US embassy cable - 05KINGSTON1676

UNCLAS KINGSTON 001676 
 
SIPDIS 
 
STATE FOR WHA/CAR (WBENT), EB/TPP/JALLEN 
USTR FOR SBOVIM, BMAKENS 
 
E.O. 12958:  NA 
TAGS: EFIS, SENV, JM 
SUBJECT:  WTO DEMARCHE ON SWISS FORMULA BENEFITS FOR 
CARIBBEAN 
 
REF: STATE 120667 
 
1. (U) Per reftel, Econoff met with Esmond Reid and Richard 
Brown of the International and Economic Affairs Department 
at the Ministry of Foreign Affairs and Foreign Trade on July 
5, 2005 to convey reftel demarche on the Swiss formula 
benefits for the Caribbean.  He left the talking points and 
supporting charts as a non-paper. 
 
2. (SBU) On the issue of losing preferential trade access 
advantages under the Argentina/Brazil/India (ABI) formula, 
Brown challenged the current utility of those advantages for 
Jamaica, since the Caribbean Basin Initiative (CBI) does not 
presently cover several market sectors of interest to the 
GOJ, while the Jamaican economy is currently unable to make 
significant exports in many of the sectors covered by CBI, 
such as textiles and ethanol.  He said that, by contrast, 
the ABI plan would force cuts in many of the markets where 
Jamaican exporters have interest.  Brown suggested that 
Jamaica could support the Swiss formula if the CBI were 
expanded to give Jamaica tariff advantages in a broader 
variety of product categories. 
 
3. (SBU) Regarding the ability of developing countries to 
protect "import sensitive" sectors under the provisions of 
Paragraph Eight of the Swiss formula proposal, Brown said 
that the GOJ could support the plan if its financial 
analysis showed that the terms of the Paragraph Eight 
exemptions allowed the GOJ to maintain its revenue streams 
at a sufficiently high level. 
 
4. (SBU) Regarding lack of access to major developing 
country markets under the ABI plan, Brown said that the GOJ 
was not terribly concerned about the lack of access, since 
70 percent of Jamaica's foreign trade is with the United 
States, and geographical considerations make the developing 
Asian markets unattractive to Jamaican exporters. 
 
5. (SBU) Reid inquired as to news of progress on the Free 
Trade Area of the Americas (FTAA), in light of the recent 
passage by the U.S. Senate of Central American (and 
Dominican Republic) Free Trade Area (CAFTA) legislation.  He 
stated that, in the absence of a FTAA system, an enhanced 
CBI agreement would be of great interest to the GOJ.  Reid 
added that cooperation could be enhanced in many areas, 
using the CBI as a framework. 
 
6. (SBU) Reid and Brown said that they would convey the 
talking points and supporting data to their negotiators in 
Geneva. 
 
7. (SBU) Comment:  The GOJ's complaint that the CBI 
agreement is poorly suited to Jamaica's current needs seems 
accurate in many areas, especially in light of the near 
total collapse of the island's textile industry.  Both Reid 
and Brown expressed interest in supporting the Swiss formula 
if the flexibility provided by the terms of Paragraph Eight 
meets the GOJ's needs, and if the categories of the CBI can 
be expanded to cover some of Jamaica's more active export 
sectors.  End Comment. 
 
TIGHE