Caribbean Trade Law and Development

Tag: CARICOM

  • 37th Regular Meeting of the CARICOM Heads of Government Conference Concludes

    Alicia Nicholls

    Heads of Government of the Caribbean Community (CARICOM) held their 37th Regular Meeting of the Conference of the Heads of Government last week, July 4-6 in Georgetown, Guyana. The Heads of Government paid tribute to, and highlighted the contribution of the former Prime Minister of Trinidad & Tobago, Mr. Patrick Manning who passed away two days before the conference. Mr. Manning, a strong proponent of the regional integration project, was praised, inter alia, for displaying “the finest qualities of regionalism” and for having an “unswerving commitment to building his country and the wider CARICOM”.

    The major topics on the agenda included regional security, the CARICOM Single Market & Economy (CSME), facilitation of travel within the Community, correspondent banking, information and communication technology for development (ICT4D) and border disputes.

    Below is a synopsis of some of the major decisions to which the HoGs agreed:

    • Agreement to host a Global Stakeholder Conference on the Impact of the Withdrawal of Correspondent Banking on the Region
    • Decision to reconstitute the Prime Ministerial Sub-Committee on Cricket with the Prime Minister of St Vincent and the Grenadines, as the Chairman
    • A mandate that the CARICOM Secretariat convene a meeting of Chief Immigration Officers, CARICOM Ambassadors, and other relevant officials by 30 September 2016, in order to address the challenges being experienced by Community nationals travelling throughout the Region.
    • Endorsement of the Action Plan for Statistics in the Caribbean  which seeks to strengthen national statistical systems, inter alia.

    In regards to Brexit, the HOGs “agreed that CARICOM should continue to monitor developments as the exit process unfolded and underlined the importance of a common and structured approach that married the technical, political and diplomatic”.

    The Heads of Government also met with specially invited guest, Her Excellency President Michelle Bachelet of Chile. The HoGS expressed satisfaction with the ongoing process of normalisation of US-Cuba relations but took the opportunity to renew their call for the US to lift the economic and trade embargo against Cuba.

    The full communique may be viewed 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.

  • Brexit wins: What possible implications for the Caribbean?

    Brexit wins: What possible implications for the Caribbean?

    Alicia Nicholls

    Last week while I was climbing the Mayan ruins in the beautiful Central American/Caribbean country of Belize, the British people were casting their vote on one of the most important questions regarding the future of their country’s involvement in the global economy. In response to the simple referendum question, “Should the United Kingdom remain a member of the European Union or leave the European Union”, British voters decided that the UK was better off outside of the 28-member bloc. Although I, like many others, expressed doubt that the Leave vote would have been triumphant, the British people by a 52 to 48% margin have decided that leaving the EU is in their best interest.

    In a previous article on this matter, I noted the possible ramifications of this then hypothetical outcome for tourism dependent economies like Barbados which are highly reliant on the British market for tourist arrivals and for real estate investment. The current situation is uncharted territory.

    In the wake of the Brexit vote, financial markets reacted violently while Sterling lost 10% of its value on currency markets within the days following Brexit, the lowest rate since 1985. Bear in mind that most Caribbean countries’ currencies are pegged to the US dollar and any depreciation of Sterling against the dollar makes the region less price competitive to British travellers. The increased volatility in the value of sterling and any slowdown in the British economy could dampen British demand for travel to the region and or reduce their level of spending during trips. It is a situation which tourism officials across the region have been closely monitoring. Moreover, the political uncertainty as Prime Minister Cameron prepares to demit office in October, the possibility of Scottish demands for another independence referendum, as well as the uncertainty over what impact Brexit will have on the UK economy will result in a wait and see approach by investors, which could impact private British investment in the region.

    Against this background of uncertainty and messiness, what we in the Caribbean need to consider is what implication will the UK’s departure from the EU possibly have on our future trade and foreign relations with both the UK and the EU? Of crucial importance will be the possible impact it will have on the CARIFORUM-EU Economic Partnership Agreement, bearing in mind that once the UK officially is no longer a part of the EU CARIFORUM will no longer have preferential access to the UK market.

