Regional Integration Lecture Notes PDF

Regional Integration George A. Pilgrim BSc M.A  If we have sometimes failed to comprehend the essence of the regional integration movement, the truth is that thousands of ordinary Caribbean people do, in fact, live that...

Regional Integration George A. Pilgrim BSc M.A  If we have sometimes failed to comprehend the essence of the regional integration movement, the truth is that thousands of ordinary Caribbean people do, in fact, live that reality every day. In FEDERATION Barbados, our families are no longer exclusively Barbadian by island origin. We have Barbadian children of Jamaican mothers; Barbadian children of Antiguan and St Lucian fathers.... And this fact of regional togetherness is lived everyday....It is a reality which is lived, but which we have not yet been able to institutionalise. (The Late Errol Barrow, 3 July 1986)  What institutions exist that represent PROBE an aspect of regional togetherness ? Factors A common history (European and African ancestry, slavery, exploitation etc) encouragi Similar colonial experiences Similar political institutions and ideologies ng ( Westminster system, Capitalist/socialist ideas) regional Similar official language and culture Neo-colonialistic experiences and relations with unity the developed world All subjected to cultural imperialism and the resultant social tensions The impact of international trading blocs e.g. EEC, NAFTA. WTO  Geographical separation Factors Different rates and levels of growth and economic and social development encouragi Disparities in exchange rates e.g. ng Guyana $160 =1US, Barbados $2=1US. Parochialism and insularity regional Competition for international aid and fragment tourists ation Isolation from centuries of colonialism Xenophobia Factors Territories are independent and sovereign states encouragi Lack of commitment from regional ng leaders Limited knowledge/understanding of regional the dynamics and benefits of integration fragmenta The go it alone attitude of some tion Caribbean leaders. History-a long history of fragmentation-years of isolation under colonialism Advantage A stronger voice internationally (this will involve a coordination of the countries foreign policy s of position) Regional control over regional resources regional Less dependency on foreigners integration Increase regional trade: less outflow of currency Increase movement of people from the region within the region Increase job and business opportunities for Caribbean people (investment, service provision...,) Expansion of regional businesses e.g. through franchising Advantage The creation of a regional identity. s of Increased output of goods and regional services integration Bigger markets for CARICOM goods and services  Forms of Social and Economic: CARIFTA Integratio CARICOM n Caribbean Single Market and Economy (CSME). Political: Confederation or Federation 1958-62.  The main factors which prompted the establishment of the West Indian Federation The may be briefly stated. To begin with, history and geography combined to recommend the Federal federal form of governance. Experime The units which became a part of the nt 1958- Federation all shared a common history of colonial control by the British. some, such as 62 Barbados, St Kitts and Jamaica could trace this history back to the 17th century, for more than 300, uninterrupted years; and, arising from this history, all the units shared the English language, familiarity with British institutions, and a socio-cultural heritage which included acceptance of, and resistance to, certain British norms and values The Federal Experiment 1958- 62. Established in 1958, the West Indies Federation comprised the ten territories of: Antigua and Barbuda, Barbados, Dominica, Grenada, Jamaica, Montserrat, the then St Kitts- Nevis-Anguilla, Saint Lucia, St Vincent and Trinidad and Tobago. The Federation was established by the British Caribbean Federation Act of 1956 with the aim of establishing a political union among its members The Federal government was headed by an Executive Governor-General, appointed by Britain and included A Prime Minister, elected from among and by the members of the House of Representatives A Cabinet, comprising the Prime Minister and ten other elected Members chosen by him  The A Council of State presided over by the Governor General. The Council included the Federal Prime Minister and Members of the Cabinet as Experimen well as three senators and three civil servants. The senators and civil servants were chosen by t 1958-62. the Governor General. (The Council of State was the principal policy (decision)-making body at the start of the Federation. In 1960 Britain agreed to abolish this Council and allow the Cabinet to take over the powers of the Council) A forty five-member House of Representatives, with Members elected from among the Territories; and A nineteen-member Senate, nominated by the Governor General following consultation with the Prime Minister  The Federation began quickly to seek to establish federal institutions and supporting structures. It created a federal civil service Established the West Indies Shipping Service (in 1962) to operate two multipurpose ships – the Federal Maple and the Federal Palm – donated to it by the Government of Canada. Early It had embarked also