Gonsalves says OECS might have to consider exiting CSME

By Kenton X. Chance

KINGSTOWN, St. Vincent (CMC) — St. Vincent and the Grenadines Prime Minister Ralph Gonsalves has assumed the chairmanship of the sub-regional Organisation of Eastern Caribbean States (OECS), highlighting a number of complaints about the larger CARICOM regional bloc.

Like St. Lucia Opposition Leader, Allen Chastanet, had done during the meeting of the OECS Assembly on Tuesday, Gonsalves said that to address some of these issues, the OECS may have to decouple from some elements of CARICOM.

Chastanet had asked the OECS Assembly, comprising government and opposition legislators from the nine-member grouping, to consider what would happen if the sub-regional group exited CARICOM and negotiated bilateral agreements with the other members.

However, Gonsalves did not go so far, saying, “the OECS countries may well, most reluctantly by force of circumstances, have to put on the table the continued relevance of our participation in the CSME (CARICOM Single Market and Economy), while, of course, remaining in CARICOM until the inequities refer to hearing are satisfied”.

Gonsalves, currently, the longest-serving head of government in the 15-member CARICOM, noted that the OECS has a deeper level of integration than CARICOM.

He said the OECS, as the most-integrated form of the several circles of integration in the Caribbean, allows for overlapping membership of several regional entities, including CARICOM, the Association of Caribbean States, the Community of States of Latin America and the Caribbean and the Bolivarian Alliance for Our America.

“Each of these circles of integration provides optimal outcomes for their members only if they pursue the mandates effectively through their own arrangements, and also leverage, efficaciously, their points of contact and relevance with the other regional integration mechanisms.”

The Vincentian leader said that with the OECS having the tightest level of integration, its members “have to make sure that we do in ours and all the others of which we are members the best in accordance with the mandates in those organisations and for them to have points of relevance and contact with one another, so that all can be cohesive, going towards certain desired ends”.

Gonsalves, however said that in this process, “multiple contradictions and challenges arise, and in this regard, it is to be seriously regretted that CARICOM has yet to find it possible to provide a specific carve out for the OECS within its treaty arrangements for a special attention beyond the general regime in CARICOM’s Treaty, chapter seven of it, covering special treatment for disadvantaged countries, regions and economic sectors”.

He said both the OECS and CARICOM have been designed as integration entities “to be organic as distinct from mechanistic.

“This means, in effect, that the strengths and weaknesses, limitations and possibilities of each member state are dissolved into an integrated whole, which is greater than the sum of the individual parts, from which each becomes a beneficiary and receives value greater than it otherwise would have realized, had it not been a member”.

He said the value garnered has to be substantially material, enhancing the life, living and production of the people of each member state, adding that there is great value in small states such as those in CARICOM and OECS coming together.

Gonsalves said most people take so much of those benefits for granted “that they do not quite appreciate the value until something goes awry.

“Still, if the member countries within the specific regional integration entity are unequally yoked in terms of decision making and outcomes, and if not corrected, the integration entity may wither or it may itself become a yoke too burdensome for some members to bear.”

CARICOM arrangements disadvantage OECS manufacturing

Gonsalves said that in the OECS “this particular conundrum does not exist or hardly so” but in the case of CARICOM, there are “relevant queries” which ought to be raised “honestly yet again.

“First, it is evident that the trading arrangements of CARICOM have benefited the member states with a larger territorial and economic base, particularly in respect of manufacturing commodities and the comparatively cheaper energy resource in Trinidad and Tobago has additionally made that country’s manufacturing sector the uneven beneficiary from CARICOM’s trade in commodities,” Gonsalves said.

He said that before the OECS signed on to the CSME, the OECS had conducted a study which confirmed that “the CARICOM arrangements disadvantaged the OECS manufacturing sector.

“It is nevertheless true that without special protection offered through article 164 of the CARICOM treaty to the production of flour in the OECS, our Eastern Caribbean Flour Mills in St. Vincent and the Grenadines’ very existence would be in grave jeopardy.”

Gonsalves, however, noted that this protection for Vincentian flour, for example, under Article 164 of the revised Treaty of Chaguaramas, “is time-bound periodically and always in jeopardy.

“On the last occasion on which this matter came up for renewal, the opposition of Trinidad and Tobago, Jamaica and Barbados almost scuttled this protection,” Gonsalves said.

“Fortunately, my government was able to secure continued protection under the rules through the combined support of the OECS countries, Guyana, Haiti, Belize and Suriname. Next time, will the anchor hold?

“Undoubtedly, the producers in Trinidad and Tobago want to take over the entire flour market in the Eastern Caribbean. We in St. Vincent and the Grenadines will draw a line in the sand on this.”

Forex complaint

The second grievance Gonsalves raised related to foreign exchange, saying that the control arrangements in Trinidad and Tobago have “conspired to reduce to near nothingness a hitherto US$12 to US$15 million annual trade in agricultural export from St. Vincent and the Grenadines.

