Stephen VasciannieSHOULD JAMAICA'S trade policy be driven exclusively by economic considerations, or should it also embrace wider socio-political and international concerns? And, if the trade policy should reflect more than economic maximisation, by what criteria should the non-economic concerns be assessed. These questions have come to the fore in recent weeks with respect to Jamaica's position on the Venezuelan oil deal.
At the theoretical level, the case for an economistic approach to trade policy is largely akin to arguments in favour of free trade. Generally, the main argument for excluding non-economic concerns from trade policy is that this approach will lead, ultimately, to welfare maximisation within the Jamaican society.
By relying solely on economic concerns, the Jamaican State will, for example, purchase essential items from the cheapest sources, and will, thereby, be able to pass on the best terms to the country's citizens. Similarly, where reliance is placed on economic considerations, the State will place no restrictions on local entrepreneurs who, in the context of a liberal environment, are encouraged to seek out those sources and markets that will facilitate profit maximisation and growth in the country's trade.
In addition, a policy which places emphasis on economic concerns will probably be more straightforward in its implementation than alternative approaches. This is so because, where non-economic concerns help to determine trade policy, there needs to be some bureaucratic device to ensure that the non-economic trade policy is being followed.
So, for instance, if, for whatever reason, Jamaica buys oil from a relatively expensive source, the State will need to put in place mechanisms to ensure that cheaper oil is not imported by persons who wish to take advantage of the price discrepancy created by the non-economic trade policy. These mechanisms are a drain on the budget, give rise to preferences under the table, and, generally, foster a climate of favouritism and chicanery.
As a matter of State interest and of common-sense, then, such considerations must have some influence over our trade policy. On the other hand, it is equally clear that the pure economic approach may not fulfil the country's aspirations in other areas. More specifically, as trade is one of the main forms of interaction between and among States, it is an important device by which a country may indicate its preferences and perspectives in international relations.
In the case of Jamaica and, indeed, almost all countries this is not really a matter of doubt. During the apartheid years in South Africa, for example, there was near-unanimity (if not unanimity) on the need for us to refrain from trading with the regime in Pretoria. This posture represented a clear statement of principle: even if South Africa sold the cheapest goods in the world, we were not prepared to "sell our souls" to racist bidders. In some cases, therefore, our trade policy transcends purely economic considerations, and provides us with an opportunity to support particular community goals.
Guyana-Venezuela
Now, the Guyana-Venezuela matter in particular. Clearly, by reference to concerns such as regionalism, cultural affinity, historical allegiance, and national self-respect, Jamaica should be reluctant to accept an oil deal with the Venezuelans, if this deal is designed to create divisions among CARICOM member States. CARICOM may not yet have lived up to initial expectations, but it is constructed on a foundation of solidarity among Anglophone Caribbean States. The Guyanese share our history and our realities, and have long been our friends: there is a strong case for standing with them if they are threatened by Venezuelan actions.
So, does this mean that Jamaica should have rejected the Venezuelan oil deal? My perspective is that at important points in the debate we did not have all the relevant information to reach an appropriate decision. In the first place, the word was out that the Venezuelans had deliberately sought to distinguish between Guyana, on the one hand, and other CARICOM States, on the other.
But, though the word was out, it was placed within a penumbra of vagueness. In a report in its October 8 edition, for instance, here is what the Observer stated in part:
"Caracas is said to have excluded Guyana from the proposed credit-line, saying that it is using oil as a political weapon to gain leverage in its claim to Guyana's mineral and forestry-rich Essequibo county" (my emphasis).
Caracas "is said": what does this mean? Said by whom? When? With what degree of clarity? Certainly, if the relevant Venezuelan authorities actually said that they were excluding Guyana from the oil deal because of the territorial dispute, this could have been perceived as economic blackmail and we may justifiably have been offended. But, did Caracas actually say this? It may be naveté to assume that Caracas did not intend to use the oil weapon to pressure Guyana, but, Caracas "is said" does not really establish Venezuela's intentions.
Secondly, even assuming that Caracas had said what was attributed to it, further information was still needed. The case for buying the Venezuelan "cheap oil" turns essentially on the fact that the concessionary price and trading arrangement allows Jamaica and other beneficiaries to use profits from the deal for alternative economic objectives. If we were to reject the oil, then, this would have created some degree of economic dislocation in a country already in the midst of financial hardships. In this context, should we not have a sense of the magnitude of the sacrifice involved in supporting Guyana?
Selling out?
I have been told that raising this question amounts to an attempt to ascertain the price for selling-out Guyana. But does it really? If we are to make hard choices, then, at very least, we should try to identify the consequences of the options before us. No serious analysis of this question was attempted, so we were left to approach the question primarily with our hearts, and not, to any significant extent, with our brains.
In the end, it seems that, on this occasion, we did not have to make the difficult choice between financial benefits and friendship, for, according to our Minister of Trade, the Venezuelans themselves regard the use of the oil weapon as "silly". I am still curious, however, as to how our Government would have resolved the question of principle. We care for Guyana, but that takes cash (which is in very short supply).
On reflection, if the choice is posed in stark terms, we should stand by Guyana: otherwise, we would be succumbing to cheap politicking, or, as the Biblically-inclined might argue, we would be selling our friendship for a mess of pottage.
Stephen Vasciannie, an attorney-at-law, teaches at the University of the West Indies
