Category Archives: regional integration

CARICOM Protocol on Contingent Rights: An important Step to CSME Consolidation

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Alicia Nicholls

The Government of Barbados has recently announced a Bill entitled the Caribbean Community (Amendment) Bill 2019, which, when passed, would amend the principal Act to give effect to the CARICOM Protocol on Contingent Rights, making it part of Barbadian law.

Barbados, along with six other CARICOM Member States, had signed the Protocol during the 39th Regular Meeting of the Conference of CARICOM Heads of Government in Montego Bay Jamaica in July 2018.

Following the recently held 30th Inter-sessional Meeting of the Conference of CARICOM Heads of Government in St. Kitts & Nevis, it has been reported that all CSME participating Member States have now signed the Protocol. But what is the Protocol about and why is it necessary for the consolidation of the CSME?

What is the Protocol on Contingent Rights and Why is it Necessary?

The Revised Treaty of Chaguaramas confers a number of rights to Community Nationals, including the right of establishment, the right to provide services, the free movement of capital and of skilled Community Nationals to seek employment in other CSME participating Member States. However, it was recognised by Member States that despite these rights (called ‘primary rights’) being conferred, additional enforceable rights (or ‘contingent rights’) were needed to ensure that Community Nationals could enjoy them effectively and without frustration.

For example, there was concern by CARICOM nationals who were working in other jurisdictions about their inability to access social services on the same basis of nationals of the host country, the inability of their spouses to also legally seek employment, and for their children to access primary education on the same basis as the children of nationals of the host country. These barriers frustrate the exercise of the rights conferred in the Revised Treaty.

The Protocol, which was a long time in the making, confers certain enforceable social and economic rights to Community Nationals and their immediate families who make use of the right of establishment, the right to provide services, the right to move capital and the free movement of skilled labour under the Revised Treaty of Chaguaramas. As such, the Protocol is not only a starting point for addressing some of the issues currently faced by Community Nationals seeking to exercise these rights effectively, but is, therefore, an important step towards the consolidation of the CSME.

Rights guaranteed under the Protocol

The framers of the Protocol define ‘contingent rights’ as “rights to which a national and his or her spouse and immediate dependents are entitled, contingent on the exercise by the principal beneficiary of the right of establishment, provision of services, movement of capital or free movement of skills”.

Subject to certain exceptions, the contingent rights currently guaranteed under the Protocol are:

  • the right of a principal beneficiary resident in a host country, his or her spouse or their dependants to transfer capital into and from a host country subject to Article 43 of the Treaty, which speaks to restrictions to safeguard balance of payments;
  • the right of a spouse or dependants of a principal beneficiary resident in a host country to leave and re-enter a host country;
  • the right of the spouse of a principal beneficiary resident in a host country to work in a host country without a work permit;
  • the right of a principal beneficiary resident in a host country and his or her spouse to access on a non-discriminatory basis lands, buildings and other property for residential or business purposes reasonably connected with the exercise of the rights of the principal beneficiary;
  • the right of dependent children of a principal beneficiary resident in a host country to access primary education on a nondiscriminatory basis, where and to the extent provided by the Government of the host country;
  • the right of a principal beneficiary resident in a host country to import into the host country free of duties within six months of being granted a stay, subject to the principal beneficiary having already satisfied the duty regime in another Member State, tools of trade that are (i) reasonably connected with the exercise of any of the
    primary rights of the principal beneficiary; (ii) in the possession of the principal beneficiary in the exercise of any of those primary rights; and (iii) located in a Member State.

These are a minimum standard and as such, Article IV of the Protocol specifically notes that Member States are not precluded from granting greater rights once not done in a discriminatory manner in contravention of the non-discrimination principle (Article 7) and more specifically, the Most Favoured Nation principle (Article 8) of the Revised Treaty respectively. It should be noted that consistent with a phased approach, the Barbados Bill adopts the Protocol as is and does not grant any greater rights.

Who may qualify for these rights?

Principal Beneficiary

The Protocol defines a ‘principal beneficiary’ as a national of a Member State exercising one or more primary rights, that is, rights pursuant to the Treaty in relation to the operation of the CSME and described in Articles 32, 34, 36, 40 and 46 of the Treaty, which deal with right of establishment, right to provide services, the movement of capital and free movement of skilled community nationals respectively.

For example, under the free movement of skilled nationals regime, ten categories of wage earners may move and work freely within CSME participating Member States without having to seek a work permit in the jurisdiction in which they seek to work and once they hold a CARICOM Skills Certificate (formally known as the CARICOM Certificate of Recognition of Skills Qualification).

The five original categories under the Revised Treaty of Chaguaramas were: University graduates, artistes, musicians, sportspersons, media workers. These were later expanded to include five additional categories: nurses, teachers, artisans with a Caribbean Vocational Qualification (CVQ), holders of Associates Degrees or comparable qualification and Household Domestics with a Caribbean Vocational Qualification (CVQ) or equivalent qualification. These eligible categories will soon include others, namely, agricultural workers, barbers, security guards and beauticians.

All other Community nationals need to apply for work permits in order to seek employment in another CSME jurisdiction.

