a AQ) | the caricom Sing IDEAS a cml single Market is the first phase of the proposed Caricom Single Market an‘ my (CSME) ore Sn to promote the development of the region individually and collectively. © The CSME is the smallest regional bloc in the world ‘© The CSME is similar to an economic union. © The CSME is based on the model of the European Union. © Inorder for the Caricom single market to exist, member states must remove all restrictions to the free movement of capital, labour, and goods and services of Caricom origin. © Asingle market for goods has existed in the Caribbean since 1973, when the Common Market was created. © Under the Common Market, restrictions remained in place on the right of establishment, the movement of capital and labour, and the provision of services —— ‘The Caricom Single Market: This is an arrangement by which Caricom countries have agreed to convert their separate national markets into one large single market, through the removal of all barriers to the free movement of regional goods, services, capital, and labour. Economic union: An economic union is a common market with a common currency and the exchange of capital and labour. Factors of production: All the resources, such as natural resources, labour, capital, and enterprise, which are needed to create goods and services. CSME is a third stage; it is different im Kind fike boiling water Hurning into vapour. Tt is mot another step, it is a guantun Leap. Stabroek News, 3 August 2008 Owen Arthur, a former had the lead res the CSME, ner prime minister of Barbados, sponsibility for the implementation of Put exercise 1s partici Belige in which Wav distinct econonit as a sims in the Same Sense ‘example, is One #™ Owen Posie Figure 4.27: Th Figure 4.28: Th: ‘Movement of rej categories of lal le Market (CSM) imply as possible, it is am 8 eee Frail ov taking the pibingy economies Sting Fog tie Gest to Suriname in the cag t oxisted hitherto as separate, es, and reconstituting they te market and a single economy, in which Barbados, £ Fional rather tha i parish economies. “Arthurs description of how CSM was expected to work : fatign ana Jamaica Saint Kitts and Nevis jarouda Derma aint Lucie Barbados ened - Sent Yet “ & oa and the panied Grenadines reo ay yah so 1e member states of the CSM single market removed barriers to the {ree "gional goods and services, capital, and so? ibour,‘The Caribbean Common Market only permitted the free movement of goods of Caricom origin within the region. Restrictions to the establishment of businesses, the provision of services, and the movement of capital and labour still remained. This prevented scarce factors of production from moving to the countries where they were needed. This in turn prevented Caribbean producers from producing their goods at the best possible prices to enable them to compete easily in international markets, Meanwhile, as globalization and trade liberalization continued to spread, more and more consumers around the world continued to enjoy a wider variety of goods that were also cheaper. Inefficient businesses were forced out of operation because they could no longer rely on protection in international markets. Caribbean producers now had to become more competitive in order to survive and earn enough foreign currency to enable the region to at least maintain its level of development. They needed an organization to help them respond to the challenges and opportunities of trade liberalization and globalization. The Revised Treaty of Chagu: In order to ensure the continued develop: the region, Caricom leaders decided that they transform the Common Market into a single market and economy in order to prepare the region for the challenges and opportunities resulting from trade liberalization and globalization. Consequently, the 1973, Treaty of Chaguaramas was revised in 2001. In the revised treaty the Caribbean Community and Common Market was renamed the Caribbean Community Including the Single Market and Economy (CSME). Under the provisions of the treaty the existing Common Market was to become a single market and economy, which was to be implemented in two phases. The Single Market (CSM) was implemented 'n 2006 in the first phase; the Single Economy Was to be implemented in a second phase in 2008. However, at the time of writing the Single Economy has not been established. The Caricom Single Market (CSM) fe will now discuss the Single Market aspect of the CSME. The Single Economy aspect will be 'scussed in Unit 4.9. ‘The revised treaty stated that the Caricom Single Market was to be created by member states: © removing the existing barriers to the trade in goods and services of Caribbean origin © allowing Caribbean citizens to move their financial capital and technology between member states without any restrictions; this is to enable the region to develop its capital market to help finance the region’s development. © allowing skilled workers such as university graduates, media workers, sports persons, musicians, artists, managers, supervisors, and service providers such as domestics to live and work in another member state without a work permit © granting Caribbean citizens and existing Caribbean businesses the right to set up businesses in any member state without restrictions; this provision is known as the right of establishment, and it enables Caribbean citizens to use their entrepreneurship to contribute to the economic development of the region © agreeing on regional standards for the production of goods throughout the region, to ensure that they are of acceptable quality; this is to encourage investor’and consumer confidence in regionally produced goods @ imposing a uniform rate of duty (CET) on goods imported from countries which are not members of the CSME; this offers some measure of protection to regional producers from extra~ regional competition © pursuing a common regional and international trade policy. These measures will have the effect of removing the existing borders of national markets and thus, creating a large single market known as the Caricom Single Market (CSM). ‘The establishment of the Caricom Single Market and Economy represents the third and final stage of the economic union of the Caribbean. It also represents the most challenging stage of the integration process because it requires par: wwipating member states to make more generonis ». mnomie concessions than any previous rep'os.si ceonomic integration strategy.ier certificate? ‘What is a Caricom Stills C 2 What isthe procedure for obtaining a Caricom Skills Certificate? VIIDVIDIDD CASE STUDY From Grenada to Barbados John and Mary are married. They are Grenadian citizens ‘and they have two children of school age. John is an ‘economist and Mary is a qualified nurse, John has been’ offered a job by the Caribbean Development Bank in Barbados, He will migrate to Barbados with his family. a Read the case study above and discuss the following questions in a small group. 