The U.S. initiative was coordinated with Mexico, Canada, and Venezuela. The CBI included the elimination of U.S. tariffs on Caribbean Basin exports over the course of twelve years; the creation of investment incentives, mainly through tax reforms, to encourage U.S. investment in the region; and an emergency Fiscal Year 1982 supplemental appropriation of $350 million in U.S. aid to assist the private sector in countries in which foreign exchange and trade was the most difficult.
The CBI had three primary goals: to increase economic growth, to strengthen democracy, and to provide security. Most of the specifics of the CBI dealt with economic policies. The centerpiece of the economic component was the elimination of U.S. duties. There were two exceptions to this free-trade initiative, however. Tariffs on textiles and apparel would remain in place, and sugar tariffs would be reduced but not fully eliminated. The U.S. government would, however, extend more favorable treatment to textile and apparel exports under other bilateral and multilateral agreements. In addition, Washington would attempt to negotiate bilateral investment treaties with interested countries in the region. Finally, the United States pledged to work with the Overseas Private Investment Corporation and the Export-Import Bank to provide increased risk insurance and short-term credit to bolster private-sector investment efforts.
It is difficult to assess just how much economic growth was stimulated by the CBI. It appeared that U.S. officials were not willing to wait for increases in economic growth to lay the groundwork for regional political stability. For instance, in October 1983, fearing Cuban exploitation of political unrest, the Reagan administration sent a contingent of U.S. Marines to Grenada to quell a potential communist insurgency there. Throughout the 1980s, Washington gave large amounts of economic and military aid to right-wing governments in the region to head off left-wing insurgencies. By the early 1990s, the CBI had been subsumed by the Free Trade Area of the Americas, a free-trade zone for the entire Western Hemisphere.
James F. Siekmeier
Bamberg, James. British Petroleum and Global Oil, 1950-75: The Challenge to Nationalism. Cambridge: Cambridge University Press, 2000.; Maingot, Anthony P. The United States and the Caribbean: Challenges of an Asymetrical Relationship. Boulder, CO: Westview, 1994.; U.S. Department of State, Bureau of Public Affairs. Background on the Caribbean Basin Initiative. Special Report No. 97, March 1982.; U.S. Department of State, Bureau of Public Affairs. Caribbean Basin Initiative in Perspective. Current Policy No. 381, 11 March 1982.