2018 will test CARICOM's collective resolve
In 2018, unless Caribbean Community (CARICOM) countries eschew their tendency to pursue narrow 'national interests' in the conduct of their international relations, each of them individually and all of them collectively will be buffeted by larger and more powerful countries and regions.
The CARICOM states that accede or succumb to lures or demands of bigger countries may secure short-term economic gains, but in the longer-term they will severely compromise their independence and sovereignty.
Events toward the end of 2017 demonstrated that both the United States and the European Union have no qualms about using a big stick to get their way.
In a letter to Ambassadors of many developing countries, including CARICOM states, on December 19, the US Ambassador to the UN Nikki Haley, minced no words when she wrote: "The President will be watching this vote carefully and has requested I report back on those countries who voted against us. We will take note of each and every vote on this issue".
The issue was a Resolution reiterating the United Nations' position on Jerusalem. It affirmed "that any decisions and actions which purport to have altered, the character, status or demographic composition of the Holy City of Jerusalem have no legal effect, are null and void and must be rescinded in compliance with relevant resolutions of the Security Council."
The Resolution was directed at the US government which, the day before, used its veto power in the UN Security Council to block its adoption. The other four permanent members – Britain, China, France and Russia – as well as the 10 non-permanent members all supported it. The General Assembly vote of December 21, to which Halley referred in her letter to UN Ambassadors, was more symbolic than substantive. Resolutions in the Assembly are non-binding and do not carry the force of international law as do measures agreed in the Security Council.
As it turned out, the resolution was adopted by 128 countries with 9 against, 35 abstentions and the others absent. CARICOM countries were divided between 7 that voted for the resolution, 5 that abstained and 2 that absented themselves.
No CARICOM consensus on the matter was possible at the UN because there was no consensus among Caribbean governments. Those who depend upon the US for aid or who fear non-tariff barriers being applied by the US to remittances and trade, including tourism and financial services – opted not to rock the US boat. Others felt the principle was worth the risk of bucking the US and are hoping for the best, and two simply ducked for cover. The important point is that there was little attempt to "seek to ensure, as far as practicable, the adoption of Community positions on major hemispheric and international issues" and even less to "co-ordinate the positions of the Member States in inter-governmental organisations in whose activities such States participate", as the CARICOM Treaty requires. Yet, had there been a single CARICOM position and action, the US would have been hard-pressed to sanction the entire area.
In this connection, CARICOM countries let themselves down, demonstrating that the very thing they proclaim as their strength, i.e., their 14 collective votes, is seldom maintained, and more often ignored.
The European Union also showed clearly and unequivocally that the 28-nation group is very ready to threaten developing countries, including member states of CARICOM, that do not bend to their will. On December 5, it issued a blacklist of countries that it claims are non-cooperative for tax purposes. And, it threatened them with sanctions if they did not quickly comply. The threatened sanctions go beyond tax areas to include "foreign policy, economic relations and development cooperation". This could range from cutting off loans and aid to applying sanctions such as withdrawing banking facilities.
Further, the euphemistically-described "defensive measures" that the Council proposes to the EU member states include: reversal of the burden of proof, withholding tax measures and special documentation requirements.
On December 7, I published a commentary making the point that while some Caribbean countries, notably Barbados, complained about the blacklisting "no one questioned the authority of 28 European countries alone to decide tax standards for the rest of the world".
Subsequently, on December 19 in a statement, issued by its Secretariat, on which there was consultation, CARICOM states "strongly objected to the disappointing decision of the European Union", protested that the EU unilateral screening process is "unjust and inequitable since it has not been applied to its own Members nor subject to peer review examination", pointed out that process of compiling the list is "inconsistent with the objectives and principles enshrined in the EU-CARICOM Economic Partnership Agreement", and called on the EU "to desist from the imposition of any defensive measures and to enter an early dialogue with CARICOM States as a group with a view to agreeing on benchmarks for good tax governance that could be applied in a fair and equitable manner, taking account of the economic circumstances and capacity of all their jurisdictions".
Whether the CARICOM states will jointly stand by this statement or meekly and quietly each succumb to the EU demands will be judged in the first part of the New Year. The record so far has not been encouraging. As far back as 2000 when the opportunity for a solid CARICOM resistance to the FATF and OECD rules, driven by the EU, was ripe, governments failed to act in concert. In beggar-thy-neighbour policies in which countries sought to escape blacklisting, there was little or no solidarity, and one by one they acquiesced, abandoning coordination, joint positions and collective resistance.
With the current mood in the US and the EU, more than any other year 2018 will test CARICOM's capacity to act collectively. The region's interest – and the interests of the individual states – would be best served by recalling the warning in 1776 of one of the US founding fathers, Benjamin Franklin, to the 13 American colonies that confronted the then mighty Britain over their desire to be independent of an overlord - "We must, indeed, all hang together or, most assuredly, we shall all hang separately".
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(Sir Ronald Sander is Antigua and Barbuda's Ambassador to the United States and the OAS. He is also a Senior Fellow at the Institute of Commonwealth Studies, University of London and Massey College in the University of Toronto. The views expressed are his own)