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Implications of CSME for CARICOM

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Title: Implications of CSME for CARICOM


1
CARICOM SINGLE MARKET ECONOMY
Programme Manager, Single Market and Economy Ivor
Carryl
OVERVIEW
2
(No Transcript)
3
CARICOM SINGLE MARKET ECONOMY
  • OVERVIEW OF THE CARICOM SINGLE
    MARKET AND ECONOMY(CSME)
  • IMPLICATIONS FOR CARICOM
  • By
  • Ivor Carryl Programme Manager CSME
  • MAY 2004

4
CARICOM SINGLE MARKET ECONOMY
  • BASIC CONDITIONS
  • We must remind ourselves why the enterprise of
    integration
  • Globalisation and liberalisation
  • Debilitating force of smallness, vulnerability
  • Slow internal development
  • any significant achievement in the last 25 years
    in any field that propels development ? in
    economics, in law , in entrepreneurship, in
    invention? Why not?
  • Limited opportunities and growth
  • Continued outward migration, unemployment ,
    social restlessness and lack of social cohesion
  • Unnecessary obstacles among people to the natural
    development of markets and business activity

5
CARICOM SINGLE MARKET ECONOMY
  • CHANGE IS INEVITABLE
  • ensure that people benefit from change
  • timing important but not always your own choice
  • resistance to change
  • cant do is not the way forward

6
CARICOM SINGLE MARKET ECONOMY
  • THE RESPONSE OPTIONS
  • Go it alone or,
  • Cooperate using following vehicles
  • Common rights, law and rules in a regional
    economy
  • Integration of markets /
  • Access to resources
  • Common macro, sectoral and foreign policies
  • Common institutions
  • Collective governance responsibility

7
CARICOM SINGLE MARKET ECONOMY
  • FUNDAMENTAL RATIONALE FOR INTEGRATION
  • IN SUMMARY
  • Overpowering the limitations of
  • Individual small size( labour force ,consumer
    population, resources)
  • Vulnerability to economic shock, natural
    disasters, structure of economy
  • Economic viability of small economy/state
  • Rigid economic structure based on preferences
  • Separate action (Community political and social
    cohesion vital for progress)

8
CARICOM SINGLE MARKET ECONOMY
  • Therefore The Global Strategy and World
  • view of development into the 21 century
  • Deepen Economic Integration
  • Widen economic mass of Community
  • Negotiate together to participate in other
    regional and multilateral rules based frameworks

9
CARICOM SINGLE MARKET ECONOMY
  • Integrating Theatres

FTAA COTONOU
OECS
CARIFORUM BI-LATERALS ACS
CSME
WTO
10
CARICOM SINGLE MARKET ECONOMY
  • Integrating Theatres
  • Non linear, but rather multiple theatres
  • Inner Core- OECS,CSME
  • Cariforum
  • Intermediate Structures (bilaterals,ftaa,cotonou
    ,etc)
  • Outer circle is multilateral system (WTO)

11
CARICOM SINGLE MARKET ECONOMY
  • THE CARIBBEAN COMMUNITY
  • Membership of the Community
  • Fifteen Countries and Territories
  • Antigua and Barbuda , The Bahamas, Barbados,
    Belize ,Dominica, Grenada, Guyana,Haiti,
    Montserrat, Haiti , Jamaica, St Kitts, and Nevis,
    St Lucia, St Vincent and the Grenadines, Suriname
    ,Trinidad and Tobago

12
CARICOM SINGLE MARKET ECONOMY
  • THE CARIBBEAN COMMUNITY
  • Other kinds of Memberships
  • The Bahamas (full member but not of the CSME)
  • TCI and BVI (associate members)
  • Bermuda ( associate member)
  • Cayman Is.(to be associate member)
  • Anguilla

13
CARICOM SINGLE MARKET ECONOMY
  • THE CARIBBEAN COMMUNITY
  • More developed (MDSs)
  • Bahamas , Barbados Guyana Jamaica
    Suriname,Trinidad and Tobago
  • Less developed (disadvantaged) Antigua/Barbuda,
    Belize ,Dominica,Grenada,Haiti, Montserrat, St
    Kitts/ Nevis, St Lucia, St Vincent/ Grenadines,
  • Issue
  • - the concept of community is clear it however
    lacks enough substance and require further
    engineering, to give it common meaning and value
    in law, institutionally and practically

