Order Code RL32160
CRS Report for Congress
Received through the CRS Web
Caribbean Region:
Issues in U.S. Relations
Updated January 25, 2006
Mark P. Sullivan
Specialist in Latin American Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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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. With the exception of Haiti,
most Caribbean economies have rebounded since 2003, although the extensive
damage resulting from several storms in 2004 caused economic difficulties 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. It maintains that Caribbean nations are “vital partners
on security, trade, health, the environment, education, regional democracy, and other
hemispheric issues.”
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 in the relationship. For example,
relations between Caribbean Community (CARICOM) nations and the United States
became strained in the aftermath of the departure of Haitian President Jean Bertrand
Aristide from power in February 2004. In the aftermath of several devastating storms
in 2004, Congress approved $100 million in emergency supplemental funding (P.L.
108-324) to support humanitarian efforts and reconstruction in Haiti, Grenada, and
Jamaica.
In the second session of the 109th Congress, congressional interest in the
Caribbean will likely include continued anti-drug trafficking and anti-money
laundering cooperation, support to combat the HIV/AIDS epidemic in the region,
post-hurricane reconstruction efforts, and security concerns such as port security and
border security efforts. 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, by Maureen Taft-Morales; and CRS Report RL32730,
Cuba: Issues for the 109th Congress, by Mark P. Sullivan.

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Contents
Conditions in the Region
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of U.S.-Caribbean Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
U.S. Foreign Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Drug Trafficking and Money Laundering Issues . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trade Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Movement Toward Free Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Third Border Initiative and Security Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Crime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Caribbean Energy Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
HIV/AIDS in the Caribbean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Hurricane Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legislative Initiatives in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Port Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
HIV/AIDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Tsunami Detection and Warning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Cuba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Guyana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Haiti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Montserrat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
List of Figures
Figure 1. Caribbean Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
List of Tables
Table 1. Caribbean Countries: Basic Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table 2. U.S. Imports from Caribbean Countries . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 3. U.S. Exports to Caribbean Countries . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 4. U.S. Foreign Assistance to the Caribbean, FY2002-FY2006 . . . . . . . . 25
Table 5. U.S. Foreign Assistance to the Caribbean by Program,
FY2005 Estimates and FY2006 Requests . . . . . . . . . . . . . . . . . . . . . . . . . . 26

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Caribbean Region:
Issues in U.S. Relations
Conditions in the Region
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 and Suriname held elections in May,

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CRS-2
and St. Vincent and the Grenadines held elections on December 7. Haiti was
expected to hold elections in 2005, but significant problems and political instability
resulted in those elections being postponed several times; they are currently
scheduled for February 7, 2006. Also in 2006, Guyana is due to have elections by
August and parliamentary elections in St. Lucia are due by the end of the year.
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
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, although most Caribbean
economies, with the exception of Haiti, have rebounded since 2003. 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 market access from
former Caribbean colonies for bananas by 2006 and for sugar by 2009. The Haitian
economy has been in decline since 2001, with political instability exacerbating
already difficult economic conditions in the hemisphere’s poorest nation. The
strongest performing economies in recent years have been those of the Dominican
Republic, fueled by the apparel sector, and Trinidad and Tobago, with substantial
energy resources. In 2003, however, the Dominican economy experienced a decline
in economic growth due to the financial strains caused by the collapse of one of the
largest domestic banks.
In 2004, the region’s strongest economic performers were Suriname, Trinidad
and Tobago, and St. Kitts, with growth rates over 6%, and St. Lucia and Antigua and
Barbuda with growth rates over 5%. Those countries not faring well economically
included Haiti, with an estimated 3.8% decline in gross domestic product (GDP), and
Grenada, with a GDP decline of 2.8% because of the devastation caused by
Hurricane Ivan.
Preliminary estimates for 2005 show continued economic growth in the region,
with the Dominican Republic, St. Lucia, and Trinidad and Tobago registering growth
rates of 7% or more. Those countries faring poorly are Guyana, with an estimated
GDP decline of 2.9%, and Haiti and Jamaica, registering only modest growth rates

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CRS-3
of 1.5% and 1.4% respectively.1 Concern that rising oil prices could cause an
economic setback for some countries has been alleviated to some extent by
Venezuela’s new subsidized oil program for Caribbean countries known as
PetroCaribe. Some observers have also been concerned about the region’s high level
of public debt, with several Caribbean nations having debt levels that exceed 100%
of their GDP.2
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. It describes Caribbean nations as “vital
partners on security, trade, health, the environment, education, regional democracy,
and other hemispheric issues.”3
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. For example, relations between
Caribbean Community (CARICOM) nations and the United States 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 Aristide’s departure, and Haiti’s participation in CARICOM remains
suspended pending the election of a new government.
1 U.N. Economic Commission for Latin America and the Caribbean (ECLAC), “Balance
Preliminar de las Economías de América Latina y el Caribe, 2005,” December 2005.
2 “Organization of Eastern Caribbean States, Country Report,” Economist Intelligence Unit,
September 2005.
3 U.S. Department of State, Congressional Budget Justification, Foreign Operations,
FY2006, “Third Border Initiative,” p. 548.