    The truth is that although the EPA has not yet achieved the potential that it has been hoped to achieve, the EU is second only to the US in terms of its importance as a trading partner for the Caribbean. The main source market in the EU for Caribbean countries is the UK market. Once the UK is no longer part of the EU, Caribbean countries will no longer have preferential access to the UK market for their goods and services. Moreover, market access openings for services trade, particularly under Mode 4 (presence of natural persons) which is currently the most restricted mode, will have to renegotiated as part of any new trading arrangement which the UK decides to establish with Caribbean countries. As the UK sets about negotiating its own trade agreements with major partners, the Caribbean is unlikely to be anywhere near the top of the UK’s list of priorities. All that while, Caribbean exporters will face uncertainty in the UK market.

    Prime Minister Cameron has already decided that it will be up to his successor, whomever he or she maybe, to invoke Article 50 of the Treaty of Lisbon which formally commences the UK’s secession from the EU. Until such time as a withdrawal agreement is negotiated and agreed to, or after the lapse of two years after the invocation of Article 50, the UK remains part of the EU and bound by its regulations and rules. However, during this time there will be great uncertainty as to what kind of relationship the UK will negotiate with the EU and what will be the impact of Brexit on the UK economy. British companies, services providers and traders need certainty of access to the EU single market. For this reason, it is clear that at the very least the UK will want an agreement which allows the same level of access to the EU single market. Whether the eventual withdrawal agreement involves the adoption of a Norwegian-like model, a free trade agreement, customs union or simply trade under WTO rules will not be known for some time. The EU leaders have already indicated their unwillingness to engage in any informal talks and the EU Parliament passed a resolution urging  the UK to invoke Article 50.

    Colonial and historical ties and a shared language have made the UK our main ally in Europe. The UK will no longer be at the EU table once the withdrawal agreement is finalised which means the region will lose a powerful voice and ally in the grouping. This comes at a time when a confluence of important issues with severe development consequences requires the Caribbean to have as many allies in the room as possible. One of these issues is the whole problem of de-risking practices by international banks, a topic on which I spoke in Belize during my stay there last week.

    Although it has been primarily US banks which have ended or restricted correspondent banking relations with local banks, some European banks have also done so. Another, and not entirely unrelated issue, is the whole matter of blacklists. One would recall that last year the EU compiled and released a list of all of its countries’ blacklists which included some Caribbean offshore financial centres, despite the fact that all of our countries have been given a clean bill of health by the OECD. Thirdly, the EU is currently in the process of redefining its relationship with the countries of the Africa, Caribbean and Pacific (ACP) group. Fourthly, there are important issues which need to be sorted out in regards to the EPA. One of these is the issue of the octroi de mer (dock dues) which serve as barriers to trade between the Caribbean and French West Indies.

    An important issue is the whole matter of the European Development Fund (EDF), the main instrument through which the EU provides development aid to ACP countries and an important source of development funding for Caribbean countries. EU members directly contribute to the EDF based on contribution keys. Germany, France and the UK account for almost half of the contributions under the 11th EDF. This could result in the CARIFORUM countries receiving a smaller share of aid under EDF. On the bright side, the UK is one of the largest bilateral aid donors to the Caribbean and may decide to increase its aid in light of its withdrawal from the EU. However, more “well-off” countries like Barbados, the Bahamas and Trinidad & Tobago have often been excluded from some of this bilateral aid because of their relatively high GDP per capita, another issue which Caribbean countries have been fighting.

    Another impact of Brexit is that it is refocusing the microscope on the future of the Caribbean’s own main integration project, the Caribbean Community (CARICOM).  There are already rumblings by some for there to be a similar referendum on CARICOM. Any such referendum now would be a bad idea. Recall the referendum which Jamaica did on September 19, 1961 which led it to leave the West Indies Federation. At a time when Caribbean countries are facing a wide range of global challenges, the region needs solidarity and unity now more than ever.

