CARICOM Single Market and Economy website of Trinidad and Tobago

Hosted by The CSME Unit of Trinidad and Tobago and The Trinidad and Tobago Manufacturers’ Association (TTMA)

Thursday 13th July, 2006

TTMA Headquarters

NO.42, 10th Street, Barataria

Good Morning!

I wish to firstly thank you - the captains of industry, manufacturers, representatives of government, academia, members of civil society and members of the media - for your presence here today, at this seminar entitled “CSME – Report on New Developments.”

This seminar is jointly hosted by the CSME Unit of Trinidad and Tobago and the Trinidad and Tobago Manufacturers’ Association and seeks to provide information on and an understanding of the developments that have been made with respect to the establishment and operations of the CARICOM Single Market and Economy (CSME) arising out of the recently concluded Twenty – Seventh (27th) Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM) held in St. Kitts and Nevis during the period July 3rd to 6th 2006.

Ladies and Gentlemen, this year 2006 is proving [and in the words of His Excellency Edwin Carrington, Secretary General of the Caribbean Community], “to be a most exciting one” in the life of the Caribbean Community. Among the many exciting events, save and except, the return to democracy in Haiti and the international recognition brought on by the Soca Warriors, is the significant progress made in deepening regional ties.

As the year earmarked for the implementation of the Single Market component of the CSME, this region has been true to its word. On January 30th 2006, all Member States participating in the CSME reaffirmed their commitment to the regional integration process by either signing on to the Declaration of the coming into being of the CARICOM Single Market (CSM) or the Declaration of Intent.

Barbados , Belize, Jamaica, Guyana, Suriname and Trinidad and Tobago through the Declaration of the coming into being of the CARICOM Single Market (CSM) signalled to the region and indeed the rest of the world, that the basic framework of the Single Market is functional. Such a framework as you know, includes:

i. Regimes governing the:

- free movement of wage earners, namely University Graduates, Sports Persons, Media Persons, Artistes, Musicians, and self employed persons, that is to say service providers and persons establishing businesses;

- free movement of goods;

- free movement of services;

- free movement of capital;

- the right of establishment; and

ii. supporting legal and institutional measures.

The Declaration of Intent as signed by Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines signified the intention of those Member States to join with Barbados, Belize, Jamaica, Guyana, Suriname and Trinidad and Tobago in the more advanced stage of the regional integration process by the end of June 2006.

Since January however, several developments have taken place. While these developments are demonstrative of the progress made in deepening and advancing the regional integration process, of paramount importance however, is the significance and meaning of these developments to the implementation and operations of the Single Market and later the Single Economy components of the CSME.

It is in this context that I wish to focus this morning’s Presentation on:

1. Developments in the Single Market and Single Economy;

2. A synopsis of the Single Market in operation;

3. The Public Education Programme;

4. The Single Economy; and

5. Benefits under the CSME

1. DEVELOPMENTS IN THE SINGLE MARKET

As of July 3rd 2006, the status of the CSME, both from the perspectives of the Single Market and the Single Economy, changed positively in terms of participation and operations. These developments relate specifically to:

i. Participation in the Single Market;

ii. Expansion of categories of persons who can access free movement;

iii. The Regional Development Fund;

iv. The Framework for the Single Economy; and

v. The formation of the Caribbean Business Council

i. Participation in the Single Market:

Ladies and Gentlemen, on July 3rd 2006, the Member States of Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines signed the Declaration by Heads of Government of the Caribbean Community on the participation of their countries in the CARICOM Single Market.

This action:

* brings into force “full participation by all twelve Member States in the Single Market component of the CSME.”

