Order Code RL32160
CRS Report for Congress
Received through the CRS Web
Caribbean Region:
Issues in U.S. Relations
Updated January 18, 2005
Mark P. Sullivan
Specialist in Latin American Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

---

Caribbean Region: Issues in U.S. Relations
Summary
With some 34 million people and 16 independent nations sharing an African
ethnic heritage, the Caribbean is a diverse region that includes some of the
hemisphere’s richest and poorest nations. The region consists of 13 island nations,
from the Bahamas in the north to Trinidad and Tobago in the south; Belize, which
is geographically located in Central America; and the two nations of Guyana and
Suriname, located on the north central coast of South America. With the exception
of Cuba and Haiti, Caribbean governments have generally respected the human rights
of their citizens. Regular elections are the norm, and for the most part have been free
and fair. Nevertheless, while many Caribbean nations have long democratic
traditions, they are not immune to threats to their political stability, including
terrorism. Many nations in the region experienced economic decline in 2001-2002
due to downturns in the tourism and agriculture sectors. The extensive damage
resulting from several storms in 2004 caused an economic setback for several
Caribbean nations.
U.S. interests in the Caribbean are diverse, and include economic, political, and
security concerns. The Bush Administration describes the Caribbean as America’s
“third border,” with events in the region having a direct impact on the homeland
security of the United States. According to the Administration, the United States has
an interest in bolstering political and economic stability in the region because
instability would heighten the region’s vulnerability to drug trafficking, financial
crimes, and illegal immigration.
The U.S.-Caribbean relationship is characterized by extensive economic
linkages, cooperation on counter-narcotics efforts and security, and a sizeable U.S.
foreign assistance program. U.S. aid supports a variety of projects to strengthen
democracy, promote economic growth and development, alleviate poverty, and
combat the AIDS epidemic in the region. Despite close U.S. relations with most
Caribbean nations, there has been tension at times on such issues as the lack of
widespread Caribbean support for U.S. military operations in Iraq and policy
differences regarding Cuba. CARICOM nations also expressed concern about the
circumstances regarding the departure of President Jean Bertrand Aristide from Haiti
in February 2004. In the aftermath of several devastating storms in 2004 —
Hurricanes Charley, Frances and Ivan, and Tropical Storm Jeanne — the United
States is providing humanitarian assistance to the afflicted countries, including Haiti,
Grenada, Jamaica, and the Bahamas. Congress approved $100 million in emergency
supplemental funding for the region in the aftermath of the storms (P.L. 108-324).
This report deals with broader issues in U.S. relations with the Caribbean and
does not include an extensive discussion of Haiti and Cuba. U.S. policy toward these
Caribbean nations is covered in two CRS products: CRS Report RL32294, Haiti:
Developments and U.S. Policy Since 1991 and Current Congressional Concerns, and
CRS Report RL32730, Cuba: Issues for the 109th Congress.

---

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Overview of U.S.-Caribbean Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Drug Trafficking and Money Laundering Issues . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Trade Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Movement Toward Free Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
AIDS in the Caribbean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Third Border Initiative and Homeland Security . . . . . . . . . . . . . . . . . . . . . . . . . . 13
U.S. Foreign Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Hurricane Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
U.S. Relief Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Other Donors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
List of Figures
Figure 1. Caribbean Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
List of Tables
Table 1. Caribbean Countries: Basic Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 2. U.S. Imports from Caribbean Countries . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 3. U.S. Foreign Assistance to the Caribbean, FY2002-FY2005 . . . . . . . . 22

---

Caribbean Region:
Issues in U.S. Relations
Most Recent Developments
On November 21, 2004, an earthquake struck Dominica, damaging some
buildings and causing landslides. Heavy rains earlier in the month had also caused
landslides.
Several hurricanes and storms caused devastating damage to nations across the
Caribbean in the 2004 hurricane season. In mid-August 2004, Hurricane Charley
struck western Cuba causing damage to over 70,000 homes and thousands hectares
of crops. On September 2, 2004, Hurricane Frances struck the Bahamas, causing
widespread damage. Before striking the U.S. mainland on September 15, 2004,
Hurricane Ivan caused severe damage across the Caribbean — especially Grenada
(where 80 to 90% of the buildings were destroyed), Jamaica, the Cayman Islands (a
British dependency), and to a lesser extent Barbados, Cuba, St. Lucia, St. Vincent,
Trinidad and Tobago, and Venezuela. On September 18, 2004, Tropical Storm
Jeanne caused mudslides and floods in Haiti that killed some 3,000 people, with
more than 2,800 in the city of Gonaives. The storm also caused flooding and damage
in the Dominican Republic.
Through October 2004, the United States committed or obligated $22.6 million
in assistance to Caribbean nations in the aftermath of the storms. On October 5,
2004, the House approved H.Con.Res. 496 (Lee) expressing support for the provision
of humanitarian assistance to Caribbean nations devastated by the storms.
Subsequently, Congress approved $100 million in emergency supplemental funding
for the region in the aftermath of the storms (P.L. 108-324). Numerous other
bilateral, regional, and multilateral donors are making contributions to the relief
effort. (See Hurricane Disaster Assistance below.)
For information on U.S. hurricane disaster assistance to the region, see USAID’s
website at [http://hurricane.info.usaid.gov/].
For information on international humanitarian relief provided to the Caribbean,
see ReliefWeb, a project of the U.N.’s Office for the Coordination of Humanitarian
Affairs (OCHA) at [http://www.reliefweb.int/w/rwb.nsf].

---

CRS-2
Background
The Caribbean, encompassing 16 independent nations, is a diverse region of
some 34 million people that includes some of the hemisphere’s richest and poorest
nations (see Table 1). The region consists of 13 island nations, from the Bahamas
in the north to Trinidad and Tobago in the south; Belize, which is geographically
located in Central America; and the two nations of Guyana and Suriname, located on
the north central coast of South America. Many countries in the region share a
common African ethnic and British colonial heritage, while Cuba and the Dominican
Republic were Spanish colonies, Haiti was French, and Suriname was Dutch. The
dates of independence of these countries range from Haiti in 1804 to St. Kitts and
Nevis in 1983. The largest nations in terms of land area are Guyana and Suriname,
while those with the largest populations are Cuba, the Dominican Republic, and
Haiti. The island nations of the Eastern Caribbean are among the smallest countries
in the world. Politically, all Caribbean nations, with the exception of communist
Cuba, have elected democratic governments. Most of the former British colonies
have parliamentary forms of government, with the exception of Guyana, the
Dominican Republic, Haiti, and Suriname, which are republics headed by presidents.
In terms of regional integration, 14 of the region’s independent nations belong
to the Caribbean Community (CARICOM), with the exception of the Dominican
Republic (which has observer status) and Cuba. CARICOM was formed in 1973 to
spur regional economic integration. Some critics argue that it has been slow to
promote integration, compared to other regional economic groupings, but progress
has been made in moving toward a single economic market and in establishing a
Caribbean Court of Justice. In addition to CARICOM, six Eastern Caribbean nations
are members of the Organization of Eastern Caribbean States (OECS), the
subregional organization designed to stimulate economic integration and foreign
policy harmonization. The six OECS nations also share a common currency, the
Eastern Caribbean dollar, with monetary policy managed by the Eastern Caribbean
Central Bank. The Caribbean Development Bank (CDB), headquartered in Barbados,
promotes economic development and regional integration.
With the exception of Cuba and Haiti, Caribbean governments generally respect
the human rights of their citizens. Regular elections are the norm, and for the most
part have been free and fair. In 2004, Antigua and Barbuda held free and fair
elections in March (this contrasted to the 1999 elections in Antigua and Barbuda that
were tainted by irregularities involving inflated voting rolls); the Dominican
Republic held presidential elections in May; and St. Kitts and Nevis held general
elections in late October. In 2005, Dominica will hold general elections by July.
Haiti is expected to hold elections in 2005, although that goal could prove illusive
amid continued political violence.
Although many Caribbean nations have maintained long democratic traditions,
they are not immune from terrorist and other threats to their political stability. In
1993, stability on St. Kitts was threatened following violent protests after disputed
elections; order was restored with the assistance of security forces from neighboring
states. In 1990, the government of Trinidad and Tobago was endangered by a coup
attempt by a radical Muslim sect. Earlier in the 1980s, the government of Eugenia

