Transcript Implications of CSME for CARICOM

Programme Manager, Single Market and Economy
Ivor Carryl
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OVERVIEW OF THE CARICOM SINGLE
MARKET AND ECONOMY(CSME):
IMPLICATIONS FOR CARICOM
By
Ivor Carryl : Programme Manager CSME
MAY 2004
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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
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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
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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
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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)
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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
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Integrating Theatres
FTAA
COTONOU
WTO
CARIFORUM
BI-LATERALS
ACS
CSME
OECS
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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)
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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
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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
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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
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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
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THE OBSTACLES, CONSTRAINTS ,CHALLENGES
:
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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
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Inadequate understanding
Absence of Community
Financing the Community
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Transportation , information and communication
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THE CSME IS :
• AN INTEGRAL PART OF THE COMMUNITY
• A RULES BASED ENTITY
• AN ECONOMIC SPACE
a regional economy
a market system
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THE CSME IS , A Rules Based Entity
LEGAL ARCHITECTURE
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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;
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INSTITUTIONAL ARRANGEMENTS
Governance and decision-making
arrangements
Dispute Settlement
Bilateral Approach
Good Offices
Conciliation
Mediation
Arbitration
Judicial Settlement
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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
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THE SINGLE MARKET ECONOMY(CSME)?
KEY PRINCIPLES UNDERPINNING CSME
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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
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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
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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 NonMembers (Common External Policy)
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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
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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 ,
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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.
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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.
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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
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THE RESULT AND THE
OPPORTUNITY MUST BE
MARKET LIBERALISATION:
FREE ESTABLISHMENT OF PRESENCE
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Right of Establishment
Obligations:
• Permit establishment in all areas
• Do not introduce new restrictions
• Remove existing restrictions
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Establishment :
Who has right? art 32
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natural persons ; citizens nationals residents
natural persons ;self employed ,agricultural,
industrial, commercial, artisanal and
professional
companies and other legal entities ; agencies ,
branches and subsidiaries
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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.
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Establishment:
Elements of regime;
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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
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When can right be denied
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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)
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RECIPROCAL ENFORCEMENT OF
JUDGENMENTS
• Draft Legislation in progress
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THE RESULT AND THE
OPPORTUNITY MUST BE
MARKET LIBERALISATION:
FREE MOVEMENT OF NATURAL
PERSONS
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SUMMARY ON FREE MOVEMENT OF NATURAL
PERSONS
(i) There are two Regimes :
(a) Facilitation of Travel (Art 46)
(b)Movement of Skills (Art 32,34(d),3637)
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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
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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
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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)
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THE RESULT AND THE
OPPORTUNITY MUST BE
MARKET LIBERALISATION:
FREE MOVEMENT AND TRADE
IN GOODS
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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
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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
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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
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THE RESULT AND THE
OPPORTUNITY MUST BE
MARKET LIBERALISATION:
FREE MOVEMENT AND TRADE
IN SERVICES
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LIBERALISATION REGIME
APPROACH
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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
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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
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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
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LIBERALISATION REGIME :
PROCESS
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STANDSTILL Art 36
ROLLBACK Art 37
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Existing restrictions law and in effect must be
removed in by 31 December 2005:
(a) As a general undertaking (ART 37)
(b) As a specific undertaking ; in accordance with the
Programme to Remove Restrictions established by
the Thirteenth Inter-Sessional Meeting of the
CONFERENCE
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LIBERALISATION REGIME :
PROCESS (CONTD)
IN SPECIFIC CASES removed restrictions include ;
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Those restricting a company
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Those restricting Non-Wage Earners(self employed
persons) industrial, agricultural, professional,
commercial and artisanal providers
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Those restricting managerial, technical and
supervisory persons
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Those restricting the Spouse and dependant persons
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LIBERALISATION REGIME : Number of Restrictions
Country
All
Restrictions
2003 2004
2005
Antigua
15
5
7
3
Barbados
34
31
-
3
Belize
31
7
3
21
Dominica
27
21
1
5
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LIBERALISATION REGIME : Number of Restrictions
Country
All
Restrictions
2003 2004
2005
Grenada
21
5
1
15
Guyana
43
5
8
30
Jamaica
69
28
26
9
Montserrat
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LIBERALISATION REGIME :Number of Restrictions
Country
All
Restrictions
2003 2004
2005
St Kitts
6
2
4
St Lucia
44
21
13
10
St Vincent
12
5
5
2
Suriname
35
8
1
24
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LIBERALISATION REGIME :Number of Restrictions
Country
All
Restrictions
2003 2004
2005
Trinidad
10
2
4
4
TOTAL
349
140
69
130
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EXCEPTIONS
• Balance of Payments Art 43
• Restrictions to Resolve Difficulties Art 47
IN PROGRESS
• Agreement on Financial Services
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BUILT IN AGENDA (art 239)
• GOVERNMENT PROCUREMENT
• TRADE INVOLVING FREE ZONES
• FREE CIRCULATION
• ELECTRONIC COMMERCE
• CONTINGENT RIGHTS
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WHO BENEFITS
• THE COMPANY /BUSINESS
ORGANISATION IN THE MARKET
• NATURAL PERSONS IN THE MARKET
• CONSUMERS
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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
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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
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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
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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
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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
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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
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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
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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
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COMMON DEALING WITH NON
MEMBERS;
NEGITIATING ISSUES
• Subsidies,
• Resource Transfers, Technical Assistance
• Preferences
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WHAT MUST A MEMBER STATE
DO
(i)
(ii)
(iii)
(iv)
IMPLEMENT THE CSME REGIMES
NATIONAL STRAEGY
COMPANY DEVELOPMENT
INDIVIDUAL STRATEGIES
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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
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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
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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
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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
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