14
CARICOM SINGLE MARKET ECONOMY
  • THE OBSTACLES, CONSTRAINTS ,CHALLENGES
  • Resistant attitudes to change resistance to
    removing obstacles
  • Internal pressures, limited economic growth
    ,meager resources, national mindset not Community
    mindset
  • Policy anchored irrationally by type of economic
    structure and preferences in trade
  • The business organisation, the problem of cross
    border investment
  • Preparedness to compete

15
CARICOM SINGLE MARKET ECONOMY
  • THE OBSTACLES, CONSTRAINTS ,CHALLENGES
  • Single space , collective governance , but
    separate sovereigns
  • Instability in Haiti and lack if complete
    integration of some states
  • Capacity of small state to act policy, law
    ,infrastructure, public administration reform
  • Inadequate understanding
  • Absence of Community
  • Financing the Community
  • Transportation , information and communication

16
CARICOM SINGLE MARKET ECONOMY
  • THE CSME IS
  • AN INTEGRAL PART OF THE COMMUNITY
  • A RULES BASED ENTITY
  • AN ECONOMIC SPACE
  • a regional economy
  • a market system

17
CARICOM SINGLE MARKET ECONOMY
  • THE CSME IS , A Rules Based Entity
  • LEGAL ARCHITECTURE
  • THE TREATY
  • INTER-GOVERNMENTAL AGREEMENTS
  • IMPLEMENTING LAWS
  • REGULATIONS,ORDERS AND RULES
  • DISPUTE SETTLEMENT REGIME
  • ENFORCEMENT UNDER DOMESTIC LAW
  • ENFORCEMENT UNDER CARIBEAN COURT OF
    JUSTICE
  • ISSUE
  • The rules in the treaty are inadequate to
    guarantee predictability,
  • transparency and objectivity in respect of both
    enforcing rights and
  • discharging obligations

18
INSTITUTIONAL ARRANGEMENTS
  • Governance and decision-making arrangements
  • Dispute Settlement
  • Bilateral Approach
  • Good Offices
  • Conciliation
  • Mediation
  • Arbitration
  • Judicial Settlement

19
CARICOM SINGLE MARKET ECONOMY
  • THE CSME IS A Regional economy/market ?
  • YES The Economic Theatre for Trade/
    Business/Personal Development
  • 15 Million consumers spread over 2000 miles
  • When Bilaterals added, consumer population is
    over 75 Millions
  • Combined GDP, about EC 60 Billions
  • Total Export Trade in Goods EC 18 Billions
  • Intra-regional Exports in Goods EC 3.4 Billions
  • Services Receipts EC 4.9 Billions Bahamas EC
    2.0 Billions

20
CARICOM SINGLE MARKET ECONOMY
  • THE SINGLE MARKET ECONOMY(CSME)?
  • KEY PRINCIPLES UNDERPINNING CSME
  • EQUAL RIGHTS AND TREATMENT FOR ALL PERSONS OF
    MEMBER STATES IN THE MARKET
  • NON -DISCRIMINATION (i ) national
    treatment (ART 7) (ii) most favoured nation
    treatment (ART 8)
  • EXCEPTIONS
  • DIFFERENTIAL TREATMENT LDCs /DISADVANTAGED
  • CARICOM ISSUES IN DEALING WITH THIRD STATES AND
    GROUPS OF STATES
  • DIFFERENTIAL TREATMENT FOR THE DISADVANTAGED ,
    SIZE, VULNERABILITY , FLEXIBILITY, PROGRESSIVITY,
    SCOPE

21
CARICOM SINGLE MARKET ECONOMY
  • HOW TO CREATE ONE MARKET -ECONOMY FROM 15
    SEPARATE
  • ECONOMIES ?
  • WHERE ARE WE IN THE OVERALL IMPLEMENTATION
  • Negotiate the treaty
  • Entrenching CSME legal personality, in all states
  • Install/build institutions
  • Reforming governance structures
  • Market liberalisation
  • Economic integration
  • Structures and procedures for external policy
  • The built in Agenda