* demonstrates that “there is a functioning Single Market in the Member States of Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago”

* enables “CARICOM Nationals to be able to exercise their rights as it relates to the free movement of persons, goods, services, capital and business establishment in any of these twelve Member States”

* brings into reality the vision of our founding fathers, various administrations on both sides, academia, other leaders, calypsonians and various voices et al for “a united Caribbean;” and

* in keeping with the recommendation of Sir Shridath Ramphal, who in the Report of the West Indian Commission - “Time for Action” purported the need for the region to pursue initiatives, conclude agreement, and strengthen institutions of implementation with a sense of urgency so that, the West Indies would be a more closely integrated Community of sovereign states.

ii. Expansion of categories of persons who can access free movement

It is acknowledged that the free movement of persons in the Community is of extreme importance in the creation of an even closer Caribbean Community. In keeping with the goal of free movement for all CARICOM Nationals by 2008, the Conference of Heads of Government agreed to:

a. the addition of Nurses and Teachers in the list of approved skilled CARICOM Nationals who can access free movement; and

b. further consideration on artisans, domestics and hospitality workers pending elaboration by the Council for Human and Social Development (COHSOD) of procedures for certification and accreditation. Individual Member States can however enter into bi –lateral agreements with each other to source such categories of workers.

These developments, in essence signify:

- that Nurses and Teachers, like University Graduates; Sports Persons; Media Persons; Artistes and Musicians can now move to any of the twelve participating Member States to engage in economic activity using a Certificate of Recognition of Caribbean Community Skills Qualification (Skills Certificate), the procedures of which have been shared with you in previous Presentations and available on our website www.csmett.com ;

- a commitment by the Community to remove the elitist stigma attached to the categories of persons eligible for free movement within the region;

- the availability of a larger pool of human resources from which the region can source skills;

- that the performance of business entities and public policy formulations in the main can be enhanced ;

- that qualified and skilled labour can migrate to member states where there is a demand for such labour, thereby reducing the haemorrhaging of our indigenous talent to extra-regional territories;

- the strengthening of the human resource capital within CARICOM, which will certainly support the creation of Pan-Caribbean companies and brands whilst contributing to greater efficiency; and

- the commitment made by Heads of Government to incrementally expand on the categories of wage earners who can access free movement

As the region contemplates the expansion of categories for the free movement of labour, permit me to quote the Honourable Patrick Manning, Prime Minister of Trinidad and Tobago and immediate Past Chairman of the Conference of Heads of Government of the Caribbean Community, “We in CARICOM, must shed our mental shackles on this important matter. It is most essential for the way forward. Notwithstanding technological progress, human capital continues to be the most important factor of the productive process. No progress is possible without the human mind.”

iii. The Regional Development Fund

Ladies and Gentlemen, as you are aware one of the main reasons behind the delay in the implementation of the Single Market to July 2006 in the Member States of Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines is the finalization of the Regional Development Fund.

This Fund as you know is intended to provide financial or technical assistance to countries, regions or sectors so disadvantaged by the operations of the CSME. Its capitalization is aimed at two hundred and fifty million United States dollars (US$250 million) with contributions from Member States and other sources such as donor agencies. Already Barbados, Jamaica and Trinidad and Tobago have pledged contributions totalling seventeen million United States Dollars (US$17 million).

The Twenty – Seventh (27th) Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM) agreed to the contribution formula proposed at the third (3rd) Special Meeting of the Council for and Planning Finance (COFAP) and mandated that the Fund and the Regional Development Agency be fully operational by the Twenty – Eighth (28th) Meeting of the Conference of Heads of Government in July 2007.

The contribution formula that has been agreed to, takes into consideration the CARICOM Budget Formula and Member States’ respective economic size, economic well-being and share of benefits of the economic integration process. It is to be noted that several formulations were initially proposed by the Task Force headed by the Caribbean Development Bank.

The Regional Development Agency, once operational will be responsible for identifying and mobilizing technical assistance and institutionalizing and facilitating the implementation of Article 143 of the Revised Treaty of Chaguaramas which sets out the objective of the Regime for Disadvantaged Countries, Regions and Sectors as well as the Special Regime for the Less Developed Countries of the Community.

Our local businesses can continue to utilize the services of the Business Development Company (BDC). Such services are offered under Consultancy Services and the Trade Assistance Programme.

The Consultancy Services include:

- Market Research,

- Feasibility Analysis,

- Preparation of Business Plans,

- Strategic Planning,

- Operational Planning, and

- Process Improvement.

