The Caribbean Community: The Geographical, Economic, and Political Legacy - Case Study Example

This paper will study the CARICOM, its origins and trading regulations, its history and the various member states, the various factors and regulations that a new entrant will have to adhere to and finally look at a possible trading structure for the new state known as New Carribea. The Caribbean Community (originally the Caribbean Community and Common Market) or CARICOM came into existence through the Treaty of Chaguaramas on August 1, 1973. Some of the initial members of this association were Barbados, Jamaica, Guyana and Trinidad and Tobago. Later on the Treaty of Chaguaramas was changed to accommodate certain clauses and it was used to establish the CARICOM Single Market and Economy or the CSME. In the year 1962 the CARICOM was founded to replace the already existing CARIFTA or the Caribbean Free Trade Association. The organization was developed and created to give a long lasting economic association among all the English-speaking nations of the Caribbean after the area of West Indies, got distributed on 1962. The membership of the nation of Haiti was temporarily withdrawn in the year 2004 but it was later re-admitted as a full member in the year 2006 into the CARICOM. Also the Haiti President also addressed the council of ministers meeting during the same year (Lewis, Gordon) The Foreign Minister of the Dominican Republic in the year 2005 sought full membership status in CARICOM following its previous membership. A number of difficulties however are expected to arise in the committee regarding this matter. The Dominican Republic has a very high population and large geographical size compared to the current members of CARICOM and also has in the past differed in its foreign policies from the other states. Due to these factors it remains to be seen if the member states of the CAICOM will unanimously vote for the re-entry of the Dominican Republic. The Netherlands went ahead and made a request for the status of associate membership in 2005. Here again the future of the dissolution of Netherlands Antilles might affect its observer status or its requested status of associate membership. In 2007, the U.S. Virgin Islands government made it public that it would soon be seeking ties with CARICOM. Though the request for status for membership remains unclear it will be definitely applying for one of the membership roles offered by CARICOM. It must be noted that the U.S. Caribbean Puerto Rico's currently holds an observer status. The following is the list of the 15 Full Members of CARICOM Barbados (1 August 1973), Belize (1 May 1974) ,Bahamas (4 July 1974) , Dominica (1 May 1974) , Jamaica (1 August 1973), Saint Kitts and Nevis (26 July 1974), Saint Lucia (1 May 1974) , Grenada (1 May 1974) , Guyana (1 August 1973) , Montserrat (1 May 1974) , Saint Vincent and the Grenadines (1 May 1974) , Antigua and Barbuda (4 July 1974) , Suriname (4 July 1995) , Trinidad and Tobago (1 August 1973) , Haiti (2 July 2002). The list of 5 associate members: Anguilla (July 1999) ,Bermuda (2 July 2003) ,British Virgin Islands (July 1991) Cayman Islands (16 May 2002), Turks and Caicos Islands (July 1991). The list of 7 observers: Aruba, Colombia, Dominican Republic ,Mexico ,Netherlands Antilles , Puerto Rico, Venezuela. All the member states of the CARICOM then decided to emphasize and place a renewed focus on developing and executing trade agreements that would help consolidate and promote exports and imports between the members and other countries. This development of the FTAs is actually done through the CRNM or the Caribbean Regional Negotiating Machinery (Worrell, Delisle). The following countries are its primary trading partners and also listed are the various FTAs and agreements which have been established, Preferential agreements CARICOM - Venezuela (January 1, 1993) CARICOM - Colombia (January 1, 1995) Free Trade Agreements CARICOM - Cuba (July 5, 2000) CARICOM - Dominican Republic (December 2001) CARICOM - Costa Rica (March 9, 2004) In the Pipeline CARICOM - Canada: After the CAFTA agreement. CARICOM/CARIFORUM - European Union: Negotiations on EPA Let us take a brief look into the branches at CARICOM which influence the trade structure and entry of new countries like New Carribea into the CARICOM. It consists of the Chairmanship of CARICOM (Head of CARICOM), CARICOM Headquarters Secretariat and the CARICOM Secretary General. Apart from this there are several other posts for the overall development of the entire region and the integration of the region (Benn, Denis). The Community Council: It consists of Ministers who take care of various community affairs. It has a number of supporting organs and bodies, Supporting Organs and Bodies include, The Council for Finance and Planning (COFAP) The Council for Trade and Economic Development (COTED) The Budget Committee The Committee of Central Bank Governors The Caribbean Court of Justice (CCJ) is the central jurisdiction for settlement of all disputes on the functioning of CARICOM and CSME. It is headquartered in Port of Spain, Trinidad and Tobago. As of now we have seen the entire scenario of the CARICOM and the prevailing trade agreements and partners. New Carribea as we know is a large group of Islands with considerable geographic size that is quite large