Presentation by H.E Jerry Narace
Ambassador Extraordinary and Plenipotentiary and Head, CSME Unit At The Ninth (9th) Annual Caribbean Postal Union Conference

June 27th 2005


Overview of the CSME and its Implications for the Postal Sector

Ladies and Gentlemen,

Good Afternoon.

It is certainly a pleasure for me to be here at this the Ninth (9th) Annual Caribbean Postal Union Conference of Postmasters General. This Conference, which brings together Postmasters, Government Officials and other players in the field, is indeed timely as it is taking place when the issue of communications is very much in focus in the region. It was only last week that CANTO held its 21st Annual Conference, of which the theme was ‘Telecom Liberalization and the CSME - Opening New Doors’¨.


I have noted that this Conference over the next couple of days will seek to address a number of pressing issues and challenges facing the Postal Sector. These issues and challenges include the prospects for our integration process through the creation of the CARICOM Single Market and Economy (CSME) and the directives arising out of the Bucharest Congress. I am confident therefore that the chosen theme for this year’s Conference ‘The Changing Postal Environment’ the Impact of the CARICOM Single Market and Economy and the Bucharest Congress¨ will indeed provide a strategic framework in which the Caribbean Postal Sector will be able to successfully conduct the shift from public orientated entities to commercially driven organizations within a highly competitive and liberalized environment.

Despite the constant threat of fast and emerging technologies namely telephone, fax and computers, the raison d¡¦etre of the Post, is still to ensure that countries, their economies and populations receive a postal service that is of high quality and at the same time affordable. We here in the Caribbean still rely on the Post as a basic form of communication with the rest of the world. According to Postal Market 2004 - Review and Outlook,¨ eighty one percent (81%) of the population in Latin America and the Caribbean receive postal services at their doorsteps, while fourteen percent (14%) have access through an establishment and five percent (5%) are without any service.

Notwithstanding these statistics however, the global market for postal services is undergoing fundamental change. This change is evident in the fact that there is:

i. An increasing demand by customers, particularly business customers for more reliable service and greater variety in product;
ii. The growing acceptance and development of Electronic commerce; and
iii. Greater liberalization of traditional monopolies

To address these challenges, it is important that as postal providers and administrators, you are given the freedom to compete in an environment conducive for growth. It is against this backdrop that I wish to focus my presentation on the CARICOM Single Market and Economy (CSME), an initiative taken by Caribbean Heads of Government to foster regional growth and development. In so doing, I will also highlight the implications for the Postal Sector, which will surely assist you in your deliberations over the next few days.
THE CARICOM SINGLE MARKET AND ECONOMY (CSME):

Distinguished ladies and gentlemen, you would appreciate that the CSME was designed to facilitate the pooling of the region¡¦s financial, human and natural resources to build capacity and to respond to globalization and the emergence of mega trading blocs. In so doing it confers five (5) rights on all CARICOM Nationals. These rights being:

1. Free movement of persons
2. To establish a commercial presence:
3. Free Movement of Capital
4. Free Movement of Goods
5. Free Movement of Services

1. Free movement of persons: This is perhaps the most critical element in the creation of a genuine Single Market and Economy and one in which substantial progress has been achieved by all Member States. The Free movement of persons as envisioned in the CSME is specifically linked to economic activity and includes:


- The Free movement of Skills/Labour; and
- The Facilitation of Travel

With respect to the free movement of Skills/Labour, the CSME allows for CARICOM Nationals to seek work or engage in gainful employment in all participating Member States as either a wage earner or non ¡V wage earner, without the need to obtain a work permit in the Member State in which he/she desires to work.

As a first step towards achieving full free movement of Skills/Labour, the following categories of wage earners are entitled to move and work freely in the Community:

- University Graduates
- Artistes
- Musicians
- Media Persons
- Sports Persons
- Managerial, technical and supervisory personnel connected to a company or self employed person.


