Notes on Regional Integration

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4.1 Introduction to integration
4.2 Major challenges facing the Caribbean
region
4.3 The West Indies Federation
4.4 The Caribbean Free Trade Association
(CARIFTA)
4.5 The Caribbean Community (Caricom)
4.6 The Caribbean Common Market
4.7 Globalization and trade liberalization
4.8 The Caricom Single Market (CSM)
4.9 The Caricom Single Economy (CSE)
4.10 The governing structure of the Caribbean
Community (Caricom) under the Revised Treaty
4.11 Functions of the Caricom secretariat
4.12 The West Indies Associated States Council
of Ministers (WISA); the Eastern Caribbean
Common Market (ECCM); the Organization of
Eastern Caribbean States (OECS); and the
Organization of Eastern Caribbean States
Economic Union
4.13 The governing structure of the Organization
of Eastern Caribbean States (OECS) under the
revised Treaty of Basseterre
4.14 The Association of Caribbean States (ACS)
and CARIFORUM
4.15 Regional factors that promote integration
4.16 Extra-regional factors that promote
integration
4.17 Factors that hinder regional integration:
governance issues
4.18 Other factors hindering regional integration
4.19 The benefits of regional integration
4.20 The role of citizens, businesses and
government in the integration process
4.21 Areas of regional cooperation

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4.1 Introduction to Integration

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Regional integration:
• is the uniting of the separate Caribbean
states into a regional organization.
• is necessary for the development of the
region.
• must be embraced by Caribbean
governments and people in order to be
successful.

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4.2 Major challenges facing the
Caribbean region

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There are several major challenges facing the Caribbean
region:
 Small markets which do not allow producers to reap economies
of scale.
 Uncompetitive products which cannot compete in international
markets.
 Heavy indebtedness to international lending agencies.
 Shortage of skilled labour and high levels of unemployment and
underemployment.
 Vulnerability to natural disasters.
 Limited exploitable natural resources and lack of diversification.

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4.3 The West Indies Federation

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Facts about the West Indies Federation:
 It was a political union of ten Caribbean states formed
in 1958.
 It aimed to improve the social and economic
development of the member states and prepare them
for self-rule.
 It was administered by a central government based in
Trinidad.
 It did not achieve any of its objectives and collapsed in
1962.

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4.4 The Caribbean Free Trade
Association (CARIFTA)

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 A free trade area is a basic example of economic cooperation among a
group of countries.
 The Caribbean Free Trade Area/Association was established on 1st May
1968 among the countries which were members of the West Indies
Federation along with Guyana and Belize (British Honduras).
 The Caribbean Free Trade Area (CARIFTA) aimed to:
• Promote free trade among its members by removing all restrictions
to the free flow of goods produced and traded within the Region.
• Increase the quantity and variety of goods and services produced for
intra-regional trade
• Give all the members states an equal opportunity to develop.
 CARIFTA was successful in increasing intra-regional trade.
The Caribbean Free Trade Association (CARIFTA)

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4.5 The Caribbean Community
(CARICOM)

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 The Caribbean Community and Common Market were
established by the Treaty of Chaguaramas in 1973.
 The Caribbean Community is an association of sovereign
Caribbean countries.
 The Common Market replaced CARIFTA.
4.5(a) The Caribbean Community (CARICOM)

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4.5(b) The Caribbean Community’s objectives
The objectives of the Caribbean Community include:
• Increasing free trade in regionally produced goods among
members of the Common Market.
• Encouraging member states to pursue common trade
policies when dealing with non-member states.
• Encouraging the independent Member States to adopt
common policies when dealing with non-member states and
international organizations.
• Promoting functional cooperation among member states in
areas including: education, culture, health, communications
and industrial development.

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4.6 The Caribbean Common
Market

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4.6(a) The Caribbean Common Market
 A common market is a group of countries which agree to promote
free trade by:
o removing all tariff and non-tariff restrictions on goods which they
produce and sell to each other
o allowing the free movement of capital and labour across member
countries
o charging a common external tariff (CET) on goods imported from
countries which are not members of the group
 A common market is a more advanced form of economic integration
than a free trade area.
 Under the Caribbean Common Market, restrictions remained in place
on the right of establishment, the movement of capital and labour,
and the provision of services.