22
CARICOM SINGLE MARKET ECONOMY
  • THE FINAL PRODUCT
  • Art 78(2) Full integration of national markets
    into single, unified, open market area
  • Differential Treatment of Disadvantaged
  • Common Policy On Treatment of Non-
  • Members (Common External Policy)

23
CARICOM SINGLE MARKET ECONOMY
  • THE FINAL PRODUCT
  • A fully developed and implemented legal
    framework which includes the Revised Treaty,
    additional amendments to include the Article 239
    built in agenda issues , inter-governmental
    agreements, implementing laws and regulations.
  • A stronger collective governance framework which
    include increasingly effective implementation
    capabilities and new Community institutions
    with particular emphasis on the Caribbean Court
    of Justice, a Community Competition Commission ,
    bodies to regulate educational standards and
    qualifications., and standards for agricultural
    and non agricultural goods and for services

24
CARICOM SINGLE MARKET ECONOMY
  • THE FINAL PRODUCT
  • The full enjoyment of national treatment by
    citizens and nationals of all Member States in
    respect of production and trade in goods, the
    provision of services, the movement / transfer
    of capital for the purposes of investment and
    current payments throughout the market area ,
  • The freedom to move around to seek work and
    compete for employment in any geographical part
    of the CSME by university graduates, media
    workers, sportspersons, musicians, artistes,
    managerial, technical and supervisory persons
    (including their spouses and dependants)
    associated with establishing entities and by
    entitled persons qualifying as self employed
    industrial, commercial, artisanal, professional
    and agricultural service providers.

25
CARICOM SINGLE MARKET ECONOMY
  • THE FINALPRODUCT
  • The freedom to create a company or other legal
    entity and establish and operate such an entity
    in any part of the CSME
  • The freedom of nationals of Member States to
    travel within the Community ,benefiting from
    national treatment at ports of entry and using
    machine readable travel documents including a
    Common Community Passport and embarkation/
    disembarkation documents.

26
CARICOM SINGLE MARKET ECONOMY
  • THE FINAL PRODUCT
  • Functioning institutional arrangements,
    procedures and practices for the effective
    coordination of macroeconomic ,sectoral and
    foreign trade policy,
  • An informed public which understands and supports
    the CSME and demonstrate this understanding and
    support by their active participation
    /competition in the markets of individual
    interests.
  • Stronger presence of the elements of Community
    and social cohesion

27
CARICOM SINGLE MARKET ECONOMY
  • THE RESULT AND THE
  • OPPORTUNITY MUST BE
  • MARKET LIBERALISATION
  • FREE ESTABLISHMENT OF PRESENCE

28
CARICOM SINGLE MARKET ECONOMY
  • Right of Establishment
  • Obligations
  • Permit establishment in all areas
  • Do not introduce new restrictions
  • Remove existing restrictions

29
CARICOM SINGLE MARKET ECONOMY
  • Establishment
  • Who has right? art 32
  • natural persons citizens nationals residents
  • natural persons self employed ,agricultural,
    industrial, commercial, artisanal and
    professional
  • companies and other legal entities agencies ,
    branches and subsidiaries

30
CARICOM SINGLE MARKET ECONOMY
  • Establishment
  • Issues
  • Does Common Regime mean single legal framework
    for establishment that extend beyond Articles
    32,33 and 34?
  • How to transform concept that, an entity
    established in one state is simultaneously in the
    CSME.

