Reagan administration witnesses gave the president's 2-year-old Caribbean Basin Initiative mixed reviews yesterday and said U.S. policies have undercut possible CBI successes.
"Some of our own policies in the United States -- most notably regarding sugar -- have limited the ability of CBI producers to compete freely in our market in products where they have a comparative advantage," U.S. Trade Representative Clayton Yeutter told the House Ways and Means Committee's oversight panel at the opening of two days of hearings on the basin plan.
Commerce Undersecretary Bruce Smart said reductions of sugar quotas resulting from last year's farm bill "will worsen the problem and lend further credence to the commonly voiced complaint that what the United States gives the Caribbean with one hand we take away with the other."
Yeutter, the administration's CBI coordinator, called the overall trade figures "disappointing," but placed a major blame on the world oil glut that had a devastating effect on shipments from three Caribbean nations with large refining capability.
On the other hand, Yeutter said he is "encouraged by the growth in manufacture and nontraditional exports," including fruits and vegetables, furniture and electronic components. These have increased 14 percent.
The CBI was inaugurated with great fanfare in 1984 by President Reagan to show that U.S. policy in the Caribbean goes beyond fighting the Sandanistas in Nicaragua and propping up the government in El Salvador. It was designed to give CBI nations trade preferences for some exports to the United States and to enhance American private investment to speed the region's economic development.
Ambassadors from CBI nations, who had embraced the program with enthusiasm, painted a bleaker picture of the Reagan initiative than did the administration aides.
"I regret to report that the CBI has had only a marginal impact on the economy of Barbados and indeed of the entire Caribbean Basin," said Ambassador Peter Laurie of Barbados. He blamed exemption from CBI trade preferences of products such as textiles, the "failure" of large-scale American private investment to materialize and a tightening of sugar quotas.
Dominican Republic Ambassador Eulogio Santaella said gains his country has made in attracting new investment and expanding existing businesses "have been substantially undermined" by the slowdown in sugar exports that provide the bulk of its foreign exchange.
Since 1984, when the CBI was inaugurated, U.S. imports of sugar from 12 Caribbean nations with sugar quotas have dropped by 40 percent and their export earnings have declined $175 million.
President Reagan pointed to the sugar section as a major defect when he signed the farm bill. Yeutter yesterday said the administration is preparing new legislation.