on negotiations to acquire the subsidiary of the British Overseas Airways Achieveme Corporation (BOAC), namely British West Indies Airways (BWIA). nts Cooperation in tertiary education was consolidated and expanded during this period. University College of the West Indies (UCWI), which was established in 1948 – One campus at Mona, Jamaica, opened its second campus at St Augustine, Trinidad and Tobago, in 1960. Reason Manipulation on the part of the British Government s why Differences among the leaders of the various territories on the structure of the the federation. Federat Parochialism Differences in the level of development- the two most ion developed countries carried the economic burden of the federation failed Some influential regional leaders refused to enter federal politics Jamaican political leaders were eager for constitutional advancement-independence The federal government was weak. Mainland territories refused to join -Guyana, Belize. Trade and communication between the territories was sporadic A VEHICLE FOR Some supporters of the West Indian INDEPENDEN Federation were also influenced by the CE desire to use federalism as a vehicle for national independence. More specifically, the period following World War II witnessed growing nationalism in Jamaica and in some of the other territories constituting the British West Indies. As Norman Manley put the matter from as early as 1947: "I cannot imagine what we should be federating about if it is not to achieve the beginning of nationhood."  The federation was perceived as instrumental in other respects. Thus, it was argued that the federal arrangement would assist the individual territories to overcome the challenges of their small size. In SIZE some respects, this overlapped with the pro-independence perspective, for, arguably, Britain would be more inclined to grant independence to a larger, more viable, collective unit, than to smaller entities of limited national strength  This perspective is reinforced by stated British RAISE IN positions which invariably presumed that LIVING federation would promote "economy and efficiency". Similarly, bearing in mind the STANDARD economic challenges faced by the territorial units, there was scope for the view that federation, by S prompting regional economic and social collaboration, could assist in raising living standards throughout the British Caribbean colonies.  Added to this, it was occasionally posited that closer union would strengthen labour unity in the region and create stronger bargaining power for the Caribbean entities as a whole in international negotiations. In a 1956 address at Woodford Square, Eric STRENGT Williams put the matter of small size in H IN its context: UNITY "The units of government are getting larger and larger…federation is inescapable if the British Caribbean territories are to cease to parade themselves to the twentieth-century world as eighteenth-century anachronisms.  Most strikingly, Jamaica was geographically separated from the nearest other member of the Federation, Antigua and Barbuda, by a range of other islands. ROLE OF The more pronounced propinquity of some units in the eastern and JAMAICA southern Caribbean, if anything, emphasised the Jamaican position as an outlier, but also, the distance from Trinidad to Antigua and Barbuda did not facilitate easy administrative arrangements.  Jamaica maintained that the establishment of a customs union for the federation would have a net negative effect on Jamaica’s ISSUES revenues, while Trinidad and Tobago feared that freedom of movement FOR would lead to a flooding of that LARGER territory’s labour market by Caribbean persons from other COLONIES places. Barbados, on the other hand, anticipated that the federal union would naturally include free movement of labour across the various units  In significant respects, the lack of enthusiasm for the federation in the popular will influenced decisions made by Caribbean leaders. FEDERAL Norman Manley, who had POLITICS- committed the People’s National Party (PNP) to the federal idea, had, MANLEY at an important formative stage of the union, opted not to assume leadership of the Federal Government  Manley’s decision should be seen as an acknowledgement that the domestic environment in Jamaica continued to be paramount, even following the establishment of the federation. BUSTAMAN TE But, in addition, it also evidenced the fact that the opposition Jamaica Labour Party (JLP) under Sir Alexander Bustamante, was lukewarm and ambivalent — at best — towards federalism from the outset  The Economics of Nationhood — an influential publication from Trinidad and Tobago which received support from some Eastern Caribbean countries — it was proposed that a stronger role should be given to the CENTRE federal centre. VS UNITS This, however, encountered marked resistance from Jamaica, leaving the federal entity largely bereft of both financial sustainability and influence over decision making  In History of the People of Trinidad and Tobago (1964), Williams also attributed considerable importance to the rival conceptions of federation between Jamaica and Trinidad and Tobago. In this publication, however, Williams suggested that these differences, and various attempts to reconcile them up to 1961 represented "not the beginning of the