when compared to the existing members. Gaining entry into the committee requires it to have a similar population and geographical spread as the member nations. So it will face some difficulties in this area. Let us assume that New Carribea plans to export Soya Beans to the member nations and other associated nations. For a full membership into the CARICOM it must first have its foreign policy altered to be in line with the other nations, a checkered foreign policy will not get a favorable result. Considering that the prices for the Soya Beans is at the rate of $5 a kilogram we would be looking at minimum trade volumes and minimum trading price that is prevalent in the CARICOM. This condition needs to be met if New Carribea is to enter the CARICOM (Kenneth O. Hall). Also there are a number of new regulations and new initiatives that have been taken by the committee off late. One of them is the common visa initiative where all the member nations have to issue a common visa to travel into any of the 15 full membership states of the CARICOM with minimum paper work and difficulty akin to something like what currently exists in the European Union. The next venture is the common passport venture that it needs to subscribe to. This again makes trading and movement of people among the CARICOM nations much easier and simpler. Both these initiatives need to be studied by the New Carribean government before applying for the full membership of the CARICOM (Bourne, Compton). Now coming to the trading processes and regulations that New Carribea will have to take not of. The goods produces inside of CARICOM will not have any import duties at all. The tariffs and other volume related restrictions in the other states will be removed. So here New Carribea has a better chance of selling its product ie. Soya beans to the rest of the states since it will be differentiated from the same goods coming from other parts of the world. Though New Carribea will have to adhere to certain regional standards of production it will definitely have an advantage in exporting its goods to the countries of CARICOM. So basically New Carribea has access to a set of 14 million people with a differential advantage in terms of price and trading regulations from the rest of the world. This gives it a stable customer base to target and also helps it grow economically. Also the companies can transfer and send across money within the countries of CARICOM without prior approval which gives a lot of convenience in terms of payment for goods sold. New Carribea can also invest and remove capital from one country to another freely so it is not bound to set up its factories in one single country alone. New Carribea also does not need to worry about currency fluctuations and interest rate differences between countries since it is all coordinated and free flow of capital lets the companies have wide access to large markets and this actually will go a long way in making New carribea a more competitive country in the international scenario. Also all these regulations bring in a certain amount of predictability within the states of CARICOM since rules and regulations can be changed according to the need of the hour and there is always a lot of coordination between the countries. So basically New Carribea needs to lay a trading plan with a pricing policy similar to existing ones in CARICOM and look into the regulations so that its exports are satisfactory. In my viewpoint the nation New Carribea is well poised to enter into the CARICOM since it satisfies or is very close to satisfying most of the formalities and requirements of the committee. References Government of Jamaica. Grand Anse Declaration. CARICOM General Meeting at Grenada. 1993. Kenneth O. Hall (Ed.). The Caribbean Community - Beyond Survival - Ian Randle, Kingston Jamaica, 2001. Lewis, Gordon. Growth of the Modern West Indies - Monthly Review Press, 1968. UWI-CARICOM Skills Assessment Report. Prepared by the UWI-CARICOM Project, 2002. Benn, Denis. The Caribbean Community: The International Environment, The Geographical Economic and Political Legacy, Ten Years of CARICOM. Washington: IDB, 1984. Bourne, Compton. Caribbean Development to the Year 2000: challenges, prospects and policies. London: Commonwealth Secretariat, 1988. Prepared for the Caribbean Community Secretariat with Assistance of an Advisory Group from the Commonwealth Caribbean. Brewster, Havelock and Thomas, Clive Y. The Dynamics of West Indian Economic Integration. Mona: UWI, Institute of Social and Economic Research, 1967. CARICOM Secretariat. The Caribbean Community in the 1980s: Report by a Group of Caribbean Experts. Georgetown: CARICOM Secretariat, 1981. Demas, William, G. West Indian Development and the Deepening and Widening of the Caribbean Community. Kingston: Ian Randle Publishers, 1995. Girvan, Norman. Caribbean Integration: Rhetoric or Reality. Kingston: s.n., 1991. Mills, Gladstone et al. Report on a Comprehensive Review of the Institutions and Organizations of the Caribbean Community. CARICOM Secretariat, 1990. Müllerleile, Christoph. CARICOM Integration, Progress and Hurdles - A European View. Jamaica: Kingston Publishers Ltd, 1996. Worrell, Delisle. A Common Currency for the Caribbean: A Study. West Indian Commission Occasional Paper No. 4. Black Rock: West Indian Commission, 1992. Read More