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 The role of the Caribbean Common Market was to
further promote economic integration.
 The objectives of the Caribbean Common Market
included:
• increasing and regulating free trade among member
states and sharing the benefits from increased trade
fairly
• increasing the total output of goods
• promoting the economic development of the member
states
4.6(b) Role and Objectives

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4.7 Globalization and Trade
Liberalization

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 Globalization and trade liberalization have influenced
regional integration.
 Trade liberalization involves the removal of restrictions to
the flow of goods, services, labour and capital on a global
scale.
 Globalization is the process by which countries around the
world are becoming interconnected.
 Globalization and trade liberalization present the region with
many challenges and opportunities.

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4.8 The CARICOM Single Market
(CSM)

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4.8 (a) The CARICOM Single Market (CSM)
 The Caricom Single Market is one aspect of the proposed Caricom
Single Market and Economy (CSME)
 Member states must remove all restrictions to the free
movement of capital, labour, and goods and services of Caricom
origin in order to create a single market.
 A single market for goods has existed in the Caribbean since
1973, when the Common Market was created.
 Under the Caribbean Common Market arrangement, restrictions
remained in place on the right of establishment, the movement
of capital and labour, and the provision of services.

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4.8 (b) CARICOM Single Market (CSM) Objectives
The objectives of the CARICOM Single Market include:
• increasing trade in regional goods and services
• increasing the output of goods and services
• promoting competition among Caricom firms
• promoting the most efficient use of the region’s
resources
• improving the welfare of Caricom citizens

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4.9 The CARICOM Single Economy
(CSE)

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4.9(a) The Caricom Single Economy
 In the Caricom Single Economy, member states
will be required to adopt a common currency
and pursue similar monetary and fiscal
policies.
 The objective of the CSE is to create a single
financial space involving all the members of
Caricom. When it is established, the CSE will
complement the CSM.

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4.9(b) The Caricom Single Economy
The single financial space is to be created by the
governments of the member states:
• pursuing corresponding revenue (taxation) and
spending policies (fiscal policies)
• pursuing corresponding policies to control the
availability of spending money to businesses and
consumers (monetary policies)
• adopting a single currency
• adopting common customs and company laws
• pursuing similar development policies in the major
industries such as agriculture, tourism,
manufacturing, and fisheries

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4.10 The Governing Structure of
CARICOM under the Revised
Treaty

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4.10(a) The governing structure of the Caribbean
Community (Caricom) under the Revised Treaty
 The hierarchical structure of the Caribbean
Community is as follows:
• The Conference of Heads of Government (The Conference)
• The Community Council of Ministers (The Council)
• The Ministerial Councils
• Other bodies of the Community
• The Caricom Secretariat

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4.10(b) The governing structure of the Caribbean
Community (Caricom) under the Revised Treaty
 The Bureau of the Conference is a sub-committee of
the Conference.
 The Conference is the policy-making organ of the
Community and functions as a quasi-cabinet.
 The Council coordinates member states’ activities in
the areas of economic cooperation and functional
cooperation.
 The Ministerial Councils assist the Conference and the
Community Council of Ministers.

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4.11 Functions of the CARICOM
Secretariat

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4.11 Functions of the Caricom Secretariat
The main functions of the Secretariat include:
• preparing proposals for consideration and decision by the
relevant organs
• servicing meetings of the organs and bodies of the community
and taking follow-up action on decisions taken
• collecting, storing, and circulating relevant information to
member states
• assisting community organs in developing and implementing
proposals and programmes
• mobilizing resources from donor agencies to assist in the
implementation of Caribbean Community programmes
• assisting member states in implementing Caribbean
Community decisions

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4.12 Other organizations: The West Indies
Associated States Council of Ministers
(WISA); the Eastern Caribbean Common
Market (ECCM); the Organization of
Eastern Caribbean States (OECS) and the
Organization of Eastern Caribbean States
Economic Union

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4.12 (a) The West Indies Associated States Council of
Ministers (WISA) and the Eastern Caribbean Common
Market (ECCM)
 There are similarities in the stages of the integration
process involving both the Eastern Caribbean States
and Caricom.
 WISA (West Indies Associated States Council of
Ministers) was a political organization which also
promoted functional cooperation among its members.
 ECCM (Eastern Caribbean Common Market) was
established to promote economic cooperation among
its members.

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4.12 (b) The Organization of Eastern Caribbean States (OECS)
and the Organization of Eastern Caribbean States
Economic Union
 OECS (Organization of Eastern Caribbean States) is a
nine member community of states with a governing
structure and objectives similar to Caricom’s. It
replaced WISA and the ECCM.
 OECS is a sub-grouping within the Caribbean
Community.
 The objectives of the OECS Economic Union are similar
to those of the Caricom Single Market (CSM).

