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CARICOM SINGLE MARKET & ECONOMY. Programme Manager, Single Market and Economy Ivor Carryl. OVERVIEW. CARICOM SINGLE MARKET & ECONOMY. OVERVIEW OF THE CARICOM SINGLE MARKET AND ECONOMY(CSME): IMPLICATIONS FOR CARICOM By

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slide1

CARICOM SINGLE

MARKET & ECONOMY

Programme Manager, Single Market and Economy

Ivor Carryl

OVERVIEW

slide3

CARICOM SINGLE

MARKET & ECONOMY

OVERVIEW OF THE CARICOM SINGLE MARKET AND ECONOMY(CSME):

IMPLICATIONS FOR CARICOM

By

Ivor Carryl : Programme Manager CSME

MAY 2004

slide4

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
slide5

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
slide6

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
slide7

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)
slide8

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
slide9

CARICOM SINGLE

MARKET & ECONOMY

Integrating Theatres

FTAA

COTONOU

OECS

CARIFORUM

BI-LATERALS

ACS

CSME

WTO

slide10

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)
slide11

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

slide12

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
slide13

CARICOM SINGLE

MARKET & ECONOMY

THE CARIBBEAN COMMUNITY

  • More developed (MDS’s)

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

slide14

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
slide15

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
slide16

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

slide17

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;

institutional arrangements
INSTITUTIONAL ARRANGEMENTS
  • Governance and decision-making arrangements
  • Dispute Settlement
  • Bilateral Approach
  • Good Offices
  • Conciliation
  • Mediation
  • Arbitration
  • Judicial Settlement
slide19

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
slide20

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 ; LDC’s /DISADVANTAGED
  • CARICOM ISSUES IN DEALING WITH THIRD STATES AND GROUPS OF STATES
    • DIFFERENTIAL TREATMENT FOR THE DISADVANTAGED , SIZE, VULNERABILITY , FLEXIBILITY, PROGRESSIVITY, SCOPE
slide21

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

slide22

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)

slide23

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
slide24

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.
slide25

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.
slide26

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
slide27

CARICOM SINGLE

MARKET & ECONOMY

THE RESULT AND THE

OPPORTUNITY MUST BE

MARKET LIBERALISATION:

FREE ESTABLISHMENT OF PRESENCE

slide28

CARICOM SINGLE

MARKET & ECONOMY

Right of Establishment

Obligations:

  • Permit establishment in all areas
  • Do not introduce new restrictions
  • Remove existing restrictions
slide29

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
slide30

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.
slide31

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
slide32

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)
slide33

CARICOM SINGLE

MARKET & ECONOMY

RECIPROCAL ENFORCEMENT OF

JUDGENMENTS

  • Draft Legislation in progress
slide34

CARICOM SINGLE

MARKET & ECONOMY

THE RESULT AND THE OPPORTUNITY MUST BE

MARKET LIBERALISATION:

FREE MOVEMENT OF NATURAL PERSONS

slide35

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)
slide36

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
slide37

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

slide38

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)

slide39

CARICOM SINGLE

MARKET & ECONOMY

THE RESULT AND THE

OPPORTUNITY MUST BE

MARKET LIBERALISATION:

FREE MOVEMENT AND TRADE

IN GOODS

slide40

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
slide41

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

slide42

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

slide43

CARICOM SINGLE

MARKET & ECONOMY

THE RESULT AND THE

OPPORTUNITY MUST BE

MARKET LIBERALISATION:

FREE MOVEMENT AND TRADE

IN SERVICES

slide44

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
slide45

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
slide46

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

slide47

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
slide48

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
slide49

CARICOM SINGLE

MARKET & ECONOMY

LIBERALISATION REGIME : Number of Restrictions

slide50

CARICOM SINGLE

MARKET & ECONOMY

LIBERALISATION REGIME : Number of Restrictions

slide51

CARICOM SINGLE

MARKET & ECONOMY

LIBERALISATION REGIME :Number of Restrictions

slide52

CARICOM SINGLE

MARKET & ECONOMY

LIBERALISATION REGIME :Number of Restrictions

slide53

CARICOM SINGLE

MARKET & ECONOMY

EXCEPTIONS

  • Balance of Payments Art 43
  • Restrictions to Resolve Difficulties Art 47

IN PROGRESS

  • Agreement on Financial Services
slide54

CARICOM SINGLE

MARKET & ECONOMY

BUILT IN AGENDA (art 239)

  • GOVERNMENT PROCUREMENT
  • TRADE INVOLVING FREE ZONES
  • FREE CIRCULATION
  • ELECTRONIC COMMERCE
  • CONTINGENT RIGHTS
slide55

CARICOM SINGLE

MARKET & ECONOMY

WHO BENEFITS

  • THE COMPANY /BUSINESS ORGANISATION IN THE MARKET
  • NATURAL PERSONS IN THE MARKET
  • CONSUMERS
slide56

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

slide57

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
slide58

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
slide59

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
slide60

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
slide61

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
slide62

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
slide63

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
slide64

CARICOM SINGLE

MARKET & ECONOMY

COMMON DEALING WITH NON

MEMBERS;

NEGITIATING ISSUES

  • Subsidies,
  • Resource Transfers, Technical Assistance
  • Preferences
slide65

CARICOM SINGLE

MARKET & ECONOMY

WHAT MUST A MEMBER STATE

DO

  • IMPLEMENT THE CSME REGIMES
  • NATIONAL STRAEGY
  • COMPANY DEVELOPMENT
  • INDIVIDUAL STRATEGIES
slide66

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
slide67

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
slide68

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
slide69

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