CARICOMCARIBBEAN COMMUNITY AND COMMON

MARKET

• Page 306, # 1-151. 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

A MULTI-LATERAL agreement is one which involves more than two countries or states e.g.:

1. West Indian Federation (1958-1962)2. CARIFTA (1968-1973)3. CARICOM (1973 …)4. OECS: Organisation of Eastern Caribbean

States (1981…)5. ACS: Association of Caribbean States (1995…)

CARIBBEAN FREE TRADE ASSOCIATION1968-1973

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 TRADE2. 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. Antigua2. Bahamas3. Barbados4. Belize5. Dominica6. Grenada7. Guyana8. Haiti

9. Jamaica10. Montserrat11. St. Kitts/Nevis12. St. Lucia13. St. Vincent and the

Grenadines14. Suriname15. 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 NON-MEMBER 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 POLICIES1. 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 CARICOM1. Creates more employment for CARICOM nationals2. Goods imported from member states cost less3. Greater unity and friendliness among member states4. Assistance to members States in times of natural and

national disasters5. Crime fighting through the Regional Security Service6. Culture boosted through CARIFESTA7. Regional cooperation in sporting activities enhances

the skills and talents of our sportsmen and women8. Greater cooperation among member states through

the Caribbean Media Corporation9. 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. Secretariat2. Heads of Government3. Commonwealth Market Council4. Institution of Ministers5. 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 non-

members 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 CARICOM1. 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 Jean-Bertrand Aristide overthrown• CARICOM sent a combined peace-

keeping 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