With respect to the free movement of University Graduates, Media Persons, Sports Persons, Artistes and Musicians, since June 2003 Trinidad and Tobago has been able to implement all the necessary legislative measures and institute the administrative structures for the free movement of these categories of persons.

The Tenth Special Meeting of Heads of Government held in Trinidad and Tobago in 2004 mandated the Prime Minister of Dominica to examine other categories of wage earners, to which this right could be extended. In this regard, discussions are currently under way for the expansion of the categories of skilled persons to those possessing qualifications in the technical and vocational fields as well as those acquiring associate degrees. The ultimate goal of free movement is that by 2008, all CARICOM Nationals would be able to access this right.

The non-wage earners who are currently able to move freely are persons wishing to establish a business or provide a service. Trinidad and Tobago has in this regard, removed the work permit requirement for such CARICOM Nationals through the Immigration (Exemption from Work Permit Requirement) Order, 2005.

It should be noted, however, that the free movement of persons can only be fully realized if all CARICOM Nationals have easy access to and out of Member States. Accordingly, Hassle-free travel, which hinges on two key principles National Treatment and Most Favoured National Treatment, is facilitated by the:

- Establishment of CARICOM National/Non-CARICOM National Lines at all ports of entry;
- Development and Use of a Common E/D Form; and
- The CARICOM Passport

In catering for the categories of non ¡V wage earners who are accorded free movement, COTED agreed at its Eighteenth (18th) Meeting to the proposal by Trinidad and Tobago for a mechanism to be introduced so that access could be granted to bona fide service providers. This mechanism which will take the form of a Register of Service Providers is currently being developed by Trinidad and Tobago before submission to CARICOM.

In the interim, however, the region is currently considering measures that would standardize the procedures to be followed for persons wishing to exercise the right of establishment in another Member State as well as provide a service. It is expected that a decision on these proposals will be made very shortly.

2. CARICOM Nationals have the right to establish a commercial presence:
Article 32 of the Revised Treaty of Chaguaramas grants the Right of Establishment to persons, companies and other legal entities such as partnerships. As 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 artisanal nature; or form or register a company if he/she wishes to engage in any of those types of economic activity. Accordingly, CARICOM Nationals wishing to establish a commercial presence under the CSME are allowed:

- Ease of entry to establish a commercial presence and indefinite stay to do so.
- Ease of administration for the registering and/or incorporation of companies.
- Access to capital in the receiving member state.
- Access to land, buildings and other property for purposes directly related to the establishment of a business.
- Freedom of entry for managerial, supervisory and technical staff and spouses and immediate dependent family members.

With respect to the registration and/or incorporation of companies in all States participating in the CSME, a person or company may establish a business presence, having complied with the relevant legal and administrative requirements provided under the laws of that Member State.

The right of establishment is currently operational subject to the rules and regulations governing the establishment of businesses in each respective Member State. With the coming on stream of harmonized Companies¡¦ legislation, companies and other business entities, which, once incorporated in one Member State, will be able to easily move to another Member State and establish a business presence, without the need for re-incorporation or registration.

3. CARICOM Nationals also have the Right to Free Movement of Capital:
Capital transactions are promoted in the CSME. Trinidad and Tobago for some time now 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.

4. We now have the Right to the Free movement of services
For an economic space to be achieved there must be the free movement of services. Under the CSME, all Member States are required to remove restrictive or discriminatory measures in the areas of establishment, services and capital. These restrictive or discriminatory measures have been approved by the Council of Trade and Economic Development (COTED) and itemized for each Member State in a Programme for the Removal of Restrictions. A study by Dr. Noel Watson and Kimberley Erriah identified over 450 legal and administrative restrictions on such activity in place across the region and which need to be removed in order for the participating Member States to be CSME compliant.

