CARICOM
CARIBBEAN COMMUNITY AND
COMMON MARKET
• Page 306, # 1-15
1. Suggest 2 ways the government of your country can
demonstrate the spirit of cooperation in the event of
an environmental disaster in the region.
2. Identify 2 regional organisations that were established
in the commonwealth Caribbean to develop
cooperation among member states
3. Give 4 examples of areas in which there is
cooperation among countries of the commonwealth
Caribbean
4. Give 3 reasons why it is important for the region to
promote cooperation among member states
Timeline of Regional Integration
1.
2.
3.
4.
5.
A MULTI-LATERAL agreement is one which
involves more than two countries or states
e.g.:
West Indian Federation (1958-1962)
CARIFTA (1968-1973)
CARICOM (1973 …)
OECS: Organisation of Eastern Caribbean
States (1981…)
ACS: Association of Caribbean States (1995…)
CARIBBEAN FREE TRADE ASSOCIATION
1968-1973
11 MEMBER STATES
•
•
•
•
•
Guyana
Trinidad and Tobago
Barbados
St. Vincent
St. Lucia
* Grenada not a member
•
•
•
•
•
Belize
Dominica
Montserrat
Antigua
St. Kitts/ Nevis/
Anguilla
• Jamaica
AIMS AND OBJECTIVES
1. TO ENCOURAGE FREE TRADE
2. TO FOSTER ECONOMIC DEVELOPMENT
– To foster economic and social development by
encouraging free trade among member states
through the removal of customs duties, taxes and
licensing arrangements which previously stifled
trade among the islands
– To encourage member states to increase their
production and expand their manufacturing
sector, thus creating new jobs and boosting their
economies
• CARIFTA was a success so the
members decided to enlarge and
deepen cooperation by forming
CARICOM in 1973
• CARICOM: Caribbean Community
and Common Market
AGREEMENT BY WHICH CARICOM
WAS FORMED
• THE TREATY OF CHAGUARAMAS, July 4, 1973
• INITIAL 4 SIGNATORIES:
– TRINIDAD AND TOBAGO
– JAMAICA
– BARBADOS
– GUYANA
• CARICOM became operational on August 1,
1973.
MEMBER STATES TO DATE:
1.
2.
3.
4.
5.
6.
7.
8.
Antigua
Bahamas
Barbados
Belize
Dominica
Grenada
Guyana
Haiti
9. Jamaica
10. Montserrat
11. St. Kitts/Nevis
12. St. Lucia
13. St. Vincent and the
Grenadines
14. Suriname
15. Trinidad and Tobago
MAIN OBJECTIVES OF CARICOM
1. ECONOMIC INTEGRATION: TRADE
LIBERALISATION (CARIBBEAN COMMON
MARKET)
2. FUNCTIONAL COOPERATION
3. POLITICAL INTEGRATION: COMMON
POLICIES FOR DEALING WITH NON-MEMBER
STATES AND TRANS-NATIONAL
CORPORATIONS
• TRADE LIBERALISATION
–Removal of barriers to trade (customs
duties, quotas, taxes, licenses):
• Increased volume of trade
• Increased economic development
• FUNCTIONAL COOPERATION
–Shipping
–air transport
–meteorological services
–Health
–education and training
–Broadcasting
–Culture
–intra-regional technical assistance
• COMMON POLICIES FOR DEALING WITH NONMEMBER STATES AND TRANS-NATIONAL
CORPORATIONS such as Hilton, Nestle,
Unilever
– CET: Common External Tariff
– Common Foreign Investment Policy
(Harmonization of fiscal incentives)
– Common Tourism Policy
• CARICOM member states depend heavily
on foreign investments for purposes of
royalties, taxes, job creation. A common
policy for attracting investment is
necessary to prevent one country from
offering greater incentives (tax-free
holidays, preferential rates on energy etc
than another)
BENEFITS OF TRADE LIBERALISATION
FREE TRADE
CHEAPER GOODS
AND SERVICES
GREATER DEMAND FOR
CARICOM GOODS
GREATER PRODUCTION TO
MEET DEMAND
MORE JOBS
CREATED
SAVINGS IN
FOREIGN
EXCHANGE
BENEFITS OF COMMON POLICIES
1. Greater bargaining power through a united voice
– better price for extra-regional exports
– Cheaper prices for imports
2. Preferential Rates and Special Quotas can be
arranged for CARICOM goods entering the
European Union (EU) and the United States (US)
