Caribbean Community and Common Market (CARICOM) Explained

Adam Hayes, Ph.D., CFA, is a seasoned financial expert with over 15 years on Wall Street as a derivatives trader. With deep knowledge in economics and behavioral finance, Adam earned his master's in economics from The New School for Social Research and a Ph.D. in sociology from the University of Wisconsin-Madison. He holds the CFA charter and FINRA Series 7, 55, and 63 licenses, and currently teaches economic sociology and finance at Hebrew University in Jerusalem.

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

CARICOM is a coalition of 20 Caribbean developing nations collaborating to create a unified economic and political community. This alliance aims to harmonize regional policies, stimulate economic development, and foster trade relationships.

Key Highlights

• CARICOM represents a regional bloc focused on shared economic and policy objectives.
• Established in 1973, it includes 15 full members and 5 associate members.
• The 2002 treaty revision paved the way for a unified market and economy.
• The Caribbean Single Market and Economy (CSME) initiative seeks to integrate member states economically and is under ongoing development.
• Free trade within the bloc enhances economic growth, innovation, and technology transfer.

Understanding CARICOM Membership

The community is composed of 15 full member countries: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago.

Associate members include Anguilla, Bermuda, British Virgin Islands, Cayman Islands, and Turks and Caicos, who enjoy limited participation rights.

These nations collaborate to expand international trade and economic opportunities, fostering regional development and engagement in global markets.

CARICOM was founded through the Treaty of Chaguaramas in 1973, replacing the earlier Caribbean Free Trade Area to better address labor and capital policies.

Advantages of CARICOM

A free trade area like CARICOM reduces tariffs and trade barriers, allowing member countries to specialize in their most competitive industries and resources. This specialization benefits consumers by providing higher quality goods at more affordable prices.

Key Institutions

CARICOM operates through several organizations, including the CARICOM Private Sector Organization (CPSO), Caribbean Tourism Organization (CTO), and the CARICOM Development Fund (CDF), all working to fulfill the community’s goals.

Free trade zones promote economic growth, encourage competitive industries, stimulate innovation, and facilitate the exchange of technological and intellectual resources among members.

The Caribbean Single Market and Economy (CSME)

In 2002, CARICOM members initiated plans to create the Caribbean Single Market and Economy (CSME), designed to eliminate tariff barriers and unify the region economically. This integration aims to help smaller economies within CARICOM compete more effectively on the global stage.

Once fully realized, CSME will enable free movement of labor and capital, harmonize fiscal and monetary policies, and provide businesses with access to a larger regional market.

As of 2021, several protocols and treaty revisions remain unsigned, and areas like e-commerce regulations are still being developed. Nonetheless, progress has been made in tax systems, regulatory frameworks, and government policies.

Largest CARICOM Member

Haiti is the most populous CARICOM country, with approximately 11.5 million residents as of 2021.

Leadership of CARICOM

Rather than a president, CARICOM is led by the Chairman of the Conference of Heads of Government. Currently, this position is held by Hon. Gaston Browne, Prime Minister of Antigua and Barbuda.

CARICOM Headquarters

The administrative center of CARICOM is located in Georgetown, Guyana.

Primary Goals of CARICOM

The organization’s core objectives are to promote economic integration, ensure equitable sharing of integration benefits, and coordinate foreign policy among member states.

Challenges Limiting CARICOM’s Trade Progress

Despite its successes, CARICOM faces hurdles such as regional governance issues, political representation challenges, and the lack of automatic funding for regional institutions, which have constrained trade advancements.

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