By IPS Correspondents
PORT OF SPAIN, Jan 3 2006 (IPS)

The official ceremony will take place in Jamaica on Jan. 23, but at the start of 2006, Caribbean Community (CARICOM) countries quietly launched their long talked about single market designed to allow goods, services and skilled workers to move more easily throughout the region.

“Today, the single market component of the CARICOM Single Market and Economy (CSME) comes into force, involving Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad and Tobago,” said Patrick Manning, the prime minister of oil-rich Trinidad and Tobago, who assumed the chairmanship of the regional bloc at the start of the year.

Manning said the Bahamas and Haiti – the latter suspended from CARICOM deliberations following the controversial removal of President Jean Bertrand Aristide from office in February 2004 – have “not signified their intention to participate in the CSME process”.

Under the trade accord, the governments have agreed to lift tariffs among participating members, and all citizens can open businesses, provide services and move capital throughout the single market without restrictions. The governments will also replace national travel documents with a regional passport by 2007.

Member nations will have access to bilateral free trade agreements that CARICOM has already made with Colombia, Cuba, Costa Rica, the Dominican Republic and Venezuela.

The Barbados Nation newspaper says it does not regard the fact that only six member states were involved in the launch of the CSME as a crisis, reminding readers that “CARICOM was inaugurated 32 years ago with four signatory countries – Barbados, Guyana, Jamaica, and Trinidad and Tobago”.

“A single regional market of 12 or 15 million people in mid-income developing countries is, in the context of the global economy, by no means powerful. The point though is that this is far more substantial than a series of individual markets of small populations,” said the Jamaica Observer newspaper.

“The benefits to regional firms of operating in a larger seamless market, taking advantage of economies of scale, are already apparent in those companies that have expanded regionally, including several from Jamaica, particularly in financial services,” it added.

“To put together a single market and economy is a historic thing,” said Barbados Prime Minister Owen Arthur, who has lead responsibility for the CSME within the region.

“Over the course of the next few weeks I think a very clear, definitive position will be made in relation to the entire process,” Arthur said.

Arthur acknowledged that getting the OECS on board was not the only issue that needed to be addressed with the new common market. Another relates to the actual Revised Treaty of Chaguaramas that sets out the legal context in which the CSME is created.

Even with the full support of the OECS, Arthur explained there was a need for an amendment to the treaty to allow CSME-ready countries to proceed to ratification. Article 234 currently prescribes that the treaty will enter into force when all CARICOM countries ratify the agreement.

“We are trying to have that process completed to have 12 countries agree to the ratification rather than 14 to allow the treaty to enter into force,” said Arthur, who appeared confident that OECS countries would honour their obligations.

Arthur had been mandated by CARICOM leaders to visit a number of OECS states to discuss ratification, including Belize, Guyana and Suriname, which “face particular challenges”, according to an official CARICOM statement.

CARICOM Secretary-General Edwin Carrington described the CSME as “an important psychological and political step for this region” even though less than half the membership was ready to enter the trade accord by Jan. 1.

“I feel pleased we have reached this stage. I would have been extremely pleased if we had all countries on board, but I understand that in life things don’t always go the way we want them to,” he told the Barbados Sun newspaper.

Manning said that Montserrat, an OECS member state that is also a British dependency, is awaiting the necessary instrument of entrustment from the British government, even though it has indicated that it intends to “be on board by the end of the first quarter of 2006”.

The OECS countries – namely Antigua and Barbuda, Dominica, Grenada, St. Lucia, St. Vincent and the Grenadines, Montserrat and St. Kitts-Nevis – have complained that their current economic position would place them at a disadvantage if they were to participate in the CSME, and have called on their regional colleagues to implement a special Regional Development Fund (RDF) to assist them.

Proposals for the initial size of the fund vary from 50 million dollars to 120 million dollars, with suggestions for mobilising financial resources from CARICOM governments, the region’s private sector and extra-regional donor agencies and institutions.

Late last year, Caribbean finance ministers meeting in Jamaica agreed to pump 10 million dollars into the RDF that CARICOM officials insist “is not the be all and end all of it”.

The Jamaica meeting also agreed to establish a technical team of representatives from the Caribbean Development Bank and all Central Bank governors in the region to examine how funding would be arranged and how member states would access the fund.

The team is expected to present its findings to the CARICOM Council for Finance and Planning at a meeting in Jamaica on Jan. 24. The Council will then send its recommendations to the first inter-sessional summit of regional leaders in Trinidad on Feb. 9 and 10.

Some of the OECS countries, like St. Lucia, are already taking steps to ensure their participation in the initiative during the second quarter of this year.

The St. Lucia government says it is in the process of implementing a new tax structure to benefit both manufactures and consumers in preparation for the CSME.

Government spokesman Titus Preville said that the new structure would involve an adjustment in the current method of calculation, resulting in a smaller consumption tax and in turn lower cost, thereby benefiting the consumer.

The move to establish the CSME dates back to 1989 when regional leaders adopted the Grand Anse Declaration at their meeting in Grenada, agreeing to remove restrictions on the free movement of capital and of approved categories of skilled CARICOM nationals, and the provisions of services.

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