Spouses and Dependents

With a nod to inclusiveness, the framers of the Protocol adopted a broad definition of ‘dependent’ to include any unmarried child of a principal beneficiary or of his or her spouse provided that such child is under the age of 18 years, under the age of 25 years attending school or university full time or over the age of 18 years who is disabled and dependent on the principal beneficiary. However, the definition of ‘spouse’ is still restricted to heterosexual relationships either via marriage, or via common-law unions to the extent that such unions are recognized by the laws of the host country.

Built-in agenda and monitoring

The issue of contingent rights has been a sensitive one as not all CARICOM Member States offer their own nationals the same level of social benefits. There are legitimate fears that there may be undue burdens placed on those States with more generous social welfare programmes, such as free education and free health care, as well as concerns about the potential for abuse of these programs.

One way the framers of the Protocol appear to seek to address this concern is by allowing for a phased approach through a built-in agenda (Article III). It enumerates a list of potential more extensive rights to be adopted by Member States on a phased approach subject to agreement. It also provides for monitoring and review. Additionally, temporary service providers are not entitled to contingent rights and safeguard measures in Article 47 apply to the Protocol mutatis mutandis.

Moving from paper to practice

CARICOM Member States are dualist States, that is, even after a treaty is signed by a Member State, it needs to be translated into domestic law in order for the treaty obligations to be binding on the State domestically. Therefore, the rights under the Protocol can only be enjoyed, and the State bound to provide these rights, once they have been translated into domestic law through an Act of Parliament.

  1. Domestic Ratification Needed by all signatories – For the Protocol to enter into force, it must be signed and then ratified by all parties to the Revised Treaty, which will not be an easy task. The Protocol, however, may be provisionally applied once seven or more of the Parties to the Protocol declare their intention to apply the Protocol provisionally before the Protocol enters into force.The next step is to ensure the Protocol is brought into force as soon as possible, thereby ensuring it is parlayed from mere ink on paper. On this front, it is commendable that Barbados, which has lead responsibility for the CSME in CARICOM’s quasi cabinet, is leading by example through its commencement of the ratification process.
  2. Procedures for implementation and monitoring – Procedures and systems must be put in place domestically and regionally to allow for implementation and monitoring of the Protocol’s operation to ensure Member States are honouring their commitments and to ascertain any problems. Data collection will be key.
  3. Training – Guidance, as well as further training of staff members of agencies which are tasked with implementation and monitoring, may be necessary.
  4. Public Awareness Campaign – As evidenced by the misinformation which was circulated on social media after the Bill was announced in Barbados, it is evident that a public awareness campaign is needed not only to educate CARICOM citizens about the rights contained in the Protocol and how they as nationals may benefit, but to help assuage concerns and fears about the Protocol’s intentions and implications.

The very timely Golding Commission Report, which had examined Jamaica’s relations within CARICOM and CARIFORUM, had spoken of the CSME implementation deficit and challenged regional leaders to chart a way forward. Having this Protocol enter into force would not only facilitate greater movement, but also be a much-needed injection of confidence to show the region’s populace that the CSME is not moribund. On this note, Barbados’ initiative to begin the ratification process is certainly a commendable one, and it is hoped that other CARICOM countries will swiftly follow suit.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

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CARICOM Foreign Policy Coordination: Priority or Pipe Dream?

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Alicia Nicholls

It has been generally recognized by most Caribbean Community (CARICOM) countries, at least in principle, that a coordinated voice on foreign policy issues endows our small countries with bargaining power beyond our size constraints. Indeed, foreign policy coordination is one of the four pillars of CARICOM, with economic integration, human and social development, and security being the other three. However, given the current and increasing discord among CARICOM countries on key international developments, is CARICOM foreign policy coordination still a priority, or is it merely a pipe dream?

An exercise of foreign policy is an exercise of a State’s sovereignty. In general terms, a State’s foreign policy is its strategy in interacting with other States, and is influenced by what that State determines to be its strategic national interests, values, goals and priorities. The key words here are “national interests”, and they may be underpinned by ideology, pragmatism or a combination of the two. A State’s foreign policy is not static, and may change depending on the ideology of the Government in power (for example, whether right-wing, left-wing or centrist) and changing national interests, values, goals and priorities.

As a State’s foreign policy is determined by its national interests, this means that a regional coordinated foreign policy inevitably necessitates the strategic alignment of the national interests of the countries concerned.

Rationale behind the goal of a coordinated CARICOM foreign policy

From as early as the days of CARIFTA (the Caribbean Free Trade Area), the predecessor of CARICOM, the founding architects of the Caribbean regional integration project viewed a coordinated foreign policy as a life raft for assisting our small, then newly independent Caribbean States, to navigate often hostile international Cold War waters in which powerful big country sharks would prey on us little small state ‘sprats’.

Our founding fathers, and later the drafters of the Revised Treaty of Chaguaramas which established the CARICOM Single Market and Economy (CSME), saw a unified foreign policy position as an insurance policy against bullying tactics and the politics of ‘divide and conquer’ – the practice by major powers of playing off CARICOM States against each other, or picking them off one by one through inducements such as aid and other financial support in order to secure votes on hemispheric and international issues. It recognises the old adage of “strength in numbers”. For example, Article 6(h) of the Revised Treaty of Chaguaramas states as one of the Community’s objectives “enhanced co-ordination of Member States’ foreign and [foreign] economic policies”.

