The CARICOM Single Market up Close

If Haiti is included, the combined population of the CARICOM Single Market (CSM) would be 14 million persons. However, as it is now, the Single Market’s combined population stands at around 6 million persons, with a combined Gross Domestic Product (GDP) of approximately US$300 million.
Because of its current political uncertainty, Haiti is unable to participate in the CSM at this time.
According to a CARICOM secretariat commissioned survey and its ensuing report, made available to JIS News, the CARICOM Single Market and Economy (CSME) when fully implemented, would be considered a fourth grouping of market importance for the CARICOM business sector.
The World Trade Organisation (WTO), the arena in which international trade rules are set and the European Union and African Caribbean and Pacific (ACP) trade arena, count as two such trade areas of importance to the region. The yet to be conceived Free Trade Area of the Americas (FTAA), whose combined population will be around 800 million, with an estimated GDP of US$10.6 Trillion, and the Bilateral agreements in which CARICOM enter are the other two trade arenas presently available to CARICOM.
But concerns abound about the rules of procedure for the CSM and the benefits to be accrued to the region’s business sector.
On January 23 and 24, Private Sector Consultant in the Regional CSME Unit in Barbados, Leila Ramocutar Narinesingh, sought to address these issues when she met with some 180 heads of privately owned Jamaican companies at the Jamaica Pegasus Hotel in Kingston. For Mrs. Narinesingh, the CSM is “the region’s most important integration strategy, designed to facilitate economic survival, through the creation of an open market without cross-border restrictions”.
Benefits of this Single Market, she said, included a stronger negotiating voice for the group of countries, and an opportunity for national companies to become regional ones and thus benefit from economies of scale.
In addition, there would be increased consumer power and standard of living as a result of the wider product range at competitive prices, more access to service providers, heightened employment opportunities and capital flows and technology transfers.
She also reminded the Jamaican business sector that prior to the January 1 introduction of the CSM, there existed a free trade area within CARICOM, since import duties were not levied on goods of CARICOM origin.
What the CSM has ensured however, is that all other tariffs and quantitative restrictions on all Member States are removed and that intra-regional imports will generally be treated more favourably than imports from the rest of the world.
Anti-Dumping
As with all free trade areas, rules exist and one such in the CSM is the provision under the Treaty of Chaguaramus concerning Anti-Dumping Duties and Counter Measures.
In the business sense, dumping occurs when goods are sold at less than normal price, most often to secure a monopoly.
“The Revised Treaty does not prohibit dumping, but it advises Member States to impose Anti-Dumping Duties and Counter measures if either there is a threat of injury or actual injury from dumping imports,” the CSME Official said.
With regard to dumped imports originating outside the region, Mrs. Narinesingh explained that the WTO provision on dumping could then be invoked.
She noted that each Member State would enact National Anti-Dumping laws and that a generic one was now in the making. “To date, Trinidad and Tobago and Jamaica have enacted modern Anti-Dumping Laws and the CARICOM Legislative Drafting Facility is now working on a model Anti-Dumping Law, which all Members States are expected to implement,” she informed.
In some cases, dumping may occur because the good is substandard for whatever reason. Regarding the latter scenario, Mrs. Narinesingh noted that a regional standards organisation has been established.
“Regional standards that conform to international standards of production are critical to market expansion and export market development. In recognition of this, CARICOM has established a Caribbean Regional Organisation for Standards and Quality (CROSQ), which has so far developed well over 50 standards for a variety of products,” said Mrs. Narinesingh.
Investment and the Free Movement of Capital
According to Mrs. Narinesingh, the Free Movement of Capital Clause of the Treaty allows CARICOM nationals to transfer money through bank notes, cheques, electronic transfers and so on, among member states, without prior authorisation. “There will also be equal rights to buy stocks and shares and freely move capital in the free trade area,” she said.
This increased availability of competitive capital should also allow for more diversification of investments, since the investment opportunities will also increase and expand.
This however, will call for a regional investment policy, which is in the making. “We are in the process of developing a harmonised investment policy framework that will be designed to achieve increased flow of investments and improved competitiveness of the region’s business base,” she said.
To be included in this investment framework, which will necessitate “wide ranging reforms of national investment policy frameworks”, are, a CARICOM investment code, a streamlined investment approval process, and a harmonised investment incentive regime.
Rights of Establishment
Rights of Establishment were also discussed at the private sector consultation. These include access to land, buildings and property and the right to transfer managerial, technical and supervisory staff, and the removal of restrictions against individuals and legal entities involved in the production of services and capital.
One such restriction is the existence of the Alien Land Act in some Eastern Caribbean countries, which will in some way limit land accessibility for CARICOM entrepreneurs, seeking to establish business in member states.
Addressing this point, Mr. Ivor Carryl, Programme Manager of the CSME regional unit, said some CARICOM countries have laws that constrict land accessibility for non-nationals.
“In Grenada, for example, and much of the Organisation of Eastern Caribbean States (OECS), those who want to establish businesses have to seek permission to do so, under the Alien Land Act. There is also some acreage stipulation. However, this is one of the Acts, which is now under negotiation,” he informed JIS News. Mrs. Narinesingh confirmed that under the Rights of Establishment, restrictions such as these would be removed. “Member states are now actively discussing the removal of restrictions. In addition to that, steps are also being taken to harmonise these laws,” she said.
She also informed that an agreement has been reached on a list of minimum requirements of CARICOM companies, which seek to move from one jurisdiction to another.
In this regard also, service providers such as architects, engineers, medical practitioners should not be discriminated against when it comes to access to land, buildings or property from CSM member states.To ensure that this does not happen, Mrs. Narinesingh said that the Council For Trade and Economic Development (COTED) established a Working Group for Services, which was now establishing common licensing requirements for the various service providers.
Another important organisation to the CSM will be the Community Competition Commission, whose designated headquarters will be Suriname. Still in its construction phase, provision for the Competition Commission was established in the Revised Treaty of Chaguaramas.