end of CENTRE Federation", but instead "the end of the beginning." VS UNITS On this reading, the end was ultimately the decision of Jamaica to withdraw following its referendum, a fact which gave rise to Williams’ famous aphorism: "Ten minus one equals zero." At very least then, Williams identified the conflict between a strong central Federation and strong individual units as a key factor in the collapse of the scheme; this is a convincing line of argument  A related set of structural issues pertained to the actual power and influence of Jamaica and Trinidad and Tobago within the scheme. On one estimate, at the time of the Federation, these two territories together comprised "83 per cent of the total land area, 77 per cent of the population and three-quarters of the wealth". This helps to explain why greater weight came to be attached to these two territories in federal CENTRE deliberations. VS UNITS Even so, however, Jamaican actions — in seeking various changes to the Federation — suggested disenchantment on the part of the country’s leaders. The basis for disenchantment was that the federal arrangements in areas such as voting power, parliamentary representation and Cabinet membership, did not reflect Jamaica’s larger population or its economic standing  Thus, Norman Manley found it "ridiculous" and "always ridiculous" that Jamaica and Trinidad and CENTRE Tobago, with "85 per cent of the population, of the resources and the VS UNITS obligations to contribute to the Federal Government" were "dominated by the remaining 15 per cent".  Finally, it is important to note that in the Jamaican referendum, the question of independence assumed critical proportions. As noted above, one of the motivating factors behind the Federation was nationalist desire for full nationhood. Referendu In the years since the 1938 disturbances in m the Caribbean, this desire had been nurtured and promoted by, among other groups, the PNP in Jamaica. In the deliberations on the referendum, however, the PNP was left to argue in favour of independence as part of the federal grouping  In contrast, the JLP, as part of its anti-federal stance, argued in 1961 for immediate independence for Jamaica on its own. As a political entity, the JLP had not been in the vanguard of the Jamaican political movement for independence since the decade of the 1930s. It was therefore paradoxical — but reflective of Bustamante’s political acumen — that the JLP was able to use the debate on federation to seize the high ground of national independence. Against this background, the referendum came to be perceived by some voters as a choice between "federation (with independence)" or "independence for Jamaica". The option against federation recommended itself to 54.1 per cent of the voters, as against 45.9 per cent in favour. EXIT JAMAICA The decisive development, which led to the demise of the Federation was the withdrawal of Jamaica – the largest member – after conducting a national referendum in 1961 on its continued participation in the arrangement. The results of the referendum showed majority support in favour of withdrawing from the Federation. This was to lead to a movement within Jamaica for national independence from Britain. It also led to the now famous statement of Dr Eric Williams, the then Premier of Trinidad and Tobago that, one from ten leaves nought, referring to the withdrawal of Jamaica and signifying and justifying his decision to withdraw Trinidad and Tobago from the Federal arrangement a short while later. The Federation collapsed in January 1962. ENTER CARIFTA After the federation collapsed in 1962 attempts were made to forge economic ties between the territories: CARIFTA Established - CARIFTA was founded by Antigua and Barbuda, (Caribbean Barbados, Guyana, and Trinidad and Tobago on 15 December 1965, with the signing of the Free Trade Dickenson Bay Agreement (the Agreement Area) 1968-73 establishing the Caribbean Free Trade Association). They were joined on 1 July, 1968 by Dominica, Grenada, St Kitts-Nevis-Anguilla, Saint Lucia and St Vincent and the Grenadines; and on 1 August, 1968 by Montserrat and Jamaica. In 1971 Belize (then British Honduras) joined the Association  Intentions CARIFTA was intended to encourage balanced development of the Region by: increasing trade - buying and selling more goods among the Member States diversifying trade - expanding the variety of goods and services available for trade liberalising trade - removing tariffs and quotas on goods produced and traded within the area ensuring fair competition - setting up rules for all members to follow to protect the smaller enterprises  In addition to providing for free trade, the Agreement sought to: ensure that the benefits of free trade were equitably distributed promote industrial development in the LDCs promote the development of the coconut industry Agreemen (through an Oils and Fats Agreement) which was significant in many of the LDCs t= rationalise agricultural production but in the interim, facilitate the marketing of selected agricultural products of particular interest to the LDCs (through the Agricultural Marketing Protocol); and provide a longer period to phase out customs duty on certain products which were more important for the revenue of the LDCs  It was at the Seventh Heads of Government Conference in November 1972, that the Caribbean leaders decided to transform CARIFTA into a Common Market and establish the CARIFTA Caribbean Community of which the Common Market would be an integral TO part. CARICOM In 1973, CARIFTA became the Caribbean Community (CARICOM).  