Full implementation of the CARICOM Single Market and
Economy (CSME) is an expensive transition for the
Member States of the Community, from separateness to
togetherness; a truth that is imperative for all
stakeholders to comprehend.
Mr. Ivor Carryl, Programme Manager of the CSME
Unit in Barbados, recently imparted a genuine
life-lesson in CSME issues and procedures during an
interview with the UWI-CARICOM Project. The
discourse between Mr. Carryl and the Project
underscored a triathlon that began with the Grand
Anse Declaration in Grenada 1989, and more
substantively with the signing of the Revised Treaty
of Chaguaramas, which includes the CSME, by Heads of
Government of CARICOM at the 22nd Meeting of the
Conference in Nassau, The Bahamas, on 5 July, 2001.
Liberalisation,
harmonisation/homogenisation and
establishment of institutions are the necessary
implementation tasks to be comprehensively executed
in order to place each Member State on a secure,
track-worthy CSME train for a lasting destination
towards Caribbean integration. Simultaneously,
stakeholders are obliged to conquer the other two
limbs of the tripartite cognitive challenge relating
to parameters of the Treaty, the association of
sovereign states model for economic integration, and
the need for superlative economic resources for
implementing the CSME.
Money
Acknowledging that the pace of implementation is
not as quick as the public would like, arguably,
chiefly concerns the mass Caribbean public, Mr.
Carryl in a manner not contrived, said:
“This thing (integration) is not for free. It
costs money to do; all of it. It costs money to
set up new institutions. One of the reasons why
some of these implementation tasks have not been
done is because Governments are checking to see
if their fiscal capacity can afford them. The
same people who are complaining about the [lack
of] speed at which it is happening have to be
prepared to pay their taxes so that the
Governments can contribute to the requirement of
putting the measures and institutions in place.
The idea that integration is not moving quickly
has to be disabused of people’s minds because it
is not for free; it costs money,” he said.
Treaty parameters
Moreover, Carryl believes that political leaders
are more willing to take up the challenge to steer
their states into full integration in today’s
environment, compared to those who signed the Treaty
of Chaguaramas 1973.
“We had a Treaty of 1973 that talked about a
Common Market, but did not have all of the
commitments and instrumentalities in order to
create it. There were two legal entities created
under that Treaty, the Caribbean Community and
the Caribbean Common Market. These were two
separate legal entities according to the rules
of international law that govern treaties.
The Common Market is now being transformed
into the CSME. The Common Market provisions of
the 1973 Treaty said that we will have a common
trade policy in relation to goods, but there
shall be no free movement of people. It spoke
about the right of establishment but did not
demand the elimination of exchange controls. The
only sure thing that the Treaty of 1973 did was
permit market integration in goods; little else.
If you do not have the legal basis within the
agreement that was signed among States under the
1973 Treaty, you cannot force any state to do
anything, or you cannot compel them to comply,
because they didn’t commit to doing anything.
We have to be careful about statements like,
‘It has been 30 years’, because the question
should be, 30 years agreeing to do what? If you
didn’t agree 30 years ago to create a Single
Market and Economy, then there is no possibility
that it could have come into being,” Carryl
reasoned.
Accordingly, a meagre half decade has elapsed
since CARICOM’s political leaders signed the Revised
Treaty unanimously agreeing thereby to pursue
implementation of a Single Market and Economy.
“What we have done from then (2001) to now is
fundamentally different from what we have done
from 1973 to 2001", Carryl said.
Sovereignty
In addition, CARICOM’s approach to integration
precludes political unity - making it more difficult
to directly have sanctions imposed by the CARICOM
Heads of Government or CARICOM organs on Member
States.
“The Community makes the policies and the
rules. But implementation is at the national
level. For example, when the Heads of Government
Conference made the decision for states to
remove a specified list of restrictions, each
Parliament, separately, must then change the
domestic laws. The centre [that is the
Community] can make the policy and rules but it
cannot implement them. This has to be done by
the Executive and the National Assembly, in each
Member State,” he said.
The clutch on individual sovereignty by each
member state is another reason that all of the
Regional Institutions needed to help administer the
CSME are yet to be established. According to
Carryl,
“It is a part of the fact of life; that
states are not very inclined to giving up the
power to do things at the national level, even
if some of those things can be done better at
the regional level – cheaper/more economically.”
Selecting the Regional Competition Commission for
illustration, Mr. Carryl pointed out that EC$20M is
required to run the Commission for its initial five
years. However, the cost to each member state will
double if attempts to administrate its own
competition commission are made, instead of
collectively operating one.
“First, it is [neither] sustainable nor
viable to set up a commission in every country.
Some of the domestic markets are just too small
to support a commission. If each state puts its
10 cents into the Regional Commission it will
give them all the services [that] they need. And
we will be able to recruit the best expertise in
the Region, so that the services would be of a
certain quality,” Carryl appealed.
