By LARRY ROHTER
KINGSTON, Jamaica -- Three years after the United States, Canada
and Mexico agreed to become a single market as part of the North
American Free Trade Agreement, their exports to each other are
booming. But
here in the Caribbean, the economies of the United States'
much smaller
neighbors are reeling from the impact of that success and
finding it nearly
impossible to compete.
From the apparel
plants of Jamaica to the sugar-cane fields of Trinidad,
NAFTA has already
resulted in the loss of jobs, markets and income for the
vulnerable island
nations of the region. The capital and investment projects
that are vitally
needed for future growth, officials say, are increasingly
flowing out
of the Caribbean Basin and into Mexico.
"The stark reality
is that Mexico can now export its products to the United
States free
of duty, which makes it more profitable for producers to operate
from there,"
Seymour Mullings, Jamaica's minister of foreign affairs and
foreign trade,
said in an interview here. "Putting it very simply, if that is not
stemmed, it
could do untold damage to our manufacturing sector and
economy as a
whole."
NAFTA's devastating
effect on the Caribbean was widely forecast before
the treaty's
passage in 1993 and Washington suggested it would cushion the
blow by extending
similar trade preferences to the island nations.
However, the
Clinton administration's proposals to give the Caribbean
"NAFTA parity"
have twice foundered in Congress in election years and
now face an
uncertain future in a new Congress that has decidedly mixed
feelings about
the benefits of free-trade agreements.
The Caribbean
now exports more than $12.5 billion worth of goods to the
United States
annually, and a recent study by the World Bank estimates
that more than
one-third of that total could be shifted to Mexico if the
existing trade
rules remain in effect.
The region's
once-flourishing apparel sector has been hard hit, officials say.
In the last
two years, more than 150 apparel plants closed in the Caribbean
and 123,000
jobs have been lost "as a direct result of trade and investment
diversion to
Mexico," according to the Caribbean Textile and Apparel
Institute, which
is located here.
Textile manufacturing
had been one of the Caribbean's few economic
bright spots.
Between 1980 and 1995, Jamaica's garment exports, primarily
underwear and
hosiery, rose from less than $10 million a year to nearly
$600 million
annually, an average annual growth rate of 28 percent.
Since NAFTA took
effect in 1994, Mexican textile exports have grown at a
rate three times
those of the Caribbean as a whole. In 1996, the Caribbean
Textile and
Apparel Institute estimates, Jamaica's garment exports fell by 7
percent, with
7,000 jobs eliminated.
Similar or even
larger decreases were recorded in Guyana, Belize and tiny
St. Lucia.
More than 600
people, about 95 percent of them women, felt the effects of
NAFTA when the
Youngone Garment factory on Marcus Garvey Drive
here closed
just before Christmas. The plant had been making T-shirts for
export to the
United States. But a Mexican factory took the business away
with a lower
bid, prompting the Korean company to shut down operations in
Jamaica and
send its employees home. The company then shipped its
equipment off
to Bangladesh.
"I lost my job
back in '95 and haven't been able to find another one since,"
said Beryl Davidson,
26, a former textile worker and single mother of three
small children.
"I couldn't pay my rent, and I couldn't feed my kids, so I've
had to move
back in with my parents to survive."
"But my cousin
in Brooklyn tells me there's plenty of work there, so maybe
I will join
her," she said.
Since NAFTA went
into effect, the creation of new jobs in this nation of
2.3 million
people has stopped altogether and overall unemployment has
risen to 16
percent from 9.5 percent, according to the Statistical Institute of
Jamaica. Among
women working in the apparel sector, the unemployment
rate is now
more than 33 percent.
Worse yet, the
loss of jobs and U.S. support occurs as the pro-U.S.
government here,
with an election due sometime in the next year, is
completing an
economic retrenchment that had been strongly urged by
Washington.
Over the past decade, Jamaica has sold off state companies,
reduced the
budget deficit and increased foreign reserves, but at a high
social cost.
"We have no safety
net here, no welfare, no Medicare," said Anthony
Gomes, director
of a large trading company. "So when people go to the
street, it has
a serious ripple effect. The way things are going, jobs are very
difficult to
get, and that is not helping our crime rate."
U.S. officials,
however, argue that Jamaica and other Caribbean nations are
blaming NAFTA
for deeper-rooted economic difficulties that will remain
even if trade
rules are eventually eased. In the case of Jamaica, they
maintain, those
include a revaluation of the currency that increased its value
by 12.5 percent
last year, making the country's products more expensive,
and a host of
regulatory obstacles.
"The main problem
here is government bureaucracy," one official said. "It is
darn near impossible
to collect the licenses and approvals you need to get a
business off
the ground."
Ironically, Jamaica's
initial export surge was the result of another U.S.
program, the
Caribbean Basin Initiative, which the Reagan administration
put in place
15 years ago. A package of aid, trade and investment
incentives aimed
at the private sector, the program was intended to
introduce the
Caribbean to what President Ronald Reagan called "the
magic of the
marketplace," and had Jamaica as its centerpiece.
But that arrangement
has also benefited the United States. U.S. exports to
the region rose
160 percent in the decade ending in 1995, to more than $15
billion a year.
The Caribbean is the only part of the world where
Washington recorded
a favorable balance of trade every year during that
time.
The Caribbean
Basin Initiative still exists, but places either duties or quotas
on those products
in which Caribbean nations enjoy a competitive
advantage, such
as sugar, textiles and footwear.
"All we are asking
is to be put on a level playing field with Mexico," said
Paul Robertson,
Jamaica's minister of industry, investment and commerce.
"We are not
seeking a handout, but only the opportunity not to be prevented
from taking
full advantage of the North American market."