Caribbean Community and Common Market (CARICOM) Definition

What Is the Caribbean Community and Common Market (CARICOM)?

The Caribbean Community and Common Market (CARICOM) is a group of 20 developing countries in the Caribbean that have come together to form an economic and political community that works together to shape policies for the region and encourages economic growth and trade.

Understanding the Caribbean Community and Common Market (CARICOM)

The CARICOM consists of 20 countries. Fifteen of these countries are full-fledged members of the community, while five of them only retain associate member status. The 15 full-time countries are as follows:

• Antigua and Barbuda
• Bahamas
• Barbados
• Belize
• Dominica
• Grenada
• Guyana
• Haiti
• Jamaica
• Montserrat
• Saint Lucia
• Saint Kits and Nevis
• Saint Vincent and the Grenadines
• Suriname
• Trinidad and Tobago

The associate members are Anguilla, Bermuda, British Virgin Islands, Cayman Islands, and Turks and Caicos. Associate members retain part-time privileges.

These nations have collectively joined together to expand their trade and economic relations internationally, including further development of activity in international markets.

The CARICOM was formed in 1973 after the founders had enacted the Treaty of Chaguaramas. It was established to replace the Caribbean Free Trade Area, which had failed in its mission to develop policies in the region pertaining to labor and capital.

Benefits of CARICOM

A free trade area is a collection of multiple countries that have established a free trade market between their nations. These markets will have very little, if any, tariffs on imports and exports. There will be no price controls enacted, either.

The benefit of free trade areas is that they allow countries to cease competing with one another for market shares on certain products and instead allow them to focus on the products that they are most qualified to produce or resources that they alone possess. This also presents an advantage to consumers as they receive higher quality products at a lower price.

Free trade areas allow for the economic growth of the countries participating in the agreements. In addition, free trade motivates the industries in the countries to be more competitive, thereby spurring innovation and avoiding stagnation. There is also a significant technological and intellectual knowledge transfer between countries participating in free trade areas.

The Caribbean Single Market and Economy (CSME)

In 2002, steps were taken to eventually allow CARICOM to integrate all of its member-states into a single economic unit. The Caribbean Single Market and Economy (CSME) would result in the elimination of all tariff barriers within the region. The hope was that such an economic unification would resolve a number of issues faced by small developing CARICOM economies that find it difficult to compete with larger international competitors on a global market.

When fully completed, the CSME will allow for free intra-regional movement of capital and labor among member-states. Additionally, member-states will share monetary and fiscal policies, and businesses operating in the economic union will have access to a larger market.

As of 2021, there are still various aspects of CSME that need to be finalized by the different member states. The revision to the original treaty contains nine protocols and other additions that have still not been signed by all members.

There are also other aspects that are still in the research and development phase, such as e-commerce protocols. Progress, however, has been made, particularly in the areas of tax systems, regulatory environments, and governmental policies.