Single Market Vs Single Economy
The Single Market addresses liberalisation,
harmonisation/homogenisation and establishment of
institutions, relating to access to the market. The
Single Economy tackles the formulation, coordination
and implementation of macro-economic policies. The
gamut of issues under the microscope for magnifying
economic oneness include, monetary policy, the
supply of money in the economic system, taxation and
expenditure, the level of interest rates, the price
system, inflation control, the stability of exchange
rates etc. Carryl said,
“The Single Economy phase is about measures,
decision-making processes and institutional
arrangements that are horizontal in their effect
across the economy, as distinct from the Single
Market phase which deals in specifics about, the
labour market, the capital market, the market
for goods, the services markets and so on.”
The will to work together in now very strong and
CARICOM States have demonstrated that an active
singular approach will enable full implementation of
the CSME. There has never been a shift from the
holistic idea of the CSME. It is only being
implemented in progressive steps.
“It is not a question of a shift from Single
Market to Single Economy. It is a question of
progression. Integration is a process not an
event and one cannot write an agreement like
this and expect that every State will be able to
put it in place tomorrow morning. It is not
possible in our circumstances. You can [only] do
it if all parties are agreed on everything and
are prepared to take all of the legislative
actions to transform the entire national economy
that they control and this assumes that they
have the resources to do so,” Carryl reiterated.
Liberalisation
The Liberalisation process was completed
within the last five years. Liberalisation of trade
in goods was done before that of services, capital
establishment and skills which started in earnest in
2001. Only a small number of goods (less than 1
percent) are affected by non-tariff restrictions. In
the case of services only telecommunications, air
and maritime transport are not fully liberalised.
Liberalisation of trade in services, liberalisation
of capital, right of establishment (right of
companies to move) and movement of people skills
translate into a removal of restrictions at the
border of CSME participating countries. The removal
of restrictions blots out differences between
nationals and non-nationals.
“That (liberalisation) has been completed for
the most part. There are minor cases where this
still needs to be done. And it is never going to
be perfect. It is not perfect in the European
Union. Not even in the US which is a federal
structure is there perfect homogeneity within.
For example, tax laws in different states are
different. One of the things that people
wrongfully do is expect 101 percent perfection.
That is not going to happen.” Carryl stated.
CARICOM nationals can enter the market outside of
their home state by three means:
- As a wage earner
- As self-employed
- As a company
Harmonisation
In the current scheme of things, intra-regional
migrants are forced to grapple with different market
regulations upon entry into another state, and “that
is not what produces a single market space.”
Consequently, harmonisation/homogenisation is
essential for creating the Single Market zone. Mr.
Carryl explained,
“It is not only important for a CARICOM
national to cross the border freely without
being discriminated against, because one is not
a national. [But] it is also important that when
one is inside the border that you are also
treated without discrimination. The only way
that this can happen is if the market is blind
to who is in it. The only way that can happen is
if the rules are fully harmonised or better
homogenised among all States. For example,
registration requirements, qualification
requirements and standards of practice must be
the same. Non Nationals cannot be confronted by
different rules from nationals or, else you’re
not talking about a single market; you’re
talking about different domestic markets if they
(nationals) are required to comply with
different rules from non nationals.”
Valiant strides are still to be made in this
enterprise (the CSME) to ensure that the laws,
regulations, administrative practices and
procedures, and institutions responsible for control
and enforcement become consistent throughout
CARICOM.
“[This] phase of the CSME project is not a
question of difficulty; it is a question of
time. It’s time- consuming to resolve all of the
specific rules and regulations and how they are
to be administered on a day to day basis,”
Carryl said.
Before the generic market milieu in the Region
comes into being, each Member State must
implement domestic laws required for the protection
of those executing transactions in the market place.
Carryl, with emphasis, said.
"If one State has domestic laws to protect
intellectual material and another country does
not have it, the country without the domestic
protection may be prevented from trading their
goods in the other country’s [domestic] market.
I don’t know if they were pirated because there
is no law to say that they were not. There must,
however, be evidence of grounds for action which
must be authorised by the Community first before
any action is taken.
Because you have not done your part, I can
legitimately deny the entry of your goods into
my market with the authorisation of the
Community.”
Institutions
There is absolutely no basis for the formulation
of regulations minus the support system for their
enforcement. Standard practice dictates that rules
in the market be enforced by a Court of Law,
assuring that those authorised to supervise these
areas comply with the law. Ministries of a
government and statutory bodies are the agencies
assigned the administration of the law in accordance
with aspects of the law. For example,
Ministries of Trade deal with consumer protection,
Ministries of Transport regulate air and sea
transport, Ministries of Labour handle labour laws.
Statutory bodies are specially created under the
law, such as the Competition Commission under the
Competition Act and the Standards Bureau under the
Standards Act.
“The relationships between those within the
market (buyer and seller) and between the market
and governmental bodies are generally governed
by law. The law regulate what people in the
market place do; you have to apply to them
(Governmental bodies) for permits to establish
and carry on most types of business ventures; we
are sometimes required to sell at a certain
price and comply with the weights and measures
regulations etc. And when we feel that their
(Governmental bodies) interpretation of the law
and what they have done injure our interest in
the market place, we have the right to go to
them and appeal saying that we think that what
was done is inconsistent with our rights under
the law in the market place. And when we don’t
get justice from them then we go to the ‘Court’,
in the case of governmental bodies, at the
notional level".
