June 03, 2009

Caricom, whither goest thou?

Caricom, whither goest thou?
Wednesday, June 03, 2009

Source: The Jamaican Observer.com

Following the April 22 column, "Caricom's meandering direction", the situation has deteriorated with a reversion to the niggling trade tactics of the 70s and 80s between Jamaica and Trinidad and Tobago.

Some would recall the "Welding Rods" episode, and the MAD technique - Maximum Administrative Delay - on Jamaican exports that gave rise to the sobriquet "Port of Pain", and the imports of goods from Trinidad manufactured in free zones without application of tariffs, and the "Tit for Tat" reciprocal counter measures, all of which were eventually resolved by political interventions. This piqued behaviour was seen as Caricom's "growing pains".

It is not that Caricom has entered its second childhood, as it is only 36 years old. However, it is demonstrating a level of immaturity that makes one wonder why the region is still mired in the aberrant ways of the past, instead of moving ahead with its economic growth and development. In the previous article mentioned above it was written: "To avoid further diverting, there must be established a central purpose and method to bring the regional group back to the narrow path of governance towards unity and stability, which are basic requirements of a well-organised and managed coalition of Caricom states, moving forward together towards the same goals. The maligned EPA could be a needed catalyst in achieving this end."

Over the years there have been endless reports, studies and recommendations on unification of the 15 member states, to achieve economies of scale and solidarity when dealing with third countries in a globalised world. All the recommendations, including Federation, Confederation and a Caribbean Commission have been unacceptable. In light of this impasse, pray tell what consolidating configuration would be acceptable to the Conference of Heads of Government? So far, the silence has been deafening, and Caricom continues to wallow in a sea of uncertainty.
This state of suspended animation does little to improve the region's image abroad, and distinctly hampers our posture in negotiations with foreign countries. Vacillation has resulted with the region being overtaken by the world recession, thus compounding its difficulties. The region's problems and suggested remedies have been fully ventilated in all media. What is left is for the 30th Annual Heads of Government Conference in Guyana to devise dynamic strategies to restart and re-energise the region's forward momentum. Failure to change the status quo would create intensified regional tensions, likely to prompt fragmentation of the Community according to the maxim that if "the centre cannot hold, things fall apart".

Jamaica expected the result of Trinidad's Phyto-sanitary tests on a shipment of patties to be completed on May 29. The tests were satisfactory and the shipment of patties was allowed entry to the Trinidad market. The situation of Trinidad requiring tests arises at a critical time when Caricom economies are being ravaged by the global recession, and increased trade between members is vital for survival. Protectionism will only aggravate and prolong recovery which is not in the region's interest.

At this critical juncture, the Dominican Republic and Haiti have applied for Caricom membership; this is the Dominican Republic's second application. Haiti has now completed the entry obligations and has applied for full membership. Both applications come with issues attached.

At the meeting of Caricom's Council for Foreign and Community Relations held in Kingston on May 9, the minister of foreign affairs and foreign trade, Dr Kenneth Baugh, said in reference to the Dominican Republic's application for Caricom membership: "There are a lot of issues to be addressed, in the context of this relationship with the Dominican Republic , but the general spirit is yes." He continued: "It is in our interest to expand in terms of penetrating those markets. the bigger the marketplace the better it is."

However, the global crisis must be considered when assessing Jamaica's anaemic economy and its ability to withstand concerted competition from the Dominican Republic whose economy grew by 5.5 per cent last year, with a debt ratio of 41 per cent of GDP compared with Jamaica's approximately 125 per cent, and the January-July 2009 ballooning trade deficit with the Dominican Republic of -US$42.2 million! If the process time for full membership is expected to be five years, and the impact study is favourable, then full membership could be conferred at that time.

The Dominican Republic's population of 9.5 million is an attractive growing market for exploitation by Carcom's private sector. However, membership should be on a phased asymmetrical negotiating basis over five years with the same EPA liberalising periods. The first offer could be associate membership with terms and conditions customised by conference, subject to a five-year review, and granting full membership if an improved economic climate prevails, with a resulting positive impact study.

Haiti, with 8.7 million inhabitants, is the Caribbean's only Least Developed Country, which has Everything But Arms access to the EU and also participates in the EPA. With full membership, attention is drawn to those categories of people allowed regional free movement and influenced by Haiti's high unemployment rate. Haiti's national health record, when dealing with immigrants and temporary migrants under mode 4 would likely necessitate border health controls to avoid exacerbation of the region's precarious health environment. Haiti and the Dominican Republic would have to enshrine the Caribbean Court of Justice with original jurisdiction for intra-Caricom trade to flourish. These are but a few issues requiring the Dominican Republic's views on full membership to assist with Caricom's response to Haiti's application. So, Conference, where do we go from here?

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