---

CRS-3
Charles in Dominica was threatened by a bizarre coup plot involving foreign
mercenaries. And of course, Grenada, under the socialist-oriented government of
Maurice Bishop, experienced a break from the democratic norm after it assumed
power in a nearly bloodless coup in 1979 and installed a people’s revolutionary
government. After the violent overthrow and murder of Bishop in 1983, the United
States intervened to restore order and end the Cuban presence on the island.
Many Caribbean nations experienced an economic slump in 2001-2002 due to
downturns in the tourism and agriculture sectors. Countries that depend on tourism
were hurt by the aftermath of the September 2001 terrorist attacks in the United
States and the subsequent U.S. economic recession and sluggish recovery. The
banana and sugar sectors in the Eastern Caribbean were damaged by a tropical storm
in 2002 and a drought in 2003. Both sectors face uncertain futures in light of the
European Union’s plan to phase out preferred access from former Caribbean colonies
to its market by 2006 for bananas and 2009 for sugar. The Haitian economy has been
in decline since 2001, with political stability exacerbating already poor economic
conditions. The strongest performing economies in recent years have been those in
the Dominican Republic, fueled by the apparel sector, and in Trinidad and Tobago,
with substantial energy resources. In 2003, however, the economy of the Dominican
Republic experienced a decline in economic growth due to the financial strains
caused by the collapse of one of the largest domestic banks.
For 2004, the region’s strongest economic performers were Belize, with 7%
economic growth, and Trinidad and Tobago, with 6.2% growth, while Antigua and
Barbuda, St. Kitts, St. Lucia, and St. Vincent all had growth rates over 5%. Those
countries not faring well economically included Haiti, with an estimated 3% decline
in gross domestic product (GDP); Grenada, with a GDP decline of 1.4% because of
the devastation caused by Hurricane Ivan; and Dominica, also hit by natural disasters,
with no economic growth.1
Overview of U.S.-Caribbean Relations
U.S. interests in the Caribbean are diverse, and include economic, political, and
security concerns. During the Cold War, security concerns tended to eclipse other
policy interests. In the aftermath of the Cold War, other U.S. policy interests
emerged from the shadow of the East-West conflict in the Caribbean that focused on
concerns about the Soviet and Cuban threat. U.S. policy priorities shifted from one
emphasizing security concerns to a new focus on strengthened economic relations
through trade and investment. Today, in the aftermath of the September 2001
terrorist attacks in the United States, security concerns have re-emerged as a major
U.S. interest in the Caribbean. The Administration describes the Caribbean as
America’s “third border,” with events in the region having a direct impact on the
homeland security of the United States. According to the Administration, the United
States has an interest in bolstering political and economic stability in the region
1 U.N. Economic Commission for Latin America and the Caribbean (ECLAC), “Preliminary
Overview of the Economies of Latin America and the Caribbean,” December 15, 2004.

---

CRS-4
because setbacks in these areas heighten the region’s vulnerability to drug trafficking,
financial crimes, and illegal immigration.2
The United States has close relations with most Caribbean nations, with the
exception of Cuba under Fidel Castro. The U.S.-Caribbean relationship is
characterized by extensive economic linkages, cooperation on counter-narcotics
efforts and security, and a sizeable U.S. foreign assistance program supporting a
variety of projects to strengthen democracy, promote economic growth and
development, alleviate poverty, and combat the AIDS epidemic in the region. The
region has had preferential treatment of its exports to the U.S. market since the early
1980s, and U.S. efforts are now focused on helping the region prepare for
hemispheric free trade.
Despite close U.S. relations with most Caribbean nations, there has been tension
at times in the relationship; examples follow.
! Leading up to the war in Iraq, the United States was disappointed
with the lack of CARICOM support for U.S. military operations,
while Caribbean officials stressed that their opposition to U.S. policy
should not be considered hostile, but as a vibrant example of
democratic decision-making. In contrast, the Dominican Republic
was a member of the “coalition of willing” supporting U.S. action in
Iraq, and contributed 300 troops until May 2004.
! In June 2003, U.S. officials were displeased by the reluctance of
CARICOM nations to support an Organization of American States
resolution criticizing Cuba for its human rights crackdown. While
critical of Cuba’s human rights situation, Caribbean nations did not
think that the Organization of American States (OAS) was the
appropriate forum for the issue since Cuba has been suspended from
participation in the OAS for many years.
! CARICOM support for the Brazil-led G-21 position at the
September World Trade Organization (WTO) ministerial meeting in
Cancún also exacerbated tensions in relations with the region. The
G-21 group had called for concessions from developed countries in
opening up agricultural markets and eliminating agricultural
subsidies and was one of the factors in the deadlock at the Cancún
ministerial.3
! Relations between CARICOM nations and the United States also
became strained in the aftermath of the departure of President Jean
Bertrand Aristide from power in February 2004. CARICOM nations
called for an investigation into the circumstances surrounding
2 U.S. Department of State, Congressional Budget Justification, Foreign Operations,
FY2004, “Third Border Initiative,” pp. 496-497.
3 For background, see CRS Electronic Briefing Book on Trade, “The WTO Cancún
Ministerial,” by Ian F. Fergusson [http://www.congress.gov/brbk/html/ebtra137.html].

---

CRS-5
Aristide’s departure. There has been disagreement within
CARICOM over whether the organization should recognize Haiti’s
interim government, with St. Vincent, St. Lucia, and Guyana
remaining opposed to such recognition.
U.S. relations with Haiti were strained under the government of Jean Bertrand
Aristide because of concerns over corruption and human rights, but there has been
renewed cooperation under the new Haitian government that took office in February
2004. A U.S.-led Multilateral Interim Force was superceded with a United Nations
Stabilization Mission in Haiti (MINUSTAH) in June 2004. The mission will
continue to provide security for humanitarian aid workers and maintain stability as
the country prepares for elections by the end of 2005. Migrant interdiction has been
a key component of U.S. policy toward Haitian migrants. (For further background on
U.S. policy toward Haiti, see CRS Report RL32294, Haiti: Developments and U.S.
Policy Since 1991 and Current Congressional Concerns; CRS Report RS21751,
Humanitarian Crisis in Haiti: 2004; and CRS Report RS21349, U.S. Immigration
Policy on Haitian Migrants.)
Since the early 1960s, U.S. policy toward Cuba has consisted largely of isolating
the island nation through economic sanctions, including a trade embargo, and the
Bush Administration has essentially continued this policy. Another component of
U.S. policy consists of support measures for the Cuban people, including private
humanitarian donations, U.S.-sponsored radio and television broadcasting to Cuba,
and U.S. funding to support democracy and human rights. U.S. immigration policy
toward Cuban migrants has been described as a “wet foot/dry foot policy,” with the
U.S. Coast Guard interdicting Cuban migrants at sea and returning them to Cuba,
while those Cubans who reach shore are generally allowed to apply for permanent
resident status.
While there appears to be broad agreement on the overall objective of U.S.
policy, to help bring democracy and respect for human rights to the island, there are
several schools of thought on how to achieve that objective. Some advocate a policy
of keeping maximum pressure on the Cuban government until reforms are enacted,
while continuing current U.S. efforts to support the Cuban people. Others argue for
an approach, sometimes referred to as constructive engagement, that would lift some
U.S. sanctions that they believe are hurting the Cuban people and move toward
engaging Cuba in dialogue. Still others call for a swift normalization of U.S.-Cuban
relations by lifting the U.S. embargo. Congress will likely continue its high level of
interest in Cuba in the 109th Congress. (For information on these legislative
initiatives, see CRS Report RL32730, Cuba: Issues for the 109th Congress and CRS
Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances. Also see CRS
Report RS20468, Cuban Migration Policy and Issues.)
Drug Trafficking and Money Laundering Issues
Because of their geographic location, many Caribbean nations are transit
countries for cocaine and heroin from South America destined for the U.S. and
European markets. In addition, two Caribbean nations — Jamaica and St. Vincent