The Treaty of Chaguaramas which established the Caribbean Community was signed at Chaguaramas, Trinidad on July 4, 1973 and came into force on August 1 of that same year. This new organisation was the successor to CARICOM CARIFTA. CARICOM presently consists of 15 states: (Caribbean Antigua & Barbuda, Bahamas, Barbados, Belize, community/Carib Dominica, Grenada, Guyana, Haiti, Jamaica, bean Common Montserrat, St Lucia, St Kitts & Nevis, St Vincent & the Grenadines and Trinidad & Tobago. Market). CARICOM s main purpose is to further economic integration and cooperation among its members. Both common external tariffs and common protective policies for trade with countries beyond its membership were established by CARICOM to protect goods produced in the regio The three (3) main The pursuit of economic areas of integration; activity of Functional or non-economic cooperation which now covers an the increasing number of areas, Caribbean ranging from common services such as UWI to LIAT. Community The coordination of the foreign policies of member states  Dr. Eric Williams in critiquing why CARICOM failed to achieve more for the various territories in terms of trade and economic development stated that: the arrangement the greater part of the Caribbean-:- Cuba, Puerto Rico etc Critique there were deep divisions in the community the treaty had been broken more than it had been observed.  In 1989, the Heads of Government of the Caribbea Caribbean Community (CARICOM) at there Tenth Conference in Grand Anse, Grenada, n Single declared their intention to deepen the integration process and strengthen the Caribbean Community in all its dimensions. Market The Heads, at the time, determined that the region should work towards the establishment & of a single market and economy as one aspect of its response to the challenges and Economy opportunities resented by the changes in the global economy. By 1992, at their Thirteenth Conference, the technical work on, and conceptualisation of, the CSME was completed and presented for endorsement by the Heads of Government.  The CSME was conceived as an instrument to facilitate Rationale economic development of the member states in an increasingly liberalised and globalised international environment; to assist in the realisation of the following objectives: Full employment of all the factors of production Improved standards of living and work c) Accelerated, coordinated and sustained economic development d) Increased economic leverage and effectiveness in other states e) Expansion of trade and economic relations with other Caribbean countries, Central and Latin American countries f) Increased levels of competitiveness. CSME The Caribbean Single Market & Economy (CSME) is an arrangement which seeks to create a single economic space without cross-border restrictions and to allow for the free movement of goods and services, labour and capital among member states of the Caribbean Community (CARICOM). It is an effort by CARICOM countries which have been functioning as separate and distinct entities, each motivated by their own national interests, to evolve into one market and one economy, free of restrictive barriers, and governed by common rules, policies and institutions. It is a regional arrangement which involves legal, institutional and administrative provisions, systems and actions which must e reflected at the national level.  1) The Single Market : This is an initiative which There are allows goods, services, people and capital o move throughout the Caribbean Community without barriers and any other restrictions. Its aim is to two broad achieve a single large economic space, and to provide for a common economic and trade policy to govern that space. compone Presently provision has been made for the free nts to the movement of the following persons: CSME: University graduates, skilled artisans, artists, musicians, journalist/media workers, sports persons, managers and service providers. (This aspect came into effect Jan, 2006)  The Single Economy: Seeks to harmonise the economic, monetary and fiscal policies and measures of all member states of the Caribbean Community, with the objective of achieving a common regional policy in these areas. It is an arrangement in which foreign SINGLE exchange and interest rate policies, tax regimes, laws and national currencies, among other things, are coordinated and ECONOM harmonised. (Not yet in place). Y To create the CSME the Treaty of Chaguaramas had to be revised in order to provide the official legal framework within which the common market could be transformed into a single market and economy. CARICOM was very limited in its conceptualisation of a common market  1 & 2: Restructuring of the Organs and Institutions of the Community 3: Right of Establishment, Provision of services and movement of capital PROTOCO 4: Industrial & Agricultural Policy LS. 5: Trade Policy 6: Transportation Policy 7: Disadvantaged Countries, regions and sectors 8: Competition policy and consumer protection 9: Disputes Settlement.