Indeed, there have been several instances where Caribbean countries have successfully leveraged their collective voice and numeric strength to their own benefit. Comprising nearly half of the membership of the Organisation of American States (OAS), CARICOM countries are a crucial voting bloc which powerful countries deem necessary to court for voting support on critical hemispheric issues. In the United Nations (UN), CARICOM countries are a smaller but still critical voting bloc.

But do CARICOM member States’ national interests really align to such an extent that a coordinated foreign policy on all issues is still (or was ever) achievable? CARICOM comprises fourteen independent countries and one British Overseas Territory (Montserrat). This necessitates balancing national interests, values, goals and priorities which do not always necessarily align. Indeed, CARICOM countries, while all small States, have their differences, whether in terms of language, geography, economic structure, population, resource endowment or size. All of these factors impact on each State’s perceived national interests, values, goals and priorities.

Foreign policy coordination has been successful in areas like climate change where Caribbean countries see their national interests as inextricably linked. But even on this important issue, there is some policy incongruence. On the one hand, CARICOM countries have demanded more urgent global action to fight climate change, while on the other, some CARICOM member States are still pursuing hydrocarbon exploration and exploitation, as part of their economic development strategy.

There have also been increasing (and frankly, embarrassing) instances of CARICOM foreign policy disunity, from as far back as the infamous US Ship Rider issue in the 1990s, the inability to unite around a single candidate for Commonwealth Secretary General in 2015, to as recently as the UN vote on the US’ controversial motion to recognize Jerusalem as the capital of Israel (instead of Tel Aviv). There is also the still unresolved issue of the region’s position on the One China Policy – some States recognize the People’s Republic of China, while a few still recognize the Republic of China (Taiwan).

The Venezuela Humanitarian Crisis

The latest example of foreign policy disunity relates to the devolving political, economic and humanitarian crisis in the Bolivarian Republic of Venezuela – a country which, despite some differences, has been an important friend to the region in terms of aid and other support. I highlight the Venezuela crisis not just because it is one of the biggest hemispheric crises affecting the region, but it is a nuanced issue which clearly shows the divide in CARICOM countries’ national interests, and hence their diverging positions on the perceived solution.

The suffering of the Venezuelan people wrought by the incompetence of the Maduro regime, and made no better by western countries’ economic sanctions, have caused spill-over security, health, economic and other risks for neighbouring countries. According to the UN, over three million Venezuelans have fled that South American country since the start of the crisis. Many have migrated (illegally in many cases) to neighbouring countries, including Trinidad & Tobago. It is, therefore, in CARICOM countries’ interest for the humanitarian crisis to be solved. However, CARICOM countries differ on what they believe the solution should be.

On January 10, 2019, the OAS Permanent Council approved a resolution not to recognize the legitimacy of the second term of current Venezuelan President, Nicolas Maduro Moros. CARICOM’s disunity on this issue was again on full display for the world to see. The Bahamas, Guyana, Haiti, Jamaica and Saint Lucia were among the 19 OAS member states which voted to approve the resolution. Dominica, St. Vincent and the Grenadines and Suriname were among the 6 (including of course, Venezuela) which voted against the resolution. St. Kitts and Nevis, Trinidad and Tobago, Antigua and Barbuda, Barbados and Belize abstained, while Grenada was the only OAS member State which was absent for the vote.

What explains this disunity? To my mind, mainly national interests, exacerbated by the fact that CARICOM remains an inter-governmental organisation. For instance, Guyana is currently embroiled in a long-standing border dispute with Venezuela, which has been inflamed under the current Maduro regime. This may explain Guyana’s vote in favour of the resolution. Ditto could be said for Jamaica which had recently decided to reacquire Venezuela-owned shares in Petrojam. On the other hand, some other CARICOM Member States are members of the Bolivarian Alternative for the Americas (ALBA) and recipients of assistance from Venezuela through, inter alia, the PetroCaribe Initiative. This may explain why they voted against the resolution. National interests not only dictate a country’s position on an issue, but are what determine whether a CARICOM member State will change its vote based on the promise of aid or support.

Moreover, while the majority of CARICOM member States appear to have adopted a position of non-intervention, some member States (the Bahamas and Haiti) have decided to follow major Western powers in recognizing Opposition leader, Juan Guaido, as interim president of Venezuela.

Given the region’s friendship with Venezuela and the implications of the ongoing crisis for many CARICOM countries, it is commendable that some CARICOM governments have assumed a leadership role on this issue. Some CARICOM governments have vociferously challenged the pronouncements of the OAS Secretary General His Excellency Luis Almagro as not speaking for all OAS member states. A CARICOM delegation led by current CARICOM chairman Dr. the Honourable Timothy Harris, Prime Minister of St. Kitts & Nevis, recently initiated a visit to the UN to discuss the crisis. It should be noted, however, that not all CARICOM governments took part in this meeting, which shows that even on this very important issue, the region still cannot sing from the same hymn sheet.

Is a coordinated CARICOM foreign policy merely a pipe dream?