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CRS-4
Caribbean nations such as Jamaica that depend on tourism expressed concerns
to the Bush Administration about a proposed State Department initiative that would
have required a passport, beginning December 31, 2005, for those traveling to and
from the Caribbean to enter or re-enter the United States. The countries feared that
tourism from the United States would be negatively affected because Americans do
not presently need a passport to travel to several Caribbean islands. For example, in
2005, some 50% of Americans traveling to Jamaica did not have a passport.4 The
State Department subsequently revised the Caribbean deadline to December 31,
2006, the same passport deadline for air and sea travel from Canada, Mexico, and
Central and South America.
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 interim 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’s
goals are to provide security for humanitarian aid workers and maintain stability as
the country prepares for elections. Migrant interdiction has been a key component
of U.S. policy toward Haitian migrants. (For further on U.S. policy toward Haiti, see
CRS Report RL32294, Haiti: Developments and U.S. Policy Since 1991 and Current
Congressional Concerns; CRS Report RL33156, Haiti: International Assistance
Strategy for the Interim Government and Congressional Concerns, both by Maureen
Taft-Morales; and CRS Report RS21349, U.S. Immigration Policy on Haitian
Migrants, by Ruth Ellen Wasem.)
Since the early 1960s, U.S. policy toward Cuba has consisted largely of isolating
the island nation through economic sanctions, including a trade embargo. The Bush
Administration has essentially continued this policy, although it has further tightened
economic sanctions, especially on travel. 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.
(For further information on policy toward Cuba, see CRS Report RL32730, Cuba:
Issues for the 109th Congress; CRS Report RL31139, Cuba: U.S. Restrictions on
Travel and Remittances, both by Mark P. Sullivan; and CRS Report RS20468,
Cuban Migration Policy and Issues, by Ruth Ellen Wasem.)
4 “OECS, Country Report,” Economist Intelligence Unit, December 2005, p. 33.

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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,
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 FY2005 aid
estimates) has again increased, amounting to about $1.2 billion, because of increased
HIV/AIDS assistance to the region (especially to Guyana and Haiti), disaster and
reconstruction assistance in the aftermath of several hurricanes and tropical storms
in 2004, and increased support for the interim government in Haiti following the
departure of President Jean-Bertrand Aristide from power. Haiti accounted for some
47% of assistance to the Caribbean region during this period. As in the 1990s, the
bulk of assistance to the region consisted of economic assistance. With regard to
hurricane disaster assistance, Congress appropriated $100 million in October 2004
in emergency assistance for Caribbean nations (P.L. 108-324), with $42 million for
Grenada, $38 million for Haiti, $18 million for Jamaica, and $2 million for other
countries affected by the storms. (See Tables 4 and 5.)
The FY2005 omnibus appropriations measure (P.L. 108-447, Division D)
earmarked ESF assistance for several countries and programs in the Caribbean,
including $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.
For FY2006, the Bush Administration requested about $316 million in
assistance for the region, with $196 million for Haiti, $28 million for the Dominican
Republic, $27 million for Guyana, and $19 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) is provided through USAID’s Caribbean Regional program, which also
funds some region-wide projects; for FY2006, the Administration requested almost
$10 million for the regional program. The Eastern Caribbean will receive almost $5
million in military assistance and a Peace Corps program.

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The FY2006 request of $6 million for a “Third Border Initiative” (TBI) will
fund regional projects for the 14-nation Caribbean Community (CARICOM) plus the
Dominican Republic that focus on administration of justice; safety and security for
the flow of people, goods, and services in the region; and disaster preparedness. The
TBI program also helps support smaller economies move toward greater
competitiveness and also support improvement in environmental management.
Operation Enduring Friendship, a new military assistance program, supports efforts
to increase maritime security in the region. For FY2006, the request provides
assistance to the Dominican Republic and Panama and to a lesser extent the Bahamas
and Jamaica to help them improve maritime security.
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, when the per capita income threshold for MCA-
eligibility increases to $3,255 or below, three additional Caribbean countries — the
Dominican Republic, Jamaica, and Suriname — could become eligible for MCA
funding.
One 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.

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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
and the Grenadines — are large producers and exporters of marijuana. Of the 16
countries in the Caribbean region, President Bush in September 2005 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 maintained that Haiti has made efforts to improve
its performance, but he expressed concerns about the government’s inability to
effectively organize law enforcement resources.5
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 2005 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 excellent in most cases, but areas of
U.S. concern include the prosecution of drug traffickers, the amount of drug seizures,
and eradication efforts. In Haiti, anti-drug efforts have been hampered over the years
by weak institutions, poor economic conditions, and political instability. Under the
interim government of President Boniface Alexandre, Haiti arrested and expelled a
major drug trafficker and established two new anti-drug law enforcement entities, but
continued political instability has impeded the fight against drug trafficking.
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 2005 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 some 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 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
5 White House, Press Release, “Memorandum for the Secretary of State: Presidential
Determination on Major Drug Transit or Major Illicit Producing Countries for Fiscal Year
2006,” September 15, 2005.

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CRS-8
as “jurisdictions of primary concern”) includes five Caribbean countries — Antigua
and Barbuda, the Bahamas, Belize, the Dominican Republic, and Haiti — and one
British Caribbean dependency, the Cayman Islands. Being on the list (which
includes the 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.
The Department of State maintains that although 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 has enacted legislation substantial
reforms that could make its large financial sector less susceptible to money
laundering, but the State Department maintains that it needs to effectively implement
these reforms. In Belize, money laundering is believed to occur primarily in the
country’s growing offshore financial center. 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.6 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.7 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
6 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.
7 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.

