Introduction to CARICOM Single Market and Economy

Director of the Caribbean Community (CARICOM) Single Market (CSME Unit), Leo Preville, speaking during the virtual conference on “Reporting on the CARICOM Single Market and Economy (CSME) on Tuesday

BRIDGETOWN, Barbados, CMC – The director of the Caribbean Community (CARICOM) Single Market (CSME Unit), Leo Preville, says the record on the role of regional integration in enhancing trade is mixed.

Addressing a Media Institute of the Caribbean (MIC) virtual conference on “Reporting on the CARICOM Single Market and Economy (CSME) on Tuesday, Preville told journalists that most of the exports has been one way from the more developed countries (MDC) of CARICOM to the less developed countries (LDC), while exports by the main MDC’s from within the region has been weak.

Trade Patterns in CARICOM

The CSME enables the free movement of goods, services, labour, and skills across the 15-member regional grouping. The Bahamas is not a signatory to the CSME.

Preville stated that there have been gradual increases in new areas of production, noting that insufficient progress has been made in agricultural output, especially in value-added agriculture. He stated that the region imports nearly $6 billion in food from third countries.

In his assessment of trade patterns, Preville told the conference that Trinidad and Tobago is the leading CARICOM exporting country, followed by Barbados. Among the LDCs, Belize is the leading exporter, followed by St. Vincent and the Grenadines and St. Lucia. He did not provide figures.

“Notwithstanding, the total level of exports from the LDCs to the rest of CARICOM is less than the second-best MDC performer, Barbados,” Preville said, noting that upon review, some interesting patterns emerge.

Challenges Facing CARICOM

”The LDCs import more from the rest of CARICOM than they export to the rest of CARICOM,” he said, adding that the leading importers of CARICOM goods among the MDCs are Guyana and Jamaica.

Trinidad and Tobago is the MDC that imports the least from CARICOM, Preville said, adding that among the LDCs, St. Lucia is the leading importer from CARICOM, with a level of imports greater than that of Trinidad and Tobago.

“The pattern of intra-regional trade suggests a significant imbalance in trade among the member states. The most significant exporters are not significant importers,” Preville said, noting “this could be as a result of the narrow range of products produced among member states”.

Preville, an economist, stated that the lack of competitiveness, due to the relatively high cost of production and smaller domestic markets, makes it difficult to capitalize on economies of scale.

Future of CARICOM

Last month, the Prime Minister of St. Vincent and the Grenadines, Dr. Ralph Gonsalves, highlighted several complaints about CARICOM. Similarly, the St. Lucia Opposition Leader, Allen Chastanet, stated that to address some of these issues, the OECS may need to decouple from some aspects of CARICOM.

Both men were addressing the OECS assembly in Kingston, which brought together government and opposition legislators from the nine-member sub-regional grouping.

Chastanet had asked the OECS Assembly to consider what would happen if the sub-regional group exited CARICOM and negotiated bilateral agreements with the other members.

Benefits of CARICOM

Preville said as a result, CARICOM member states can enter negotiations with developed and developing countries to negotiate trade agreements, “an undertaking that would not likely be possible for individual members of the grouping.

“Small individual markets of CARICOM member states are not sufficiently attractive to warrant the investment in time and resources to negotiate separate agreements. As a Regional Trade Bloc, however, the market size becomes more attractive and hence bilateral trade negotiations become more feasible,” Preville said.

He said evidence of bilateral trade negotiations between CARICOM and third countries includes CARICOM-Cuba, CARICOM-Costa Rica, CARICOM-Venezuela, and CARICOM-Dominican Republic.

Conclusion

CARICOM leaders will meet in Jamaica from July 6 to 8 for their annual summit, where the CSME is expected to be a significant item on the agenda.

Despite the challenges facing CARICOM, Preville remains optimistic about the future of the regional grouping, citing the benefits of a single market and economy.

FAQs

Q: What is CARICOM?

A: CARICOM is the Caribbean Community, a regional organization that aims to promote economic integration and cooperation among its member states.

Q: What is the CSME?

A: The CSME is the CARICOM Single Market and Economy, which enables the free movement of goods, services, labour, and skills across the 15-member regional grouping.

Q: What are the benefits of CARICOM?

A: The benefits of CARICOM include increased trade and investment opportunities, improved competitiveness, and enhanced economic growth and development.