---

CRS-6
and the Grenadines — are large producers and exporters of marijuana. Of the 16
countries in the Caribbean region, President Bush in September 2004 designated four
of them as major drug-producing or drug-transit countries pursuant to annual
legislative drug certification requirements: the Bahamas, the Dominican Republic,
Haiti, and Jamaica. The President noted that the new interim government of Haiti
has taken substantive counter-narcotics actions in the few months that it has been in
office, although he expressed concern about the ability of Haitian law enforcement
institutions to reorganize and restructure sufficiently to carry out sustained counter-
narcotics efforts. In contrast, the President had determined in September 2003 that
Haiti had “failed demonstrably” to cooperate in the past 12 months on
counternarcotics efforts, but he waived any foreign aid sanctions for Haiti, stating
that such assistance was vital to U.S. national interests.
All four designated Caribbean countries are major transit countries for illicit
drugs to the U.S. market, and Jamaica is the largest marijuana producer and exporter
in the Caribbean. The Bahamas cooperates extensively with the United States on
counternarcotics measures, including interdiction efforts through Operation Bahamas
and Turks and Caicos (OPBAT), a multinational interdiction effort, and efforts that
target Bahamian drug trafficking organizations. The Dominican Republic, a major
transit country for both cocaine and heroin, cooperates closely with the United States,
although the State Department’s March 2004 International Narcotics Control
Strategy Report notes that “corruption and weak governmental institutions remained
an impediment to controlling the flow of illegal narcotics” through the country.
Jamaican cooperation with U.S. law enforcement agencies on counternarcotics efforts
is described by the State Department report as generally good, with steady
improvements over the past year. But the report also maintained that Jamaica needs
to intensify its law enforcement efforts and enhance its international cooperation in
order to disrupt the trafficking of large amounts of cocaine through the country and
its territorial waters. In Haiti, anti-drug efforts have been hampered over the years
by weak institutions, poor economic conditions, and political instability, but there are
hopes that such efforts will improve under the new Haitian government of President
Boniface Alexandre.
Many other Caribbean nations, while not designated major transit countries, are
still vulnerable to drug trafficking and associated crimes because of their geographic
location. In particular, the State Department’s March 2004 report maintains that such
crimes have the potential to threaten the stability of the small states of the Eastern
Caribbean, and to varying degrees, have damaged civil society in all of these
countries. Given the poor outlook for the banana industry in the Caribbean, some
observers believe that it will be difficult to contain marijuana production in such
countries as St. Vincent and Dominica unless there is adequate support to diversify
these economies away from banana production.
Efforts to crack down on money laundering also constitute a major component
of U.S. anti-drug strategy, and became increasingly important as a counter-terrorist
strategy in the aftermath of the September 2001 terrorist attacks in the United States.
The State Department’s list of major money laundering countries (also categorized
as “jurisdictions of primary concern”) includes four Caribbean countries — Antigua
and Barbuda, the Bahamas, the Dominican Republic, and Haiti — and one British
Caribbean dependency, the Cayman Islands. Being on the list (which includes the

---

CRS-7
United States and many other industrialized countries) signifies that financial
institutions in the country engage in transactions involving significant amounts of
proceeds from all serious crimes, not just crimes involving drug money. While
Antigua and Barbuda has comprehensive legislation to regulate its financial sector,
the country remains vulnerable to money laundering because the sector is loosely
regulated and because of its Internet gaming industry. The Bahamas, which has a
large offshore financial sector, enacted legislation in 2001 that substantially
strengthened its anti-money laundering regime and made its financial sector less
susceptible to exploitation by financial criminals. The State Department report
maintains that the country needs to more effectively implement these anti-money
laundering measures, and needs to provide adequate resources in order to ensure the
completion of investigations and prosecutions and efficient responses to requests for
international cooperation. Money laundering in both the Dominican Republic and
Haiti stem from their roles as major drug transhipment points. In the Dominican
Republic, financial institutions engage in transactions with money derived from
illegal drug sales in the United States, with courier and wire transfers the primary
methods for moving the funds.
Some Caribbean officials and others have complained that pressure to
strengthen and enforce anti-money laundering regimes in the region will have a
detrimental effect on its offshore financial sectors. They maintain that the anti-
money laundering measures required have been indiscriminate and constitute an
attack on legitimate business conducted in the small financial sectors of the region.
In particular, after the U.S. congressional passage of new anti-money laundering
provisions in the USA PATRIOT Act (P.L. 107-56, Title III), approved in the
aftermath of the September 11 terrorist attacks, some feared that the stricter scrutiny
of transactions between U.S. and Caribbean financial institutions would threaten the
offshore financial industry in the Caribbean.4 The act’s anti-money laundering
provisions include a prohibition on U.S. correspondent accounts with shell banks
(banks that have no physical presence in the chartering country) and tighter bank
record keeping requirements. Since the anti-money laundering provisions require the
Treasury Department to issue new regulations, which takes a significant amount of
time, the full impact of the provisions will become known over time.5 For example,
although the legislation was enacted in October 2001, the final rule on prohibitions
on U.S. correspondent accounts with shell banks did not become effective until
4 For example, see “Barbados — Weighed Down by Money Laundering Controls —
Bankers and Government Officials Are Worried that Hasty Decisions in the War Against
Money Laundering Could Threaten the Financial Services Industry in Small Jurisdictions
Like Barbados,” The Banker, July 1, 2003; “U.S. Lawmaker: Antiterror Laws May Hurt
Offshore Banking,” Dow Jones International News, January 5, 2003.
5 CRS Report RL31208, International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2002, Title III of P.L. 107-56 (USA PATRIOT Act), by M. Maureen
Murphy. For additional information on the USA PATRIOT Act’s money laundering
provisions, see CRS Report RS21032, Money Laundering: Current Law and Proposals, by
M. Maureen Murphy, and CRS Report RS21547, Financial Institution Customer
Identification Programs Mandated by the USA PATRIOT Act, by M. Maureen Murphy.