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CRS-9
October 28, 2002.8 Rules for many other anti-money laundering provisions have yet
to be finalized.9
Although there has been a decline in the number of offshore banks and the
number of newly registered international business companies in the Caribbean10 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.
8 Federal Register, vol. 67, no. 187, September 26, 2002, pp. 60562-60579.
9 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].
10 U.S. Department of State, International Narcotics Control Strategy Report, Volume II:
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.

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CRS-10
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.
Congress enacted the Caribbean Basin Trade Partnership Act (CBTPA) (P.L.
106-200, Title II) in 2000, 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
criteria11 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, Vladimir N. Pregelj.)
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 $12.2 billion in 2004, an increase of about $7.5 billion. The Dominican
Republic accounted for $3.5 billion of the increase. Trinidad and Tobago, an oil and
gas exporter, increased its exports destined for the United States, from $1.4 billion
11 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.

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CRS-11
in 1984 to about $5.9 billion in 2004. 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.
U.S. exports to the region rose from $8.9 billion in 2001 to $10.1 billion in 2004
(see Table 3). Four Caribbean countries — Dominican Republic, Trinidad and
Tobago, Jamaica, and the Bahamas — are the destination for the lion’s share of U.S.
exports to the region. In 2004, U.S. exports to these four countries accounted for
81% of total U.S. exports to the Caribbean. The United States ran a trade deficit of
$2.1 billion with the Caribbean in 2004, largely because of the increase in the value
of oil and gas imports from Trinidad and Tobago. For most other Caribbean nations,
the United States ran a trade surplus.
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), although negotiations
for that agreement have been stalled since 2004.12 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. In April 2005, CARICOM members established
the Caribbean Court of Justice, headquartered in Port-of-Spain in Trinidad and
Tobago, that will serve as region’s final court of appeal and replace the Privy
Council based in London. The Court will play an important role in the region’s
economic integration by ruling on trade disputes in the forthcoming CARICOM
Single Market and Economy (CSME). Barbados, Jamaica, and Trinidad are leading
the way in moving ahead with the implementation of the CSME, which will become
operational in January 2006.
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 ultimately integrated with a free trade agreement negotiated with Central
American countries. Ultimately, Congress approved legislation (P.L. 109-53) in July
2005 implementing the U.S.-Dominican Republic-Central America Free Trade
Agreement (DR-CAFTA). The agreement had faced political uncertainty in Congress
12 For background and status of the FTAA negotiations, see CRS Report RS20864, A Free
Trade Areas of the Americas: Major Policy Issues and Status of Negotiations, by J.F.
Hornbeck.

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CRS-12
because of divergent U.S. views on relaxing trade rules for sensitive agricultural and
textile imports and on labor provisions. The Dominican Republic views the
agreement 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 Bush
Administration views the agreement as a way for the region to help create jobs,
attract foreign investment, and advance good governance. (For further information,
see CRS Report RL31870, The Dominican Republic-Central America-United States
Free Trade Agreement (CAFTA-DR), by J.F. Hornbeck; and CRS Report RL32322,
Central America and the Dominican Republic in the Context of the Free Trade
Agreement (DR-CAFTA) with the United States, by K. Larry Storrs, et al.)
In the 109th Congress, two identical bills referred to as the Caribbean Basin
Trade Enhancement Act of 2005 — H.R. 1213 (Hyde), introduced March 10, 2005,
and S. 704 (Martinez), introduced April 5, 2005 — would authorize up to $10
million in FY2006 for the Organization of American States (OAS) to establish a
Center for Caribbean Basin Trade and up to $10 million for the OAS to establish a
skills-training program for Caribbean Basin countries.
Third Border Initiative and Security Issues
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.13
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; to help
Caribbean economies move toward greater competitiveness; and to support an
improvement of environmental management.14 TBI funding amounted to $3 million
in FY2003, almost $5 million in FY2004, and an estimated $8.9 million in FY2005.
13 U.S. Department of State, International Information Programs, Washington File, “Fact
Sheet: Caribbean Third Border Initiative,” April 21, 2001.
14 U.S. Department of State. Congressional Budget Justification for Foreign Operations.
FY2003-FY2006.

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CRS-13
The FY2006 request for the TBI was for $6 million. (See Tables 4 and 5 on U.S.
assistance to the Caribbean at the end of this report.)
In addition 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, which 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 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.
Trade sanctions are an option if the port is not in compliance. By November 2004,
all Caribbean nations had self-reported that they were in compliance with the more
stringent standards of the ISPS Code. The Coast Guard is currently involved in
visiting foreign ports worldwide to ensure that security practices are up to standards.
The United States has provided 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; the State Department’s Bureau for International Narcotics and Law
Enforcement Affairs funds a port security technical assistance program for Western
Hemisphere countries; and USAID has funded a project specifically for Eastern
Caribbean nations to help assess the status of each port’s security requirements and
its security plans.
In the 108th Congress, a legislative initiative called for additional foreign
assistance in order to improve foreign port security worldwide, but 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.
In the 109th Congress, two bills would provide for foreign assistance programs
for Caribbean Basin ports. S. 744 (Nelson, Bill), introduced April 11, 2005, would
establish a Caribbean Basin Port Assistance Program. Under the legislative
initiative, the Administrator of MARAD in the Department of Transportation, in
coordination with the Secretary of State, would identify foreign assistance programs
that could facilitate implementation of port security antiterrorism measures at
Caribbean Basin ports. The Administrator and the Secretary would establish a
program for such assistance in consultation with the Organization of American

