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 week.
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.
”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.
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.
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 referred to hearing are satisfied.
In his presentation, Preville, the St. Lucian-born head of the Barbados-based CSME Unit, stated that CSME matters are not integrated into 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 liberalised. This has allowed CARICOM to be notified as a free trade area under the WTO’s (World Trade Organization) Committee on Regional Trade Agreements,” 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, 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.
“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 include trade in 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 stated that, as a result of the single market arrangements under the CSME, businesses have exercised their rights under the right of establishment regime in various sectors, including financial services, distribution, and manufacturing, among others.
He said in financial services, Sagicor and Republic Bank have established themselves in several member states. In contrast, the Trinidad-based Massy stores have expanded significantly in the area of distribution services throughout the Eastern Caribbean.
He said another Trinidad-based operation, Blue Waters, has established manufacturing operations in St. Luccia, boosting exports.
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.
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