---

CRS-8
October 28, 2002.6 Rules for many other anti-money laundering provisions have yet
to be finalized.7
While there has been a decline in the number of offshore banks and the number
of newly registered international business companies in the Caribbean8 and there are
reports that business confidence in the offshore sector has fallen, the decline is likely
attributable to the broad array of multilateral anti-money laundering efforts that have
been going on for several years, and which only most recently includes new anti-
money laundering provisions under the USA PATRIOT Act. Most significantly, the
Financial Action Task Force on Money Laundering (FATF), an inter-governmental
body with the objective of combating money laundering and terrorist financing, has
published a list of non-cooperative countries and territories in the fight against money
laundering since 2000. There also has been increasing collaboration between the
FATF and the International Monetary Fund, which has been involved in conducting
assessments of the adherence of offshore financial centers to international standards,
including recommendations of the FATF.
The FATF evaluative process has been a major factor in Caribbean countries
improving their anti-money laundering regimes. There were four Caribbean nations
and one dependent territory on the first FATF non-cooperative list issued in 2000: the
Bahamas, the Cayman Islands, Dominica, St. Kitts and Nevis, and St. Vincent and
the Grenadines. Grenada was added to the list in September 2001. Subsequent
actions by all these nations to improve their anti-money laundering regimes resulted
in all of them being removed from the list by June 2003. The Bahamas and the
Cayman Islands were removed from the list in June 2001; St. Kitts and Nevis in June
2002; Dominica in October 2002; Grenada in February 2003; and St. Vincent in June
2003. Once a nation is removed from the list, the FATF continues to monitor
developments in the country to ensure compliance.
Some observers maintain that the strengthening of anti-money laundering
regimes in the Caribbean will have the end result of increasing the attractiveness of
the region’s offshore financial sectors for legitimate business transactions.
According to this view, such efforts as the FATF evaluative process and the newer
anti-money laundering measures under the PATRIOT Act will help change the
reputation of the Caribbean as being a haven for money launderers and tax evaders.
6 Federal Register, Vol. 67, No. 187, September 26, 2002, pp. 60562-60579.
7 The website of the Treasury Department’s Financial Crimes Enforcement Network
contains the various proposed and final rules of the PATRIOT Act:
[http://www.fincen.gov/reg_bsaregulations.html].
8 U.S. Department of State, International Narcotics Control Strategy Report, Section XII:
Money Laundering and Financial Crimes, March 2003; Ian James, “New Scrutiny on
Caribbean Offshore Business, But Critics Warn that Crimes Continue,” Associated Press
Newswires, February 14, 2003.

---

CRS-9
Trade Issues
The United States has offered a one way duty-free preferential trade
arrangement for a wide range of products from Caribbean Basin nations since the
early 1980s as an incentive for increased investment and export production in the
region. In 1983, Congress enacted the Caribbean Basin Economic Recovery Act
(CBERA) (P.L. 98-67), the centerpiece of a broader U.S. foreign policy initiative
known as the Caribbean Basin Initiative (CBI) linking Central America and
Caribbean nations together under one preferential trade program. The CBERA
allowed duty-free importation of many categories of products with certain
exceptions. Most apparel and textile goods were ineligible under the CBERA, but
in the late 1980s imports of apparel from CBERA countries that were assembled
from U.S. components were eligible for reduced duties. These production-sharing
arrangements boosted the apparel sectors of several Caribbean Basin countries,
including most significantly the Dominican Republic. In 1990, Congress enacted so-
called CBI II legislation, the Caribbean Basin Economic Recovery Expansion Act of
1990 (P.L. 101-382, Title II), that enhanced the benefits of CBERA and made its
provisions permanent.
Most recently, in 2000, Congress enacted the Caribbean Basin Trade Partnership
Act (CBTPA) (P.L. 106-200, Title II), which expanded preferential tariff treatment
for Caribbean Basin nations, providing them with NAFTA-like tariff treatment. This
includes preferential treatment for qualifying textile and apparel products. The
CBTPA benefits are scheduled to expire in September 2008, or upon entry into force
of the Free Trade Area of the Americas, whichever comes first. Of the 15
independent Caribbean countries eligible for CBTPA benefits (Cuba is not eligible),
only 8 have been designated to participate in the program because they fully meet the
eligibility criteria9 set forth in the CBTPA. Belize, the Dominican Republic, Haiti,
and Jamaica were designated in October 2000; Guyana was designated in November
2000; Trinidad and Tobago was designated in February 2001; and Barbados and St.
Lucia were designated in June 2001. The remaining Caribbean countries continue
to benefit from the CBERA program, with the exception of Cuba, which is not
eligible, and Suriname, a former Dutch colony which has never elected to participate
in the CBI trade program. (For further information, see CRS Issue Brief IB95050,
Caribbean Basin Interim Trade Program: CBI/NAFTA Parity.)
Since the United States first implemented a preferential trade program for
Caribbean Basin imports in 1984, the overall performance of exports has been mixed
(see Table 2). The Dominican Republic has been the Caribbean country that has
benefitted most from the program, and its apparel sector expanded significantly
because of production-sharing arrangements. Overall U.S. imports from the
Caribbean (not including Central America) amounted to about $4.7 billion in 1984
and to about $10.5 billion in 2003, an increase of about $5.8 billion. The Dominican
Republic alone accounted for $3.5 billion of the increase. Trinidad and Tobago,
which has been the heaviest user of CBI provisions in the English-speaking
9 The criteria cover a wide spectrum of issues, including WTO obligations; intellectual
property rights; worker rights; child labor; and counter-narcotics, anti-corruption, and
transparency efforts.

---

CRS-10
Caribbean, also increased its exports destined for the United States, from $1.4 billion
in 1984 to about $4.3 billion in 2003. For other Caribbean nations, however, such as
Haiti and the Bahamas, overall exports to the United States have declined since the
early 1980s. Bahamian exports to the United States fell when the country’s oil
refinery closed in 1985; the country’s economy remains based on tourism and
financial services.
Movement Toward Free Trade
All Caribbean nations with the exception of Cuba are participating in the
negotiations for a Free Trade Area of the Americas (FTAA).10 Within CARICOM,
while some governments, like Trinidad and Tobago, are enthusiastic about the
FTAA, other Caribbean governments, especially the smaller countries of the region,
have reservations about the FTAA and its impact on the region. While participating
in the FTAA negotiations, Caribbean nations argue for special and differential
treatment for small economies, including longer phase-in periods. CARICOM has
also called for a Regional Integration Fund to be established that would help the
smaller economies meet their needs for human resources, technology, and
infrastructure.
In the meantime, CARICOM, which often has been criticized for acting too
slowly, is trying to prepare itself for the hemispheric integration by moving ahead
with its own regional integration. At its Heads of Government meeting in July 2003,
CARICOM members stressed the urgency of moving ahead with implementation of
the CARICOM Single Market and Economy (CSME). Barbados, Jamaica, and
Trinidad are scheduled to join in a single market in mid-February 2005, and it is
expected that many more CARICOM nations will join by the end of the year.11
In addition to the FTAA negotiations, the Dominican Republic and the United
States completed negotiations for a Free Trade Agreement on March 15, 2004, that
was to be integrated with the U.S.-Central America Free Trade Agreement (CAFTA)
completed in December 2003. The United States signed the CAFTA with the five
Central American countries on May 28, 2004, while on August 5, 2004, all seven
countries signed the combined U.S.-Dominican Republic-Central America Free
Trade Agreement (DR-CAFTA). The Dominican Republic views an FTA with the
United States as a means of ensuring the continuation of U.S. preferential treatment
for textiles and apparel and a means to attract U.S. investment.
The next step is for the President to forward Congress draft implementing
legislation for the combined DR-CAFTA, but it is up to Congress if and when it will
consider such legislation. The agreement has faced political uncertainty in Congress
because of divergent U.S. views on relaxing trade rules for sensitive agricultural and
textile imports and on labor provisions. The Bush Administration and some
10 For background and status of the FTAA negotiations, see CRS Report RS20864, A Free
Trade Areas of the Americas: Status of Negotiations and Major Policy Issues, by J.F.
Hornbeck.
11 “Regional Expert Discusses Implementation of Caribbean Single Market and Economy,”
BBC Monitoring Latin America, January 16, 2005.