There appears, at least in rhetoric, a renewed interest by CARICOM leaders in advancing the regional integration process, of which foreign policy coordination has traditionally been a major pillar. This has been aided no doubt by the initiative taken by Jamaica in the commissioning and publication of the Report of the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks, more popularly referred to as the ‘Golding Report’, and the reinvigorated leadership displayed by Barbados under its new Prime Minister (lead for the CSME in CARICOM’s quasi-cabinet).

The Golding Report identified the glaring failures in foreign policy coordination as one of several challenges currently confronting the regional integration process. The report rightly cites several of the issues which account for this policy disunity, including offers of aid in exchange for votes, lack of political will, inability of diplomats to get clear policy instructions from their capitals, and of course, national interests. As such, recommendation 26 of the Report is to “review the procedures for foreign policy consultation and coordination in order to avoid as far as possible, the types of conflicts and embarrassing positions that have emerged from time to time among CARICOM members depriving it of the collective force it is capable of exerting”.

However, I would go further. In this time of increased introspection by our leaders on the regional integration process, I think there needs to be reconsideration of whether a coordinated foreign policy is really an achievable goal for the region or are we merely chasing a lofty pipe dream which our diverging national interests, values, goals and priorities may be unable to bridge. Indeed, can we really say that the region is any closer to a unified position on the One China policy? Moreover, given the current ideological divide in the region on the issue of citizenship by investment programmes (CIPs), can we really mount an effective and unified CARICOM approach against the EU’s targeting of CIPs in the region?

Let me clarify that I staunchly support our founding fathers’ conviction that there is strength in unified foreign policy positions. Indeed, the enormity of the global challenges confronting the region, whether from Brexit, the possibility of another global downturn, Venezuela, rising populist and nationalist sentiments internationally, blacklisting etc, means that a unified CARICOM front, to the extent possible, should be the desired default position for helping us navigate these challenges.

On the flipside, I also recognise that we must be honest with ourselves. We must face the reality that the goal of a coordinated foreign policy on all issues may be too ambitious given divergent national interests which have accounted for the increasing track record of foreign policy disunity. Indeed, these all too public displays of foreign policy disunity only serve to undermine the Caribbean public’s faith in the sincerity of our leaders’ commitment to the regional integration process, and to empower CARICOM-skeptics. We, perhaps, are setting ourselves up for failure.

An alternative and more achievable approach, therefore, could be for CARICOM member states to clearly identify specific foreign policy priority areas on which they would strive to present a unified policy position. The European Union (EU), for instance, has sought to harmonise its foreign policy (Common Foreign and Security Policy) primarily around security and human rights issues. For CARICOM, priority areas for foreign policy coordination could be more straightforward “low-hanging fruits” such as foreign trade, security, the loss of correspondent banking relationships due to de-risking by global banks, tax issues, and climate change. These are areas in which a unified CARICOM foreign policy position is perhaps most achievable and most effective.

I appreciate that my view may be unpopular and differs from traditional orthodoxy, but in these times of increased economic and geopolitical uncertainty, the continued desirability of pursuing a coordinated foreign policy is an issue which CARICOM will need to resolve and do so quickly, even if we decide we will only coordinate on certain foreign policy issues.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Eight Key Outcomes from the St. Anns Declaration on CSME

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Alicia Nicholls

Caribbean Community (CARICOM) Heads of Government met from December 3-4, 2018, in Port of Spain, Trinidad last week for the 18th Special Meeting of the Conference of Heads of Government of CARICOM which was a special meeting on the CARICOM Single Market and Economy (CSME).

The CSME envisions deepened economic integration among participating CARICOM Member States by creating a single economic space for the free movement of Community goods, services, capital and labour, with the aim of promoting economic development and increased well-being of Community nationals. All independent CARICOM Member States, except the Bahamas, are part of the CSME, while Haiti is not yet a full participant.

Progress towards implementation of the CSME has been painstakingly slow, a point noted in numerous reports commissioned to look at this issue, including the Jamaica-government commissioned Golding Commission Report released earlier this year which examined Jamaica’s relations within the CARICOM and CARIFORUM frameworks.

At the end of the special CSME meeting last week, CARICOM leaders released their St. Ann’s Declaration on CSME in which they recommitted to the regional integration process and outlined several priority areas for immediate action, including setting timelines for some action areas.

Based on the St. Ann’s Declaration on CSME, here are eight key outcomes from the CSME Special Meeting:

1.Recommitment to national action to further CSME implementation

CARICOM leaders recommitted to take action at the national level to advance the regional integration agenda. In their preamble to the Declaration, they reiterated that the CSME “continues to be the most viable platform for supporting growth and development” in CARICOM Member States, but acknowledged that progress on the CSME should have been further advanced by now. They welcomed Haiti’s commitment to full integration into the CSME by 2020.

2.Greater voice for private sector and labour

CARICOM leaders have agreed to establish a formalised and structured mechanism to facilitate dialogue between the Councils of the Community and the private sector and labour. They also agreed to amend the Revised Treaty of Chaguaramas to include representative bodies of the regional private sector and labour as Associate Institutions of the Community.

