CARICOM Single Market and Economy

The Treaty of Chaguaramas which established the Caribbean Community (CARICOM) was signed at Chaguaramas, Trinidad, on 4 July, 1973 by Barbados, Guyana, Jamaica and Trinidad and Tobago, and came into effect on 1 August, 1973. The Treaty of Chaguaramas was first signed by Prime Minister Hon. Errol Barrow of Barbados, Prime Minister Hon. Forbes Burnham of Guyana, Prime Minster Hon. Michael Manley of Jamaica and Prime Minster Hon. Eric Williams of Trinidad and Tobago.

Subsequently, the other eight Caribbean territories joined CARICOM in 1974. These were Antigua and Barbuda, British Honduras (Belize), Dominica, Grenada, Montserrat, Saint Lucia, St. Kitts/Nevis/Anguilla (Anguilla later left the union with St. Kitts/Nevis) and St. Vincent and the Grenadines. The Bahamas became the 13th Member State of the Community on 4 July 1983 but not a member of the Common Market. Suriname became the 14th Member State of the Caribbean Community on 4 July 1995. Haiti secured provisional membership on 4 July 1997 and is now a full member of the CARICOM.

A number of Caribbean territories have been granted Associate Membership status in CARICOM. These are Anguilla on 4 July 1998; British Virgin Islands on 2 July 1991; Turks and Caicos Islands on 2 July 1991 Cayman Islands on 16 May 2002 and Bermuda on 2 July 2003. CARICOM now has 15 Member States and five Associate Members. In 1989, the Heads of Government of the Caribbean Community (CARICOM) at their Tenth Conference in Grand Anse, Grenada declared their intention to deepen the integration process and strengthen the Caribbean Community in all its dimensions. The Leaders, at that time, determined that the Region would work towards the establishment of a Single Market and Economy as one aspect of its response to the challenges and opportunities presented by the changes in the global economy. By 1992, at their Thirteenth Conference, the necessary technical work on, and conceptualization of, the CARICOM Single Market and Economy (CSME), was completed and presented for endorsement by the Heads of Government. In essence, the CSME was conceived as an instrument to facilitate economic development of the Member States in an increasingly liberalized and globalized international environment.

The Benefits of the CSME to the Caribbean

full employment in CARICOM;
improved standards of living and work;
accelerated, coordinated and sustained economic development;
increased economic leverage and effectiveness of Member States, groups of States and entities;
expansion of trade and economic relations with other Caribbean Countries, Central and Latin American Countries;
the achievement of increasing levels of competitiveness; and
organization for increased production.

MISSION STATEMENT

We envision a Caribbean Community in which every citizen has the opportunity to realize his or her human potential and is guaranteed the full enjoyment of their human rights in every sphere; in which social and economic justice is enshrined in law and embedded in practice; a Community from which poverty, unemployment and social exclusion have been banished; in which all citizens willingly accept a responsibility to contribute to the welfare of their fellow citizens and to the common good; and one which serves as a vehicle for the exercise of the collective strength of the Caribbean region, and the affirmation of the collective identity of the Caribbean people, in the world community.

SCOPE AND DEVELOPMENT VISION

I. CONTEXT AND BACKGROUND

The CARICOM Single Market and Economy (CSME) will establish a single economic space within which business and labour operate; in order to stimulate greater productive efficiency, higher levels of domestic and foreign investment, increased employment, and growth of intra-regional trade and of extra-regional exports. The Single Market component consists of freedom of movement of goods, services, capital, business enterprise and skilled labour within an area bounded by a customs union. This has been largely completed, and the Community now looks forward to implementation of the Single Economy.

Under the Revised Treaty of Chaguaramas, this requires harmonization of policies, laws, and regulations; enhanced monetary cooperation, and common external economic policies. However, stakeholders agree that there is a huge ‘information deficit’ regarding the CSME among the ordinary citizens of the Community and a major ‘credibility gap’ regarding its completion. Many citizens are cynical about the slow pace of implementation, while others are apprehensive about the possible adverse effects of increased competition for jobs and markets. It is obvious that a much greater effort at public education and consciousness-raising is necessary.

Articulating a single development vision offers an opportunity to show the regional public that the CSME can be an instrument for achieving, in a regional framework, certain development goals that are difficult or impossible to achieve individually by member states. A single vision also provides a framework of shared objectives to guide policies, priorities and sequencing for further implementation of the CSME. Nonetheless if implementation continues to lag behind commitments undertaken, the credibility of the integration process will be further undermined and the naysayers will find vindication.

Reform of Community governance that addresses the implementation deficit is, therefore, crucial to the realization of the Vision. Stakeholders also agree that the Vision should not be exclusively economistic; that is, concerned only with, trade, investment and business opportunities. Popular support for integration requires that economic benefits are spread broadly across countries and social groups; and that it makes a difference to quality of life issues such as crime, health and education. In other words, the Vision should be holistic, relating to all dimensions of development; and there must be perceptible ‘value added’ that derives from the existence of the Community. This is why functional cooperation--the second pillar of integration—is so important. Functional cooperation is not necessarily based on legal instruments or on the operation of market mechanisms: it is essentially a process of sharing services and undertaking joint activities in order to reduce costs and achieve synergies. Several kinds of functional cooperation are mentioned in this Report; notably health, human resources development, security, foreign trade policies, and research and development. Functional cooperation in the economic field has a direct economic benefit in helping to realize the potential of market integration.

In social, political and environmental matters, functional cooperation supports economic development by improving labour productivity, systemic competitiveness and sustainability. Just as important, functional cooperation speaks to other aspects of development, helping to provide integration with a ‘human face’ and facilitating broad stakeholder involvement. Hence, it is to be seen as an integral part of the integration process and as an indispensable complement to the CSME. If most of this report is devoted to CSME-related subjects, this is not to downplay the importance of progress in other integration activities.

The CSME by itself, therefore, cannot be ‘all things to all men’, neither should we expect more from it than it can realistically deliver. Even as an economic instrument, it should not be regarded as a cure-all for the region’s economic problems and its benefits will take time to be realized. Most of the development effort will continue to be made nationally and sub-regionally; but this will be bolstered by creation of a single economic space and by functional cooperation.

The third pillar of integration is foreign policy coordination. This strengthens the Community in its dealings with the wider world, increases its ability to make external arrangements that support its development objectives, and enhances the collective identity and collective capacity of Caricom states in their interactions with the world community. This is another element of ‘value added’ in integration.