    As I had concluded in my previous article, Brexit does have serious implications for future Caribbean-EU and UK trade and foreign relations. The depth and scope of the impact will depend on the length of time of uncertainty, the impact on the UK economy and the kind of trading relationship which the UK eventually negotiates with the EU. However, there are two things that must be emphasised. Firstly, the UK and the Caribbean share strong historical ties which the region should continue to strengthen even more so now that the UK is going solo. I have heard suggestions that the UK may decide to deepen its relationship with the Commonwealth. Secondly, this is an opportunity for the Caribbean to strengthen its ties with the rest of Europe now that the UK will no longer be at the table.

    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.

  • CCJ Issues Ruling in Gay Rights Freedom of Movement Case

    CCJ Issues Ruling in Gay Rights Freedom of Movement Case

    Alicia Nicholls

    Test cases in law are a legal academic’s dream. They  help to map uncharted legal waters by establishing important legal principles and rights, which, as precedents, would be binding in subsequent cases whose facts are similar. The consolidated  test cases of Tomlinson v Belize, Trinidad & Tobago brought by prominent Jamaican attorney and LGBTI (lesbian, gay, bisexual, trans, and/or intersex) activist, Mr Maurice Tomlinson, before the Caribbean Court of Justice (CCJ) aimed to do just that.

    Mr. Tomlinson challenged the consistency of discriminatory provisions contained in the Immigration Acts of the defendant states, Belize and Trinidad & Tobago, which classify homosexuals among the classes of prohibited immigrants. He claimed that the mere existence of those provisions infringed his right of entry as an LGBTI Community national under Article 45 of the Revised Treaty of Chaguaramas and the 2007 Heads of Government Conference Decision.

    Article XII of the Agreement Establishing the Caribbean Court of Justice gives the Court exclusive jurisdiction, subject to provisions of the Revised Treaty, in matters concerning the interpretation and application of the Revised Treaty. Freedom of movement of CARICOM nationals has been a sore point in Community relations, with some States claiming that their nationals are routinely discriminated against.  The Court rendered its landmark decision on the right of freedom of movement of CARICOM nationals in the case of Myrie v Barbados. The CCJ’s ruling in that case established definitively that CARICOM member states were bound by the 2007 Decision of the Conference of Heads of Government of CARICOM to allow all CARICOM nationals hassle-free entry into their territories and a stay of six months upon arrival. The only exceptions for refusing entry are where  the Member State deems a person to be “undesirable person” or where  it is believed the Community national seeking entry may become a charge on public funds.

    The points of law raised in the instant case are unique as it is the first time that a CARICOM national has challenged the immigration laws of a CARICOM member state on the basis of infringing the right of entry of LGBTI community persons. Mr. Tomlinson also claimed infringement of his right under Article 7 of the Revised Treaty to not be discriminated against on the basis of nationality only and that being a UWI graduate and thus a Skilled CARICOM National, his rights under Article 46 of the Treaty would also be infringed.

    The relevant sections from the two Immigration  Acts in question are as follows:

    Belize Immigration Act (Cap 156):

    5.-(1) Subject to section 2 (3), the following persons are prohibited
    immigrants-

    (e) any prostitute or homosexual or any person who may be living
    on or receiving or may have been living on or receiving the
    proceeds of prostitution or homosexual behaviour;

    Trinidad & Tobago Immigration Act

    8. (1) Except as provided in subsection (2), entry into
    Trinidad and Tobago of the persons described in this subsection,
    other than citizens and, subject to section 7(2), residents, is
    prohibited, namely—

    (e) prostitutes, homosexuals or persons living on
    the earnings of prostitutes or homosexuals, or
    persons reasonably suspected as coming to
    Trinidad and Tobago for these or any other
    immoral purposes;

    As a matter of context for readers outside of the Caribbean, LGBTI rights are still not recognised in Caribbean countries. No one needs to look further than the many archaic and discriminatory laws still found on our statute books, which though not all enforced, still discriminate against members of the LGBTI community and are incongruous to the requirement of legal certainty.