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CRS-14
States. In addition, the Secretary of Homeland Security would be required to submit
a report to Congress on status of port security in Caribbean Basin countries. S. 1052
(Stevens), the Transportation Security Improvement Act of 2005, includes a
provision (Section 504) that would establish a program to facilitate implementation
of port security antiterrorism measures in foreign countries, with particular emphasis
on ports in the Caribbean Basin; this bill was introduced May 17, 2005, and reported
by the Senate Committee on Commerce, Science, and Transportation on November
17, 2005.
Crime
Rising crime is a major security challenge throughout the Caribbean. The
murder rate in Jamaica continues to soar, with 1,445 people killed in 2004 and more
than 1,600 people in 2005. With rate of 60 murders per 100,000 inhabitants in 2005,
Jamaica had the highest murder rate in the world.15 High levels of violent crime,
including murder and kidnaping, also have plagued Trinidad and Tobago and Haiti.
Even smaller Caribbean nations like St. Lucia have experienced a surge in violent
crime.
Gangs involved in drug trafficking, extortion, and violence are responsible for
much of the crime. Some observers believe that criminals deported from the United
States have contributed to the region’s surge in violent crime in recent years,
although some maintain that there is no established link. Jamaica has advocated the
development of an international protocol regarding the deportation of criminals.16
Caribbean Energy Security
A major concern for Caribbean nations — the majority of which are net energy
importers — has been the rising price of oil and the potential effect of such rising
prices on economic growth and social stability. In the Caribbean region, only three
nations — Trinidad and Tobago, Cuba, and Barbados — have significant oil and gas
reserves. Of these, only Trinidad and Tobago is a major oil and gas producer,
accounting for 60% of proven oil reserves and 91% of natural gas reserves in the
region. The country is also the largest supplier of liquified natural gas (LNG) to the
United States, accounting for 75% of all U.S. LNG imports. Apart from Trinidad and
Tobago, Cuba also produces oil, but still imports a majority of its consumption
needs. Barbados also produces a small amount of oil, which is refined in Trinidad
and Tobago, but it imports 90% of its oil consumption needs.17
15 “Jamaica Named Murder Capital of the World,” BBC Monitoring Americas, January 2,
2006.
16 “Jamaica Wants Protocol to Deal with Deportation of Criminals,” BBC Monitoring
Americas, September 24, 2005.
17 “Caribbean Fact Sheet,” U.S. Department of Energy, Energy Information Administration,
July 2005.

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CRS-15
Venezuela is now offering oil to Caribbean nations on preferential terms in a
new program known as PetroCaribe, and there has been some U.S. concern that the
program could increase Venezuela’s influence in the Caribbean region. Since 1980,
Caribbean nations have benefitted from preferential oil imports from Venezuela (and
Mexico) under the San Jose Pact, and since 2001, Venezuela has provided additional
support for Caribbean oil imports under the Caracas Energy Accord. PetroCaribe,
however, would go further with the goal of putting in place a regional supply,
refining, and transportation and storage network, and establishing a development
fund for those countries participating in the program. Under the program, Venezuela
announced that it would supply 190,000 barrels per day of oil to the region, with
countries paying market prices for 50% of the oil within 90 days, and the balance
paid over 25 years at an annual rate of 2%. When the price of crude oil is over $50
a barrel, as it is now, the interest is cut to 1%.18 To date, eleven Caribbean nations
are signatories of PetroCaribe. Barbados, which already receives discounted
petroleum rates from Trinidad, has declined to sign the agreement, and Trinidad,
which has its own significant energy resources, has declined to sign.
HIV/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. In 2005, an
estimated 300,000 adults and children in the Caribbean were reported to be living
with HIV, with the epidemic claiming 24,000 lives during the year, making it the
leading cause of death among adults aged 15-44 years. The Caribbean countries with
the highest adult prevalence or infection rates were Haiti, with a rate over 3%; the
Bahamas, Guyana, and Trinidad and Tobago with rates over 2%; and Barbados,
Belize, the Dominican Republic, Jamaica, and Suriname with rates over 1%.19 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 account for the majority of the region’s
infected 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 both
countries, however, there are indications that the epidemic could be reaching a
turning point because of prevention efforts.20
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
18 “Venezuela: Caribbean Will Receive 190,000 bpd,” Latinnews Daily, September 8, 2005.
19 UNAIDS, “AIDS Epidemic Update,” December 2005, p. 53.
20 Ibid., pp. 54-56.

