Remarks on the Caribbean Basin Initiative at a White House Briefing for Chief Executive Officers of United States Corporations

April 28, 1982

Well, anyone still drinking coffee and doing things like that, go right ahead. And welcome to the White House.

I can't tell you how much I appreciate -- I know how busy your lives all are and that you're willing to come here and spend this time with us. But I think the subject is an important one, one that can help to shape the history of our hemisphere in a positive way for many generations to come. The magic of the marketplace, as all of us know, has made the United States the economic wonder of the world. And I'm convinced it can be used to bring a freer, more abundant life to our neighbors in the Caribbean Basin region.

Now, I know that you'll be meeting this afternoon with Al Haig and Don Regan, Bill Brock, Peter McPherson, and other senior administrative officials, so I will try not to steal any of their lines, use any of their material. But I can't stress enough how strongly I feel the potential for good, for human betterment, and for our own national interest is tied to what we've called the Caribbean Initiative.

More than 2 years ago, when I announced my candidacy for President, I spoke of an ambition to bring about an accord with our two neighbors of the North American continent. And I used the word ``accord'' deliberately. I wasn't thinking of any rigid, new arrangement, but rather of strengthening and renewing the natural ties that unite the freedom-loving peoples of the Americas. And this past February I carried this concept a step farther in announcing our Caribbean Basin Initiative, a comprehensive program to enhance security and cooperation with our Caribbean neighbors.

I realize that some of our citizens may have been a little skeptical at first -- why us? and why now, with all our troubles? and why the Caribbean Basin? Well, the answer, it seems to me, is as clear as it is urgent. Our neighbors in the region, some two dozen countries of the Caribbean and Central America, are not unfamiliar names from some isolated corner of the world far from home. The country of El Salvador is closer to Texas than Texas is to Massachusetts. I mean that geographically, not necessarily ideologically. [Laughter]

The Caribbean region is a vital strategic and commercial artery for the United States. It's literally our third border. Almost half of our trade -- our import and export trade and two-thirds of our imported oil -- over half of our strategic materials pass through the Panama Canal or the Gulf of Mexico. It's in our own vital interest to help our Caribbean friends to protect themselves from hostile, foreign-inspired forces that would impose an alien ideology through the use of violence and terrorism. One of those islands has already been influenced and pretty much guided by Cuba, and lately the reports that we get are of military buildup beginning on that island. It certainly can't be for defense against its neighbors.

Elements of our assistance program address this problem, I think, and they are crucial to the success of our broader hopes for peaceful economic development. But security assistance alone is only part of the picture. To me the most exciting and promising aspect of the Initiative is our economic program, a program that can plant the seeds of prosperity, freedom, and stability for the average citizens of the region by fostering the free flow of goods, ideas, and technology in a free-market setting.

Just to give you an idea of the difficulties they face, in 1977 1 barrel of oil was worth 5 pounds of coffee or 155 pounds of sugar. To buy that same barrel of oil now these small countries must provide five times as much coffee or more than twice as much sugar. This is consuming their money reserves and credit, forcing thousands of people to leave for other countries -- and a great many of them leave illegally for the United States. It's shaking even the most established democracies down there, and as always happens, economic disaster has provided fresh openings for the foes of freedom, national independence, and peaceful development. So, the economic threat to the region is also a political and a human one.

Now, last year I went to the Cancun summit of developed and developing countries and offered a fresh view of the development process. I recall that I was advertised in advance very widely throughout the country as going down where I would be burned in effigy -- if not actually in person -- and it didn't turn out that way. For the past 15 years the world has been led to believe that the road to development is paved with massive aid transfers and centralized international institutions. Well, the historical record shows that those countries that have succeeded have used chiefly their own resources and pursued policies which emphasize trade, investment, and the role of the private sector. And that is what I talked about at Cancun -- the idea of our willingness to help them get on their feet and have the kind of economies that could provide jobs and a good living for their people and that they wouldn't have to become boat people, trying to find someplace where they could live.

Now, in consultation with other governments of the Americas and with leaders of the Basin region, we have come up with a balanced package of trade, investment, and foreign assistance, offering practical examples of the view that I presented there at Cancun. If our program works -- and our own experience suggests that it can -- the Caribbean Basin Initiative can change the course of development around the world. It can usher in a new era of more free-market policy in many countries which, since their recent independence, have often marched to a different drummer.

Your role -- the private sector role -- is critical. From the very outset we've stressed that to work, our initiatives aid package must be complemented by trade and investment to help the peoples of the Caribbean Basin region earn their own way to self-sustaining growth. Our aid will encourage private sector activities instead of displacing them.

The heart of the program is free trade for Caribbean Basin products exported to the United States. Currently some 87 percent of these exports already enter U.S. markets duty free, many under the Generalized System of Preferences. But these exports only cover a limited range of existing products, not the rich variety of potential products these talented and industrious people are capable of producing under the free-trade arrangement that we've proposed.

Under our program, exports from the area will receive duty-free treatment for 12 years. Now, thus, new investors will be able to enter the market knowing that their products will receive duty-free treatment for at least the payoff lifetime of their investments. The only exception to the free-trade concept will be textiles and apparel and sugar. In these cases, our immediate neighbors will receive quotas as liberal as are consistent with our domestic and international obligations under law.

The impact of this free-trade approach will develop slowly. The economies we seek to help are small. Even as they grow, all the protections now available to U.S. industry, agriculture, and labor against disruptive imports will remain. And growth in the Caribbean will benefit everyone with American exports finding new markets.

