Why CSME leaving bad business taste?

A director of the World Trade Organisation (WTO) last week told local business people something they rather not hear : most of them do not regard the CSME (Caribbean Single Market and Economy ) as a mechanism for enhancing global competitiveness. Anthony Gonzalves was pointing out some of the perceived pitfalls facing business in the run-up to the introduction of the CSME at a seminar in the Hilton Trinidad and Conference Centre. The  TT-based WTO director for the Caribbean Regional Negotiating Machinery (CRNM) was one of the major speakers in the CSME seminar organised by the Employers Consultative Association (ECA) titled,  “Complexities, Opportunities, Benefits and Challenges for Employers.” Another disturbing fact, he added, was that only one in ten CEOs expected increased global competitiveness to be one of the benefits of the CSME.

“This is disturbing, since one of the objectives of the CSME is to improve competitiveness to the point where Caribbean firms can survive and thrive in the global marketplace,” Gonzales said. Gonzales told his audience that the real challenge for business is to penetrate extra-regional markets in goods and services, but the performance of TT over the liberalisation era has produced mixed results. “Certainly, some businesses have accepted the challenge and retooled to face the new competition,” he said, adding that a large number in agriculture, services and industry however, still face serious problems in competing. “This is reflected in export performance which outside the energy sector have not shown the desired dynamism in expanding outside of its Caricom market,” he added.

Amid all the buzz and excitement being caused by the introduction of the CSME, Gonzales pointed out that the CSME is not new. He said the process began some 16 years ago with the adoption of the  Grande Anse Declaration. He reminded his audience that TTMA president Anthony Aboud, told a meeting of the American Chamber recently that the CSME had been happening ever since manufacturers ventured into other Caricom countries to establish trade relations. “The TTMA does not expect the CSME to be any tidal wave of change to our way of doing business. What is expected however, is that the incremental changes would be able to enhance and facilitate the existing relationships,” stated Aboud. A further bugbear that would have some adverse effects on the CSME, according to Gonzales, is trying to operate a Single Market without a Single Economy.

Gonzales pointed out that while in the medium and long-term the CSME should bring sustainable benefits to TT, there were short-term problems that needed to be dealt with. Some displacement of labour in sunset industries would occur, as such industries would not be able to compete any longer with those of our Caricom neighbours. Output might also decline in some industries due to increased competition, he added. “This process of adjustment however, will be gradual to ensure that any disruption of the market does not threaten the social fabric,” stated Gonzales. “As a result, adequate safeguards exist in the CSME to allow government to take the necessary steps to ensure a smooth adjustment. Gonzales said realistically while greater competition will come from our Caricom partners with the implementation of the CSME, even greater challenges of liberalisation at the global and hemispheric levels must be met. In this regard, he said the CSME has to be viewed as just a preparatory phase.