---

CRS-11
Members of Congress had threatened to withdraw their support for including the
Dominican Republic in the agreement unless the country repealed a recently enacted
tax on beverages containing high fructose corn syrup, a major U.S. product.
Ultimately, the Dominican tax was repealed in late December 2004. (For further
information, see CRS Report RL32322, Central America and the Dominican
Republic in the Context of the Free Trade Agreement (DR-CAFTA) with the United
States; CRS Report RL31870, The Dominican Republic-Central America-United
States Free Trade Agreement (DR-CAFTA); and CRS Report RS21868, U.S.-
Dominican Republic Free-Trade Agreement.)
Legislation to provide Haiti with expanded preferential trade treatment for
apparel was considered in the 108th Congress but not completed. The Senate
approved legislation in July 2004 — S. 2261 (DeWine), the Haiti Economic
Recovery Opportunity Act of 2004 — that would have provided Haiti with expanded
preferential trade treatment, allowing duty-free U.S. imports from Haiti of textile
manufactured from material inputs originating in any country. Similar legislation
was introduced in the House, H.R. 4889 (Shaw), but no action was taken on the
measure. Reportedly, a compromise version of the bill in the House would have
applied a more restrictive rule of origin for textiles, but no action was taken before
the end of the 108th Congress.12
AIDS in the Caribbean
The AIDS epidemic in the Caribbean, where infection rates are among the
highest outside of sub-Saharan Africa, has already begun to have negative
consequences for economic and social development in the region. An estimated
430,000 people in the region are living with HIV. At year end 2003, the Caribbean
countries with the highest prevalence or infection rates were Haiti, with a rate or
5.6%; Trinidad and Tobago, with a rate of 3.2%; the Bahamas, with a rate of 3%;
Guyana, with a rate of 2.5%; and Belize, with a rate of 2.4%. Four other countries
in the region, Suriname, Barbados, the Dominican Republic, and Jamaica, have rates
over 1%.13 In contrast to other parts of Latin America, the mode of transmission in
several Caribbean countries has been primarily through heterosexual contact, making
the disease difficult to contain, because it affects the general population.
Haiti and the Dominican Republic, with a combined 380,000 adults and children
living with HIV/AIDS, account for about 84% of the infected Caribbean population.
The U.S. Agency for International Development (USAID) notes that Haiti’s poverty,
conflict, and unstable governance have contributed to the rapid spread of AIDS; in
some urban areas, HIV infection rates are almost 10%. In the Dominican Republic,
12 “House Fails to Pass Haiti Apparel Bill in Face of Republican Opposition,” Inside U.S.
Trade, November 26, 2004.
13 UNAIDS, “2004 Report on the Global AIDS Epidemic,” July 2004, p. 203.

---

CRS-12
there are indications that the epidemic could be stabilizing because of prevention
efforts.14
In Haiti, life expectancy is almost six years lower than it would be without the
epidemic, and in the Bahamas and Guyana, the number of deaths among 15-34 year
olds is two and one half times higher because of the epidemic.15 As the epidemic
continues, already-strained health systems will be further burdened with new cases
of AIDS. As a result of the epidemic, there are some 250,000 AIDS orphans in the
Caribbean, with 200,000 of those in Haiti.
Sex tourism is reportedly a factor contributing to rising HIV infection rates in
some Caribbean countries. Officials in Trinidad and Tobago have expressed concern
about the growth of sex tourism, the so-called “beach bum” phenomenon, and the
link to the spread of AIDS.16 In Jamaica, the resort town of Montego Bay has the
highest HIV infection rates in the country.17 In the Dominican Republic, AIDS
activists are concerned about child prostitution in resort areas and the spread of
HIV.18
According to the World Bank, continued increases in HIV prevalence in the
Caribbean will negatively affect economic growth. The epidemic, according to the
Bank, will have a negative impact on such economic sectors as agriculture, tourism,
lumber production, finance, and trade because of lost productivity of economically
active adults with the disease. In particular, the labor market in the region will be
dealt a shock because of deaths from AIDS. The Prime Minister of St. Kitts and
Nevis, Denzil Douglas, maintains that the epidemic threatens to cripple the labor
force just as the region needs to become more competitive in world markets amid the
momentum toward hemispheric free trade.19 Looking ahead, the World Bank warned
in 2001 that “what happened in Africa in less than two decades could now happen
in the Caribbean if action is not taken while the epidemic is in the early stages.”20
14 Ibid. p. 37.
15 UNAIDS, Latin America and the Caribbean Fact Sheet, July 2002.
16 “Sex Tourism Cause of HIV Spread, Says T&T Minister,” The Weekly Gleaner (Jamaica),
February 19, 2003. The commercial sex industry linked to tourism reportedly is well
established in the Caribbean, with increasing male prostitution by so-called “beach boys.”
See “The Caribbean Regional Strategic Framework for HIV/AIDS,” Pan Caribbean
Partnership on HIV/AIDS and CARICOM, March 2002, p. 7. Also see Annan Boodram,
“The Beach Bum Phenomena,” Caribbean Voice, August 3, 2002, and Julie Bindel, “The
Price of a Holiday Fling,” Guardian (London), July 5, 2003.
17 “Rising Rate of AIDS in the Caribbean,” All Things Considered, National Public Radio,
July 2, 2003.
18 “AIDS Activists Worried Over Child Prostitution in Dominican Republic,” Boston
Haitian Reporter, January 31, 2003.
19 “Caribbean Leaders Call AIDS ‘Single Biggest Threat’ to Development, Announce Push
for Low-Cost Antiretrovirals”, Kaiser Daily HIV/AIDS Report, July 8, 2003
20 World Bank, HIV/AIDS in the Caribbean: Issues and Options, March 2001, p.xii.