    Mr. Tomlinson argued that while he has never been himself denied entry into the defendant member states,  the mere existence of the provisions in question were inconsistent with his right of entry as to enter would amount to him being in breach of the law. As such, Mr. Tomlinson not only requested the Court to make declaratory orders declaring his right of entry to these states, but also that the provisions in question violated his right to freedom of movement and his right not to be discriminated against on the basis of nationality only. He also requested the court to order Belize and Trinidad & Tobago to remove homosexuals from the class of prohibited immigrants.

    For their part, the defendant states argued, inter alia, that the existence of the provisions in question in their Immigration Acts  has not hindered Mr. Tomlinson’s entry into their territories. They also did not deny that Mr. Tomlinson was entitled to entry and stay of up to 6 months. The defendant states also agreed that they did not see Mr. Tomlinson, a homosexual, as an “undesirable person” within the meaning given in the 2007 Conference decision.

    Judgment

    The Court agreed that homosexuals cannot be categorised as ‘undesirable persons’ and concluded that homosexual CARICOM nationals have a right to freedom of movement on the same terms as any other CARICOM national. However, in regards to the central issue on whether the mere existence of the challenged statutory provisions constituted a breach of those States’ obligations, the Court had consideration for the state practice in Belize and Trinidad & Tobago. Interestingly, the Court accepted Belize’s interpretation of section 5(1)(e) of its Immigration Act that homosexuals are only prohibited from entering the country in cases where they are engaging in prostitution or benefiting from acts of prostitution performed by others.

    Turning to Trinidad & Tobago, the Court found that unlike the Belize provision, the provision in the Trinidad & Tobago Immigration Act expressly prohibited the entry of homosexuals and not solely those seeking to engage in prostitution. The Court, however, accepted Trinidad & Tobago’s evidence of state practice that despite the existence of this discriminatory provision, it is not enforced.

    Noting the inconsistency of 8(1)(e) of Trinidad & Tobago’s Immigration Act with the Revised Treaty, the Court, however, made reference to Article 9 of the Revised Treaty which provides that “in the event of any inconsistencies between the provisions of this Act and the operation of any other law, the provisions of this Act [the Revised Treaty] shall prevail to the extent of the inconsistency’. The Court also noted that the state practice of Trinidad & Tobago and Belize does not suggest any incompatibility with the Revised Treaty or the 2007 Conference Decision. The Court held, therefore, that Tomlinson had no valid reason to assume that his rights would not be respected by the States.

    However, the Court further emphasised at paragraph 59 of the Judgment that it was not condoning the retention by member states of legislation which conflicts with Community Law and stressed that “[s]tates should ensure that national laws, subsidiary legislation and administrative practices are transparent in their support of the free movement of all CARICOM nationals”. The Court also dismissed Mr. Tomlinson’s claims that his rights under Articles 7 and 46 of the Revised Treaty were infringed.

    Jurisprudential Impact

    Although the defendant lost his claim and was denied the requested remedies, this test case achieved two main things. Firstly, the Court stated definitively that “the practice or policy of admitting homosexual nationals from other CARICOM States (not falling under the two exceptions mentioned in the 2007 Conference Decision) is not a matter of discretion but is legally required based on Article 9 of the RTC as this is an appropriate measure within the meaning of that provision”. Therefore, States cannot as a matter of practice deny entry of homosexuals into their territories. It is hoped, however, that member States will move with alacrity to repeal those discriminatory sections of their Immigration Acts, and also give greater importance to bringing their laws into conformity with Community rules.

    Secondly, in so doing, the judgment has added to the Court’s growing jurisprudence, including on the contentious issue of freedom of movement.This significance was not lost on the Court. The justices stated at paragraph 65 of the judgment that the case “raised novel questions and has contributed to the clarification and development of Community law”. While litigation may be costly for member states against which claims are brought, the testing of issues of law by Community nationals helps to clarify points of Community law and ensure that member states are held accountable and uphold the rights which they agreed that Community nationals should enjoy.

