Has the region squandered its best chance to fully implement the CARICOM Single Market and Economy?
Ever since the 2011 announcement that CARICOM leaders had agreed to place the economy part of the CARICOM Single Market and Economy (CSME) on indefinite “pause”, questions have been raised about the CSME’s future.
Two years later, with Barbados and other countries individually still grappling with economic problems that show no sign of abating, the doubts persist.
CARICOM secretary general Irwin LaRocque addressed the issue about two weeks ago while delivering remarks at the opening of the 37th meeting of CARICOM’s Council for Trade and Economic Development in Georgetown, Guyana.
“This is the opportune time to review how we are implementing the CARICOM Single Market and Economy (CSME) and whether the way we are going about it is adequate to address the immediate concerns of member states,” he told attendees at the meeting where Barbados was represented by Minister of Industry, International Business, Commerce and Small Business Development Donville Inniss.
“Just as we have agreed that the revised treaty [of Chaguaramas] must now be reviewed in order to advance our integration arrangements, we have to examine the role of the CSME in addressing the economic challenges of member states. I remain convinced, however, that the CSME is our best option for addressing our economic challenges,” LaRocque added.
Limited purpose
CSME’s roots can be traced back to 1968, with the establishment of the Caribbean Free Trade Area, which served the limited purpose of removing tariffs and other barriers to intra-regional trade in goods.
CARICOM heads subsequently agreed to establish a single market and economy, which was intended to benefit the region’s people by providing more and better opportunities to produce and sell goods and services and to attract investment, creating one large market among participating member states.
The main CSME objectives identified included making full use of labour, and the maximum exploitation of the other factors of production, natural resources and funds. This was in addition to competitive production leading to greater variety and quantity of products and services to trade with other countries, objectives which together were expected to provide improved standards of living and work and sustained economic development.
Key elements of the CSME included free movement of goods and services, the right to establish businesses in any member state, agreed duties implemented on imported products not produced by CSME members, the sharing of customs duties on some extra regional imports, and the free movement of people and money.
Research released in 2012 showed that the single market had a 64 per cent overall level of compliance. The basis was studies commissioned by the CARICOM Secretariat, information which concluded that the main regimes though functioning were not sufficiently effective.
The highest score in these core areas was for the free movement of goods (80 per cent), followed by movement of capital (72 per cent), movement of skills (66 per cent), right of establishment (64 per cent), and the free movement of services (37 per cent.
This information came six years after what was the then 12 CSME participating countries declared they were “single market compliant” and likely to be similarly single economy compliant by the end of 2008.
Member states subsequently agreed to a phased single economy implementation by 2015. Attainment of that deadline is now highly unlikely since in 2011 the single economy was put on hold. The communiqué from the 34th CARICOM Heads of Government Summit in July 2013 made no mention of CSME implementation.
This essentially means that this major symbol of regional unity is at the crossroads.
One of the strongest critics of the slowed pace is one of CSME’s strongest advocates, former Prime Minister Owen Arthur, who as Barbados’ leader had lead responsibility for its full implementation up to the time his administration was voted out of office in January 2008.
Following news of the single economy pause in 2011, he knocked the decision and said in the midst of economic turmoil there should be a renewed focus on economic unification, not suspension of the process.
Prime Minister Freundel Stuart, who has inherited the responsibility Arthur held, differed, saying commitment to CSME had not waned.
“We have not moved as quickly as we would have wished . . . . There are some knotty problems which continue to bedevil us but we must continue to wrestle them to the ground by doing some sensible prioritizing,” he said in July last year following a CARICOM meeting.
He reiterated this while delivering a lecture at the University of the West Indies Cave Hill Campus in October 2012.
“. . . . Barbados’ commitment to the realization of a fully functioning CSME within the regional integration movement is both irrevocable and profound.
“The region has made commendable progress in advancing the creation of the CSME, resting on the five pillars of the free movement of goods, services, capital, skilled labour and the free movement of enterprises,” Stuart said.