3. Full Free Movement in 3 years (for willing Member States)

CARICOM leaders have set a timeline of the next three years for those Member States which are willing to do so to move towards full free movement. The leaders have also agreed to reinforce the operation of their security mechanisms to ensure the integrity of the regime allowing the free movement of CARICOM nationals.

4. Expansion of categories of skilled nationals entitled to move

Agricultural Workers, Beauty Service Practitioners, Barbers and Security Guards will be added to the categories of skilled nationals who are entitled to move freely and seek employment within the Community.

CARICOM leaders also reiterated that a skills certificate issued by one Member State would be recognised by all Member States. They also agreed to complete domestic legislative and other arrangements for all categories of free movement of skilled persons.

5. Greater CARICOM-OECS collaboration

They have mandated that steps be taken to deepen cooperation and collaboration between the Secretariats of CARICOM and the OECS “to avoid duplication and maximise the utility of scarce resources”.

6. Single Domestic Space for passengers in the Region

CARICOM leaders agreed to examine the re-introduction of the single domestic space for passengers in the Region and agreed to work towards having a single security check for direct transit passengers on multi-stop intra-Community flights. They also agreed to conduct a special session on Air and Maritime Transportation at the Intersessional meeting of the Conference to be held next February to focus on this matter.

7. Public Procurement and Mutual Recognition of Member States’ incorporated companies

CARICOM leaders set a timeline of 2019 for the finalization of the regime that permits citizens and companies of the Community to participate in Member States’ government procurement processes. They also agreed to take the necessary steps to allow for mutual recognition of companies incorporated in a CARICOM Member State.

8. Restructured Commission on the Economy

CARICOM leaders have restructured the Commission on the Economy to advise Member States on a growth agenda for the Community. Leading Barbadian-UK economist, Professor Avinash Persaud, has been appointed to lead this restructured commission, while its nine other members include distinguished regional and international persons.

The text of the St Ann’s Declaration on CSME may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

The Golding Report Adopted by Jamaica Government: What Next?

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Alicia Nicholls

Last week the Report of the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks, commonly referred to as the “Golding Report” after the Commission’s distinguished Chairman, the Honourable Bruce Golding, former Prime Minister of Jamaica, was debated and adopted by the Jamaica House of Representatives. We now finally have some idea of what is the official position by the Government of Jamaica on the report which was commissioned by the Most Honourable, Andrew Holness, Prime Minister of Jamaica and completed nine months later in March 2017.

Initial fears that the report would serve as the basis for a Jexit (Jamaica’s exit from the CARICOM), akin to the country’s withdrawal from the West Indies Federation in 1961, have been allayed somewhat. Official statements from the Jamaican Government do not evince an intention to leave CARICOM and the Government appears convinced, at least for now, that the CARICOM Single Market and Economy (CSME) is the best raft for navigating increasingly uncertain global economic and policy waters.

The 51-page report sought to examine Jamaica’s relations within CARICOM and CARIFORUM, but has presented another opportunity for introspection by CARICOM leaders and other stakeholders on what has been achieved, where we have failed and what is needed to move forward. The fact that consultations were held with persons not just from Jamaica, but also from across the wider CARICOM shows that the Report was not solely insular in focus.

The Holness Government has indicated that it would not push for the five-year deadline for full CSME implementation recommended by the Report, calling the timeline “unrealistic”. Instead, Mr. Holness stated that the Government would “get commitments from the various heads for the full and effective implementation of the Common Market, which are things that we can do within the five years.”

The Holness Government has also thrown its support behind a review of the CARICOM contribution scale of fees payable to the Secretariat and other bodies. Jamaica is currently the second largest contributor (23.15%) and is working to reduce its arrears of just under $500 million. Jamaica is not the only Member State to owe arrears, but the lack of information on the level of arrears owed by Member States was one of the transparency issues raised in the report.

In his contribution to the debate on the Report in the Lower House, Mr. Holness further noted that some of the report’s thirty-three recommendations were more immediately implementable than others, and there was need for some flexibility. The Leader of the Opposition, PNP Leader, Dr. Peter Phillips, also supported the report.

Disappointingly, there has been no public reaction by CARICOM leaders to the report so far, aside from the comments made by Prime Minister of St. Vincent & the Grenadines, Dr. the Honourable Ralph Gonsalves. No reference was made to the Report in the Communique from the 29th Intersessional Meeting, but the report is likely to be one of the agenda items at the upcoming 39th Regular Meeting of the Conference of the Heads of Government of the Caribbean Community (CARICOM) carded for July 4-6 in Jamaica.

At the two-day Stakeholder Consultation on the CARICOM Single Market and Economy (CSME) held at the Ramada Princess Hotel in Georgetown, Guyana June 8-9, the Honourable Bruce Golding, who was one of the presenters, noted that the CARICOM Secretariat was not to blame for the implementation deficit.

The Jamaica Government should be lauded for this effort. The Report, which has been the most comprehensive report on CARICOM since the Ramphal Commission’s Time for Action Report of 1992, also addresses issues such as transparency, financing and accountability. The report’s recommendations, most of which are not new, are however, far-reaching. Among the more novel recommendations are the proposed establishment of an Office of an Auditor-General, a Central Dispute Settlement Body, and greater involvement of the private sector.