---

CRS-13
For further information, see CRS Report RL32001, AIDS in the Caribbean and
Central America; and CRS Report RS21181, HIV/AIDS International Programs:
Appropriations, FY2002 - FY2005.
Third Border Initiative and Homeland Security
As first announced by President Bush at the April 2001 Summit of the
Americas, the “Third Border Initiative” (TBI) had the goals of deepening cooperation
in fighting the spread of HIV/AIDS, responding to natural disasters, and making sure
the benefits of globalization are felt in even the smallest economies. The Caribbean
was described as an often overlooked “third border,” where illegal drug trafficking,
migrant smuggling, and financial crime threaten U.S. and regional security interests.
The initiative consisted of a package of programs to enhance diplomatic, economic,
health, education, and law enforcement cooperation and collaboration. Most
significantly, the initiative included increased funding to combat HIV/AIDS in the
region.21
In the aftermath of the September 2001 terrorist attacks in the United States, the
Third Border Initiative expanded to focus on issues affecting U.S. homeland security
in the fields of administration of justice and security. Economic Support Funds
(ESF) under the TBI have been used to help Caribbean airports modernize their
safety and security regulations and oversight, which is viewed an important measure
to improve the security of visiting Americans. TBI funds have also been used to
support border security such as the strengthening of immigration controls.22
In additional to the TBI, the United States has also provided support to improve
port security in the Caribbean region, with the objective of helping ports comply with
the more stringent set of maritime regulations embodied in new International Ship
and Port Facility Security (ISPS) Code, that went into effect on July 1, 2004. The
ISPS is a set of maritime regulations for ships and port facilities with the objective
of preventing terrorist incidents. There has been concern among Caribbean nations
about the high cost of implementing these security regulations. Some of the larger,
richer countries in the Caribbean will be better equipped to afford these extra security
costs, while some of the smaller and poorer nations will have difficulty in coming
into compliance.
The U.S. Coast Guard has responsibility for conducting foreign port security
assessments to see whether the ports are in compliance with the ISPS standards.
Possible trade sanctions are an option if the port is not in compliance. As of early
November 2004, all Caribbean nations had reported that they were in compliance
with the more stringent standards of the ISPS Code. However, the U.S. Coast Guard
had announced in September that vessels from 13 flag states would be targeted for
21 U.S. Department of State, International Information Programs, Washington File, “Fact
Sheet: Caribbean Third Border Initiative,” April 21, 2001.
22 U.S. Department of State. Congressional Budget Justification for Foreign Operations.
FY2003-FY2005.

---

CRS-14
increased boardings because these nations’ compliance with new security standards
has been below average. This includes flag vessels from the two Caribbean nations
of Antigua and Barbuda and the Cayman Islands.
The United States is providing some support to help Caribbean nations come
into compliance with the ISPS Code. The U.S. Maritime Administration (MARAD)
in the Department of Transportation organizes, manages, and implements the Inter-
American Port Security Training Program (IAPSTP) for the Organization of
American States; some U.S. assistance has supported this effort. MARAD has also
conducted hemispheric port security conferences and took the lead in developing a
hemispheric port security framework. The State Department’s Bureau for
International Narcotics and Law Enforcement Affairs funds a port security technical
assistance program for Western Hemisphere countries. The U.S. Agency for
International Development (USAID) is funding a project specifically for Eastern
Caribbean nations to help assess the status of each port’s security requirements and
its security plans. This project, spearheaded by a partnership known as the Caribbean
Basin Maritime Security Alliance, also has private sector funding and could include
multilateral development bank funding in the future. It has been lauded as a model
for the private and public sectors working together in the area of port security.
Some Members of 108th Congress wanted to approve legislation calling for
additional foreign assistance in order to improve foreign port security worldwide;
however, no final action was completed before the end of the session. The Senate
approved the Maritime Transportation Security Act, S. 2279 (Hollings), in September
2004, which would have provided for the Administrator of the Maritime
Administration, in coordination with the Secretary of State, to identify foreign
assistance programs that could facilitate implementation of port security antiterrorism
measures in foreign countries. The act also would have called for a report on the
security of ports in the Caribbean Basin, including an assessment of the effectiveness
of the measures employed to improved security at such ports and an assessment of
the resources and program changes needed to maximize security at Caribbean Basin
ports.
For further background, see CRS Report RL31733, Port and Maritime Security:
Background and Issues for Congress.
U.S. Foreign Assistance
The United States has provided considerable amounts of foreign assistance to
the Caribbean since the 1980s, although the annual level of assistance has declined
in recent years. In the 1980s, U.S. assistance to the region amounted to about $3.2
billion, with most concentrated in Jamaica, the Dominican Republic, and Haiti. An
aid program for the Eastern Caribbean also provided considerable assistance,
especially in the aftermath of the 1983 U.S.-led military intervention in Grenada. In
the 1990s, U.S. assistance to Caribbean nations declined to about $2 billion, or an
annual average of $205 million. Haiti was the largest recipient of assistance during
this period, receiving about $1.1 billion in assistance or 54% of the total. Jamaica
was the second largest U.S. aid recipient in the 1990s, receiving about $507 million,

---

CRS-15
almost 25% of the total, while the Dominican Republic received about $352 million,
about 17% of the total. Eastern Caribbean nations received about $178 million in
assistance, almost 9% of the total. The bulk of U.S. assistance was economic
assistance, including development aid, economic support funds (ESF), and food aid.
Military assistance to the region amounted to less than $60 million during the 1990s.
Since FY2000, U.S. aid to the Caribbean region (including the FY2004
estimates) amounted to $765 million, or an annual average of $153 million. (Table
3 shows U.S. foreign aid to the Caribbean, broken down by country, for FY2002-
FY2005.) Once again Haiti, the Dominican Republic, and Jamaica account for the
largest portions of this assistance, accounting for about 78% of the total. Eastern
Caribbean nations account for about 10% of assistance to the region during this
period. Similar to the 1990s, the bulk of assistance to the region from FY2000-
FY2004 consists of economic assistance. Military assistance to the region amounted
to less than 5% of total assistance since FY2000.
A recent obstacle in the provision of U.S. military assistance to the Caribbean
is that several Caribbean nations that are parties to the International Criminal Court
(ICC) have not signed agreements to exempt Americans from ICC prosecution, so-
called “Article 98 agreements.” Pursuant to the American Servicemembers’
Protection Act (P.L. 107-206, title II), the Administration terminated military
assistance to these nations on July 1, 2003: Antigua and Barbuda, Barbados, Belize,
Dominica, St. Vincent and the Grenadines, and Trinidad and Tobago. Subsequently,
Antigua and Barbuda signed an Article 98 agreement in September 2003; Belize
signed one in December 2003; and Dominica signed one in May 2004. Trinidad and
Tobago, which played a leading role in the establishment of the ICC, has strongly
resisted signing an agreement, as has Barbados. The Administration had requested
$450,000 in military assistance for Trinidad and Tobago for FY2004, but none is
being provided because of the lack of an Article 98 Agreement. Military assistance
for Barbados and St. Vincent, which also has been curtailed, had been traditionally
part of the military aid requested for the Eastern Caribbean (which also includes
assistance to Grenada, St. Kitts and Nevis, and St. Lucia).
For FY2005, the Bush Administration requested $164 million in assistance for
the region, with $54 million for Haiti (largely for development assistance and food
aid), $28 million for the Dominican Republic, and $28 million for Jamaica.
Assistance to the seven small nations of the Eastern Caribbean (Antigua and
Barbuda, Barbados Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St.
Vincent and the Grenadines) would be provided through USAID’s Caribbean
Regional program, which also funds some region-wide projects. For FY2005, the
Administration requested $16.4 million for the Caribbean Regional program,
including $7.4 million in development assistance for the establishment of an
incentive-based performance fund that rewards good country performance under
three performance categories of the Administration’s Millennium Challenge Account.
The Eastern Caribbean would also receive almost $6 million in military assistance
and a Peace Corps program. The request of $9 million for a “Third Border Initiative”
would fund regional projects for the 14 Caribbean Community (CARICOM) nations
plus the Dominican Republic that focus on strengthening the administration of
justice; enhancing safety and security for the flow of people, goods, and services in

