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OECS establishes economic union

Posted by CaribShout on December 30, 2009 at 9:30pm

Leaders of the Organisation of Eastern Caribbean States (OECS), except Montserrat, have signed a new treaty establishing the OECS Economic Union. The framework for the new free trade area was formalised in the St Kiits capital, Basseterre on Tuesday afternoon 29 December. It marks another historic milestone in the evolution of the sub-regional grouping. However, it may be some months before free trade and the related areas actually come into effect. Current OECS chairman, Prime Minister of St Kitts and Nevis, Dr Denzil Douglas, says it will take some time for OECS economic union to become a reality. He said the next six or so months will be spent putting together the institutional framework for an economic union and leaders will assess progress after that. Ahead of the signing Prime Minister Douglas said he believes that economic union within the sub-region will benefit the man on the street. He expects that the arrangements to support the treaty will be in place by May of next year. The OECS is already well integrated with common services in many areas such as a central bank and a judiciary. History repeated - and new chapter written It was 28 years ago that the same country was the site for another OECS historic moment – the signing of the Treaty of Basseterre - which established the group. Tuesday's signing takes the group of smaller Caribbean states a step closer to what appears to be an ultimate (but yet elusive) goal of political union. The OECS Economic Union is intended to expand cooperation into new economic activities, with the cornerstone a single market permitting free movement of labour, trade and capital. It will also set up a governance structure "that will give legal and binding effect" to decisions taken by heads of government. Dr Douglas has described Tuesday's signing as "an incredible juncture in the historic evolution of the OECS." He also said, "it represents a fundamental philosophical transformation and political commitment to deepening the level of integration among OECS member states." Why an economic union Globalisation and in particular the effects of the recent global financial crisis (its effects are a fall-out from globalisation) have hastened the pace towards the OECS Economic Union (OECS EU?). Earlier this year Prime Minister Baldwin Spencer of Antigua and Barbuda told his countrymen that the effects of the global financial crisis provide more evidence of the need for an economic union among OECS member states. OECS flags

The OECS has nine member states He was then speaking in St John's at the launch of a series of public consultations throughout the OECS on the economic union. “The global economic crisis,” Mr Spencer said, “has changed the world.” Other previous statements in support of an OECS economic union have come from: Prime Minister Dr Ralph Gonsalves of St Vincent and the Grenadines: "The fortunes of the OECS countries are linked." And from Sir Dwight Venner, Governor of the Eastern Caribbean Central Bank: "…there may be, other things being equal, a potential growth dynamic within a collective OECS economic union, which could accelerate the current rate of economic growth and transformation of the individual economies. "This may place the OECS and the rest of Caricom in a much stronger economic position," Sir Dwight had said in a 2005 lecture. Antigua and Barbuda's Baldwin Spencer has also spoken of "building on the success of the OECS". Already, the OECS member states share a single currency - the East Caribbean dollar ($US1.00 = $EC2.65) - a central bank and a supreme court. Other joint undertakings include telecommunications and civil aviation, education, health, sports, agriculture, export development and the environment. Counter-Caricom? There is a view that a further integrated OECS could lead to the fragmentation of an already fragile Caricom. OECS countries are already members of the Caricom Single Market, the forerunner to the eventual Caribbean Single Market and Economy(CSME). Although the CSME treaty has already been signed by OECS and other Caricom countries, all its elements are not fully in force, especially the single economy component which, crucially, requires a single currency. OECS countries are also members of Caricom But a few months ago, speaking in New York , Dr June Soomer, St Lucian and OECS ambassador sought to reassure that an OECS economic union would in fact complement Caricom. She said that it would not counter Caricom’s efforts at regional unity. The St Lucia-based OECS Secretariat has also stated that the rationale for the establishment of an economic union is the development challenges that the small states of the OECS face as a result of globalisation and trade liberalisation. It argued that this can only be countered by the creation of a single economic space which allows the free movement of people, goods, services and capital. The OECS paper states that (this will lead) to economic diversification and growth, greater export competitiveness and more employment and human resource development. So, how will it work? Two new organs are to be created; a Regional Assembly and the OECS Commission. As defined by the OECS Secretariat, the Regional Assembly will consist of members of parliaments and legislatures, while the Commission will effectively be a strengthened Secretariat. Other existing OECS bodies responsible for overall governance are “the OECS Authority - which comprises the heads of government, the Economic Affairs Council, a Monetary Council and the Ministerial Councils. The OECS Authority will be the supreme policy‐making body (as is the situation under the Treaty of Basseterre) with "responsibility for the progressive development of the Organisation," the document explains. However, unlike the original Treaty of Basseterre where decisions are not legally binding on member states, the Economic Union's governance structure will give legal and binding effect - throughout the sub-region - to decisions taken by heads of government. The critical issue of enforceability has dogged the wider 15-member Caricom grouping. As stated in the document: “each participating member state will pass common legislation transferring power to the OECS Authority. It is important to note, it adds, that no amendments to the national constitutions will be required. Montserrat The OECS member countries are Grenada, Antigua and Barbuda, St. Kitts and Nevis, Dominica, St. Lucia, St. Vincent and the Grenadines, Montserrat, Anguilla and the British Virgin Islands. The latter two are associate members. Along with Montserrat, which is a full member, they make up the non-independent territories within the group. Montserrat did not sign on Tuesday, although a government delegation was present as observers. A Montserrat government statement said its involvement was dependent on the conclusion of "internal approval processes". Montserrat, like Anguilla and the British Virgin Islands, is a British dependency requiring clearance from the UK to participate in such undertakings due to foreign policy and other implications. The Montserrat government said: “Although the Treaty has now been redrafted to allow Montserrat to retain its full membership ... (the territory) is not yet in a position to sign because our internal approval process has not yet been completed.” Montserrat's Director of Regional Affairs & Trade, Claude Hogan, said, "It is envisaged that when Montserrat signs on to the new treaty it will continue to need entrustments for accession within the union on a case by case basis.” Signing of OECS Treaty of Basseterre in 1981
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Tags: anguilla, antigua, barbuda, british, dominica, grenada, grenadines, islands, kitts, lucia

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