31
CARICOM SINGLE MARKET ECONOMY
  • Establishment
  • Elements of regime
  • Company Law, incorporation, registration of
    business name
  • Competing presence (direct foreign investment)
  • Establishment includes presence and ownership
    (Articles 31, 32)
  • Monopolies (Art 31)
  • Access to land, buildings and property (art 34f)
  • The protection of the interests of partners,
    members and other persons with financial
    interests in companies and other entities

32
CARICOM SINGLE MARKET ECONOMY
  • When can right be denied
  • monopoly established or maintained (art 31)
  • qualification origin criteria not met (art32)
  • exception approved by Community Organ
  • balance of payments action (Art 43)
  • safeguard invoked (art 47)
  • disadvantaged situation justified according to
    Community Organ (chapter 7)

33
CARICOM SINGLE MARKET ECONOMY
  • RECIPROCAL ENFORCEMENT OF
  • JUDGENMENTS
  • Draft Legislation in progress

34
CARICOM SINGLE MARKET ECONOMY
  • THE RESULT AND THE OPPORTUNITY MUST
    BE
  • MARKET LIBERALISATION
  • FREE MOVEMENT OF NATURAL PERSONS

35
CARICOM SINGLE MARKET ECONOMY
  • SUMMARY ON FREE MOVEMENT OF NATURAL PERSONS
  • (i) There are two Regimes
  • (a) Facilitation of Travel (Art 46)
  • Movement of Skills (Art 32,34(d),3637)

36
CARICOM SINGLE MARKET ECONOMY
  • SUMMARY ON FREE MOVEMENT OF NATURAL PERSONS
  • (a) Facilitation of Travel (Art 46)
  • Common travel documents
  • Common landing documents
  • National treatment at ports of entry

37
CARICOM SINGLE MARKET ECONOMY
  • SUMMARY ON FREE MOVEMENT OF NATURAL PERSONS
  • (b) Movement of Skills
  • (i) Companies and Non-Wage Earners(self employed
    persons)
  • (ii) Wage Earners
  • University Graduates , Musicians, Artistes,
  • Sports Persons Media workers Managerial,
  • Technical and Supervisory Staff of establishing
    entities

38
CARICOM SINGLE MARKET ECONOMY
  • SUMMARY ON FREE MOVEMENT OF NATURAL PERSONS
  • Wage Earners Liberalisation ,Removal of Work
    Permit
  • (a) Skilled Nationals Act ( University
    Graduates , Musicians, Artistes)
  • Sports Persons Media workers
  • (b) The programme to remove Chapter III
    restrictions ( Managerial, Technical and
    Supervisory Staff of establishing entities)

39
CARICOM SINGLE MARKET ECONOMY
  • THE RESULT AND THE
  • OPPORTUNITY MUST BE
  • MARKET LIBERALISATION
  • FREE MOVEMENT AND TRADE
  • IN GOODS

40
CARICOM SINGLE MARKET ECONOMY
  • CSME TRADE POLICIES IN THE REVISED TREATY
  • CSME MFN APPLICATIONS
  • Origin of goods Art 84
  • Freedom of Transit Art 86(2)
  • Export Drawback Art(89) (1)
  • Quantitative Restrictions Art 91(3)
  • CSME NATIONAL TREATMENT APPLICATIONS
  • Community Origin Art 84
  • Internal Taxes and Charges Art 90

41
CARICOM SINGLE MARKET ECONOMY
  • PROHIBITIONS
  • Import duties Art (87)
  • Quantitative Restrictions Art (91)
  • Governmental Assistance to Economic
    Development Art (93)
  • Public Undertakings Art (94)
  • Export Subsidies Art 99
  • ACTIONABLE
  • Subsidies causing , nullification ,impairment or
    serious prejudice Art (105
  • Subsidies causing serious adverse effects Art
    (111)
  • Agricultural Subsidies Art 121
  • Dumping Art 125

42
CARICOM SINGLE MARKET ECONOMY
  • EXCEPTIONS
  • Balance of Payments Art 43
  • Difficulties Occasioned by Particular Imports Art
    92
  • Under the Special Regime For Less Developed
    Countries
  • -Import Duties Art 160
  • -Community Origin Art 161
  • - Promotion of Industrial Development Art 164
  • - Public Undertakings Art 165
  • What remains to be done
  • Free Circulation , trade involving free zones

43
CARICOM SINGLE MARKET ECONOMY
  • THE RESULT AND THE
  • OPPORTUNITY MUST BE
  • MARKET LIBERALISATION
  • FREE MOVEMENT AND TRADE
  • IN SERVICES