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CRS-16
olds is two and one half times higher because of the epidemic.21 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.22 In Jamaica, the resort town of Montego Bay has the
highest HIV infection rates in the country.23 In the Dominican Republic, AIDS
activists are concerned about child prostitution in resort areas and the spread of
HIV.24
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.25 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.”26
The U.S. Agency for International Development (USAID) has been the lead
U.S. agency fighting the epidemic abroad since 1986. U.S. funding for HIV/AIDS
in the Caribbean region rose from $11.3 million in FY2001 to $23.4 million in
FY2003. Because of the inclusion of Guyana and Haiti as focus countries in the
President’s Emergency Plan for AIDS Relief (PEPFAR), U.S. assistance to the
Caribbean for HIV/AIDS increased to $36 million in FY2004 and $64 million in
21 UNAIDS, Latin America and the Caribbean Fact Sheet, July 2002.
22 “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.
23 “Rising Rate of AIDS in the Caribbean,” All Things Considered, National Public Radio,
July 2, 2003.
24 “AIDS Activists Worried Over Child Prostitution in Dominican Republic,” Boston
Haitian Reporter, January 31, 2003.
25 “Caribbean Leaders Call AIDS ‘Single Biggest Threat’ to Development, Announce Push
for Low-Cost Antiretrovirals,” Kaiser Daily HIV/AIDS Report, July 8, 2003.
26 World Bank, HIV/AIDS in the Caribbean: Issues and Options, March 2001, p. xii.

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CRS-17
FY2005, with Guyana and Haiti accounting for the lion’s share. The FY2006 request
was for $80 million, with Guyana and Haiti accounting for $68 million.
Some Members of Congress want to expand the list of Caribbean countries
beyond Guyana and Haiti that were cited in 2003 HIV/AIDS legislation, the United
States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (P.L.
108-25). In the 108th Congress, both the House-passed FY2004-FY2005 Foreign
Relations Authorization Act, H.R. 1950 (Section 1818), and the Senate Foreign
Relations Committee’s reported FY2005 Foreign Relations Authorization Act, S.
2144 (Section 2518), had provisions that would have added 14 Caribbean countries
to those listed in the 2003 legislation, but no final action was taken on these
measures. In the 109th Congress, S. 600, the Foreign Affairs Authorization Act,
FY2006 and FY2007, contains a provision (Section 2516) that would add 14
Caribbean countries to the list of focus countries targeted for increased HIV/AIDS
assistance.
Other legislative initiatives in the 109th Congress include the following: P.L.
109-95 (H.R. 1409, Lee), approved by both houses in October 2005, and signed into
law November 8, 2005, amends the Foreign Assistance Act of 1961 to provide
assistance for orphans and other vulnerable children in developing countries,
including in the Caribbean; H.R. 164 (Millender-McDonald), introduced January 4,
2005, would amend the Foreign Assistance Act of 1961 to provide for the
establishment of pediatric centers in certain developing countries, including Guyana,
to provide treatment and care for children with HIV/AIDS; and S. 350 (Lugar) and
H.R. 945 (Lee), both introduced in February 2005, would provide assistance to
combat infectious diseases in Haiti, including HIV/AIDS, and to establish a
comprehensive health infrastructure.
For further information, see CRS Report RL32001, AIDS in the Caribbean and
Central America, by Mark P. Sullivan; and CRS Report RS21181, HIV/AIDS
International Programs: Appropriations, FY2003-FY2006, by Tiaji Salaam-Blyther.

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CRS-18
Hurricane Disaster Assistance
Several Caribbean nations, especially Haiti, Grenada, Jamaica, and the
Bahamas, were hard hit by devastating hurricanes in 2004. Hurricane Charley struck
western Cuba in mid-August 2004 causing damage to over 70,000 homes and
thousands of hectares of crops. Hurricane Frances struck the Bahamas in September
2004, causing widespread damage throughout the country’s islands. Hurricane Ivan
caused severe damage across the Caribbean in September 2004: it devastated
Grenada with some 80%-90% of the nation’s buildings destroyed; it passed over
Jamaica causing damage in the western part of the island and in southern coastal
towns; it struck the British dependency of the Cayman Islands causing damage to
50% of homes on the island of Grand Cayman; and it affected western Cuba,
damaging houses and crops. Tropical Storm Jeanne caused devastating mudslides
and floods in northern Haiti in September 2004 that killed some 3,000 people, with
over 2,800 of those in the city of Gonaives. To date in 2005, Hurricane Dennis
heavily damaged Cuba and Grenada.
The United States provided humanitarian assistance to several Caribbean
nations in the aftermath of these storms and floods. USAID set up a Disaster
Assistance Response Team (DART) to respond to the disasters, with team members
located in the various islands. In addition, the 108th Congress appropriated $100
million in emergency assistance (P.L. 108-324) in late October 2004 for Caribbean
nations afflicted by the storms. The State Department announced that the $100
million 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. In the aftermath of the 2004 hurricane season, Congress
approved funding for the National Oceanic and Atmospheric Administration to
deploy new hurricane buoys to enhance monitoring in the Caribbean. In addition, for
several years, USAID has provided support for disaster preparedness and mitigation
in the Latin America and Caribbean region.
Some observers and Members of Congress had criticized current U.S. assistance
efforts for the Caribbean as too small in light of the devastation caused by the storms.
At the time, the Congressional Black Caucus called for $500 million in assistance to
Caribbean nations affected by the storms.27 Former President Jimmy Carter 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.28
27 Congressional Record, October 4, 2004, p. H7999.
28 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.

