CARICOM single market and economy charts destiny: progressing beyond a common market, members in this group of Caribbean nations are implementing economic integration and cooperative development, leading to a greater variety and better production of goods and services.

• Author: Bernal, Richard L.
• Position: Caribbean Community

SINCE EARLY TIMES, THE CARIBBEAN ECONOMY was made up of separate island economies, competing rather than cooperating with each other for the same markets and investments. In 1968, in a first attempt at economic integration, Antigua, Barbados, Trinidad and Tobago, and Guyana established the Caribbean Free Trade Association (CARIFTA), which eliminated import tariffs and import quotas between them.

The free trade area was not enough to achieve the desired economic efficiency, however, because it did not provide for the free movement of labor and capital, or for the coordination of agricultural, industrial, and foreign policies. With this in mind, in 1972 the Caribbean leaders took a significant step towards economic integration, transforming CARIFTA into a common market, which was part of the Caribbean Community (CARICOM).

In 1989, the CARICOM Heads of Government decided to continue deepening the regional economic integration process and strengthening the Caribbean Community by creating the CARICOM Single Market and Economy (CSME). Over the last 10-15 years, profound changes in the international economic environment has made this adjustment and transformation urgent. Owen Arthur, Prime Minister of Barbados, is responsible within CARICOM for overseeing the implementation of the CSME. He believes it is "the only realistic and viable option by which to achieve sustainable development" and "the most effective means by which the individual economies of the region can be successfully integrated into the proposed new hemispheric economy and the evolving global economic system."

The CSME was born out of substantive amendments to the Treaty of Chaguaramas which established CARICOM originally. The revised treaty goes beyond facilitating the liberalization of intra-regional trade and creates a single CARICOM economic space to facilitate regional trade, production, and investment. It provides a strengthened institutional framework to support and facilitate the enhanced program of regional economic integration and functional co-operation, modifying the decision-making rule from required unanimity to decisions by a qualified majority vote.

The revised treaty also removes barriers to the cross-border movement and establishment of businesses, thus promoting investment and the intra-regional movement of goods, services, and capital. The rights of establishment mean that CARICOM nationals can establish businesses, provide services, and move capital anywhere within the single market, except for a few areas where restrictions still exist. The removal of legal, administrative, and other restrictions permits the establishment of subsidiaries, branches, and agencies, and allows for the movement of managerial, supervisory, and technical personnel. It is also a positive incentive to investment as it enshrines the right of nondiscriminatory access to and ownership of land, businesses, and other property.

To date, 12 of 15 CARICOM member states have joined the CSME (see map on page 46), with Montserrat and Haiti still to complete the process. In 2005, the Bahamian government declared that "The Bahamas is unable to sign on to the treaty and its provisions," adding that "the national debate in the Bahamas has been stopped on the question of the revised treaty" and that "the country is unable to go any further."

The revised treaty establishes a series of...