44
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME
  • APPROACH
  • GATS ARTICLE V COMPLIANT
  • NEGATIVE LIST FOR CSME MEMBERS
  • UNIFORM LEGAL REGIME FOR TRADE IN SERVICES
  • POSITIVE LIST IN THE CASE OF THIRD NON MEMBERS

45
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME
  • SCOPE FREE MOVEMENT AND TRADE IN SERVICES
  • Provision of services as a right (ART 30)
  • All services will be open to competition except
    (a) those involving the exercise of
    governmental authority Art 30
  • (b) those where there is a monopoly Art 31
  • Non Discrimination apply to all laws, rules
    administrative measures and service industries

46
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME
  • SCOPE OF FREE MOVEMENT AND TRADE IN
    SERVICES
  • Services supplied by any of four modes (ART 36)
  • Mode I Cross Border
  • Mode 2 Consumption Abroad
  • Mode 3 Commercial Presence
  • Mode 4 Presence of Natural Persons

47
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME
  • PROCESS
  • STANDSTILL Art 36
  • ROLLBACK Art 37
  • Existing restrictions law and in effect must be
    removed in by 31 December 2005
  • As a general undertaking (ART 37)
  • As a specific undertaking in accordance with
    the Programme to Remove Restrictions established
    by the Thirteenth Inter-Sessional Meeting of the
    CONFERENCE

48
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME
  • PROCESS (CONTD)
  • IN SPECIFIC CASES removed restrictions include
  • Those restricting a company
  • Those restricting Non-Wage Earners(self employed
    persons) industrial, agricultural, professional,
    commercial and artisanal providers
  • Those restricting managerial, technical and
    supervisory persons
  • Those restricting the Spouse and dependant persons

49
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME Number of Restrictions

Country All Restrictions 2003 2004 2005
Antigua 15 5 7 3
Barbados 34 31 - 3
Belize 31 7 3 21
Dominica 27 21 1 5
50
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME Number of Restrictions

Country All Restrictions 2003 2004 2005
Grenada 21 5 1 15
Guyana 43 5 8 30
Jamaica 69 28 26 9
Montserrat
51
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME Number of Restrictions

Country All Restrictions 2003 2004 2005
St Kitts 6 2 4
St Lucia 44 21 13 10
St Vincent 12 5 5 2
Suriname 35 8 1 24
52
CARICOM SINGLE MARKET ECONOMY
  • LIBERALISATION REGIME Number of Restrictions

Country All Restrictions 2003 2004 2005
Trinidad 10 2 4 4
TOTAL 349 140 69 130
53
CARICOM SINGLE MARKET ECONOMY
  • EXCEPTIONS
  • Balance of Payments Art 43
  • Restrictions to Resolve Difficulties Art 47
  • IN PROGRESS
  • Agreement on Financial Services

54
CARICOM SINGLE MARKET ECONOMY
  • BUILT IN AGENDA (art 239)
  • GOVERNMENT PROCUREMENT
  • TRADE INVOLVING FREE ZONES
  • FREE CIRCULATION
  • ELECTRONIC COMMERCE
  • CONTINGENT RIGHTS

55
CARICOM SINGLE MARKET ECONOMY
  • WHO BENEFITS
  • THE COMPANY /BUSINESS ORGANISATION IN THE MARKET
  • NATURAL PERSONS IN THE MARKET
  • CONSUMERS

56
CARICOM SINGLE MARKET ECONOMY
  • WHO BENEFITS
  • CSME NOT AN EXCURSION INTO ACADEMIA
  • CSME IS OPPORTUNITY TO IMPROVE QUALITY OF LIFE.
    It is about,
  • The farmer who grow bananas, fresh fruit and
  • vegetables .
  • CARICOM imports over 2.7 billions US per year
  • in food

57
CARICOM SINGLE MARKET ECONOMY
  • WHO BENEFITS
  • CSME IS OPPORTUNITY TO IMPROVE QUALITY OF LIFE
    It is about,
  • The fisherman who must supply more and more fish,
    shrimp, prawns , lobster etc to the resident and
    tourist populations

