Has CARICOM reached its limits of regional integration? Part 2

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(The author is Antigua and Barbuda’s Ambassador to the United States and the OAS. He is also a Senior Fellow at the Institute of Commonwealth Studies, University of London, and Massey College, University of Toronto. Opinions expressed are entirely his own)

Mr. Ronald Sanders

In the first part of this commentary, the conclusion was drawn that the high ideals, set out in the 1973 Treaty of Chaguaramas (the CARICOM Treaty) and its revision in 2001, remain unfulfilled. But does this reality mean that, as the CARICOM project turns 50 next July, it has reached the limits of regional integration?

The previous comment showed that CARICOM has expanded by adding new members (Suriname and Haiti), but has not deepened its integration arrangements, so that while it aspires to become a market and a unique economy (SME) since 2001, it still has not established a customs union and even less a common market.

The predominant feature of CARICOM, apart from the painfully slow pace of institutionalizing integration mechanisms, has been the jealous maintenance of “sovereignty” by the governments of the region. In other words, as the late former Prime Minister of Barbados, Owen Arthur disapprovingly put it:[CARICOM] sees itself primarily as a community of sovereign states in which sovereignty is pooled but never ceded; the nation-state being the place of decision regarding the implementation of regional commitments”.

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However, it should not be assumed that political leaders are the only ones clinging to sovereignty (ie keeping all decisions at the national level). Over the years, anxious to maintain control over what they considered their own turf, bureaucrats also delayed, deferred or made impossible the implementation of decisions. The pull for local control remains greater than the push for regional authority.

The worst example of failure to fully operationalize a regional institution that CARICOM governments themselves established is the Caribbean Court of Justice (CCJ). When it was created, the CCJ was to become the final court of appeal for all civil and criminal cases, replacing the British (and colonial) Privy Council. Embodying the inexplicable dissonance that surrounds the attitude towards the CCJ, its headquarters are located in Trinidad and Tobago, a country independent since 1962, and which has long separated the Queen as head of state in favor of becoming a republic with a native president. Yet Trinidad and Tobago’s final court of appeal remains the British Privy Council due to internal politics.

Only four CARICOM countries – Barbados, Belize, Dominica and Guyana – recognize the CCJ as their final court of appeal. Despite the celebration of independence and sovereignty, Caribbean politicians (of all persuasions) through their failure to explain the merits of the CCJ to their people – or through their deliberate deception of them – maintain a contradiction.

In part, this situation persists because the CARICOM “nation-state” has not collapsed, sustained, as it is, by official development assistance from members of the international community; by international lenders who profit from lending to needy governments; and by investors whose business models are based on overly generous tax concessions from the state, driven by competition among CARICOM states, particularly in the tourism industry.

Moreover, no CARICOM country has had to bear the full national security burden that would arise from building the military apparatus necessary to protect its borders and sovereignty. There was little or no need for an air force, warships, armies or considerable armaments. Until Russia invaded Ukraine, the borders, territorial integrity and sovereignty of each CARICOM country were protected by an international order and a UN Security Council that seemed to provide protection against military aggression. Despite Russia’s action, the CARICOM countries have not discussed their collective defense. Instead, they reiterated their desire for the Caribbean to be a “zone of peace,” expecting external actors to respect it, knowing full well that the cost of their military defense far exceeds their every means.

Even in times of natural disasters, causing massive damage and economic setbacks, CARICOM countries have turned to the international donor community for assistance; borrowed money, thereby increasing their national debt burden; and entered into financial adjustment programs with the International Monetary Fund (IMF). In the latter case, they have been forced to cede aspects of ‘sovereignty’ to which they cling within the CARICOM group. However, apart from the useful but underfunded work of the Caribbean Disaster Emergency Management Agency, CARICOM is unable to respond in the way that, for example, the federal governments of the United States or Canada are capable of dealing with disasters in states or provinces.

Certainly, in the 60 years since Jamaica and Trinidad and Tobago became independent states, leading a host of Caribbean countries to do the same, independence has allowed national governments accelerate infrastructure development and economic progress in many countries. Within the CARICOM group, Haiti, with its history of foreign occupation, exploitation and succession of dictatorial and repressive governments, is the main exception.

Thus, sovereignty has not been without its advantages. But the question remains: how far along the path of economic and social progress would the CARICOM countries have had if they had not only pooled their sovereignty, but also ceded certain aspects of it to a regional center? as happened with the European Union?

According to the latest IMF research, further trade liberalization and labor mobility in the region can generate significant economic benefits, potentially over 7% of the region’s GDP in 2018.

February 2020 research finds that “a 25% reduction in non-tariff barriers and trade costs within CARICOM and vis-à-vis non-CARICOM trading partners can boost trade and improve welfare. be of all members – to around $6 billion, or 7.6% of the region’s GDP in 2018. It can also help restructure economies from contracting to expanding sectors, which will result in a net gain in jobs throughout the region”.

The IMF report titled “Is the whole greater than the sum of its parts?” Strengthening Caribbean Regional Integration,” lays out strong research to establish that while the small size and supply constraints of these countries can potentially limit the benefits of economic integration, acting as a group can enhance the scale, bring widespread benefits and help the region to further exploit global value chains.

Part 3 next week will conclude this discussion.

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