As reported by the Rt. Honourable Owen Arthur of Barbados, Prime Minister with lead responsibility for the CSME, four (4) Member States- Belize, Jamaica, Barbados and Trinidad and Tobago are fully on schedule regarding the removal of such restrictions and have committed to do so ahead of the December 31st 2005 deadline. The remaining nine (9) Members have not indicated their inability to do so.
5. Free Movement of Goods
For some time now, the region has had a fully developed and operating regime for the trade in goods in both law and practice. The Free Movement of Goods within the Single Market, like that of the Common Market arrangement requires a set of administrative arrangements, which ensure that:

- goods of Community origin are freely traded without imposition of external tariffs or discriminatory internal charges;
- goods from outside the Single Market are subject to a uniform tax; and
- here is ease of administration in transportation and payments to facilitate trade and regional production.

Trinidad and Tobago, since 1999 has implemented the fourth phase of the Common External Tariff (CET). In the case where Member States have maintained certain non-tariff regulations on intra-regional commerce, the Council for Trade and Economic Development (COTED) has set a schedule for their removal


Supportive to these five (5) rights are a number of legal and institutional arrangements aimed at ensuring that the benefits of the CSME are realized by all CARICOM Nationals. These arrangements include:

- A Social Security System;
- A Double Taxation Agreement;
- An Accreditation Council at both the National and Regional levels which would facilitate the free movement of skills by establishing a quality assurance framework for the Registration and Accreditation of Tertiary Level Institutions. The Accreditation Council of Trinidad and Tobago was recently established by the passage of Act No.16 on May 21st, 2004 and assented to and proclaimed by the President on July 9th, 2004;
-he Caribbean Court of Justice (CCJ), which in its ¡§original jurisdiction¡¦¡¦, has exclusive and compulsory jurisdiction in all matters relating to the interpretation and application of the Revised Treaty of Chaguaramas;
- Standards and Quality Body at both the regional and national levels. At the regional level, this body is in the form of the CARICOM Regional Organization for Standards and Quality (CROSQ); and
- Competition Authority at both the regional and national levels. This body is intended to ensure that the rules of competition are observed and anti-competitive business practices are prevented.

With respect to Single Economy matters, the Tenth Special Meeting of the Heads of Government held in November 2004 in Trinidad and Tobago, agreed to the following programmes and timetable for implementation:

- Agreement for the Development of Financial Services - June 2005
- Framework for the Integration of the Capital Market - June 2005
- Investment Policy Harmonization (Caribbean Investment Code) - December 2005
- Framework for the Harmonization of Fiscal Incentives - June 2006
- Framework for Fiscal Policy Harmonization - December 2006
- Framework for Monetary Cooperation - June 2007

In essence, therefore it is expected that by 2008, the region would indeed be benefiting from a Single Market and Economy. It should be noted that even as we speak some aspects of the Single Market are in operation and benefits are being accrued from this arrangement. Our manufacturers, for quite some time now, have been operating within a Single Market framework, capital is moving freely, cross listing and trading are taking place on the Regional Stock Exchange and our skilled persons are capitalizing on the greater opportunity for work.

IMPLICATIONS FOR THE POSTAL SECTOR:

For quite some time, questions surrounding the efficiency and reliability of the postal sector have always surfaced. As such, and apart from being able to provide a high quality service that is capable of meeting the differentiated and changing business and social needs of its users; increase efficiency and productivity and flexibility and adaptability in changing markets, the need for growth and development of the postal sector has become all the more important in face of increasing competition.

As postal operators, you will be appreciative of the fact that the prospects for growth and development in the postal sector can certainly be strengthened under the CSME through:

1. Good Labour Relations:
It is an accepted fact that good labour relations promotes development in all sectors of an economy. The postal sector in this regard is no exception. The Revised Treaty of Chaguaramas, which establishes the Caribbean Community including the CARICOM Single Market and Economy (CSME) speaks to the issue of the promotion and maintenance of harmonious industrial relations within the Community. In this regard, Members of the Community commit themselves, through the Council for Human and Social Development to the objectives of full employment, improved working conditions, adequate social security policies and programmes, tripartite consultations among governments, workers and employers’ organizations and cross border mobility of labour. The Council is further mandated to promote recognition of the principle of non-discriminatory treatment among Community workers in pursuit of employment within the Community.