The Trade Assistance Programme involves:

- a Loan Guarantee Programme,

- Approved Small Company Status,

- Sector Focus,

- Quality and Environmental Management Systems,

- Best Practices Survey and Policy Formulation,

- Market Entry/Access Research, and

- Export Competitiveness Study.

iv. Framework for the Single Economy

While a framework has been established for the development of the Single Economy, the Heads of Government have agreed to a series of consultations to be held at a Special Heads of Government meeting carded for later this year. These consultations are expected to produce greater details on the functioning of the Single Economy framework. This framework as you know includes:

- an Agreement for the Development of Financial Services,

- a Caribbean Investment Code

and individual frameworks relevant to:

- the Integration of the Capital Market

- harmonization of Fiscal Incentives,

- Fiscal Policy Harmonization and

- Monetary Cooperation.

v. The Caribbean Business Council

In further matters relating to the Single Economy, the Conference endorsed the formation of the Caribbean Business Council as a means of promoting co-ordination and greater collaboration between the private and public sector.

You would recall that it was at the Nineteenth (19th) Meeting of COTED that Member States agreed to the formation of a Caribbean Business Council. The Caribbean Association of Industry and Commerce (CAIC) was thereafter mandated with the task of developing the terms of reference for the functioning of the Council.

On June 10, 2006 this Council was launched in Barbados during the first Annual Caribbean Private Sector Meeting.

Having now been endorsed by the Heads of Government, this Council is expected to:

- Provide a focused point of entry at the interface between the regional Public and Private sectors.

- Provide direct private sector inputs into the discussions and deliberations of all regional Public Sector decision makers at all levels, up to and including the Heads of Government.

- Facilitate the derivation and communication of common representative Private Sector positions on key regional issues, both internal and external.

- Provide a conduit to allow regional Private Sector interest groups, both national and sectoral, to be heard.

Additionally, this Council will report to the Executive of the CAIC, for further dissemination of its issues, deliberations and activities to all regional stakeholders. The Council will receive its instructions and mandates from the Executive of the CAIC and will avail itself of inputs from the major stakeholders of the regional business environment i.e. government / regional institutions, the regional private sector and other regional and extra regional stakeholders.

Ladies and gentlemen, you will appreciate that in light of the fact that the CSME is not a finite entity but would rather evolve, developments such as these and others that follow, will certainly go a long way in ensuring that the Single Market continues to operate effectively.

2. THE SINGLE MARKET IN OPERATION

Even though timelines of 2006 and 2008 have been scheduled for the implementation of the Single Market and Single Economy components of the CSME, aspects of the Single Market have been in operation.

- Our regional manufacturers have been operating in a Single Market since in the 1970s to the extent that the value of Intra-Regional Domestic Exports among CARICOM Member States increased from EC$2.2 billion in 1996 to EC$3.2 billion by 2003. Trinidad and Tobago, in particular commands eighty percent (80%) of that trade.

- Over two thousand (2000) Certificates of Recognition of Caribbean Community Skills Qualification (Skills Certificate) have been issued to Skilled CARICOM Nationals wishing to access free movement. These have been issued by the relevant Ministries in the Member States participating in the CSME;

- Capital is moving freely;

- Services are being traded on the principles of National and Most Favoured Nation Treatment.

- CARICOM Nationals have been accessing benefits and exercising their rights under the Social Security Arrangement and Double Taxation Agreement

- CARICOM Regional Organization for Standards and Quality (CROSQ) is working with National Standards Bodies throughout the region.

Further, the economic performances of some of our Member States, while owing to the pursuit of sound economic policies, demonstrate the successful functioning of the Single Market.

Barbados has been enjoying growth rates in Tourism, Manufacturing, Construction and Services at an average rate of some 4 to 4.5% per annum since 2004, with an unemployment rate down to 9%. All indicators for 2006 point to the same trend continuing. Jamaica has experienced recovery in agriculture and growth in the agro-processing and construction industry together with a 12% growth in the Tourism Sector for 2005. Trinidad and Tobago is experiencing its twelfth successive year of positive economic growth and healthy trade surpluses with our major trading partners leading to an accumulation of external reserves of US$3.8 billion.

