Challenges and Opportunities Under CSME

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

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 (CMC Photo)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 week.

The CSME allows for the free movement of goods, skills, labor and services across the 15-member regional grouping. The Bahamas is not one of the signatories to the CSME.

Preville said that there has been gradual increases in new areas of production, noting that insufficient progress has been made in agricultural output, especially value added agriculture. He said the region imports almost six billion US dollars 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 and that among the LDCs, Belize is the lead 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.

”The LDCs import more from the rest of CARICOM that 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 which imports the least from CARICOM, Preville said, adding that among the LDCs, St. Lucia is the leading importer from CARICOM and its level of imports is greater than 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, said the lack of competitiveness due to relatively high cost of production as well as smaller domestic markets make it difficult to capitalize on economies of scale.

Last month, the St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves highlighted a number of complaints about CARICOM, and like the St. Lucia Opposition Leader, Allen Chastanet, said that to address some of these issues, the OECS may have to decouple from some elements of CARICOM.

Both men were addressing the OECS assembly in Kingston that 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.

However, Gonsalves did not go so far, saying, “the OECS countries may well, most reluctantly by force of circumstances, have to put on the table the continued relevance of our participation in the CSME, while, of course, remaining in CARICOM until the inequities refer to hearing are satisfied.

In his presentation, Preville, the St. Lucian-born head of the Barbados-based CSME Unit, said CSME matters are not integrated in national development strategies and that officers assigned to CSME matters have other competing priorities.

He said the perceptions of the movement of people are “still viewed from the lens of national insularity” and that there are still “lengthy delays” in decision making on critical issues.

He told the virtual conference that among these issues is the Policy for the Cross border Control of Mergers and Acquisitions in the CSME which was only approved in November 2024 “after being considered by COTED (Council for Trade and Economic Development) from 2016”.

In addition, the Protocol on Public Procurement was approved in 2019 “but was only signed by seven countries and ratified by only two of the signatories,” Preville said, noting also that only four member states have undertaken the amendment to national legislation to allow for  the free movement of the approved 12 skilled categories of workers.

But despite these situations, Preville said that there are opportunities and that one of the key benefits of CARICOM “is its ability to negotiate as a single trade bloc with third countries.

“CARICOM has met the provisions of Article 24 of the GATT(General Agreement on Tariffs and Trade) in terms of substantially most trade among the members being liberalized. This has allowed CARICOM to be notified as a free trade area under the WTO’s (World Trade Organization) Committee on Regional Trade Agreement,” Preville said.

GATT was a multilateral agreement signed in 1947 to promote free and fair international trade by reducing tariffs and other trade barriers. It was a set of rules and a platform for negotiations among its member countries, rather than a formal organization. GATT was instrumental in rebuilding the global economy after World War II and fostering international trade. It was eventually succeeded by the WTO in 1995.

Preville said as a result, CARICOMM member states are able to 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 include CARICOM-Cuba, CARICOM-Costa Rica, CARICOM Venezuela and CARICOM-Dominican Republic.

“These are bilateral trade negotiations mainly centered on trade in goods,”  he said, adding that CARICOM has also entered into deeper bilateral trade negotiations that includes trade ins services, investment, government procurement, intellectual property among others with developed countries.

He said CARICOM as part of the Caribbean Forum (CARIFORUM) has successfully negotiated agreements with Europe and that “these negotiations reflect the need for the existence of a significant market size to make the negotiations attractive”.

Preville said that as a result of the single market arrangements under the CSME, businesses have exercised their rights, under the right of establishment regime in financial services, distribution and manufacturing sectors to name a few.

He said in financial services, Sagicor and Republic Bank have established themselves in several member states, while the Trinidad-based Massy stores, in the area of distribution services, has expanded significantly in the Eastern Caribbean.

He said another Trinidad-based operations, Blue Waters has established manufacturing operations in St. Luccia, boosting exports.

CARICOM leaders will meet in Jamaica from Julyn6-8 for their annual summit, where the CSME is expected to be a major agenda item.