THE 1987 trade bill would mandate promoting American competitiveness and treating troublesome trading partners more firmly. The future of our economy could depend upon these laws, but as it puts the bill in final form, Congress would be mistaken to sacrifice essential foreign policy aims to our domestic needs. The Caribbean Basin and Central America retain a special importance for the United States. Eminent Presidents including both Theodore and Franklin Roosevelt and John F. Kennedy have recognized the value of a US policy to promote prosperity, stability, and democracy among our southern neighbors. Social and economic turmoil in the Caribbean threatens vital interests of the US, triggering national debate in recent years over our policies toward Nicaragua, El Salvador, Grenada, Haiti, and now Panama.
The imperatives of conscience and national interest carry special weight in a region where, because of proximity and each country's limited size, US policy can have a positive impact.
The Reagan administration's policy in the Caribbean has been dominated by attempts at controversial military solutions to social and economic problems. Even aside from support for the contras, US aid has had a heavy military bias. In Central America during the first half of this decade, 67 percent of a total of $3.5 billion in aid had a direct security purpose, and these figures do not include expenditures for the military maneuvers in Honduras that have been going on almost continuously since 1982.
The Caribbean Basin Initiative (CBI) remains the major exception to this trend. Adopted in 1983, this initiative was designed to stimulate economic growth in the Caribbean countries by giving them duty-free access to US markets. Properly implemented, CBI offers a brilliant long-term solution to American regional security concerns; it works to solve the core problems of frustration and deprivation which the administration's contra policy only exacerbates.
Yet concern about harm to certain US industries, constraints imposed by existing trade arrangements, and weak bureaucratic coordination have undermined the initiative's integrity. In the first two years of the program, non-oil imports from the region increased at less than half the rate of growth in imports from around the world.
The US has repeatedly focused on its southern neighbors. Neither Franklin Roosevelt's Good Neighbor Policy nor John Kennedy's Alliance for Progress fully realized its goals, but we have learned important lessons.
The US has learned to focus on simple and straightforward programs including trade benefits and economic aid. Providing access to US markets and encouraging the development of new industries, CBI is a straightforward and workable program. Its essential purpose is to create jobs. In a region where unemployment has hovered around 20 percent in recent years, job creation is essential to address effectively the mass frustration that can lead to revolution and dictatorship.
In its desire to make America competitive, the Congress need not anguish over the effects of CBI. In recent years, total imports from these countries have amounted to less than 0.3 percent of US gross national product. Less than 10 percent of those imports entered duty-free under CBI.
A recent study by the Department of Labor concluded that ``imports from CBI beneficiaries do not appear to have had an adverse impact on, or have constituted a threat to, domestic employment.'' The International Trade Commission endorsed this conclusion, determining that ``the impact of CBI on US industries and consumers has been minimal.''
I have included measures in the trade bill to protect the integrity of CBI against other provisions within the bill. With the leadership of Sen. Bob Graham, legislation to extend CBI for 12 years from the enactment of the bill has also been included. Working together with members of the House Ways and Means Committee, I intend to introduce separate measures to reinforce the initiative, including better means of accountability and coordination and better promotion of investment.
The Caribbean Basin Initiative has a natural bipartisan constituency. Introduced by a Republican administration, it has the strong support of legislators from both parties. Its primary opponents are the representatives of specific producers, yet many of these industries are in better economic health now than when the CBI legislation was adopted.
Most important, CBI has the committed support of the governments of the region. They recognize that this is a policy not of intervention, but of opportunity. A group of Washington ambassadors from CBI countries has set up a seven-point program to promote the initiative. President Oscar Arias S'anchez wrote to me in May that ``we in Costa Rica praise the Caribbean Basin Initiative,'' noting that fostering economic growth is ``obviously instrumental in securing peace.''
But the administration clings to a Nicaragua policy that is fundamentally anchored with the contras. That policy remains both morally and politically untenable at home and abroad. The contra policy only lends substance to anti-US rhetoric, and solidifies the Sandinista alliance with the Soviet Union. The Arias plan represents the most promising political solution to the Nicaraguan problem. CBI, which can surround Nicaragua with enviable prosperity, is the most promising long-term economic solution. It is the policy to help change Nicaragua and to forestall future Nicaraguas, and it is time we gave it full support.
US Sen. John Kerry (D) of Massachusetts is a member of the Committee on Foreign Relations.