3. PUBLIC EDUCATION ON THE CSME

It is noteworthy however the success achieved thus far in the operations of the Single Market are in a large measure attributable to the public’s perception and understanding of the CSME. I have noted however an article written by Tony Fraser titled ‘Wanted: Info on CSME’ which appeared in the Trinidad Guardian on Wednesday 21st June, 2006. In this article Mr. Fraser claims that “there continues to be general ignorance on the establishment of the CSME.” I beg to differ as the facts speak for themselves.

Public Education on the CSME remains both a regional and national mandate. Nationally we have achieved tremendous success from our own initiatives on sensitizing and educating the public on their rights as CARICOM Nationals under the CSME. Print and electronic advertising, presentations, workshops, outreach sessions, schools’ competition and community visits via the CSME Caravan were instrumental in the sensitization and education process. Through these media, we at the Unit have provided to the national population information pertaining to the necessity for a Single Market and Economy, the components of the Single Market and Economy and ways in which CARICOM Nationals can exercise their Rights. In respect of the latter, emphasis was placed on:

* The Procedures involved in obtaining a CARICOM Skills Certificate, a copy of which is included in your information package;

* CARICOM Nationals eligible for Free Movement; and

* Contingent Rights, of which a draft Protocol is currently being developed regionally;

* The need for training and accreditation to improve our Skills base;

* The Procedures involved in exercising the Right of Establishment;

All this information can be found by logging on to our website www.csmett.com, which incidentally has received close to eighty thousand (80,000) hits thus far and/or by calling our hotline on 627- CSME (2763).

Distinguished Ladies and Gentlemen, since the launch of the Unit in May 2004, we have been able to achieve an eighty percent (80%) awareness in Trinidad and Tobago along with a fifty-five percent (55%) understanding of the CSME. These findings are based on two separate surveys taken in late 2004 and April, 2006 respectively.

Today’s Presentation is yet another in a series of activities that will signal the commencement of Phase III of the National Public Education Programme. As you will recall from your own involvement, Phase I had as its aim, the sensitization of the national population to the CSME. Phase II sought to build on that sensitization created and to develop awareness and basic understanding of the CSME. Phase III, while continuing the objectives set out in the two previous Phases, seeks to further educate the population on their rights and participation in the Single Market. The Programme outlined for this Phase will therefore include Seminars, Town Meetings, Use of the Mobile Caravan, Audio – Visual Material for schools and public sector and intensive press and electronic advertising.

Apart from these efforts however, information, analyses and other forms of meaningful communication on the CSME can be obtained from the CARICOM website: www.caricom.org or from contact with the various specialist personnel attached to the Secretariat in Guyana and Barbados. These Specialists are responsible for the development of Policies and Programmes as it relates to the establishment and operations of the CSME.

As the Unit continues its mandate of not just implementing the CSME but also that of ensuring our population is constantly kept aware of the facts, I urge you all here today to partner with us, in this our education drive. You can act as the first point of contact between the Unit and all information seekers in your respective domains. I call on the Media, in particular, to continue to liaise with us as we take our Programme throughout the length and breadth of Trinidad and Tobago.

4. THE SINGLE ECONOMY

With the Single Market in place, the region’s attention will now be focussed on the plans for the Single Economy. To this end a series of symposia have been held in both Barbados and Jamaica under the chairmanship of the Rt. Hon. Owen Arthur, Prime Minister of Barbados and Prime Minister with lead responsibility for the implementation of the CSME. The symposia are all aimed at providing the foundation for the Single Economy.

Some work has already started and in some instances completed to have in place a framework within which the Single Economy can be developed. Such works include:

- a Regional Plan for Sustainable Tourism has been developed and approved by Heads of Government;

- a Common Strategic Plan for Regional Agriculture and a Regional Transformation Programme for Agriculture to put the sector on a more competitive footing has already been presented to and approved by Heads of Government; and

- a Regional Plan for the development of Services was started in 2002 and elements of the proposed programme have been submitted for the consideration of Member States.

