Caribbean Free Trade Association

• Author: Duke Pollard
• Profession: Sitting senior judge of the Caribbean Court of Justice (CCJ), the highest appellate municipal court of the Caribbean Community (CARICOM)
• Pages: 49-95

The Caribbean Free Trade Association 49

4

THE CARIBBEAN FREE TRADE ASSOCIATION

The collapse of the Federal experiment in 1962 and the emergence shortly thereafter of

the independent nations of Jamaica and Trinidad and Tobago were sufficient testimony

that political integration in the Commonwealth Caribbean would be a non-starter.

However, the failure of political integration did not dampen hopes for economic

integration of some form or another especially since the fragile economies of the

Commonwealth Caribbean did not offer much hope for their survival as autonomous

political entities. Shortly after the collapse of the Federation, initiatives were taken by

the United Kingdom, Canada and the United States of America to explore the possibility

of some form of integration of the OECS countries and Barbados. These initiatives

finally bore fruit in the establishment of the Caribbean Development Bank (and the

Eastern Caribbean Central Bank) to harness and manage capital resources for the Region

as a whole. Metropolitan concern for the sustainable development of the small economies

of the Commonwealth Caribbean was informed by the success of the Cuban revolution

and fear that some Commonwealth Caribbean countries might be tempted to go the

Cuban route. Indeed, the socialist leanings of the Cheddi Jagan administration in

British Guiana were cause for much alarm in the metropolises of the West.

Consequent on the developments mentioned above the environment in the

Commonwealth Caribbean was not entirely inauspicious for a modest attempt at

economic integration. Furthermore, political changes in the Region tended to favour

such a move. The Jagan administration in British Guiana fell from power after the

introduction of the Kaldor budget, intense political unrest and the introduction of

proportional representation and there was a change of administration in Barbados which

brought Errol Barrow’s Democratic Labour Party to power. Shortly thereafter, Vere

Bird Snr., Forbes Burnham and Errol Barrow signed the Dickenson Bay Agreement in

1965 establishing the Caribbean Free Trade Association (CARIFTA). The front runners

of the regional economic integration movement at the material time had a choice of

models to guide them - the Rome Treaty of 1957 and the European Free Trade Association

Agreement (EFTA) of 1960. Perusal of these instruments does appear to confirm that

the latter was more persuasive in providing a model for economic integration in the

Commonwealth Caribbean that the former.

The objectives of CARIFTA as elaborated in Article 3 of the Dickenson Bay

Agreement were: to promote the expansion and diversification of trade in the area of

the Association; to ensure that trade between Member territories takes place in conditions

of fair competition; to encourage the progressive development of the economies of the

Area and to foster harmonious development of Caribbean trade and its liberalisation by

50 THE CARICOM SYSTEM

the removal of barriers. Pursuant to this objective the Agreement provided for Area

Tariff treatment, not unlike the EFTA Agreement, for intra-regional consignment of

goods of area origin status. Member States also undertook not to levy import duties on

goods qualifying for area tariff treatment and not to impose export duties in specified

circumstances. Similarly, Member States undertook not to impose quantitative import

and export restrictions on goods intended for intra-regional trade except in specified

circumstances. Supportive of the integration effort were provisions addressing restrictive

business practices, dumped and subsidised goods, establishment, approximation of

incentive legislation, protectionist revenue and internal taxation measures, government

aids, public undertakings and consultations on economic policies. There were also

safeguard provisions in case of balance of payments difficulties or difficulties in particular

sectors. Moreover, exemptions for obligations assumed under the instrument were

made in the interest of public safety, public morality, public health and national security.

Although a bold and interesting initiative, the Dickenson Bay Agreement offered

cold comfort for most countries of the OECS, which saw themselves unable to compete

with the larger entities of the Commonwealth Caribbean. Consequently, significant

adjustments had to be made to the Agreement to bring this group on board. In this

connection the Agreement supplemental to the Dickenson Bay Agreement 1965, which

called for the establishment of an economic community, assumes considerable

significance. One significant change in the supplemental agreement was the deferment

of the establishment of an economic community and the immediate creation of a free

trade area referred to in the preamble. Another significant change related to the promotion

of industrial development in the less developed countries. This provision was probably

intended to assuage the apprehensions of the OECS countries regarding their ability to

compete with industries from the MDCs. Significant amendments were also made to

the Schedules.

The Dickenson Bay Agreement also provided for the recognition and grant by

Member territories of privileges and immunities for the Association which were to be

set out in a Protocol to the Agreement. The Council was authorised to conclude a

headquarters agreement on behalf of the Association with the host government. The

Council was recognised as the principal decision-making organ whose decisions and

recommendations were to be unanimous except where provided otherwise in the

Agreement. The procedure for reaching decisions is indicative of the reluctance of

Member countries to compromise their sovereignty. Retention of autonomous decision-

making by Member Territories was further emphasised by the provisions of the

Agreement requiring its ratification by national legislatures.

The Caribbean Free Trade Association 51

THE DICKENSON BAY AGREEMENT

AGREEMENT ESTABLISHING

THE CARIBBEAN FREE TRADE ASSOCIATION

The Governments of Antigua, Barbados and British Guiana –

Sharing a common determination to fulfil within the shortest possible time the

hopes and aspirations of their peoples of other Caribbean countries for full employment

and improved living standards;

Conscious that these goals can most rapidly be attained by the optimum use of

available human and other resources and by accelerated and sustained economic

development;

Aware that the broadening of domestic markets through the elimination of barriers

to trade between the territories is a prerequisite to such development;

Convinced that such elimination of barriers to trade can best be achieved by the

immediate establishment of a Free Trade Economic Community for all the countries

who so desire;

Have agreed as follows:-

Article 1

Association

1. An Association to be called the Caribbean Free Trade association (hereinafter

referred to as “the Association”) is hereby established.

2. The Members of the Association, hereinafter referred to as “Member Territories’

shall be the Territories on behalf of the Governments of which this Agreement is ratified

in accordance with Article 31 and such other Territories as participate therein by virtue

of paragraph 1 of Article 32.

3. The institutions of the Association shall be a Council and such organs as the

Council may set up.

4. The Caribbean Free Trade Association shall operate over the areas of the

Member Territories collectively called the Caribbean Free Trade Area (hereinafter referred

to as “the Area”).

Article 2

Objectives

The objectives of the Association shall be-

(a) to promote the expansion and diversification of trade in the area of the

Association;

(b) to secure that trade between member territories takes place in conditions

of fair competition;