Port of Spain, Trinidad: Sixteen years after Caribbean Community (Caricom) leaders agreed on the need to establish a Caricom Single Market and Economy (CSME), light appears to be at the end of the tunnel, even though fresh concerns were recently expressed by smaller states within the regional grouping. "The creation of a single Caribbean market by December 2005 will mean that Caricom will, 16 years after the commitment at Grand Anse, find itself in the position of Europe in 1992, some 35 years after that continent agreed to create a single market in the 1957 Treaty of Rome," said Barbados Prime Minister, Owen Arthur. Arthur, who has lead responsibility for the CSME, told a private sector meeting in Trinidad and Tobago on 9 June that "no (participating) member state has indicated an inability to meet the December 2005 deadline though these member states have requested technical assistance to enable them to do so". But when the leaders gather in St Lucia from 3-6 July for their annual summit, questions are bound to surface as to whether the initiative, described by regional governments as a suitable response to a changing global environment, is indeed a saviour. Prior to their annual summit in Dominica last week, the governments of the sub-regional Organization of Eastern Caribbean States (OECS) were certainly not heartened by the findings of a study which revealed that the private sectors in their countries were not ready to face the challenges of the CSME, which will allow for the free movement of goods, services, skills and labour across the region. The study, commissioned by the OECS Secretariat to investigate trade patterns between the sub-region and the rest of Caricom from 1985 to 2003, reveals that trade between those countries has stagnated. The study showed that in 1985, there were nine products produced by the OECS for which the sub-region had much more than 25 per cent of the market share within Caricom. By 2003 those numbers changed drastically, as the OECS had only one product with more than 25 per cent market share, and only five products with more than 10 per cent market share. "The trade characteristics highlight a very narrow base, in that there are a small number of goods and services that are traded among ourselves in Caricom and these goods and services are very highly concentrated by country, by product and by firms," said Dr Len Ishmael, the OECS director-general. Dr Ishmael said the findings of the study should serve as a wake up call for the business community in the sub-region. At the end of their summit, the OECS, which groups the islands of Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent, St Lucia, Montserrat, St Kitts and Nevis, Anguilla and British Virgin Islands, said it would press for preferential treatment before joining the CSME. The OECS leaders said they were concerned about a widening trade imbalance between their countries and the wider 15-member CARICOM grouping. The deficit has widened from 214m US dollars to 418m US dollars between 1980 and 2003, according to the joint communique issued at the end of the summit. But OECS Chairman, Ralph Gonsalves, the St Vincent and the Grenadines Prime Minister, said the countries of the sub-region support the initiative and "are committed to it". Former OECS director-general, Dr Vaughan Lewis, agrees that the sub-region is entering the CSME having not gone through the structural adjustment process that their more developed Caribbean neighbours had to endure as part of the process of the changing global environment. "The lesser developed countries had not really experienced the economic recession of the 1980s and therefore did not feel the urge, nor were they being pressed, to go through any structural adjustment regime. Recall that in 1995, Jamaica and Trinidad and Tobago were declaring themselves ready to face the rigours of joining NAFTA (the North American Free Trade Area)," he said. Dr Lewis, who is now a professor in international relations at the University of the West Indies (UWI), said the CSME was being established at a time when the OECS states are experiencing "fiscal disequilibrium precisely at a time when the major productive activities of their economies are experiencing difficulty". "And their evolution through structural adjustment is occurring precisely when they also have to create new arrangements for permitting open access to their markets, and adjust their economic and production systems to the less favourable environment of future trade in agricultural commodities with the European Union." In such a context, Dr Lewis said, many OECS governments are not persuaded that the compensatory arrangements provided for in the Revised Treaty of Chaguaramas, which established the CSME, would be forthcoming, or sufficient. "So we see that the LDC's (less developed countries) are required to go through a multiple set of processes of adjustment simultaneously: adjustment to fiscal disequilibrium, adjustment to the CSME provisions, and adjustment to the changes in the EU preferential regime involving, by inference, acceptance of and adjustment to the WTO regime," he said. He argues that the sub-regional states must regard their involvement in the CSME "not as a discrete process, but as part of the process of adjusting to the wider process of economic liberalization emanating both from their European Union, and their hemispheric environments". Prominent Caribbean economist, Professor Clive Thomas, agrees, saying the CSME is often portrayed as leading to a rising tide of well-being for all Caricom participants. "This rosy picture, unfortunately, cannot hold true. The CSME is at its heart a market driven process of integration. As such, it runs all the risks normally associated with market-driven processes," he said, while delivering the annual William Demas Memorial Lecture last month. Thomas said one such risk is that it would replicate the pattern of inequalities of outcomes, clearly visible at the global level. "Let there be no illusion or deception, the CSME will undoubtedly have winners and losers, both in short-term and the longer-term. About that there is no doubt," he said, while arguing for the establishment of mechanisms that are substantial in their effectiveness and "not hallow declarations of future intent". Thomas said that recent surveys of integration arrangements support the validity of his observation and points to a 1979 Inter-American Development Bank (IADB) statement that "in the absence of corrective mechanisms, the development benefits of regional integration are often asymmetrically distributed among partner countries or regions within them". Thomas said that many of the protocols of the CSME "remain ineffectual as they are principally descriptions of intent rather than practice". Source: mediamonitor.com