    Recognising the need not to discourage parties from bringing test cases, particularly in the Court’s current stage of development, the Court in its discretion found the current circumstances were “exceptional circumstances” under Part 31.1(3) of its Original Jurisdiction Rules 2015 and so ordered both parties to bear their own costs.

    Copies of the summary, entire judgment and the video of the delivery of the judgment are available on the CCJ’s website 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.

     

  • Race for the White House and US-Caribbean Relations

    Race for the White House and US-Caribbean Relations

    Alicia Nicholls

    US presidential election campaigns are keenly followed in the Caribbean not just for the riveting debates and endless intrigue, but for the important consequences which any change in US domestic and foreign policy will portend for the region. The US is not just the largest trading partner for many Caribbean countries and a valued ally. It is a major tourism source market and is also home to a large and growing Caribbean diaspora.

    As of writing, the US presidential race has narrowed down to billionaire business mogul Donald Trump as the presumptive nominee for the Republicans. Former Secretary of State, Hillary Clinton, appears to be mathematically on track to securing the Democratic nomination, despite a continued spirited fight by Vermont senator, Bernie Sanders.

    More so  than in any other election season in recent memory, trade policy has been a hot button topic in both the Democratic and Republican presidential primaries. Echoing sentiments long held by some Americans who are fed up with what they see as America getting a raw deal from free trade, the talking points of the presidential candidates have adopted a more protectionist and anti-trade tone than has been seen in recent election cycles. Strong criticisms are being leveled at the recently signed but not yet ratified Trans-Pacific Partnership Agreement with Pacific-Rim countries, as well as the longstanding tri-nation North American Free Trade Area (NAFTA) with Canada and Mexico.

    Feeding into the populist, anti-establishment anger, candidates of both major parties have raised concern about the US’ large trade deficits with Mexico and China, the offshoring of US companies to countries with lower labour and production costs, and the consequential loss of American manufacturing jobs. The presumptive Republican nominee, known for his hardline positions on immigration and trade, colourfully equated the US’ deficit with China to rape.

    As small island developing states, Caribbean countries have long posited that trade must be fair, foster sustainable development, and not be to the detriment of the local jobs and industries. However, the current tone of the US presidential campaign equates fair trade with trade which supports only US interests. It is maybe fortunate for the region that the Caribbean has not featured in any of the foreign policy discussions or debates during either the Democratic or Republican Primaries, although discussions around tax havens in light of the Panama Papers will have implications for the offshore financial centres in the Region. Anti-immigration rhetoric on the Republic side, while aimed primarily at the anti-immigration lobby’s favourite “villains” like Mexican and Muslim immigrants, could have implications for Caribbean migration to the US as well.

    It would be naïve to think that any country would put another’s ahead of the needs of its own people. However, the current “America first” rhetoric raises issues of the future of unilateral preferential arrangements like the Caribbean Basin Initiative which provide beneficiary countries duty-free access to the US market for most originating goods, without the beneficiary country having to confer reciprocal access to US originating goods. Seventeen Caribbean countries and dependencies currently benefit from such status. Perhaps one saving grace is that the programme is seen to be a benefit to the US and the region has a trade deficit with the US. According to the Report to Congress released in December 2015, “[t]he value of U.S. exports to CBERA beneficiary countries grew 2.5 percent in 2014, exceeding the growth rate for total global U.S. exports, which grew 2.1 percent”.

    The anti-trade, “America first” message which pervades the current US presidential election campaign brings into question whether there will be any resolution in sight to the long-running US-Caribbean rum dispute. Caribbean rum producing countries have long raised concerns about subsidies given by the US federal government to rum producers in its territories, namely Puerto Rico and the US Virgin Islands. The cover-over programme allows tax revenues raised by the Federal Government from the excise tax on both local and foreign produced rums to be transferred to the “location of production”, that is, the Puerto Rico and US Virgin Islands. The treasuries of both territories depend heavily on these subsidies for revenue to support investments in infrastructure, education and health and it is no surprise that both territories have increased rum production in order to increase their share of these revenues.

