Regional and global business environment 3
Yvonne Harvey, Contributor

Once again, it is time for principles of business. How are you all? All SBAs have been completed and handed in and you should be studying in earnest for the exams. This week I will continue looking at the institutions that affect the Caribbean area.

Caribbean Basin Initiative

The Caribbean Basin Initiative (CBI) was a unilateral and temporary United States programme initiated by the 1983 Caribbean Basin Economic Recovery Act (CBERA). The CBI came into effect on January 1, 1984, and aimed to provide several tariff and trade benefits to many Central American and Caribbean countries. It arose in the context of a US desire to respond with aid and trade to leftist movements that were active in some countries of the region, such as the guerrillas in El Salvador and the Sandinista government in Nicaragua. Provisions in the CBERA prevented the US from extending preferences to CBI countries which it judged to be under the influence of Communists or which had expropriated American property.

The Caribbean Basin Economic Recovery Expansion Act of 1990, known as CBI II, made the CBI permanent. However, once the US entered into the North American Free Trade Agreement (NAFTA) in 1994 with Mexico, it became easier for Mexico to export its products to the US. CBI countries had lost their advantage relative to Mexico, a major com-petitor in industries such as textiles and apparel, so they sought to increase their own preferences and achieve NAFTA parity. Those efforts were not successful until the 2000 Caribbean Basin Trade Partnership Act, which was broadened in 2002. Several exports from the region continue to receive preferential status in the US; however those preferences will likely be replaced by bilateral free trade agreements and possibly by the proposed Free Trade Area of the Americas.

CARIBCAN

The Caribbean-Canada Trade Agreement known as (CARIBCAN) is a Canadian government programme established in 1986 by the Parliament of Canada. The agreement was created to promote trade, investment and provide industrial cooperation through the preferential access of duty-free goods from the countries of the Commonwealth Caribbean to the Canadian market.

Features of the agreement also include seminars for businesspersons of the Caribbean region to learn more about developing a market for their products in the Canadian market, a programme to expand export capabilities by Caribbean businesses and the assistance of the Canadian Department of Industry and Technology in the Caribbean region for regional trade commissioners with the aim of trade promotion efforts to the Canadian market.

According to the DFAIT, "CARIBCAN's basic objectives, then, are to enhance the Commonwealth Caribbean's existing trade and export earnings; improve the trade and economic development prospects of the region; promote new investment opportunities; and encourage enhanced economic integration and cooperation within the region."

The European Union

The European Union (EU) is an economic and political union of 27 member states, located primarily in Europe. It was established by the Treaty of Maastricht on November 1, 1993, upon the foundations of the pre-existing European Economic Community. With almost 500 million citizens, the EU combined generates an estimated 30 per cent share (US$18.4 trillion in 2008) of the nominal gross world product.

The EU has developed a single market through a standardised system of laws which apply in all member states, guaranteeing the freedom of movement of people, goods, services and capital. It maintains common policies on trade, agriculture, fisheries and regional development. Sixteen member states have adopted a common currency, the euro. It has developed a limited role in foreign policy, having representation at the WTO, G8 summits and at the UN. Twenty-one EU countries are members of NATO. The EU has developed a role in justice and home affairs, including the abolition of passport controls between many member states which form part of the Schengen Area, which also incorporates some associated European non-EU countries.

The Eastern Caribbean Common Market (ECCM)

The Eastern Caribbean Common Market (ECCM), originally the Caribbean Community and Common Market, was established by the Treaty of Chaguaramas which came into effect on August 1, 1973. The first four signatories were Barbados, Jamaica, Guyana and Trinidad and Tobago.

ECCM replaced the 1965-1972 Caribbean Free Trade Association (CARIFTA), which had been organised to provide a continued economic linkage between the English-speaking countries of the Caribbean following the dissolution of the West Indies Federation which lasted from January 3, 1958, to May 31, 1962.

A Revised Treaty of Chaguaramas establishing the Caribbean Community, including the CARICOM Single Market and Economy (CSME), was signed by the heads of government of the Caribbean Community on July 5, 2001, at their 22nd meeting of the conference in Nassau, Bahamas.

For each institution, ensure that you can say who the member countries are, when and where it was established and, most importantly, be able to outline its aims or objectives and its functions.

That is it for now my friends. See you next week.

Yvonne Harvey teaches at Glenmuir High School. Send questions and comments to kerry-ann.hepburn@gleanerjm.com