Introduction
Thank you for this opportunity to address this select group on the subject of the CARICOM Single Market and Economy (CSME).
Sustained and successful engagement with leaders of the business community, civil society and social partners in Jamaica, is critical to the desired outcome of a fully operational and effective CSME.
The creation of the CSME is an ambitious exercise, in terms of its depth and the scope of its provisions.
Its success will depend largely on your active participation in the final stages of our efforts to make it an effective reality.
BACKGROUND
Based on a decision taken by Heads of Government in 1989 at Grand Anse, Grenada, Member States negotiated nine Protocols amending the Treaty of Chaguaramas to enable the establishment of the CSME.
The negotiations, undertaken between 1992 and 1997, were incorporated into a single revised Treaty, which was signed by Heads of Government in the Bahamas in July 2001.
The revised treaty, which has so far been ratified by three territories, is being implemented on the basis of a Protocol of Provisional Application, signed in Belize in February of 2002.
It is a programme for deepening regional integration and, simultaneously, a key component of the Caribbean community's international strategy.
It is the mechanism through which we hope to achieve sustained economic development based on international competitiveness, and enhanced trade and economic relations with Third Countries.
We recognize that optimal production by economic enterprises in the community requires the structured integration of production in the Region, and particularly, the unrestricted movement of capital, labour and technology.
Member States therefore resolved to establish, through the CSME, conditions which would facilitate access by their nationals to the collective resources of the Region on a non-discriminatory basis.
The main pillars of the CSME are the:
- Provision for the free movement of capital;
- Provision for the free movement of goods, services and people within the CSME;
- The establishment of a common trade and economic policy in dealing with the rest of the world;
- Harmonisation of economic, fiscal and monetary policies; and There will come eventually, a common currency.
The CSME will permit entrepreneurs to:
- Trade freely without hindrance;
- establish and service markets and clients in other member states;
- Attract capital or invest and utilise funds in another State; and;
- Hire from, or work in, another State;
all with the objective of facilitating internationally competitive production.
The CSME will provide the Region with a unique opportunity to prepare for more efficient and competitive production and trade.
It is expected that once the legal, institutional and administrative arrangements are in place, persons in any part of this single space or market area will be able to transact business by a common set of rules and regulations and would be accorded the same treatment as nationals of any Member State within the economic space.
The Conference agreed on a programme for the removal of restrictions relating to the movement of services and the Right of Establishment, by December 2005. Jamaica, Trinidad and Tobago and Barbados have set a target date for December 2004.
The programme seeks to remove restrictions on the Right of Establishment of Nationals of a Member State in the territory of another Member State and forbids restrictions on the setting up of agencies, branches or subsidiaries by nationals of a Member State in the territory of another Member State.
The Benefits of the CSME
Jamaica should welcome the inflows of new capital, entrepreneurship and technology likely to arise from those Member States investing in Jamaica in the form of new businesses, acquisitions, mergers and joint ventures.
There should also be benefits from an interchange of managerial and professional experts from other CARICOM countries. This also presents and opportunity for Jamaicans to invest in other Regional territories.
Other tangible benefits to be derived include:
- Increased inflows of new capital, entrepreneurship and technology from other Member States by the establishment of new businesses, acquisitions, mergers and joint ventures within a legal and organised framework;
- Greater opportunities for travel, study and work throughout CARICOM.
- Accelerated, coordinated and sustained economic development.
Geography/environment/space
Although a 'Union' of fifteen - fourteen sovereign states and Montserrat, the Single Market will operate as a unified economic space where consumers and producers operate within one economic space.
Various rights to operate freely in the Market have been conferred on CARICOM Nationals i.e. to travel - seek employment, provide services and establish business - enjoying the same rights of the Nationals of the country in which the business enterprise are established.
All economic agents will be able to move as they wish, trade goods and provide services and otherwise engage in the entire range of economic activity as though they occupied one nation state.
Removal of Restrictions
To ensure the orderly operation of this economic space there must be of a necessity the same regulatory and administrative environment throughout all its Member States.
The first order of business was therefore the removal of restrictions/impediments to the Rights accorded members under the Treaty. Accordingly all Member States in February 2002 adopted a phased programme for the removal of such restrictions by 31st December 2005. Trinidad, Barbados and Jamaica have committed to the removal of all these restrictions by 31st December 2004. We have to move speedily to ensure that our part of the bargain is kept.
The proper conduct of business in the CSME requires the supportive, facilitatory and regulatory systems that would at least demand harmonization and at best realize unification of our rules, systems and Laws.
Advantages and Opportunities
How will the Single Market and Economy provide advantages and business opportunities to Jamaican businesses and Jamaicans?