58
CARICOM SINGLE MARKET ECONOMY
  • WHO BENEFITS
  • CSME IS OPPORTUNITY TO IMPROVE THE QUALITY OF
    LIFE It is about
  • the furniture manufacturer who must put his best
    designs into CARICOM households from Belize to
    Suriname

59
CARICOM SINGLE MARKET ECONOMY
  • WHO BENEFITS
  • CSME IS OPPORTUNITY TO IMPROVE THE QUALITY OF
    LIFE It is ,
  • The media worker who must see his workplace as
    including all CARICOM with Grenada being only
    one part of market
  • The electrician and carpenter and other artisans
    who must see Grenada as only one of fifteen
    geographical markets to make money

60
CARICOM SINGLE MARKET ECONOMY
  • WHO BENEFITS
  • CSME IS OPPORTUNITY TO IMPROVE PROFITABILITY OF
    COMPANIES It is about ,
  • Parbo beer in competition with Carib in TT and
    Banks in Guyana and Barbados, Red stripe in
    Jamaica
  • Fernandes Limonade in competition with busta
  • I-cee and coca cola.
  • CIC in competition with Ansa Macal for the market
    for detergents

61
CARICOM SINGLE MARKET ECONOMY
  • EXTERNAL NEXUS COMMON DEALING WITH
  • NON MEMBERS
  • Common External Tariff
  • Community Rules Of Origin
  • No Quantity Restrictions Except as Authorised by
    WTO
  • Community Examination in cases of Subsidised and
    Dumped Goods by COTED
  • Art 78(3) (a) common instruments, common services
    ,joint regulation ,operation ,administration of
    external commerce

62
CARICOM SINGLE MARKET ECONOMY
  • COMMON DEALING WITH NON MEMBERS
  • Common negotiating positions where possible Art
    78(3)(a)(ii)
  • Cooperation on External Trade arrangements
  • Community Bilateral Arrangements
  • National Bilateral Treaties Art 80

63
CARICOM SINGLE MARKET ECONOMY
  • COMMON DEALING WITH NON MEMBERS
  • NEGITIATING ISSUES
  • Special and Differential Treatment
  • Size and vulnerability
  • Scope of undertakings
  • Disciplines to which we should be contracting
    parties
  • Flexibility
  • Progressivity

64
CARICOM SINGLE MARKET ECONOMY
  • COMMON DEALING WITH NON
  • MEMBERS
  • NEGITIATING ISSUES
  • Subsidies,
  • Resource Transfers, Technical Assistance
  • Preferences

65
CARICOM SINGLE MARKET ECONOMY
  • WHAT MUST A MEMBER STATE
  • DO
  • IMPLEMENT THE CSME REGIMES
  • NATIONAL STRAEGY
  • COMPANY DEVELOPMENT
  • INDIVIDUAL STRATEGIES

66
CARICOM SINGLE MARKET ECONOMY
  • WHAT MUST A MEMBER STATE
  • DO
  • (i) IMPLEMENT THE CSME REGIMES
  • get cabinet to focus on legislative agenda,
  • nonpartisan parliamentary approach to
  • CSME,
  • push other Member States to do same

67
CARICOM SINGLE MARKET ECONOMY
  • WHAT MUST A MEMBER STATE DO
  • (ii) NATIONAL STRATEGY
  • position the country in the CSME,
  • set CSME targets,
  • deepen non-state actors partnership,
  • look at support of private sector in the wider
    CSME,
  • macro and sectoral measures

68
CARICOM SINGLE MARKET ECONOMY
  • WHAT MUST A MEMBER STATE DO
  • (iii) COMPANY DEVELOPMENT
  • business organisation, business outlook,
  • develop market access know how,
  • skills deepening,
  • intensification of export marketing ,
  • technical and operational aspects of companies
  • non tariff barriers ,
  • preferences and safeguards

69
CARICOM SINGLE MARKET ECONOMY
  • WHAT MUST A MEMBER STATE DO
  • (iv) INDIVIDUAL STRATEGIES
  • know your rights and the rules
  • choice of careers, retraining,
  • capital accumulation,
  • support consumer advocacy organisations ,
  • question labour organisations regarding
    representation on CSME issues
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