The tax incentives we're asking the Congress to provide will further encourage investment in the Caribbean Basin. We're also prepared to negotiate bilateral investment treaties with individual Basin countries. And we're also asking for economic support funds to provide direct aid to these countries to help them overcome balance of payment problems and also to help those who cannot be really open to investment until there has been something done about their lack of infrastructure -- power, sewage facilities, things of that kind.

Through your leadership and example, we can prove anew that economic freedom works and that it's still the best path to peace and prosperity. Government can't do it alone. You are indispensable.

What can you do specifically? Well, first, if I could, let me ask you to, if necessary, familiarize yourself with the various programs in AID, OPIC, the Department of Commerce, the Department of Labor, other Government agencies that support the Caribbean Basin Initiative.

Second, let me encourage you to make available to these agencies, should they request it, some of your highly qualified midcareer people who can bring a realistic perspective to these government programs. At AID, Peter McPherson is developing a new private enterprise bureau. That bureau needs investment specialists to advise on making our aid programs more helpful in creating the infrastructure that is needed to support private investment.

Third, reconsider the prospects for your companies to invest in the Caribbean. Take another look at this region in light of the commitment which this government and other governments of Mexico, Canada, Venezuela, and Colombia have undertaken to encourage private sector development in the Caribbean.

And fourth, let us have your comments and advice, as you move into this region, about what we could do better.

Fifth, help us to secure passage of the Caribbean Basin legislation now pending before the Congress. And I have a hunch that you know somewhat how to contact your Congressmen with that regard.

I'm confident that a sustained, working relationship can grow out of the meetings that you'll have here today. As I said in my radio speech last Saturday, this could be the start of something big.

Nearly a century ago, a great citizen of the Caribbean and the Americas, the Cuban poet and statesman Jose Marti, wrote that ``Mankind is composed of two sorts of men: those who love and create, and those who hate and destroy.'' Our own history proves that the forces of freedom and economic vitality can unlock what is best in human nature. In this country, we've made freedom work. And with your help, our friends in the Caribbean Basin can do the same thing for themselves.

Let me just say a word if I could, now, about -- if you're not familiar with them -- about the people down there.

I recently made a trip down there. It was widely heralded as a vacation. I did take a day and a half off to go swimming and then found out, the second day I went swimming, that even the natives didn't go in when the water was that rough -- that I shouldn't have gone in. [Laughter] But I made it back to shore. So, I was told by officials I met down there with -- and Prime Ministers of half a dozen of the Caribbean nations -- met with Prime Minister Seaga on Jamaica, and we spent the rest of our time on Barbados there with their very fine Prime Minister, and the others came there for the meetings that we held. I was told, by these officials, that I would find, there on those islands, that there was a great love for America. And, unlike some of the places where we've had to go and ignore the graffiti on the walls, it was true.

I never have felt such warmth on the part of just the rank-and-file citizenry. They went out of their way. They waited, sometimes hours, just for you to go by so they could yell, ``We love you.'' And I am convinced -- they're also -- they haven't been spoiled by as much welfare as we have in our country.

I was talking to the Prime Minister in Barbados about how some of our people out in my own State who prefer surfboarding to working had worked out a system where unemployment insurance could be manipulated to make it possible for them to do that a great deal of the time. And the Prime Minister said, ``Well, we have the kind of people -- we have surfers and people that love the beach that way here too, but,'' he said, ``they don't do it that way.'' He said, ``For example, a German came here and brought the first surfboard that any of them had ever seen. And,'' he said, ``within 2 weeks, he had partners, and they were in the business of making surfboards.'' And it was these so-called beach bums -- [laughter] -- that had joined with him. So, I think that there is a great prospect, but I also think that it's very necessary.

There has evidently been a news story, which I haven't seen but which I've heard about, critical of this -- critical also of the program for Jamaica. And I'm going back and read that story, because I think it's time for a statement to be made and I want to make that statement. I conceived the idea of doing something for Jamaica when Seaga won the election and took that country back from Communist rule. But already under that Communist rule the economy had been virtually destroyed and devastated.

And I turned to the private sector and asked -- and asked David Rockefeller to be chairman of a group -- if they would, as a task force, go and see how we could use private enterprise to help restore the economy and make sure that this course that had been set out by Prime Minister Seaga would work. And this they did. And already, the results -- not completely home-free -- but the results have been amazing.

A once great resort area which had dropped to 40-percent occupancy of its resort hotels saw in this last season a hundred-percent occupancy. And it was from this that I conceived the idea of the Caribbean Initiative. And once having named that, we found that in addition to helping with the original task force -- Canada, Venezuela, other countries -- that Mexico, Canada, Venezuela, Colombia have all said they want to be a part of the Caribbean Initiative.

This was started by this administration with the idea that it is for the good and the welfare of the United States as well as for those neighbors of ours and for that strategic area.

I think all of us here are old enough to remember World War II when down in that area tankers and freighters -- the Wolf Pack submarines in World War II were destroying them within sight of land, and it brought Winston Churchill to the lowest point in his feeling about whether we could be successful in World War II. And then we found an answer to the Wolf Pack submarines. Well, I think right now that the same national security interest is a part of what we're talking about here.

And therefore I'm going to do what the little girl in her letter to me said when she told me all the advice she could give me about what to do as President and then added a P.S. and said, ``Now get back to the Oval Office and get to work.'' [Laughter] I'll do that, and Elizabeth Dole is going to come up here, and I know you have a program then that has been set for the afternoon.

But again, just a heartfelt thanks. God bless you for coming here and at least evidencing this for your willingness to do something in this regard.

Thanks very much.

Note: The President spoke at 12:50 p.m. in the State Dining Room at the White House.

Elizabeth H. Dole is Assistant to the President for Public Liaison.