CARICOM SINGLE MARKET AND ECONOMY (CSME) A DEFINITION AND GOVERNMENTS VIEW AND VISION

November 10, 2004

STRUCTURE OF THE ECONOMIES OF THE CARIBBEAN COMMUNITY1.Small geography, labour force, consumer base, natural resources

2.Vulnerable economic and other shocks e.g natural disasters and rigid structure of the economies

Background Why a CARICOM Single Market & Economy?

CARIFTA in 1968

CARICOM in 1973

With globalization in the 1980s, the Treaty of Chaguaramas proved an inadequate mechanism for facilitating responses to a new world economy which involves larger markets, intense competition and the free movement of capital

Background continues.

The emergence of mega trading blocs in different parts of the world and the development of the Free Trade Areas of the Americas, meant a Single Market and Economy became an urgent necessity for our region.

CSME: Origin and Definition

It was therefore clear that a new framework for growth was needed:

1989 decision to create the CARICOM Single Market and Economy (CSME)

The CSME was created by the Revised Treaty of Chaguaramas through the amendment to nine (9) Protocols of the Treaty of Chaguaramas which had established CARICOM in 1973

CSME: Origin and Definition

The CSME is established on the premise that it will facilitate the pooling of resources to improve our competitiveness

It is geared towards minimizing the problems of small size and structural deficiencies

The Single Market is to be created by January 1, 2006

The Single Economy is an ongoing effort

CSMEs Global positioning in the International Trade ArenaWTOEU-ACPFTAACSMEBi-lateralsBackground

CSMEs Global positioning in the International Trade Arena continues

The Member States of the CSME are also members of the World Trade Organization (WTO), which is the overarching body governing international trade.

The CSME therefore must be WTO Compliant

CSMEs Global positioning continues

The CSME offers a secure platform for the Caribbeans entrance into the FTAA

It allows our firms to test the waters of new regional markets increasing competitiveness and preparedness for global competition

The CSME will facilitate greater economies of scale and most certainly the creation of Pan-Caribbean companies and brands

CSME Membership (13)- Market of 6 million people

Antigua & BarbudaMontserratBarbadosSt. Kitts & NevisBelizeSt. LuciaDominicaSt. Vincent & the GrenadinesGrenadaSurinameGuyanaTrinidad & TobagoJamaica

CSME - Definition

The CSME is a single enlarged economic space created through the removal of restrictions and resulting in theFree movement of:GoodsServicesPersonsCapitalTechnology

It confers the right on CARICOM nationals to establish business in any CARICOM Member State and to be treated in the same manner as a national of that State

PILLARS OF CSMEThe five (5) main pillars of CSME are:

Provision for the free movement of CapitalProvision for the free movement of Goods, Services and People within the CSMEThe establishment of common trade and economic policyHarmonization of economic, fiscal and monetary policiesA common currency

Rights to CARICOM Nationals Under the CSME

Free Movement of PersonsFreedom to provide ServicesRight to Establish a Commercial PresenceFree Movement of CapitalFree Movement of Goods

Implementation of the CSME 10 Key Elements

Treaty RevisionFree Movement of PersonsNational AdministrationFree Movement of CapitalEnforcement, Regulation and Supporting InstitutionsCommon External PolicyRight of EstablishmentPublic Education ProgrammeFree Movement of ServicesHarmonization of Laws

Free Movement of Persons under the CSME

Hassle-Free Travel Service Providers

Skilled Persons

Other Persons agreed by the Conference of Heads

Free Movement of Persons continues..

Approved categories of wage earners (skilled persons) that do not require a work permit are:University graduatesMedia workersArtistesSportspersonsMusicians

T & T has fully implemented the Free Movement of Skilled Nationals Act

Free Movement of Persons continuesSkilled Certificate

The movement of skilled persons is facilitated through the issuance of a Skilled Certificate, also called the Caribbean Community Skilled Qualification based on a set of criteria by the CARICOM Secretariat.

Free Movement of Persons continues

Other Category of persons:

Self Employed Service ProvidersEntrepreneursTechnical, Managerial and Supervisory StaffSpouses and immediate dependentsPersons consuming services abroad

HASSLE-FREE TRAVEL

The following measures have been deemed criticalFor hassle-free travel

Use of ID cards or other forms of identification witha photographEstablishment of CARICOM National/ Non-CARICOM National lines at all ports of entryUse of a Common E/D FormDecision on a CARICOM Passport

Freedom to Provide Services

Free trade in services require a set of administrative arrangements which allows CARICOM nationals to provide services within any Member State without restrictions

Article 37 of the revised Treaty requires Member States to abolish discriminatory restrictions on the provision of services within the Community in respect of Community nationals

Freedom to Provide Services continues

Each Member State has notified the CARICOM Secretariat of its existing restrictions on the provision of services and has agreed on a timetable for removal ending December 31st 2005

Trinidad and Tobago has a total of 15 restrictions to remove, on an agreed time of December 2004