(especially agricultural goods such as bananas,
sugar, rum)
3. Reduced competition in attracting foreign
investment leading to better deals with foreign
investors
BENEFITS OF FUNCTIONAL
COOPERATION
1. METEOROLOGY: Caribbean Meteorology
Organisation located in T&T collects weather
information and transmits it to the other
CARICOM states
2. HEALTH: CAREC (1975) – Caribbean
Epidemiology Centre: conducts research into
certain communicable diseases e.g. polio,
typhoid, cholera, AIDS
3. ENVIRONMENTAL HEALTH: CEHI (1988) –
Caribbean Environmental Health Institute
– Preservation and protection of the environment (air,
land, water)
– Solutions for disposal of toxic waste
– Coastal and marine pollution
– Testing quality of drinking water
– Collection and treatment of waste water
4. NATIONAL DISASTERS: CDERA – Caribbean
Disaster Emergency Response Agency (1991)
– Hurricanes, earthquakes, flooding, volcanic eruptions
– Coordinates relief in response to natural disasters
– Provides assistance rebuilding after a disaster
• AGRICULTURE: CARDI (1975): Caribbean
Agricultural Research Development Institute
(UWI, St. Augustine)
– Develop systems to improve productivity in
agriculture
– Establish farming techniques to meet the needs of
small farmers
– Lower production costs in agriculture
– Undertake research to find solutions for plant diseases
– CARDI is funded by CARICOM governments, the CDB
and other international lending agencies
* The Caribbean region depends heavily on
agriculture for export and local consumption but
various problems have stifled the sector resulting
in a high food import bill.
Achievements of CARDI
• Developed a special variety of tomato suited to
local conditions (CALYPSO)
• Provided solutions for brown spot disease which
affects yams
• Established systems to increase peanut
production in St. Vincent
• Developed feeds/rations for animals using locally
available by-products
• Developed pesticides for the sugar-cane moth
borer, the sugar cane mealy bug and the diamond
back moth which attacks cabbage
BENEFITS OF CARICOM
1.
2.
3.
4.
5.
6.
7.
8.
9.
Creates more employment for CARICOM nationals
Goods imported from member states cost less
Greater unity and friendliness among member states
Assistance to members States in times of natural and
national disasters
Crime fighting through the Regional Security Service
Culture boosted through CARIFESTA
Regional cooperation in sporting activities enhances
the skills and talents of our sportsmen and women
Greater cooperation among member states through
the Caribbean Media Corporation
Exploitation by transnational corporations is reduced
VOCABULARY
• Globalization: (1) the penetration of trade,
capital and technology flows throughout the
world; (2) the process whereby there is reciprocal
action and interdependence among all countries
of the globe eg under WTO
• Interdependence: dependence on each other
• Dependence: reliance on someone or something
for support
• Cooperation: working helpfully with others
• Integration: the act of combining things to create
a whole
• BARRIER: anything that restrains or obstructs progress,
access etc; a limit, obstacle or boundary
• LIBERALISATION: refers to a relaxation of previous
government restrictions, usually in areas of social or
economic policy.
• PREFERENTIAL: giving priority or rights in matters of
trade
• QUOTA: a physical limit on the quantity of a good that
can be imported into a country in a given period of
time.
• TARIFF: a tax levied on imported or exported goods.
• SUSTAINABLE: able to keep up or keep going
• ENTREPRENEUR: a person who organizes and manages
a business, usually with considerable initiative and risk.