Let me draw attention to the tremendous advantage provided by our ability to enter regional and global trade negotiations with a single goal - but retaining the power to cast votes as 15 or 14 independent sovereign states.
While we are earnest in our efforts to level the playing field in the Region, we must grasp every advantage to increase our leverage in international negotiations with the developed countries who now see us as inconsequential. We have to struggle within a global system that is clearly hostile to small vulnerable economies in order to level the global playing field. We are seeking ensure that trade is not a one-way street. It should allow a free flow of 'traffic' in both directions.
Within our own economic space the free movement of capital will allow firms to have access to a wider market for the accessing of capital instruments - at more competitive rates, thereby increasing the competitiveness of our productive sectors.
The movement of capital will also pave the way for increased investment opportunities, through sole ownership, or joint ventures and production of goods at points of least cost, thereby impacting positively on our unit transaction cost - of which we (Jamaica) may well have the highest in the Region.
The open trade and investment policies of the Single Market will create a market-driven and efficient domestic economy. Business Leaders must of necessity engage in the process.
A special oversight unit has been established in Barbados. It has the responsibility for coordinating, facilitating and working towards the development and implementation of the CSME in a fashion that converges with our bilateral, hemispheric and global trade and economic negotiations.
Local Focal Points
To complement the CSME Unit, all Member States have identified a National Focal Point to which all CARICOM correspondence should be sent for appropriate despatch and follow-up.
In our case, that unit resides in MFAFT.
An Inter-Ministerial Consultative Committee has also been established to monitor the progress of implementation.
It is in the interest of business to support these endeavours with both economic and human resources.
The Region's Customs Administrators are essential in the implementation of the CSME.
There must be a common customs policy binding all the contracting parties.
Customs officials have a critical role in the fiscal machinery to ensure that the marketing of goods and services (services - in the sense of tools of trade) and the establishment of a commercial presence are integrated. They must hold as 'sacred' the nature of a single customs jurisdiction for goods of community origin in order to ensure eligibility for preferential treatment.
Firms/businesses are encouraged to invest in Human Resource Development to really ensure that our productive capacities and competitiveness are improved, spurred by the creativeness of our Caribbean peoples.
The Caribbean Court of Justice (CCJ)
A market, like any other dynamic grouping, will have its disagreements and disputes. For the integrity of the market to be assured, member states must fulfil their obligations under the Treaty.
The Treaty has therefore catered for an extensive menu of Dispute Settlement Mechanisms. They range through - good offices, mediation, obligation to enter into consultations, conciliation proceedings, arbitration - to - judication. As business persons, you know that it is sometimes necessary to resort to judication. The knowledge of a Judiciary System often assists in settlement at less contentious levels within the disputes settlement range.
For purposes of the CSME, the CCJ in its original jurisdiction will operate as an International Court.
A body of harmonized/unified laws is being undertaken in the form of model legislation by the CARICOM Legislative Drafting Facility.
Model Legislation has already been drafted for the free movement of Labour and other factors of production as well as Fair Competition - two bits of legislation seen as vital for the operation of the Single Market and Economy.
The Community seeks to promote, maintain and encourage competition and to prohibit prevention or restriction of competition. Abuse of a dominant position in the market will be prohibited to ensure that benefits expected from the CSME are not frustrated.
Work has been commissioned on the establishment of the Regional Competition Commission which will have oversight for the orderly conduct of business in the Community.
Work is also progressing towards legislation to provide contingent rights to Community Nationals, their spouses and children. An indicative list of these contingent rights has already been prepared by the CSME Unit, Barbados.
The CSME is Upon Us
Suddenly the reality of the CSME is upon us - we are -'Open For Business'. Immediate areas of cooperation present themselves in the productive sectors of Manufacturing, Energy, Agriculture, Bauxite, Tourism and Transportation.
The Regional Industrial Policy charges us, among other things, to coordinate the national industrial policies of the Member States; in collaboration with the Social Partners - the advancement of production integration.
This involves the production in more than one Member State by a single economic enterprise.
In fulfilment of CSME we are expected to pursue cross-border employment of natural resources, human resources, capital, technology and management capabilities for the production of goods and services on a sustainable basis. We must also examine linkages among economic sectors and enterprises within and among the Member States of the CSME.
Opportunities of the Market
New opportunities will result from trade in goods and services; movement of capital; movement of skilled nationals and labour - managerial, supervisory and technical - connected with the establishment of enterprises.
We must first appreciate the market and its size by its inhabitants which numbers five (5) million and including Haiti moves to 13 million.
The market brings 14 Member States, with Haiti 15, together as one market without borders. In any business, this change in market size must present tremendous opportunities which should send Managers back to the drawing board to re-examine - in a positive way - their operations in the supply of goods and services in the expanded market.