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Legislative Initiatives in the 109th Congress
General. H.Con.Res. 71 (Lee), introduced February 17, 2005, and passed by
the House on June 27, 2005, expresses the sense of Congress that there should be
established a Caribbean-American Heritage Month. H.Con.Res. 175 (Rangel),
introduced June 8, 2005, and passed by the House (382-6, 2 present), acknowledges
African descendants of the transatlantic slave trade in all of the Americas with an
emphasis on descendants in Latin America and the Caribbean, recognizes the
injustices suffered by these African descendants, and recommends that the United
States and the international community work to improve the situation of Afro-
descendant communities in Latin America and the Caribbean. H.R. 953 (Menendez),
introduced February 17, 2005, and S. 682 (Dodd), introduced March 17, 2005, would
authorize the establishment of a Social Investment and Economic Development Fund
for the Americas to proved assistance to reduce poverty and foster increased
economic opportunity in Western Hemisphere countries, including in the Caribbean.
H.R. 1130 (Waters), introduced March 3, 2005, would provide for the cancellation
of debts owed to international financial institutions by eligible poor countries,
including the Caribbean nations of Guyana, Haiti, and Jamaica.
Trade. P.L. 109-53 (H.R. 3045), the Dominican Republic-Central America-
United States Free Trade Agreement Implementation Act; both houses approved in
July 28, 2005, and the measure was signed into law August 2, 2005. Two identical
bills referred to as the Caribbean Basin Trade Enhancement Act of 2005 — H.R.
1213 (Hyde), introduced March 10, 2005, and S. 704 (Martinez), introduced April 5,
2005 — would authorize up to $10 million in FY2006 for the Organization of
American States (OAS) to establish a Center for Caribbean Basin Trade and up to
$10 million for the OAS to establish a skills-training program for Caribbean Basin
countries. H.R. 3176 (Menendez), introduced June 30, 2005, would amend the
Caribbean Basin Economic Recovery Act to provide for preferential treatment for
certain apparel articles that are both cut (or knit to shape) and sewn or otherwise
assembled in a beneficiary country under the act from fabrics or yarn not widely
available in commercial quantities.
Port Security. S. 1052 (Stevens), the Transportation Security Improvement
Act of 2005, introduced May 17, 2005, and reported by the Senate Committee on
Commerce, Science, and Transportation on November 17, 2005, includes a provision
(Section 504) that would establish a program to facilitate implementation of port
security antiterrorism measures in foreign countries, with particular emphasis on
ports in the Caribbean Basin. S. 744 (Nelson, Bill), introduced April 11, 2005, would
establish a Caribbean Basin Port Assistance Program.
HIV/AIDS. P.L. 109-95 (H.R. 1409, Lee), introduced March 17, 2005,
approved by both houses in October 2005, and signed into law November 8, 2005,
amends the Foreign Assistance Act of 1961 to provide assistance for orphans and
other vulnerable children in developing countries, including in the Caribbean. H.R.
164 (Millender-McDonald), introduced January 4, 2005, would amend the Foreign
Assistance Act of 1961 to provide for the establishment of pediatric centers in certain
developing countries, including Guyana, to provide treatment and care for children
with HIV/AIDS. H.R. 945 (Lee), introduced February 17, 2005, would provide

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CRS-20
assistance to combat infectious diseases in Haiti, including HIV/AIDS, and to
establish a comprehensive health infrastructure. S. 600 (Lugar), introduced March
10, 2005, the Foreign Affairs Authorization Act, FY2006 and FY2007, contains a
provision (Section 2516) that would add 14 Caribbean countries to the list of focus
countries targeted for increased HIV/AIDS assistance. The list already includes
Guyana and Haiti.
Tsunami Detection and Warning. P.L. 109-13 (H.R. 1268), Emergency
Supplemental for FY2005, signed into law May 11, 2005, provided $10.2 million for
buoys for the Pacific and Atlantic Oceans, Gulf of Mexico, and Caribbean Sea for
observing ocean conditions at depth. Several legislative initiatives have been
introduced in the 109th Congress regarding support for a U.S. tsunami detection and
warning system, including S. 50 (Inouye), passed by the Senate July 11, 2005; H.R.
1674 (Boehlert), ordered reported by the House Committee on Science May 4, 2005.
For analysis of these initiatives, and information on additional legislative initiatives,
see CRS Report RL32739, Tsunamis: Monitoring, Detection, and Early Warning
Systems, by Wayne A. Morrissey.
Cuba. Numerous legislative initiatives have been introduced in the 109th
Congress regarding Cuba’s human rights situation, U.S. economic sanctions
(including the overall embargo, travel restrictions, and restrictions on financing for
U.S. agricultural exports to Cuba), and radio and television broadcasting. For a
listing of legislative initiatives and action, see CRS Report RL32730, Cuba: Issues
for the 109th Congress, by Mark P. Sullivan.
Guyana. H.Con.Res. 74 (Meeks), introduced February 17, 2005, would express
the sense of Congress with respect to the urgency of providing adequate assistance
to Guyana, devastated by severe flooding. Also see H.R. 164 in the “HIV/AIDS”
section above; and H.R. 1130 in the “General” section above.
Haiti. Numerous legislative initiatives have been introduced in the 109th
Congress regarding Haiti, including on migration, reconstruction assistance, health
assistance, and on the establishment of an independent commission examining the
U.S. role in the 2004 “coup” in Haiti. For a listing of legislative initiatives and
action, see CRS Report RL32294, Haiti: Developments and U.S. Policy Since 1991
and Current Congressional Concerns, by Maureen Taft-Morales.
Montserrat. Two bills — H.R. 342 (Owens), introduced January 25, 2005, and
S. 297 (Schumer), introduced February 7, 2005, would provide for adjustment of
immigration status for certain aliens granted temporary protected status in the United
States because of conditions in Montserrat.