HOME-WORK
• Page 306 #16-30
• Q2: Cooperation among members of the OECS
• Write an article for your school magazine on the
above topic. In your article name 2 member
countries of the OECS and state 2 objectives of
the OECS. Give 3 reasons why common financial
services is an example of cooperation among
member countries and finally suggest 2 measures
that the OECS Secretariat may take to make it
easy for OECS citizens to enter and live in any
member country.
HOW IS CARICOM ORGANIZED
1.
2.
3.
4.
5.
Secretariat
Heads of Government
Commonwealth Market Council
Institution of Ministers
Associate Institutions
–
–
–
–
–
UWI
UG
CXC
CDB
CIC
HEADS OF GOVERNMENT
• Decide on:
– Policies and general direction of CARICOM
– Which treaties between CARICOM and
other international bodies should be
accepted
– The resolution of disputes among member
states
COMMON MARKET COUNCIL
• Oversees the effective operation of free trade
among member states
• Ensures trade barriers are not applied among
member states
• Ensures application of CET
• Oversees free movement of citizens from one
state to another to establish businesses
• Applies common policy in dealing with nonmembers and TNCs
INSTITUTIONS OF MINISTERS
• Formulation and adoption of common policies
for their respective ministries
• Resolving problems associated with their
various ministries
• E.g Institution of Ministers of Health will form
a policy for dealing with AIDS in the Caribbean
CARICOM SECRETARIAT
• The CARICOM Secretariat is the
Head office of CARICOM and is
located in Georgetown, Guyana
• The head of CARICOM is the
Secretary General: Edwin
Wilberforce Carrington (1992…)
CARICOM SECRETARIAT FUNCTIONS
• Arranges CARICOM meetings
• Implements decisions taken by CARICOM
• Researches issues related to economic
integration
• Prepares estimates of expenditure for
CARICOM projects
ASSOCIATE INSTITUTIONS OF CARICOM
1. CARIBBEAN DEVELOPMENT BANK (CDB)
– predated CARICOM
– HQ in Barbados
– Includes members and non-members
– Common fund used to promote development
• Soft loans for industrial, agricultural and
tourism projects
• Feasibility studies to determine potential
profitability of projects
• Technical assistance for new projects
• Sources funds from other lending agencies
2. CARIBBEAN INVESTMENT CORPORATION
(C.I.C)
– Promotes development in the poorer member
states
– Similar functions as CDB but only services
CARICOM member states
3. CARIBBEAN EXAMINATIONS COUNCIL (CXC)
– Established late 1970s
– Develop curricula with a Caribbean focus
4. THE UNIVERSITY OF THE WEST INDIES (UWI)
– Established 1948
– 3 campuses
• Mona, Jamaica
• Cave Hill, Barbados
• St. Augustine, Trinidad
– Curricula with a heavy Caribbean focus
– CARICOM members no longer have to go
abroad for higher education
CARICOM SINGLE MARKET AND
ECONOMY (CSME)
• CSME created in 1989
– CARICOM nationals can freely migrate to other
member states with their money, employees,
machinery and equipment etc to establish a
business
– Common Currency (NOT realised) – 1992
– CCJ or Caribbean Court of Justice
• Replace Privy Council in Britain
• Oversee function of the CSME
• The CARICOM Single Market and Economy is intended
to benefit the people of the Region by providing more
and better opportunities to produce and sell our goods
and services and to attract investment. It will create one
large market among the participating member states.
• The main objectives of the CSME are: full use of labour
(full employment) and full exploitation of the other
factors of production (natural resources and capital);
competitive production leading to greater variety and
quantity of products and services to trade with other
countries. It is expected that these objectives will in turn
provide improved standards of living and work and
sustained economic development.