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4.13 The governing structure of the
Organization of Eastern Caribbean
States (OECS) under the revised
Treaty of Basseterre

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 The OECS Authority of Heads of Government of Member
States is the highest decision-making organ.
 The Council of Ministers assists the OECS Authority.
 The OECS Assembly enacts legislation for the organization.
 The Economic Affairs Council oversees the Economic Union
Protocol.
 The OECS Commission is the principal administrative organ.
 The Institutions of the Organization promote functional
cooperation.
Governing Structure of OECS

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4.14 The Association of
Caribbean States (ACS) and
Cariforum

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 The Association of Caribbean States (ACS) is a grouping of
Caribbean and Latin American States.
 The objectives of the Association of Caribbean States are to
promote economic integration and functional cooperation
among the states, countries, and territories of the
Caribbean Basin.
 CARIFORUM is an association between the Caribbean
Community countries and the Dominican Republic and
Cuba.
 Its purpose was to negotiate the Economic Partnership
Agreement (EPA) with the European Union (EU).
ACS and Cariforum

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4.15 Regional factors that
promote integration

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 Common cultural heritage.
 Small size of national markets and the need to create
competitive businesses.
 The need to increase intra-regional trade and raise the
standard of living.
 The region’s vulnerability to natural disasters.
 Differences in allocation of exploitable natural resources
among regional states.
 The high cost of government and the need for functional
cooperation.
 Shortage of skills.

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4.16 Extra-regional factors that
promote integration

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4.16 Extra-regional factors
 The increasing global trend towards the establishment
of trade blocs.
 The effects of Globalization and Trade Liberalization.
 The vulnerability to economic shocks which originate
from outside the region.
 The political and economic insignificance of the
individual countries in a globalized world environment.

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4.17 Factors that hinder
regional integration:
governance issues

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4.17 Governance Issues
 The way in which Caricom is governed is a major
hindrance to regional integration.
 Both governments and citizens of some Caricom
countries are showing opposition to regional
integration.
 There is hesitancy on the part of some governments to
support some regional institutions.
 Some regional governments continue to place their
national interests before Caricom’s.

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4.18 Other factors hindering
integration

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 The region’s dependence on extra-regional markets in
preference to regional markets.
 Lack of oneness among Caribbean people.
 The existence of multiple currencies in the region.
 Limited opportunities for the masses to participate in
regional integration directly.
 The unequal distribution of exploitable natural
resources among Caricom states.
 Differences in the stages of growth and development
among Caricom states.

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4.19 The benefits of regional
integration

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4.19(a) Benefits to citizens
 Increased employment opportunities.
 Access to a greater quantity, variety and better quality
of regionally produced goods and services.
 Unrestricted travel in the region.
 Access to common services provided by regional
governments.
 A feeling of a sense of community.
 Opportunities to move capital freely within the region
for investment purposes.

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4.19(b) Benefits to businesses
 Access to a large regional market.
 Access to a larger pool of resources.
 Protection by the Common External Tariff (CET).
 The right to establish business ventures in any
member state.

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4.19(c) Benefits to the country/region
 Reduced cost of government.
 Increased trade.
 Increased bargaining power.
 A closer-knit region.
 Reduced unemployment and underemployment.

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4.20 Roles in the integration
process

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4.20(a) The role of citizens in the integration process
 Entrepreneurship.
 Supporting regional producers.
 Giving mutual support to fellow Caricom
citizens.

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4.20 (b) The role of businesses in the integration
process
 Improving competitiveness.
 Increasing output and trade.
 Providing investment opportunities for Caricom
citizens.
 Promoting and protecting the welfare of
consumers.

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4.20 (c) The role of governments in the integration process
 Supporting regional institutions.
 Honouring the protocols of the Revised Treaty of
Chaguaramas.
 Supporting competition among regional businesses.
 Educating citizens about regional integration.

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4.21 Areas of regional
cooperation

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 The Caribbean Disaster Emergency Management Agency
(CDEMA)
 The Caribbean Meteorological Organization (CMO)
 The Caribbean Public Health Agency (CARPHA)
 The Caribbean Agricultural Research and Development
Institute (CARDI)
 The Caribbean Court of Justice (CCJ)
 The Caribbean Development Bank (CDB)
 The Caribbean Examinations Council (CXC)