Trinidad and Tobago seeking greater economic space in financial services

Most of the remaining member states have indicated that they will be in a position to participate by the end of the first quarter of 2006. As far as the single economy is concerned it is anticipated that all Caricom member states will strive to bring this into being in 2008.

While the Caribbean Single Market is an arrangement allowing goods, services, people and capital to move throughout member states without restrictions as an ultimate objective there are still matters that cannot at this stage be fully implemented for example, the free movement of people. Certain categories of workers eg media personnel, artistes, musicians, sportspersons, managers, technical and supervisory staff attached to a company and university graduates can now work without needing work permits but there are proposals to expand the groups to other professionals and artisan workers and this is only a matter of time. It is likely that expanding the category of workers will come much faster than the five years it took for implementation of the Single market since the signing of the Revised Treaty of Chaguaramas.

Although the Single market is now a reality, there is not yet an Agreement on Financial Services and therefore the status quo remains where national legislation continues to regulate this sector. While certain Trinidad and Tobago companies already dominate financial services not only locally but also in other member states it is imperative that there is an Agreement on Financial Services. In short, the Financial Services Agreement ought to provide for cross-border trade within the single market and home office supervision and this requires member states in particular, Trinidad and Tobago to have an updated modern insurance legislation and regulatory framework. Work is proceeding apace in bringing legislation later this year in respect of financial services that will modernise both banking and insurance services and so place Trinidad and Tobago at the forefront of a well regulated financial services sector. Modern legislative framework is a prerequisite if Trinidad and Tobago is to realise its ambition to become the financial capital of the Caribbean.

While our Trinidad and Tobago insurance companies do business in a number of states in Caricom they do so through a commercial presence and establishment and have to conform to all the requirements of national regulators. If there is a Services Agreement in place then companies would have the choice of how they sell and distribute their products and how they satisfy the requirements of regulators and if there is harmonisation of the legislative framework within the region, this could result in a reduction of administrative expenses and greater efficiency. Insurance companies have been pressing for uniformity for more than 25 years as regards the completion of returns to the regulators and the Financial Services Agreement within the CSME holds out hope for the realisation of this dream.

While work is progressing behind the scenes, there are opportunities for our financial services sector if we are able to conclude negotiations with various trading blocs. For example, there is a move to complete services negotiations with the Dominican Republic (DR) and there is engagement with the European Union on an Economic Partnership Agreement (EPA). It must be noted that there is no Services Chapter to the CARICOM-Costa Rica Agreement as they were only interested in trade in goods.