Key elements of the CSME
• Free movement of goods and services - through measures
such as eliminating all barriers to intra-regional movement
and harmonising standards to ensure acceptability of goods
and services traded;
• Right of Establishment - to permit the establishment of
CARICOM owned businesses in any Member State without
restrictions;
• A Common External Tariff - a rate of duty applied by all
Members of the Market to a product imported from a
country which is not a member of the market;
• Free circulation - free movement of goods imported from
extra regional sources which would require collection of
taxes at first point of entry into the Region and the
provision for sharing of collected customs revenue
Key elements of the CSME
• Free movement of Capital - through measures such as
eliminating foreign exchange controls, convertibility of
currencies (or a common currency) and integrated capital
market, such as a regional stock exchange;
• A Common trade policy - agreement among the members
on matters related to internal and international trade and a
coordinated external trade policy negotiated on a joint
basis;
• Free movement of labour - through measures such as
removing all obstacles to intra-regional movement of skills,
labour and travel, harmonising social services (education,
health, etc.), providing for the transfer of social security
benefits and establishing common standards and measures
for accreditation and equivalency.
Other measures of the CSME
• Harmonisation of Laws: such as the harmonisation of
company, intellectual property and other laws.
• There are also a number of economic, fiscal and monetary
measures and policies which are also important to support
the proper functioning of the CSME. These include:
– Economic Policy measure: coordinating and converging
macro-economic policies and performance; harmonising
foreign investment policy and adopting measures to
acquire, develop and transfer appropriate technology;
– Monetary Policy measures: coordinating exchange rate
and interest rate policies as well as the commercial
banking market;
– Fiscal Policy measures: including coordinating indirect
taxes and national budget deficits.
SUMMARY: Objectives of the CSME
• Harmonization of:
– Fiscal (tax) policies
– Monetary policies (including a single CARICOM
currency)
– External trade policy
– Legislation (custom, companies)
– Sectoral policies in agriculture, manufacturing and
fisheries
MAIN RESOURCES OF CARICOM MEMBER STATES
Home-work: Read pages 292-293 and do
questions 1 and 3 on page 294
CARICOM MEMBER STATES ASSIST ONE ANOTHER
– HAITI 1994: DEMOCRATIC LEADER JeanBertrand Aristide overthrown
• CARICOM sent a combined peacekeeping force to assist
– Windward Islands Banana Dispute: 1997
WTO moved to cut banana exports to
Europe from the Windward islands
(Dominica, St. Vincent, St. Lucia, Grenada).
• CARICOM protested/resisted
CARICOM MEMBER STATES ASSIST ONE ANOTHER
– CARICOM assists in Guyana elections crisis – 1998
• Jagan (PPP) won, Hoyte (PNC) refused to
acknowledge his party’s loss.
• Violent demonstrations
• 5 CARICOM Prime Ministers audited the results
and helped restore peace
– CARICOM enters Suriname/Guyana border
dispute:
• Petroleum deposits near borders / each wanted
rights to explore for petroleum
• CARICOM listed this as a major topic for
discussion at the 20th summit in 2000
FAILURES OF CARICOM: UNRESOLVED ISSUES
1. No common air carrier for the region (Air
Jamaica, Guyana Airways, Caribbean Airlines,
LIAT)
2. Difficulties setting up a smelter plant to utilize
vast bauxite resources from Guyana and Jamaica
using T&Ts immense gas and crude oil supplies
for energy
3. The West Indies Shipping Corporation (WISCO)
not yet running smoothly, frequent closures
affect intra-regional trade
FAILURES OF CARICOM: UNRESOLVED ISSUES
4. Barbadian fishermen arrested for fishing in
Trinidad and Tobago waters – eg of failure to
cooperate in exploring common resources
5. Only some of the member states have
ratified the clause of the Treaty which allows
for free movement of self-employed people
from one member state to another
FAILURES OF CARICOM: UNRESOLVED ISSUES
6. Many instances where free trade agreement
was contravened by enactment of trade
barriers on goods produced within the region
– July 1996: T&T accused J’ca of putting barriers to
its exports of food and drink to J’ca
– 1996: T’dad accused B’dos of imposing trade
restrictions on pasta and milk from T&T
7.
Privy Council not yet replaced by the
Caribbean Court of Justice