2. Efficiency:
The CSME promotes efficiency through the different regimes which constitute the Single Market as well as through the sectoral policies of the Single Economy. It is an acknowledged fact that one way in which efficiency could be achieved in the Postal sector is through an effective and reliable transport service, whether by air, land or sea. The Community Transport Policy has as its goal, the provision of adequate, safe and internationally competitive transport services for the development and consolidation of the CSME. To this end, the Community is striving to have in place a transport system that would be efficient, reliable and affordable throughout all Member States as well as competitive ancillary services.

3. Product Innovation:
In the face of competition from other means of communication, the postal sector needs to be an innovative driver in order to secure its market share. Product Innovation for the sector has pointed to logistics services, hybrid mail and online services as possible areas of development. You would recognize, however that all these new services center on technological developments, which are given a great deal of priority in the CSME. CARICOM, in setting an agenda for technological advancements has instituted a Connectivity Plan which focuses on infrastructure, utilization and content. In terms of infrastructure, emphasis is on hardware, software, human resources and telecom network. Utilization concentrates on the added value of the use and application of digital information, while content will ensure that there is pertinent high quality digital information. At the national level, Member States have also embarked on a Strategy for Information and Communication Technologies which is well in keeping with the CARICOM¡¦s Plan.

4. Good Business Conduct:
Even though the Postal sector in the Caribbean is semi-liberalized in the international parcels/express market, the majority of postal services are provided through a public operator. The CSME, while providing for Monopolies to be retained in the interest of the public also stipulates a Competition Policy which seeks inter ¡V alia to promote consumer welfare and interest. Given the moves to reform and in some cases liberalize, this policy will also prove useful as it ensures that all anti-competitive business conduct which prevents, restricts or distorts competition is prohibited. In essence, the CSME seeks to ensure that there is a level playing field.

While I have alluded to the opportunities provided through the CSME to the Postal sector, there are at the same time challenges which may occur not just in this sector but in general. It is recognized that in order to deal with such challenges, Governments must ensure public education and corrective mechanisms. The CSME in catering to such challenges has made provisions for the establishment of a Development Fund as its compensatory and or corrective mechanism. This Fund is intended to provide relief to Member States, regions or sectors disadvantaged by economic dislocations arising from the CSME. The modalities of this Fund are currently being addressed with definite recommendations being put forth to the Heads of Government in July 2005.

In terms of Public Education, which is deemed as one of the key elements in the implementation process, the Year 2005 has been designated the Year of the Single Market and each of the thirteen (13) participating Member States are involved in activities to recognize this. Trinidad and Tobago has adopted an holistic approach and since May 2004, launched an intensive National Public Education Programme. The Programme includes a well-developed advertising campaign using all forms of media, the Post and widespread outreach through presentations to all National Associations, Non-Governmental Organizations and members of Civil Society. The Programme is designed to reach every citizen of our Republic and thus includes the School population. A Secondary Schools’ Quiz was recently held and the level of performance was indeed commendable.

In closing let me say emphatically that in this age of technological advancement, innovation and changing market conditions, efficient communication is key to national development. The Post, today, is still considered by many Governments as an essential component of their national infrastructure that facilitates and supports economic growth and social development. The lessons to be learned from competition points to the fact that in these changing times, the Postal sector needs to become more strongly competitive and customer driven. In so doing, as operators in the field, it is incumbent on you to take on board the developments at the regional and international levels. The CSME therefore mandates that in seeking to increase its presence once more in the global arena, the sector must be responsive to change and at the same time equip itself to manage new opportunities.


Ladies and Gentlemen, I Thank you!