    However, Caribbean rum producers like Barbados have argued these subsidies amount to unfair competition, by making Caribbean rums less competitive in the US market. The loss of market share not only means the loss of foreign exchange flows to cash-strapped Caribbean countries and a weaker current account position, but it also threatens jobs in the rum sector in Caribbean countries. So far there has not been any real progress on this issue and it is not pessimistic to think that this may very well go the same way as the US-Antigua Gambling case went after the US failed to comply with the World Trade Organisation’s rulings – nowhere.

    An issue which is not directly trade-related but which would also have an impact on US-Caribbean trade, investment and remittance flows is that of the loss of correspondent banking relationships due to de-risking practices by US-based banks. Fears of harsh sanctions by US regulators has led several US banks to abandon the risk-based approach by avoiding risk altogether and terminate correspondent banking relationships with banks and money transfer providers in the region. It is an issue which CARICOM, in conjunction with the Caribbean Association of Banks, has been raising at the bilateral, and increasingly the hemispheric and multilateral level. Last week, St. Kitts & Nevis Prime Minister Dr. Timothy Harris led a delegation which raised the issue again with officials from the US State and Treasury Departments at a consultation in Washington DC.

    Another key issue is that of climate change. Climate change is a threat to the world, but is an existential threat to the small island developing states of the Caribbean which bear the brunt of the adverse impacts. President Obama’s stance and support for tackling climate change may not be replicated by his successor. As one of the world’s largest emitters of greenhouse gases (GHG), US emission cuts and whether it ratifies the Paris Agreement will have important implications for whether the target of temperature increases of no more than 1.5 degrees or 2 degrees above pre-industrial levels is met.

    Historically seen as the US’ backyard, the Caribbean has lost much of its geostrategic importance to US administrations in recent years. Conflicts in the Middle East, Africa, as well as tensions with Russia and China have occupied US foreign engagement. It has opened the door for greater engagement by the Caribbean with China which has expanded its influence in the region. However, there are issues on which the US and Caribbean still share common concerns, including issues of security, energy, combating drug and human trafficking, to name a few. At the U.S.-Caribbean-Central American Energy Summit in Washington DC, chaired by Vice President Joe Biden, the US reaffirmed its commitment to regional energy integration with the Caribbean and Central America.

    There does appear to be another nugget of hope. On April 20th, H.R. 4939 – United States-Caribbean Strategic Engagement Act of 2016, a bi-partisan bill sponsored by New York Representative Eliot Engel (Democrat)  won the unanimous consent of the House Foreign Committee. The objective of the bill is “to increase engagement with the governments of the Caribbean region, the Caribbean diaspora community in the United States, and the private sector and civil society in both the United States and the Caribbean, and for other purposes”.

    Though still in need of debate and approval by both Houses of Congress, the bill could be a catalyst for constructive re-engagement of US-Caribbean relations. Some of the objectives include increasing US-Caribbean diplomatic relations and economic cooperation, supporting regional economic, political and security integration efforts in the Caribbean, encouraging sustainable economic development , reducing crime and improving energy security, inter alia. Section 3 of the draft Bill provides that a multi-year strategy for US engagement with the Caribbean must be submitted no later than 180 days after the Act’s enactment. Whether this new re-engagement with the Caribbean will fit within the foreign policy agenda of the next president will have to be seen.

    The US relationship with the Caribbean is a valued relationship with ties which go beyond trade. Despite these bonds, there is indeed need for deeper constructive dialogue, engagement and cooperation with the US on a number of pressing issues which have sustainable development and macroeconomic implications for the Caribbean. The Caribbean region does have supporters in the DC Beltway. These include members of the Caribbean diaspora who have ascended to positions of influence in Congress and which have been instrumental in lobbying the US government on issues of concern to the region. However, like everything else, the future tone of US-Caribbean trade relations, will depend heavily on who takes the presidential oath of office in January 2017.

    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.