Barbados Provides Update On CARICOM Single Market
by Mike Godfrey, Lowtax.net, Washington
30 June, 2015
Barbados has reported that the Caribbean Community member states are making progress towards establishing a Single Market.
Under the Single Market and Economy initiative, the CARICOM states are aiming to harmonize their rules for businesses and remove tax and non-tax barriers to trade. They will collectively levy a common external tariff on goods imported from outside the bloc.
Barbados's Prime Minister, Freundel Stuart, said the agenda is "on the march" but acknowledged that the Single Economy element has been a little more challenging because it calls for more fundamental decisions.
The key elements of the Single Market and Economy include:
- Free movement of goods and services, through measures such as eliminating all barriers to intra-regional movement and harmonizing standards to ensure acceptability of goods and services traded;
- Right of Establishment, to permit the establishment of CARICOM-owned businesses in any member state without restrictions;
- A Common External Tariff – a rate of duty applied by all members of the Market to a product imported from a country which is not a member of the market;
- Free circulation – the free movement of goods imported from extra regional sources which would require collection of taxes at first point of entry into the Region and the provision for sharing of collected customs revenue;
- Free movement of capital, to be achieved through measures such as eliminating foreign exchange controls, convertibility of currencies (or a common currency), and an integrated capital market, such as a regional stock exchange;
- A common trade policy – an agreement among the members on matters related to internal and international trade and a coordinated external trade policy negotiated on a joint basis; and
- Free movement of labor, through measures such as removing all obstacles to intra-regional movement of skills, labor, and travel, harmonizing social services (education, health, etc.), providing for the transfer of social security benefits, and establishing common standards and measures for accreditation and equivalency.
Stuart said: "I would say that largely we have managed to get all those mechanisms in place. There are always a few remaining things to be done, in particular the Contingent Rights for people who establish businesses in respective countries. That has caused a few challenges because of differences in our legislation and the kind of inequalities between countries in the region at different levels of development. Therefore, the rights that one country might be able to give easily, do not come as easily to countries less resourced, so we are still trying to plough our way through that."
Stuart said the Single Economy is a little more challenging because it will require a harmonized customs environment. "A single economy where there are different taxation regimes in the individual units would create a lot of problems because the scope for playing off one country against the other would continue."
"We would need to harmonize our companies' legislation so that there is a sense of being able to do business anywhere or being able to live anywhere and not feel you are disadvantaged by country A or B," he stated.
Stuart concluded that progress on the initiative had stalled during the crisis, but the talks are being revisited by the members of CARICOM: Antigua and Barbuda, the Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago.
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