More could have been said in the Report about ensuring buy-in by future generations by increasing youth participation and engagement in the regional integration process, such as through the expansion of the CARICOM Young Ambassadors Programme, the establishment of a CARICOM Young Professionals Programme at the CARICOM Secretariat or across its institutions, or at least providing greater opportunities for young persons to see first hand the work of the Secretariat through internships.

Like the many reports and studies before it, the Golding Report presents an important opportunity for conversation and dialogue, but talk must be parlayed to action. Jamaica will assume chairmanship of the Conference of Heads of Government under its rotational system from July 1-December 31, 2018, and Mr. Holness will have an opportunity within his six month chairmanship to hopefully influence how much attention is paid to the report and its recommendations, and what should be the next steps.

It is hoped that the Golding Report will not suffer the fate that so many previous studies on CARICOM suffered, that is, being relegated to “File 13”. The report should provoke serious introspection about whether the CSME is really what we want. What concrete steps are we willing to take to implement the commitments made under the Revised Treaty of Chaguaramas?

Leaders of CARICOM countries must not just be willing to make commitments but be champions for their implementation domestically. The election result in Barbados, which under the quasi-cabinet has lead for the Single Market (including Monetary Union), presents some cause for hope. The new Prime Minister, the Honourable Mia Amor Mottley, has taken a more pro-integration stance than seen in the previous administration, and one of her first acts was to remove the visa requirement for citizens from Haiti, which is not yet a CSME participatory but is a CARICOM Member State.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

CARICOM Heads to meet this week for 29th Intersessional HoG Meeting

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Alicia Nicholls

Heads of Government of the Caribbean Community (CARICOM) will meet this week, February 26 & 27, 2018, in Port au Prince, Haiti for their 29th Intersessional Meeting. The meeting will be chaired by current chairman of the Conference of the Heads of Government, Haitian President, His Excellency Jovenel Moise.

Chairmanship of the Conference of Heads of Government rotates every six months. Haiti, which became a full member of CARICOM in 2002, will hold chairmanship from January 1st to June 30th. Jamaica’s Prime Minister Andrew Holness will assume chairmanship on July 1st.

Major agenda items for the intersessional meeting include building climate resilience, crime and violence, the impact on CARICOM Member States of blacklisting actions and de-risking actions by global banks.

Additionally, according to the official press release, the meeting “will seek to advance plans to further strengthen key elements of the CARICOM Single Market and Economy (CSME)  including those related to travel and trade”.

CARICOM Secretary-General Ambassador Irwin LaRocque; the immediate-past CARICOM Chairman, Prime Minister Dr. Keith Mitchell of Grenada and current Chairman, President Moise of Haiti, will make remarks at the Opening Ceremony carded for February 26 and which will be live streamed on CARICOM’s website.

In anticipation of the meeting, Haiti’s Ministry of Trade held a Public Forum last Friday to discuss “Integration of Haiti in CARICOM: Challenges and Opportunities”.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

COTED concludes 42nd Meeting; Deputy SG calls for greater ease of doing business

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Alicia Nicholls

The Council for Trade and Economic Development (COTED) of the Caribbean Community (CARICOM) convened its 42nd meeting in Georgetown, Guyana last week, with the Caribbean Single Market & Economy (CSME) as one of the main areas for discussion for CARICOM trade ministers. COTED is the organ of the Community responsible for the promotion of trade and economic development and consists of Ministers designated by CARICOM Member States.

The agenda for the two-day meeting which took place April 21-22 included the treatment of CARICOM nationals, trade in goods, trade in agriculture, the issue of correspondent banking and regional transportation. Dr. Arancha Gonzalez, Executive Director of the International Trade Centre (ITC)  was also present at the meeting.

Despite the Caribbean Court of Justice’s judgment in Myrie v Barbados, the vexing issue of the treatment of CARICOM nationals seeking entry into other CARICOM member states is a topic which has reared its head in the news media again in recent weeks.  The latest flare up surrounded the deportation of 12 Jamaicans by Trinidad & Tobago authorities over the Easter weekend, which prompted some Jamaicans, not for the first time, to call for boycotts of products from the twin-island republic.

Deputy Secretary General of CARICOM, Ambassador Manorma Soeknandan,touched on this issue in her opening remarks.  Noting that the average citizen judges integration by the ease by which he or she can cross regional borders, she highlighted that “more sensitization has to be done among our border officials in relation to the rules that are already in place and the procedures that should be followed”. She suggested to COTED Ministers that they may wish to consider “establishing a quick-response mechanism to resolve situations as they arise on the ground”.

Terming the CSME “the bedrock of our economic resilience”, Ambassador Soeknanda emphasised that CARICOM people wanted to see results and rightly noted that “consolidation and enhancement of the operations of the Single Market will also allow for a more coherent approach in our External Trade Negotiations”. She referenced the review of the Common External Tariff which is to be commenced.

Ambassador Soeknanda also spoke of the need to improve the ease of doing business in the region, an issue which I have touched on in previous articles. She said, “we are all complaining in our Region [about the ease of doing business], but what is each one of us doing to change the situation.” She noted that in addition to improving our individual country rankings, there are issues which Caribbean countries can address jointly, such as the time taken to start a business, registering property, and the enforcement of contracts.