CSME Ways a Service can be Traded

Mode 1 Cross Border

Mode 2 Consumption Abroad

Mode 3 Commercial Presence

Mode 4 Movement of Natural Persons

Right to Establish a Commercial Presence continues

Article 32 of the revised Treaty grants the Right of Establishmentas such an individual wishing to establish a business must be engaged in non-wage earning (self employed persons) activities of a commercial, industrial, agricultural, professional or artisan nature or form a company in any of those types of economic activity

Right to Establish a Commercial Presence

Ease of entry to establish a commercial presence and indefinite stay to do soEase of administration for the registering and/or incorporation of companiesAccess to capital in the receiving member stateAccess to land, building and other property for the purpose of establishing a businessFreedom of entry for managerial, supervisory and technical staff, spouse and immediate dependent family members

Harmonized Companies Legislation

This harmonized legislation seeks to provide conditions whereby companies will be able to operate across border as if they were operating in their own Member State

The mechanisms that are expected to be in place are:-a system of registration of companies and supporting institutions and administrative infrastructure-a central depository for information on companies incorporated and registered within the CSME

FREE MOVEMENT OF CAPITAL

Trinidad and Tobago has abolished Foreign Exchange Controls and there are no restrictions to Capital Market activity. Currently Trinidad and Tobago, Barbados and Jamaica comprise the Regional Stock Exchange

COMMON EXTERNAL POLICY

This pertain to the regime governing the Trade in Goods. Trinidad and Tobago has fully implemented the fourth phase of the Common External Tariff

HARMONIZATION OF LAWS

Trinidad and Tobago has been officially notified of five (5) areas:

Competition PolicyAnti-Dumping and Countervailing DutiesLegislative Regime for the Movement of FactorsConsumer ProtectionCustoms Legislation

Implementation Status

February 13, 2003 Barbados, Jamaica and T&T committed to being CSME ready by 2004 Other Member States - 2005

Trinidad and Tobagos Success

80% ready and progressing steadilyCabinets decision to enact the Treaty into domestic lawEstablishment of all the necessary national and regional administrative structuresFull implementation of the CET

Trinidad and Tobagos Success

Free movement of five categories of skilled personsThe abolition of foreign exchange controls and restrictions to capital market activityT & T already has a National Standard of Bureau Fair Trading Authority to be established

Trinidad and Tobagos Success

The Accreditation Council has been establishedLeast number of legislative and administrative restrictions to removeEmbarked on an Attachment Programme

Trinidad and Tobagos Concerns

Model legislation

Dispute settlement

Contingent rights

Reciprocity

The Attributes of Trinidad and Tobagos ProgressMinistry of Foreign AffairsMinistry of Trade and IndustryInter-Ministerial Consultative CommitteeBusiness and Labour Advisory CommitteeChief Parliamentary CounselCARICOM SecretariatCSME Unit of Trinidad and Tobago

Benefits under the CSME Goods are being traded in free market conditionsPeople of approved categories are moving freelyCapital is moving Jamaica and T & T have no exchange control

Overall Benefits under the CSME

Increase Inflows of New Capital, Entrepreneurship and Technology from other Member States

Larger Market Opportunities

Improved Service Sector

Greater Opportunity for Travel, Study and Work in CARICOM Countries

Overall Benefits under the CSME continuesIncreased Employment Opportunities and Improved Standard of Living Secure platform for our entrance into the FTAAGreater economies of scale Pan-Caribbean Brands

Overall Benefits under the CSME continuesStrengthened competitivenessLower consumer pricesCreation of regional companiesIncreased opportunities to invest through direct stock ownership or mutual fund investments

Public Education Programme

An intensive National PEP has begun, and includes information-sharing in the print and electronic media as well as outreach sessions with the public at large

CSME Public Education Programme

AdvertisingPublic RelationsPerson-Person Meetings

The CSME tests our capacity, and will, to do what is necessary Globalization presents a harsh reality for small statesThe survival of the Caribbean hinges on our preparedness to face open international competition and to adapt to technological developments.The CSME is our policy instrument for enhanced international competitiveness and greater prosperity for all our people.

GOVERNMENTS VISION

Enhance competitiveness to meet the challenges of globalization and liberalization CSME

Developing a human resource base to produce a competent, productive and knowledgeable workforce Knowledge based society

Pursuing sound policies to continue economic growth Services and Investment

GOVERNMENTS VISION\

Developing a human resource base to produce a competent, productive and knowledgeable workforce Knowledge based society:

Free movement of SkillsAccreditation CouncilNational Training AgencyE-CommerceHuman Resource Development Agenda

Pursuing sound policies to continue economic growth Services and Investment Services contribute approx. 63% of the GDP Services Trade Policy Investment Promotion Policy

THANK YOU

CONTACT INFOWebsite: www.csmett.comE-mail: csme@foreign.gov.ttTelephone: 627-CSME (2763)Fax: 624-9944