Country

Overall project value

Proportion carried out by legal entity (%)

No of staff provided

Name of client

Origin of funding

Dates (start/end)

CSME Member States

USD 174,549

80

3

CARICOM Secretariat/ CSME Unit

Inter-American Development Bank

12/2008 – 12/2009

Detailed description of project

Type of services provided

Twelve CARICOM Member States are currently in the process of establishing the CARICOM Single Market and Economy (CSME). This process entails, among other things, the integration of national goods, services and factor markets through intra-regional liberalisation and regulatory harmonisation and, as a result, the creation of a single, seamless market space within the Community. Through the CSME, Member States are seeking to achieve accelerated, coordinated and sustained economic development and convergence, enhanced levels of international competitiveness, and expansion of trade and economic relations with third countries and regions.  However, as of yet two important policy issues which would need to be in place for a functioning single market are not in place. These are:

  • A uniform regional safeguards regime, in compliance with the WTO Agreement on Safeguards, to protect CSME Members against sudden surges of imports from countries of origin outside the common market. The introduction of a regional safeguards mechanism is more complicated at a regional level than at the domestic level because it requires (a) the harmonization of existing national mechanisms and (b) the establishment of a formula for the distribution of costs and revenues.
  • A regime for free circulation of goods. Without such a regime, extra-regional suppliers face border taxes and other restrictions both at the point of entry into the single market and each time goods that are not of Community origin are re-exported to another member within the CSME. These internal border restrictions, within what is supposed to be a single economic space, increase the cost of goods and act as a disincentive to trade. They also hamper the establishment of cost-saving and productivity-enhancing distribution centres and hubs in the region.

BKP Development supports the Caribbean countries in addressing these two areas of the single market in an effort to make the CARlCOM Treaty fully operational.

Expected outputs:

  • Technical recommendations and legal instruments for the introduction of harmonized and/or uniform procedures concerning the introduction of temporary safeguards;
  • An assessment of the impact, including the fiscal revenue impact, of free circulation of goods within the CSME;
  • Policy recommendations for possible legal and institutional reforms, legislative enactment and administrative procedures required to give effect to a regime of free circulation of goods in the region.
Free circulation of goods
  • Paper on implications of free circulation;
  • Review of Member States' current (customs) procedures relevant for free circulation;
  • Review experience of EU related to free circulation of goods;
  • Determination of required legal, institutional and administrative arrangements for free circulation of goods;
  • Determination of fiscal implications of free circulation and preparation of recommendations.
Safeguards
  • Review of CARICOM Member States' safeguards procedures;
  • Review of safeguards in other customs unions;
  • Assessment of WTO requirements and proposal for harmonised CSME safeguards procedures.
General
  • Identification of costs of reform and work plan;
  • Presentation of analysis and recommendations at a validation workshop with CSME Members' government officials.