---

CRS-16
the region; modernizing safety and security regulations and oversight of Caribbean
airports; and strengthening immigration controls.
In FY2005 foreign operations appropriations (Division D of P.L. 108-447,
H.Rept. 108-447), Congress included a number of ESF earmarks for the Caribbean:
$9 million for the Third Border Initiative, $9 million for Cuba democracy programs,
$3 million for the Dominican Republic, and $40 million for Haiti for judicial reform,
police training, and national elections. The measure also earmarked $20 million in
Child Survival and Health funds and $25 million in Development Assistance for
Haiti.
U.S. assistance levels for the Caribbean region for FY2004 and FY2005 will
increase beyond the original estimate for FY2004 and the requested amount for
FY2005, almost $145 million and $164 million respectively (See Table 3) because
of increased support for the interim government in Haiti, increased HIV/AIDS
assistance to the region, and disaster and reconstruction assistance in the aftermath
of Hurricanes Frances and Ivan and Tropical Storm Jeanne (see section below on
“Hurricane Disaster Assistance.”)
With regard to HIV/AIDS assistance, Guyana and Haiti are included as target
countries (along with 12 African countries) in the President’s Emergency Plan for
AIDS Relief (PEPFAR). Under this program, the Administration allocated an
additional $13 million for Haiti and $5.1 million for Guyana in FY2004. PEPFAR
also included funding for several so-called “non-focus” countries. This included $2
million in additional funding for a Caribbean Regional program that supports efforts
in the smaller countries of the Eastern Caribbean. The lionshare of the PEPFAR
assistance for the region, however, has been targeted for Haiti and Guyana. For
FY2005, the Administration indicated that potential allocations for the Global AIDS
Initiative for FY2005 include $18.3 million for Guyana and $40 million for Haiti.
In the 108th Congress, some Members of Congress and Caribbean leaders
wanted to expand the list of Caribbean target countries beyond Guyana and Haiti,
arguing that high mobility in the region necessitates a regional approach in combating
the epidemic. Both House-passed H.R. 1950 and S. 2144 had provisions that would
have added 14 Caribbean countries to those already listed in the United States
Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (P.L. 108-25),
but action was not completed on these measures.
Looking ahead to future years, several Caribbean nations are potential recipients
for Millennium Challenge Account (MCA) assistance, an initiative to target foreign
assistance to countries with strong records of performance in the areas of governance,
economic policy, and investment in people. While Haiti and Guyana were potentially
eligible for MCA funds in FY2004, because their per capita income was below
$1,415, neither country was approved to participate. Guyana could be approved in
future years, but Haiti would likely have difficulty meeting the criteria for MCA
funding. Beginning in FY2006, four additional Caribbean countries could become
eligible for MCA funding, because their per capita income levels are below $2,935:
the Dominican Republic, Jamaica, St. Vincent and the Grenadines, and Suriname.

---

CRS-17
Hurricane Disaster Assistance
Several hurricanes caused devastating damage to nations across the Caribbean
in the 2004 hurricane season — Hurricanes Charley, Frances and Ivan, and Tropical
Storm Jeanne. Hurricane Charley struck western Cuba in mid-August 2004 causing
damage to over 70,000 homes and thousands hectares of crops. Hurricane Frances
struck the Bahamas on September 2, 2004, with maximum sustained winds of 140
miles per hour causing widespread damage throughout the country’s islands, but
especially affecting the islands of Grand Bahamas (Freeport), New Providence
(Nassau), San Salvador, Cat Island, Eleuthera, and Abaco. Two people were killed
and hundreds were left homeless.
Hurricane Ivan caused severe damage across the Caribbean before striking the
U.S. mainland on September 15, 2004. The hurricane devastated Grenada on
September 7, with between 37-48 reported deaths, and some 80-90% of the nation’s
buildings destroyed. On September 11-12, the hurricane passed over Jamaica
causing damage in the western part of the island and in southern coastal towns.
Eleven deaths have been confirmed in Jamaica; some 70,000 families were affected;
and 8,000 houses were completely destroyed. On September 12, Hurricane Ivan
struck the British dependency of the Cayman Islands (located south of Cuba) causing
damage to 50% of homes on the island of Grand Cayman. On September 13, 2004,
the storm affected western Cuba, damaging houses and crops. Other countries
affected to a lesser degree by the hurricane include Barbados, St. Lucia, St. Vincent,
Trinidad and Tobago, and Venezuela.
On September 18, 2004, Tropical Storm Jeanne caused devastating mudslides
and floods in northern Haiti that killed some 3,000 people, with over 2,800 of those
in the city of Gonaives. Some 300,000 people were affected by the flooding. Troops
of the United Nations Stabilization Mission in Haiti (MINUSTAH) (which currently
has a strength of around 3,000 military personnel and some 650 civil police officers)
have been working to restore order and set up food distribution sites. Tropical Storm
Jeanne also caused flooding and damage in the Dominican Republic, with several
people killed.
U.S. Relief Efforts. The United States has provided humanitarian assistance
to several Caribbean nations in the aftermath of these storms and floods. The U.S.
Agency for International Development (USAID) set up a Disaster Assistance
Response Team (DART) to respond to the disasters, with team members located in
the various islands. Through October 2004, the United States committed or obligated
$22.6 million in assistance to Caribbean nations in the aftermath of the storms, with
$11.8 million for Haiti, $6 million for Grenada, $4.2 million for Jamaica, almost
$445,000 for the Bahamas, and $50,000 each for the Dominican Republic and Cuba.
The $22.6 million total includes $9 million in disaster relief provided by USAID’s
Office of Foreign Disaster Assistance (OFDA); $9.8 million in USAID rehabilitation
and reconstruction assistance; and about $3.4 million in emergency food assistance
for Haiti. (For up-to-date information on U.S. disaster assistance, see USAID’s
website available at [http://hurricane.info.usaid.gov/]; for background on U.S. and
international relief efforts during Haiti’s February 2004 humanitarian crisis amid the
country’s political conflict, see CRS Report RS21751, Humanitarian Crisis in Haiti:
2004.)

---

CRS-18
In addition, the 108th Congress appropriated $100 million in emergency
assistance for Caribbean nations afflicted by the storms. The White House submitted
two supplemental budget requests to Congress — the first on September 27, 2004,
and the second on October 5, 2004 — each of which included $50 million in
international disaster and famine assistance funds to mitigate the effects of the storms
on Caribbean nations. The assistance, according to the request, would provide for
the temporary provision of electricity; housing rehabilitation and reconstruction;
agriculture sector reconstruction; water and sanitation systems reconstruction; and
the rehabilitation of roads, irrigation, and rural infrastructure, schools, and health
facilities. On October 4, 2004, the House approved H.Con.Res. 496 (Lee) by voice
vote expressing the sense of Congress in support of the provision of humanitarian
assistance to the Caribbean in the aftermath of the storms. Subsequently, on October
6, 2004, the House approved an emergency supplemental appropriations measure,
H.R. 5212, that included the $100 million in assistance for the Caribbean.
Ultimately, Congress included the $100 million for the Caribbean in the FY2005
Military Construction Appropriations and Emergency Hurricane Supplemental
Appropriations Act (H.R. 4837, P.L. 108-324). The hurricane assistance was
included in the conference report (H.Rept. 108-773) to H.R. 4837, which was
approved by the House on October 9 and the Senate on October 11, 2004.
The State Department announced on November 10, 2004, that the $100 million
appropriated by Congress would be targeted as follows: $42 million for Grenada, $38
million for Haiti, $18 million for Jamaica, and $2 million for other countries affected
by the storms, such as the Bahamas.
Some observers and Members of Congress have criticized current U.S.
assistance efforts for the Caribbean as too small in light of the devastation caused by
the storms. The Congressional Black Caucus has called for $500 million in
assistance to Caribbean nations affected by the storms.23 Former President Jimmy
Carter has urged the United States and other international lenders to forgive part of
Grenada’s foreign debt.
In addition to assistance, some called on the Bush Administration to provide
Temporary Protected Status (TPS) or “deferred enforced departure” to nationals of
several of the affected countries, especially Haiti.24 Haiti’s interim Prime Minister
Gerard LaTortue appealed to the Administration requesting TPS for some 20,000
Haitians in the United States.
Other Donors. Numerous other bilateral, regional, and multilateral donors are
making contributions to the Caribbean in the aftermath of the hurricanes. The
Caribbean Disaster Emergency Response Agency (CDERA), an inter-governmental
agency headquartered in Barbados, helped mobilize and coordinate disaster relief
from governmental and non-governmental organizations. The U.N. Office for the
23 Congressional Record, October 4, 2004, p. H7999.
24 Jacqueline Charles and Alfonso Chardy, “Immigration Advocates: Allow Migrants from
Storm Damaged Islands to Stay in the United States,” Miami Herald, September 22, 2004;
For further background on TPS, see CRS Report RS20844, Temporary Protected Status:
Current Immigration Policy and Issues, by Ruth Ellen Wasem.