- a Task Force on a Regional Energy Policy has been created and is developing recommendations to support regional initiatives in this crucial area.

These sector specific works are intended to give direction, coherence and impetus to the main elements of the Single Economy.

5. BENEFITS

That the CSME through the pooling of the region’s financial, human, and economic resources will enable the region to improve its standard of living and work, achieve full employment of labour and factors of production, expand trade and economic relations with third states, enhance levels of international competitiveness and increase production and productivity, is to say the least.

The prospects for social and economic development are phenomenal. Drawing on the experience of other integration arrangements and based on statistical evidence, the European Union, the only other economic grouping to rival the CSME, has showed a marked increase in economic activity among Member States. Indeed, intraregional trade rose by 41% in the first ten years of the European Union, by 17% in the first seven years of NAFTA, 67% in the first nine years of Mercosur’s existence and the anticipated benefits of deeper integration across ASEAN Member States should be on the order of 10% of this regional economy.

While some commentators contemplate that benefits will not accrue to the less developed, experience from other regional trade blocs suggests that these less developed countries have the most to gain from integration. In the European Union, GDP growth has been far higher in Ireland, Portugal, and Spain, which were largely agricultural when they joined, than for Britain, France and Germany. Similarly, in NAFTA, Mexico has grown faster since integration than the US or Canada. Indeed, merchandise exports from Mexico to other members increased by more than 500% from 1990 to 2004, in an environment where intraregional trade among members grew by 300% during the same period. It stands to reason therefore that a similar trend could be experienced in CARICOM.

The success we have achieved thus far in our own initiative must not be taken for granted. The Single Market must be continually viewed in the context of it being the avenue through which our Member States can transform and position their respective economies on the path to progressive development. Nationally, even though our economy continues to enjoy consecutive years of economic growth, we recognize that given the changing face of globalization and trade liberalization, we need to continually be dynamic both internally and externally so that our businesses are given the room for growth and development and our human resources have easier access to a wider playing field. Regionally, we acknowledge, like ourselves, our sister states are small and at the same time vulnerable to economic and other shocks.

For reasons such as these, continuous developmental work on the CSME, in particular the five market regimes of free movement of persons, goods, services, capital and the right of establishment, will always remain an integral part of the work programme for the implementation of the CSME. This of course would augment the ten key elements of Treaty Revision, Establishment of national and regional administrative structures, Enforcement, Regulation and Supporting Institutions, Free Movement of Services, Free Movement of Persons, Free Movement of Capital, Right of Establishment, Common External Policy, Public Education Programme and Harmonization of Laws.

6. CONCLUSION

Ladies and Gentlemen, you will agree with me that this year has thus far proven to be a year of significant achievements. Now that there is full participation in the Single Market, expansion in the categories of persons able to access free movement, headway in the finalization of the Regional Development Fund, the formation of the Caribbean Business Council and continuation in the work to develop the Single Economy, as CARICOM Nationals we can look forward to many good prospects that lie ahead under the CSME.

These prospects of course, include:

- greater employment opportunities for University Graduates, Sports Persons, Media Persons, Artistes, Musicians, service providers, persons establishing businesses and their technical, managerial and supervisory staff and now nurses and teachers;

- increased inflows of new capital;

- entrepreneurship and technology from other Member States;

- larger market opportunities;

- greater opportunity for travel, study and work in CARICOM countries;

- improved standards of living,

- the creation of Pan Caribbean companies; and

- the opportunities to invest through direct stock ownership or mutual fund investments;

- an improved services sector

- strengthened competitiveness through increases in the absorptive capacity of the economies of the Member States which will also impact on inflation and so benefit consumers.

At the same time we must recognise that the functioning of the Single Market depends on all CARICOM Nationals taking advantage and exercising their Rights. This of course requires a genuine appreciation and understanding of the workings of this regional initiative. Developmental work will continue to ensure that the CSME remains true to the vision of creating a ‘Stronger Voice Towards Greater Prosperity.’

I Thank You.