The Deputy Secretary General’s remarks may be accessed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

Global Trade and Socio-economic tides pushing Caribbean countries to the back of the shoal: Integrate or be left behind

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Alicia Nicholls

A few days ago I had the pleasure of being on the Regional Integration panel at the 17th Annual SALISES Conference held this year in Barbados where I presented a paper co-authored with founder and president of the African, Caribbean and Pacific Young Professionals Network (ACP YPN), Miss Yentyl Williams. The consensus all the panelists had reached in our papers was that as small fish in a very large pond, Caribbean countries are facing a growing swell of global trade and other socio-economic tides which are deepening our marginalisation in the global economy.

We argued that the region desperately needed to deepen and widen its integration process or face being further relegated to the back of the global shoal. Of course, what we were saying was not novel and indeed, has been one of the oldest and most compelling justifications for the regional integration project.

The Good

Caribbean countries have generally attained high levels of socio-economic and political development and high per capita incomes, which have put us “ahead of the pack” of other small island developing states (SIDS). An unfortunate side effect has been the graduation of several “high income” Caribbean countries like Barbados, the Bahamas and Trinidad & Tobago from accessing most concessional loans and grants, with a shift in aid focus towards Least Developed Countries (LDCs). We also have long traditions of stable democratic rule underpinned by respect for the rule of law which has been a source of comfort for investors seeking to do business in the region.

The Bad

Despite these very noteworthy accomplishments, Caribbean countries confront many challenges endemic to SIDS, including vulnerability to natural disasters and to international economic and financial shocks, open economies with a high dependence on imports and on a narrow base of exports and trade partners, a paucity of natural resources, unsustainably high levels of debt, low growth rates, wide fiscal and current account deficits, declining competitiveness, growing informal economies and unpredictable foreign direct investment (FDI) inflows.

The potential shift in trade rule making from the multilateral level (Doha is practically dead post-Nairobi), to the regional and plurilateral levels means Caribbean countries will be subject to rule-taking on important trade issues such as services, competition policy, investment and government procurement, without having a seat at the negotiating table. Mega regional trade agreements like the recently concluded Trans-Pacific Partnership Agreement (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP) which is currently under negotiation and plurilaterals under negotiation like the Trade in Services Agreement (TISA), also have the potential to further erode the narrow margins of preference Caribbean countries’ exports enjoy in the US and EU markets respectively. Regional exports to these countries are not only below potential but remain heavily concentrated in commodities, namely, minerals and fuels and agricultural products,  and some textiles.

Although low oil prices have benefited oil-importing countries of the region by lowering their fuel import bills, the region’s largest oil exporting economy, Trinidad & Tobago, has gone into recession.

One bright spot is that Caribbean tourism appears to be on the rebound in the aftermath of the impact of the global recession. The latest Caribbean Tourism Organisation (CTO) State of the Industry Report indicates that in 2015, international arrivals to the Caribbean region grew 7%, outpacing global tourism growth of 4% in the same period. Tourist arrivals from within the Caribbean increased by 11.4%. Nonetheless, shocks like 9/11 and the global recession and possibly the current Zika outbreak, highlight the very sensitive nature of the industry, which has implications for countries like Barbados, the Bahamas and the Eastern Caribbean where tourism is a major foreign exchange earner and employer.

The loss of correspondent banking relationships due to the de-risking practices of banks in metropolitan countries has the potential to undermine the region’s trade, investment and remittance flows, a lifeline for many communities within Caribbean countries. The view of the region as being a “risky” place to do business cannot be divorced from Caribbean countries’ constant need to fight their inclusion on arbitrary blacklists, with the EU being one of many latest examples. On the social front, there is rising unemployment and underemployment, which are particularly acute among young persons, as well as rising crime and security concerns.

All of these challenges, many both national and regional in texture and scope, are injurious to regional development, including our progress towards achieving the 17 United Nations sustainable development goals (SDGs). These challenges necessitate harmonised national and regional responses. However, progress on the regional project remains lacklustre.

Functional cooperation has been the pillar in which CARICOM has been most successful. There has also been some success on the foreign policy coordination front as exemplified by the Region’s cohesive position at the Paris Negotiations which led to the Paris Agreement. However, economic integration has been where the challenge lies. The implementation deficit, though spoken of ad infinitum, remains problematic given the long delays in domestic implementation of regional decisions and missed deadlines. The “E” of the Caribbean Single Market and Economy (CSME) is still in the realm of dreams as opposed to reality.

CARICOM countries export the majority of their trade extra-regionally (mainly to the US, EU and Canada). Intra-regional trade remains low and under-exploited and dominated by CARICOM MDCs, particularly petroleum exports from Trinidad & Tobago.

Without doubt, the lack of political will deserves a significant share of the blame for the current malaise. The fact that most CARICOM states have still not signed on to the appellate jurisdiction of the Caribbean Court of Justice is just but one example. At the same time, the slow process of integration in CARICOM can be juxtaposed to the deep level of integration among member states of the Organisation of Eastern Caribbean States, which have their own Eastern Caribbean Supreme Court, currency union, central bank and recently have granted Martinique, a French Caribbean Outermost Region, associate membership.

