What Was the Caribbean Free Trade Association (CARIFTA)?
The Caribbean Free Trade Association (CARIFTA) was a multilateral free-trade area composed of Caribbean nations and dependencies that existed from 1965 to 1972. Following the dissolution of the West Indian Federation, a political union in the region, CARIFTA was established to strengthen and encourage economic activity among its members primarily by removing tariffs and quotas on goods produced within the trade bloc.
CARIFTA was succeeded by the Caribbean Community and Common Market (CARICOM), which was formed in 1973 after the founders had enacted the Treaty of Chaguaramas.
- The Caribbean Free Trade Association (CARIFTA) was a regional free-trade arena in place between 1965 to 1972.
- The Caribbean Community and Common Market (CARICOM) 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.
- One of CARICOM's current goals is to establish a free-trade zone and single market for increased trade and economic growth in the region.
Understanding Caribbean Free Trade Association
After the West Indian Federation failed at creating a single independent state among the Caribbean islands, many governments in the region thought that it was critical to continue collaborating with neighboring islands by having some form of economic linkage.
In 1965, a trade bloc known as the Caribbean Free Trade Association (CARIFTA) was formed by four islands to continue economic integration. Other islands joined the free-trade area shortly after seeing the potential benefits of increased trade with each other. The increase in trade came as a result of reductions in tariffs on imports coming from other islands participating in the free-trade agreement.
This caused some issues as many Caribbean islands were heavily dependent on revenue generated from tariffs, and as a result governments in the region were not too keen on removing nor reducing their trade barriers. Jamaica claimed that it was disproportionally represented in the federation and pulled out. Other countries followed suit.
This ultimately resulted in CARIFTA being short-lived. However, it did provide a foundation for the formation of the Caribbean Community and Common Market (CARICOM), which still exists today.
The Caribbean Community and Common Market (CARICOM)
The Caribbean Community and Common Market consists today of twenty countries. Fifteen of these countries are full-fledged members of the community while five of them only retain associate member status. The fifteen full-time countries are as follows:
- Antigua and Barbuda
- Saint Lucia
- Saint Kits and Nevis
- Saint Vincent and the Grenadines
- 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 Caribbean Single Market and Economy (CSME) is an initiative currently being explored by the Caribbean Community and Common Market that would integrate all of its member-states into a single economic unit. This would result in the elimination of all tariff barriers within the region.