1 What rights which are enjoyed by Barbadian citizens should Mary and her children be given by the Barbados government? State TWO ways in which an influx of Caricom nuclear families may affect the social services in Barbados, Can your country accommodate all the qualified Caricom nationals who wish to live and work there? Give THREE reasons to support your answer. Would John and Mary prefer to live and work in Barbados, or in their own country? Give ONE reason to support your answer. Chapter Three of the Revised Treaty of Chaguaramas states that Caricom nationals should be permitted to establish Caricom-owned businesses in any member state without restrictions and on the same terms as, national enterprises, You are the owner of a successful business in St Lucia, You have been granted permission by the government of Antigua Barbuda under Chapter Three of the Revised ‘Trealy to set up a branch of your business there Draft the main points you would wish to raise with the Minister of Caricom Affairs in Antigua-Barbuda about the concessions which to grant you in order t business there. you expect that country ‘0 enable you to set up your Objectives of the Caricom Single et (CSM) . “ een of the Caricom Single Marker (Cg), OO go help the region respond to the are intende! rer ; a Henges and opportunites created By globaizg, and trade liberalization. Caricom Single Market “The objectives of the include: © increasing trade in regional goods and service S increasing the output of goods and services © promoting competition among Caricom firms © promoting the most efficent use of the region resources © improving the welfare of Caricom citizens, “The heads of government expected that the Single Market would help regional producers by giving them more and better opportunities to produce and sell their goods and services in the region and by allowing them to benefit from economies of scale. They also expected that, if market forces were allowed to determine where the factors of production were to be utilized, this would result in more efficient and economical use of the factors. Tt was honed chievement of these two objective te to competitive production, and th ad to increased production of goo ! and extra-regional markets, and inc hange earnings from exports, ineseased production would also lead to fill utilization of the region’s factors of production. If all these objectives were met the end result would be sustained economic development and an improved standard of living for the region. The challenge would be to ensure that the benefits of the Caricom Single Market were shared fairly among all its citizens. The regional development fund Itis recognized that membership in the CSM does create some disadvantages for some member states, Particularly the less developed countries. A regiond! development fund has therefore been set up to helP them cushion the negative effects of the CSM on their economies4:9 KEY IDEAS © Inthe Caricom Single Economy, member states will be required to adopt a common currency and pursue similar monetary and fiscal policies. © The difficulties in arriving at common monetary and fiscal policies for the region are delaying the implementation of the Caricom Single Economy. Fiscal policy: A government's revenue (taxation) and spending policy. Monetary policy: Actions by government to control the availability of spending money to businesses and consumers. Exchange rate: The price for which the currency of a country can be exchanged for another country’s currency. The Caricom Single Economy is intended to complement the Caricom Single Market. It was planned that the Caricom Single Economy would have been implemented in 2008. This would have been the final stage in the integration process. The Caricom Single Economy will be created by member states © having corresponding company, property, and intellectual property laws © pursuing a common foreign investment policy © working together in deciding the taxation and monetary policies they will pursue © pursuing similar strategies in developing their industries and small businesses © using a common currency. The creation of the Caricom Single Economy requires that the member states give up their national currency and use a new common regional currency. No agreement has been reached on the common currency: this is one of the factors which is delaying the implementation of the Caricom Single Economy. ‘The Caricom Single Economy (CSE) Some governments still think that it may be veceseary for them to pursue their Own monetary and fiscal policies. Objectives of the Caricom Single Economy (CSE) “The CSE will create a single financial space involy all the members of Caricom. The objectives of the Caricom Single Economy are to have member states © pursuing corresponding revenue (taxation) and spending policies (fiscal policies) © pursuing corresponding policies to control the availability of spending money to businesses and consumers (monetary policies) © ‘adopting a single currency © adopting common customs and company laws © pursuing similar development policies in the major industries such as agriculture, tourism, manufacturing, and fisheries. groups. Each group upport the region's adoption con policies, then presents their policy © Group 2: monetary policy © Group 3: development policy © Group 4: customs and company laws At present, Caricom citizens are not able to freelf exchange the currency of one member state into the currency of another member state. Some Caricom countries still impose foreign-exchange control ‘These are measures whereby their central banks linit | the conversion of national currencies into foreig currencies, an