CARICOM Single Market and Economy

History

The Caribbean Community (CARICOM) established the CARICOM Single Market and Economy (CSME), with the signing of The Revised Treaty of Chaguaramas in 2001.  The CSME is built on a series of progressive trade and economic integration efforts, beginning with the establishment of the Caribbean Free Trade Association (CARIFTA) in 1965 to 1973, following the earlier efforts to integrate as a unified Anglophone Caribbean in the West Indies Federation, which lasted from 1958 to 1962. CARIFTA liberalised trade in manufactured goods, provided for managed trade in agricultural goods, and contained special arrangements for the Less Developed Countries (LDCs).

The original Treaty of Chaguaramas, which was signed in 1973, deepened the economic integration process with the establishment of the Caribbean Community and Common Market which further liberalised trade in goods among the Member States with a common external tariff, and laid the basis for the further strengthening of the integration movement. 

Goal of the CSME

The goal of the CSME is to provide the foundation for growth and development through the creation of a single economic space that allows for the Free Movement of Goods, Capital, Services, CARICOM Nationals and the Right of Establishment. These are the five core regimes of the CSME and this platform is key to CARICOM’s economic integration,one of the four pillars on which CARICOM rests in pursuit of its objectives. The other three pillars are Foreign Policy Coordination; Human and Social Development; and Security Cooperation.

Focus

CARICOM agreed in 2006 to start operating the CSME focusing on the CARICOM Single Market (CSM). At that point, twelve Member States declared they were ready to put the CSM to put into operation. They were Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago. Haiti signed on in 2010 but is unable to participate in all regimes. Montserrat, a British Dependency who is a full Member of CARICOM, participates in elements of the CSME. It, however, has not yet acceded to the Revised Treaty and related agreements. The Bahamas does not participate in the CSME.

Operations

The Conference of Heads of Government has continually reaffirmed its view that the CARICOM Single Market and Economy (CSME) is the main vehicle to achieve economic growth and development.

The CSME consists of the:

  • Five core regimes – free movement of goods, free movement of capital, free movement of services, business establishment and free movement of skilled nationals;
  • Macro-economic policy coordination and harmonization; and
  • Production integration including sector development.

The work to develop, operationalize and maintain effective CSME includes the development of the:

  • regulatory, administrative practices and procedures to administer the five core regimes
  • built-in agenda : public procurement, free zones (on hold), free circulation, E-Commerce and Contingent Rights;
  • supportive measures necessary for the full functioning and effective implementation of the CSME : intellectual property protection; standards and technical regulations, harmonisation of laws, prevention of double taxation framework, robust competition policy and consumer protection framework, integrated information and communications technology;
  • The sectors – Agriculture, Transportation, Industry, Energy, Services.

Principles

The CSME is governed by the principles of:

  • non-discrimination on grounds of nationality
  • most favoured nation (MFN) treatment – that is – the prohibition of treatment of third countries (or a third Member State) better than another Member State (Article 8 of the Revised Treaty); and
  • non-reciprocity (a Member State is bound to implement its obligations regardless of whether other Member States are implementing theirs).
  • recognition that the countries are at different stages of development – Chapter VII of the Revised Treaty provides special and differential treatment for less developed countries as well as for disadvantaged regions and sectors.

CARICOM Secretariat support for implementation

The CSME Unit was set up in 2002 to implement the CSME.  It is a part of the CARICOM Single Market and Trade Directorate (CSMT) of the Caribbean Community (CARICOM) Secretariat.  Its work is complemented by the work on areas of the CSME (capital, sectoral issues, macro-economic policy coordination and harmonization, sectors) which is coordinated by the Units of the Economic Integration and Innovation Directorate (EIID) at the Headquarters in Georgetown. 

The CSME Unit deals with policy development and establishing the legal and administrative framework for the Free Movement of Skilled Nationals; addressing,labour matters; business establishment and services (movement/administrative requirements for entry and stay); social security, competition policy and consumer protection policy, public procurement, e-commerce and contingent rights). The CSME Unit also monitors implementation of the CSME.

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