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CRS-21
For Additional Reading
CRS Report RL30935, Agricultural Trade in the Free Trade Area of the Americas,
by Remy Jurenas.
CRS Report RL32001, AIDS in the Caribbean and Central America, by Mark P.
Sullivan.
CRS Issue Brief IB95050, Caribbean Basin Interim Trade Program: CBI/NAFTA
Parity, by Vladimir Pregelj.
CRS Report RL32322, Central America and the Dominican Republic in the Context
of the Free Trade Agreement (DR-CAFTA) with the United States, coordinated
by K. Larry Storrs.
CRS Report RL32730, Cuba: Issues for the 109th Congress, by Mark P. Sullivan.
CRS Report RS21718, Dominican Republic: Political and Economic Conditions and
U.S. Relations, by Clare Ribando.
CRS Report RL31870, The Dominican Republic-Central America-United States Free
Trade Agreement (DR-CAFTA), by J.F. Hornbeck.
CRS Report RS21930, Ethanol Imports and the Caribbean Basin Initiative, by Brent
D. Yacobucci.
CRS Report RS20864, A Free Trade Area of the Americas: Major Policy Issues and
Status of Negotiations, by J.F. Hornbeck.
CRS Report RL32294, Haiti: Developments and U.S. Policy Since 1991 and Current
Congressional Concerns, by Maureen Taft-Morales.
CRS Report 98-684, Latin America and the Caribbean: Fact Sheet on Leaders and
Elections, by Mark Sullivan and Barbara Salazar Torreon.
CRS Report RL32733, Latin America and the Caribbean: Issues for the 109th
Congress, coordinated by Mark P. Sullivan.
CRS Report RL33162, Trade Integration in the Americas, by M. Angeles Villarreal.
CRS Report RL33200, Trafficking in Persons in Latin America and the Caribbean,
by Clare Ribando.
CRS Report RL32739, Tsunamis: Monitoring, Detection, and Early Warning
Systems, by Wayne A. Morrissey.
CRS Report RL32487, U.S. Foreign Assistance to Latin America and the Caribbean,
coordinated by Connie Veillette.

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CRS-22
Table 1. Caribbean Countries: Basic Facts
Per Capita
Population
Income
Area
(2004,
(U.S. $, 2004
Head of
Last
Country
(sq. miles) thousands)
est.)
Government
Election
Antigua and
170
80
10,000
Baldwin Spencer
Mar. 2004
Barbuda
Bahamas
5,382
320
14,920
Perry Christie
May 2002
Barbados
166
272
9,270
Owen Arthur
May 2003
Belize
8,867
283
3,940
Said Musa
Mar. 2003
Cuba
44,200
11,365
a
Fidel Castro
b
May 5,
Dominica
290
71
3,650
Roosevelt Skerrit
2005
Dominican
18,704
8,900
2,080
Leonel Fernandez
May 2004
Republic
Grenada
133
106
3,760
Keith Mitchell Nov. 2003
Guyana
82,980
772
990
Jagdeo Bharrat
Mar. 2001
Boniface
Haiti
10,714
8,600
390
Alexandrec
Nov. 2000
Percival James
Jamaica
4,244
2,700
2,900
Oct. 2002
Patterson
St. Kitts and
101
47
7,600
Denzil Douglas
Oct. 2004
Nevis
St. Lucia
238
164
4,310
Kenny Anthony
Dec. 2001
Dec. 7,
St. Vincent
130
108
3,650
Ralph Gonsalves
2005
May 25,
Suriname
63,037
443
2,250
Ronald Venetiaan
2005
Trinidad and
1,980
1,323
8,580
Patrick Manning
Oct. 2002
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 2006.
a. Estimated by the World Bank to be between $826-$3,255.
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. Alexandre became president February 29, 2004, following the resignation of President Jean
Bertrand Aristide.

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CRS-23
Table 2. U.S. Imports from Caribbean Countries
(U.S. $ millions)
Country
1984
2001
2002
2003
2004
Antigua and
7.898
3.741
3.527
12.767
4.366
Barbuda
Bahamas
1,154.282
313.889
449.697
479.305
637.331
Barbados
252.598
39.546
34.438
43.428
36.872
Belize
42.843
97.401
77.668
101.443
107.103
Dominica
.086
5.268
4.670
5.252
2.883
Dom. Republic
994.427
4,183.435
4,168.881
4,455.230
4,528.420
Grenada
.766
24.117
6.886
7.602
5.101
Guyana
74.417
140.344
115.615
118.690
122.667
Haiti
377.413
263.108
255.007
332.340
370.666
Jamaica
396.949
460.559
396.317
422.749
320.304
St. Kitts and Nevis
23.135
41.096
48.627
44.588
41.701
St. Lucia
7.397
28.911
19.180
12.999
14.347
St. Vincent
2.958
22.493
16.475
4.142
4.130
Suriname*
104.636
142.918
132.722
140.064
140.804
Trinidad and
1,360.106
2,380.010
2,440.304
4,333.753
5,854.311
Tobago
Total
4,695.275
8,146.836
8,170.016
10,514.352
12,191.006
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; 2000-2004 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.