Besides the lack of political will, other factors remain hindrances to regional integration as well, including human and financial capacity constraints at the national and regional levels, limited monitoring and evaluation of member states’ implementation of reforms and the inability of CARICOM to force compliance with regional imperatives due to its intergovernmental structure. Not to be overlooked are the fears, suspicions and nationalist sentiments we Caribbean people still harbour towards each other, as well as the very “inward looking” as opposed to “regional looking” approach by  many regional leaders.

The options

As the saying goes, Caribbean states are tiny fish in a very large pond but a shoal of fish is better than one if the region is to avoid being swept away by global tides and relegated to the back of the global shoal. Boosting intra-regional trade among Caribbean countries and trade with third states are priorities. For this, improving trade facilitation and ease of doing business in the region are a must.

Caribbean countries have an average rank of ease of doing business of 104 out of 189 economies, according to the latest World Bank Doing Business Survey 2016. Though in ease of trading across borders, Caribbean countries had a average regional rank of 95 (higher than Latin America (108) and East Asia Pacific Islands (112), a lot more work needs to be done. Just compare our average to the comparable SIDS, Mauritius which topped Africa with a rank of 32 in 2016. The highest ranking Commonwealth Caribbean country was Jamaica (68).

Doing business between Caribbean countries can be a frustrating exercise due to differing customs regulations and other regulatory standards, existing non-tariff barriers to trade (e.g: sanitary & phyto-sanitary standards and technical barriers to trade), foreign exchange controls, the high cost of regional transport and lack of access to timely information on documentary and other requirements. While the region has very liberal investment regimes, investors seeking to do business in multiple Caribbean countries have to navigate a complex web of different border and behind the border regulations. This increases the cost of doing business.

A single economic and investment space as envisioned by the CSME, aided by fiscal, investment policy and regulatory harmonisation, would make intra-regional trade easier and also make the region a more attractive destination to extra-regional investors. To this effect, it is imperative that Caribbean countries follow through with the current reforms and the vision of the CARICOM Strategic Plan 2015-2019. Additionally, so far just a handful of Caribbean countries have ratified the World Trade Organisation’s Trade Facilitation Agreement, which while a global agreement, the reforms undertaken would also benefit intra-regional trade.

What the  global financial and economic crisis has reinforced is the need for Caribbean countries to diversify their export profiles and trade partners. The latter is happening to some extent as both China and Venezuela have become major investors and development partners in the region, adding to the traditional partners of the US, EU and Canada. However, China’s economy has slowed as it transitions from export-led to more consumption-led growth. Venezuela faces significant socio-economic turmoils which call into question the sustainability of the Petrocaribe arrangement, under which most Caribbean countries receive oil from Venezuela on highly concessional terms. Some OECS countries are exploring deepening diplomatic and possibly economic relations with Middle Eastern countries. Antigua & Barbuda recently announced it was establishing an embassy in Iraq and lifted its ban on Iraqi nationals seeking to apply for its Citizenship by Investment programme.

Like all trading economies Caribbean states have both offensive and defensive interests. There is the need to convert market access under existing trade agreements such as the CARIFORUM-EU Economic Partnership Agreement and preferential arrangements like the Caribbean Basin Initiative (CBI) and CARIBCAN into market presence. CARICOM should also explore the expansion of existing partial scope agreements the region has with the Dominican Republic (its CARIFORUM partner), Costa Rica, Cuba and  Colombia, as well as the possibility of concluding trade arrangements with other South and Central American countries.

Additionally, there is the need to move into higher value products than just traditional commodities like cocoa, sugar and rice and also accelerate the development of possible growth sectors like the cultural industries, transshipment, ICTs and renewable energy (for domestic consumption and possible export). To this effect, the region needs to make optimum use of aid for trade initiatives.

CARICOM countries must continue to speak with “one voice”, particularly on global trade, economic and social issues which have implications for the development of our economies and our peoples. This includes continued advocacy for the interests of small vulnerable economies (SVEs) in WTO negotiating groups and continuing to support the multilateral system to ensure its primacy, and not FTAs and plurilaterals, as the forum for trade rule making so that the Region has a say in the rules to which it is subjected.

OECS countries have long seen the utility of maintaining joint representation in diplomatic capitals, such as the OECS Joint Mission in Brussels. It is time CARICOM consider the same.

Any regional strategy requires continuity and continuity mandates engaging the future of the region – our young people. The region has to harness and unleash the energies of its young people, many of whom feel alienated from the regional integration process and from their societies in general. While the CARICOM Youth Ambassadors is a great step, I have always argued that CARICOM needs a Young Professionals Programme similar to the young professionals programmes of other organisations, where the region’s young people, many of whom have increasing difficulty finding jobs commensurate with their skills, can be systematically recruited into various regional institutions and inject new ideas and enthusiasm. As SIDS, our human resource has always been our greatest resource. It is time we exploit it to the fullest.

In sum, the growing challenges facing the region means it cannot be business as usual. The time for talking is over. It is time for action. Countries with economies and populations larger than ours have seen the importance of deepening their integration. As small fish in a large pond, Caribbean countries need to do the same or face being left at the back of the global shoal.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.