For instance, a customs department is a
governmental body, with the authority to enforce the
customs act and if this body “overcharges you
customs duty on imported goods of CARICOM you can go
to the Local ‘Court’ (not the CCJ) citing that they
[customs] have no justification for overcharging and
if the court agrees it can mandate that customs
reimburse the overcharged sum.”
“When the matter in issue amounts to a
dispute between two states we involve the
regional court to settle the dispute. [The
Caribbean Court of Justice (CCJ)]. That is how
the Single Market will work as well,” Carryl
said.
The process of creating the CSME, therefore,
includes establishing Regional institutions whose
purpose is to assist the organs of the Community
administer the CSME in the same manner in which
national statutory bodies assist ministries to carry
out certain functions at the local level.
Two types of bodies are to be established:
- National bodies (e.g. national accreditation
council, national competition and anti-dumping
authorities, standards bureau)
- Regional bodies
Thus far, two regional institutions have been
founded:
The Caribbean Court of Justice (CCJ), and
The Caribbean Regional Organisation of
Standards and Quality (CROSQ).
The following three other regional bodies are
required:
- The Community Competition Commission,
- The Regional Accreditation Body, and
- The Animal Health and food Safety Agency
“These three bodies have not yet been
established mainly because the recurrent costs
proposed in the budget for them have not been
settled among member states. The budgets [for
running the institutions] have been prepared; we
know what the institutions’ designs are like.
All that is required is for member states to say
that they are ready to pay their share and they
haven’t said that as yet. The delay in the
establishment of the institutions is essentially
about money; nothing else; everything else is in
place,” Carryl revealed.
Disadvantaged Countries, Regions and Sector
Regime
The CSME is an innovative model for the Caribbean
which, for many CARICOM nationals and political
leaders, alike, presents challenges for the
preservation of sovereignty and the threat of
competition. Such sceptics like The Bahamas have
opted to remain outside of the CSME loop. [Although,
it was on Bahamian soil that the Revised Treaty
which built-in the CSME, was inked]. Other small
island states within the Organisation of the Eastern
Caribbean States (OECS) cluster have taken solemn
consideration of their geographical proportions,
which put them at a developmental disadvantage.
Thus the Disadvantaged Countries, Region and
Sector Regime – a special and differential regime –
has been instituted as a safeguard mechanism to
maintain balance in the CSME. Carryl’s analogy is,
“If everyone is going to stay aboard the CSME
train then there has to be a way for the train
to stop and wait for them sometimes. And if the
train can’t stop at a particular time then one
must have another vehicle that can catch up with
this train and put them back on board if they
fall off. Since each country is required to
remove the restrictions at the border then one
of the ways that they can fall off the train is
if incoming competition crush them. So stopping
the train from time to time would mean being
able to re-introduce the restrictions
temporarily under certain circumstances. That is
one of the things that Chapter Seven [of the
Revised Treaty] does; it says that you can stop
the train if the threat is so grave that it can
damage the economy and make it impossible to
repair.”
The Development Fund is a fledgling of the
Disadvantaged Counties, Regions and Sectors Regime
which facilitates the transfer of resources (from
the Fund) to countries in difficulty for restoration
of their economic status.
“Let us say that the manufacture of wooden
furniture in one Member State collapses because
of import of wooden furniture from other CSME
States; 5,000 people are unemployed; the
communities in which the manufacturing
businesses were located begin to decline. The
responsibility of the Community in such a case
under Chapter seven (of the Revised Treaty) is
to use a mechanism such as the Development Fund
to transfer resources from the Fund to the
States in difficulty so it can restore its
industry and maintain trade and business with
these States those which have more or are in a
better condition to those which have
difficulties,” Mr. Carryl explained.
The Regional Development Agency is another
offshoot of the Disadvantaged Counties, Regions and
Sectors Regime which is to provide technical
assistance to states in an economic bind.
To kick-start any safeguard mechanism one of
CARICOM’s Councils or the Heads of Government must
be outrider to affected member states. It is
mandatory for such a state to provide proof of its
injury or threat thereof to the relevant CARICOM
Council. Carryl reiterated,
“It cannot be a problem that they (the Member
State) created themselves [or] a problem that
originated outside of the CSME. The state must
prove that the difficulty arose as a result of
their relationship with the CSME.”
CSME Public Education Programme
The CSME Unit, based in Barbados, has been
running a vigorous Public Education Programme (PEP)
utilising, mainly, the print and electronic media.
CSME booklets and other documentation are also
available at the Documentation Centre of the CARICOM
Secretariat. The CSME Unit is about to launch a
fresh round of public education activities, which
will be funded under a project valued at C$7.5M
[support from the Canadian International Development
Agency (CIDA)]. In addition to
disseminating updated information via currently used
channels, the project will ascertain other
appropriate channels of reaching the mass audience
with CSME messages.
Additional information about the CSME can be
obtained at:
CARICOM Secretariat, CSME Unit,
Sixth Floor, Tom Adams Financial Centre,
Church Village,
Bridgetown, Barbados.
E-mail:
info@csme.com.bb
UWI-CARICOM Project
October 27, 2006
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