focused priorities when possible, regardless of which administration is in power.

ASSOCIATE DIRECTOR and fellow, Caribbean, at American think tank The Atlantic Council’s Adrienne

Arsht Latin America Center, Wazim Mowla. (FP)