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CRS-24
Table 3. U.S. Exports to Caribbean Countries
(U.S. $ millions)
Country
2001
2002
2003
2004
Antigua and Barbuda
95.526
81.359
127.314
125.270
Bahamas
1,026.342
975.309
1,074.694
1,182.066
Barbados
286.613
267.646
300.095
347.579
Belize
173.167
137.667
198.808
151.675
Dominica
30.690
44.972
34.332
35.890
Dominican Republic
3,757.045
4,250.068
4,205.449
4,342.882
Grenada
59.873
56.406
68.420
69.910
Guyana
141.252
128.208
117.148
135.620
Haiti
550.383
573.185
639.441
663.001
Jamaica
1,405.522
1,420.187
1,469.545
1,431.596
St. Kitts and Nevis
46.338
49.461
58.768
60.417
St. Lucia
86.743
99.499
119.544
103.304
St. Vincent
38.836
40.449
46.216
45.396
Suriname
155.306
124.757
192.655
178.561
Trinidad and Tobago
1,087.143
1,020.211
1,063.297
1,207.194
Total
8,940.779
9,269.384
9,715.726
10,080.361
Source: Trade statistics are from the Department of Commerce, as presented by World Trade Atlas.

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CRS-25
Table 4. U.S. Foreign Assistance to the Caribbean,
FY2002-FY2006
(U.S. $ millions)
FY2005
FY2006
Country
FY2002
FY2003
FY2004
(estimate)
(request)
Bahamas
1.444
1.336
1.264
1.331
0.840
Belize
1.876
2.046
2.082
2.116
2.085
Cuba
5.000
6.000
21.369
8.928
15.00
Dominican
22.280
28.099
33.968
29.095
28.078
Republic
Guyana
5.677
8.407
11.590
18.548
27.215
Haiti
55.925
71.887
132.324
163.596
196.473
Jamaica
19.102
22.337
24.186
23.151
19.364
Suriname
1.140
1.397
1.471
1.504
1.495
Trinidad and
0.432
0.540
0
0
0.050
Tobago
Caribbean
3.550
13.008
10.310
107.540
9.655
Regional
Eastern
Caribbeana
15.491
4.255
6.900
4.851
4.978
Third Border
—
3.000
4.976
8.928
6.000
OAS Special
Mission in
—
—
4.971
—
—
Haiti
Operation
Enduring
—
—
—
—
5.00
Friendship
Total
131.917
162.312
255.411
369.588
316.233
Source: U.S. Department of State, FY2004-FY2006 Congressional Budget Justifications 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.

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CRS-26
Table 5. U.S. Foreign Assistance to the Caribbean by Program,
FY2005 Estimates and FY2006 Requests
(U.S. $ millions)
Country
DA
CSH GHAI ESF PL 480 IMET
INCLE FMF Other
Total
Bahamas
FY2005 Est.
.24
.99
.10
1.33
FY2006 Req.
.24
.50
.10
.84
Belize
FY2005 Est.
.20
.20
1.72
2.12
FY2006 Req.
.20
.20
1.69
2.09
Cuba
FY2005 Est.
8.93
8.93
FY2006 Req.
15.00
15.00
Dominican Republic
FY2005 Est.
7.06 13.00
2.98
1.10
.99
3.36
29.09
FY2006 Req.
9.08 10.55
3.00
1.10
1.00
3.35
28.08
Guyana
FY2005 Est.
3.46
13.15
.30
.10
1.54
18.55
FY2006 Req.
3.94
21.36
.30
.10
1.52
27.22
Haiti
FY2005 Est.
25.00 20.00 39.37 39.68
37.70
.15
.30
1.39 163.59
FY2006 Req.
19.32 47.00 50.00
32.53
.22
15.00 1.00
31.41 196.48
Jamaica
FY2005 Est.
12.88
4.56
.70
1.48
.60
2.93
23.15
FY2006 Req.
10.91
3.29
.70
1.00
.60
2.87
19.37
Suriname
FY2005 Est.
.15
.10
1.26
1.51
FY2006 Req.
.15
.10
1.25
1.50
Trinidad & Tobago
FY2005 Est.a
FY2006 Req.
.05
.05
Third Border Initiative
FY2005 Est.
8.93
8.93
FY2006 Req.
6.00
6.00
Operation Enduring Friendship
FY2005 Est.
FY2006 Req.
5.00
5.00
Caribbean Region
FY2005 Est.
2.81
4.73
100.00 107.54
FY2006 Req.
4.92
4.73
9.65
Eastern Caribbean
FY2005 Est.
.80
.99
3.06
4.85
FY2006 Req.
.78
1.25
2.95
4.98
Total - FY2005 51.81 42.29 52.52 60.52
37.70
3.64
2.47 3.38 115.26 369.59
Total - FY2006 28.85 37.89 68.36 74.00
32.53
3.74
16.50 9.35
45.04 316.26

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CRS-27
Source: Figures are drawn from Congressional Budget Justification, Foreign Operations, Summary
Tables, Fiscal Year 2006 U.S. Department of State. Table prepared by CRS, March 29, 2005.
“Other” includes Peace Corps; $100 million for Caribbean Regional assistance was for disaster
assistance; and $30 million for Haiti is for Transition Initiatives. Operation Enduring Friendship
includes activities in Panama.

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CRS-28
Figure 1. Caribbean Region

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