---

CRS-19
Coordination of Humanitarian Affairs (OCHA) dispatched United Nations Disaster
Assessment and Coordination (UNDAC) teams to the affected countries. On October
1, 2004, the U.N. issued an emergency appeal for $32 million for Haiti and $27
million for Grenada for food, shelter, water, sanitation, and medicine.25 The Inter-
American Development Bank provided emergency financing to assist the Bahamas,
Jamaica, Grenada, St. Lucia, and St. Vincent, and it provided emergency grant
assistance to Haiti. The Organization of American States also pledged support to
mobilize disaster relief aid. The Pan American Health Organization supported relief
efforts in nine Caribbean countries affected by the storms. The World Bank
announced that it would provide assistance to countries affected by Hurricane Ivan.
The International Federation of Red Cross and Crescent Societies (IFRC) issued an
appeal for donations.
See ReliefWeb, a project of the U.N.’s OCHA at [http://www.reliefweb.i4nt/
w/rwb.nsf], for information on international humanitarian relief being provided to the
Caribbean.
25 UN Office for the Coordination of Humanitarian Affairs, “United Nations Launches
Humanitarian Appeals for Storm-ravaged Haiti, Grenada,” October 1, 2004.

---

CRS-20
Table 1. Caribbean Countries: Basic Facts
Per Capita
Population
Area
Income
Head of
Last
Country
(2002,
(sq. miles)
(U.S. $, 2002 Government
Election
thousands)
est.)
Antigua and
170
69
9,390
Baldwin Spencer
Mar. 2004
Barbuda
Bahamas
5,382
314
14,860
Perry Christie
May 2002
Barbados
166
269
9,750
Owen Arthur
May 2003
Belize
8,867
253
2,960
Said Musa
Mar. 2003
Cuba
44,200
11,263
a
Fidel Castro
b
Dominica
290
72
3,180
Roosevelt Skerritc
Jan. 2000
Dominican
18,704
8,600
2,320
Leonel Fernandez
May 2004
Republic
Nov. 27,
Grenada
133
102
3,500
Keith Mitchell
2003
Guyana
82,980
772
840
Jagdeo Bharrat
Mar. 2001
Boniface
Haiti
10,714
8,300
440
Alexandred
Nov. 2000
Percival James
Jamaica
4,244
2,600
2,820
Oct. 2002
Patterson
St. Kitts and
101
46
6,370
Denzil Douglas
Oct. 2004
Nevis
St. Lucia
238
159
3,840
Kenny Anthony
Dec. 2001
St. Vincent
130
117
2,820
Ralph Gonsalves
Mar. 2001
Suriname
63,037
423
1,960
Ronald Venetiaan
May 2000
Trinidad
1,980
1,318
6,490
Patrick Manning
Oct. 2002
and Tobago
Sources: Area statistics are drawn from the U.S. Department of State Background Notes for each
country; population and per capita income statistics are from the World Bank’s World
Development Report 2004.
a. estimated by the World Bank to be between $736 - $2,935.
b. Castro has served as head of government since the 1959 Cuban Revolution. Since that time, there
have been no elections for head of government.
c. Skerrit was sworn in as prime minister on January 8, 2004, following the death of Prime Minister
Pierre Charles.
d. Alexandre became president February 29, 2004, following the resignation of President Jean
Bertrand Aristide.

---

CRS-21
Table 2. U.S. Imports from Caribbean Countries
(U.S. $ millions)
Country
1984
2000
2001
2002
2003
Antigua &
7.898
2.292
3.741
3.427
12.767
Barbuda
Bahamas
1,154.282
275.016
313.889
449.697
479.305
Barbados
252.598
38.638
39.546
34.438
43.428
Belize
42.843
93.555
97.401
77.668
101.443
Dominica
.086
6.926
5.268
4.670
5.252
Dom. Republic
994.427
4,383.331
4,183.435
4,168.881
4,455.230
Grenada
.766
27.072
24.117
6.886
7.602
Guyana
74.417
139.889
140.344
115.615
118.690
Haiti
377.413
296.922
263.108
255.007
332.340
Jamaica
396.949
648.184
460.559
396.317
422.749
St. Kitts & Nevis
23.135
36.808
41.096
48.627
44.588
St. Lucia
7.397
22.261
28.911
19.180
12.999
St. Vincent
2.958
8.858
22.493
16.475
4.142
Suriname*
104.636
135.210
142.918
132.722
140.064
Trinidad &
1,360.106
2,228.813
2,380.010
2,440.304
4,333.753
Tobago
Total
4,695.275
8,343.777
8,146.836
8,170.016
10,514.352
Source: 1984 statistics are from U.S. International Trade Commission, The Impact of the Caribbean
Basin Economic Recovery Act, Fifteenth Report, 1999-2000, September 2001; 2000-2003 trade
statistics are from the Department of Commerce, as presented by World Trade Atlas.
* Suriname has not been a beneficiary of the Caribbean Basin Initiative preferential trade program.

---

CRS-22
Table 3. U.S. Foreign Assistance to the Caribbean,
FY2002-FY2005
(U.S. $ millions)
FY2004
FY2005
Country
FY2002
FY2003
(estimate)
(request)
Bahamas
1.444
1.336
1.262
1.340
Belize
1.876
2.046
1.968
2.218
Cuba
5.000
6.000
6.959
9.000
Dominican Republic
22.280
28.099
31.815
28.248
Guyana
5.677
8.407
6.289
8.814
Haiti
55.925
71.887
54.534
54.012
Jamaica
19.102
22.337
21.675
27.836
Suriname
1.140
1.397
1.397
1.623
Trinidad and Tobago
0.432
0.540
0
0.050
Caribbean Regional
3.550
13.008
7.668
16.436
Eastern Caribbeana
15.491
4.255
7.215
5.729
Third Border
—
3.000
3.976
9.000
Total
131.917
162.312
144.760
164.306
Source: U.S. Department of State. FY2005 Congressional Budget Justification for Foreign
Operations.
a. The Eastern Caribbean category funds military assistance and Peace Corp programs for seven
countries. Antigua and Barbuda, Barbados, Dominica, Grenada, St. Kitts and Nevis, St. Lucia,
and St. Vincent and the Grenadines. Development assistance for these nations is funded under
U.S. AID’s Caribbean Regional program.

---