“This injustice has caused manifest material difficulties to farmers and agro traders in my country. Our country pays Trinidad and Tobago annually in excess of US$65 million. We pay in hard foreign currency for visible exports from Trinidad, mainly petroleum products and manufactured goods.  But our sister CARICOM country cannot find less than a miserly four million US dollars in foreign exchange to pay for our agricultural products.

“This is absolutely unfair and ridiculous. Our traders are paid in Trinidad and Tobago dollars, which are not convertible outside of Trinidad and Tobago. In Trinidad, they have to use the money to buy goods in Trinidad if they want to make some money on the back end. If they bring up the Trinidad and Tobago money, may as well they bring up Monopoly money.”

Unresolved issues from CLICO collapse

Gonsalves also complained about unresolved issues related to the 2009 collapse of the Trinidad-based CLICO financial empire, which resulted in hundreds of millions of dollars in losses for insurance and other investment policy holders in the OECS.

“There is still outstanding US$64 million of the US$100 million, which the last UNC (United National Congress) administration under Prime Minister Kamla Persad Bissessar had negotiated as a partial settlement with OECS countries.”

He said the Persad Bissessar government paid US$36 million shortly before it was voted out of office over 10 years ago, “but the successor administration has failed or refused to honour the prior commitment.

“We reasonably expect that the new Persad Bissessar administration will address this soonest,” he said, referring to the government that was voted into office on April 28.

Gonsalves also took issue with Port of Spain’s continued control of the OECS airspace “for its near exclusive material benefit through its control of the relevant oversight authority remains a contentious issue, which demands urgent resolution. This bristles.

“Neither Barbados nor the OECS has representation on that oversight body. We get no accounting and there is no transparency.”

He said the oversight body was established as a colonial construct and, since independence in Trinidad and Tobago, has been accorded “a measure of seeming permanence”.

Gonsalves said that the then Patrick Manning administrations in Trinidad and Tobago realised in practice that the OECS countries were unequally yoked in CARICOM, and made compensatory arrangements by the establishment of a special fund to assist OECS countries.

He said Manning was a “deeply committed regionalist in theory and practice” and ensured that foreign exchange was available for Vincentian agricultural products.

“He, too, was always compliant with Trinidad and Tobago’s contribution to the CARICOM Development fund, the CDF, which was established under Section 158 of the revised Treaty of Chaguaramas to assist with the socio-economic development of disadvantaged countries, regions and sectors in CARICOM.”

Gonsalves noted that Manning Village in his constituency is named “in honour of this great Trinidadian and Caribbean leader on account of his profound solidarity, a pearl perhaps greater than his tribe.

“I want to name another village after another leader of Trinidad and Tobago. I hope it will be called Kamala village.”

Gonsalves said that up to earlier this year, and continuing, Trinidad and Tobago and Jamaica have baulked at making their assessed contributions to the CARICOM Development Fund.

“It has been an exercise for the rest of CARICOM, akin to pulling teeth without anaesthesia — extremely painful and tiring.”

OECS joined CSME ‘with our eyes wide open’

He said the OECS countries had eventually signed on to the CSME in 2003, two years after the signing of the Revised Treaty of Chaguaramas.

“We did so with our eyes wide open. We knew of the challenges, but we put in the balance at least three other considerations.”

Gonsalves said the OECS had weighed the bundle of special treatment measures, including the CDF and a protective market for some of our commodities in chapter seven of the treaty for disadvantaged countries, like the OECS members.

“Secondly, the more general and important CSME provisions relating to free movement of persons and capital and the like offered possibilities for the OECS.

“And thirdly, there was the vital consideration of the enduring value of belonging to CARICOM as an integrated community of nations and its functional cooperation work in health, education, disaster preparedness and security and the coordination of our region’s foreign policy.”

Gonsalves, however, noted that the Bahamas, as a member state of CARICOM, is a beneficiary of all the non-CSME values of CARICOM, while opting out of the CSME provisions.

He therefore suggested that the OECS may have to consider exiting the CSME until the inequalities are rectified.

“In that or any event, we are called upon to fortify evermore the OECS,” Gonsalves said.

“Undoubtedly, given the general level of development of the OECS, the tightly drawn nature of its integration mechanism and the resources resident in the entire OECS, there are immense possibilities ahead for our OECS, despite our limitations and even differences, we must seize them urgently. We know what we have to do, and we must be laser-focused in doing that,” he said.

“Our mandates are in the Revised Treaty of Basseterre and in the agreements with our associate member states. Together, we can do and be much more than we are. So let us set about it with energy and will, vision and skill, plus the X factor of drawing out for developmental purposes, the genius and hidden resources of all kinds resident in our people,” Gonsalves said.

The OECS Authority will meet in caucus on Wednesday.