While Belize has considered itself an ally of democracy and has depended on good relations with the United States, it also has consistently supported third world nationalist movements—including the Palestine Liberation Organization (PLO), the Polisario Front (fighting for the independence of Western Sahara), and Cuba. Belize has good economic and political ties with both Mexico and the Caribbean Community and Common Market (CARICOM), to which it belongs; it has also joined the 77-member African, Caribbean, and Pacific Group of States (ACP Group), created to manage trade relations with the European Union (EU).
Export competition from Mexico and Guatemala, along with concern about Mexico's continued appeal to Belizean consumers, have strained relations between the two countries. Belize joined other CARICOM nations in opposing the U.S. campaign against European Union (EU) import preferences for Caribbean products, especially bananas. Belize's export of bananas (the country's top export product) to the EU created tension in trade relations with the United States and led to restrictions on Belizean banana exports to the United States. In December 1998, the Musa government launched a vigorous "Buy Belizean" campaign, aimed at winning the attention—and budgets—of growing number of Belize consumers who travel north to Mexico to shop.
While the economy remained the major challenge, the government has taken steps to achieve a permanent settlement of the country's most volatile political issue, its relationship with neighboring Guatemala, which long claimed Belize. The issue, and the political divisions surrounding its resolution, effectively delayed Belizean independence for at least a decade. Even after independence, a British garrison remained in Belize to support the tiny Defense Force against any Guatemalan threat. In the late 1980s, however, Guatemala, concerned about its growing international isolation, indicated its willingness to resume negotiations on settling the dispute. In 1991, Guatemalan president Jorge Serrano recognized Belize's right to self-determination and the two countries agreed to establish diplomatic relations. The PUP pledged to enact legislation stating that Belize would not claim its territorial sea rights beyond three miles in the south and would undertake mutual development projects, including tourism and agroindustry, in a Joint Development Zone.
Initially endorsed by the UDP leadership, the terms of the agreement, embodied in the legislation, encountered widespread opposition, especially in the economically neglected south, and provoked a split in the opposition coalition. The UDP leadership then reversed itself, proposing legislation not take effect until a referendum was held. The government passed the Maritime Areas Act (MAA) in January 1992, amended to state that it would be subject to a national referendum. Then, in May 1993, Britain announced that its troops would be reduced and eventually withdrawn from Belize. Three weeks later, Serrano was overthrown and replaced. In the midst of this uncertainty, the PUP leadership, confident that its mandate would be renewed, called a general election for 30 June even though their term did not expire until September 1994. But the PUP underestimated the depth of Belizean concerns on this issue, which intensified with the fear that 5–10% of the GDP—and some 3,000 Belizean jobs—would be lost with the British withdrawal.
After the UDP victory in June 1993, the MAA, while not repealed, was never put to a referendum and the issue was again put on hold. In Guatemala, the new government acknowledged the interim agreement but declared that until a final treaty was concluded, its claim remained valid. In late 1993, however, Belize and Guatemala pledged to refrain from using force against each other and, on 1 January 1994, Britain handed over security responsibilities to Belize and began its troop withdrawal. This was completed in 1996 and talks resumed between Belize and Guatemala on normalizing relations.
Long-standing fears about Guatemala, stemming from its more developed economy and large and growing population, as much as its more powerful military, kept the issue volatile in Belize and made broad-based economic development a central policy issue. Perhaps recognizing this, the PUP made economic empowerment of the south part of its election manifesto.
The territorial dispute erupted anew in 2000 with the murders of two Guatemalans by Belizean border guards. Yet on 20 July 2000, Belize and Guatemala signed an agreement based on the de facto boundary (which is not recognized by Guatemala) at the Organization of American States (OAS) toward a resolution of the border dispute. The agreement is tenuous at best, as evidenced by a flare-up of tension in January 2001. Border patrols accused 200 Guatemalans of trespassing in Belize and Guatemala defended their rights to settle the area. Officials from both countries met with OAS representatives to find a solution to the stand-off. The countries are committed to building a relationship of peace.
In 2002, Belize and the United States signed an agreement to combat drugs, violent crime, and money laundering. Under the agreement, the United States would commit $434,500 to a series of projects, including the Belize Law Enforcement Infrastructure, the establishment of a forensics laboratory, and programs for case management and prosecution of criminal activity.
Said must balance his country's need to develop its economy with its relations with neighboring Guatemala and its powerful trading partner, the United States.