Community Single Market and Economy (CSME)

BRIDGETOWN, Barbados, CMC – Former Barbados Prime Minister Owen Arthur has warned regional leaders that now is not the time to procrastinate on the creation of the Caribbean Community Single Market and Economy (CSME) that is scheduled for full implementation by 2015.

Arthur, who has been a leading proponent of the CSME, is worried that further delay in finalising the economic component of the regional project would negatively affect the region’s ability to cope with globalisation and also hurt trade with other regions such as Europe, which has just finalised a new Economic Partnership Agreement (EPA) with the Caribbean.

“Failure to carry out regional economic and financial liberalisation, as contemplated under the Revised Treaty of Chaguaramas (the CARICOM Treaty), will compromise severely the region’s capacity to take advantage of new economic partnership agreements with its major trading partners, or to fit the regional economy into the evolving global economy,” warned Arthur.

“The implementation of the provisions of the EPA and the completion of the work to make CARICOM a Single Market and Economy ideally are initiatives which must go hand in hand for both to be successful,” he added.

Addressing the 35^th Annual General Meeting of the Caribbean Association of Indigenous Banks here on Tuesday, the former Barbados Prime Minister acknowledged that the EPA, which governs future trade between Europe and the region, was not a perfect agreement.

He described it as a modern instrument of economic engagement and cooperation, which, if used properly, would allow the region to build new, competitive enterprises.

Arthur said Caribbean indigenous banks stood to benefit from the agreement.

However, he pointed out that in order to make full use of the new arrangements, financial institutions would have to deal with accreditation and other mutual recognition of qualification issues.

He also said that the cost of entry into the EU market and the requirement to assume a specific legal form may prove problematic, but added that failure to act in respect of the CSME would present even bigger challenges.

“The greatest challenge that the region may face in taking advantage of the provisions of the EPA may come not from these challenges, but from the region’s tardiness in putting its own house in order in respect to its regional initiative to become a single economy,” Arthur said.

Article 38 of the Revised Treaty makes provision for the removal of restrictions on Banking, Insurance and other Financial Services.

But the former prime minister said “it would now appear that the Regional Financial Services Agreement, like so much of the proposed arrangements to convert the region into a single economy, is now at large, clouded in doubt, and constrained by the inertia which regrettably seems now to be overtaking our regional affairs in increasing proportions.

“It was clearly understood that the removal of such restrictions is absolutely necessary to facilitate the growth of our financial institutions, the forging of strategic alliances, and to afford enterprises in the sector the ability to acquire the critical mass without which they will have difficulty competing at home and abroad,” Arthur said.

A total of 14 Caribbean partners signed off on the EPA in October. They are Barbados, Antigua and Barbuda, the Bahamas, Belize, Dominica, Grenada, Guyana, Jamaica, Trinidad and Tobago, Suriname, St. Lucia, St. Kitts, St. Vincent and the Grenadines, along with the Dominican Republic.

Haiti is the only CARICOM member which did not sign the agreement. The country, which installed a new government shortly before the accord was signed in Bridgetown, had also been grappling with the impact of recent natural disasters.