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Caribbean Single Market faces uncertainty hours before Caricom heads meet

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Kingstown St. Vincent June 02: The much touted Caribbean Single Market (CSM) appears to be facing some hitches just hours before Caricom Heads of Government prepare to meet in St Kitts for the annual summit Monday. Caricom Chairman patrick Manning had assured that all the islands of the Organisation of Eastern Caribbean States would have met their June 30 deadline of signing on the to CSM so as to open up the region's markets to one another. 

However St Vincent Prime Minister Dr Ralph Gonsalves, wrote to Caricom Secretary General Edwin Carrington, setting out a condition for his country and the five other OECS territories,to sign on to the CSM-that the Aliens Land Holding Act be retained.

This Act bars foreign nationals from owning lands in these territories for anything but business purposes, and it was expected that, in the unification spirit of the CSM, it would have been abolished.

In his response dated June 27, Carrington agreed that the revised Treaty of Chaguaramas, which enables the CSM, "does not provide for unrestricted access by Caricom nationals to land in member states".

He counterproposed though, that it should be retained only if "it's s coupled with an administrative mechanism to monitor the granting of access to land and assessment of the conditions of the access, to ensure compliance with the Treaty".

Dr. Gonsalves is reported to have agreed to this condition but said as far as he is concerned, there are several valid reasons why this Act should especially be upheld in the age of free market in the region. Key among them, he said, was the fact that "frankly, St Vincent and other OECS countries have very little to benefit from the CSM".

Gonsalves said the Aliens Act protects these countries from losing limited commercial and arable lands to rich foreign nationals. It is one of their few insurance in the CSM trade agreement, which, he argues, the OECS could do without at this time.

"We don't have oil to sell to you (the economic powerhouses like Trinidad and Barbados), we have very little manufacturing and there is of course some agricultural trade but we did all these things before the CSM," he said.

In fact, in pointing out that several other, existing Caricom trading agreements duplicate that of the CSM, Gonsalves effectively noted that the CSM may not even be necessary at this time.

"The CSM is not going to bring about some dramatic change, you know," he stressed.

"All you are doing is cutting off a series of restrictions," he added.

As for the argument that the Act is contrary to the unifying spirit of the CSM, he bluntly dismissed it. "It's a single market, not a political union."

Meaning that each country still has the duty, he said, to protect its own economic interests.

He maintained that compromises were necessary, but at the end of the day, it was Caricom's superpowers that will benefit from the CSM, revised economic policies or not.

Another significant element of the CSM agreement, Gonsalves said, was that of the US$250m regional Development Fund.

Caricom countries are supposed to contribute US$120 million to this fund, which is supposed to buffer the negative effects of the free trade market to the weaker economies in the region.

"The question of the contribution formular to the fund is one which is still a work in progress," Gonsalves said, adding that he "anticipated" at this week's Heads of Government meeting, "it will be finalised". 

It is unclear as to whether OECS heads are unified on this matter and if they are prepared to stand their grounds when Caricom heads meet.

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