Pan-Caribbean Companies will now enjoy distinct advantages - creating companies that can effectively serve the region and of a scale to allow us to compete internationally.
A first thought may be how many subsidiaries do I need to service this Single Market - you are no longer thinking of only Spanish Town, Lucea or Montego Bay but a host of other towns spread throughout the Market.
The Right of Establishment under the Revised Treaty will allow you to move, not only goods and services, but managerial, supervisory and technical personnel to any location within the market.
To reduce start-up problems, you can move staff already familiar with the business.
Capital
Several Jamaican firms have already established their market presence in particular service industries - professional services, insurance and finance and more recently the construction industry. This trickle can become a veritable flood by aggressive market promotion.
Agriculture
As 15 separate and distinct markets we have been underachievers in the area of agriculture. Working within a single market, we must make critical decisions as to what happens where - that is - which part/s of the market will grow crops and which part/s will convert these crops into agri-products.
For the synergies in agriculture and Agro-industry to be achieved - we will seek to combine production efforts throughout the market. These efforts must be driven by businesses operating within the market - you must explore, you must reason and you - must decide - then produce.
- Where do we grow crops?
- Where do we refine products such as sugar, what of natural resources such as petroleum and bauxite?
The market must decide.
The Community Industrial Policy implores us to promote production integration. That means the direct organization of production in more than one Member State by a single economic enterprise.
As Small States, we have always been dogged by the lack of the quantities needed to achieve economies of scale. With one market (CSME), advantages for increased competitiveness, using combined effort, would strengthen our capabilities to enter the markets of Third States.
This has nothing to do with each small farmer growing multiple crops to ensure food security for his family and to earn his livelihood. All Member States need that security. But we must rationalise and increase production in a properly structured 'single' agricultural space that capitalises on the most suitable prevailing conditions.
It is time to "count our change; and stop listening to the noise".
Our traditional crops of sugarcane, bananas and coconuts are cases in point. With speciality raw materials say from Grenada and Jamaica in spices - nutmeg, cloves, ginger, scotch bonnet pepper, escallion, along with our traditional crops of banana, sugarcane, coconut - can we not utilise these to create products unique to the Region? We must explore every opportunity to establish our own niche market so that we can compete more effectively in the global market place.
Tourism
How will we combine our Tourism Product for the benefit of the tourists and raise the living standards of our people? Opportunities exist in sports, culture and entertainment.
For too long we have ignored the rich diversity of our culture and the natural athleticism existing in so many of our peoples. We have therefore fallen short in the areas of 'events tourism' in these areas.
World Cup Cricket will be hosted in the Region in 2007. No single Member State could have accomplished this feat.
The commercial activities associated with this event are yet to be quantified - businesses must inform themselves appropriately on this major event and be ready to seize the moment. We cannot afford to simply perceive it as the happening of a sport near and dear to our hearts - but one which can redound to the economic enrichment of the entire region.
Transportation
Lack of proper transportation continues to hamper the free and easy flow of traffic in, goods, services and persons, throughout the region. The Community must find a way to slay this 'dragon'.
Transportation, both sea and air will be critical in the achievement of the movement of persons, goods and persons moving to provide services.
It has been long recognised that the lumber supply of Guyana is the best in the region and suitable for a wide range of uses such as the building of houses and the manufacturing of furniture and fixtures, while Jamaicans are arguably the best builders of houses and manufactures of furniture and furniture paints and varnishes (in the region).
We must pool the economic and human resources of the Region to establish the types of partnerships/joint ventures that make the best use of our talents and natural resources
October Meeting
On the agenda for the Fourth Meeting of the Prime Ministerial Sub-Committee is the item: "Greater involvement of the Private Sector".
We are past the planning and are about to implement the plan.
The legal, economic and social infrastructure is in place. The manual of Administrative Procedures for the Implementation of the CSME is now being reviewed towards a final draft. The Outcomes have been identified, the Job Descriptions have been written - and the standards have all been set.
We are now summoned to produce goods and creative services to meet the exacting demands of a competitive global market place.
Conclusion
If Jamaica and the wider community are to provide a coherent and organised response to the process of engagement with the rest of the world, we must complete our internal agenda of integration within an appropriate time frame.
It is imperative that all stakeholders act with the assurance that the regional policy is consistent with national interests and policies.
Ultimately, the CSME is being pursued with a view to enhancing the development potential of all CARICOM territories with specific consideration given to nationals and their prospects for a better quality of life.
It is my hope that civil society, labour and business leaders in Jamaica will all become immediately engaged as the Single Market gets off the ground and we soar to new heights of well being and prosperity for the people of our region.